Tony Mayo

The Value of Leaders Learning from History

2007-12-17T18:03:48Z

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 the right decisions at the right time. This ability to seize the zeitgeist of the times to create something new, optimize an opportunity, or reinvent a moribund business is the essence of contextual intelligence. On the other hand, I have also advised leaders to learn from history. But if one is too preoccupied with the present context, will they inevitably fail to recognize any parallels in history?

Murray’s post was reinforced by Kevin Chamberlain, who wrote: “Leaders often fail to consider history because they have an unhealthy sense of their own uniqueness, and they have a sense that the events around them are 'peculiar' to their time and therefore history is of little value.” Murray and Kevin raise an interesting challenge for leaders, who must both understand the peculiarities of your own time and recognize the parallels between the past and the present. In the heat of decision making, it is all too easy for leaders to both forget the past and pay little attention to the present. Great leaders must be able to hold these dual and sometimes conflicting notions in balance at the same time. In some cases, there is no disconnect. In other cases, the links to the past may not be as apparent or as relevant, but a leader’s ability to at least recognize the value of history should enable them to make more informed decisions and to potentially avoid the mistakes of others.

An appreciation for history and an appreciation for the present do not have to be mutually exclusive. Though this balancing act can be difficult, leaders who make the effort to learn from the past and understand the present context will make better decisions. The tougher part for many will be recognizing that they are not as unique as they think they might be. Murray and Kevin both correctly identified a leader’s hubris (their faith in their own abilities) as an impediment to their appreciation of history. This hubris may also block their ability to care about their context. It may be that the ability to appropriately balance the past and the present is what identifies truly great leaders.

Read all of Tony Mayo's "21st Century Leadership" posts.

Ford, RCA, and the Consequences of an Entrenched Management Style

2007-12-12T17:28:41Z

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, Sarnoff would repeat some of the same blunders as Ford. By understanding how to tap into the power of the radio and then television, Sarnoff was able to build RCA into one of the most formidable and competitive companies in the world. His constant focus on technology and the implications of that technology enabled RCA to make dramatic leaps in its products and services (especially through its ownership of NBC). Technology reigned in the early days of both media, but as it became more prevalent, the content for these applications took center stage. Sarnoff was unable and seemingly unwilling to recognize this shift. He was also unwilling to recognize the technical superiority of others in the industry (especially the electronics industry in Japan). Instead of building on the success of others, he doggedly pursued a flawed technological investment path. This blind faith in technology eventually sealed the fate of RCA -- a fate that has made the once heralded brand an almost unknown entity today.

Both Ford and Sarnoff failed to adjust their management style during pivotal moments in their company’s history. This led to a major challenge to Ford’s dominance in the automobile industry (being eclipsed by General Motors in the 1920s) and the eventual anonymity of the RCA brand.

To be successful over the long term, CEOs and founders need to understand and manage constantly changing contextual forces such as consumer demands as well as evolving technology. In today’s market, Steve Jobs is an interesting example of an individual who has been able to use technology to drive a rebirth and reinvention of Apple. Unlike his first stint at Apple, Jobs is using technology as an enabler for compelling consumer products instead of using technology for technology sake.

What CEOs do you see managing change well? Who else has learned from Sarnoff and Ford what not to do?

Read all of Tony Mayo's "21st Century Leadership" posts.

Risk, History, and Why Wall Street Never Learns

2007-11-29T02:13:12Z

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 -- or more likely chose not to -- read the signs of a new economic climate in the early 1970s. Despite an impending recession and changing global events (namely the impact of the oil embargoes), Ling steadfastly continued his acquisitions, eventually extending the company to the point that it could not longer service its debt. The resultant sell-off of several assets was the precursor to the forced resignation of the former financial maverick. Ling was superb at reading the glory days of the 1960s, but was unwilling to mitigate his risk-taking nature when the environment changed. The high-stakes gambler eventually took one risk too many.

Through my research on great business leaders, I found that a business leader’s fiscal approach is highly correlated with his risk tolerance levels. The more risk-averse the business leader, the more fiscally conservative he is with the company’s capital. Knowing when to be fiscally liberal and opportunistic is critical to being able to successfully take advantage of the times. It can also be disastrous when the context of the times changes sharply. The extravagant spending and liberalism of the 1920s had run its course by 1929. Business leaders of the 1930s were forced to adopt a fiscally conservative approach if they were to survive the Great Depression.

