Analysis and Evaluation of 21st Century Leadership: Brian Chesky and Airbnb
Using relevant theories and models critically evaluate and analyse the leadership of a 21st
century leader of a (business, government or not-for-profit) organisation. If you were in the
position of the leader, what could you do to be a better leader and make a stronger impact
on the followers and on the situation?
For this assignment you can select a leader from a large or a small organisation. You can
select a leader from your own organisation or one that you are familiar with. It could be a
CEO of an international organisation whom you have read about in the
newspapers/biographies, or a family member who runs a small business with a few staff
members. The choice of leader and organisation is yours.
Write a report in which you cover the following:
• a clear description of the leader, the organisation/industry, and situation/context
• an evaluation of the leader by referring to concepts and theories covered in the
subject (e.g. style, behaviour, traits, attitudes, power) and by referring to relevant
examples and mini-cases in the textbook (where appropriate)
• a discussion of how you would lead differently if you were put in the same situation/s
as the leader and how you could make a stronger impact on the followers and on the
situation/s.
It is important to demonstrate your knowledge about leadership and to clearly reference
your sources. Read about leadership in journal articles (using AIB Online Library), books
(including the textbook), and business literature, etc. Note the sources and use them
throughout the report.
Remember that pure description and paraphrasing is not sufficient. A good report will clearly
take an analytical approach and demonstrate application of leadership concepts/theories.
In order to do well you need to structure your discussion appropriately, use good references,
and clearly link recommendations to description and analysis presented earlier in the report.
Leadership is a process through which an individual influences a group of other individuals, referred to as followers, towards the attainment of a particular goal. Leadership is an important function that facilitates the realization of organizational goals. It is essential and central, and occurs in any setting within which individuals are organized. Leadership can either be formal or informal. Formal leadership occurs within formalized settings, whereby leaders exercise authoritative power, a form of power derived from their positions of influence. The instance of leadership analyzed in this essay is one of formalized leadership. Here, the leadership style of Brian Chesky is evaluated. First, Brian Chesky is described. This is followed by an extensive and critical analysis of his leadership approach. Finally, the author presents a comparison of the identified approach and the author’s own approach.
Brian Chesky and Airbnb
Brian Chesky is the co-founder and CEO of Airbnb, which is a hospitality exchange service. Chesky is one of numerous internet entrepreneurs, a prominent set of entrepreneurs whose cutting-edge innovations are based on the internet. At just the age of 34, Chesky is worth an estimated $3 billion (Wakeford, 2015). Chesky’s success has earned him a number of prestigious accolades and recognition. He is ranked number 7 among America’s richest entrepreneurs under 40 (Forbes, 2016). Within the technology field, he is ranked as the 62nd richest individual. Furthermore, Forbes ranks him as number 194 amongst Forbes 400 richest. Evidently, Chesky is a global icon and this warrants his review.
Chesky’s innovation, Airbnb, is essentially an internet sharing service that allows people to list, find and rent housing. Chesky co-founded Airbnb in 2008, together with Joe Gebbia. The idea for Airbnb was born during an industrial design conference in 2007. Chesky and gebbia were having problems paying rent. They decided to buy three air mattresses and host some of the attendees, referring to their plan as ‘air, bed and breakfast’ (Lagorio-Chafkin, 2010). Airbnb is a shortened version of this plan name. They were able to raise rent and it is from this success that they then proceeded to establish their startup. They later received help in designing the website that would act as the platform for Airbnb from their third co-founder, Nathan Blecharczyk. Airbnb has grown into a very popular platform and today, it is worth about $25 billion (Forbes, 2016). It operates in 34,000 cities in 190 countries. Forbes further notes that as of February 2016, the rental service has been used by more than 60 million guests (2016). This demonstrates the scope and level of influence that Chesky’s innovation has had globally.
Airbnb, like several other internet-based entrepreneurial ventures, has a very unconventional structure. As noted, it is an internet based innovation. It can be categorized together with a number of several other online platforms that encourage peer-to-peer commerce (Cohen & Sundararajan, 2015). As noted, Airbnb allows individuals to host other people in their homes. In this manner, those renting out their houses are in a sense quasi-employees of Airbnb, since they receive monetary compensation in exchange for their provision of hospitality and accommodation. Carrion (2015) indicates that Airbnb promotes self-management through practices such as self-advertising, self-creation and self-administration. It is quite the case that at times, the individuals renting out their premises themselves turn into clients, seeking accommodation through the platform. This is best explicated by Chesky, who reports that he still lives in the original Airbnb and occasionally leases it out (Wakeford, 2015), and that he often books an Airbnb together with his girlfriend (Gallagher, 2015). This nature means that there is a mutual co-dependency or client-employee phenomenon. This is not to imply that Airbnb does not have its own set of in-house employees. While there are no clear statistics on the exact number of in-house employees, Airbnb does have internal employees. The unconventional nature of Airbnb forms the context within which Chesky’s leadership approach is evaluated.
