Episode 17 Management by fear MOAL Academy Strategic Leadership CerAficate Program BHH © 2012 Management by fear IntroducAon to today’s topic: •  What are the pros and cons of management by fear? •  Does fear create a stronger bond than friendship? •  Can you trust informaAon produced in a fearful environment? •  What is the relaAonship between management by fear, and individual commitment, passion, and flexibility? BHH © 2012 Discover The Mind of a Leader… Management by fear BHH © 2012 Screen episode Management by fear Intro: In chapter XVII ‘Of cruelty and clemency, and whether it is beVer to be loved than feared’ Machiavelli says a.o. things that it will be desirable to be both the one and the other; but as it is difficult to be both at the same Ame, it is much safer to be feared than to be loved. Men have less hesitaAon in offending one who makes himself beloved than one who makes himself feared, for love holds by a bond of obligaAon which, is broken whenever it is for the interest of the obliged party. But fear holds by the apprehension of punishment, which never leaves men. To what extent does Machiavelli’s thought’s apply to the roles and responsibiliAes of modern leaders from different countries, cultures and trades? What are the pros and cons in using management by fear? Discover The Mind of a Leader… BHH © 2012 Management by fear Selected quotes: RICHARD VALDEMAR: It’s interes*ng to me that Machiavelli is one of their favourite books. And In general all of these groups do consider the leadership style of being feared or being hated even is a be=er leadership style than being loved. First of all love to them is weakness and can be exploited, but fear they can control and u*lize to for this what ever they need… You know the drill instructor was not a man to love, he was a man to fear, but it was a very effec*ve way to have me change from the cultural laissez-­‐fair aGtude I had in the world to a combat ready person who was capable of taking some ones life and I needed that drill instructor, I needed that fear and it went through the military process you know when we actually went in combat, you know I saw men who without hesita*on would take command, you know, and there was an element of fear in it. ANITA RODDICK: I think it’s horrendous, I think that every worker that is being driven by fear should sabotage the workplace, no doubt about it, whether it’s puGng bloody water in the CEO’s car, you know tank, I would do anything do sabotage it. JOHN DUNN: It’s not very helpful in electoral compe**on just to be ruthless and bold what you most need to be, a bit of *mely ruthlessness and boldness will be required sooner or later, but what you most need to be is very good at doing the thing that Machiavelli said isn’t really a good poli*cal investment, you need to be very good at geGng other people to like you quite a lot… STEVEN HILTON: …from my own experience working in a founda*on and being true to who I am I would rather be loved than feared and I think that ideally that can create an environment where people can do there best… BHH © 2012 1-­‐2 Management by fear JAN CARLZON: …if you want to control a company to 100 percent which means that you instruct and you give order to people down to every single li=le item then I could guess, I could guess that fear could work as a tool to get people to do what you really want them to do. Also if you are in a war situa*on if you are leading an army I think the general, there are some credits in being the authoritarian leader… I am 100 percent sure that the only thing that work is when people feel that they are trusted that they are respected that you create an environment of love because what happens then is that people dare to perform much closer to their own capability while if there is a fearful environment, fearful situa*on they stop to perform fare below their reel capability to secure that they don’t do any mistakes and get punished. STAN SHIH: I don’t consider by fear is a good approach, maybe it’s not my style so I have to find a different way and the approach is I con*nue to thinking about what’s their interest and to build a common interest a plaPorm for all of them. BRUCE COHEN: I think you are s*ll going to get be=er work if people really respect you and enjoy the work environment and appreciate that you are trying to make a good posi*ve working environment for them. LARRY FLYNT: No I don’t think so, I… Although you never ansi*ng a ques*on, you know I would equate it to torture you know… That informa*on you get is unreliable that’s been proven, you know over the decades it’s been employed. A successful business has core group of happy campers you know, you are not going to have those happy campers if everybody, you know is in an in*mida*on mode all the *me. MADS ØVLISEN: Smart mistakes are the price of progress in many situa*ons and if you make people fearful they are not going to try doing new things… 2-­‐2 BHH © 2012 Management by fear Machiavelli quotes: "…it is much more safe to be feared than to be loved, when you have to choose between the two. For it may be said of men in general that they are ungrateful and fickle, dissemblers, avoiders of danger, and greedy of gain. So long as you shower benefits upon them, they