Nvidia’s CEO was labeled a ‘demanding’ boss by staff. But experts say you have to be cutthroat

Nvidia’s CEO Jensen Huang knows he’s a tough boss and has no regrets about it.

In a recent interview with “60 Minutes,” employees at the company’s Santa Clara headquarters told correspondent Bill Whitaker that the entrepreneur is “demanding,” a “perfectionist,” and “not easy to work for.”

Huang, who co-founded the chipmaker in 1993 which is now worth over $2 trillion, said this described him “perfectly.”

“It should be like that. If you want to do extraordinary things, it shouldn’t be easy,” he told Whitaker.

This isn’t the first time Huang’s leadership style has come under the spotlight. He previously told CNBC that he has “50 direct reports” to stop unnecessary layers of management developing at the company — most CEOs have about 10 direct reports.  

He said he expects senior executives to operate very independently with little guidance and pampering.

In the age of the empathetic leader, Huang’s tactics may be a little controversial, but experts say that you have to be relentless to run one of the largest companies in the world.

“He is to some degree cutthroat,” Wladislaw Rivkin, associate professor of organizational behavior at Trinity Business School, told CNBC Make It. “He is the leader of a trillion-dollar valued company and has gone through a very rough selection process because there are many tech companies which are at the trillion or billion-dollar mark.”

Many smaller companies have gone bankrupt but Nvidia “survived,” Rivkin noted. You must be “resilient” to operate at that level, he added.

Additionally, Huang’s tenure in Silicon Valley has lasted over three decades which is “quite rare,” according to Sankalp Chaturvedi, a professor of organizational behavior and leadership at Imperial College Business School.

Workers at a high-profile company like Nvidia generally have other options but “they are choosing to remain for as long as they can,” says Chaturvedi, which suggests Huang is doing something right.

Huang’s immigrant background has played a role in shaping his leadership style, the behavioral experts told CNBC.

The billionaire was born in Taiwan in 1963 and was then sent to the U.S. by his parents when he was nine years old, even though he couldn’t speak English.

He spent some time at a boarding school where he was relentlessly bullied, according to a New Yorker profile. As a teenager, he took on part-time jobs and worked as a dish washer at Denny’s restaurant, and even cleaned toilets.

Huang now displays a “task-oriented” leadership style which places value on getting things done, setting ambitious goals, and monitoring performance, Rivkin said.

This is reminiscent of an immigrant background and work ethic where there’s a prevailing belief that “to get ahead, you need to work hard,” he added.

Task-oriented leaders can be “effective” because they tend to challenge their employees, Rivkin said.

“We have quite a lot of evidence, both in leadership, but also in motivational research that challenges can motivate people and draw out peak performance,” according to Rivkin.

Having to “fight it out” from a young age also indicates that he prefers exerting a high degree of control over every aspect of the company, Chaturvedi explained.

“He understands his organization as a machine, thinking about plans, thinking about economics,” Chaturvedi said.

Although this approach has paid off over the decades, Huang may have overlooked other important leadership traits.

The bottom line being, they believe Huang’s leadership style could be improved.

“I think taking care of people’s wellbeing, recognizing people as people, and not just as workers, can be something that could be looked into,” Rivkin said.

But being a people-focused leader and meeting workers’ needs is “very demanding,” he said. It requires remembering people’s names and maintaining relationships with numerous people, Chaturvedi added.

“Being task-oriented requires much less energy because you set the task, you set the deadline, you set the milestone, you check it out, then that’s pretty much it. You don’t care who is essentially doing the work,” Rivkin said.

And the one thing that Huang is seriously lacking with 50 direct reports to manage, is time.

“All of us have 24 hours in a day and the more direct reports we have the harder it is to coordinate,” said Chaturvedi.

“I can tell you for sure that he must be struggling to manage that many direct reports,” Chaturvedi added. “He’s trying to control every bit of operations and not coordinate his strengths, and that’s where the problem lies.”

Lots of people want to work for Nvidia so Huang’s cutthroat leadership style has worked so far, because there’s always going to be a revolving door of talent coming through the company, according to Rivkin.

“If your company struggles to hire talented employees, which applies to most of the companies on the market, then I think it will be difficult to lead with such a ruthless leadership style because the people who have a choice and looking at it from an employee perspective will just look for other opportunities,” Rivkin said.