Blog > Category: Leader

How IBM's Sam Palmisano Redefined the Global Corporation

In the 20th century, a select group of leaders — General Motor's Alfred Sloan, HP's David Packard and Bill Hewlett, and GE's Jack Welch — set the standard for the way corporations are run. In the 21st century only IBM's Sam Palmisano has done so.

When Palmisano retired this month, the media chronicled his success by focusing on IBM's 21% annual growth in earnings per share and its increase in market capitalization to $218 billion. But IBM hasn't flourished because it kowtows to Wall Street. In fact, five years after Palmisano took over, IBM stock was stuck where it had been when his tenure began.

The real story behind IBM's success is the course Palmisano set for 21st century global enterprises. Recognizing that the company's command-and-control culture wouldn't work in the 21st century, he defined leadership as leading by values and created a unique collaborative organizational structure.

In 2002 Palmisano succeeded a legendary leader in Lou Gerstner, who saved IBM from being broken up and put it on a viable course. Whereas Gerstner famously declared "the last thing IBM needs is a vision," Palmisano had a clear vision for the company. He saw its unique strength as offering complete solutions tailored to customers' needs — something no other company could match. To concentrate on customer solutions, Palmisano spun off personal computers and disk drives and acquired PriceWaterhouseCoopers' consulting business.

Executing this strategy required seamless integration of IBM's product capabilities with its geographic reach. This meant abandoning IBM's existing organization, in which product silos and geographic entities operated independently and frequently were more competitive than collaborative. Palmisano reorganized IBM into a "globally integrated enterprise" focused on worldwide collaboration. He cajoled, pushed, and pulled the company into a client-centric, agile structure able to customize delivery of IBM's software assets, hardware assets, and intellectual property.

With 440,000 employees in 170 countries, Palmisano recognized that IBM couldn't be run solely from the top; rather, it needed thousands of leaders operating collaboratively around the globe to fulfill its customers' diverse needs. His first act was to abolish IBM's corporate executive committee.

Palmisano understood that reorganizing IBM's formal structure wouldn't be sufficient; he had to thoroughly transform the company's culture and do so in a sustainable way. His ingenious first step toward creating a collaborative culture was a massive, global collaboration. In 2003 he launched an online, interactive "values jam" involving all employees for 72 hours to determine what IBM's values should be. The three principles that emerged from that event guided decision-making throughout the organization, giving IBM's huge, globally dispersed workforce the discipline necessary to execute the company's new strategy.

Palmisano could not have succeeded at placing values at the center of IBM's operations without strong principles of his own. These are the qualities I believe made him the best CEO, so far, of the 21st century:

Humility and openness. Palmisano has an engaging manner and keen sense of humor. Colleagues say his humility and humor are disarming. In a speech on IBM's 100th anniversary, he said:

The old model of the heroic superman is increasingly archaic. The most active and successful leaders today see themselves as part of the global community and peer groups. They listen as well as they speak. Never confuse charisma with leadership. The first job of a leader is to enable an organization to survive without him or her. The key to that is to build a sustainable culture.

He practiced this by listening intently to employees throughout the organization. He also talked to customers on a daily basis and circumnavigated the globe six times a year to meet customers in person. These relationships were essential in gaining the confidence of customers who had qualms about outsourcing to IBM.

Patience and a long-term view. Palmisano warned against prioritizing shareholders or other constituents, calling this "a false choice," and explaining that "Long-term management is a serious challenge in a world driven by short-term thinking. Forward-thinking leaders are not just achieving measurable success in the short-term. They are innovating in ways that create virtuous circles for a generation or more." He was comfortable making smart bets to position IBM for decades-long growth, such as creating the Emerging Business Organization to incubate new businesses and shield them from P&L pressures. And his time leading IBM's Asia-Pacific business taught him about the value of building long-term relationships, not just doing transactions.

Directness. Palmisano believes the technology industry requires "a high-performance, in-your-face, speak-your-mind culture." He's personable, but blunt. Known for walking out of long meetings to make sales calls, he shortened IBM's two-month annual budget process to six days. Instead of formal performance reviews, he regularly engaged in short conversations, focusing on key initiatives. Many who know him cite his impatience as a strength; it kept him relentlessly focused on execution.

