donald sterling

Can having a leader with extreme moral prejudices affect that business’ ability to innovate and grow? The answer is yes, but not in the ways you may initially think.

Strong leadership is one of the cornerstones of innovation. I’m not talking about the lone genius entrepreneur who develops society changing innovations (like Nikola Tesla or James Dyson). I’m talking about the people at the head of businesses large and small, the CEOs and owners who enable their staff to innovate and take the company forward. And this week, I’ve had a bit of an internal struggle with the debate of whether a “bad” person can still be a “good” leader.

Can a CEO with discriminatory personal views still be a strong and innovative leader?

Their situation which has brought this all to light has been a leaked private telephone conversation with Donald Sterling, the owner of the Los Angeles Clippers NBA basketball team. If you don’t know much about basketball in the USA, over 80% of the players are black, including those on the Clippers. But in the phone conversation with his ex-girlfriend, Sterling apparently says:

“It bothers me a lot that you want to broadcast that you’re associating with black people”, and, “You can sleep with

[black people]. You can bring them in, you can do whatever you want”, but “the little I ask you is … not to bring them to my games.”

As a result of this, there has been outrage in the USA, from players and fans, and Donald Sterling was banned from the NBA for life. He will probably be forced to sell his ownership of the team, although he is currently fighting this, claiming he is not a racist. In my view however, it is clear that deep down he is.

The question however does arise as to whether his personal moral views towards minorities actually affected his business decisions. After all, his team was always full of black people, and he could be seen chatting and fraternising with other black owners and celebrities at the games. It appeared as though he knew that he needed to stop his personal views from interfering what was best for the business and kept them separate.

So is it possible to be a business leader with discriminatory personal views? Yes, unfortunately.

But is it possible to lead innovation in a company with discriminatory personal views? No, in the long term. Innovation requires a leader to not only enable his people to innovate, but also to set the company vision and strategy, which will influence how they should innovate. This is where discriminatory personal views begin to strongly interfere with innovation:

  1. Unconscious bias when selecting ideas: There is an ever-growing body of evidence that all people suffer from common, automatic biases when they are making decisions. This is best exemplified in the great book Thinking Fast and Slow by Daniel Kahneman. People in a decision-making position, especially important when selecting ideas to invest in, will try to think “rationally” about what is best for the business, but in fact will still be biased against someone they have a discriminatory view of who suggests an idea.
  2. Lack of diversity internally: The best innovations are often those which provide value to a large group, and this requires understanding the challenges and needs of that group. This is why diversity is such an important factor, and having someone heading the company who discriminates against a group of people means there is likely lower diversity of people in that company.
  3. Inspiring internal teams and corporate culture: The behavior of the leaders in the company directly influences the behavior of other people in the organisation. For your business to actually succeed at producing innovations again and again, you need a leader who actively and passionately supports such behavior and exemplifies it themselves. However, any undercurrent of personality known from the boss will indirectly affect the work which their staff do, and may even begin to spread to other people. There are many examples of companies who’s internal corporate culture could be described as a “Boy’s Club”.
  4. Forward-looking vision & strategy: I do strongly believe that there is a link between open-mindedness in your personal life and a business mindset of looking toward the future with a willingness to change. True innovators are the leaders who are willing to invest in change because they can see where the market is going (or where their company will take the market). They are the ones who succeed long-term. Less open-minded leaders are more likely to be forced to change because the market makes them catch up.

But let’s not forget that there are other types of discrimination in addition to racism. Discrimination based on religious views and sexuality is still a serious issue in many parts of the world, in some places punishable by law. Age discrimination is a serious issue in places full of technology startups like Silicon Valley and London. But the one which intrigues me the most is sexism.

I haven’t been able to find an example of a specific high-profile business leader who has been removed from their position due to sexual discrimination charges (Sexual harassment is different story). I can tell you from conversations with many of my female friends working in Professional Services in London and Singapore that there is still an undercurrent of discrimination against women, whether it be in consulting, law, finance or many other professional services. Yet it seems to just be more commonly accepted that this is how our society works.

Why is this? Why is there so much outrage when anyone in the public eye makes a racist remark, but no equivalent passion towards views against women in the workplace?

Maybe its because some discrimination, like racism or religions, make grand sweeping assumptions against a whole group of people based on superficial characteristics. Sexism on the other hand is usually directed more at specific individuals. Somehow this appears to make it less controversial. I hope in time the gender gap will continue to shrink.

May people like Donald Sterling go the way of the dinosaurs.

And what about the question of whether having a racist CEO is ok? Well, if I’m right in my view that more open-minded leaders result in more innovative companies, then like Darwin’s theory of Natural Selection, the more innovative companies will overtake and outlast those with more old-fashioned personal views. May people like Donald Sterling go the way of the dinosaurs.

For any London companies which do want to improve their likelihood of innovation success, check to see if there are still spaces available for my “Build your Innovation Leaders” London workshop on the 16th May.

Would you be able to work for someone you knew was a racist/sexist/other if the company was performing well? Let me know in the comments below, and don’t forget to get my weekly Innovation Insights newsletter along with my report on the Secrets of Ongoing Innovation Success using the form below.