"Crisis Called. Who Answered?" WBF Contest Winner

With the “Crisis Called. Who Answered” World Business Forum Contest officially at its end, I'd first like to thank everyone who submitted a nomination for the best crisis-time leader across this past year. 

All of the submissions have been reviewed, and it is now my pleasure to announce our winner: Dr. Ellen Weber of Rochester, NY.  Dr. Weber who wrote a very compelling nomination on behalf of Dr. Bill Cala, a highly admirable leader and philanthropist also hailing from Rochester.  (I profiled her submission in a blog post earlier this month, but I’ve copied it again below.)

And as Dr. Weber has very graciously transferred her award to Dr. Cala, I look forward to seeing him at the World Business Forum at Radio City Music Hall next week.

Dr. Bill Cala leads with a sense of service that defies the rise and fall of finances. Just retired from a busy and highly successful superintendency, Bill brings hope to hundreds by schools he raises and supports in Africa.

In addition, Dr. Cala is currently launching a high-performance Regional School here in Rochester, NY. Bill plans to lead an organization for disadvantaged youth from urban areas to learn and lead alongside advantaged youth from suburbs. His idea is for mutual learning and teaching that brings together differences in ways that benefit all, and builds community.

Bill spends personal finances extravagantly to fund much of his philanthropic work, is highly respected and sought after from areas of both learning and leading, and serves with unique humility and passion.

While most business and government leaders in my area cut employees and slashed programs, seeing only financial crisis, Bill gave back more because he saw how others were harder hit by broken financial systems they must deal with daily.

Bill and his wife Joanne, travel to Africa each summer to oversee several schools and water systems they built in extremely poor areas. Then, for several months following, he facilitates many highly successful leaders here in Rochester, to give back to disadvantaged and those in need.

As a renewed leader Bill leans toward transformational ethics, reconfigured intellectual systems that work more for youth and less to sustain bureaucracy, and mind-bending generosity that gathers the best and brightest together to build and serve those who possess less fortune, for whatever reason.

I've personally been deeply inspired by Dr. Cala, and yet I know that I am only one of many who'd rejoice if he won admission to your wonderful World Business Forum at Radio City Hall on Oct. 6th and 7th, 2009. Thank you kindly!

CNBC Tonight, MPR Tomorrow

I tweeted about both of these earlier, but a number of folks came back with questions so I thought I’d write a quick post with the info.

At 12:00pm Central time, Minnesota Public Radio will be rebroadcasting last week’s Leadership in Crisis Summit with Anne Mulcahy, John Donahoe, David Gergen, and Marilyn Carlson Nelson.  You can listen to it live by visiting http://minnesota.publicradio.org/features/ and clicking on “listen now.”

And below is an excerpt from the CNBC introductory release on the “Executive Vision” series.  I’ll be on tonight at 9:00pm Eastern time, along with Bill Frist, Jeffrey Kindler, Gerard Kleisterlee, and David Snow in the segment “"The Blueprint for Breakthrough Leadership: Health Care."

Watch tonight or keep an eye on my blog as I’ll be posting video of the episode across the week.

"'Executive Vision,' a CNBC five-part series hosted by CNBC's Melissa Francis and Simon Hobbs is an executive strategy session as some of the world's brightest minds gather to tackle the most compelling issues they face in their fields. The series examines how leaders gain the trust, dedication and admiration of all around them as they confront the challenges in today's ever-changing world."

"The series explores the art of leadership within five specific industry groups beginning Tuesday, September 29th at 9PM and 1AM ET and for five consecutive Tuesdays at 9PM and 1AM ET on CNBC. "Executive Vision" gets to the heart of what drives some of the world's most successful, courageous, and insightful leaders."

Let’s Bury Short-Termism to Avoid Another Crisis

The Aspen Institute recently made the following announcement:

“Twenty-eight leaders representing business, investment, government, academia, and labor joined the Aspen Institute Business & Society Program’s Corporate Values Strategy Group (CVSG) to endorse a bold call to end the focus on value-destroying short-termism in our financial markets and create public policies that reward long-term value creation for investors and the public good.”

