Good Riddance to the Imperial CEO

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When Frank Blake became the new CEO of Home Depot he recognized the importance of moving away from the imperial leadership style of his predecessor. In addition to taking a much lower salary, Blake discontinued the catered executive luncheon that the company's top management team had enjoyed under Bob Nardelli and "suggested" that the members of senior management eat in the cafeteria with the other employees. This sent a clear message to the employees that Blake intended to be a different kind of leader.

Perhaps the most common mistake top executives make in all types of organizations is not recognizing the importance of communicating directly and effectively with employees. One CEO who does recognize the importance of this is Jim McNerney, CEO of Boeing (BA). Boeing has a global workforce of 160,000, so communicating with everyone is not a simple task. When asked recently if he was going to spend more time with customers and stock analysts, he replied that it is more important for him to spend time with Boeing's employees than to spend it on raising his profile and visibility in the press. According to him, employees "have got to know that working with them is more important to me than public forums where I'm making big speeches."

Yes, strategies to increase a business' success are certainly essential and can be time-consuming to develop and implement. But even the smallest act—like eating lunch with an employee—goes a long way toward establishing positive relationships with staff as well as helping the "chiefs" more effectively solicit constructive feedback and input from employees.

Simply put, the days of rigid business hierarchies cannot continue, and senior management need to acknowledge that a company's human capital is its most valuable and sustainable competitive asset. As businesses make the decision to adopt an HC-centric approach, an imperialistic attitude toward leadership is not an option if they expect to thrive while attracting and retaining top talent.

Adapted from: Talent: Making People Your Competitive Advantage (Jossey-Bass, April 2008)

Edward E. Lawler III (www.edwardlawler.com) is the author of Talent: Making People Your Competitive Advantage (Jossey-Bass, April, 2008) and Distinguished Professor of Business at Marshall School of Business at the University of Southern California. A leader in the fields of organization development and HR management, he is also director of the Center for Effective Organizations at USC.