Post Co-Written By John Coleman and Bill George.
The recent Occupy Wall Street protests are only the latest of a series of global movements carried out by those who have grown cynical about leadership in business, government, and society.
There is reason for this cynicism. The twenty-first century has been rocked by scandals and failures of leaders in the baby boomer generation. In business, companies like Enron and individuals like Bernard Madoff have broken laws and violated trust. In 2008 financial markets melted down, triggering the Great Recession and costing millions of people their jobs. Governments have failed to demonstrate fiscal responsibility, creating trillions in debt and stifling global growth.
After a decade of problems, it’s not hard to see why people take to the streets or grow distrustful of those who bear responsibility for the troubles we face and who have too often put their self-interest ahead of their institutions.
But while senior leaders have often failed to fulfill their responsibilities, we see many hopeful signs that the Gen X and millennial generations have learned from these failures and are prepared to step up their leadership in these trying times.
According to a recent survey of 500 young MBAs from top business schools:
- The emerging generation is actively thinking about its responsibilities and taking on leadership roles. Eighty percent believe their generation views leadership entirely different than previous generation.
- They’re globally minded. On average, MBAs worked in four countries prior to graduate school; and planned to work in five more within ten years of graduation.
- They want an open workplace that is inclusive of everyone, regardless of gender, race, national origin or sexual preference. Ninety-two percent believe workplace diversity leads to better business outcomes.
- They are highly effective at navigating an interconnected world where leaders from multiple sectors collaborate to achieve lasting solutions to seemingly intractable problems. Eighty-four percent believe it is essential for business leaders to understand the public and non-profit sectors. Nearly a quarter of them worked in the public sector prior to entering their MBA programs, and thirty percent have already worked in the non-profit sector.
We’ve gotten to know many of these emerging leaders and find their life stories are truly inspiring:
- Wendy Kopp founded Teach For America shortly after graduating from Princeton, creating the most significant innovation in public education in thirty years. Teach for America has become a prized job for graduating college seniors at leading universities like Harvard, Virginia, and Yale. Though no longer in her 30s, Mrs. Kopp set the stage for other young leaders seeking impact.
- While a college student at North Carolina, Rye Barcott founded the non-profit Carolina for Kibera, fostering healthcare and development in the slums of Kibera, Kenya. Then he built his organization even while serving as a Marine captain in Iraq, Bosnia, and the Horn of Africa.
- Umaimah Mendhro fled Pakistan as a young girl, but returned after rising through the ranks at Microsoft to build schools in the rural areas near her hometown.
- Andy Goodman so enjoyed his time as a debater at Oxford that he dedicated himself to building Qatar’s first debate system, working with the leaders of that country to give students an opportunity to engage the country’s most important issues in free and open dialogue.
- Building on the year she spent working in Brazil following high school, Abigail Falik founded Global Citizen Year – which offers graduating high school seniors a gap year to engage in service learning and leadership development in a foreign country prior to entering college.
Far from unique, these leaders are typical of the many people in their 20s and 30s we have worked with. Many young leaders are consciously building careers that combine both innovation and social good, while working tirelessly to have a positive impact on this critical moment in the world’s history.
The holidays can be a confusing time. With 24/7 media outlets relentlessly pursuing negative stories, it is tempting to be pessimistic about the coming year. But we think there are signs that the next generation of leaders has learned from these crises. No doubt the road ahead will be filled with challenges and pitfalls, but, with help, we believe these emerging leaders will replace cynicism with hope, callousness with compassion, and destructive self-interest with creation of societal gains.
The time is ripe for the baby boomer leaders to begin providing opportunities to this new generation of young leaders to demonstrate just how effective their kind of authentic, collaborative leadership can be. And perhaps the pessimism of 2011 can turn into a bit of hope for the new year.
Bill George is professor of management practice at Harvard Business School and the author of five books including True North and True North Groups. John Coleman is an author of Passion and Purpose: Stories from the Best and Brightest Young Business leaders.