Analysis of Chesky’s Leadership Style
Leaders may adopt any of several leadership styles or develop their own unique approach. Ultimately, even such a unique approach will somehow conformto one of several major leadership approaches. Chesky’s overall leadership approach can best be described as a transformational leadership style. This leadership style is characterized by charisma and a shared vision between the leader and his followers (Lai, 2011). In particular, there are five dimensions to transformational leadership. These are: two types of idealized influence, inspirational motivation, intellectual stimulation, and individual consideration (Bass & Riggio, 2006). The review of Chesky’s approach indicates that he exhibits each of these dimensions. This is demonstrated in the following discussion.
The first dimension highlighted is idealized influence. These are in fact two dimensions, bundled into one. These are attributed idealized influence, and behavioral idealized influence. Idealized influence is also referred to as charisma. Chesky possesses each of these idealized influences. Idealized influence essentially pertains to the extent to which leaders are able to serve as role models to their followers (Lai, 2011). Chesky’s portrayal of these traits is described.
Attributed idealized influence pertains to the traits that are assigned or attributed to a leader. These are essentially the views of others on the leader, and whether they perceive him as a confident individual (Elenkov & Manev, 2005). It is essential that followers feel confident in their leader, as this increases their level of commitment. Chesky’s attributed idealized influence is brought out by a crisis incident that happened in 2011 (the incident is described elsewhere). Chesky’s handling of the crisis instilled confidence amongst Airbnb’s employees. In particular, Fortune quotes Airbnb’s head of product management saying “That was the turning point where I had 100% confidence in this company’s leadership … threw at us”. This illustrates Chesky’s attributed idealized influence, whereby his followers exhibit confidence in his leadership capabilities.
The second type of idealized influence is behavioral idealized influence. Behavioral idealized influence regards the manner in which a leader acts based on their own beliefs and values (Elenkov & Manev, 2005). This implies that with regard to the leader, behavioral idealized influence is more active than attributed idealized influence which operates rather passively. There are many instances that portray Chesky’s behavioral idealized influence. One of the best, however, is his handling of the aforementioned crisis, which evolved into a source of attributed idealized influence. His philosophy also depicts his idealized behavioral influence, whereby Chesky opts to go straight to the source so as to gain leadership skills. Chesky believes that this approach is the most effective way of learning something (Gallagher, 2015).
Transformational leadership is further characterized by inspirational motivation, which Chesky exhibits. Through inspiration motivation, leaders cheer on the team with the aim of inspiring and motivating them. Essentially, this dimension relates to the motivation aspect of the staffing function of management. leaders use inspiration to motivate their followers/employees towards the attainment of the goals of the team. Chesky’s inspiration motivation is exhibited through the manner in which he communicates with the company’s employees. In one of the sessions with his employees, Chesky challenges them to be crazy, contending that the biggest threat to the company would be if employees stopped being creative (Gallagher, 2015). Another instance of inspiration is manifest in one of Chesky’s rule, which is to refill the reservoir. In exercising this rule, Chesky frequently participates in social gatherings as he believes that this is one of the best sources of inspiration. Another aspect of inspirational motivation is the formulation of a compelling organizational vision(s), that is usually clear and attractive. In Chesky’s case, his compelling vision for his employees is for them to be crazy in their thinking (Gallagher, 2015). This again illustrates how he expresses this vision.
The fourth dimension of transformational leadership is intellectual stimulation. Chesky also exhibits this attribute. With intellectual stimulation, the leader instills creativity and new approaches to thinking and problem solving amongst followers/employees. For Chesky, this trait is exhibited in the manner in which he communicates with his employees. A good instance is when he is hiring. Chesky indicates that when welcoming new hires, he encourages those coming on board to be bold and crazy (Gallagher, 2015). Another of Chesky’s philosophy also exemplifies this trait. This philosophy is up-leveling, which entails him pushing himself or others to think big. The examples highlighted above illustrate Chesky’s intellectual stimulation and push towards creativity, and his satisfaction of this dimension.
