Article on leadership published in Executive Excellence magazine.
Great Leadership: Don’t Be Fooled by What You See
Not too long ago, a business author named Theodore Kinni contacted me about writing a blurb for his book on the leadership lessons of Douglas MacArthur. My first thought was: Douglas MacArthur? The guy who was fired by his boss? Some military history bloggers continue to argue that MacArthur was the worst American general in history.
After reading Kinni’s No Substitute for Victory: Lessons in Strategy and Leadership from General Douglas MacArthur, however, I had a new appreciation for the leader behind the headlines and the controversy. MacArthur’s greatest achievement was in his role as the de facto leader of Japan immediately after World War II. As proconsul, he helped lay much of the groundwork for Japan’s extraordinary rise to prosperity from the rubble of World War II. Among the many examples of his leadership was his decision to invite to a personal tea the women legislators who had been barred from taking their seat in the Japanese parliament. His message was quiet and forceful at the same time: It is time for professional Japanese women to be treated as all women in 20th century industrialized nations are treated.
MacArthur is revered in Japan, but his success there is all but forgotten in the United States. If you ask someone to name a great American World War II general, Dwight D. Eisenhower will come to mind of course, but so will an Army leader with much less responsibility and authority than Ike: General George S. Patton.
Why? Eisenhower, as Supreme Allied Commander, was indeed supreme. But what about Patton? What is the iconic image of Patton that reminds us of his leadership skills? The answer lies in the famous incident of the general slapping a psychologically traumatized soldier. He did this not out of cruelty, but as an intense, motivating gesture — both for the soldier himself (whom Patton saw as a slacker) and for the physically wounded heroes who shared the ward with him.
One general slaps a soldier, the other general invites some women to tea: Is it any wonder that Patton is the one remembered as the greatest leader?
Comparing these two gestures reveals one of the misconceptions of great leadership: that the flamboyant, tough, almost physical leader is a greater leader than one who is quietly effective. (In our comparison of the two generals, I am referring specifically to the quietly effective MacArthur of Japan rather than the flamboyant MacArthur of Korea).
The greatest model of the tough, flamboyant leader is Jack Welch. The former CEO and chairman of General Electric is the undisputed number one star of corporate leadership today, thrilling audiences around the world with his stories and his direct, hard-hitting advice on how to lead, how to create leaders, and how to develop winning organizations. Once labeled Neutron Jack for the drastic cuts he made to the GE workforce, Welch’s incredible results, including multiplying GE’s capitalization by 400 percent, are now legendary.
Why does Welch continue to be revered as the greatest CEO of the 20th century? Why does it seem that every year, even as his tenure at GE recedes further in the past, even as his successor receives his own accolades for reinventing the company, Welch’s popularity continues to increase?
The reason is that through scores of books by and about him, and through his personal appearances, Welch’s tough, take-no-prisoners leadership persona has given way to a more complex portrait of the former GE leader. What emerges is a leader who believes the organization should do everything to help talented people succeed, that to string along those who will never succeed in their current position is more cruel than humane. The importance of being realistic about the state of the company is another note in the new Jack Welch chord. Is it better to cut the payroll and save the company, or ignore the problem and, eventually, watch every employee lose his or her job as the company goes under?
But perhaps the greatest impression of Jack Welch that stays with those who meet him today is the impression that he respects others. In my very few interactions with Welch, I have been treated with respect, even generosity, at all times. And I have seen him treat others with equal respect, whether he is having his picture taken by an admirer or sharing the stage with Peter Drucker.
Welch seems to “respect followers” — a phrase used by James O’Toole, the co-founder of The Leadership Institute at the University of Southern California and the author of one of the great leadership books of the past 20 years, Leading Change. Leading Change was written in 1996, when Welch was the poster child of heartless, fear-driven leadership, and the book specifically offers Welch as the leader not to be. Welch’s type of leadership was, in the opinion of O’Toole, unsustainable because it was amoral. Amoral leaders, he explained, are moral relativists who believe that sometimes economic necessity requires the moral guidelines of trust and integrity to be put aside. Moral relativism, however, soon permeates the organization, encouraging more amoral behavior and actions. Jack Welch was an amoral leader, O’Toole wrote, and the proof was in the various legal, ethical and regulatory violations that had cost General Electric millions of dollars.
