Nvidia thrives under demanding CEO, but experts say focus on employee well-being could be key. Nvidia

Nvidia CEO Jensen Huang, renowned for his visionary leadership in the tech industry, is often described by his employees as "demanding" and "not easy to work for." Despite this reputation, Huang firmly believes that high expectations and rigorous standards drive innovation and excellence.

He puts it, "That's the way it should be."

During a recent interview on 60 Minutes, staff at Nvidia's Santa Clara headquarters described the company's founder as highly demanding, a perfectionist, and someone who expects a lot from his employees.

Huang, who co-founded the now over $2 trillion chipmaker in 1993, agreed that this description fits him "perfectly." He further emphasised to Whitaker, "It should be like that. If you want to do extraordinary things, it shouldn't be easy."

Huang's leadership approach isn't new to public scrutiny. In a previous interview with CNBC, he explained his decision to have a large number of direct reports, around 50, to avoid creating unnecessary layers of management within the company.

It is worth noting that most CEOs manage significantly fewer direct reports, averaging around 10. Huang elaborated that he expects senior executives to function with high autonomy and minimal oversight or coddling.

While Jensen Huang's leadership style might raise eyebrows in the current era of empathetic leadership, experts acknowledge the need for a relentless drive at the helm of a major corporation. In fact, this management strategy is paying off.

In June, Hedge Fund manager Eric Jackson made a bullish prediction for Nvidia's stock, forecasting a rise to $250 per share by year's end. "He is to some degree cutthroat," Wladislaw Rivkin, associate professor of organisational behaviour at Trinity Business School, told CNBC Make It.

Rivkin further noted that it is important to remember that Huang is leading a company valued at over a trillion dollars. These leadership positions aren't handed out easily, especially in the highly competitive tech industry, where numerous companies reach billion—or trillion-dollar valuations.

Professor Rivkin pointed out that numerous smaller companies have yet to be as fortunate, succumbing to bankruptcy. At that level, he emphasised that "resilience" is essential. Sankalp Chaturvedi, a professor of organisational behaviour and leadership at Imperial College Business School, further highlights the rarity of Jensen Huang's longevity in Silicon Valley.

Huang's tenure is quite exceptional, having lasted over thirty years. This long tenure proved instrumental as Nvidia, under his leadership, surged past other tech giants to become the world's most valuable publicly traded company in June.

A Demanding Leader At The Helm

Jensen Huang's leadership style at Nvidia has garnered attention for its intensity. Behavioural experts consulted by CNBC shed light on how Huang's immigrant background may have influenced his approach.

Born in Taiwan in 1963, Huang's parents sent him to the U.S. at the age of nine, despite him not speaking English. According to a New Yorker profile, Huang's early years in the U.S. included a challenging period at a boarding school where he faced bullying.

To support himself as a teenager, he took on various part-time jobs, including washing dishes at Denny's and other cleaning tasks. Professor Rivkin attributes Huang's "task-oriented" leadership style, which focuses on achieving results, setting challenging goals, and closely tracking performance, to his immigrant background and the associated work ethic.

Professor Rivkin explains that task-oriented leaders can succeed because they push their employees to achieve their full potential. "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," Professor Rivkin said.

A Potentially Evolving Style

While Jensen Huang's leadership is undeniably results-oriented, some experts believe there's room for improvement. "I think taking care of people's wellbeing, recognising people as people, and not just as workers, can be something that could be looked into," Professor Rivkin said.

However, Professor Chaturvedi acknowledges that leading with a strong focus on employee wellbeing and development is also demanding. Leaders must invest time in building relationships and remembering team members as individuals.

"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.

Professor Chaturvedi highlights a potential challenge with managing a large number of direct reports, as Huang does with his 50. With limited time available in a day, coordinating effectively becomes increasingly difficult as the number of direct reports grows.

"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."

Professor Rivkin acknowledges that despite Huang's demanding leadership, Nvidia continues to attract a talented workforce. This suggests a steady flow of incoming talent, perhaps due to the prestige of working at a leading tech company.

"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," Professor Rivkin noted.

Huang's leadership style is a subject of debate, with some praising its focus on results and others urging a more people-centric approach. Regardless of perspective, there's no denying Huang's impact on Nvidia's success. Only time will tell how his leadership will continue to shape the company's future.