Message to CEOs: Employee opinion matters.

New research from the 91探花 finds that employee approval greatly influences whether a board of directors will retain or dismiss a chief executive officer. For a CEO, that means job security could hinge on keeping workers positively engaged and appreciative of leadership.

Financial performance, analyst recommendations and the level of CEO power within the organization are among the most well-known predictive factors. But the study, recently published in , shows that employee approval also has an impact on this consequential decision made by boards of directors. Employees can offer an inside perspective on CEO performance, which is the premise behind the research. This is important because they are primarily responsible for implementing the organization鈥檚 strategies.

鈥淭he bottom line is, employees matter 鈥� both to CEO success and organizations,鈥� said , co-author and professor of management in the 91探花Foster School of Business. 鈥淭hat鈥檚 an group of stakeholders that鈥檚 been underrepresented in strategic leadership research. Employee approval does have a significant impact on the most consequential decision a board can make 鈥� the involuntary turnover and dismissal of the CEO. Based on our findings, you can predict, with some degree of accuracy, the risk of a CEO being dismissed. 鈥�

The authors gathered data from Glassdoor.com, an online platform where current and former employees can share information anonymously about their leaders and organizations. Their analysis revealed that employee approval or disapproval is predictive of a board鈥檚 dismissal decision. This is particularly true when the CEO has less power than the board, because powerful CEOs have more influence over decisions and become further entrenched in their position. Employee opinion also carries more weight when a firm is performing well financially and has positive recommendations from security analysts.

鈥淚f a firm is performing poorly, then you know there is a problem,鈥� Avolio said. 鈥淏ut if they鈥檙e doing well, and your employees don鈥檛 value your leadership, something is going on that may not seem as obvious. There鈥檚 also been a lot of attention in the news recently about the importance of employee sentiment and their well-being. Employee morale has also been rising to the top in terms of the factors that can impact an organization鈥檚 success. Employee sentiment, just like consumers, is going to matter more and more. Leadership is going to have to pay attention.鈥�

Researchers used longitudinal data from 338 firms and 1,252 firm-year observations between 2010 and 2018.聽To make sure reviews reflected an organization鈥檚 current situation, the researchers analyzed data only from current employees. And they used only the years 鈥� where Glassdoor.com had data 鈥� that had input from at least 60 employees. The authors also dropped all years in which CEO succession occurred.

Separately, via one-on-one interviews, researchers found that board members are paying attention to employees鈥� opinions.

鈥淚 interviewed about 20 members of major boards,鈥� Avolio said. 鈥淎lmost all were certainly aware of social media. Many were aware of Glassdoor, and a proportion of them said that they regularly get briefings on that kind of data.鈥�

When approval of a CEO is high, Avolio said it shows that employees are confident in their leadership and are supportive of their strategies. If a board removes that CEO, it could upset employees and potentially hurt future organizational success. Conversely, low approval ratings signal employees aren鈥檛 confident in a CEO and are less likely to implement their strategies. In this case, replacing a CEO could help a firm regain employee confidence.

鈥淓mployee satisfaction covers so many things, including the quality of management,鈥� Avolio said. 鈥溾�淭he most common source of stress for employees, which is bad for you physically and mentally, is a bad supervisor. All of us have worked for people who kind of suck the energy out of units and organizations. I think there鈥檚 a real thing growing around the importance of health and well-being of employees tied to effective leadership and organizational performance.鈥�

Other authors were of Rutgers University, of Hong Kong Polytechnic University and and of Arizona State University. Zhu was supported by a research grant from The Hong Kong Polytechnic University.

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For more information, contact Avolio at bavolio@uw.edu.

Athletes at the Olympic Games in Tokyo are not only displaying their athleticism, talent and grit. They鈥檙e also modeling new ways of being a leader 鈥� on and off the competitive stage.

With the wide range of sports at the Olympics, we are witness to the variety of ways to compete and collaborate. Sometimes an Olympian goes for the win, and sometimes they decide to hold back, working with teammates, or even rivals, and exhibiting heroic displays of good will and kindness 鈥� all under the challenges and constraints of the COVID-19 pandemic. We鈥檝e watched rival swimmers hug in the pool at the end of a race, cyclists take turns drafting and runners pull each other up off the track.

