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“Every Successful enterprise requires three men:
a dreamer, a businessman, and a son of a bitch.”
Peter McArthur, Photographer
History has shown that whenever the Presidents’ approval rating drops under 50%, the markets rally and the growth averages 9%. Sounds strange?
Change isn’t always popular and as a young COO running the operations of a $25 Million manufacturing company, I found myself being disappointed if at the end of the week I did not find any graffiti about myself on the notice boards of the plant restroom. I could not understand why I felt disappointed until one day it came to me … I was not active enough and I needed to take more risks that introduced change into the idling system. CHANGE is what causes popularity loss. Not the talk about change, but the actual change/shakeup of someone’s perceived state of “unruffled” comfort.
Note this sequence:
Popularity DOWN when CEO demanded –
- higher efficiency
- more overtime
- more output
- more sales effort
Popularity UP when CEO increased –
- increased benefits
- increased commissions
- increased paid time off programs
You can continue this list, but you see the trend.
The formula for business is: Profitability = Revenue – Costs. Simple and obvious yet very complex at the same time. Every CEO must (and CEO performance is based on) driving revenues UP and driving cost DOWN so that they do not grow in the same proportion as the revenue. That will assure growth in Profitability. Now compare this objective of every CEO with issues related to His/Her Popularity. In most cases, when one strives for Popularity, this will increase the cost of running the business and will stagnate revenue growth.
For example, Steve Jobs, a dreamer, a businessman, and most unpopular CEO (to insiders) of Apple, created an unprecedented business success story for a company that was about to collapse. While he strived to create a new type of industry and product lines for Apple, there were still stories about people trying to avoid at any cost getting in the same elevator with him. Today the results are outstanding and those who benefited on the share price growth are happy, but most of them still do not like the CEO who introduced the CHANGE, got them all to work hard and sacrifice a lot of personal comfort in the process.
Leadership is tough on popularity and likability. Executives and managers who strive for popularity, friendship, and for “being liked” by their peers and employees will become less effective and as a result, often impede their progress to succeed in the marketplace.
Let’s take it to my favorite examples with our kids. There is always this dreadful moment when your 5 year old suddenly in frustration tells you: “I hate you …”. What just happened? Your popularity rating just dropped to the bottom … but most likely this was after you got him to do what you wanted as most of the time these words come after your insistence on doing something they do not want to do on their own. If you let them have their way and drop your demands … well, you know, you will get a smile and “I love you” and a kiss. It is hard to demand and insist … but it builds character and eventually respect; after recognizing that your demands were reasonable and fair and that after performing as requested, you gave them candy or something they wanted so much.
Lets just substitute the striving for “love and popularity” with striving for respect and you may hit the perfect balance.
So here are two magic life rules for a better balance that will lead to respect and efficiency:
- Always demand performance, but be reasonable and fair and adjust these demands to the person you are asking to perform these requests.
- Always acknowledge the effort of the implementation even if the result is not 100% to your expectation, but do not hesitate to ask and insist on another solution if the result is unacceptable.
General Patton was known to demand performance and would not take any excuses, for that many called him “the most respected SOB” in the forces.
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Yakov Soloveychik is a business advisor, mentor and a personal coach to CEO’s and business owners. Yakov’s professional and entrepreneurial career includes VP, COO, CEO positions and service on board of directors with a number of technology based companies in Los Angeles and Silicon Valley