Leadership Kudos go to European financial leaders IMF president Christine Lagarde and EC bank president Mario Draghi for stepping up to resolve the Euro crisis, in part with IMF’s €2.2 billion loan. Their concerted leadership has gone a long way to stabilizing the financial crisis, although much more work well be required to bring the budgets and debts of member countries back to fiscal responsibility and stability.
Leadership Gaffes go to the Olympus board of directors and former CEO Michael Woodford for poor governance that led to the cover-up of $1.7 billion in losses. The details are murky but the failures of leadership are very evident. As a result of the board’s poor governance, a great company is being destroyed and customer and investor confidence is being shattered.
Leadership Kudos this week go to John Hope Bryant, founder, chairman and CEO of Operation Hope, the nation's leading non-profit organization committed to financial literacy. Since founding Operation Hope in 1992, Bryant has raised more than $500 million to help the poor achieve financial literacy. He is vice chair of the President's Advisory Council on Financial Literacy, appointed by former President George W. Bush and reappointed by President Barack Obama. Bryant is a Young Global Leader of the World Economic Forum and author of Love Leadership. With HRH Crown Prince Haakon of Norway and Finnish philosopher Pekka Himanen, Bryant founded Global Dignity Day, which has had global impact in restoring dignity for all people of the world. Most recently, Bryant started the Silver Rights Movement to help all people achieve financial literacy and 5MK - or Five Million Kids - to help children become financially literate. He is a remarkable leader: compassionate, passionate, and focused on helping the poor around the world.
Leadership Gaffes go to Corporate Lobbyists for their attempts to water down the Foreign Corrupt Practices Act (FCPA). While some clarifications in definitions may be necessary, we shouldn’t lose sight that FCPA has been an important force for the integrity of U.S. corporations in doing business overseas, setting a higher standard than those practiced by many other nations. The act has given the United States more than the moral high ground, it has also given American companies a competitive advantage. By taking a higher road of ethical standards and focusing on product and service superiority, rather than paying bribes, U.S. companies outmatch non-U.S. companies in terms of real value creation. Indirectly, FCPA is having the impact of encouraging other nations also to set high standards of business practice. Reducing the U.S. standards for integrity would be a major mistake.
The fate of the fiscal stability of the United States was sealed on the weekend of December 4-5, 2010. The previous Thursday President Obama received the long-awaited report of his National Commission on Fiscal Responsibility and Reform, co-chaired by Democrat Erskine Bowles and Republican Alan Simpson. The report of the commission received a favorable vote with an 11-7 majority, but fell short of the 14 votes required for a mandatory "up-or-down" vote by Congress.
The commissioners delivered a balanced report that reduced U.S. deficits by $4 trillion over ten years - $3 trillion from spending cuts and $1 trillion from revenue increases. It received favorable consideration from both Republicans and Democrats on the commission. President Obama had the perfect opportunity to restore stability to U.S. finances by endorsing the plan and sending it to Congress.
For the President it was the perfect political setup, complete with "air cover." He appointed a bipartisan commission. It had delivered a bipartisan proposal. Surely, he could rally the country behind it by going directly to the American people. While the deficit reduction plan would have faced opposition from the extreme right and extreme left, President Obama had the opportunity to demonstrate his leadership and garner the support of fiscal conservatives, moderates and independents around the country.
What did the President do? Nothing.
The silence from the White House was deafening. The President ignored the commission's report entirely. He chose the politically expedient route and, in so doing, failed to lead the country by improving its long-run fiscal health.
Actually, what he did was worse than nothing. Over that weekend, the President negotiated with Republican congressional leaders a $4 trillion increase in the nation's deficits over ten years ($858 billion for the first two years, with the remaining $3.2 trillion projected over the next eight years). The added deficits came from a combination of tax cuts and spending increases - just the opposite of what the Bowles-Simpson commission recommended.
This new deal was passed by Congress over the objections of Democratic congressional leaders, who felt left out in the cold. On December 18, 2010 the President signed the deal into law, thereby killing any hope of deficit reductions coming from the Bowles-Simpson recommendations.
