Last week, I had the pleasure of giving a session on leadership together with Oliver Blume, the CEO of VW and Porsche and thus arguably the most influential manager in Europe, at the University of St. Gallen.

At the start of the event, Oliver Blume said it was fine if everyone addressed each other on a first-name basis. He said he was “Olli,” and within the group he’s on first-name terms with his colleagues too. During the Q&A session, the question came up whether it’s really professional for the CEO of a company with 670,000 employees to let people address him informally. The risk, the argument went, is that he might not be taken seriously enough and might find it harder to make unpopular decisions. Using formal titles, according to the widespread view, makes it easier to deliver bad news to employees and better guarantees respectful treatment than informal address does.

Clearly, there’s still uncertainty today about which form of address is appropriate and what impact that choice has on organizational culture. So here are a few facts and observations:

• In one out of every three German companies, people now address each other by first name across all levels of hierarchy (Kienbaum & Stepstone study, 2023).
• Companies with a first-name culture come across as more employee-oriented, agile, and innovative to outsiders (see Kanning, 2019).
• Using first names improves social closeness, which in turn is a central element in building trust within teams (Groysberg & Slind, 2012).
• First-name cultures tend to be more relaxed and humorous.

Performance reviews conducted on a first-name basis are perceived as more human and empathetic.

However, these effects only materialize if people are actually comfortable with informal address and can live it authentically. For instance, 22% of employees surveyed who address their boss by first name said they would actually prefer to go back to formal address (see Forsa, 2023). Ultimately, which form of address you choose is a personal decision, and it has a lot to do with your own upbringing. As a child, I was always deeply impressed by how my father, already back in the 1980s, would consistently address absolutely everyone by first name in his roofer’s overalls. From the bank director to the police officer to my teacher – to him, everyone was on a first-name basis, and he simply addressed everyone informally, whether they wanted it or not.

In any case, Oliver Blume’s answer to the question above was that you can absolutely work together at the highest professional level while being on a first-name basis, and that he has kept up first-name address ever since the start of his career at the VW Group. He feels comfortable with it, and it would honestly seem odd if he suddenly switched to formal address now that he’s CEO. That convinced the students, and I can tell you – the moment Oliver Blume told everyone he was simply “Olli,” a quiet murmur went through the hall, and instantly the mood became more relaxed, easygoing, and approachable.

This post was published by Wolfgang Jenewein on LinkedIn on 03/11/2024. View the original post