I am one of those twenty-eight leaders, and am proud to join the likes of Warren Buffett, Louis Gerstner, Barbara Hackman Franklin, and Richard Trumka as a signatory to the statement, “Overcoming Short-termism: A Call for a More Responsible Approach to Investment and Business Management.”

Short-termism (seeking quick profit at the expense of strategic growth and sustainable profits) is the bane of long-term economic prosperity.  Short-termism derails growth strategies, is a detriment to long-term market health, and sows the seeds of greed-driven stock price manipulation.  And in the current financial crisis, short-termism led many CEOs to irresponsible behavior in order to juice quarterly profits, ultimately putting the American economy into a tailspin.

It is imperative that we take shareholders who advocate short-termism to task, but we cannot force-feed just any solution.  Rather, we need to incentivize the right one. 

The proposal in this statement leverages responsible investment behavior by:

1) providing market-based incentives through restructured tax policy;

2) aligning investor interests with company interests; and

3) increasing the transparency of shareholder/investor influence.

Ultimately, these measures are aimed at encouraging shareholders and corporate leadership to “adopt long-term strategies for growth and sustainable earnings, and to rely on long-term, forward-looking metrics in the consideration of compensation and performance incentives.”  I am sincerely confident we can achieve these goals.

Every signatory has their own reasons for joining the Aspen Institute in this project.  I’ve included just a few of mine below in the hopes that it encourages other leaders to follow suit.

First, I became a signatory because I feel that it is incumbent on America’s leaders to voluntarily commit to upholding and encouraging responsible business practices like these.  We’ve been reminded all-too-recently of the business community’s potential ability to over-leverage itself in the interest of short-term profit, so it seems clear that the best means if ensuring responsible behavior is a mutually-enforced, preemptive commitment. 

Secondly, I am very confident that putting these leverages into action is a key step towards making certain that we do not have to endure a similar financial collapse.  The only way we can truly reform the financial system to the point where we will not risk collapse is if we incentivize responsible behavior on Wall Street.  This plan does that explicitly.  The market will always have ups and downs – such is its nature, and the nature of capitalism – but extreme highs and crashing lows reflect a maladjusted system. 

Thirdly, I signed on because this plan encourages simple, sound, and profitable business-logic.  Strategic, long-term investments reap considerable benefits without the unreasonable risk accompanying short-term profit gimmicks that can lead to economic collapse. 

You only need look at Berkshire Hathaway, Goldman Sachs, or IBM for top tier examples of success by long-term investment.  And you only need look at GM, Lehman Brothers, and AIG for examples of those who subscribed to short-terminism. 

You want smart investing?  Make it long-term.

Extra, Extra, Tweet All About It

Recently, someone asked me: "would you recommend to a current CEO that he or she join Twitter?"  At the time, my jury was still out.  Now, six weeks in, I have an opinion. 

I would strongly recommend a sitting CEO utilize Twitter. 

Twitter makes you the spoke of a (potentially) very, very large wheel.  The caveat?  You must keep spinning, or the wheel goes flat.  Twitter has been a great communication tool for me, but I’ve come to realize that it requires as much output as I receive input.  And that output needs to be original, opinionated, and reflective of a unique personality and viewpoint; otherwise it’s just fluff.

Across the past six weeks, in 140-character bursts I’ve heard pundits, politicians, renowned bloggers, and steeped authorities weigh in with answers to questions I had never even considered (and those I’ve pored over many times).  As is the expectation, I’ve joined that dialogue, adding my expertise where I can and jumpstarting new conversations where possible.

All told, I’m 267 Tweets and 510 Followers in.  I’ve done the requisite article linking (thank you “bit.ly” URL) and my fair share of retweeting.  I’ve live-tweeted a Presidential address to Congress, held Q & A’s, and even promoted my new book. 

