Blog Archive
Harvard Business Review is hosting a six-week long blog series on how leadership will look in the future. They've brought together many different perspectives and conversations on the topic of leadership and posted them on their site. These conversations will help shape the upcoming Leadership Colloquium, “Imagining the Future of Leadership,” that will be hosted by Nitin Nohria, Rakesh Kharana, and Scott Snook at Harvard Business School in June 11-12. This symposium is a great opportunity to bring together a broad range of ideas on leadership.
My contribution to the conversation looks at New 21st Century Leaders. Some of these thoughts and conversations steamed from my March Wall Street Journal - "The New Leaders: Collaborative, Not Commanding."
For the full article:
Harvard Business Review - The New 21st Century Leaders
It’s no secret I have been critical of General Motors management, right up to its bankruptcy filing a year ago. For decades, GM management focused on short-term profits, while it was steadily losing market share – from 53 percent of the U.S. market all the way down to 19 percent. Along the way it was unable to keep pace with international competitors or shifting customer demand and concessions in work rules, health care and pensions to its union that caused the firm to fail when the market collapsed in the fall of 2008.
All that changed rapidly when the Obama administration appointed Ed Whitacre as its chair in July 2009. Whitacre, the highly successful ex-CEO of ATT, took over as CEO as well last fall and immediately started transforming GM into a modern auto company that could compete in both the U.S. and world markets.
He went out on a limb and promised GM would return to profitability within two years and repay its debts to the United States government within seven years. At the time GM was still in the red, while Ford was thriving and Toyota was outpacing both in worldwide production and sales. Furthermore, American consumers were distrustful of General Motors quality and angry that their tax dollars had been used to keep the company on life support.
When Toyota encountered its quality problems earlier this year, Whitacre moved in high gear to capture the available market share. Now he has taken action to fulfill his promises. Not only has General Motors repaid its loan with interest from the United States government, it has continued to improve customer service. Currently, GM is projecting ambitious global growth in 2010 and 2011. In the coming months, the company plans to initiate a public sale of stock, allowing the automaker to regain its independence from the U.S. government.
How did this turnaround happen so rapidly? How did Whitacre restore a bankrupt giant, repay billions to the government, and make bold growth projections for the future?
Whitacre made the tough internal decisions. He shed unprofitable brands like Saturn, Hummer, Saab, and Pontiac, eliminated layers of management, abandoned the company’s fossil-like committee structure, reduced excess global inventory, and closed 1,350 underperforming dealerships. Those were not popular decisions internally or with GM’s bloated dealer structure. But they were necessary steps to shed its losses and transition away from the finance-driven “analysis paralysis” that dominated its management for four decades.
He became the face of the company with the public. With public speeches, press interviews, and even starring in company ads, Whitacre put himself on the line with the American public. Americans wanted a real leader at the helm of GM, and Whitacre was willing to be that person.
He regained trust in the company. By backing up his public promises – and offering himself up as the new face of GM, Whitacre lent personality and warmth to a brand that had become a concrete monolith of stagnation. At risk to his impressive professional career, Whitacre put his reputation on the line. He fought for new customers by making promises about GM’s autos and trucks and their quality, even offering a “money back guarantee.” If nothing else, Americans respect a confident, trustworthy leader who is trying to restore respect for a tattered institutional brand.
He’s not done yet. Whitacre is not one who rests when a preliminary goal is met. In his recent television spot and speeches, it’s clear that he and GM management are focused on improving GM’s product lineup while fulfilling its promises to its customers.
At a time when so many leaders have failed, Americans are pleased to rally around a corporate comeback story built on trust and quality assurance. With Ed Whitacre still at the helm, it’s a comeback story that could keep going for years to come.
Penny and I just returned from Zurich where we spent a remarkable three days with His Holiness the Dalai Lama. We were there as part of the Mind and Life Institute meeting of economists, scientists, contemplatives, and concerned citizens trying to make the world a better place. The subject was a first-ever dialogue on "Compassion and Altruism in Economic Systems."
