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Bill George

Harvard Business School Professor, former Medtronic CEO

Category: Leader

10 Great Blogs from the World Business Forum

There’s been a lot  of chatter in the blogosphere on the heels of last week’s World Business Forum.  Here are 10 of the premier blogs I’ve come across from several folks you’ll recognize.

Andrea Meyer Bill Clinton & Bill George on Leadership (World Business Forum #wbf09); “Former President Bill Clinton was asked about his lessons on leadership.  His answer was threefold:

  • It begins with a vision of where you want to go: you have to articulate where you are, where you want to go, and how to get there
  • A leader has to continually communicate and sell the vision
  • Leaders need to understand people, not just policies

That last point about leaders needing to understand people was the comment that was most retweeted during the live-tweeting of Clinton’s talk. It was the point that resonated the most deeply with the audience.”

 

Dr. Ellen WeberJeffrey Sachs on Influence and Money Abuse

Wonder why so little of the money trickles down to any of brilliant ideas you champion?  Or do you have ideas about what potent solution could turn this ferocious downturn around?  Jeffrey Sachs called for a complete change in economic policy…

 

Kathy RobisonThinking Without the Box

“So how do you go about getting rid of the proverbial box?  It is hard enough just to get people to think outside of the box, how can we possible get rid of the box?  The reality is, that the box is the very thing that is holding us back.  The box is a framework that is often hard to look past when it is staring you in the face.  We are stuck in a business model born 150 years ago during the Industrial Revolution, and it simply no longer provides what is needed for businesses to continue to flourish.”

 

Steve ToddWorld Business Forum 2009 Wrap-up #WBF09:  “…in summary the speakers provided the audience with advice and insight into the following different areas:

  • Trends and directions in managing people within global corporations
  • Must-have qualities for corporate leaders
  • Trends and directions in corporate marketing
  • Economic outlook from outside of the US
  • A call to action by former US President Bill Clinton

 

Stuart MinimanConnections Make the Event

What pulls people into conferences? Big name speakers, a nice location, and all of the trinkets that you can fit while not going over your luggage weight limit (or in yet another conference bag)?  Of course not, it is the information that is important.  At the World Business Forum this week, it was the connections to ideas and people that made the event worth attending…

 

Paul GladerWSJ @ WBF – Clinton: Bush Administration Should Have Rescued Lehman

“I feel more strongly now it was wrong,” said Mr. Clinton. “They decided not to facilitate a loan to Lehman Brothers. They thought Lehman Brothers was so much smaller than AIG or Bear Stearns, they could afford to let it fail. The problem is that Lehman Brothers had already paid. When they failed, all the rest of us paid. It led to a collapse of the stock market. Every bank in America that had mortgage investments it hadn’t sold off looked like it had bad loans.”

 

Linda PetockWorld Business Forum: Lessons from the Bloggers Hub

Throughout it all, there were several key concepts that kept cropping up: transparency, innovation, global interdependence, emerging markets, resiliency, and compassion. What does this mean for you as a professional and a job seeker? To paraphrase Gary Hamel: “We are no longer in the knowledge economy. We are in the creative economy.”

 

Margery WeinsteinIs Your Company See-Through?

Not to be overly titillating, but the most successful company going forward may also be the most see-through…

 

Kelly EvansKraft CEO: With or Without Cadbury, ‘We’re Ready to Take That Next Step’

Ms. Rosenfeld toyed with the crowd at the start of her speech today (the subject of which was titled “Leading Transformational Change”): “Before I get going,” she said with a wry smile, “our lawyers have asked me to tell you all the following.”

 

Hank WasiakAll-Star Morning Wisdom from the World Business Forum

Setting the Stage.  Les Hinton, CEO of the Dow Jones Company summed up the past year with a quote. “If you ride through hell, you don’t stop.” He advised the audience to be vigilant and “keep on riding” since there are still challenges ahead. It’s not over yet. He was simultaneously optimistic about focusing on the future, the importance of small business, and sticking to what business does best: creating value!

Questions We Didn’t Get To Answer

It’s been a little over two weeks since the “Summit on Leadership in Crisis,” and we’re still seeing questions and feedback pour in via Twitter and email.  I was flipping through several of these over coffee this morning, and while I don’t have the other panelists here with me, I thought I’d take a crack at answering a few as a way to wrap up this first discussion on leadership in crisis (of many more to come).    