Time has shown that Welch followed at least one of O’Toole’s guidelines to being a values-based leader: Become a leader of leaders. A number of Jack Welch lieutenants have gone on to successfully lead multi-billion dollar companies, including Larry Bossidy, the former Chairman of Allied Signal and the co-author of the bestseller Execution, and Jeffrey Immelt, who succeeded Welch as CEO of General Electric.
The point here is not to sing the praises of Welch, but to show that Welch’s success as a leader is due not to the fear he may have inspired as he was slashing the GE payroll, but to the respect he showed talented GE employees and executives.
Welch is flamboyant and impressive. No doubt he was also a tough and sometimes feared leader. However, many unscrupulous leaders who are now in jail or facing jail were equally flamboyant and equally forbidding. O’Toole is right. Without respect for others and without values, the most charismatic and toughest of leaders will fail.
Indeed, whether a leader has charisma or not is irrelevant. In his 2001 book, Quiet Leaders, Harvard Business School professor Joseph Badaracco, Jr. argues that the bulk of leadership in organizations and institutions is achieved by modest, restrained and patient leaders who diligently work far from the media spotlight.
One of Badaracco’s themes is that great leaders cannot be painted in black and white strokes. For example, great leaders are driven as much by self-interest as they are by altruism and self-sacrifice. These mixed motives in difficult situations are necessary and should be embraced — but they should not be allowed to impede action.
Badaracco also described how quiet leaders know how to buy time, know how to count their political capital before proceeding in an uncertain situation, and are always ready to drill down into the morass of technical, bureaucratic and legal details that complicate problems and issues.
Every year more books are published on leadership, and they will continue to be published. While there may be some familiar themes, most of these books offer new and insightful advice or guidelines for great leadership. The reason there continues to be room for new thinking on leadership is that great leadership is a complex, multi-layered, almost indefinable quality. At first glance, personalities such as Jack Welch and Douglas MacArthur seem etched in bold and simple lines; were it not, however, for the many different, sometimes subtle, and sometimes contradictory facets of their characters, these men, and many more leaders like them, could not have become great.
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Review of a marketing business book for ADV Magazine.
The Creative Path to Revolutionary Products
“Everything that can be invented has been invented,” said U.S. Office of Patents Commissioner Charles H. Duell in 1899. While his assertion proved to be slightly off the mark, product developers and marketers today may sometimes feel as if, indeed, every product and variation of product possible has been invented!
Take a look at the 1,000 varieties of cereal in a grocery store cereal aisle. Is there possibly a combination of cereal that has not been dreamed up, developed and displayed?
The problem, according to marketing eminence grise Philip Kotler, is that marketers are taking a vertical approach to product development. In other words, they take a product category and drill down into that category to find subcategories that can attract more customers.
The cereal category, for example, features dozens of subcategories for consumers who watch their weight, want fiber, want fruit in their cereal, prefer cereal with chocolate, want cereal in special shapes, and so on. This traditional vertical marketing, with its emphasis on market segmentation and brand proliferation, leads to markets that are fragmented and saturated. (Again, check out the cereal aisle.)
In recent years, Kotler has been evangelizing a new approach: “lateral” marketing. As explained in his 2003 book Lateral Marketing, co-authored with marketing consultant Fernando Trias de Bes, the goal of lateral marketing is not to capture part of a market; it’s to create an entirely new market.
Take the doll market, for example. Until the late 1950s, dolls varied in price, size, nationality, design, dress, complements, accessories, color of eyes, and color of hair — but they all had one thing in common: They looked like babies. Doll manufacturers had taken the baby doll market and segmented it. It would take a woman who was not in the doll business to introduce lateral marketing to the industry. Ruth Handler was watching her daughter play with paper dolls one day and imagined a doll that looked like an adult rather than a baby. The success of the adult-looking doll, named after Ruth’s daughter Barbie, highlights the potential of lateral marketing.
