Good morning!
Fortune reporter Natalie McCormick here, filling in for Brit Morse.
In his 17 years running Airbnb, CEO and cofounder Brian Chesky says he’s ignored popular leadership advice that he’s found imprudent. Within that category is the belief that leaders shouldn’t play favorites.
He concedes that the idea of heralding certain employees has a negative connotation. “At most companies, there’d be a protest if the CEO picked [favorites],” Chesky said in a recent interview with Fortune. “It would be considered unfair and not systematic.”
But Chesky argues that when done well, employee favoritism allows leaders to spotlight top performers, tap their skill set and knowledge for strategy planning efforts, and demonstrate to other employees who they should emulate.
To be sure, so-called favorites should be selected based on fair criteria and concrete success metrics rather than sheer cronyism. “You can have people making sure there’s no unconscious bias, people keeping you honest, looking for disparate impact inside the organization. You can do a lot of surveys, and you can use that to reinforce your assumptions,” Chesky said. He added that “if you can’t have favorites, if you can’t say this is a high performer, and this is what excellence is, then you are going to be in big, big trouble. That’s just not good leadership.”
As a tech founder, Chesky said he looks to Apple founder Steve Jobs for leadership inspiration. Jobs was known to gather his top 100 employees annually for a secretive three-day meeting to strategize the future of the company.
Chesky calls Airbnb’s version of this congregation “The Roadmap Review.” It’s a rolling two-year strategic plan that’s updated every six months by 80 to 100 hand-selected employees, most of whom are senior leaders. Together, they then spend a week hashing out the budget. At most companies, Chesky said, the CEO and CFO put their heads together to draft an annual plan then ask about 20 different teams to circle back on their strategy and budget for the following year. “Everyone’s going to ask for the world, and then you’re going to say no, and you’re going to have this negotiation, and it’s crazy,” Chesky said.
Chesky declined to name his favorite employee at Airbnb, cheekily responding that he has “so many.” But he did say his favorites are those with whom he texts on a regular basis.
Most research on employee favoritism highlights its pitfalls. A study from The Ohio State University suggests that CEO favoritism can undermine workplace culture and breed division. On the opposing side, a study published in the Journal of Organizational Behavior found that when a boss displayed favoritism to one employee, it set a higher bar that motivated other employees to learn and improve.
As for Chesky, he believes that as long as there’s an equitable and transparent process to how he selects his first string, favoritism is fair game, adding that the notion that a CEO shouldn’t have discretion over who’s in the room with them is mistaken. “The president of the United States would pick. We should too,” he said.
Natalie McCormick
natalie.mccormick@fortune.com
Today’s edition was curated by Brit Morse.
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