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Kudos and Gaffes: Remembering a quiet leader and continued failed leadership on the economic recovery

Leadership Kudos go to former First Lady Betty Ford, who passed away this week at age 93. A quiet leader, Ford showed remarkable courage in publicly acknowledging her chemical dependency and later establishing the Betty Ford Center for treatment of people suffering from alcohol and drug dependency. After she was diagnosed with breast cancer, Ford urged other women to seek treatment for their cancer. Throughout her long lifetime Ford proved that public leaders can retain their graciousness and humility while serving millions of people.

Leadership Gaffes go to U.S. economists who have wrongly predicted since early 2009 that jobs would recover and unemployment would decline sharply. Last month’s unemployment numbers – in contrast to forecasts of virtually every economic forecast – finally made it clear that the current U.S. economic improvement is tepid at best and is proving to be a jobless recovery. With 26 million Americans unable to find full-time jobs, the time is long overdue for new approaches for jobs creation.

Leadership Kudos and Gaffes: Dean Nohria is making transformative changes while the MN politicians fail to act

Leadership Kudos this week go to Harvard Business School Dean Nitin Nohria. After only one year in office, Nohria is making transformative changes at  HBS to make its mission of “educating leaders who make a difference in the world” a reality. He has launched major changes in the MBA program to give students more leadership opportunities, global immersion in companies, and entrepreneurship, all in a new year-long course called FIELD. He is focusing on the role of business in society and the regaining of trust in business leaders with emphasis on values and ethics. Already more students are going into manufacturing and services, and a higher proportion of women have been admitted than ever before. His visionary leadership is putting HBS on a very positive course for the future.

Leadership Gaffes are awarded to Minnesota politicians for their failure to reach agreement on a balanced budget, thus shutting down state government, just in time for the 4th of July weekend. All state parks and museums and the Minnesota Zoo are  closed for the holidays. Those concerns didn’t keep the politicians from declaring their own five-day holiday, presumably they can spend it in neighboring Wisconsin where budgets are balanced and parks are operating. This is not good news for former Governor Tim Pawlenty, who left his successor a $5 billion deficit so he can run for President as a fiscal conservative.

Obama’s Choice on Jobs: Politics or Policy

President Obama held his second meeting with his new Jobs and Competitiveness Council earlier this month at an electronics plant in North Carolina. With job growth stagnant and the nation’s underemployment stuck at 16 percent — that’s 25 million Americans — the meeting represented an ideal opportunity for the president to develop a list of sound ideas he could put into action.

It didn’t happen. Instead, the meeting turned into a campaign “photo op” in a swing state Mr. Obama carried in 2008. The A-list of leaders who run General Electric, American Express, DuPont, Facebook, Xerox and Procter & Gamble was impressive. The ideas coming from the meeting were not. The group produced only a tepid list of quick-fix ideas rather than fundamental solutions to put jobs on a solid growth trajectory.

Instead of boarding Air Force One for Florida fund-raisers after the meeting, Mr. Obama should have boarded Amtrak for South Carolina. Boeing’s chief executive, W. James McNerney Jr., who heads up the president’s Exports Council, would have gladly given him a tour of Boeing’s new aircraft factory that will manufacture its the flagship 787 Dreamliner. Boeing has billions of dollars in aircraft orders for export and has spent $1 billion in constructing the plant and hired the first 1,000 workers. Thousands have applied for the remaining 5,000 jobs.

But there is a problem: Mr. Obama’s National Labor Relations Board has sued Boeing to stop production for locating in a right-to-work union state. The issues are being contended in a Seattle court, where Boeing has recently hired an additional 2,000 unionized employees. Years of appeals lie ahead.

While in South Carolina, the president could have also stopped by BMW’s and Mercedes’s highly successful automobile plants. The irony here is obvious: German companies are permitted to produce in a right-to-work state, but not American companies.

These two situations typify why the nation’s jobless rate is stuck at a perilously high level, one that will threaten Mr. Obama’s 2012 re-election bid. Neither photo opportunities nor empty pronouncements can shroud the ugliness of the present economic malaise or the magnitude of the crisis this country now faces.

Two years ago, I wrote that the president is like the Roman god Janus, with two heads facing in opposite directions, as Mr. Obama the politician pulls against Mr. Obama the leader. Since 2009, Mr. Obama the politician has prevailed, but time is running out for Mr. Obama the leader to implement policies that restore America’s economic competitiveness.

First-hand reports from chief executives who have met with the president indicate that he listens hard and seems to understand the deeper problems, but fails to take action. Or stated more clearly, he takes only politically expedient actions.

These leaders are pragmatists. With the American economy growing at less than 2 percent and emerging markets at 10 percent, they are focusing on overseas sales — and jobs are following. If you were a chief executive with responsibility for tens of thousands of employees, would you do anything different?

In addition to stagnant domestic growth, these chief executives cite several limitations that keep them from investing at home: political gridlock in Washington, the unpredictable regulatory environment, excessive corporate tax rates and uncertainty over health care and financial regulation.