 

As always, would love to hear your feedback.

 

Q:  “How does an organization get back the confidence needed to perform @ high levels in tough time?”

 

A:   It needs to start at both the very top and the very bottom for confidence to spread within an entire company in the midst of crisis.  Leaders at the top need to be honest and candid about the challenges ahead, while continuing to project optimism and inspiration.  Our panelist Anne Mulcahy did a phenomenal job of this when she first took the helm at Xerox.

 

But employees cannot just rely on confidence to trickle down from their CEO – mid-level managers and the employees also must be bulwarks of poise and self-reliance.  Companies need all employees asking: “What can I do more efficiently and positively today, and how can I help someone else do the same?”  To regain confidence, leaders need to make it a company-wide prerogative.

 

Q:  “Our crisis of capitalism seems to be mainly a crisis of character.  How can we – or can we – develop character traits like courage and integrity?

 

A:  “Crisis of character” is an apt description for the “short-termist,” unprincipled leadership that led to the economic crisis.  And while recognition of the root cause is a great first action in ensuring that we do not repeat the economic collapse of 08-09, it is merely the first of many needed to combat this “crisis of character.”  The next steps require a working combination of several congruent elements:

 

First, leaders must begin taking themselves to task and ensuring that their behavior is geared toward long-term viability not just short-term profit-seeking.  Likewise, boards of directors need to make a concerted effort to incentivize those positive behaviors, primarily by tying compensation to performance.  Furthermore, the U.S. government must resist the temptation to over-regulate and install overly-restrictive executive pay standards.  Regulation is important, but it can easily go too far.

We need all decision-making bodies to jointly foster a climate where traits like courage and integrity are concretely rewarded, not simply lauded as idealistic traits.  The best way to encourage principled behavior to take root in the capitalist system is to incentivize it.  This, in turn, will help ensure the long-term viability and profitability of American companies.

 

Q:  “How can we solve any major problems in this climate of incivility?  And what kind of leadership is required to bring us back to civility?”

A:  To the first question, unfortunately we will be incapable generate the most necessary and comprehensive solutions if the current climate persists.  While speaking to our audience during the Summit, David Gergen gave an honest assessment of the state of incivility in American political discussion – if we continue trending along this path of vitriol and blind argument, we risk sowing the seeds of our republic’s demise.  If we continue to yell, rather than debate respectfully, we’ll continue putting off solutions to issues like health care, education, and energy policy reform.  And accepting this legislative stalemate could lead to our being surpassed by other nations, both in progress and in prestige. 

 

Partisan jockeying should have no place, and instead leaders must be willing to risk popularity in the interests of real solutions.  We need leaders who are capable of making the difficult decisions and of reaching reasonable compromises; and we need them to insist on doing so in a respectful manner.  It would be helpful if that mentality not only blossomed in the halls of Congress, but in the blogosphere and the mainstream media.    

Let’s Bury Short-Termism to Avoid Another Crisis

The Aspen Institute recently made the following announcement:

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

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

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

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

The proposal in this statement leverages responsible investment behavior by:

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

2) aligning investor interests with company interests; and

3) increasing the transparency of shareholder/investor influence.

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

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

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

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

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

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

You want smart investing?  Make it long-term.

GM Borrows a Page from the Iacocca Playbook

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

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

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

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

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

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

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

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

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

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

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

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

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

“Crisis Called. Who Answered?” WBF Contest Nominee: Dr. Bill Cala of Rochester, NY

The “Crisis Called. Who Answered?” World Business Forum (WBF) Contest is off to a breakaway start, with nominations pouring in for the best crisis-time leader across the past year.  This particularly compelling nomination comes from Rochester, New York in support of Dr. Bill Cala.

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

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

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

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

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

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

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

Dr. Cala is undoubtedly among the best in American leadership.  And while he is most certainly in the running, the contest is not over yet – who would YOU nominate as the best crisis-time leader in America.

JP Morgan’s Jamie Dimon: A Leader Steps Up

In these days when corporate executives are keeping their heads down and trying to stay out of trouble, it is refreshing when one CEO steps up to a challenge and a broader responsibility. In taking over Bear Stearns, the failing investment bank, just hours before it would have been forced into bankruptcy by a proverbial “run on the bank,” JP Morgan CEO Jamie Dimon took on a broad public responsibility to keep financial markets from unraveling and apparently made a very attractive purchase for his institution.

