Nearly two thirds of all large North American companies changed their CEO in the last five years, according to a new study. Of the CEOs who left, 90 per cent of them left voluntarily. Steve Smith was not one of those.
But it wasn’t because of anything Smith did. It was just his personality.
“His style didn’t fit,” says Siobhan Vinish, director of public relations and communications for WestJet Airlines, the company that let Smith go.
The former CEO has been described as “brilliant,” “successful” and “a very nice gentleman.” More importantly, while he was CEO from March 1999 until he parted ways with the company last month, WestJet’s earnings jumped 154 per cent (in the most recent quarter) and share prices rose 120 per cent.
So it wasn’t his performance that created the rift. It was his style.
“WestJet is a family,” says Vinish. “Things here are very casual. Nobody wears ties. Nobody calls each other mister. It’s a very casual, family, relaxed environment.”
Smith, on the other hand, has a leadership style that could be described as “militaristic.”
Vinish says Smith has “policies and procedures,” whereas WestJet has “promises.”
Those promises are partly suggested by the firm’s “People Department” — its moniker for human resources.
WestJet empowers its staff at every level to think for themselves and make decisions that make sense for their clients.
If a flight attendant accidentally spills a drink on someone, other airlines would offer the person a dry-cleaning certificate. The WestJet attendant is also likely to buy the customer a replacement drink.
If a person misses his flight because of traffic, most airlines’ policy manuals say the customer is out of luck. WestJet’s customer service representatives are likely to simply put the client on the next available flight.
“As we teach people the definition of empowerment, what comes with that are boundaries, But the distance to move within those boundaries is great,” says Vinish.
The distance afforded to employees who work under “policies and procedures,” on the other hand, is usually small.
According to Canadian CEOs Canadian HR Reporter spoke with, their personal style is most likely to define the style of the organization. If the CEO is militaristic, the organization will eventually become that way too, likely within just a few years.
When WestJet started showing signs of a split personality, a casual and relaxed “family” suddenly having to follow orders from a new and stricter step-father, things came to a head and Smith was asked to leave.
“What was starting to happen was, (staff members) were seeing the difference in culture and they would then question what way is the right way,” says Vinish. “The potential was there to cause confusion for our people over time. It didn’t get to that point, but it could have.”
Culture is not just important to WestJet - it is everything. That is why the firm’s founder, Clive Beddoe, realized “we must do whatever we need to do to protect that culture,” says Vinish.
In mid-September, Smith and WestJet dissolved their partnership using a clause in his employment contract. Smith has called the decision “mutual” and says he continues to have the highest respect for his former employer and its staff members. Vinish says Smith’s “way of leading and managing would work very well in a different organization” and has no doubt that in the future “he (will) be very successful, as he was in the past.”
The firm will not replace Smith with another outsider. Instead, Beddoe has assumed the roles of chair, president, CEO and, by all accounts, father figure.
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