Ginny Rometty became IBM’s first female CEO in January, 2012. Since then, to lift a line from Forbes, it’s been “anything but smooth sailing.” Though the company’s stock price did slightly better in the first half of 2015, since becoming CEO Rometty presided over 11 consecutive quarters of declining revenues. Moreover, in 2014 IBM posed a shareholder return of negative 12.4%, and lower profits as well as lower revenues.
Still IBM’s board recently saw fit to boost her compensation 38.5 percent, to $19.3 million. In defending its decision the Board announced that the shortfall in IBM’s financial results were balanced against the “substantial strategic actions taken to balance the company.” Moreover, the board continued, Ms. Rometty’s increased package reflected its “strong confidence” in her “ongoing leadership.”
Ms. Rometty’s hike in pay is worth noting primarily because it is unusual these days to reward poor company performance. This is not to say that it never happens. It does. But the fact is that CEO pay is generally tied now to CEO performance. Chief executive officers do well when their shareholders do. According to the Wall Street Journal’s annual pay survey, “All 10 of the CEOs posting the best shareholder returns were paid more than they had been a year earlier, and all but two of the 10 worst performers got pay cuts.”*
So Rometty is clearly an outlier – her boost in pay in spite of IBM’s poor performance during most of her time at the helm is out of step with current corporate norms. The question is why. I have no reason to doubt the Board’s official statement: there are reasons for the nearly steady decline in IBM’s stock price and revenues; and the Board does continue to have confidence in Rometty’s “ongoing leadership.” But still I wonder if part of the explanation for Rometty’s significant raise in pay – up by over a third – in spite of her lackluster performance is reverse discrimination. To favor an individual – in this case the CEO of a computing giant who is female – who belongs to a group known to have been discriminated against previously is not exactly unheard of.
In arguing for a systemic approach to leadership – one that invariably involves 1) leaders, 2) followers, and 3) context, as opposed only to leaders – I never diminish the importance of the leader. Leaders obviously matter.
However just yesterday were two seismic events in American politics evidencing once again that to fixate on leaders at the expense of followers – at the expense of everyone else – is to misread how history happens.
First was a semblance of closure in Charleston, when President Obama delivered his eulogy for Reverend Clementa Pinckney, one of nine African-Americans killed a week earlier in an historic Charleston church. The events that followed the killings were as dramatic as unforetold. They swirled around the symbolism of the Confederate flag, which came overnight to be seen as offensive to the point of intolerable. Across the south political leaders joined to insist that it was time for the flag permanently to come down. And across the country business leaders joined to insist that it was time for the flag permanently to be removed from the nation’s shelves.
How did this happen? Did the governors of South Carolina, say, and Alabama, simply wake up one morning and have a change of heart? Or did they in the immediate wake of the shootings call for the elimination of a symbol that many had long perceived as racist? They did not. They did not on their own have a change of heart, and they did not immediately after the shootings call for the flag to be taken down. Nor for that matter did the CEOs of companies such as Walmart, Amazon, and Google act on their own, out of a sudden impulse to do the right thing by refusing to sell Confederate flag merchandise.
No, what distinguished this moment in American history was not any leader but a group of followers, the victims’ families, who first charted the path toward forgiveness and redemption, toward peace and love not war and hate. By setting a tone of reconciliation in the immediate aftermath of the Charleston killings – “I forgive you and have mercy on your soul,” said the daughter of one of the victims to her mother’s killer – the families of the slain set the tone for everything subsequent. It was they, followed by the people of Charleston, who changed the nation’s history in a way that will forever be seen as significant.
Yesterday’s second event demonstrating the importance of followers not just leaders was, of course, the Supreme Court ruling that same-sex marriage was now legal in all 50 states. To the naïve it might seem that the five Supreme Court justices who came down in favor were leading the nation on equal rights. But anyone who knows anything at all about history knows that these five justices were not leading at all, they were following. They were following the American people, the majority of whom now believe that gay men and women should have the same right to marry as straight men and women. And they were following gay rights activists, who started organizing in earnest in the 1980s, and whose cause since then has steadily gathered momentum.
On the surface yesterday was about an impassioned eulogy delivered by the nation’s chief executive. And on the surface yesterday was about a transforming ruling handed down by the nation’s highest court. But only on the surface. Scratch beneath and you will find that both were in consequence of ordinary men and women doing what they believed to be right.
A couple of weeks ago, the president of Cooper Union, Jamshed Bharucha, announced his resignation. Whatever the circumstances surrounding his particular presidency, the fact is that like other American leaders, in the 21st century leaders of American colleges and universities are having to navigate choppy waters.
In the old days presidents of institutions of higher education were removed from the exigencies of everyday life. They were sheltered by what then was the cloistered nature of the academy, and by the expectation that their leadership would be exercised primarily in the intellectual realm, not in the rough and tumble world that was beyond the ivory tower.
Now though that’s different. Just like other American leaders, leaders of colleges and universities are having to suffer the indignities of being closely scrutinized; are having to cope with constant demands from various constituencies; and are having to immerse themselves in the worlds of cash and commerce from which previously they were exempt.