I’ve also learned several lessons – a few must-dos – that I would recommend any green-tweeter consider:

First, always respond to comments and messages.  It ensures the genuineness of the process, and is the best way to establish lasting relationships.  Plus, for those more high-profile of CEOs, to gain a reputation as an engaging, personal character on Twitter can earn you a loyal following.

Second, learn the lingo.  The shorthand and abbreviations took some getting used to, but it has made my Tweets far more effective at reaching people in a way they can understand.

Third, as Twitter is really free-flowing conversation pit, to be effective you must pose and respond to questions.  Bring fodder to the conversation.  I’ve tried to do this, so far (and thankfully have been told where I’ve succeeded, and where I’ve fallen short, by me fellow tweeters).

In reality, I would never need to recommend Twitter to an active CEO, as many of them are tweeting already.  But should one be new to the experience, I’d tell them to just ask @stevecase, @jack_welch, or @mark_cuban. 

They’ll tweet you all about it.

Crisis Called Who Answered - WBF Contest Update

With only two days left in the “Crisis Called. Who Answered?” World Business Forum Content, entries are continuing to pour in.  Here’s one from Rita in Oregon, speaking on behalf of the behind-the-scenes leaders who are helping the American middle class get back to work.

In my view, there are many 'local heroes' who work discretely and unnoticed. While I don't suggest you make an effort to discover them, Ellen DeGeneres style, they are present in remarkable number. Ultimately, it isn't the Brad Pitts of the world who mitigate the crisis, it is the individuals massed together who greet the crisis head on and daily to make a lasting difference.

(This is not self promotion; I only use me as an example because I represent so many others.) My point is I, and many of my employment-based colleagues, created free tools (mine is a free white paper "LinkedIn for Job Search," which has been downloaded thousands of times thanks to an initial boost from Anne Fisher of Fortune Magazine) and quietly offer occasional pro-bono support of those professionals looking for work.

Ignoring for the moment the self appointed experts who created webinars and other media without the credentials to back them up and who are carpetbaggers to the unemployed, there are many highly credentialed professionals lending a hand. In my view, getting the middle class back to work will do more for the economy than employing those who build roads and infrastructure.

Responding to the middle class unemployment crisis, I and hundreds of qualified professionals like me, created blogs with bona fide and field tested advice that do much to get the middle class back to work. We make no money from such efforts (for most of us) and take pride in knowing we help in some small way.

Thus, I direct your attention to those who responded/respond to the employment crisis in stealth mode, often helping only one person at a time, but helping nevertheless. You know from experience, we make almost no money from our books and none from our newsletters or blogs...yet the expertise and commitment spent creating them are no less valuable. I can personally attest to many who report my LinkedIn commentary and solutions and website blogs made a significant difference in refining a job search to land a good job faster.

There are also heroes, unemployed themselves, who work to help others in their situation. I direct your attention, for illustration, to Geoff Tucker and Ben Meyerhoff from Seattle. Both, frustrated with their job search and stymied by the need to network, created networking groups where advice and networking are the focus. Recruiters and hiring authorities have been invited to the meetings and these grass roots efforts result in folks landing jobs. Geoff and Ben donate their time and invite those with the right expertise to participate in guiding their minions; their highly personalized answer to the crisis.

I believe as did Emerson, "Teachers affect eternity; they never know where their influence stops." To that end, those of us who spend a measure of our weeks researching and communicating valid job search advice, answer the crisis with a resounding voice. Our reward is knowing we make a difference.

Best of luck on your effort to recognize those who respond to the crisis. I can only hope their visibility is not the only metric.

Regards, Rita

The deadline for submissions is tomorrow, September 24, 2009 – who would YOU nominate as the best crisis-time leader in America.

Leadership Summit in the News *Updated with New Articles

Lots of press coming out this week on the heels of the Summit on Leading in Crisis last week – take a look at these articles for recaps of the event.  (Also see a few behind-the-scenes snapshots further below)

The Minnesota Daily:  "Top Business Leaders Discuss Leadership in Crisis."  Panel stressed cooperation, culture, and adherence to values...

The Start Tribune:  "Rancor Won't Help Heal Nation's Ills."  Americans share a responsibility to keep nation on track... 

