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Leaders who are feared may be harming their companies.

Leaders who are feared may be harming their companies

The numbers tell a story of success. International Telephone and Telegraph (IT&T) was an $800,000 foreign-telephone business when Harold Geneen became president and chief executive in 1959. When he stood down in 1977, it was the USA's eleventh-largest industrial conglomerate, with more than 375,000 employees and some $16.7 billion in revenue.

Geneen masterminded some 350 acquisitions, in areas as varied as hotels, house-building and insurance. He increased the company's profit from $29 million to $550 million in less than 20 years.

But there is another side to the Harold Geneen story. A workaholic with few interests outside his job, he expected his senior managers to share his single-minded dedication to the IT&T cause. He routinely subjected them to humiliating cross-examination during the company's monthly financial meetings. Some were so frightened of him that they became physically ill and could not sleep for nights before they needed to report to him.

In Financial World's November 2009 issue, Witzel examines whether it is better for leaders to be loved by their subordinates, or to be feared by them. The author accepts that pressure is often needed if people appear to be falling behind, but argues that punishing failure more severely than rewarding success encourages senior executives to play safe in order not to fail. He demonstrates that Geneen, along with Thomas Watson of IBM and Ford Motor Company founder Henry Ford, all harmed their businesses by using methods such as demotion, dismissal and public disgrace to enforce their will.

The New York Times obituary Harold Geneen, published in November 1997, stated: 'He stretched his people and his company to the legal limits, scarring the company's image to the point where it became a popular symbol of corporate arrogance and insensitivity.'

Wright examines whether senior executives who rob their employees of their self-esteem and confidence can redeem themselves in the October 2009 issue of Training Journal. The author, who has worked with a wide range of business leaders as director of UK learning and development consultancy OnTrack International, argues that redemption is possible, but the price in terms of humility could be too high for some to pay.

According to Wright, humility is about recognizing faults and having a remorseful desire to do things better, rather making than a forced apology in an attempt to wipe the slate clean. He advocates addressing the trust issue, re-establishing trust within relationships and taking a patient and consistent approach in applying behavioural change. 'After that, continual self-assessment and feedback will ensure that your new message is being conveyed clearly,' he claims.

Wright advocates a 'green leadership' strategy, based on: developing a climate that encourages individuals to raise their performance; giving motivational and developmental feedback; ensuring open and honest communication; reinstating integrity in relation to organizational values and behaviours; and being an exemplary role model.

Green leadership creates a desire in others to follow. 'After all, if no one is following, who are you leading?' he asks. 'It's a challenging journey requiring education, dedication and persistence, but the rewards for the leader and the organization can be huge.'