Dark vs. Light Leaders: Lee Kuan Yew and Kenneth Lay

Introduction

Persons in leadership positions often display diverse and unique leadership characteristics and approaches. This paper focuses on two historical leaders with the intention of assessing their leadership styles. The leaders selected are Lee Kuan Yew and Kenneth Lay. As outlined in the discussion below, Kenneth Lay can be described as an unethical leader, whereas Lee Kuan Yew was essentially an ethical leader.

Ethical Leader: Lee Kuan Yew

Born in 1923, Lee Kuan Yew (LKY) was a politician best known for having served as Singapore's prime minister between 1959 and 1990. In this context, Singapore can be deemed the "organization" led by this ethical leader. LKY is credited with the turnaround of this Southeast Asian country during his 31-year reign (Oei, 2015). Prior to serving as prime minister, LKY served in various capacities within and outside government. He had earlier, in 1949, earned a law degree in England. As Oei (2015) points out, LKY won the country's elections in 1959 after riding on a reform agenda. Soon after being elected, he instituted massive reforms that saw Singapore become a high-income economy and one of the most stable countries not only in Southeast Asia, but also across the world (Oei, 2015). LKY died in 2015.

LKY's leadership style has been described as transformational leadership. In basic terms, transformational leadership "is a leadership style that can inspire positive changes in those who follow" (Burns, 2010). As Burns further indicates, transformational leaders possess an inherent capability not only to inspire, but also to motivate followers — an ability that enables them to bring about positive change in organizational settings. LKY demonstrated this leadership style by uniting an entire country behind a reform agenda, particularly in relation to educational services expansion, women's emancipation, the initiation of better housing, and, most importantly, the fight against corruption. In the words of Josey (2013), "while improving health and social welfare services, Lee continually emphasized the necessity of cooperation, discipline, and austerity on the part of the average Singaporean" (p. 187). This is a clear demonstration of his resolve to inspire and motivate followers. He has also been described as energetic and emotionally intelligent — both key characteristics of transformational leaders (Josey, 2013).

Ethical leadership, as DuBrin (2012) points out, involves the demonstration of acceptable behavior and the pursuit of the common good. LKY was ethical in the sense that he was committed to promoting the wellbeing of his people and demonstrated appropriate conduct through his deep reverence for ethics. This is evident in his formulation and implementation of policies that improved citizens' wellbeing — such as slum upgrading projects — and his deployment of measures to rein in corrupt behavior (Josey, 2013). As Josey (2013) further observes, LKY was convinced that countries could gain an unassailable competitive advantage by embracing ethical leadership. Indeed, LKY is quoted making this assertion: "one 'X' factor remains a key differentiator, especially for developing countries: that is ethical leadership… A clean, efficient, rational, and predictable government is a competitive advantage" (Josey, 2013, p. 137).

Thanks to his embrace of ethical leadership, LKY was able to transform Singapore into a developed country within just over three decades. Today, the country is considered a high-income economy and has been featured in numerous texts as one of the world's greatest economic transformation stories. Singapore's GDP per capita is consistently higher than that of many Western European countries — a particularly impressive achievement given that, prior to LKY's ascent to power, crucial aspects of governance and the economy were largely underdeveloped in terms of GDP, housing, and industrialization.

Unethical Leader: Kenneth Lay

Born in 1942, Kenneth Lay studied economics and began his career in junior economist positions at companies such as Humble Oil (Fox, 2004). He later joined the U.S. Navy, eventually attaining the rank of lieutenant after three years of service. He subsequently served in diverse roles within the government until 1974, when he returned to the private sector. There, he assumed leadership roles at key players in the energy sector, including Transco Energy Company, Continental Resources, and Florida Gas Transmission (Fox, 2004). Ten years after joining the private sector, Lay became CEO and Chairman of Houston Natural Gas, which was later renamed Enron in 1985. He was among those deemed most culpable for Enron's bankruptcy in 2001 and died five years later, in 2006.

According to Tourish and Vatcha (2005), Lay was a charismatic leader. In the words of DuBrin (2012), "charismatic leadership is defined by a leader who uses his or her communication skills, persuasiveness, and charm to influence others" (p. 113). As DuBrin further points out, charismatic leaders possess an inherent ability to establish deep connections with others, owing to a unique skill set that includes excellent communication, enthusiasm and high energy, and confidence. Consequently, charismatic leaders are often effective at navigating organizations through challenging times and developing an emotional connection with their followers.

Lay demonstrated this kind of leadership because, as Tourish and Vatcha (2005) observe, he established such a deep emotional connection with Enron employees that the company came to resemble a cult. In their words, "Enron can be usefully regarded as an example of a corporate cult" (Tourish & Vatcha, 2005, p. 456). The authors note that in addition to deploying a compelling vision, Lay was intensely relatable and empathetic, and constantly painted an optimistic picture even when circumstances were deteriorating. His charming and engaging nature allowed him to pull the wool over the eyes of most people around him.

Prior to its fall, Enron was considered a rare corporate success story. According to Shanker (2012), Lay — along with other officers of the firm — was instrumental in the company's demise, which led a grand jury to indict him in 2004. He was accused of, among other things, making misleading and/or false statements of accounts, as well as engaging in wire fraud and securities fraud (Shanker, 2012). Throughout the proceedings, Lay maintained that Enron's collapse had been caused by various internal and external rogue players, including the mass media, company executives, and short sellers. However, he was ultimately found guilty on multiple fraud and conspiracy counts, and died before sentencing (Shanker, 2012).

Lay's unethical conduct ultimately resulted in the bankruptcy of an otherwise competitive and highly successful company. Among those most severely affected were investors: at Enron's peak, the company's stock traded at $90.75, but by the time of bankruptcy it had collapsed to an all-time low of $0.26 (Benke, 2018). The company also owed creditors billions of dollars. Employees were equally devastated, losing their livelihoods when the company collapsed.

Conclusion

In the final analysis, the relevance of ethical leadership cannot be overstated. Numerous organizations have collapsed in the past as a result of unethical conduct on the part of their leaders. Enron is a prime example: before its leaders lost their ethical bearing, the company had been performing exceptionally well. However, the failure of top leadership to uphold principles of upright conduct ultimately resulted in the company's bankruptcy filing.

Singapore, on the other hand, is a clear demonstration of the potential and promise of ethical leadership. Through his embrace of ethical leadership and commitment to a sound reform agenda, Lee Kuan Yew transformed an otherwise developing nation into a prosperous, developed country within a relatively short period of time. The comparison presented in this paper is therefore a strong indicator of the promise and potential that ethical leadership holds for organizations and nations alike.

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Fox, L. (2004). Enron: The rise and fall. John Wiley & Sons.

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Shanker, D. (2012). Enron. Hyperink.

Tourish, D., & Vatcha, N. (2005). Charismatic leadership and corporate cultism at Enron: The elimination of dissent, the promotion of conformity and organizational collapse. Leadership, 1(4), 455–480.