Corporation as CEO: Character Based Leadership
Authors: Judy Johnson, Ella McQuinn
Precision Biologic CEO Michael Scott is a principled leader who has carefully crafted a corporate culture where employees are treated like customers.
Sometimes following his principles has defied common business sense, but the company’s performance speaks for itself.For most leaders the following situation is all-too familiar: a senior and valued employee comes into your office to announce that he is leaving, having found a better-paying position elsewhere.
Why do our valued employees choose to leave?
For many leaders, this is just an unlucky day or even an expected part of doing business. For Precision Biologic CEO Michael Scott, though, this is the time to ask some tough questions: “Why didn’t I see this coming?” “Why wasn’t I closer to this person to understand that something was up?” and “What does this say about the culture I am creating if an employee does not feel comfortable raising a salary concern with me?” The employee was not leaving because he disliked his job. Quite the contrary. He loved the company and wanted to stay, but he needed more money to support his family and felt the other job would give him a fairer wage for his skills. This particular employee started with the company at a more junior level than his background would have suggested. His rise within the company was very quick, but his salary had not kept pace. The company had failed to notice; it was a serious oversight.
Naturally Michael, like any good leader, tried to turn the situation around. The employee was offered a more suitable salary, based on current research, and competitive with the other company’s offer. But it was too late; he had already made a commitment to his new employer and was set on leaving. Which brought Michael to another tough question: “Because of our oversight, we underpaid this employee for some time. What is the right thing to do now?” His conclusion was unusual. Realizing that the discrepancy between the fair salary and the actual salary was the company’s mistake, Michael decided to compensate the departing employee retroactively. There was no legal obligation to do so. And it was already clear that money would not buy the person’s loyalty back. It was simply the right thing to do.
What are the liabilities of being so ceo‑centric? in order to further embed the culture, the senior leadership team has begun to discuss a key question: “what is it that only Michael does that needs to be cultivated across the leadership?”
Brisk growth through engagement
Founded in 1983, Precision Biologic Inc. (PBI) specializes in developing, manufacturing and marketing diagnostic products used to assess blood coagulation disorders. Over the past fifteen years, growth has been dramatic: gross sales have increased at an average annual rate of 20%, and the number of employees has more than doubled from 24 in 2003 to 54 in 2010…
We treat our employees in a similar way as we treat our customers – this philosophy enables employees, in turn, to treat our customers in a respectful and creative way, which gives us product and service-innovation advantages.