Leaders must live up to obligations

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Of the millions of books, articles, lectures and Web sites that aim to define leadership and how one best demonstrates such, there are a few simple themes that emerge time and time again. One of these basic tenets is summed up in three easy words: Lead by example.

One would think this simple rule of thumb that has proven successful countless times would be well understood by the leaders of our largest businesses, organizations and governments — and indeed many do understand and practice this idea to great success — but I have been struck lately by examples where Michigan leaders failed in this measure.

In Detroit, Mayor Dave Bing is trying to tame the finances of a city on the brink of state receivership, as the city’s tax base is unable to support services for a city that was built for more than double its current population. Thus, when Bing proposes a 10 percent pay cut and a number of layoffs, though it certainly means some difficult changes to city services, it is largely understandable.

What are not as easily understood are the raises that Bing gave to many of his appointees upon hire. His press secretary defended these raises by saying Bing is demanding more of his appointees and that “asking people to help save the Titanic requires more than asking them to simply help steer a vessel.” While the work expected of them might be great, shouldn’t they be rewarded with raises after proving that they can successfully steer some part of city government to better conditions?

Perhaps if the city was not cutting its work force and the wages of those who remain, the situation would not be more than a blip on the radar. But given the dire economic situation of the city, how can these upfront raises possibly be defended to the laid-off worker who still resides in the city and pays city taxes? While it is noble that Bing himself is forgoing a salary, that is not an example many — if any — rank-and-file city worker can follow. It seems to me that the better example to set, and one that has the potential for better public relations, would be for Bing to demand that his appointees — like everyone else — share in the sacrifice with the promise of rewards later when meaningful progress has been made.

At Oakland University, teachers postponed the start of the semester as they went on strike last week over a contract dispute. At the center of the controversy is that President Gary Russi received a $100,000 raise last year as the school asked faculty to freeze wages for several years and accept reduced medical benefits. The school has said the president’s raise was to keep in line with others in his profession, but again, the question must be asked: How do you explain your $100,000 raise to the teacher who has effectively taken a pay cut and has reduced medical insurance benefits?

Beyond this specific example, how do you ask an employee to keep working toward your mission — whether it be an educational one, a professional one or a business one — while cutting their incentives and raising your own? How do you inspire people to follow your lead and trust your leadership when they feel shortchanged and cheated?

In a previous column about so-called leaders, I wrote about American Axle CEO Dick Dauch, who demanded his employees take a $10/hour pay cut while receiving a salary of almost $16 million. While these cuts might have been necessary to remain competitive in the crumbling auto supplier industry, they were hard to justify when considered next to his obscene salary. Furthermore, Dauch spoke of these cuts in bitter, angry language, seeming to have no consideration for the lives of his employees.

Perhaps nothing has brought the issue of overcompensated leaders who failed to lead by example to light more than the collapse of the financial sector. While such inequality always has been a part of the capitalist system, it has never been such a wide gap between the lowest and highest paid. Public frustration finally centered on this issue when failed bank executives received “golden parachutes” while the rest of Americans faced rising unemployment and a spiraling economy. The result for many businesses is a new “executive pay czar” to oversee and approve such pay for companies receiving government support.

While these examples differ in many important ways, they all represent a failure of leadership to understand that basic rule. And in each case, it is not hard to imagine better outcomes had these individuals chosen to lead by example. By sharing in sacrifice and making it clear that our collective fate depends on such partnership, each could have led and inspired rather than outraged people and stalled progress.

Ryan Dinkgrave is a State News guest columnist and public relations graduate student. Reach him at dinkgrave@gmail.com.

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