Abstract
The paper is aimed at analyzing the leadership styles used by Blake Mycoskie and Martin Shkreli. The results of comparative analysis based on the available literature indicate that these entrepreneurs’ approaches to leadership are different in terms of purpose, ethical values, and communication with current and ex-followers. The identified similarities include the emphasis put on the organizational impact produced by a leader.
In spite of significant differences related to the entrepreneurs’ current situation, the report provides general improvement recommendations based on the ideas of flexibility in leadership and the 4V model of ethical leadership. According to them, Mycoskie’s areas of improvement include vision (client-centeredness, the effectiveness of charity activities, the quality of goods). Shkreli can grow as a leader by improving the ethical aspect of his activities and working with values.
Introduction
Historical Background of the Two Leaders
Blake Mycoskie, the first leader, included in the assignment, is a famous entrepreneur in his early forties and the author of popular books on leadership. Born in Texas, this person is best known for his approach to business in the apparel industry (Toms Shoes) that mixes for-profit activities and philanthropy. Martin Shkreli, the second person, included in the analysis, is a 35-year-old man of Albanian origin and a former monopolist in the pharma industry of the United States. In different periods of his career, he was a CEO of two pharmaceutical corporations and damaged their reputation.
Executive Summary
Definition of Leadership
Leadership and its notion are among the most widely discussed concepts in management. Having summarized a range of definitions, it can be said that leadership involves a range of processes used by people in order to coordinate the efforts of other group members. In this report, leadership is understood as a set of principles that guide managers’ decision-making in relation to strategic goals, employee incentives, competition, and other aspects of the business.
Leadership Styles and Positions
Judging from Blake Mycoskie’s initiatives and strategy, he is a transformational leader who manages to balance the use of directive and free-rein styles. Mycoskie’s participative approach makes him a successful co-leader – initially, he was the only founder of TOMS Shoes, but today, he shares the reigns of power with some of his colleagues (Bronk and McLean 27). As for the style represented by Martin Shkreli, this former leader’s unethical actions and efforts to conceal the truth about financial operations characterize him as an authoritative and unethical leader, utilizing a directive approach to management. Nowadays, he does not hold any leadership positions due to being imprisoned (Plummer et al. 19). However, during the peak of his business success, he was a key decision-maker in Turing Pharmaceuticals.
Main Issues/Concerns/Problems to be Addressed
Challenges to Leadership Styles
The two entrepreneurs’ challenges to leadership styles are extremely different due to a range of dissimilarities between their approaches to business ethics and the distribution of decision-making power. The key challenges associated with Shkreli’s directive approach include the neglect of ethical norms and strategic mistakes related to the public perception of pricing decisions. Using a participative approach, Mycoskie faces potential challenges based on some employees’ overutilization of power.
Failures and Success
The leadership failures of Shkreli are numerous, and the majority of them have to deal with ethical values. The key decisions that can be listed in this category are price hikes that he initiated, bullying former employees, and involving colleagues in illegal activities (Plummer et al. 19). His success is also a controversial topic, but a rapid profit enhancement of Turing Pharmaceuticals and the company’s competitive ability can be attributed to it.
Mycoskie’s failures relate to the average quality of the products, and, in some critics’ opinions, to marketing efforts that make people feel guilty for consuming “regular” goods (Talpalaru 172). The success of Mycoskie is manifested in his team’s positive experiences about working with him, the effectiveness of “one for one” model, and the ability to combine the seemingly conflicting things such as profits and charity activities.
Discussion of Main Issues
Similarities
Both the participative leadership of Mycoskie and Shkreli’s authoritarian approach to work are characterized by leaders’ high organizational involvement. It means that both entrepreneurs discussed in the paper prefer to take an active position in managing the resources of their organizations and try to control the vector of development. However, as is clear from the practical results of their actions, the ways that they channel their activity and see their companies’ goals are extremely different. Mycoskie uses his decision-making ability to strike the right balance between financial and charity goals, whereas Shkreli’s intentions can be reduced to the extension of power through increasing profits (Talpalaru 182; Plummer et al. 20). Being active, the two entrepreneurs elicit their potential in dissimilar ways and, therefore, face completely different practical results.
Differences
Blake Mycoskie’s approach to leadership is based on the use of inspiration and motivation as the key drivers of success. Judging from the views of leading others shared by this entrepreneur, Mycoskie gives preference to transformational leadership in his work (Bronk and McLean 27). Unlike other approaches to leadership, becoming a transformational leader involves having an inspirational idea and implementing it into practice to create a focused vision.
The central element of the leadership strategy utilized by Mycoskie is the idea of encouraging customers and employees to act as charity providers. This perspective helps the entrepreneur to share a “sense of fulfillment” with others (Bronk and McLean 27). Importantly, both passion and a sense of purpose peculiar to transformational leadership seem to inform Mycoskie’s decision-making when it comes to leadership. The significance of passion is manifested in his decision to transform one idea that appeals to his emotions into a well-organized development strategy used by an entire company.
