How Much Damage Will It Cause?

Every so often we get a crystal-clear lesson in what not to do as leaders. Sometimes they include examples of the latest best practices, yet they go very wrong. While we might not consider an office furniture company a potential hotbed of workplace controversy, there’s been a big mess over at MillerKnoll, which some of you may already know about. From a leadership and an HR standpoint it’s an object lesson in what happens when you follow best practices in name only.

Essentially, CEO Andi Owen managed to turn a whole series of commendable leadership strategies into a mess. She held a company-wide town hall (a very good practice) to personally explain a compensation policy (also a good practice) as well as address authentic employee questions on air (also a recommended practice). Instead of being relatable and transparent, she came off as tone-deaf and worse.

I’ve written about emotionally intelligent leaders before, and about the incredible power of having an inspiring, accessible people leader who can also lead from a business standpoint. As we emerge from the pandemic into the glare of a very tricky economy and labor market, many leaders are looking for signs of how to best spark employee engagement and motivation — they’re not the same thing, as well as loyalty and retention (also not the same thing). Which leads me back to Owen, who managed to disengage, demotivate, sever a wellspring of loyalty, and likely lose some of her best workforce.

When A Leader’s Town Hall Goes South

In the town hall, Owen offered the usual work culture homilies about being kind and leading by example — which, to be fair, are often part of a leader’s intent in a town hall: underscore the core values of the company as part of the address, and there’s nothing wrong with that if you take it out of context. But context is everything here. Owen got to the topic of bonuses — which no one was going to get. The company had already decided to withhold them, except for her own bonus of an alleged $6.4 million, and the workforce already knew.

As with many a town hall, the call had gone out for questions for the CEO to answer. That may have been where the trouble started. There were honest questions from employees about how they were supposed to stay motivated without receiving bonuses — how does anyone keep up above-par output despite feeling disappointed and possibly betrayed? That rankled the host enough to come out swinging.

Some armchair HR analysis here: to me what came out sounds like it was an unfiltered blend of two enormous issues ringing in her head at the same time. On the one hand, she had a financial target that the company had to hit or else. On the other, she needed to get a whole lot of employees motivated without anything material to motivate them with — and if she couldn’t pull the company out of its hole, they have a company for them to work for.

The Power Of Words

Google “what not to say to your employees,” and Owen’s words may start coming up. What she said has been repeated endlessly across the internet with the usual, merciless digital speed. “Spend your time and your effort thinking about the $26 million we need and not thinking about what you’re going to do if you don’t get a bonus. Alright? Can I get some commitment for that?”

Another common bit of leadership rhetoric to note is the request for a commitment, but it was delivered through a filter of frustration, and that never works. Then Owen went on to talk about how people needed to leave “pity city,” and then wished everyone a great day. Pity City is a strange term, implying she refused to have pity for employees, employees shouldn’t have pity for themselves, and possibly, there was some tough love in there about not pitying the company’s spot itself. No surprise that no one really took the great day part seriously, or that the backlash came fast and went viral.

Aiming For A Target With No Incentive

Should we pity Owen? Pressure is part of the job when you’re a leader. That $26 million target is the kind of neon sign flashing in your brain that many a CEO has experienced: it’s likely the sum of sinking or swimming, and that primal drive to survive (a good quality in a CEO) may have obliterated her ability to read the room. As of 2022, the company employs a workforce of 11,300: this isn’t a Mom and Pop. A not insignificant piece of context is that Owen received a fixed salary of $1.1 million as well as an additional $3.9 million in incentives, and then there’s the question of that $6.4 million bonus (unverified at press time). Like any good CEO, she’s heavily invested in her role, and the company is heavily invested in her success. Or was.

As an all-hands plea for productivity, announcing a target is a common approach, be it a production target, a sales target, a fundraising target, or any other kind of milestone that has to be hit. But incentives, rewards and recognition are fundamental drivers of productivity. They’re part of the social contract of employment — and whatever kind of workforce you have, they remain. Another fundamental driver is a leader’s fervent belief in everyone’s ability to succeed, and palpable faith in her workforce, her troops. In this case, it sounds to me like Owen was already assuming defeat before she got there, and couldn’t hide her own disappointment at her employees’ disappointment.

Undoubtedly there’s more to the story. There will be some damage control and a mea culpa, and possibly fewer stars on sites like Glassdoor, though a few employee reviews already pegged the executive culture as awful and the workplace culture was “terrible.” An apology has already landed, but whether it works or not isn’t clear yet. What’s unfortunate is that for all the best practices in the world, there’s one reality we can’t escape: leaders are human. We have good days and bad days. We’ll see what comes next.