are all yours; they offer you their blood, their substance, their lives, and their children, provided the necessity for it is far off; but when it is near at hand, then they revolt.” "To come back now to the ques*on whether it be be=er to be beloved than feared, I conclude that, as men love of their own free will, but are inspired with fear by the will of the prince, a wise prince should always rely upon himself, and not upon the will of others; but, above all, should he always strive to avoid being hated, as I have already said above." Niccolò Machiavelli, 1513 BHH © 2012 Management by fear Advice: A) Consider that fear can be effecAve under specific oken highly controlled circumstances and that some environments does consider fear a stronger bond of loyalty than friendship. B) Acknowledge that fear may restrict a person from daring to perform at the highest level of capability and that it reduces personal commitment, passion and flexibility. C) QuesAon the informaAon you get from a fearful environment. E) Understand that smart mistakes may be the price of progress and that fearful people are not going to try doing new things. BHH © 2012 ? Management by fear QuesAon: •  Is it ever beVer to be feared than loved? BHH © 2012 QuesAons & Cases MOAL Academy Strategic Leadership CerAficate Program Management by fear Supplementary quesAons: •  How do you relate to the given advice? •  Have you ever experienced working in an environment where ‘Management by fear’ paid off? •  Have you ever experienced working in an environment where ‘Management by fear’ did not pay off? •  Is it possible to keep an organizaAon efficient without insAlling some form of fear for not performing well or meeAng corporate objecAves? BHH © 2012 Management by fear Assignments: •  How do you react when being driven by fear? •  Do you think other people would react the same way? •  Ask yourself: would you increase fear by 10% if the financial outcome would be a 20% increase? •  Ask yourself, on a scale from 1 to 4 (1 being very well), how you relate to authoriAes? BHH © 2012 Management by fear Case 1: The assembly line. The CEO and HR manager of a manufacturer of car parts are discussing the working condiAons of the assembly line. The HR manager argues that it is inhumane to have people work long hours in a packed room with no windows. The CEO disagrees, saying that the workers should feel privileged, that they have a job at all. The business model is based on low cost. Besides, workers are easily replaceable. The HR manager then argues that the workers are being driven by fear, and that: A)  Fear can never be a means towards producAvity. Is this correct? B)  Fear is bad CSR (Corporate Social Responsibility). Is this correct? C)  Fear would negaAvely impact corporate culture. Is this correct? BHH © 2012 Management by fear Case 2: The service industry. The management group of a company operaAng in a service oriented industry with high demand for individual freedom of acAon, is discussing what to do about increased compeAAon and declining sales numbers. The CEO says there is the need for stricter rules to improve discipline and to make everyone work harder. The HR manager disagrees, saying that: A) Fear has proven to limit performance in service industries. Is this correct? B) You cannot trust informaAon generated in a fearful environment. Is this correct? C) Fear always decreases producAvity. Is this correct? D) Fear always creates disloyalty. Is this correct? BHH © 2012 Management by fear Case 3: The high employee turnover rate. A successful markeAng consulAng agency has the highest employee turnover rate in the country. The CEO is not concerned about the situaAon since the high turnover rate is built into the business model. He says that the agency might demand more from its employees than other companies, but in return, the employees gain extensive experience in the industry, as well as a disAnguished corporate brand they can list on their resumes. Every other evening at approx. 8pm the CEO walks through the office and places a yellow post-­‐it sAcker on empty chairs as a way of telling the employees that he has noAced who is working late and who is not. A)  Is this appropriate? B)  A former employee argues that these methods would ulAmately result in a negaAve business culture and publicity. Do you agree? BHH © 2012 IllustraAons & models MOAL Academy Strategic Leadership CerAficate Program Management by fear Performance Industries that demand a lot from individuals: Service industries, creaAve industries, science etc. Management by fear Fear of failure is proporAonal with the desire to explore and peak. BHH © 2012 Management by fear Industries that demand liVle from individuals: Assembly line workers, and to some extend the military, etc. Performance Industries that demand a lot from individuals: Service industries, creaAve industries, science etc. Management by fear •  It is possible that ‘Management by fear’ may work in specific industries. •  Management by fear, however, will eventually give the company a bad name in markeAng and CSR (e.g., sweatshops). BHH © 2012 www.themindofaleader.com Classroom tools and assignments DVDS Books & Audiobooks MOAL Academy cerAficate programs Ad consulAng BHH © 2012