The Minnesota Post:  "Leadership Event Focuses on Nation's Economic and Political Strife."  America needs better leadership...

JUST ADDED: Minneapolis / St. Paul Business Journal: "The importance of having a strong company culture in place when a crisis (economic or otherwise) strikes was one theme that emerged at a discussion on leadership among prominent business leaders held Thursday evening."

My sincere thanks again to David Gergen, Marilyn Carlson Nelson, John Donahoe, and Anne Mulcahy – as well as everyone in the crowd – for their insightful participation. 

Insightful Night at Ted Mann Concert Hall

Thank you again to everybody who joined David Gergen, John Donahoe, Anne Mulcahy, Marilyn Carlson Nelson, and me last night for the Summit on Leading in Crisis.  It was a successful, honest, and insightful conversation.  Here are some of the highlights below, told in real-time:

 

6:17 – I want to set a very honest stage, so I commence with the acknowledgement that we are all facing crisis, and today’s leaders need to be very honest about past faults and future projections.  Our major problems are in the area of global peace, poverty, education, job creation and innovation.  However, it is in crisis that we have the opportunity to make things better. 

 

Don’t waste this crisis, as it is a defining moment for our country to improve. 

 

6:19 – At that, I turned it over to our leaders:  Anne Mulcahy, David Gergen, Marilyn Carlson Nelson, and John Donahoe

 

6:23 – I ask Anne Mulcahy how she approached taking over as Xerox CEO, a role she initially had never planned for.  Anne explained that her 35 years at Xerox, gave her perspective on the company heritage and culture, and earned her a variety of applicable competencies.  Going into the position, Anne explained that it was important for her to grasp the seriousness of a Xerox’s problems while maintaining a high level of optimism.  Logistically, the most important thing was simply the proper alignment of her people.

 

6:25 – I followed up: “How do you exude confidence when times are tough?”  Anne explained that when she became CEO, she traveled the globe to see every major operation.  (Paraphrasing) “We didn’t make decisions too quickly,” she explained.  This helped everyone at Xerox feel like they were part of the solution - which was important, because they were.  Then, she regrouped her team and they settled on a Wall Street-oriented action plan.

 

6:27 – To the entire panel, I posited:  “What should every leader know about crises?”  David Gergen responded that crises come in different forms, and the key is preparation.  For instance, Ben Bernanke is a student of the great depression which made him prepared to respond appropriately when the economy crashed last year.  Furthermore, the most important crisis for government to deal with is the crisis that is over the horizon 5 to even 15 years away.  Leaders must summon the will to address these issues and not always pander to popular tastes – they must have courage to say what needs to be said.

 

I asked: “Does a President need to create a sense of crisis to get the people to act?” 

 

David Gergen responded in the affirmative.

 

6:34 – I then turned to Marilyn Carlson Nelson.  “How do you prepare your employees for inevitable crises?”  Leaders must empower their team at all times, she explained.  They must instill in individuals the idea that they have the ability to lead, and that the expectation exists for them to lead when the time comes.  Every foot soldier of Napoleon’s Army napoleon foot soldier had a baton in their pack so that if they fell the next person could lead.  Marilyn tried to create a similar mentality.

 

6:43 – To John Donahoe: “eBay provides an immense marketplace for small business.  How have you reacted to the recent financial crisis?”  John prefaced with the acknowledgement that 25 million people sell products on eBay, and 1.3 million make their primary or secondary living.  EBay provides an outlet for people to start their own business, putting it in a uniquely precarious position with the financial collapse.  The Economic crisis was front and center for them because of their relationship with the customer - the customers are struggling, and the crisis had become a rallying call for the company to recommit to creating opportunity for them.

 

John went further, explaining that last year at this time the big retailers said that they were going to have a horrible season, so they decided to discount everything to get rid of inventory.  Big companies can do this, but small retailers – Ebay’s sellers – cannot.  John and eBay stopped running ads on TV and reallocated that money towards discounts for purchases on the site.  John conceded that these were not easy changes to make, but necessary ones.  The crisis created the opportunity to change the culture and the business model to refocus on the customer.