Unlike Mycoskie, Shkreli does not use appeals to high purposes in his leadership strategy. Instead, he is likely to present a bright example of an autocratic leader who does not rely on the principles of integrity and loyalty to end-customers in decision-making. First, it would not be possible to do his Ponzi-like management scheme work without creating a strict organizational hierarchy and using effective leverages over his employees. More than that, his authoritarian ambitions manifest themselves in numerous attempts to become a monopolist in drug production and distribution.
Instead of creating value through investing in drug research, Shkreli focused on buying exclusive rights to certain medicaments for the extension of power. Also, the decision-making abilities of his team do not seem obvious because many sources claim that all sharp rises in prices were his initiatives (Plummer et al. 19; Marshall et al. 1434). In this connection, it is important that the cases of his employees’ protests against new pricing policies are not widely known. Its real causes present a significant question, but it is possible to suggest that Shkreli’s organizational hierarchy was structured in such a way as to limit any contrariness and opportunities to express discontent.
One more feature of Shkreli’s leadership style that makes it extremely different from the approaches used by Mycoskie relates to the communication with the current and ex-employees. Due to his financial position, Shkreli was able to maintain an atmosphere of fear, and some of his employees were punished for their mistakes and the willingness to pursue their individual interests. One of the brightest examples of Shkreli’s manipulative strategies entered the public domain five years ago when the so-called “pharma bad boy” was accused of harassing his portfolio manager’s family (Silverman par. 1). In the messages and letters, his manager was accused of “stealing 1.6$ million”; worse still, they contained numerous threats (Silverman par. 6). Probably, Shkreli violated the norms of communication in further cases, but they did not come to the attention of the police.
Outcomes of Leadership Roles
Fulfilling the role of a leader has never been an easy task since it involves being responsible for the outcomes of other people’s work. In general, judging from the reputation of the companies that are or were led by the discussed entrepreneurs, Shkreli’s style is not effective since a good leader manages to prevent any reputational damages and become a positive role model for the employees. Mycoskie, despite his critics’ claims, can be regarded as an effective leader due to his corporation’s positive image and achievements.
Defining Leadership Theories
There are theories that are helpful in the analysis of Mycoskie’s and Shkreli’s success and issues. According to the theory of situational leadership, effective leaders should change approaches in response to some external changes, and this point can be used to provide necessary recommendations (Thompson and Glaso 527). More than that, the analysis utilizes the concepts of authoritative and transformational leadership mentioned in a variety of classifications (Barth-Farkas and Vera 217).
Solutions
If the specific leadership failures of both people are taken into account, it is clear that the proposed solutions should focus on ethics and the effectiveness of marketing strategies. In the case of Mycoskie, it is necessary to propose solutions based on new policies and messages to handle many authors’ constructive criticism (Taub par. 1). As for Shkreli, in his current situation with reputation, he is unlikely to become a successful leader again. The solutions that can be effective in this case are difficult to implement since they should be based on a complete change of the line of behavior.
Recommendations and Discussion of Recommendations
The recommendations given to Shkreli include the following: realize the long-term effects (financial and reputational) of price hikes, pay enough attention to the company’s social responsibilities, and let other people participate in decision-making. The recommendations are aimed at making Shkreli’s leadership more ethical. As for Mycoskie, he can be recommended to consider customer feedback to collaborate with designers and improve the quality of accessories. Also, to become a better leader, it is possible for him to invest in research to study the needs of financially vulnerable people more thoroughly. Although Mycoskie does not make obvious mistakes like Shkreli, these recommendations could be helpful in producing more tangible practical results.
Trials of Recommendations and Results
To test the effectiveness of the recommendations, it is possible to use the 4V model of ethical leadership. According to the model, “voice, vision, and values” are the components that form virtue (Kar 112). The recommendations provided above support the mentioned model and are aimed at filling the entrepreneurs’ leadership gaps. Thus, Shkreli is supposed to make improvements related to values, whereas the recommendations to Mycoskie are focused on the vision.
Review and Measurements of Results
Using the 4V model for guidance, both leaders are expected to get positive results, but the problem relates to the extent to which their failures damage their reputation. The results of the analysis demonstrate that these leaders’ mistakes are extremely different in terms of their reputational influence and legal issues. To measure the recommendations’ practical effectiveness, it would be pivotal to focus on the presence of reputational change after their implementation, not on companies’ sales.
Summary and Conclusions
General Summary
In the end, the approaches to leadership utilized by Shkreli and Mycoskie have a range of differences related to ethical values, a sense of purpose, and social missions. Despite these dissimilarities, both leaders want to have a high organizational impact, which demonstrates that they do not appreciate the ideas of free-rein leadership. The recommendations that can be given include the need to focus on ethical integrity in the case of Shkreli and make the strategy more client-centered in the case of Mycoskie.
What Could Have Been Done Differently and the Statement on Leadership
The potential limitations of the given report include the choice of the leaders who are difficult to compare due to the peculiarities of industries, dissimilar improvement opportunities due to imprisonment, and other factors. Also, to provide more accurate results, it would be good to study the organizational climate in the companies that are underresearched in the available literature. In terms of the key learnings, the analysis indicates that leadership styles have a direct impact on companies’ development strategies, the volume of sales, and social image.