Maybe the Tesla bosses who agreed to give Elon Musk a $56 billion paycheck were just feeling generous. Or perhaps, as the judge who canceled the deal suggested, they were really taken by Musk’s superstar appeal.

 

In her decision, Kathaleen McCormick said those who decided to give Musk the biggest pay in corporate history might have been swept up by the talk surrounding one of the world’s most famous CEOs. Certainly, Musk and his style of leading are always in the spotlight.

 

The German sociologist Max Weber (1864-1920) might have described Musk's leadership style as "charismatic." Weber saw charisma as a particular kind of authority that comes from people attributing extraordinary qualities to one person.

 

He said these leaders, whether in politics or industry, seemed to have a special something that sets them apart and allows them to make big changes in ways others can't.

 

My research shows that charismatic leadership is making a comeback after not being so popular for the past twenty years.

 

Charismatic leaders used to be everywhere, especially in big businesses in the West from the late 1970s to the early 2000s. In the US, for example, Lee Iacocca was seen as the savior of Chrysler for making it profitable again after it almost went bankrupt.

 

Similarly, Jack Welch, as CEO of General Electric, was famous for his management style and cutting costs ruthlessly, which led to amazing growth at the company. In the UK, Richard Branson and Alan Sugar were celebrated as innovative businesspeople who made lots of money.

 

But after a series of scandals in the early 2000s, like the collapse of Enron and WorldCom, charismatic leadership became less popular.

 

This trend sped up after the global financial crisis in 2008 and as people became more aware of issues like climate change and gender inequality, which called for new, more responsible leadership styles.

 

So, the charisma-based way of managing went out of style, replaced by leadership styles like "authentic" (being true to yourself) or "shared" (leadership as a collective effort).

 

Ten years ago, the CEOs of the biggest global companies weren’t famous household names. But today, bosses of companies like Meta, Amazon, and Tesla are world-famous. So why the change?

 

Partly, it happened because after the 2008 financial crisis, tech companies grew rapidly in value, often credited to their founders. Figures like Jeff Bezos and Sam Altman became seen as entrepreneurial heroes, increasing their fame.

 

Another reason is that we're living in a time of crisis. Some sociologists warned back in 2002 that praising charismatic CEOs as "saviors" distracts us from others' contributions to a company’s success.

 

Charismatic leaders may seem like an easy solution to worries about climate change, war, and economic troubles. When Musk talks about saving humanity by colonizing space, or Sam Bankman-Fried talks about ending world poverty, they present themselves as redemptive figures to more than just their investors and employees.

 

Also, in a world where algorithms play a big role, business can feel less human. People might want leadership with a human touch.

 

But this doesn't mean charismatic leaders will be as dominant as they were in the past. If they're making a comeback, it's on a more crowded stage. They might be popular in some circles, but so are leaders who champion diversity, ethics, or human relationships.

 

While charismatic leaders get a lot of attention, many of us might prefer bosses who are less grandiose and more modest in their leadership. That could be someone like Mary Barra at General Motors or Lars Fruergaard Jørgensen at Novo Nordisk. Or it could be one of the many leaders whose names aren't in the news every day.

 

As a recent biography of Musk shows, he holds a lot of power through his business interests in social media, satellite technology, and cars. So, maybe the big question is how we can make sure some charismatic leaders don't have too much power. Cutting $56 billion from someone's fortune might be a step in the right direction.