Before becoming the CEO of Biscom, a multimillion-dollar enterprise-secure file transfer company, Bill Ho was a volunteer firefighter. Before becoming the CEO of SAP, a software solutions company with over 75,000 employees, a 16-year-old Bill McDermott bought a deli to support his family. When Gay Gaddis isn’t serving as chair of C200, or CEO of T3, the largest female-owned independent advertising agency in the U.S., she's raising cattle on her ranch with her husband.
In spite of these and other stories of humble beginnings, unique side jobs, and value-driven decisions, new research suggests that tales from the top of the corporate ladder have far less impact on employees than the experiences shared by their peers.
According to a recent small study published in the Academy of Management Journal by Sean Martin of Boston College's Carroll School of Management, stories of CEOs and leaders’ commitment, perseverance, and strength have no impact on their employees’ level of commitment to the organization’s values.
"Stories about high-level organizational members who might be seen as organizational representatives are perhaps not as effective at influencing some important and desired newcomer behaviors as was once supposed," Martin wrote in the study, adding, "stories that one hears about peers, coworkers, or others at one's own organizational level [prove] to be influential means through which organizational values are embedded in newcomers' behaviors."
This study drew from the experiences of 290 recent graduates who were 10 weeks into a five-and-a-half-month training period for entry-level programmers. They were broken into four groups and each was told different stories during the training process. One group was exposed to stories of high-ranking executives upholding companies' values, and another was told stories featuring high-ranking officers who had transgressed company values. The third group was exposed to tales of low-ranking employees upholding company values, and the final group heard tales of lower-ranking employees who violated company values.
"Stories about high-level members were more likely to convey the [firm’s] formally espoused values," wrote Martin, "but the values-supporting and values-opposed stories about lower-level members appear to be more impactful on behaviors."
This study is consistent with findings from the Edelman Trust Barometer, a survey of 33,000 people that concluded only one in three employees actually trust their employers. That study found that trust in leadership decreases the lower you go down each rung of the corporate ladder, with 65% of executives, 51% of managers, and 48% of rank-and-file staff expressing trust for their organization. That study also found that employees trust their peers more than CEOs with regards to company information.
Perhaps the most surprising result in Martin’s study is that when participants were asked to rate their peers on a five-point scale—including whether they took property from work without permission, neglected to follow instructions, or intentionally worked more slowly than he or she could have worked—participants that were exposed to stories of leaders with strong values received the lower scores. Martin, however, believes that these employees weren’t necessarily demonstrating the worst behavior, but were instead being evaluated based on higher standards.
"When newcomers hear stories about high-level characters acting in values-upholding ways, it may lead them to compare their peers to a very high behavioral standard that is difficult to achieve and lead them to evaluate peers’ behavior stringently," he says.
In his conclusion, Martin explains that organizations would be better served if they focused on sharing the stories of rank-and-file employees to company newcomers, as opposed to the inspiring tales of the company’s leadership.
This is already being put into practice at many companies, especially those that don't have a big brand name to attract candidates. As the founder of Palo Alto, California-based Due, John Rampton wrote for Fast Company:
Obviously you’re going to be enthusiastic about your startup. Because that's expected, it'll be harder for you personally to instill that same enthusiasm in candidates who've never heard of your company before. They may, however, want to hear from the people who already work there. Whether it’s an adviser, coder, or investor, having someone do some recruiting legwork for you can be an effective tactic. The reason? They’re already sold. And they can explain to others what it exactly was that made them join your startup.
"Organizations invest significant resources to socialize newcomers and embed in them the desired aspects of the culture," Martin wrote in the study. "Cultural elements such as narratives might be used more strategically to increase the likelihood that organizational values are embedded in newcomers at the behavioral level."