Vishal Garg, CEO of a US-based mortgage lender called Better, is under attack for sacking as many as 900 employees in a three-minute Zoom call. He has quickly been added to the list of some of the worst CEOs, pictured as a digital-age version of Al Dunlap of the 1990s, the much-disparaged CEO known as ‘Chainsaw’ Al because of the way he fired people, slashed costs and boosted valuations before he went down in ignominy.
Garg faces a firestorm given that the mass sackings came on the eve of the holiday season, after a cash infusion in the company he founded and were followed by remarks attributed to him that the people fired were “stealing” because they were not working their hours.
The ugly remarks and uncivil method apart, the action in itself is not so unusual or unknown in the US and in many other markets. This then puts the focus on the how Garg did it rather than what he did, reflected in many comments including one in which he acknowledged having “blundered the execution”, and this one by the industrialist Anand Mahindra: “I’m curious whether you think a CEO can survive after a blunder like this? Is it fair, or not, to allow a second chance…?” The question was answered in part over the weekend when news came in that Garg was asked by the Board to go on leave.
Attacking the symptom
Yet, the bulk of the attention attacks the symptom rather than the unacknowledged disease at the heart of corporate weltanschauung — which is the underlying view among many that the CEO is meant to be “tough” and takes “hard” decisions to “deliver” on the goal, which is willy-nilly centred around driving shareholder value to the exclusion of everything else.
This kind of CEO cannot be the binder, the synthesiser or the enabler but the ring master who must wield the whip to keep his and other ever-truant players in check. This is of course not the universal view but it is still a view widespread enough to be bought and imbibed by many of the Garg ilk, causing damage to the business, the way business activity is viewed and widening an already existing trust deficit with society. It robs business of the capacity to contribute to society and limits its greater potential to serve by building people and relationships.
In his brashness, Garg lays bare this approach that so many others who do not use his language also live by. Often, the presentation has changed and is couched in a more inclusive tone but the everyday actions on the ground can still be of the crude command-and-control variety.
Further, in many cases, achievement begins and ends even now at the desk of the “heroic” CEO, who is put on a perch from where it is easy to fall prey to hubris, get drunk on power and be sold on stories of self-glorification. This is then offered a further fillip in popular culture and the plethora of uncritical evaluations and laudatory mentions of “leadership”, celebrating and cheering the CEO who has delivered whatever is understood as performance, usually in the short term.
Typically, this framing is devoid of an understanding of the context, is unmindful of the contribution of others and glorifies parts of a more complex story that takes shape in a million decisions, good, bad and ugly, before they add up to the grand total of what a CEO might then do. The messy, complex process of an organisation at work, when reduced to a simplistic, romantic and hierarchical view of how CEOs lead and followers meekly follow gives us the disaster we see in the personality of Vishal Garg.
Given the anger he has generated with his latest actions, Garg will probably face more scrutiny. There is enough in his past to cause him some serious trouble, with a former partner accusing him of fraud and a host of other allegations and investigations. Already, some resignations have hit the company and the lost goodwill will not be easy to recover. And he will in all likelihood not attract talent given the way he treats his people.
It won’t be long before the conclusion can be made that his actions damaged him and the business. The lesson is that the notion of CEOs as solo star performers needs to be resisted, the role needs to be de-glamourised and businesses must note that the ‘great man’ theory of leadership is long dead and gone. This must then open the space for understanding the work of leadership as a more distributed phenomenon, residing in a variety of voices and actions that support and are in turn supported by each other to build a chorus of which the CEO is one part.
The writer is a journalist and a faculty member at SPJIMR. Views are personal. (Through The Billion Press)