CEOs Shouldn’t Try to Embody Their Firms’ Culture

Eric Nyquist The Research: Arizona State University’s Angelo Kinicki and Georgia State University’s Chad Hartnell led a team that surveyed the top managers of 114 companies. The executives were asked to rate the leadership style of their CEOs and the culture of their organizations as either task/results oriented or people/relationship oriented. In the best-performing organizations, the study showed, the CEO’s orientation differed from the corporate culture’s instead of aligning with it. The Challenge: Should CEOs’ behavior really run counter to their firms’ ethos? Is culture clash a good thing? Professor Kinicki, defend your research. Kinicki: “Clash” isn’t the right word. I think our research shows that a CEO’s style should complement the company’s culture, so he or she provides something the culture doesn’t. If your company is already very relationship focused—emphasizing collaboration, shared decision making, and interpersonal support—a leader with the same orientation would be redundant. What you really need is someone who will set expectations, clarify rules, and push people to get things done. And the reverse is also true: If your company is results oriented, it needs a CEO who is good at building relationships. HBR: Where’s the line between good different and destructive different? The research doesn’t answer that question, but anecdotal evidence might. If you compare cases like Alan Mulally at Ford and Carly Fiorina at HP, you can see that it’s probably a matter of degree. He brought task leadership—discipline and an execution focus—to an organization lacking that orientation and produced positive financial results. But her attempts to do a very similar thing failed because her style was, by all accounts, too antithetical to “the HP way.” She took misalignment to an unproductive extreme. Back to the study: How much better did companies perform when there was a mismatch? Among the small to midsize, mainly privately held technology companies we looked at, those with complementary CEO leadership and cultural styles generated returns on assets that were 1% to 4% higher in the nine months after the survey than the returns of those with matching CEO leadership and cultures, controlling for past performance. That’s a pretty significant difference in financial results. Did you go in expecting that outcome? Not really, because management theory, as well as real-world examples, suggests that a similarity between CEO style and corporate culture is beneficial sometimes. Look at Jack Welch’s tenure with General Electric. Both he and the company had a strong results orientation, and it worked for many years. On the other hand, there are examples like Mulally at Ford. So we went in with two contrasting hypotheses—matches between CEO leadership and culture will boost performance, and mismatches will boost performance—not knowing which one would prove right. Very convincing arguments could be made on both sides. It seems obvious that mismatches will work when the leader is supposed to serve as a change agent. But what about when you want to maintain the culture while still boosting performance? We don’t know the particular circumstances of the companies covered in our study, but you can bet that some of the outperformers wanted to and did keep their existing cultures. Remember, though, when you do research like this, it gives you a snapshot in time. We’ve demonstrated that there’s an important interaction between leadership style and culture, but we’re not capturing the dynamic nature of that interaction. For example, we know from research and practical experience that leadership styles are contagious. So, if a CEO like Mulally does strategy and implementation reviews with his top team every other week for a year, it will have a trickle-down effect and eventually change the culture of the whole enterprise. If that’s taken to an extreme, the company could become too micromanaged, resulting in a need to move away from that match. The CEO then might have to dial back the task and results focus and start to emphasize relationships and collaboration a bit more. That’s why the job of a CEO is so hard. You can’t just have one style today and stick with it. You have to adjust the dynamics for external changes and internal integration. Is it possible that you should strive for mismatches only in fast-changing industries like technology? We suspect that it’s a broader phenomenon, and in fact, we’ve replicated our findings in a similar study involving small to midsize enterprises from a variety of industries in the United States. We’ll need to do further research to see whether there are similar patterns in larger organizations, in publicly traded ones, and in other countries. Why did you focus on task and relationship orientation instead of other aspects of culture and leadership? In the years that I’ve spent working with CEOs, I’ve always asked what they consider to be the most important aspects of the job, and they’ve always given the same two answers: execution and relationship building. And if you look at the literature on organizational culture and leadership, those two buckets crop up again and again. The terms might vary—“production” versus “employee,” “structure” versus “consideration,” “market” versus “clan,” “outcome focus” versus “respect for people”—but the idea is the same. What about lower-level leaders? Should they also try to provide what the culture doesn’t? We haven’t studied it, but my gut reaction is yes. The point is to reduce redundancies between leadership and culture. But organizations have subcultures, so this doesn’t mean that everyone should mimic the CEO. Also, as I said before, if the organizational ethos ultimately shifts because all the bosses adopt an opposing leadership approach, they might want to swing back in the other direction. You’re looking for checks and balances. HBR prides itself on having a collaborative, employee-focused culture. We’re hitting our financial targets, but should the bosses be tougher taskmasters? Sounds as if you already have the right complementary mix. That said, I would lean toward using task leadership to reinforce the goal of publishing a world-class magazine on a timely basis.

CEOs Shouldn’t Try to Embody Their Firms’ Culture

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