By Adrian Wooldridge
Management gurus have been preaching for years against the evils of autocratic management. Successful managers thrive on feedback, the argument goes; autocrats don’t listen to anybody but themselves. Successful managers bring out the best in their employees; autocrats turn them into shivering chihuahuas. The imperial CEOs of yesteryear — “Neutron” Jack Welch at General Electric Co. and “Chainsaw” Al Dunlop at Sunbeam Products — earn mention in business schools today only as examples of how not to manage.
The anti-autocrats can hardly control their glee at having a real-time example of the evils of autocracy — Elon Musk’s troubled takeover of Twitter. Since Musk’s arrival, the social media company has been in such turmoil that its imminent death is repeatedly announced. Having already sacked half the company’s 7,500 employees, Musk sent out a midnight email giving the remaining employees a choice between going “extremely hardcore,” by which he meant “long hours at high intensity,” or taking a three-month severance package. Another 1,200, or half the remaining workforce, quit. Musk is even in trouble with the San Francisco city authorities (who apparently don’t have anything else to do, given the impeccable state of that city’s streets) for turning conference rooms into bedrooms without planning permission. William Klepper, of Columbia Business School, has described Musk’s approach to management as “a case study of failed leadership.” Peter Coy, of the New York Times, says that “it’s hard not to draw parallels between Musk’s problems at Twitter and Vladimir Putin’s problems in Ukraine.”
___STEADY_PAYWALL___But is autocratic leadership such a recipe for disaster? And is the current fashion for bleeding-heart CEOs really a recipe for success? A glance at business history suggests at the very least a nuanced answer to both questions. A striking proportion of the greatest CEOs have been autocrats — sometimes to the point of carpet-biting derangement.
Henry Ford was so obsessed with exercising personal control that he brought out all seven minority stockholders in a dispute and refused to create a proper bureaucracy (one department calculated its costs by weighing invoices). Organizational charts were verboten since everybody reported to Ford. He was so hard to please that he drove his son and heir to an early death and so obsessed with conspiracies that his henchmen lived in fear of him. He was both the greatest businessman of the 20th century and an appalling human being.
Thomas J. Watson Jr. ran International Business Machines Corp. like a cult of personality. He demanded not just obedience but complete adulation. In the IBM Rally Song, employees sang about his virtues: “The name of T. J. Watson means a courage none can stem/And we feel honored to be here to toast the ‘IBM’.” There were regular lengthy awards ceremonies in which his employees gave him awards for his various achievements. For years he boasted the longest entry in Who’s Who in which he recorded even the most Ruritanian honors (Eloy Alfaro Internat. Found. Cross, Republic of Panama.”) If he was thwarted in any way, his temper was volcanic. If his subordinates questioned his decision, they were “managed out” of the company.
Steve Jobs was a more recent example of the imperialism of the soul. Egotistical and moody, he wouldn’t accept anything less than total devotion from his employees. Apple Inc. products had to be technically and aesthetically perfect; anything less was a dereliction of duty and a personal betrayal. Nothing was too small for him to obsess over: He once called a Google executive on a Sunday about fixing the color gradient of the yellow “O” in the Google logo as it appeared on the iPhone. And no challenge was too big to deter him from his mission of turning his vision into reality.
These autocratic habits were not just incidental to these great men — the warts on otherwise unblemished faces. They were quintessential. Capitalism is at its core a bet on the future. Great businesspeople (as opposed to routine managers) are in the business of dragging a bit of the future kicking and screaming into the present.
To do this they need rare qualities. They need to be able to distill the future into its essence — putting the world on wheels in Ford’s case or bringing the power and beauty of technology to the public in Jobs’s. They need to be willing to stick to their vision even when everybody tells them that they are nuts. And they need to create organizations that will turn that vision into reality. Doing all these things requires the personality traits of the autocrat rather than the servant-leader or empathizer-in-chief: stubbornness, arrogance, monomania, a willingness to turn other people into objects of your will. Those might not be the best qualities in a dinner companion. But they are necessary if you are going to change the direction of history.
Autocracy certainly has its downsides. The mix of qualities that companies need to succeed changes as they mature from start-ups into regular businesses: The very qualities that made Ford a great entrepreneur — his intolerance of other people’s doubts and his conviction that he knew what people wanted better than they did — condemned his company to relative decline.