For 21st century Charles Duells who are thinking, “Well, that may work for some products, but not mine…”, let’s return to the cereal aisle.
The fact that the cereal market is extremely fragmented and saturated didn’t prevent a European food company named Hero from inventing a completely new cereal product, thanks to some lateral thinking. Instead of developing another variety of cereal, the marketers at Hero asked themselves: Why should cereal be limited to breakfast? Why not turn cereal into a healthy snack that can be eaten at any time of the day?
The idea needed refining, of course. Carrying around cereal in bags and eating it with your hands wasn’t the best solution. Eventually, the company decided to adopt the shape of another snack food: the chocolate bar. The result was the Hero Muesli cereal bar. Huggies’ Pull Ups (diapers for older kids), Kinder Surprise (combining chocolates and toys), and Baby Mozart and Baby Beethoven videos (offering classical music as an early childhood development tool) are other examples of lateral marketing products.
As a business book reviewer for more than 10 years, I know that lists of examples do not a theory make. Too many authors backfill real life case studies to support their theoretical concepts. In Lateral Marketing, however, Kotler and de Bes explain in practical detail the process for lateral thinking and how to apply this thinking to marketing.
Despite being chosen by Library Journal as one of the best business books of 2003, Lateral Marketing has not had the success it deserves. Read Lateral Marketing: New Techniques for Finding Breakthrough Ideas. It’s a short book (200 pages, but with big type) that may lead you to invent the next Barbie. Or cereal bar.
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Article on business trends published in Opportunity World magazine.
The Threats and Opportunities of Major Business Trends
A number of years ago Kenichi Ohmae of McKinsey wrote a book called The Borderless World (HarperBusiness, 1990) that described a triumvirate of economic power composed of the United States, Europe and Japan (joined to a lesser extent by aggressive economies in Taiwan, Hong Kong and Singapore). The United States, despite a growing debt and bottomless budget deficit that the politicians choose to ignore, is still the most formidable economic power on the planet. The same, however, cannot be said of the other two. And there is of course a new and very big kid on the block: China.
The fact that China was not listed as a key economic player by the insightful and knowledgeable Ohmae shows just how dramatically things have changed in a few short years. It also shows the danger of articles that purport to extrapolate from current trends to describe the future. Ironically, it is the cataclysmic changes that often arrive without warning. Overpopulation and pollution have been (justifiably) on the futurists’ radar for decades. But what of the Internet, the personal computer … and China?
Notwithstanding the possibility of a giant threat or opportunity that can arrive unannounced at any time, business writers and thinkers share a general consensus about the important trends that will affect American business, both in the workplace and on the competitive playing field. (There is, however, no consensus on whether such trends are productive or destructive.) There are also writers and thinkers who offer exciting new ideas on how current trends will dramatically change the world.
The emergence of China as an eventual economic superpower is one macroeconomic trend generally accepted by today’s business community.
China: The New America
In the mid-1990s, Alfredo G.A. Valladão, a professor at the Institut d’Etudes Politiques in Paris, wrote a book entitled The 21st Century Will Be American (Verso, 1996). Valladão’s point was not that America the nation would dominate the world, but rather that the world would in essence become one great America (he called this new entity World-America).
There is a growing belief, however, that eventually the most powerful nation of the century will be China. In The Chinese Century (Wharton Publishing, 2005), author Oded Shenkar, a Ohio State University professor, makes an intriguing comparison between China today and the United States 150 years ago. In essence, the two nations are identical, a fact that has serious implications for the future. China is not just another emerging economy, following in the footsteps of Germany, Japan, and the so-called Asian tigers, such as Hong Kong and Singapore, Shenkar argues. It is the next United States.
One of the most striking examples of how today’s China is yesterday’s America is in Shenkar’s discussion of the piracy of intellectual property, for which China is so well known. Shenkar notes that the piracy of European intellectual property was rampant in the early years of American capitalism. Charles Dickens even came to America on a mission to stop the piracy of his novels; he was not receiving a cent from the American sales of his books. Charles Dickens was unsuccessful.