To get the American economy growing again, a multifaceted plan is required to address these issues:

1. Resolve the budget gridlock with a solid deficit reduction plan rather than letting the debt ceiling imperil the nation’s solvency.

2. Reduce regulations that suffocate jobs. Why let politicians block the remarkable shale gas discoveries that would reduce pollution and help balance the nation’s energy supplies? Why is the Food and Drug Administration holding up so many life-saving drugs and devices? According to California Healthcare Institute, clearances for devices are down 43 percent and approval times have lengthened by 75 percent.

3. Lower basic rates to make corporate tax rates competitive with other nations, while eliminating corporate deductions to yield a more equitable tax system. To incentivize companies to bring back the $1 trillion trapped overseas, reduce repatriation tax rates to 15 percent from 35 percent, if the money is invested in physical assets in the United States.

4. Clarify lingering uncertainty created by the health care and financial services laws. The buck now rests, or stagnates, in the regulatory agencies. Meanwhile, small businesses cannot get loans and will not hire workers without knowing the cost of their health care. Furthermore, Medicare is on course toward bankruptcy. The McKinsey Quarterly reports that 30 percent of employers will plan to stop offering employer-sponsored insurance in the years after 2014. The Obama administration must reach agreement on practical rules to enable these vital sectors to move forward.

Instead of addressing these problems with policies that would solve them but might cause some political pain, President Obama continues to put politics over policy. The nation continues to suffer.

 


Originially posted in the New York Times Dealbook on June 27, 2011

 

Leadership Kudos and Gaffes: IBM Palmisano's Leading by Values and Winklevoss' Persistence

Leadership Kudos this week go to IBM and CEO Sam Palmisano on the occasion of the company's 100th anniversary. Since taking over from Lou Gerstner nine years ago, Palmisano has built IBM into the world's leading information technology company, eclipsing HP, Microsoft, and Intel. He has done so by focusing on "leading by values," collaboration, and intense focus on meeting global customer needs with tailored systems. Now with 440,000 employees in 170 countries and $100 billion in revenues, IBM's market capitalization has grown steadily to $200 billion.

Leadership Gaffes are awarded to Cameron and Tyler Winklevoss who continue to try to extract more money from Facebook and its founder, Mark Zuckerberg. The Winklevoss twins had an idea for an on-line dating site, not a social network, but they never designed it, got a patent on it, or commercialized it - all of which are clear criteria for intellectual property. To get rid of the case, Zuckerberg and Facebook settled for $65 million in cash and Facebook stock, which is now worth a multiple of that figure as Facebook's value has grown. Recently, a judge threw their case out of court, but these talented twins - Harvard graduates and Olympic rowers - won't give up. As Zuckerberg said, "They should get a life."

Kudos and Gaffes: Creating Shared Value

Leadership Kudos this week go to my HBS colleague Michael Porter, whose article on “Creating Shared Value” in the January edition of Harvard Business Review represents a turning point in the relationship of business to society. In the article Porter observes that, in pursuit of maximizing short-term shareholder value, business has often operated in opposition to society’s interests, leading to regulatory limitations on its actions. Porter argues persuasively that business needs to operate insync with society, leading to many more opportunities for the private sector by creating new markets and, ultimately, far greater shareholder value.

Leadership Gaffes go to President Obama’s National Labor Relations Board (NLRB), which is blocking start-up of Boeing’s new $1 billion plant in South Carolina to produce its most important new aircraft, the 787 Dreamliner, for which Boeing has already received billions of dollars in orders for exporting the plane to foreign airlines as wellas domestic. Ironically, President Obama appointed Boeing CEO Jim McNerney as co-chair of his export council with the goal of increasing U.S. exports. Boeing has already hired its first 1,000 of an eventual 10,000 employees, and hired an additional 2,000 in Seattle. Does the Obama administration’s left-hand know what the right-hand is doing? Is anyone in the White House serious about jobs?

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.

Kudos and Gaffes: Teamwork is superior to individual

Leadership Kudos of the Week go to Lionel Messi and his teammates at Barcelona for demonstrating that teamwork is superior to individual, as they won the Champion’s Cup as the world’s top professional team with skillful passing, patience, and intensity. With Iniesta, Xavi, Messi, Villa, Pedro and so many brilliant players, Barca has become the best team of all time. Every aspiring soccer player should study the tapes of this game and then learn how to do it.

Leadership Gaffes of the Week go to John Edwards for allegedly using funds given to him to run for President to cover up his affair as his wife Elizabeth was dying with cancer. It doesn’t get any worse than this. What if we had elected this man President?

Grand Rapids Memories

Growing up in the awesome 1950s in my hometown of Grand Rapids, MI, living 2 blocks from Congressman Jerry Ford, remembering cold mornings delivering newspapers & how we loved Buddy Holly, Richie Valens & The Big Bopper. Those were the days, my friend, we thought they’d never end...