Harvard Business Publishing

Having studied business leaders over a long period of time, it was refreshing to read the perspectives and reflections on the discussion thread of “Why Don’t Leaders Learn from History?” One commenter, Murray Bristow, wrote: “I think the repetition of history by those who are repeating it is caused primarily by people viewing their own circumstances as somehow different from those circumstances faced by people in the past. Often those looking in from outside can see the parallels and may even comment on the similarities and the lessons that should be drawn from history. But when the decision makers want to go in a particular direction, they rationalize away the similarities with historical events, perhaps often attributing the differences to their own capabilities.” Murray raises an interesting dilemma for me. On the one hand, I have advised leaders to pay attention to the context to maximize the potential of making... Keep Reading »

A business leader’s management style has profound implications for his or her firm’s ability to create and sustain a productive organizational culture. Certain times demand specific management orientations to produce and sustain thriving businesses, and great CEOs and founders are skilled at accurately assessing when to adapt. For many, however, this adaptation process became an almost impossible challenge. This was certainly apparent for both Henry Ford (Ford Motor Company) and David Sarnoff (Radio Corporation of America). Both individuals made tremendous contributions to business and society during their early decades as the heads of their respective firms. Ford’s ability to create a highly efficient production operation was in no small way related to his dogmatic and hard-nosed management style. Believing that his most significant adviser should be himself, Ford failed to recognize the transformational changes that were occurring both within the automobile industry and the buying public. Only one generation later,... Keep Reading »

The implosion of the home mortgage industry that has impacted the fortunes and careers of many on Wall Street provides a cautionary tale on risk taking. It's a tale that is far from new. Take, for instance, the case for James Ling, who in the late 1950s and throughout the 1960s created the fastest growing company in the United States: Ling-Temco-Vought Corporation (LTV). Ling was one of the early proponents and beneficiaries of the conglomerate movement that swept the business world of the 1960s. Through dozens of unrelated acquisitions over 14 years, Ling built one of the largest industrial companies in the United States by the end of the 1960s. Through creative debt financing and very bold acquisitions, Ling rode the wave of heavy profitability that was fueled by the conglomerate business model. He became so enamored by his success. Thirsty for new risks, Ling was not able to --... Keep Reading »

Who would ever have believed that a commodity item, like chicken, could become a branded, premium-priced product? Perdue Farms was a very successful breeder and reseller of chicken, and it could have easily continued on this path -- a path that involved little risk but steady and manageable growth prospects. Observing the technological advances in automated chicken raising that evolved in the 1960s, Franklin Purdue (CEO from 1953 to 1988) saw an opportunity to transform his family’s company. Bucking a family tradition of avoiding debt, Perdue borrowed $500,000 and set about to fundamentally change his operation from a chicken farmer and reseller to a fully automated chicken raising and retail operation. Through his bold investments, he changed the company’s process of raising chickens, their distribution network, and ultimately, their market position. Perdue is most well known for his quirky, yet extremely effective advertising campaign, a campaign that successfully differentiated his... Keep Reading »

When he launched the USA Today national newspaper 25 ago, Allen Neuharth, the CEO of Gannett Company from 1973-1986, was derided by both Wall Street analysts and the newspaper establishment. Having built a very successful chain of regional newspapers and having been named the newspaper publishing Chief Executive of the Year by the Wall Street Transcript in 1979, why would Neuharth want to take such a bold and seemingly foolish risk? Who would buy “bite-size” news? The answer today is clear -- millions would buy it and continue to buy it, but that was certainly not the case in 1982 when the paper was launched. Neuharth saw a future for his family’s newspaper empire that others could not see. He also saw a time-starved consumer base that was thirsty for news in manageable chunks. Capitalizing on his regional network of newspaper organizations, Neuharth created an elaborate logistical process to produce... Keep Reading »

I recently read that Vladimir Putin is considering staying on as prime minister in Russia once his presidential term ends. Russian law currently prevents Putin for serving as president for a third consecutive term. He could run again as president in six years (essentially sitting on the sidelines for one term). The announcement that he is considering the prime minister position indicates that he is not willing to step aside quietly. While the prime minister post in Russia has been largely ceremonial, I suspect that it will be anything but ceremonial with Putin, based on his strong-armed politics to date. Putin’s inability to move on reminded me of many business leaders who have difficulty both sharing power and knowing when to step aside. Some leaders fail to groom adequate successors and others undermine their successors by staying on as chairman, quietly pulling the strings in the background. The airline industry... Keep Reading »

My 14 year old son Alex asked me if I had heard about the ridiculous ruling that the National Football League made regarding the New England Patriots videotaping scandal. My son could not believe that Bill Belichick was being personally fined $500,000 and that the team would lose a top draft pick as well as pay a fine of $250,000 for videotaping the New York Jets defensive signals at last weeks game. He asked: “Dad, can you believe that ruling? It’s so out of whack. People are just jealous of the Patriots; they just got caught doing what every other team does anyway.” Now, Alex and I are strong Patriots fans. Despite the black-eye for New England, I was concerned about my son’s response. I thought the penalty was not severe enough. The NFL’s rule is unambiguous on the use of video cameras during games, and I could see the... Keep Reading »

Leaders have plenty of trouble learning from the lessons of history. Maybe it's because business and political leaders are supposed to be looking forward. As Warren Buffet once said, “it’s more important to look out the windshield than in the rear view mirror.” But a few looks in the rear view mirror of history would help leaders who have become embroiled in scandals and cover-ups. A few looks back may have even helped them prevent the same mistakes that others have committed. The effort that former Attorney General Alberto Gonzales and his legal team went through to “forget” the past essentially cost him his position. The more they tried to distance themselves from what they'd done or might have done, the less anyone trusted them. Such forgetfulness has also been the Achilles heel of countless disgraced congressional members and business leaders. It seems that many leaders have to learn the... Keep Reading »

If you want to know where American business is going, follow the demographics. Demographic shifts can create new niche market opportunities, shift the priorities of human resource professionals, and generate large-scale change. The Baby Boom created a host of new business opportunities, from larger cars to big box toy retailers to suburban housing -- and all the products to fill them. Successful business leaders like Ray Kroc (McDonald’s), Charles Lazarus (Toys R Us), Alonzo Decker, Jr. (Black & Decker), and C. Kemmons Wilson (Holiday Inn) seized the opportunity to serve an expanding and economically vital population segment. As the Baby Boom generation ages, it will have a profound impact on current and future business opportunities. At the turn of the 21st century, 12.4% of the population was at least 65 years old. By 2030, that percent is expected to reach almost 20%. The aging population should be viewed as a... Keep Reading »

Over the past several years, Nitin Nohria and I have been studying the evolution of business leadership in the United States during the twentieth century. In our book, In Their Time: The Greatest Business Leaders of the Twentieth Century, we noted that opportunity emerges when environmental factors and individual action come together. And "come together" is the most important part. The environmental factors that we cited created a specific and sometimes unique context for business. Within this contextual framework, some individuals envisioned new enterprises or new products and services, while others saw opportunities for maximizing or optimizing existing businesses, and still others found opportunities through reinvention or recreation of companies or technologies that were considered stagnant or declining. For instance, in the eighties, when many industries (including telecommunications and financial services) were deregulated, certain individuals created new companies or transformed their industries. We called this awareness of and ability to... Keep Reading »