Given the speed of the learning curve in 21st century business, it would be a mistake to believe that it will take China as long as it took the United States to become an economic superpower. Only politics can slow it down. Western capitalism can partner with a country that lacks formal democratic institutions, but egregious human rights abuses and threats against Taiwan or Tibet will dampen cooperation.
Even though only a fraction of the Chinese population is needed to create one of the largest markets of consumers in the world — keep in mind that China has 166 cities that have a population of more than one million people! — this consumer market is still a few years off. Large businesses should still prepare a China strategy, a way to become a player in the development of this super-economy. For small businesses, a China strategy can be folded into a strategy that addresses the second (but not lesser) macroeconomic trend of the 21st century: globalization.
Globalization: The Inexorable Factor
Although Kenichi Ohmae did not predict the emergence of a Chinese economic power, the globalization theme of The Borderless World was exactly on target. The merits of globalization can continue to be debated, but it doesn’t matter: Globalization is here, and political and social activists should focus not on stopping globalization, but on finding ways to ensure that globalization benefits all.
As with the emergence of China, globalization represents both a threat (from global competitors) and an opportunity (of global markets). Except perhaps for a local retailer serving a village community, there is probably no business that is completely free of globalization — and even the local retailer may carry international products.
As a result of the pervasive nature of globalization, both small and large businesses must make themselves more culturally aware. Books such as Bridging the Culture Gap by Penny Carté and Chris Fox (Kogan Page, 2004) help to explain not only how mores differ from nation to nation, but also why these cultural traits exist, and how to handle them.
Knowledge of and comfort with other cultures is becoming one of the key attributes of successful leaders, In Navigating the Badlands (Jossey-Bass, 2004), business forecaster Mary O’Hara Devereaux attributes much of the success of Carlos Ghosn at Nissan to the concerted effort by Ghosn to understand and appreciate the Japanese before trying to radically change one of their flagship companies.
Making the Best of Outsourcing
Often entangled in discussions of globalization is the topic of outsourcing. The outsourcing of manufacturing to China is one familiar example. However, according to a number of new books, the potential of outsourcing has only just begun to be revealed.
More and more companies will be outsourcing any competencies that do not need to be kept in house, leaving behind only the core proprietary competencies that differentiate the company. As quoted in The Black Book of Outsourcing by Doug Brown and Scott Wilson (John Wiley, 2005), a study conducted by Yankelovich Partners for PricewaterhouseCoopers revealed that 63 percent of the companies surveyed outsourced one or more business processes, including functions such as human resources, finance and accounting, payroll, real estate and procurement. Bruce Judson, author of Go It Alone! (HarperBusiness, 2004), pushes the idea of outsourcing to the extreme as he shows that tiny micro-companies, often consisting of just one or two employees, can develop extraordinary revenues by using a combination of technology and business process outsourcing to move all of the usual support functions to outside vendors.
Those who view globalization and outsourcing as major threats to their companies and their employees can muster the evidence to support their pessimistic conclusions: Who can deny the challenges of global competition from low-cost manufacturers or the economic hardships caused by the outsourcing of jobs to countries with lower cost workforces? Successful companies in the 21st century, however, will learn to adjust to the threats and uncover the opportunities presented by these two major trends.
For example, in his latest book, The Next Global Stage (Wharton, 2005), the ever-insightful Kenichi Ohmae presents “platforms for progress” — tools that companies can use to succeed globally, including the new global language, English. The board of the Finnish giant Nokia, for example, holds its meetings in English. At a Korean-owned garment factory in Vietnam, management offered a $5 incentive for proficiency in English (on top of the basic monthly salary of $45).
Another of Ohmae’s platforms for progress is the Internet, reflecting one of the most fundamental trends of early 21st century business: the growing importance of the Internet in a company’s core strategy or business model.
The Internet: Restarting the Conversation
Unlike globalization and outsourcing, the Internet is viewed by business almost exclusively as an opportunity. During the 1990s, dot.com entrepreneurs launched a variety of creative Internet-based businesses, many of which eventually failed. We now think in terms of the dot.com boom followed by the dot.com bust, although the latter term is an overstatement. A true bust leaves a ghost town in its wake; the Internet continues to be a vibrant, crowded marketplace of widely diverse enterprises.
