In a paean of praise to Bill Greehey, former CEO of Valero Energy and current CEO of NuStar, Dan Hilbert (who worked for Greehey at Valero) describes Greehey’s leadership model that drove Valero to the third-fastest growth rate in American history and increase the value of NuStar from $500 million to $3 billion in three years. The model is simple:

1. Take care of your employees.
2. Demand that employees take care of the community.
3. The community takes care of the company.

How did Greehey take care of his employees? One way was through direct, person-to-person thank-yous for hard work and encouragement for his subordinates to do the same throughout the company. Hilbert also describes the extreme and costly outpouring to take care of employees in the New Orleans area after Hurricane Katrina devastated the area. Greehey also operates under a no-layoff policy.

This is a perfect example of the importance of putting employees (not shareholders) first. If you take care of your employees, they will take care of you, your customers, your community and your shareholders.

The story of a personal thank you is particularly telling — we all need and indeed crave appreciation and recognition of our efforts. But instilling such a culture of recognition must start at the top — and be emphatically and consistently demonstrated by the CEO and then encouraged in his direct reports, and so on down the line.

Though I haven’t had a chance to see the American version “Undercover Boss,” I couldn’t agree more with this statement from Professor Michelle L. Buck, director of leadership initiatives at the Kellogg School of Management, when asked her opinion of the show and CEO experiences on them:

“A CEO or top executive won’t be able to go undercover or even do a walkaround to meet all employees. But they can institute and create the organizational culture where the top leader has to be the role model. They have to walk the talk, and this has to cascade throughout the organization.”

Whether or not CEOs are actively trying to cascade their desired culture through the organization, they are doing so. Everyone looks to the top to know how they should act. What is being demonstrated or what cultural tone is being set by your CEO?

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