The first day we heard some impressive new research that refutes what the classical economists have been telling us for three decades, which is that people only operate in their self-interest. Quite to the contrary, new economic research demonstrates conclusively that most people express empathy and compassion for others, even when they incur a considerable cost. Furthermore, new findings in neuroscience using fMRI technology indicate that actual changes take place in the brain when people express compassion and empathy and that this tends to reduce their destructive emotions.
On the second day we witnessed some remarkable practical applications, from micro-finance, to educating illiterate women, to powering small villages using only solar power. Very inspiring.
On the third day I was given the opportunity to engage the Dalai Lama in a discussion about compassionate authentic leadership and the essential role that leaders must play in bringing a much stronger sense of compassion and altruism to organizations and the economy as a whole. After 15 minutes, I asked him how we could develop more leaders who were both compassionate and authentic and could sustain successful outcomes over an extended period of time.
He stated clearly that people are not born angry or hostile, but develop that way because of their inability to address their destructive emotions that exist due to difficulties they have faced in their lives. To overcome these negative feelings and be genuinely compassionate, leaders need to have a set of practices that they do routinely. Meditation is the obvious candidate, as I have experienced in my own life, but yoga, tai chi, physical exercise, massage, and other forms of relaxation therapy can achieve the same result.
The notion of contagion - that is, people drawing from the emotional state of others - that we heard about on the first day is relevant here as well. As leaders exude compassion and empathy in leading others, they cause other people to do the same, creating organizations that are more compassionate overall and able to sustain effective results.
The key to doing so is having a common sense of purpose, or mission, and practicing what the Dalai Lama terms "secular ethics." In using this phrase, he makes it clear that he is not talking about the Buddhist religion, but rather the practices that enable leaders to act in a manner consistent with their values, even under extreme pressure.
For all the challenges we face in the world, I believe there is much that non-Buddhists can learn from Buddhist practices that will enable us to lead more effectively and develop compassionate organizations that can sustain high levels of performance.
“A good compromise leaves everyone slightly unhappy.”
Today’s leaders ought to frame that phrase and hang it on their office walls. Regardless of their chosen arena – be it business, religion, the military, politics – etc., every leader should do a gut check, and ask “When is the last time I actually compromised?” I don’t mean in terms of compromised principles – those ought to never waver. I’m referring to those moments when you placed the long-term good of two parties ahead of the short-term good of one. When you actually gave up something – and really hurt because of it – with the hope that it would yield something better, later. When you lost, to gain.
No one wants to give up something important today for something uncertain tomorrow. No one wants to bring harm – financial, military, political, or social – to themselves or the potential tens of thousands of people they represent. This is true especially when that decision depends on putting trust in a rival or unknown party.
But a genuine compromise forces us to do so. Compromise leaves leaders vulnerable in their temporary defenselessness. And for the leaders of today – or any day – that is a position we’re taught to avoid, particularly in our capitalist culture where confidence can sometimes be as important substance to closing a deal. And yet we’re in the financial position we face today in great part because of our leadership’s inability to enact real compromise.
Leaders on Wall Street failed to strike arrangements with boards and shareholders on reasonable long-term growth projections, leaving them pursuing untenable gains and inflating the economic bubble. Leaders on Capitol Hill have often failed to relinquish ideology on healthcare, climate change, and financial reform in the interests of progress for the constituents they serve, leaving them (and us) with arguably the most partisan political system in American history.
We’re living in a highly volatile time made worse by dire economic straits, and we’re growing increasingly unable to take the time to understand each other, and concede personal interests for the greater interests of the whole. The media is more segmented than at any time in a generation. The stratification of social classes is increasing. We, as a nation, are increasingly polarized. To right the ship, we need leaders who can rediscover the true nature of compromise.