In one weekend our nation's leaders swung from a plan to reduce the deficit $4 trillion to actions that increased it $4 trillion – an $8 trillion unfavorable swing. This proves the old political adage that it is easier to cut taxes and raise spending that it is to demonstrate fiscal responsibility, as long as you've got a plan to get out of town before the sheriff comes.
The sheriff didn't take long to arrive. Realizing this President wasn’t prepared to take tough fiscal actions, Republican leaders next played brinksmanship with appropriations. That brought the federal government to the verge of shutting down at midnight on April 8, 2011. A last minute deal to cut the budget by $38 billion averted the shutdown. President Obama hailed the agreement as "the biggest annual spending cut in history." Hmmm. Seems pretty paltry compared to $4 trillion over ten years.
Republican leaders, seeing blood in the water, attacked again like sharks on a rampage in August, 2011. Demanding more spending cuts with no revenue increases, Republicans held the line against raising the debt ceiling until the August 1st deadline. A last-minute compromise reflected the agreement to disagree. At the 11th hour, the President and congressional leaders passed the Budget Control Act, appointing a Congressional "super committee" with the requirement to reduce the deficit by $1.2 trillion by November 23, 2011.
Concerned by feckless political behavior, Standard & Poor's took the historic step of reducing the U.S. sovereign debt rating from AAA to AA+. "The political brinksmanship of recent months," the company said, "highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed."
This paved the way for the super-committee's failure on Monday. If committee members were ever serious about compromise, it wasn't evident. Republicans refused to agree to any revenue increases, causing Democrats to back away from spending and entitlement cuts they had offered. Now $1.2 trillion in automatic cuts go into effect next September. Speaking on CNN, political commentator David Gergen called the move "an irresponsible, reckless gamble."
The consequence of this gridlock? The financial troubles of the U.S. get worse, the country's competitiveness continues to slip, and the prospect of a future deal is even further away.
And it all started with an $8 trillion reversal one weekend last December.
Gov. Mark Dayton's jobs summit last month was a remarkable example of the extraordinary collaboration taking place between business leaders and government officials to rebuild Minnesota's jobs machine.
Historically, Minnesota has benefited from diverse industries including agriculture and food products, financial and professional services, health care, education, and high-technology manufacturing that allowed us to offset economic downturns. But after outpacing the nation for 30 years in job creation, Minnesota has fallen behind since 2003.
The 800 business and civic leaders who jammed into the ballroom at the Crowne Plaza in St. Paul engaged in serious discussions about how to stimulate job growth in Minnesota and re-create the Minnesota Miracle. This convergence of business and government leaders was a welcome contrast to the political gridlock that shut down state government in July.
At the summit the governor wasted no time in making his position clear: "It is the task of private enterprise to create jobs and wealth," he said. "The government's role is to create the environment and rules that make that possible." Dayton put substance behind his pledge, announcing a $100 million fund for small business loans, distributed through 300 Minnesota community banks.
These efforts are none too soon. Alarmed by declining job trends, a group of leading CEOs and civic leaders formed the Itasca Jobs Task Force in 2009. Chaired by Ken Powell of General Mills and Marilyn Carlson Nelson of Carlson Companies, their 2010 report highlighted three strategic initiatives to improve the region's competitiveness:
•Address the cost of doing business.
•Develop a vision, strategy, and approach for regional economic development.
•Enhance entrepreneurship and innovation.
To implement the report's recommendations, Itasca formed a team of 60 participants, chaired by HealthPartners CEO Mary Brainerd. "For us, this is the most important thing we have been part of,'' Brainerd said. "The commitment to a thriving community is really extraordinary."
In addition, the Minnesota Business Partnership, which includes the heads of 150 local companies, formed three task forces of its own under the leadership of Ecolab CEO Doug Baker Jr. The partnership made concrete recommendations to the governor and Legislature regarding fiscal policy, health care, and education.