The Olympic Games brings to mind another arena that is both collaborative and competitive: the workplace.

鈥淚n both the Olympics and the workplace, how you perform matters in an individual context and based on group or team outcomes,鈥� says , executive director of the 91探花Center for Leadership & Strategic Thinking and a professor of management in the 91探花Foster School of Business. He researches what constitutes genuine leadership development and other related areas in organizational behavior.

91探花News asked him what we can learn about work by watching the Olympics.

What do the Olympics have in common with the workplace?

In both the Olympics and in broader organizational contexts, it takes a lot of discipline, focus, self-sacrifice, support, feedback, mentoring, failure, resiliency, persistence and intrinsic motivation to be successful. It takes those same qualities to build a team where the people on that team have a common mission and objectives and are aligned, focused, supportive, challenging, inspiring, empathetic, inclusive, clear in their expectations, and willing to step up or step down.

In the Olympics, a highly diverse group of people can come together, compete with each other, and come away respecting their competitors and admiring each other鈥檚 accomplishments. . A sports team where members have this team-based mental model can take years to build, and likely the same is true in most organizations dealing with greater complexities and dynamic changes.

Your research is on positive forms of leadership. What example of this do you see on the Olympic stage?

There are many positive forms of leadership including: ethical, servant, considerate, inspiring, humble, authentic, transformative, instrumental, innovative, supportive, directive and empowering. Every positive form of leadership is reflected in aspects of the athletes鈥� behavior and how they work together, in the coaching of those athletes, in the support they receive from friends and family, and in the organizations and sponsoring organizations that support this high level of competition.

I would also say that every negative form of the above is likely present. Some athletes will take performance-enhancing drugs that are forbidden, coaches or family members will push athletes physically or mentally too far, an organization that is charged with running these Olympics will allow abuse to go on for years before taking a stand to eliminate it, sponsors will take advantage of these young athletes鈥� careers and peers will promote themselves over others.

I am not suggesting the good and bad are equal. Rather, when you bring so many stakeholders together, you鈥檇 be naive to think there would not be things done wrong.

During the Olympics, we鈥檝e watched athletes alternate between sometimes collaborating and supporting each other 鈥� and other times competing to 鈥済o for the gold.鈥� How do people within organizations balance these two options?

A lot of times, people balance ways of engaging with each other really well and many times very poorly. A company has to build an overall culture that promotes cooperation and competition. Businesses live and die based on competition, but they also can cooperate with each other to be successful. This occurs more often now in terms of drug research, where you collaborate across large groups and then at a certain point you open it up to competition, perhaps later on in the drug trials.

In the Olympics, athletes have to compete with each other, but you also see them helping each other prior to or following events by providing feedback, support, encouragement and direction. One can still compete at the very top of their game, and if everyone is being collaborative, it鈥檚 still likely that the very best competitor in the moment will succeed.

Many workers are starting to return to the office after working remotely. What lessons about teamwork can they take from the Olympics?聽

Be mindful of the range of contingencies and challenges you are going to face and prepare as much as you can to address them. Athletes spend years preparing their mindsets and bodies to compete in complex routines against the best competitors. That is no different from going back to a complex world of work, and knowing that people鈥檚 expectations will be very different about where and how they are supposed to work together.

Each organization can view this as being its Olympic challenge, where we have to examine the many pathways that can lead to success, customized to meet the individual needs of our workforce. Be ready to test and experiment new ways, and to adapt and change if some don鈥檛 work. The pandemic has been a massive experiment for our world. Coming back to work successfully will also require judicious experimentation.

Ask yourself, as any great athlete would: What kind of feedback do I need, or we need, to optimize our full potential and success? How can we treat all members of our team equitably based on their needs to optimize their performance? How can we provide just-in-time support to foster team development? Ask yourself, do I know what people fear? Do I know what people hope for? How can my team share in the responsibilities of trying out different ways of working differently? What are the 鈥渘ew鈥� norms, rules or boundaries for how we should work? What is a win? How do we score points differently in work and at work now versus how we scored points before the pandemic? These questions are all applicable to work and to what goes on at the Olympics.