A similar, though less dramatic, retrenchment process unfolded between the 1960s and 1970s. The conglomeration movement of the 1960s resulted in unwieldy debt levels in the decade that followed. To extract value in the 1970s and 1980s, business leaders abandoned the unrelated diversification approach and undertook a massive sell-off and “company busting” campaign. The individual parts became greater in value than the “sum of the whole.” Understanding and orchestrating the appropriate risks at the appropriate times were often the keys to maximizing the potential of businesses and, in some cases, whole industries. Ling, for one, was clearly unable to make this transition. It seems that many Wall Street business leaders are learning -- or not -- the same lesson again.

Read all of Tony Mayo's "21st Century Leadership" posts.

MORE ON RISK MANAGEMENT:
A Framework for Risk Management (Supply Chain Strategy Article)
Risk Intelligence (Hardcover)
Reputation and Its Risks (HBR Article)
Strategic Risks: How to Embrace Them for the Growth Opportunities They Afford (Collection)

How Frank Perdue's Risk-Taking Paid Off

2007-11-02T13:11:37Z

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 chicken from the rest of the flock.

While he did not “bet the company” on this transformation, Frank Perdue took a tremendous risk -- leaving behind the security and steady income that the company had achieved for almost three decades. The image of Frank Perdue that has been indelibly engraved in the minds of millions of Americans as the silly, almost pathetic evangelist of chicken is not the typical image of a bold risk taker. Like Allen Neuharth of USA Today, Perdue saw a vision for what his company could become and took the risks to achieve that vision. Perdue did what others considered impossible. He branded a product that was historically thought to be a low-end, unmarketable commodity. Perdue, like other successful CEOs and founders, did not take risks that were foolhardy or overly dependent on luck. He took prudent, calculated risks based on a concept or vision of a future end state.

For the most part, it is not surprising that many great CEOs and founders had a strong propensity for risk -- for without taking at least some calculated risks, their businesses would not have flourished and more importantly lasted. This is especially true for many entrepreneurs that I have studied. For some, they had nothing to lose, but for others, like Perdue, there was a tremendous amount at stake -- both personally and professionally.

Like vision, an appetite for risk taking is considered almost a prerequisite for success. Knowing when to be a risk taker and opportunistic is critical to being able to successfully take advantage of the times. It can also be disastrous when the context of the times changes sharply. Sociologist Orrin Klapp once wrote: “The same act performed too soon or too late or in the wrong scene may make a person a fool rather than a hero.” That sentiment aptly applies to risk taking in business.

Read all of Tony Mayo's posts.

MORE ON RISK MANAGEMENT:
Strategic Risks: How to Embrace Them for the Growth Opportunities They Afford (Collection)
Risk Intelligence: Learning to Manage What We Don't Know (Hardcover)
What Are the Risks You Should Be Taking? (Newsletter Article)
How Risky Is Your Company? (HBR Article)

The Importance of Vision

2007-10-29T13:09:24Z

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 and deliver a national newspaper to supplement, not replace, regional carriers. What was it about Neuharth that enabled him to see the vast possibilities of a national newspaper? He clearly possessed a vision of what could be and more importantly, the ability to make it a reality.

The ability to visualize and articulate a possible future state for an organization or company has always been a vital component of successful leadership. In fact, when initially describing someone as a “great business leader,” the knee-jerk reaction is often to cite something about his or her strategic ability or vision. We often hear stories of exalted CEOs and their strategic prowess. The downfall of many a failed CEO has also been attributed to his or her lack of vision. And in many cases, with 20-20 hindsight, it is easy to understand and sympathize with a leader’s vision. In the heat of the moment, however, it is not so easy. Neuharth’s vision of a national newspaper seems very plausible today, but that was far from the reality of 1982.

Through our research In Their Time, it became increasingly apparent that vision can be both directly impacted by and conceived through the context of the times. Vision divorced from context can produce very erratic and unpredictable results. The irrationality of the 1920s and again in the Internet-crazed 1990s demonstrated vision that was not grounded in reality. Great business leaders need to walk the fine line between capitalizing on the opportunities that are ripe for the present context and planning for a possible future state. Though context is very important for laying the foundation for success, leaders are not mere pawns. Leaders like Neuharth can and do shape the parameters for success through a vision for a future. And, just as important, they possess the ability to oversee that vision’s implementation.