Pragmatism. When the U.S. government cut back on work permits for foreign nationals, IBM had thousands of Indian employees forced to return to their home country. He turned that problem into competitive advantage by relocating most of IBM's software operations to India as its Indian operations grew from 3,000 to 100,000 employees. He also forced partners and distributors to commit in writing to uphold IBM's strict ethical standards. In 2009 he called off the $7 billion acquisition of Sun Microsystems in part due to Sun's egregious golden parachutes.

As Palmisano built IBM into the world's leading information technology company, its competitors dithered. HP suffered from a progression of strategic missteps and failed leaders. Microsoft's enterprise services stagnated. Cisco now sells mostly commoditized products. In contrast, IBM kept laser-like focus on building the global organization to execute its strategy, and financial results followed.

Palmisano once said, "The CEO is not the brand! It is not about you. You are a temporary steward of a wonderful enterprise, so leave it in better shape than you find it." As he concludes his career, he leaves his successor, Virginia Rometty, with an iconic giant poised to dominate its industry for decades to come.

 


Originially Written for Harvard Business Review on January 18. 2012
This post draws upon several resources, including: the IBM archives; Palmisano's own article, "The Globally Integrated Enterprise" in Foreign Affairst and his speech on the Future of Leadership; aHarvard Business Review interview with Palmisano, "Leading Change When Business is Good;"Rosabeth Moss Kanter's case on IBM and Joseph Bower and Sonja Ellington Hout's case on IBM. The author and Sam Palmisano together serve on the board of directors of the Exxon Mobil Corporation.

 

 

Leadership Kudos and Gaffes: Recognizing a leader's legacy

Leadership Kudos go to all those who have finally recognized Steve Jobs’ leadership legacy. Jobs didn’t fit anyone’s classic description of a leader but he was always authentic, passionate, visionary and committed to the highest standards – AND he grew wiser by understanding his failures and following his heart to the end. It is great to see him so recognized at his passing. His best advice that we can all follow: "Your time is limited, so don't waste it living someone else's life. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition." 


Leadership Gaffes this week go to Reed Hastings of Netflix who tried to be too clever with Qwikster.  He got caught with chasing his escalating stock price . . . and wound up destroying 65% of Netflix market cap. Hasting needs to get back to focusing on his customers before he loses them to competitors Amazon and Apple.  While Hastings admitted his error, he doesn’t seem to acknowledge the root cause of his mistakes. As Rob Kaplan says, it’s time to look at the person in the mirror.

Remembering the Greatest Innovator of the Past Fifty Years

With the tragic death of Steve Jobs at the age of 56, the world lost its greatest innovator in the past fifty years. Through his visionary genius, Jobs transformed five separate fields: personal computers with the Macintosh and iMac, animated films with Pixar studios, music players with the iPod, entertainment storage with iTunes, the smart phone with the iPhone, and most recently, created an entirely new field with the iPad. No one in history has successfully transformed so many different fields.

Jobs was not an engineer or scientist, nor did he make use of traditional marketing techniques such as consumer focus groups. Rather, his creative genius was his ability to perceive what consumers would want before they could articulate it. In a data-based era where everyone is demanding data and “proof” in advance, Jobs used his intuitive abilities to envision the kind of problems that would please consumers and meet their unstated desires.

Then he translated those wants into simple, yet elegant devices that were so intuitive to use that no user manual was required. In 1985 he pioneered creative graphics, using a wide array of color, that brought computer screens to life and made them easy to use without understanding programming languages. I had my first Apple product with the Apple 2 in 1982, but my engagement with personal computers really took off with my first purchase of a Macintosh in 1986. Since then, I have enjoyed using my iPod, iTunes, iPhone, iPad, and I ‘m looking forward to becoming an iCloud user.

What’s not well understood about Jobs is the extent to which he was influenced by failure – his own. Recognizing the limits of his managerial abilities in his younger years, the Apple board insisted he bring in a business partner, which led to the recruiting of John Scully in 1982. That marriage, which seemed to go well at first, blew up in 1985 when the two differed on strategy. Was it Jobs’ rigidity over refusing to open up Apple’s unique software to applications developers, or Scully’s need to call the strategic signals – or simply an inevitable power struggle between two strong-willed personalities? We may never know the real answer to that question.