The analogy of the Internet as the village marketplace, offered by Rick Levine, Christopher Locke, Doc Searls and David Weinberger in The Cluetrain Manifesto (Perseus, 2000), presents the most accurate picture of the opportunities offered by the Internet. The village marketplace, after all, is more than a location for sales. Shoppers meet and interact in the aisles between the stalls, holding impromptu and informal conversations. Shoppers can also interact back and forth with merchants. The merchants make the pitch, the shoppers explain what they are looking for. And the shoppers are not necessarily the end-users; the best restaurants go to the local markets for fresh fish and vegetables.
The Internet, according to the authors, has ended the silence among shoppers and between shoppers and merchants that was imposed by the Industrial Age. The most successful businesses of the 21st century will be those who know how to make the most of this rediscovered conversation. They will build communities of shoppers on the Web. They will communicate their messages directly to consumers of their products — and will allow the consumers to communicate right back to the company. And successful businesses will not forget the internal conversation that the Internet – or an Intranet – allows. Developing the boundaryless organization as proposed by Jack Welch of General Electric is even more possible through cross-functional conversation via cyberspace.
Today’s Workers Want a New Deal
The job-for-life covenant between companies and workers no longer exists. One result is the growth of what commentator Daniel Pink labels the “free agents.” In Free Agent Nation (Warner Books, 2001), Pink argued that more and more workers — management consultants, plumbers, graphic designers and countless other professionals — were becoming self-employed soloists. He also noted the growing number of what he called free agents by default: America’s 3.5 million (at the time) temporary workers.
This trend does have its limits. While there are increasing opportunities (or requirements) to work on a consulting or part-time basis, most companies still fill their cubicles with full-time, working-hours staff.
Those full-time employees, however, have specific beyond-the-paycheck expectations that employers cannot ignore. Work-life balance is not just a phrase for feel-good consultants. The day of the businessman who never got a chance to watch his children grow up is over. First, of course, both parents are most likely working; fewer employees have the “luxury” of a non-working spouse responsible for the children. Employees have to balance the demands of work and the demands of home, and employers have to help them achieve that balance — or risk losing their best people. Even former GE Chairman Jack Welch, hardly known for coddling employees, addresses the issue of work-life balance in his new book Winning (HarperBusiness, 2005).
In his book TrendSmart (Sourcebooks, 2003), futurist Louis Patler notes that there is some backlash against more employee-friendly workplaces as a result of the dot.com bust. Dot.coms strove to make the workplace fun with a variety of initiatives; traditionalists will point out that many of those fun workplaces are now closed down. However, instead of rejecting every idea from the dot.com world, Patler says, businesses would do well to take the best of the ideas, such as casual dress and flextime.
The key to keeping employees today is to understand what they truly value from their work. More and more employees expect their jobs to be more than a paycheck: They are looking for fulfillment. In his book, The Seven Hidden Reasons Employees Leave (AMACOM, 2005), Leigh Branham notes that lack of growth and advancement opportunities, feeling devalued and unrecognized, and stress from overwork and work-life imbalance were among the key reasons employees looked to change jobs.
The End of the Information Age?
In his follow-up to Free Agent Nation, Daniel Pink sees a fundamental change in the workforce that goes beyond increased expectations. In A Whole New Mind (Riverhead Books, 2005), Pink argues that technology and globalization have made the logical and analytical left-brain attributes of Information Age employees obsolete, at least in America. Left-brain tasks are being outsourced to lower-cost international workforces or replaced by technology. As a result, Pink writes, “the capabilities we once disdained or thought frivolous — the ‘right brain’ qualities of inventiveness, empathy, joyfulness and meaning — increasingly will determine who flourishes and who flounders.” The demise of Peter Drucker’s knowledge worker reflects the demise of the Information Age — and the rise of what Pink calls the Conceptual Age.
Whether the turn of the 21st century represents a seismic shift to a completely new era in the history of business, or simply a natural evolution of our current era, remains to be seen. We can all agree, however, that the emergence of China, globalization, outsourcing, the Internet, and the new employee covenant represent major trends that businesses large and small must address.