Read all of Tony Mayo's 21st Century Leadership posts

HARVARD BUSINESS ONLINE RECOMMENDS:
Building Your Company's Vision (HBR OnPoint Article)
Peripheral Vision: Detecting the Weak Signals that Will Make or Break Your Company (Hardcover)
Organizational Vision and Visionary Organizations (CMR Article)
The Future of Management (Hardcover)

Vladimir Putin and Continental Airlines: Two Different Approaches to Succession Planning

2007-10-15T12:39:20Z

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 for most of the twentieth century suffered from this inability to groom successors and may explain some of the troubles the airlines had well before the tragic incidents of 9/11. Though the airlines have suffered considerably since 2001, they were already in a downward spiral at the turn of the century.

Major US airlines including American, Continental, Pan American, Delta, and United had CEOs or founders who served for 35+ years, essentially through most of the regulated phase of the industry (1938-1978). They did not groom successors and did not prepare their companies for a vastly different competitive landscape. For instance, Bob Six of Continental Airlines ran the airline from 1936 until the early 1980s, when Frank Lorenzo staged a hostile bid for the company in the early days of deregulation. Continental’s performance declined precipitously and the airline went on to have a series of one-year presidents or CEOs over the course of a decade. It was not until 1994 when Gordon Bethune (with the considerable help of Greg Brenneman as COO) joined as the 10th CEO in 10 years that the company experienced a significant turnaround. They applied a streamlined “back to basics” approach that was aligned with the new competitive landscape in the industry. In essence, they applied a new strategy for a new time moving the company from last to first in terms of many service indicators. Ten years later, Bethune walked away after having groomed a successor and fundamentally repositioned the airline as a strong and viable competitor.

Bethune’s example is one that many business leaders should heed: knowing when and how to step aside. The long-term viability of a company or a country depends to some extent on the right leadership at the right time. Being willing to recognize the changes in the competitive or political landscape and then acting on them are keys for long-term sustainability. It is not easy to walk away from something that you have built, but doing so at the right time might preserve it.

MORE ON LEADERSHIP AND SUCCESSION PLANNING:
The CEO Within: How Inside Outsiders Are the Key to Succession Planning (Hardcover)
Growing Talent as If Your Business Depended on It (HBR Article)
Developing Your Leadership Pipeline (HBR Article)

The Cost of a Leader’s Reputation

2007-09-17T19:40:06Z

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 league forcing the Patriots to forfeit the game.

I told my son that regardless of whether or not the videotaping practice was widespread and that the Patriots were unlucky to get caught, it did not make it right. Alex retorted: “It’s just part of the game. Belichick is a tough coach and a tough competitor.”

To me, this incidence raises important questions of personal leadership and character. I certainly support tough competition and admire individuals who do “whatever it takes” to succeed, but I do not support success at all costs, especially when those costs involve crossing the line of integrity.

Belichick initially defended his actions by stating that he had a different interpretation of the rules. In essence, he acted as if the rules did not apply to him. Belichick’s response is unfortunately not out of character for some leaders who have been very successful. Their success sometimes clouds their judgment. They are so concerned with sustaining success that they sometimes do not think through the consequences of their actions. This is further exacerbated when no one speaks up to the coach or manager or when a leader surrounds himself with “yes-people.”

Belichick has taken responsibility for his actions and the league has been swift with its judgment, but I am still troubled that Belichick’s actions can be construed as just part of the competitive spirit of the game. He crossed the line from healthy to unhealthy competition. And the price for crossing that line is far more valuable than the fines and lost draft pick. This one act has shattered his reputation and the reputation of the team.

At the end of the day, what is more important: one extra win or one’s reputation? Leaders are constantly faced with major and minor ethical dilemmas each day. Perhaps the highly public flogging Belichick and the Patriots are taking will serve as a reminder for us all to think twice about the decisions we make.