The numbers tell the tale. In 2012 the average tenure of a leader of an institution of higher education was 7 years. Just six years earlier it was 8.5 years. In the Philadelphia region alone, during the three year period 2011-2014, 16 out of 36 four year colleges and universities saw either the exit or arrival of a new president.
The fact that leaders in higher education are not exempt from the pressures on leaders more generally testifies to the importance of the larger context within which leaders – and their putative followers – are located. The academy is no longer an armor against the larger forces that make leadership in America so difficult now to exercise.
Unlikely it may seem. But it is not. In the second decade of the 21st century leaders emerge from the strangest of places. And in the second decade of the 21st century leaders inhabit the most improbable of bodies – in this case that of a pretty and petit 25 year old, who makes her living singing.
Taylor Swift has chosen to use her platform constructed of fame and fortune to change the way the world works, or has. She has taken on, in quick succession, both Spotify and Apple, to try to oblige them to pay their artists what she thinks, or, more precisely, what they think they deserve. Apple caved virtually immediately, tweeting Taylor, “we hear you,” and agreeing to pay artists for their music even during the three month trial of its new platform, Apple Music.
But the point is not that a single company – even arguably the most powerful in the world – bent to Swift’s will. The point is that she is making a stunningly strong case for artists, insisting that they be paid for their wares just like everyone else.
Swift is as eloquent on the subject as she is forceful. In taking on Spotify she wrote in a 2014 Wall Street Journal op-ed, “Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for….Music should not be free.”
And in 2015, in taking on Apple in a letter posted to her Tumblr page, Swift wrote that Apple’s policy was “shocking, disappointing and completely unlike this historically progressive company.” She went on to assert that she was by no means speaking only for herself – which presumably is why, in a New York minute, Apple reversed itself.
Swift is in a singularly strong position: she is a spectacularly successful singer. What makes her a leader, however, is that she has capitalized on this success. She has used it to create a change that many deeply believe long overdue.
I am always struck by the persistence and pestilence of bad leadership. It’s an endemic epidemic – a social disease for which we have no cure.
But some weeks seem worse than others, the last was one of them. Four examples – two of Callous Leadership and two of Evil Leadership.
In my book, Bad Leadership, I defined Callous Leadership as follows:
The leader and at least some followers are uncaring or unkind. Ignored or discounted are the needs, wants, and wishes of most members of the group or organization, especially subordinates.
Don Blankenship was, is, a callous leader. As a recent article in the New York Times documented, he ruled his business, Massey Energy, with an iron fist. (Link below.) He micromanaged to the point of demanding production updates from Massey Mines every 30 minutes. He fired those who worked for him without an apparent second thought. He was capable of behaving brutally to those beneath him, subordinates who ran afoul of exactly what he wanted. He was “quasi-dictatorial” in his overall management style. And, the evidence strongly suggests, he cut corners. He cut corners at the expense of the safety of those in his employ.
He will have his day in court – an opportunity to rebut the charge that in his efforts to minimize costs and maximize profits he bears responsibility for an explosion in a West Virginia coal mine that cost the lives of 29 men. Whatever the outcome of the legal proceedings there is this: the 2010 disaster was the deadliest in the coal mining industry in 40 years.
If Blankenship were alone or even in the small minority, no big deal. He would be an anomaly. The problem is that he is not. Callous leadership is endemic, and it is stressful, and it is bad for our health. A professor at Georgetown University, Christine Porath, reports that in 1998 a quarter of those she surveyed said they were treated rudely at work at least once a week. In 2005 this figure rose to nearly half; by 2011 it was over half. (Link below.) Bad behaviors by bosses include interrupting, being judgmental, failing to pass on important information, talking down to people, and neglecting the niceties. The point is this: bosses can be nice or at least reasonably civil at no great cost to themselves. Their frequent failure to do so is, however, costly to us, in the quality of our lives and our health. Being treated badly by bosses on a regular basis stresses our immune systems, and puts at risk our physical as well as psychological well-being.
In my book Bad Leadership I defined Evil Leadership as follows:
The leader and at least some followers commit atrocities. They use pain as an instrument of power. The harm done to men, women, and children is severe rather than slight. The harm can by physical, psychological, or both.
By almost any measure Sudan’s President Omar Hassan al-Bashir is an evil leader. In fact, the International Criminal Court has indicted Bashir on charges of genocide. Trouble is that he continues to elude capture, that his brutality goes on unabated, and that catching him and bringing him to justice appears low on everyone’s list of priorities, including the president of the United States. Just last week Bashir openly visited South Africa, and then flew back to Sudan before anyone could be bothered to hold him on the genocide charge. In other words, Americans along with everyone else lack the will to stop a leader who has been bad to the point of being evil.
Finally, there is this simple statistic. Nearly 60 million people – half of whom are children – have been driven from their homes by war and persecution. This figure, recently released by the United Nations, is unprecedented. It is that large. To what can we attribute these numbers if not to bad leadership – and bad followership? To leaders and followers – from Activists to Bystanders – who encourage this to happen, enable this to happen, allow this to happen?
Obviously it is an outrage. Less obviously it is a mystery. It is a mystery that over the millenniums we have managed effectively to eliminate a host of physical diseases. But we have not managed even to examine the worst of social diseases – bad leadership.