Confronted; by Scully with an “either/or” decision, the board unwisely went with Scully and fired Jobs. As Jobs said later, “How can you get fired from the company you founded?” But fired he was and cut adrift at age thirty to rethink his future. In his prescient graduation address at Stanford University in 2005, the year after he was first diagnosed with pancreatic cancer, Jobs acknowledged that his firing freed him from carrying the burdens of managing a large enterprise. It also permitted him to pursue his creative desires, unencumbered by managerial tasks he didn’t enjoy and wasn’t especially good at.

For the next twelve years, Jobs flourished while Apple floundered. He founded a new computer company called NeXt that enabled him to start all over in designing his ideal computer. Then he bought a small computer graphics subsidiary of Lucas Productions from George Lucas and turned it into Pixar animation studios. Pixar became the greatest producer of animated films of all time, highlighted by Toy Story 1, 2, and 3. At the height of its success, he sold Pixar to Disney in 2006, taking a large ownership position in that company and joining its board of directors.

Meanwhile, Apple stumbled after Jobs left, as Scully demonstrated that he lacked the insights or leadership abilities to keep Apple’s success going through creative designers and exciting new products. His termination led to a succession of outside recruits, including Michael Spindler and Gil Amelio, all of whom fell victim to their inability to lead and inspire Apple’s people. In a historic turn of events, the Apple board purchased NeXt in its desperation in 1996 and brought Jobs back in an undefined role.

But this was not a rapid turnaround. Jobs led the design of the iMac, which was widely appreciated by Apple devotees, but failed to stem the steady slide of Apple’s market share, which dipped below 3%. Apple’s stock continued to slide. By 2003 it was worth no more than when Jobs returned to Apple seven years earlier. My former company, Medtronic, had a market capitalization in 2003 that was ten times Apple’s; today, the tables are reversed as Apple is the world’s most valuable company with a share value that is ten times Medtronic’s.

Then came the iPod, which to computer gurus seemed like a diversion from the computer business, and perhaps it was. But its linkage to reams of legal music files through iTunes wiped out both the player business and the compact disc market. More importantly, it paved the way for integrated information/entertainment devices like the iPhone and iPad, putting Apple well ahead of established competitors in those fields.

It is worth noting that Apple is the only integrated computer company with its own unique hardware, software and retail stores. The latter has created the highest sales per square foot in the history of retailing, featuring only Apple products and authorized accessories.

To me, the most important lesson of Steve Jobs’ life is the way in which he learned from his own hardships – of being an adopted child, of being fired, and of facing death every day for seven years. He accepted these hardships not just as part of life, but as opportunities to go his own way in making a difference in the world.

And make a difference he did! No one in our lifetime has made more unique contributions to the worlds of innovation, of business, or of consumer stimulation. Let us hope that in celebrating his life many other young people will be inspired to go their own ways, trust their intuition, and pursue their dreams and their visions. That could be Steve Jobs’ greatest legacy of all.

Leadership Kudos and Gaffes: Leading and supporting a team, while the other is burying his mistakes

Leadership Kudos this week go to Sheryl Sandberg, Facebook’s chief operating officer. While founder Mark Zuckerberg gets the media attention, it is Sandberg whois steadily building Facebook into a great growth company. Her steady hand on thewheel is driving a well-oiled machine that continues to take on broader challengesand strengthen its management talent. Watching the P&L as well as numbers ofparticipants, Sandberg is the driving force behind Facebook’s growing market value,estimated by some as high as $100 billion.


Leadership Gaffes go to News Corporation’s founder and CEO, Rupert Murdoch.  Who else? Murdoch has aggressively built his media empire by taking over newspapers and television stations and turning them into mouthpieces for his political goals. Now his tactics, many of them unethical and even illegal, have caught up with him. He can fire Rebekah Brooks and Les Hinton (or “bury his mistakes,” as he likes to say), but the buck stops with him. His scandal threatens even the British political establishment. Is it time for him to accept responsibility and step down?