Not that Dimon acted alone. He had a little help from his friends – namely, Secretary of the Treasury Henry Paulson and Federal Reserve Chairman Ben Bernanke – who urged Dimon to step to the challenge of taking over Bear and agreed to guarantee up to $30 billion in failing mortgage-backed securities.

Having watched their shares fall from $170 per share a year ago to the $2 settlement outraged Bear´s shareholders. On the other hand, media pundits like CNN´s Lou Dobbs called it a “corporate bailout” and charged the Bush administration with enriching Bear´s executives. Not exactly, Lou. Thirty per cent of Bear Stearns´ shares are held by executives and employees, who saw their value decline by more than 98 per cent in the last year.

The reality is that there are many more legitimate claimants to a firm like Bear than just its shareholders, especially when its equity value is collapsing. Investment firms will heavily leverage their equity – in Bear´s case, more than 30:1 – and the lenders and a wide array of counterparties all have a stake in the financial health of the firm. I believe that Paulson and Bernanke acted wisely to negotiate a settlement that kept Bear from defaulting on its debt obligations while letting the equity holders take the largest financial hit. After all, they were responsible for the position that Bear Stearns got itself into this past week, and they should pay the price. By the way, this responsibility should also mean that Bear Stearns executives like CEO Alan Schwartz and former CEO James Cayne, who held the top slot until this past January, should not receive any termination or change-of-control payments as a result of the sale to JP Morgan.

The Founder Returns: Howard Schultz is back as CEO of Starbucks

In returning as Starbucks´ CEO, Howard Schultz follows in the footsteps of Steve Jobs, Michael Dell, and a long line of founders who turn the reins of their companies over to a hand-picked successor and wind up being dissatisfied with the results.

Conventional psychology tells us that founders like Schultz cannot let go of their babies, get frustrated being away from the action, and believe that only they can run the company. If the explanation were that simple, these returning founders would fall flat on their respective faces. Yet surprisingly, they do extremely well in their encores. To understand why, we have to look a lot deeper at what´s going on in these “redux” performances.

First of all, founders like Schultz, Dell, Jobs and others have a far better grasp than their successors on the essentials of the business and the internal people who make it go. Their initial success was based on brilliant intuitive skills that enabled them to create unique value for their customers and to inspire their employees. They combine that intuition with an unstoppable drive to see their business succeed and the ability to motivate their teams to peak performance. They are gifted leaders, even without formal management training.

On the other hand, successors like Jim Donald at Starbucks, John Scully at Apple, and Kevin Rollins at Dell were professional managers that specialize in the processes of management, but lack the creativity and passion of the founders. In attempting to install the type of discipline and systematic approaches that mark a company like General Electric, they fail to grasp what made the business successful in the first place and demotivate the key people who make the company go. Often, they spend more time in meetings than they do in the marketplace, and more time working the numbers than learning from their employees.

Let´s delve into these three cases in point to see what´s really going on:

  • Howard Schultz built Starbucks around the principle that “satisfied employees create satisfied customers.” Even as chairman, he visited two dozen stores a week, just to observe the interplay between Starbucks employees and their customers. What he saw in the past year was deeply disturbing to him: in an effort to speed up service, Starbucks management put large, automated machines between the barista and the customer, thus taking away the charm and smell of the coffee-making process. All of a sudden, Starbucks felt more like a McDonald´s store. When Schultz wrote a confidential memo to his successor expressing this concern, he could not have been happy to see it leaked to the media.
  • Steve Jobs got brutally forced out of the company he founded by Scully and the Apple board, not even being given the dignity accorded Schultz and Dell to stay as board chair. So founded Pixar and became highly successful in creating animated film. Meanwhile, the only thing sinking faster than Apple´s market share was its morale. The “cult” of Apple´s famed software geniuses was dying, as a succession of failed CEOs nearly put the company out of business. Upon his return, a wiser but no less creative Steve Jobs brought the magic back to Apple and transformed the company with the Ipod and Iphone. These days Apple investors are smiling all the way to the bank.
  • Mike Dell built his franchise on low cost computers, distributed directly to customers. The company was wildly successful until his successor failed to master the need to provide service, especially to corporate clients. Over at Hewlett-Packard, Mark Hurd, Carly Fiorina´s successor, saw an opening and took advantage of Dell´s weakness. Without Mike Dell´s daily inspiration, morale at the company sunk rapidly and is only now beginning to recover under Dell´s second act.

