Servant leadership is a unique, engaging concept for businesses. Instead of a pure hierarchy with top-down only decision making, servant leadership demands that leaders hold themselves accountable to their employees, fostering and stewarding relationships that reward and nurture each employee (Northouse, 2018, p. 231). The culture of the company is inextricably tied to the application of servant leadership, and thus must attract and retain a specific type of follower who is receptive to this type of engagement from upper management (Northouse, 2018, p. 234).
Among many, two vastly different companies share the servant leadership model: Chick-fil-a, helmed by Dan Cathy, and Gravity Payments, helmed by Dan Price. Dan Cathy is a second-generation CEO/owner of Chick-fil-a, the business his father began in the ‘40s, now a national enterprise that has made the Cathy family among the wealthiest in the country. Dan Price is a first-generation CEO/owner of Gravity Payments, a started-small now mid-size credit card processing firm, now nationally known for the leadership of its CEO. Both have grown their businesses; both have achieved remarkable success. Where does the path diverge in terms of servant leadership?
In the case of the two Dans, the divergence in servant leadership is in the “how” and not the “what”. Cathy has been quoted as saying, “Selfless, servant leadership is about action” and that service to others is the “Golden Rule” of the company (Cathy, 2021). For Chick-fil-a, this is often a customer focused effort that being in the service industry demands of high-quality restaurants. It is nearly impossible to keep customers happy without fulfilled employees. Chick-fil-a invests heavily in their employees, from ongoing education to scholarship to in-company shadowing programs to intangibles, like a confirmed day off each week (Sunday). The investment in, and care for, the well being of individual employees has helped the company maintain its success. The ethos of the company rests largely in the founders’ religion-based value structure, as is frequently cited in company publications, and emphasizes charity which drives towards societal betterment indicative of servant leadership in the Liden, Wayne, Zhao and Henderson (2008) model (Northouse, 2018, pp.218-239).
While Gravity Payments also is a customer-focused business, the CEO takes servant leadership to a different level. Dan Price shot to national renown in 2015 when he announced that as CEO, he would be raising his company’s minimum starting salary to $70,000/year and funding it by decreasing his own pay. Price’s example embodies Greenleaf’s (1970) “underlying philosophical position that leaders should be altruistic and humanistic” (Northouse, 2018, p. 240). The pay cut and salary increases weren’t for publicity but came from a commitment and realization that change could start within his organization. Price went from young millionaire to hero in a blitz of media attention. Many questioned his choice and thought the company would go under in a year or two. Gravity Payments flourished almost immediately with hiring, retention, and employee satisfaction skyrocketing. Price was able to continue to grow his company and his employees are dedicated to the success of the business. Price has been interviewed numerous times and his leadership philosophy always comes back to servant leadership. His decision to raise his company’s minimum salary wasn’t a publicity stunt, but a carefully curated investment in the people who worked for him in order to allow their growth personally and professionally, thereby “strengthening the organizational performance … and (producing) a positive impact on society” as noted in Greenleaf via Northouse (2018). Price’s investment in people through servant leadership is a new model for success: Gravity Payments employees have reported positive impacts in their personal lives, and an increased loyalty to the company.
Northouse (2018) notes that servant leadership’s defining characteristic is the ability to put others first, a characteristic embodied, though differently, with both companies. Today, with Chick-fil-a’s success well in hand, Cathy is worth billions but still fastidiously committed to the idea of servant leadership. Price’s commitment to his employees hasn’t made him Cathy’s billions, but it has tripled his employees in six years, grown his company, and impacted the traditional notion of leadership.
References
Northouse, P. G. (2018) Leadership: Theory and practice (8th Edition). SAGE Publications, Inc. (US).
Gravity Payments. (2021, October 29). Credit Card Payment Processing Merchants Trust. https://gravitypayments.com/about/
Peterson-Withorn, C., Fernandez, M., Berg, M., Ponciano, J., Porterfield, C., Wasserman, T., et al. (2021, November 1). Dan Cathy. Forbes. https://www.forbes.com/profile/dan-cathy/?sh=7f6918da7b9d
Board of Directors: Dan Cathy. (2021, November). Chick-Fil-A. https://www.chick-fil-a.com/board-officers/board-of-directors/dan-cathy
Thanks so much for your post. I found comparing the implementation of servant leadership within the two companies a fascinating analysis that examines the different ways organizations can serve employees. I am drawn to the practical elements of the servant leadership model. The connection between culture, behavior, and outcomes transcends the relationship between leader and follower into something larger, such as community recognition, values, and enhancing the lives of employees both within the organization and outside of it. Incentives such as higher education reimbursement, or increased pay are examples of ways organizations have solidified their ongoing relationship with employees as one that cares about personal growth and livable financial health and flexibility. Historically this level of commitment and dedication to the livelihood of employees has altered significantly, and it is not surprising that as interest in Organizational Psychology and robust Human Resources departments grow, interest in servant leadership and setting a cultural foundation to support this are also growing.
Your post examines the different ways organizations can go about implementing servant leadership. Depending on company values and culture, each leader may choose different behaviors or strategies to accentuate. This will most likely also change depending on organizational goals and follower needs. As followers learn the impact of listening and strengthening relationships from leaders they will reciprocate with trust, commitment, and engagement (Northouse, 2019). Organizations can recognize potential in followers, especially in terms of finding the right individuals that are also dedicated to serving others and developing relationships. The servant leadership model, conditions, behaviors, and outcomes can also be taught in leadership training classes. This is often times done through “self-assessment exercises, educational sessions, and goal setting” (Northouse, 2019). This further demonstrates a commitment to honoring employee well-being and will enhance leader legitimacy and be recognized as authentic organizational endeavor.
References:
Northouse, P.G. (2019). Leadership: Theory and Practice. 8th Edition. Los Angeles: Sage Publications.
I have found the study of servant leadership fascinating. While I could see the application of it easily fitting into churches of charity organizations, I wondered how it could fit into a business model. I find it interesting at the differences in the two Dan’s businesses and the results that follow. While Chick-fil-a does have a servant leadership model, and it does work, theirs is voiced so often that their servant model almost seems self-serving. Does that not almost make itself not a true servant leadership model?
I have never previously heard of Gravity Payments. I am very interested in their servant leadership model and how the CEO seems to truly be living it. I look forward to delving into a bit more research in the company.