I’m no idealist. I know how the world works – I’ve lived too long, and done too much in the business world, not to. And it’s with that knowledge I can say that our ability to move the progress needle rests on our leaders’ collective ability to think, “what can I give up to move forward?”
Then, that leader should give a little more. Pragmatism isn’t always elegant. But it works.
Posted Apr 5, 2010 by Bill George |
Filed in: Leadership
30 seasons as a head coach. 867 wins. 12 ACC conference championships. 76 NCAA tournament victories. 11 previous Final Four appearances. 3 national championships. 2 Olympic gold medals.
A Naismith Basketball Hall of Fame Coach – and a best-selling author, speaker, and Fortune 500 pitchman – Duke’s Mike Krzyzewski (aka “Coach K”) is one of the most distinguished leaders in collegiate athletic history. An average athlete who displayed leadership prowess at an early age as a player and coach under the equally legendary Bobby Knight, Coach K’s name is synonymous with success. Now in the twilight of his career – or what the throngs of Duke-haters hope is the twilight of his career - the most recognizable man in college basketball will patrol the sidelines tonight, competing for a potential fourth national championship.
And he’ll do so against a man who just last week was mistaken by NCAA security guards for one of his own players.
3 seasons as head coach. 89 wins. 3 Horizon conference regular season championships. 6 NCAA tournament victories. 0 previous Final Fours. 0 national championships. 1 gold watch (no medals).
Brad Stevens, head coach of Butler University, assumes the role of “David” to K’s “Goliath” in tonight’s matchup. Leading a squad of unknown athletes from an previously unheralded university, Brad Stevens’ enthusiasm, youth, and fearlessness will be put on display against Mike Krzyzewski’s experience, discipline, and fire. A passionate young coach – one who is already tying records for “most wins in a coach’s first three seasons” – Stevens' name is becoming synonymous with “underdog.” He joined the Butler staff as a volunteer in 2001-02 (the same year as Coach K’s last championship), having quit a career at Eli Lilly to pursue his passion as a coach and leader of college athletes. And after years of gutting it out as an unpaid, and then low-paid, assistant coach, he assumed the head coaching mantle at Butler in 2007.
In many ways, Stevens’ rise as a leader of young athletes mirrors that of Mike Krzyzewski. Both are former athletes, having played basketball for four years at DePauw and West Point, respectively. Both have found a calling in mentoring and leading the next generation of leaders and athletes. Both have a firm commitment to the concept of the “student athlete” (with graduation rates reflective of that mindset). Both have a profound appreciation for the “team” (at several points throughout the season, Coach K has said explicitly that his players are not particularly talented, rather they are particularly cohesive.) Both have a phenomenal support staff of former players and top assistant coaches, on whom they have relied heavily throughout the course of the tournament. Both are family men and enjoy a balanced and successful life off the court as well as on.
Both exceeded expectations this season. Both have an undeniable passion for competition.
Both are winners. And both hate, hate to lose.
Which is why tonight’s matchup is so compelling. It’s more than two terrific basketball teams grinding it out on national television. It’s more than CBS’s “One Shining Moment.” It’s about two hard court leaders going head to head, two coaches occupying different stages in their careers but who find themselves equals on the national stage. It’s about two men who have spent years hand-picking their athletes, building up, breaking down, and reconstructing strategies, and who have somehow managed to mold their admittedly un-athletic individuals into two distinct, winning teams.
No doubt, tonight’s commentators will make much of the “David v. Goliath” parallels. Big v. small. Perennial Powerhouse v. Surprising Newcomer.
But what I’m most excited by is the leadership we’ll see on display tonight. The strategies playing out across the game. The inspirational huddles. The crisis-time adjustments. And the finality of the competition – when the final whistle blows, there will be one winner, one loser. As one who’s been on both sides of that coin, I look forward to see these two class acts respond with grace, respect, pride, and compassion.
When true leaders collide, you get true, unadulterated competition. That is not something which comes about every day. Tonight, it does – I recommend we all tune in for a lesson in leadership.