True North Groups Webinar Today

Today at 2:00 pm EDT (1 pm CDT/11am PDT) I will be giving a Webinar on "How to become a Better Leader with True North Groups." At this time we will discuss ways to develop as an authentic leader, and the importance of having a support group in your life, including a True North Group. The Webinar will also include a preview of my new book, True North Groups: A Powerful Path to Personal and Leadership Development, written with my colleague Doug Baker. It will be published on September 1. I hope you can join us on line. You can register for free here.

Kudos and Gaffes: Innovating Game Changer and a Leader Without a Team

Leadership Kudos this week go to Apple’s Steve Jobs for launching iCloud, yet another game changer from Apple. Look to Apple to enable you to store all your iTunes, books, movies, documents, on-line downloads and photos in one place as you move effortlessly from the iMac to iPad, iPod, and iPhone, which will make our mobile and stationery lives that much easier to navigate. Jobs’ latest breakthrough is a sharp rebuke to the security analysts and media pundits who were calling for Apple’s board to announce his successor when he began his latest medical leave earlier this year. Don’t count Jobs or Apple out quite yet.

Leadership Gaffes go this week to Newt Gingrich and his futile presidential campaign, as 16 of his top aides on campaign staff resign en masse. It’s hard to lead when you don’t have a team, and even harder to run for President from a cruise ship in the Greek Isles. Gingrich vows to forge on, but it’s time for him to return to writing and teaching. 

Leadership Book Suggestion: Flying Without A Net

My HBS colleague Tom DeLong has a brilliant new book that I strongly recommend to you: Flying Without A Net: Turn Fear of Change into Fuel for Success. Tom directly addresses the fears that we all have that hold us back & may even destroy us - and shows how to convert anxiety into success. He shows how to draw strength from vulnerability by being even more vulnerable to turn frea of change and failure into fuel for success. It's a great read.

Why Leaders Lose their Way: Part II Staying Grounded

This is the second portion of an excerpted guide I wrote for my Authentic Leadership class on Why Leaders Lose their way.  On the heels of the recent scandals, I believe we must reexamine what motivates inappropriate behavior from leaders at the top of their game. 

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How can we avoid the pitfalls of falling into the same traps of so many leaders who have lost their way?  It starts with devoting ourselves to a lifetime of personal development that strengthens our inner life and keeps us grounded throughout our lives. 

To get started, let’s return to the question posed earlier, “What is your purpose for becoming a leader in the first place.”  “What are you passionate about?”  “What really excites you and turns you on?”  “Do you find the intrinsic purpose of your work fulfilling, or is it just a job?” 

This may require a reframing of our role from the hero or savior into a servant of the people we lead.  This requires a great deal of thought and introspection to bring our egos in line, as most of us go into leadership roles in response to our ego needs in the first place.  But which ego needs?  The external gratification of people telling us how great we are?  Or the internal satisfaction of making a difference in the world through our leadership?  Through wealth, fame, prestige, and visible power?  Or the deeper knowledge that if you do good work and serve others, that this will be your reward, and the external rewards will be “the frosting on the cake.”

To develop themselves for increasing levels of responsibilities, leaders need to continue their development in seven areas, 1) personal disciplines, 2) managing stress, 3) building relationships, 4) connecting with their communities, 5) focusing inward, and 6) finding balance in our lives.

Personal Disciplines

Being effective in your work and staying sharp to make complex decisions under pressure requires personal practice and discipline.  It may be surprising to young leaders to learn that the habits they establish early in life will continue with them for the rest of their professional lives. 

Taking care of your body through eating healthily, exercising regularly, and getting your required level of sleep is an important part of being an effective leader.  It is difficult, if not impossible, to think deeply and clearly when you’re tired, out of shape, overweight, and stressed out.  Some people turn to chemicals to make them feel better, to give them a lift out of depression.  But it doesn’t work; they’re just digging a bigger hole for themselves.

Managing Stress

Leading is high stress work.  There is no way to avoid the stress of being responsible for people, organizations, outcomes, and the constant uncertainties of the environment.  The higher you go, the greater your freedom to control your destiny, but also the higher the level of stress involved.  The question is not whether you can avoid stress, but how you can control it to maintain your own sense of equilibrium.

