Commentary: What does it mean for a company if 95% of employees threaten to quit alongside the CEO?
When OpenAI CEO Sam Altman was initially sacked, most employees threatened to leave rather than stay without him. Such loyalty can be risky, says leadership consultant Miriam Capelli.
In the corporate world, unity is often considered a strength. However, when 95 per cent of a company's employees are willing to walk out alongside their CEO, it raises eyebrows. (Image: iStock/sesame)
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SINGAPORE: In the corporate world, unity is often considered a strength. However, when 95 per cent of a company's employees are willing to walk out alongside their CEO, it raises eyebrows.
When the board of OpenAI, the company that launched ChatGPT a year ago, announced the dismissal of co-founder and CEO Sam Altman on Nov 17, shockwaves rippled across the industry.
The response from OpenAI’s nearly 800 employees was swift. They wrote a letter addressed to the board indicating that almost 95 per cent were willing to leave the company with immediate effect unless both Altman and co-founder Greg Brockman were reinstated.
What ensued was a tumultuous week that saw OpenAI's financial backer Microsoft recruit Altman and other members of his team, followed days later by an agreement for Altman to return to OpenAI as CEO.
Altman officially returned to OpenAI as CEO on Nov 29. “Now that we’re through all of this, we didn’t lose a single employee. You stood firm for each other, this company, and our mission ... Top marks. Thank you all,” Altman said in a message to employees upon his return.
RESPONSE BY OPENAI EMPLOYEES IS UNUSUAL
The response by OpenAI employees to Altman’s initial sacking is unusual in both the extreme nature of the action as well as the level of solidarity amongst employees. It presents an interesting insight into the complex relationships that CEOs have with their boards and their employees, and the powerful, yet often unspoken influence of culture on these dynamics.
Altman has been described by venture capitalist Vinod Khosla as a "once-in-a-generation CEO" and as "one of the true missionaries in a world full of mercenaries" by Rewind AI CEO Dan Siroker.
His intellect, charisma and belief in the mission that artificial general intelligence benefits all of humanity were key drivers in the level of followership he generated at OpenAI. The depth of commitment to both the organisation and Altman as its leader is evident in the employee letter to the board following his dismissal.
This dual loyalty is not common and at its most powerful, creates work environments where productivity, engagement and retention, team cohesion and collaboration, and customer focus are all at their peak.
In the case of OpenAI, however, the reaction to the decision to dismiss Altman brought an underlying risk rapidly to the surface - the board had underestimated the depth of affection and commitment that the organisation had for their CEO. In this case, the culture, mission and purpose of OpenAI was so intrinsically connected to Altman that employees would rather leave than stay without him.
THERE IS A THING AS TOO MUCH LOYALTY
At first glance, such high levels of commitment to a single individual seem to be an enviable asset. We tend to associate loyalty with success - after all, the most famous and successful leaders often have great followership built on unique skills, talents or achievements.
Followership is of course essential for effective leadership. It aligns people around a vision and shared goals, creates an environment of collaboration and galvanises people around delivering results. Therefore, we assume that increased loyalty will lead to stronger organisational cultures and greater business results. However, this is not always the case.
When overplayed, such that loyalty becomes devotion to an individual over an organisation, there is a risk that allegiance to a particular leader can start to have a negative impact on organisational culture.
Primarily, this level of loyalty can create blind followership resulting in a reluctance to challenge the thinking of the CEO or those who are visible supporters. The lack of critical thinking, limited diversity of perspective, reduced feedback loops and resistance to change are some of the cultural impacts that can be caused by overplayed loyalty to a leader.
These factors can quickly become the enemy of progress and ultimately hinder success.
LESSONS FROM OPENAI
What happened at OpenAI is an anomaly; other similarly respected leaders would be unlikely to generate such a reaction.
Because OpenAI is a relatively young and small organisation with fewer than 800 employees, there is likely a much closer emotional bond within the employee base and a more direct and intimate connection to the organisations' leadership.
As a result, there was likely high anxiety around the impact of its founder leaving on both the strategic direction of the company and the potential personal financial downside this could represent for employees.
What can we learn from the OpenAI example? Firstly, the alignment between boards and leadership teams, in particular the CEO, is essential. Alignment does not of course mean agreement - dynamic tensions are important in this relationship to ensure accountability. However, fundamental principles around strategy, culture, operating structures and ethical foundations must be shared.
Boards, particularly those of start-ups or nascent organisations must also understand culture, be closer to the pulse of the people and understand the power of leadership loyalty.
Miriam Capelli is Managing Director of Russell Reynolds Associates.