Lord Acton’s dictum about power corrupting and absolute power corrupting absolutely applies to corporations. A host of studies show that even in regular people power produces over-confidence, risk-taking, insensitivity, intolerance and a higher likelihood of treating other people as means rather than ends. The so-called “cookie monster study,” conducted by psychologists at the University of Wisconsin, Madison, shows that randomly assigned “powerful people” are more likely to help themselves to second cookies, eat with their mouths open and get crumbs on their faces. A handful of autocratic CEOs get better with age (Jobs) or sense when it is time to hand over power (Jeff Bezos) or shift their focus to another great project (Bill Gates). Many more, like Ford in the past and perhaps Mark Zuckerberg today, become victims of the qualities that made them great in the first place.
Still, the downside of corporate autocracies is nothing compared with the downside of corporate democracies. The idea that companies need to import the democratic spirit in order to thrive in today’s world of knowledge-workers and opinionated citizens rests on a category error. We are born into citizenship. We choose to work for this and that company. The point of companies is to do things collectively that can’t be done individually or by the market. They need clear directions from the top and clear systems of command and control. Leaders need to be willing to take unpopular decisions when times are tough as well as to stroke egos when they are easy. Empowerment is fine if it increases the creativity of the whole. But too often it means people pursuing their own interests or wasting time in endless meetings or, in the most self-indulgent companies, consciousness-raising sessions. Peter Drucker would undoubtedly rethink his argument that companies should model themselves on voluntary organizations if he could look at the way that many progressive groups in America have been brought to a standstill by navel-gazing, recrimination and internal witch hunts.
Which brings us back to our supposed showpiece of the evils of autocratic management, Elon Musk and Twitter Corp. Musk was probably wrong to buy Twitter given the clash between his own values and those of the company’s established employees. He was certainly wrong to pay $44 billion for it. He is unlikely to be able to turn it into a revenue source any time soon if at all. Musk buying Twitter was more like Jeff Bezos buying the Washington Post or Laurene Powell Jobs buying The Atlantic than a commercial activity. Musk’s other interests, particularly Tesla Inc., have paid a heavy price for his obsession with Twitter. Notwithstanding all the hyperventilating, there is a significant chance that the platform will collapse, or that the ever-mercurial Musk will lose interest.
That said, there is also a plausible argument in favor of Musk’s authoritarian style. His authoritarian techniques have served him well in other areas. He has repeatedly used the same playbook: Create a sense of existential crisis (the world overheating or humanity having a reserve planet in Mars); unveil a bold solution (the electric car or a private spaceship); work like hell to get the idea off the ground; obsess about minor details; and ignore little things like turning a profit. During the early days of Tesla, he worked 120 hours a week, sleeping in the factory, popping Ambien, to get the first car out of the door. (“Nobody ever changed the world on 40-hours a week,” as Musk likes to say.) In 2012 he fixated on the ugliness of the car’s sun visor and declared that “we have to decide on the best sun visor in the world and then do better.” His techniques have always brought crisis and chaos — staff resigning, share-price yo-yoing, bankers losing patience, conflicts with the authorities. They have also helped to bring the future into being: Tesla’s market capitalization is five times as great as Ford’s and GM’s put together, and SpaceX’s Starship is the largest launch system ever constructed.
Applying the same technique to Twitter will be harder. In Twitter’s case, it’s harder to find a compelling vision that everybody can get behind in the way that they can get behind reducing pollution — Musk is discovering that free-speech absolutism must be compromised when it comes to anti-Semitism or hard-core pornography or the crazier conspiracy theories. It’s also harder to persuade advertisers to stick with you when you’re potentially playing with fire.
On the other hand, Twitter was ripe for tough love, having gone from start-up to decadence without the intervening period of success. Twitter lost money in eight of the past 10 years and seldom launched new ideas or products. Facebook, by contrast, enjoyed twice the revenue per employee than Twitter despite having more workers devoted to longer-term products. Under-employed workers spent their time in meetings or helping themselves to various corporate perks rather than coming up with new ideas. The urgent task of acting as a fair monitor of content was handicapped by liberal groupthink. Musk was undoubtedly right to cut the size of the staff (though he may have lost good people in the chaotic way that he did it), and undoubtedly right to give a complacent culture a shake-up.
There is nothing wrong with applying the smack of firm government to Twitter and trying to inject a culture of hard work and incessant innovation into a prematurely decadent organization. The best advice for Musk is not to change his autocratic management style but to know when it’s time to finish with Twitter and focus on more important ventures, not least the company that turned him into the world’s richest man in the first place, Tesla.
Read more:
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