Managing stress requires discipline.  Some people practice meditation and/or yoga to center themselves and relieve stress.  Others find solace in prayer.  Some people find they can relieve stress by taking a long run.  Still others find relief through laughing with friends, listening to music, watching television, attending sporting events, reading, going to movies, or watching the performing arts.  It doesn’t really matter what you do, as long as it works for you to manage the stress in your life and enables you to think clearly about your work and personal issues.

Building Relationships: Who Will Be There to Help?

Ask yourself the question, “Who in my life influences me in profound ways?  How do I stay connected to them?”  Few of us can stay centered all by ourselves.  We depend upon the people in our lives to keep us grounded – those who know us best and to whom we will really listen.  For many of us that person is our spouse or our partner in life, because they know us better than anyone else.  They are not impressed by our titles, our prestige, or our growing accumulation of wealth.  In fact, they are worried that these outward symbols may be causing them to lose the authentic person they were attracted to in the first place.  In their presence it is difficult to use our false self or our dominant tendencies to avoid having them hold a mirror up to us that reflects our true behavior. 

But we shouldn’t put the entire burden on our spouses or partners.  All of us need mentors.  A mentor is someone whom we turn to for advice and counsel when we are facing difficult decisions or irresolvable dilemmas.  It is someone with whom we can be completely honest.  A reliable mentor can be counted on to be completely straight with us, and help us define our truth and develop action plans to change if we are dissatisfied with our leadership or our lives.

Having a group of close friends who serve as your personal advisors can be also invaluable.  They too are not overly impressed by your external success, because they know you well enough, and care enough about you, to confront you when you are not being honest with yourself.  A team of professional advisors, be it your board of directors, your colleagues, or others in your line of work, can also be a great source for sharing your problems and seeking honest consultation on how to address them.  In your organization it is more than healthy – it is essential – to have one or more “honest critics” who are prepared to challenge your ideas and action, to help you see the other side or the way others will view your actions.

Connecting with my Community

Another means for staying grounded, and developing compassion for others, is through direct community service.  Examples include tutoring inner city students, working in a homeless shelter, reading to the blind, befriending people in need, and connecting with the lives and needs of people with limited economic means.  Direct contact is infinitely more important and rewarding, but also less comfortable, than chairing the board of the United Way or a social service organization.  The reasons for this are obvious: as we progress in our professional lives, it is easy to lose touch with the lives of ordinary people.  Instead of becoming more compassionate, over time our hearts become hardened.  By engaging with our community, we remain in touch with the real world.

Focusing Inward

Understanding our role in the world is the most personal and profound area of our leadership development.  Many people turn to their spiritual and religious practice to engage these issues, either privately or with like-minded people.  Some seek the answers through a process of introspection.  Others explore them through discussions with the people closest to them in their lives.  Still others choose to ignore these questions altogether until confronted with an overwhelming dilemma, a personal tragedy, or a life-threatening illness.

Finding Balance in our Lives

Finally, we stay grounded by regularly rebalancing our professional lives and our personal lives.  There is no doubt that the time commitments of leading major organizations can absorb all our time and emotional energy, leaving little left for ourselves or for those closest to us.  This poses an enormous danger:  the very act of working ever harder distorts our judgment and our ability to think clearly, and accentuates the risk of losing our way.  We have a continual need to recalibrate what our behavior says about what is most important in our lives.

But keeping ourselves grounded through personal disciplines, developing close relationships, and maintaining a reasonable balance between our professional and personal lives can provide the basis for long-term success in whatever venue we choose for leadership.  It positions us to discern the authentic purpose of our leadership and to draw satisfaction from its intrinsic rewards.

Conclusion

There is no guaranteed path to become a good leader.  It is a process requiring a lifelong commitment to personal development, so that you will be prepared to confront the enormous complexities leaders face and, under tremendous pressure, to fulfill your responsibilities honorably and successfully.  The challenges are great, but the satisfaction of knowing you made a positive difference in the lives of others is even greater.