These three examples, and many more like them, give us valuable insights into what makes companies successful. Simply stated, it is leadership. There is a plethora of skilled managers around who know how to manage budgets, analyze computer models, and run businesses with systems and procedures. Business schools are turning out more and more of them every year. All too often these analytically-oriented managers drive out the very leaders who make companies successful in the first place.

Brilliant leaders understand what it takes for their companies to succeed: inspired employees who can create great value for their customers. Instead of churning out numbers experts, our business schools ought to figure how to create more entrepreneurs who can follow in the footsteps of authentic leaders like Schultz, Jobs, and Dell.

The Triumph of Competence over Charisma

Despite all of the failures at the top of companies in recent years – or perhaps because of them – we are finally moving into an era of competent leaders, favoring them over charismatic leaders.

The appointment of the highly competent Bob Zoellick to replace the charismatic Paul Wolfowitz as president of the World Bank is just the latest such move. Zoellick is highly respected by finance ministers and bankers around the world and will be quickly confirmed. He was passed over two years ago for the ideological Wolfowitz who didn´t take long to alienate the bank´s staff as well as financial leaders around the world with his focus on ideology rather than performance. Look for Zoellick to turn that around quickly and to rebuild the trust in the institution. Unlike Wolfowitz, who placed his own interests ahead of the institution he was elected to lead, Zoellick has always been a builder of competent institutions who gets things done.

Zoellick´s selection has echoes of the replacement of Dick Grasso, the charismatic leader of the New York Stock Exchange by the very competent John Thain. The NYSE has flourished under Thain´s leadership, as he has quietly led it into the era of electronic trading and global trading.

It is ironic that several of the most competent leaders of today were initially passed over by their boards who gave preference to charismatic leaders instead. When these charismatic leaders got their companies in trouble, the boards turned to these competent leaders to bail the company out. Just look at the enormous success these leaders have achieved:

o A.G. Lafley at Procter & Gamble was passed over for the charismatic Dirk Jager. In less than two years Jager´s abrasiveness and abandonment of long-held P&G values led to a revolt of its management and his replacement with Lafley. Lafley has rebuilt the trust in P&G while quietly transforming the company into a global powerhouse in consumer goods.

  • Anne Mulcahy at Xerox was also passed over for IBM star Rick Thoman, who led the company to the brink of bankruptcy in just thirteen months. Mulcahy avoided bankruptcy and rebuilt Xerox by focusing on its core products, new technologies, and customer service while reducing the company´s debt by 60 percent.
  • Andrea Jung of Avon was also passed over by the appointment of a board member who came from Duracell, the battery company. In just twenty months the Avon board recognized its mistake and replaced him with Jung. Jung quickly changed the company´s mission to “the empowerment of women” and built her organization from 1.5 million to 5.5 million people, the largest in the world.
  • The board of Hewlett-Packard recruited the highly charismatic Carly Fiorina as its CEO. Fiorina hit the top of Fortune´s “Most Powerful Women” lists several times, just as the company´s performance was tanking and its organization imploding. To replace Fiorina, the H-P board recruited Mark Hurd, another highly competent, but not charismatic, leader. In less than two years, Hurd has put H-P back on track, as it regains lost market leadership and its original culture.

Some of today´s top leaders were simply recognized for their competence – and have demonstrated it time and again, while building great organizations capable of sustaining growth:

  • Steve Reinemund led PepsiCo to great heights for six years before deciding to focus on his family and teenage twins.
  • Bob Ulrich took over the reins of Target from a failing leader a dozen years ago and has quietly transformed the company into the retail powerhouse with its great values for consumers with fashion-forward merchandise.
  • Doug Conant has transformed Campbell´s Soup into a growth company once again by developing competent, authentic leaders throughout his organization.