Also last month, 12 large companies joined with local municipalities to launch Greater MSP, with Baker as its chairman. A $2 million budget was established, with 70 percent from the 12 companies and the remainder from government units. Its mission is to recruit out-of-state and international companies to locate in Minnesota and to encourage local companies to expand locally. Michael Langley was hired as executive director, coming from Pittsburgh, where he led a comparable initiative.
These remarkable efforts are a testament to the quality of Minnesota's leaders. Our state is blessed to be home to 20 Fortune 500 companies led by progressive leaders who understand that Minnesota's quality of life and a well-educated workforce are essential to their success -- and necessary to offset negatives like high taxes, high cost of living and weather.
Historically, Minnesota's strength has been the quality of its workforce. Thanks to efforts put in place 50 years ago, the Twin Cities leads the nation with 93 percent of citizens holding high school diplomas, and is third in bachelor's or graduate degrees with 37 percent. Ecolab's Baker notes, "Ultimately, the education and skills of the workforce are MSP's competitive advantages."
But this advantage appears to be at risk. The Itasca report forecast a gap by 2030 of 322,000 skilled workers that could constrain the region's growth. Bush Foundation President Peter Hutchinson notes that these other efforts will be in vain unless the region has the right workforce. He favors investments in infrastructure, K-12 schools, and higher education.
"It's a painful reality that many of the 215,000 Minnesotans without jobs don't have the education needed for the new economy,'' said Steven Rosenstone, the new chancellor of Minnesota State Colleges and Universities (MnSCU). "By 2018, 78 percent of Minnesota's jobs will require postsecondary education."
Minnesota has its challenges. But given the remarkably committed leaders we have today, I feel confident that these new initiatives will bear fruit and create the second Minnesota Miracle.
Originially posted: StarTribune
November 19, 2011
Leadership Kudos this week go to Erskine Bowles and Alan Simpson, co-chairs of President Obama’s Deficit Reduction Commission. Last December they proposed a $4 trillion reduction in U.S. deficits over ten years with a balanced plan of spending and entitlement cuts, and revenue increases. Although the commission passed the plan with an 11-7 vote, it was not enough for a mandatory Congressional vote. The thoughtful plan was ignored by President Obama and Congressional leaders in both parties. A great tragedy that led to the historic downgrading of U.S. sovereign credit ratings this past summer.
Leadership Gaffes go to Congressional Super-Committee for failing to come to a compromise agreement to reduce U.S. deficit by $1.2 trillion, setting the stage for automatic across-the-board cuts to go into effect. Confidence in Congress has dropped to 9%, and deservedly so. Congressional leaders continue to put party politics ahead of the needs of the country, as our financial state erodes and we lose competitiveness to many other countries. When will our politicians wake up and put their country first?
Leadership Kudos for the week go to Andrew Mason, CEO of Groupon, for leading his creative web-based company to a successful initial public offering whose value results from a unique marketing and promotional idea. After much controversy over the summer months, Groupon’s IPO came to market during a turbulent period for stocks. Priced at $20.00 per share, Groupon rose almost immediately by 31% to $26 per share. After five trading days, it sustained most but not all of its increased value, closing last week at $24.25, a 21% increase above its initial offering. Throughout this period Mason has been steady and committed to moving his young company ahead.
Leadership Gaffes go to Silvio Berlusconi, the now deposed leader of Italy, who finally stepped down officially as prime minister over this past weekend. Berlusconi’s flagrant mismanagement of Italy’s finances has brought the country to the brink of bankruptcy. He served three times as prime minister, dating back to 1994, yet today is one of the world’s richest people with nearly $8 in net worth. Berlusconi’s ethics are highly questionable, as he continues to favor his own enterprises to the detriment of his country. His successor, Mario Monti, is a man of the highest integrity, economic understanding, and the character to lead Italy through the current crisis.
It’s no secret that Americans are frustrated with the lack of job opportunities available.