Why Leaders Lose Their Way

David Sokol, Mark Hurd, Greg Mortenson, Eliot Spitzer, and Rajat Gupta.  The list of talented leaders at the top of their game losing their way continues to expand. All of these leaders were highly successful in their respective fields and had promising careers ahead of them. For this reason, their behavior is especially perplexing and raises many questions:

  • What causes these leaders who have been known for their integrity and their leadership to engage in unethical activities?
  • Why are they willing to risk great careers and unblemished reputations for such ephemeral gains?
  • Is this simply greed, as many have suggested, or is something deeper going on?
  • Do they think they won't get caught, or could they honestly believe their elevated status puts them beyond the law?
  • Did they get caught the first time they did something inappropriate, or have they been building to this for a long time with lesser actions paving the way?

Despite myriad news articles, I have yet to see one that illuminates what led to such unusual behavior by such successful people. To be clear, I’m not taking a position on the legality of their actions, but rather examining the root causes of their actions.

After the fall of Enron, WorldCom, et. al. in 2003, I became very troubled by what had happened to so many of our corporate leaders. In 2004 I wrote a paper for my new class on "Leadership and Corporate Accountability" at Harvard Business School titled, "Why Leaders Lose Their Way." I’ve excerpted pertinent examples below, which seem very pertinent to today’s cases:

Part I - Why Leaders Lose their Way

 In the seemingly never-ending revelations of corporate scandals that have been exposed since the fall of Enron, the media, politicians, and the general public have taken to characterizing their leaders `as “bad people,” even to the point of considering them evil.  The rest of our leaders have become suspect, as corporate executives are tied for dead last with used car salesmen in terms of the public trust. These overly simplistic notions of “good leaders” and “bad leaders” only serve to cloud our understanding about the nature of leadership in the business world and how good leaders can lose their way. 

Very few people go into leadership in business to cheat or do evil things.  Yet all of us have the capacity to do things we deeply regret unless we develop the means of staying centered within our leadership. These leaders are not bad people; they have just gone astray. 

Before anyone takes on a leadership role, they should first ask themselves two fundamental questions, “Why do I want to lead?” and “What is the purpose of my leadership?”  These questions are simple to ask, yet the process of seeking answers to them is profound and may take decades, even a lifetime, to answer.

If the truthful answers to the first question are simply power, prestige, and money, these leaders may be at risk of relying on external gratification as the source of their fulfillment.  There is nothing wrong per se with desiring these outward symbols as long as they are combined with a deeper desire to serve something greater than oneself, such as to be responsible to those you are leading and to serve them.  That’s where the deeper sense of inner satisfaction comes from, not from having money, prestige or power. 

Leaders whose singular goal is the quest for power over others, unlimited wealth, or the fame that comes from success tend to look to others to give them a superficial sense of satisfaction and to attest to their greatness, if not their goodness. In public, as well as in private, these individuals exhibit ego-centeredness.  As their names appear more frequently in the media, they start to believe their own press.  As leaders of institutions, ultimately they come to believe that they are the institution and that the institution cannot survive without them.

Most leaders don’t start out this way.  Yes, they like to be fairly compensated for their accomplishments and to have the material pleasures that come with them.  Being given added power reinforces their success, and they enjoy the prestige that goes with it.  But along the way, their success in these realms can go to their head, and they start seeking more and more external success until they cannot get enough.  It is at this point – at the height of their power, their fame, and their material wealth - that they are most susceptible to losing their way, if they haven’t already lost it.  Their string of successes creates a deep desire to keep it going, just as they feel more and more like imposters in their roles. Out of fear of losing their status and stature, they are prone to doing increasingly bizarre and even illegal things. 

Losing Touch with Reality

Let’s examine how this happens.  By focusing on external gratification instead of inner satisfaction, leaders find it difficult to stay grounded.  They begin to lose touch with reality, even if the ability to define reality accurately was a key quality that brought them success in the first place.  Typically, these leaders reject the honest critic who holds up a mirror to them and “speaks the truth to power.”  Instead, they surround themselves with sycophants who tell them what they want to hear.  Over time, these leaders lose the capacity for honest dialogue, as others learn not to confront them with reality or the truth. 

Craving Success

Let’s look deeper into the root causes of these behaviors.  Losing touch with reality, which is one of the most common and dangerous traits of successful leaders, often results from the lack of introspection about who they are.  Underlying these tendencies may be an insatiable craving for success caused by a burning desire to overcome narcissistic wounds from childhood.  These wounds may have been caused by perceptions that their parents did not love them, they are not good people, or the trouble they had in making friends in their early years.  So they try ever harder to keep their string of accomplishments going so the external world will view them as highly successful.