There are many more examples of competent leaders who are emerging as the giants of the 21st century: Dick Kovacevich of Wells Fargo, Jeff Immelt of GE, Rex Tillerson of ExxonMobil, Sam Palmisano of IBM, Ken Lewis of Bank of America, Lloyd Blankfein of Goldman Sachs, John Mack of Morgan Stanley, Ken Chenault of American Express, and Dan Vasella of Novartis. All of them give priority to building leadership in the marketplace and authentic leadership in their organizations over publicity for themselves. They all have well controlled egos and are focused entirely on building great organizations.

Isn´t it time for corporate boards to abandon the needless search for charismatic leaders and simply promote the competent, authentic leaders right in front of them? These new leaders may not impress Wall Street by hyping the company´s stock, but in the long-run they will create far greater shareholder value by building authentic growth organizations that stay focused on their True North.

Where Have All the Leaders Gone?

Paul Wolfowitz, Alberto Gonzales, Joseph Nacchio of Qwest, Heinrich von Pierer of Siemens, . . . What do they have in common?

A failure to accept the responsibilities of leadership.

No one seems to be willing to take responsibility for leading anymore. Either they “don´t know,” “can´t recall,” or “were just following their lawyer´s advice.” These leaders are either asleep, incompetent, not telling the truth about their actions, or simply unwilling to be responsible leaders.

What ever happened to leading with honor and accepting full responsibility for leadership? It brings to mind the title of the introduction to my first book, Authentic Leadership, “Where Have All the Leaders Gone?” – that is also the title of Lee Iacocca´s new book.

Let´s look at what these leaders have done or said and explore the common threads:

Paul Wolfowitz:
Wolfowitz directed the World Bank to pay after-tax compensation at the State Department for his “friend” Shaha Riza which exceeded the amount paid to Secretary of State Condoleezza Rice, and refused to own up to it. In so doing, he has besmirched the values of the office he is sworn to uphold, and completely undermined the credibility of his “anti-corruption” campaign. In working behind the scenes to hang onto his job, he risks cutting so many deals that he will render the power of his office useless.

Why doesn´t Wolfowitz resign with honor?

Alberto Gonzales:
Under oath before the Senate Committee, Gonzales testified time after time that he “could not recall” being involved with the decisions to eliminate the nine prosecuting attorneys and replace them with Bush loyalists. Couldn´t recall? Where was he on such an important decision? Either he failed to do his job, or he had a convenient memory lapse. In hanging onto his job, he damages the credibility of the Attorney General, and brings dishonor to the President.

Why doesn´t Gonzales resign with honor?

Joseph Nacchio of Qwest:
Last Thursday Joseph Nacchio, the former CEO of Qwest, was convicted on nineteen counts of insider trading for selling his Qwest stock just before it collapsed, at the same time he was giving shareholders rosy predictions about earnings growth. Nacchio led Qwest´s hostile takeover of U.S. West, a regional Bell operating company, drove its stock price to $60/share by initiating dramatic cuts in its service levels, and then sold his stock while the stock price declined all the way to $1.07 per share when the telecommunications bubble burst.

Shortly thereafter, he was replaced as CEO by the Qwest board of directors. Now it seems our legal system has judged him accordingly.

Heinrich von Pierer of Siemens:
As CEO and now chairman of Siemens during the 1990s, Heinrich von Pierer was one of Germany´s most respected business executives. He resigned last week to remove himself as a focal point of criticism of the firm for its alleged $500 millions in illegal payments by its communications division. While von Pierer claimed no knowledge of the payments, one has to wonder how engaged he was in the business if he did not know, or why he had not put in an effective audit system that would reveal the payments.

To his credit, von Pierer did the honorable thing and resigned.

 

All of these cases lead the general public to the conclusion that leaders can no longer be trusted. This is a very dangerous conclusion because the very nature of leadership requires that leaders maintain the trust and confidence of their constituencies.

 

The problem is not that leaders cannot be trusted. Rather, we are choosing the wrong people to lead. We should choose responsible leaders who are well grounded in their values and place the interests of their institutions and their constituencies ahead of their own. We don´t need leaders of public or private institutions that are known for their charisma, their style or their image. We need leaders known for their character, their substance, and their integrity. We need leaders who have demonstrated throughout their lives the capacity to lead in a responsible manner, especially under pressure – and when they fail in their responsibilities, to resign with honor.