 

6:55 – Paraphrasing John Donahoe:  “This gets to the test of what America is all about.  70% of new job creation in the patst70 years has been through small business.”

 

Anne Mulcahy chimed in: “We (big companies) are not the solution.”

 

John Donahoe continued, asserting that technology enables the entrepreneurial instinct of Americans.  He recalls a visit to a couple who sell clothing, which they purchase from department stores at liquidation and then sell on eBay.  They have created a job. 

 

Marilyn Carlson Nelson agrees, but asserts that small business needs big business to handle distribution. A partnership between the two must exist, and America needs to make financing available so that entrepreneurs can get their small businesses going.

 

7:07 –   To the panel, I ask: “How do you maintain yourself during crisis? How do you remain resilient? How do you be vulnerable, and still be a leader?”

 

The silence on the stage triggered laughter throughout the room!

 

Anne Mulcahy offered that people inspire you during difficult times.  During the darkest days at Xerox, she was inspired by the amazing set of people that were coming to work every day.  “You have this incredible sense of accountability,” she recalled.

 

John Donahoe recalls that Jeff Immelt once said, “They didn’t make me CEO because of how much I know they chose me because of how quickly I could learn.”

 

7:32 – “What type of leadership is going to bring back the civil discourse?”  Anne Mulcahy found the recent lack of civility very concerning.  And one person, one leader, cannot remedy the situation alone.  The most glaring examples of public indignity have occurred in politics lately, and Anne asserts that is responsibility of the various government branches to lead in bringing people together. 

 

David Gergen revealed that he is worried about two things: 1) the future potential for the incivility to develop into violence; and 2) the future of practical governability.  If every issue is going to see our politicians and citizens so deeply divided, David wondered how we can expect to move forward.  He asserted that if we continue on this line of polarization it’s going to be hard to maintain ourselves as a power.   It is up to our President, member of Congress, community and civic leaders, to turn the tide and make a difference in how people think.  He agrees with the President that we have to find a way to make civility interesting.

 

7:47 – As time wound down, I asked a question on a hot-button issue: “People are angry about executive compensation?  Should it be regulated?”

 

Marilyn argued that boards have to take it on, and is confident that most, but not all, will.  She is reluctant to allow legislation on the matter to run rampant as there is an unsustainable business model if you can’t recruit top talent.  And money draws talent.

 

David Gergen agrees, arguing that all societies need some self restraint and it is up to the CEO community to take some responsibility.

 

Anne Mulcahy projects that this is not an issue that will see an overnight fix.  Boards have to step up to the plate to make sure that they don’t return to the past.  Accountability among and by boards is paramount.

 

In closing, John Donahoe summed up the discussion’s focus on crisis quite well.  (Paraphrasing) “Leaders should embrace adversity not fear crises as the will allow them to become good leaders.” 

 

I couldn’t agree more.  As I say in 7 Lessons for Leading in Crisis: “A smooth sea never made a skilled mariner.”

 

Thanks again to everyone who joined us at Ted Mann Concert Hall last night.  And thanks again to our panelists David Gergen, John Donahoe, Anne Mulcahy, and Marilyn Carlson Nelson.

GM Borrows a Page from the Iacocca Playbook

Hats off to Ed Whitacre.  He has officially taken ownership of General Motors.  Much like Lee Iacocca at Chrysler in the 1980s, Mr. Whitacres’s face is now stamped on the GM brand with his upcoming TV spots.

I have been highly critical of GM leadership in the past, and with good reason.  But this campaign is a good decision.  The ad is candid, challenging, and optimistic.  Will this sell more cars?  That’s difficult to say.  But it’s the right step towards rebuilding the GM brand.

The accountability is there.  Whitacre admits, “Before I started this job, I’ll admit, I had some doubts.”  So did we, Mr. Whitacre.  Not about your personal ability, necessarily, but about the viability of GM.  We still do.  Kudos for addressing the elephant in the room though.

