Fear-Based CEOs Versus Trust-Based Leaders: Who Actually Wins?

Leadership that leans on intimidation might impress Wall Street, but data shows that it’s destroying companies from within. In this video, MIT SMR columnist Brian Elliott examines why command-and-control tactics fail at AI adoption, RTO mandates, and talent retention.

According to a recent Slack survey, nearly half of employees are unwilling to tell their managers that they’re using generative AI because they fear being seen as incompetent or lazy. This is a typical outcome in a traditional command-and-control structure, where fear becomes the primary motivator. When leadership takes a trust-based approach, on the other hand, employees feel more psychologically safe. Managers who are willing to experiment with new tools and share their experiences openly generate trust, which frees their employees to experiment more openly with technologies like AI.

In this video, MIT Sloan Management Review columnist Brian Elliott details the rise of tough-talking CEOs on issues like AI adoption and return-to-office mandates.

He says that while Wall Street might like that leadership approach, such top-down tactics produce short-term gains at the expense of long-term cultural growth. In fact, research shows that organizations whose leaders trust their employees are 11 times more likely to be high performers relative to their industry peers. Elliott points to Microsoft’s “lost decade” under Steve Ballmer’s demanding leadership style as a cautionary tale: After Satya Nadella, a more collaborative leader, took the helm, Microsoft regained its footing, he contends.

Elliott also points to other areas where fear-based leadership doesn’t generate the desired outcomes:

• Generative AI adoption stagnates when employees hide their AI use in a culture of fear.
• “Rank and yank” performance management systems create unhealthy internal competition that can lead employees to sabotage colleagues.
• Despite a 13% rise in RTO mandates, organizations are seeing only 0% to 3% compliance.

“Human-centered leadership is not just about giving people trust. It’s actually about being demanding and being clear about goals, about outcomes,” Elliott says. “Tough talk isn’t going to get you there.”

For more insights on this topic, read Elliott’s MIT SMR column “Five Leadership Lessons for ‘Tough’ CEOs,” coauthored with workforce adviser Sophie Wade.