The final dimension of transformational leadership that Chesky also exhibits is individualized consideration. This aspect essentially refers to a concern for each member of the organization or team. With individualized influence, the leader is concerned with the personal development of members of the organization. The leader endeavors to provide opportunities for followers to thrive. Intellectual stimulation acts as a complement to this aspect. Individualized consideration in a company can be perceived through management’s empowerment of its employees. Chesky’s encouragement of his employees to be crazy represents an instance of employee empowerment (Gallagher, 2015). Chesky’s hiring decisions provides perhaps the best illustration of his individualized consideration. According to him, when choosing individuals to hire, he looks for those who are aspiring towards a particular goal, rather than those who are merely seeking responsibilities (Bryant, 2014). Such a basis for hiring indicates the consideration for the individual, rather than an explicit focus on the job.
From the above analysis, there is wide support for the notion that Chesky adopts a transformational leadership approach. Usually, such an approach is suited for situations of change or crisis, where widespread uncertainty prevails within an organization. An organization in transition and a startup such as Airbnb have many parallels. A startup is usually replete with uncertainty concerning the future. Moreover, the organizational culture, mission and vision are new. During such periods, it is essential for management to galvanize employees’ views and efforts towards the attainment of a common organizational vision. An instance of Chesky’s handling of a crisis situation is described.
Transformational leadership is usually a very effective approach for periods of crisis. Airbnb went through such a period, with Chesky’s handling of the crisis exhibiting aspects of transformational leadership. The particular incident occurred in 2011, after a rather routine rental went awry. In the incident, an individual who was renting an apartment through Airbnb burglarized and vandalized it. (Shontell, 2011). The victim, only identified as EJ, further suffered material and identity loss as the perpetrator stole cash, jewelry and copies of social security cards. Intitially, Airbnb responded with an apology which the victim, however, deemed unsatisfactory. Consequently, the story dragged on attracting much public attention. Eventually, Chesky arrived at a crucial decision to assume full responsibility. He offered an apology and announced a $50000 guarantee for property protection (Chesky, 2011), with the program being backdated to cover EJ and other individuals who had suffered losses in the past. Chesky’s reaction exhibits certain aspects of transformative leadership, particularly individualized idealized influence.
Chesky’s leadership also features risk-taking. This is best illustrated by Chesky’s position as an entrepreneur. Entrepreneurism is essentially hinged on precepts of risk-taking. Risk taking is one of the tenets of entrepreneurial leadership, alongside other aspects such as innovation, proactiveness and aggressiveness in opportunity seeking (Kozłowski & Bratnicki, 2015). The setting up of Airbnb is in itself an exemplary example of Chesky’s risk-taking capacity. A more elaborate case of risk-taking is Chesky’s decision to implement a guarantee program, where Airbnb hosts receive $50000 protection from damages. The nature of this implementation as a risk is further elaborated by Chesky’s decision to implement it universally without first testing it as he had been advised. The program appears to have been a success since the amount of protection has been raised to $1 million for renters in the US (Feloni, 2015). The above examples illustrate Chesky’s risk-taking nature.
A different Approach
Chesky has generally excelled in his leadership of Airbnb.
He has been able to have a tremendous impact in steering the company to one of
the leading global entrepreneurial ventures. This is especially in
consideration of the complex and unconventional nature of the startup and
manner of its operations. It is therefore quite difficult to point out areas
for improvement. In general, I believe that the transformative leadership
approach is an excellent approach, especially considering that the company is a
startup and a lot of uncertainty prevails. Nonetheless, there are some areas
where I would pursue a different approach to Chesky’s chosen approach. For
instance, I would adopt a more transactional leadership approach. It has been
discussed that when hiring, Chesky opts for those individuals who have a goal,
rather than those seeking responsibilities. While it is not clear whether this
is the case at all levels, one can safely assume that this is indeed the case
for all levels of employees. If this is the case, then I feel that a
transactional approach would be more effective where for some roles employees
are hired based on other considerations rather than their goals. Here, the aim
would be to procure individuals who will provide a high-level of output, and
who will do as they are asked. This may especially be useful considering the
complex nature of Airbnb, where one slight mistake could prove to be very
costly. A transactional leadership approach would suffice in ensuring that the
CEO is fully in control of the situation.
List of References
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Available at: http://blog.airbnb.com/our-commitment-to-trust-and-safety
[Accessed 13 May 2016].
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[Accessed 13 May 2016].
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[Accessed 13 May 2016].
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Brian Chesky Is Worth $3 Billion But Still Rents Out His Own Home. [Online]
Available at: http://www.people.com/article/airbnb-ceo-brian-chesky-is-worth-3-billion-but-still-rents-his-own-home
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