As the unemployment rate held strong in September at 9.1% and 26 million Americans (16.5% of the workforce) were still unable to find full-time jobs, it is becoming increasingly clear that the economy is in “a jobless stagnation.” In reality, the bulk of those 26 million people aren’t going to find regular fulltime jobs for many years.
There are constant news stories profiling young professionals who have college degrees in hand but nowhere to put those years of education into practice. Of the graduates from last June’s college classes who were fortunate to find work, fewer than half of them found jobs requiring a college degree.
The new generation of 20 something’s is taking matters into its own hands. Facing this situation, more and more people are creating their own jobs as independent contractors and entrepreneurs. The Bureau of Labor Statistics estimates that unemployed job creators will account for 40% of all jobs by 2030.
Members of the Millennial generation know how to build their careers – and their lives – by designing their own work, often electronically, from their homes. Inc. magazine released its annual survey of top entrepreneurs under the age of 30 for 2011. These young business men and women exemplify the young professionals who are choosing to take their careers into their own hands, instead of waiting around in a bleak job environment.
Take, for example, Drew Houston, who founded his company Dropbox in 2007. Dropbox is a cloud-based file-syncing service that allows users to access their digital files from nearly any computer or mobile device. Houston started writing code for the program when he mistakenly left his USB drive at home and could not access the files he needed.
Jessica Mah is a serial entrepreneur who founded three start-ups by the age of 19. Mah had been using Mint.com for a few years and became frustrated the site did not provide an applicable function for her small businesses. As a result, inDinero was contrived. inDinero is a business helping other small businesses grow and track their progress through the accounting services that can oftentimes be wildly inconvenient. Mah and her co-founder Andy Su built the prototype for inDinero and launched the company in 2009.
While still a college student at the University of Seattle, Brayden Olson founded Novel, Inc., a creative game company focusing on simulations for corporations to develop and assess people. Olsen lived at home with his parents to save money and accelerated his education to graduate in three years. At age twenty, he decided to focus his full attention on building Novel. He was fortunate to attract $500,000 in venture capital funds to enable him to attract a quality team around him that could develop the complex software required for Novel’s games. His first products will enter test markets early next year.
Young entrepreneurs also have time to experiment with ideas and keep learning. Zach Clayton started a subscription-based media company while still in college at the University of North Carolina. That business idea didn’t take off, but it inspired him to start another one, which did. After graduating from Harvard Business School in 2009, Zach started business#3: Three Ships Media. The company helps its clients acquire new customers through digital media and social media channels. Without raising venture capital, he’s profitably grown Three Ships into a multi-million dollar business. (Note: I have used Zach’s services for Website creation and social media research).
Other former job seekers are creating work as creative strategy consultants, dog walkers for dual career families, home office managers, and personal IT consultants.
This economy requires a new class of technology-enabled businesses. The United States needs innovation, human capital investments, and research and development to build those businesses. Most importantly, it needs the entrepreneurs to get them started. The new generation has the potential to create entirely new services that will rebuild a vital economy, but one that looks entirely different from the last ten years.
My advice to job seekers is to stop shooting resumes and emails off to everyone you know in hopes of landing a regular job. The odds are that it wouldn’t use your full abilities, nor stoke your passions. Instead, think hard about what you love to and what you are really good at. Then seize the initiative and create your own job.
The advice of Steve Jobs, who dropped out of college and founded Apple at age 21, should resonate with you: "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. Have the courage to follow your heart and intuition."
Leadership Kudos for the week go to Germany Chancellor Angela Merkel and French President Nicholas Sarkozy. Their tenacity and political courage enabled them to forge a deal to prevent the pending default in Greece and requiring the bankers to take a reduction of 50 percent in the value of their bonds. This was not an easy sell politically in either country, but they both recognized the importance of the Euro and keeping a single trading group in Europe. Only time will tell whether Europe’s other high-debt nations like Spain, Italy and Portugal will move aggressively to get their economies in order and reduce their debt, but Merkel and Sarkozy have sent an important signal of what is required to save the Euro.
