The Leader-member exchange (LMX) model is a theory that emerged in the 1980s and that served as an alternative to traditional leadership theories. The latter argues that leadership outcomes hinge predominantly on the characteristics of the leader, dispositional, and situational factors. In this framework, all subordinates were treated the same, which was reconsidered in the LMX model that showed that leaders do not treat followers equally (Jyoti & Bhau, 2015). Their dyads vary in the quality of relationships and modes of communication.
This discernment is pronounced in how Winston Churchill interacted with state leaders and the British nation. One of Churchill’s private secretaries wrote that Churchill’s zeal had an immediate effect on everyone in Whitehall. The prime minister set high standards for work during wartime; he did not condone delays, inefficiency, and waste of time (International Churchill Society, n.d.). At the same time, in an exchange with the British nation, Churchill famously said: “The British people are like the sea. You can put the bucket in anywhere, and pull it up, and always find it salt” (Misior-Mroczkowska, 2018, p. 50) To sum up, he cultivated the spirit of patriotism and pride for the nation.
When it comes to Kenneth Lay, the differences in treating subordinates is also evident, but unlike Churchill’s case, the case of Lay is a negative example. Churchill’s exchanges aimed at the common good; he saw peace and prosperity of the nation as the shared goal. In contrast, Lay’s interactions with followers only served his ego and selfish interests. When it became evident that Enron was no longer staying afloat, the CEO punished and fired those who did not want to rig accounts and forged documents. However, those who complied with Lay’s egotistical urges were commended and continued their careers.
Authentic leadership is an approach to leading people that is based on trust, honesty, and ethics. Some of the key qualities of an authentic leader include confidence, optimism, hope, and resilience. Churchill assumed the highest position in the country in the wake of World War II. His biographists say that the prime minister condemned all forms of defeatism, which is best reflected in his “We shall go on to the end” speech (Misior-Mroczkowska, 2018).
One of Churchill’s inarguable strengths was his foresight: for instance, he predicted that the Western alliance will ultimately defeat Nazi Germany. Not only was he confident, resilient, and optimistic himself, but he also channeled the winning attitude to everyone around him (International Churchill Society, n.d.). The leader is known to travel military positions and installations himself where he took time to boost morale and support commanders.
Ironically enough, throughout his career, Kenneth Lay demonstrated the aforementioned qualities, though in him, they took a twisted turn. Pava (2015) writes that from his early days at Enron, Lay had a reputation of a transformational leader. He possessed a rare power of conviction which he used to persuade the followers that they are the trailblazers of the deregulated energy market (Pava, 2015). Lay’s confidence and ungrounded optimism led to a cult-like organizational vision and structure. During the downfall of the corporation, the CEO was nonetheless resilient and kept finding loops to protect the bottom line (Pava, 2015). However, unlike Churchill, he was an inauthentic leader because his leadership qualities were not backed up by honesty and ethics.
Adaptive challenges refer to situations where there are no known solutions, which means that leaders have to take steps guided by very little information and empowered only by their own adaptive capacity. In the times of Churchill, World War II was an unprecedented military conflict on a global scale. The leader lived in an era when scientific progress took a fast pace.
A fan of science himself, Churchill was aware that new challenges required new solutions. This is why he passionately supported Professor Robert Watson-Watt’s pioneering work in the creation of the first-ever radar set (Ghosh, 2015). The invention was especially important because, with the development of airpower, Britain lost its natural defense – water. It is said that radars helped Britain win the Battle of Britain against all odds.
For Kenneth Lay, the rough patches that Enron was going through could also be reframed as an opportunity to step forward as a leader, and yet, he never did. At big corporations, senior executives’ compensation is often tied to their performance, which gives them an incentive to improve and give back to the business. It was not the case for Enron where even during the worst times, C-level executives were receiving generous remunerations, mostly due to nepotism. All in all, Lay failed to build a system of rewards that would work toward the future of the company.
As for the ethical side of the relationship, it is clear that Churchill was guided post-conventional morality. He had a genuine interest in doing what is right, and his actions were not motivated by fear of punishment or desire for compliance (D’Souza & Gurin, 2016). The former prime minister did not abuse his power, and instead, he used his leverage to secure peace for his nation and protect it against hostile foreign forces. Moreover, he set aside animosity toward the Stalinist USSR and made an effort to build a better relationship with the United States (Feis, 2015). In other words, in the pursuit of the common good, Churchill even made decisions that back then, could be seen as highly controversial.
In contrast, it is evident that Kenneth Lay was adept of pre-conventional morality. He followed the rules because he was afraid of losing personal gains. For this reason, the CEO kept issuing fake reports and bribing accountants to conceal the actual financial performance of the company (Eckhaus & Sheaffer, 2018). In its final stages, Enron could be characterized by a toxic triangle with a destructive leader (charismatic and machiavellian Kenneth Lay), a conducive environment (lack of regulations), and susceptible followers (cult-like following and cut-throat internal competition).
As per the Hill Model of team leadership, Churchill successfully carried out both internal and external (environmental) tasks (Rodberg, 2017). As mentioned earlier, he organized the workflow at Whitehall in a way that was conducive to higher efficiency. The leader provided support to the troops not only through boosting their morale but also by investing in resources, such as scientific inventions. As for the external environment, Churchill entered strategic alliances with other countries. Unlike Churchill, Lay did not unite his subordinates but rather pitched them against each other, which hurt teamwork. He did not collaborate with regulatory bodies and instead evaded inspections to pursue his agenda.
D’Souza, J., & Gurin, M. (2016). The universal significance of Maslow’s concept of self-actualization. The Humanistic Psychologist, 44(2), 210.
Eckhaus, E., & Sheaffer, Z. (2018). Managerial hubris detection: The case of Enron. Risk Management, 20(4), 304-325.
Feis, H. (2015). Churchill-Roosevelt-Stalin: The War They Waged and the Peace They Sought. Princeton University Press.
Ghosh, P. (2015). Winston Churchill and his wartime passion for science. BBC. Web.
International Churchill Society. (n.d.). Churchill: Leader and statesman. Web.
Jyoti, J., & Bhau, S. (2015). Impact of transformational leadership on job performance: Mediating role of leader–member exchange and relational identification. Sage Open, 5(4), 2158244015612518.
Misior-Mroczkowska, A. (2018). The retrospective analysis of selected speeches given by Winston Churchill from 1938 to 1945. Styles of Communication, 10(2).
Pava, M. (2015). Leading with meaning: Using covenantal leadership to build a better organization. St. Martin’s Press.
Rodberg, S. (2017). Strategically logical and ethical decision-making in leadership and management. In Encyclopedia of Strategic Leadership and Management (pp. 1709-1718). IGI Global.