8 Apr 2019
The Charisma Enigma
Jim Prior writes in Forbes on the new leadership paradigm.
Jim Prior, Global CEO
Michael O’Leary recently announced he would be stepping back from the day-to-day running of Ryanair because, he says, he fears his reputation has had a negative impact on the business.
I disagree with him.
Over the years O’Leary has been an incredible brand ambassador for Ryanair, constantly reinforcing the brand’s budget values and keeping its name in lights. Who needs a huge marketing spend when you can have a spokesman like O’Leary ensuring that even something as prosaic as a results announcement gains front-page news coverage? While he seemed to be espousing a strategy of deliberately winding-up the media with penny-pinching messages about toilet-charges etc., what O’Leary was really doing was reinforcing Ryanair’s fundamental proposition of an unrelenting commitment to minimising the price of its flights. For passengers prepared to sacrifice non-essentials in order to travel from A to B as cheaply as possible, O’Leary was common sense personified; the airline’s story has been less about its own brand and more about his.
Across the business spectrum we see several examples of how charismatic leadership (yes, I do think O’Leary’s style is a form of charisma) can act as a proxy for the brand they represent. Richard Branson, Steve Jobs, Elon Musk, Sheryl Sandberg, and Warren Buffett are a famous few. But, at the same time, there are many organisations that prosper with strong but much less visible CEOs at the helm, in which the strength of the company’s brand is overwhelmingly greater than that of its lead spokesperson.
"Across the business spectrum we see several examples of how charismatic leadership (yes, I do think O’Leary’s style is a form of charisma) can act as a proxy for the brand they represent. Richard Branson, Steve Jobs, Elon Musk, Sheryl Sandberg, and Warren Buffett are a famous few. But, at the same time, there are many organisations that prosper with strong but much less visible CEOs at the helm, in which the strength of the company’s brand is overwhelmingly greater than that of its lead spokesperson."
This gives rise to an interesting question: should every organisation have a charismatic leader, or should none, or is it merely a matter of circumstance or choice?
The answer to that question may well lie in an analysis of consumers’ relationship with the product, service or sector in question. In businesses where customers are obliged to relinquish control of their experience to the company, a company leader very often acts as an emblem for trust in the entire organisation.
Let’s go back to airlines. Passengers cannot fly a plane themselves, yet the safety of that experience is of paramount importance so trust in other people is compulsory. Yet they cannot possibly know enough about each pilot, engineer, or air-traffic controller involved in the process, so they need a simpler reference point. And so, the charismatic leader is given permission to emerge, hence Virgin Atlantic’s Richard Branson, Air Asia’s Tony Fernandes, or Ryanair’s Michael O’Leary.
Contrast that leadership style with another form of transport, the automotive industry, where the customer is (to a large extent) in control of the experience – literally, in the driving seat. Here, and in today’s world of proven car engineering, there is less need to trust others; the consumer trusts themselves. So it is that Ford or Ferrari are, today, not businesses represented by charismatic leaders but rely more on a broader, consumer-centric experience of their brand.
Elon Musk at Tesla may appear to challenge this hypothesis in the automotive industry, but his role has more to do with the role of leaders in normalising innovation than it does with the driving experience. Whenever we see disruption in a sector the importance of the leader is high, at least at first. With technology and innovation the science is often hard to understand so people look for assurances from someone they think they can trust. Steve Jobs was that person at Apple, just as Henry Ford and Enzo Ferrari once were for their eponymous brands. It’s also noteworthy how the more a leader’s public persona fits the stereotype of a creative, technologically savvy, entrepreneurial genius, the easier it is for people to rally behind them. But as disruptive brands become established and the efficacy of their technology becomes taken for granted, the importance of the charismatic leader declines. This can explain how Musk’s eccentric character is now waning towards rejection, with major shareholders recently saying that he doesn’t need to be CEO of the company. Carlos Ghosn’s fall from grace is another example of the auto industry rejecting individuals in deference to the brand. Perhaps the advent of autonomous vehicles will give rise to a new wave of famous automotive leaders but for now, at least, where airlines are rich in leader-personalities, car brands have very few.
We could interpret from this analysis then, that disruptors and businesses that demand high levels of trust would be well advised to appoint a charismatic leader as a central pillar of their brand strategy. And that may indeed be correct. Brands in the financial services industry, for example, might benefit from this – ‘celebrity’ fund managers are common-place, but retail banking has perhaps lacked personality in its leaders.
Healthcare could be another sector where the need for customer trust juxtaposes with the complexity of the product, hence where a powerful human champion might help drive success. But the example of Elizabeth Holmes at Theranos shows us how this can go badly wrong. Conforming quite perfectly to the stereotypical image described above, Holmes used her charisma to raise funds and drive a $10bn valuation into a company with a product that simply did not work. Inglorious failure was the inevitable result.
"So, whichever leadership style a company adopts, one thing must always be clear. The integrity of the product and of the company’s contribution to society is of paramount importance. No amount of charisma can ever mask a lack of that."
First published in Forbes.