Leadership Gaffes go to MF Global and CEO Jon Corzine for taking the firm into bankruptcy by betting $6.3 billion on the sovereign debt of Italy and Spain, refusing to listen to colleagues who pleaded with him to reduce the risk, and declaring “our positions have relatively little underlying principal risk.” In this volatile era solid risk management, adaptability to changing markets, and high levels of liquidity are essential for survival.
Fortune magazine is out with its annual “40 Under 40” list of business leaders and superstars. Reading through their bios gives great hope for the leadership we can anticipate from the next generation. All forty of these leaders are passionate about their work, deeply engaged in it, and most important of all, committed to making a difference in the world.
Familiar names like Facebook founder Mark Zuckerberg (#1), Google founders Larry Page (#2) and Sergey Brin, and Tony Hsieh of Zappos dot the list. But a deeper dive reveals some of the most interesting leaders of the new generation. Let’s take a deeper look at some of them:
- Aditya Mittal (#4) may have a famous father, Lakshmi Mittal, but he is a genuine star in his own right. Aditya has been CFO of AcelorMittal, the world’s leading steel company, for a number of years and he personally led the complex merger between French producer Acelor and U.K.-based Mittal. In spite of the pressures of his work, he is equally committed to his children and his wife’s career.
- Daniel Ammann (#7) is the CFO of General Motors who has led GM back to profitability, financial stability, and competitive labor agreements with the UAW. The latter will enable GM to get a lot closer to being competitive on a global scale and bring small car production back to Michigan – and they said it couldn’t be done!
- The entire George family is thrilled that our son Jeffrey made the list at #9. Thanks to Novartis leaders Dan Vasella and Joe Jimenez, he was given a remarkable opportunity three years ago to lead the turnaround of its generics drug subsidiary, Sandoz. Now the second largest generics company in the world, Sandoz has grown in double digits each of the last three years.
- Kevin Plank (#12) is a superstar who founded Under Armour and has built it into a remarkably successful sportswear company. Its fashion-forward apparel are the rage of the younger generation and it's is rapidly growing among the older set as well.
- Cesar Conde (#14) is president of Univision Networks, the leading Spanish language television network in the U.S. Cesar’s mother fled Cuba after the Castro revolution. In 2007 we interviewed Cesar for True North where he noted in reference to his employees, “It is motivating to realize I have the opportunity to do something great for other people.” Cesar is a caring and compassionate leader who heads the most rapidly growing cable network.
- Michael Hasenstab (#15) runs one of the world’s largest hedge funds for Franklin Templeton, where he manages $60 billion and has achieved double digit gains with contrarian bets. Coincidentally, he went to Carleton with our son Jeff, where they were both international relations majors who led Carleton’s very successful Model UN team.
- Marissa Mayer (#20) is a superstar at Google where she led the creation of breakthroughs like Google Earth and Google Maps. Currently, she is spearheading the integration of Zagat, Google’s most recent acquisition.
- Libby Wadle (#23) is executive vice president of J. Crew, where she built its outlet division and is currently running its retail and direct-sales operations. That puts her in line to succeed CEO Mickey Drexler.
- Charles Best (#31) founded Donors Choose, a rapidly growing non-profit that has raised $90 for public school classrooms in the past decade. His creative funding model is bringing in tens of thousands of new donors to the philanthropy world.
- Erin Burnett (#33) is the rapidly rising star of the cable world. She led CNBC’s very successful early morning show, “Squawk Box,” where she interviewed me numerous times. The depth of her questions reflected a probing intellect and thoughtful insights that went well beyond the obvious conclusions. Now she has joined CNN, where she has her own primetime show. Look for more great things in the future from Erin.
- Carolyn Everson (#35) is leading Facebook’s initiatives in creating partnerships with name brands and advertising agencies – the backbone of Facebook’s revenues that has created its market value of more than $50 billion. She and COO Sheryl Sandberg form an awesome team whose efforts make Mark Zuckerberg (#1) not only look good but remarkably wealthy, on paper at least.