The challenge is there.  “I just know that if you get into one of our cars, you are going to like what you see.”  American consumers love a good “test-our-product” campaign (see: Pepsi Challenge, Tide’s 100-wash guarantee, etc.).  Test-drivers are revving their engines.

The reassurance is there.  “So we’re putting our money where our mouth is.  Buy a new Chevy, Buick, GMC, or Cadillac, and if you’re not 100% happy, return it.  We’ll take it back.”  A cynic might argue that he’s actually puttingour money where their mouth is, but that’s neither here nor there.  The forthright confidence and reassurance is pervasive.

The crux of this ad is a straightforward Ed Whitacre, with his disarming southern drawl, putting his reputation on the line and his face on his brand.  The best companies do this.  Steve Jobs stands behind Apple.  Howard Schultz stands behind Starbucks.  Warren Buffett is Berkshire Hathaway.  How are GM’s cars?  The jury is still out.  But thanks to Ed Whitacres’s ad, I am warming up to its leadership.

“Crisis Called. Who Answered?” Contest Update, 9.15.09

With the “Crisis Called. Who Answered?” World Business Forum Contest well underway, we’ve received scores of submissions from all across the country.  Here’s another compelling nomination, this time from Anwar Chowdhury in support of UK PM Gordon Brown.  Reactions?

I nominate British Prime Minister Gordon Brown for his leadership in leading us out of the abyss caused by the financial crisis. Amongst world leaders, he played the most significant role in quickly identifying the need to stabilize the financial system by injecting money into financial institutions to recapitalize so that banks could continue to lend money to businesses and individuals to protect jobs. He also played a significant role by hosting an international summit of world leaders to stimulate the economy.

He emphasized the need for concerted global action and cautioned us against protectionism that would result in a much more serious and prolonged recession.

At the time of crisis, his voice was one of reassurance that we would be able to control the damage and restore confidence in the financial system.

He is also a leading advocate of strengthening the regulation of the financial industry to avoid future catastrophe.

The World Business Forum is three weeks away (Oct. 6^th–7^th), so there’s still time to submit a nomination – who would YOU nominate as the best crisis-time leader in America.

My Defining Moment

As I explore in “7 Lessons for Leading in Crisis,” every leader faces a defining moment that shapes their career.  Below, I’ve selected an excerpt from “7 Lessons” that describes my defining moment:

My defining moment came in 1988 on a beautiful fall day in Minnesota, with the maple trees ablaze in reds and oranges. Driving around the lake near our home, I looked in the rear view mirror and saw a person in agony who was in the midst of a crisis and drifting away from his True North.

I asked myself, how could this be? In my wife Penny I had an amazing life partner of twenty years, two wonderful sons, and a great job as executive vice president of Minneapolis’ leading company.

What I saw in that mirror was a person striving so hard to become CEO of a large company like Honeywell that he was rapidly abandoning his True North. I was getting caught up in the politics and appearances at Honeywell, which were rampant at the time, rather than ignoring them as I had done in the past. I was even wearing cufflinks to impress senior people, something I had never done before.

In that instant I recognized that Honeywell was not the right place for me, nor was I proud of what was happening to me in this environment. That was the defining moment when I decided to stop striving to become CEO of Honeywell and to get back to focusing on values-centered leadership.

I drove home and told my wife Penny what I was feeling. She said wisely, “I’ve been trying to tell you this for a year, but you weren’t prepared to hear it.” How right she was.  Often it is the person closest to us who looks through our blind spots and sees us as we really are.

Just three months before, I had turned Medtronic down for the third time in ten years to become its president, most likely because the company wasn’t large enough to fit my image of what I should be doing. When I walked through Medtronic’s front door six months later as its new president, I felt like I was coming home – home to an organization where I had never been before. It felt like home, a place where I could grow personally and make a difference in helping to fulfill our shared mission of “restoring people to full life and health.”

Everything that has happened in my professional life in the past twenty years followed from that decision, from my thirteen years at Medtronic to my focus the last seven years on helping leaders develop themselves.