. . . and Fearing Failure

The other side of the coin of craving for success is a deep-seated fear of failure.  Many leaders get to the top by imposing their will on others, even to the point of destroying people that stand in their way.  By the time they reach the top, they may be paranoid that someone else waiting in the wings to knock them off their pedestal.  This is akin to the “King of the Hill” game that little children play in the schoolyard.  Thus, these leaders can develop “the imposter complex,” caused by a deep insecurity that they really are not good enough to hold such a powerful leadership role and that any day now someone is going to unmask them.

To prove that they are not imposters, they drive so hard for perfection that they are incapable of acknowledging their failures and their weaknesses.  When confronted with information demonstrating their failures, they try to cover it up or to create a rationale that convinces others these problems are neither their fault nor their responsibility.  Often they will look for scapegoats on who they can blame their problems, either internal to their organization or on the outside.  Through the combination of power, charisma, and communications skills, they force others to accept these distortions, causing entire organizations to lose touch with reality.

Making Big Mistakes

At this point leaders are vulnerable to making big mistakes, such as violating the law or putting the very existence of their organization at risk.  In their desperation to keep their success going, they may wind up stretching the rules beyond legal limits.  In some cases their distortions of reality and powers of persuasion enable them to convince themselves and others they are doing nothing wrong. Or they believe they can outsmart the enforcers of laws.  Some rationalize that their deviations are acceptable because they are seeking to create a greater good.

In examining the behavior of leaders at this stage, one may conclude that they lack a moral compass, a sense of their “true north,” that keeps them centered.  Some may have had a moral compass originally, but lost sight of it as they got caught up with external gratification. 

The Loneliness Within

It is lonely at the top.  No one doubts that.  When you’re in that position, you know that the lives and fortunes of so many people rest in your hands, and you are ultimately responsible for what happens.  If you fail, many will be deeply hurt.  You try to deny that loneliness, which may lead to avoiding the anxiety of facing reality.  You shut down your inner voice, because it is a constant reminder that long ago you abandoned your true self.  It is just too painful to confront or acknowledge, but it returns to you in your dreams as you try to resolve the irresolvable conflicts rustling around inside your head.

 . . . that Can Lead You Astray

Lacking connection with your own inner voice, you start listening to all the voices pressuring you, thinking that if you can satisfy them, all will be well.  But their advice is often conflicting, or too painful to face.  So you choose to listen only to those voices that reinforce your views. Meanwhile, your work life and your personal life are growing more and more unbalanced.  Fearing failure, you favor your work life, even to the point of saying, “My work is my life.”  You lose touch with those closest to you – your spouse, your children, and your best friends – or you co-opt them with your point of view. Eventually, you lose your capacity to think clearly about important issues. 

By now your little mistakes have turned into major ones.  No amount of hard work can correct them.  In your desperation you keep digging yourself a deeper and deeper hole.  The collapse is near.  When it comes, there is nothing you can do to avoid it.  You attempt to stave off the consequences, but societal powers overwhelm you.  You are trapped.  The tragedy of your behavior is unfolding to its ultimate conclusion.  There is nothing you can do.

Who are you?  You could be one of those executives facing prosecution for their actions.  Or just a former CEO forced to resign “for personal reasons.”  But “you” could be me, as we are all subject to these tendencies, in greater or lesser ways.  We may not face a plight as severe as these leaders, but we can all go this route.

Next Generation of Leadership Discussion at Center for Public Leadership

Here's an interesting video from a panel I participated in last fall at Harvard Center for Public Leadership's Fellows Reunion. Thepanel discussion was on "Next Generation Leadership." The panel included David Gergen, executive director of the Center for Public Leadership; Rosalinde Torres, managing director of the Boston Consulting Group; Betsy Myers, leadership advisor and former chief operating officer for the Obama campaign; and myself. It was moderated by George Leadership Fellow John Coleman who was in his final year of the joint degree program of Harvard Business School and Harvard Kennedy School.