HARVARD BUSINESS ONLINE RECOMMENDS:
Your Leadership Legacy: Why Looking Toward the Future Will Make You a Better Leader Today (Hardcover)
Ego Makes the Leader, 2nd Edition (HBR Article Collection)
Firing Back: How Great Leaders Rebound After Career Disasters (Hardcover)
Bill Belichick and the Cleveland Browns (Case)

Why Don’t Leaders Learn From History?

2007-09-06T16:41:35Z

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 lesson anew that the attempt to cover up the “crime” or “scandal” or “misjudgment” is often worse than the crime itself. Richard Nixon paid the ultimate price for this error in judgment in 1974. More than 20 years later, Bill Clinton paid a similar if not as drastic price; a price that has, nonetheless, tarnished his legacy. In business, Martha Stewart, Jeff Skilling, and others have failed to learn from history. A simple admission of the facts would have certainly resulted in very different outcomes.

Is it a failure to appreciate the lessons from history or a sense of superiority and arrogance that one is above the law? What prevents people in power from exercising the perceptive judgment that enabled them to reach the pinnacle of success? In some cases, it may be their ability to take big gambles and succeed that sets in a false sense of security and invulnerability. It may be that they fail to seek advice or actively discourage differences of opinion when they move up the organization. Will there be more efforts to hold leaders accountable for their actions in the 21st century? I hope so, but the plethora of scandals and failed cover-ups in this first decade does not bode well.

Pearl S. Buck once wrote that “knowledge of history as detailed as possible is essential if we want to comprehend the past and be prepared for the future.” Business and political leaders would do well to heed this advice. History does not have to repeat itself, but it will if we fail to respect it.

HARVARD BUSINESS ONLINE RECOMMENDS:
Corporate Governance in the U.S.: Scandals, Reforms, and the Future (CD-ROM)
Power: The Good, the Bad, and the Ugly (HBR Article Collection)
Paths to Power: How Insiders and Outsiders Shaped American Business Leadership (Hardcover)

What's Your Demographics Plan?

2007-08-28T17:00:47Z

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 vital and important customer segment, generating new and innovative product and service offerings. Funding and investment in healthcare, biotechnology, and other wellness products and services should expand dramatically. Companies that focus on expanded leisure activities targeted at this population segment should also be poised for success.

Beyond its purchasing potential, this aging segment of the population could also be seen as a target employee base -- individuals whose experience and wisdom can be applied to business or society in general as part of a third or fourth career. Some institutions are already developing reeducation programs for the aging population to facilitate this transfer of skills to new careers and/or service initiatives. What do you see as opportunities and/or threats from the aging of the population? How do you view the aging segment of your employee base? What businesses should thrive in the next several decades?

HARVARD BUSINESS ONLINE RECOMMENDS:
It's Time to Retire Retirement (HBR Article)
When the Boomers Leave, Will Your Company Have the Leaders It Needs? (HMU Article)
Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent (Hardcover)

Context-Based Leadership

2007-07-24T13:42:42Z

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 adapt to the context contextual intelligence. Many great business leaders in the twentieth century possessed contextual intelligence. They were able to seize the zeitgeist of their times. Yes, business leaders need to have certain personal characteristics to be successful, but it is often the application of those characteristics within a specific context that define great success. It's not only who you are, but when and where you are.

There is far too much focus on individual characteristics of leadership and far too little focus on the situational context. By placing too much emphasis on the individual, we can easily fall prey to the cult of the CEO and believe that any individual who was successful in one setting would naturally be successful in a new setting. The list of once-successful CEOs who have failed in new business settings is long.

Bob Nardelli is a prime example. His stellar career and track record at General Electric seemed to be just what The Home Depot needed. Nardelli’s success at GE was predicated on a command-and-control leadership style that fit that company. That same style was less suited to the participatory culture of Home Depot. Nardelli failed to recognize the importance of Home Depot’s culture and was unable to survive despite certainly having the raw talent to manage the company.

The ability to succeed in multiple contexts is based on what Warren Bennis and Robert Thomas in Geeks & Geezers called adaptive capacity -- the ability to change one’s style and approach to fit the culture, context, or condition of an organization. Success in the twenty-first century will require leaders to pay attention to the evolving context. How will the context shape business leadership? What do you think is different now?

HARVARD BUSINESS ONLINE RECOMMENDS:
Leading for a Lifetime: How Defining Moments Shape Leaders of Today and Tomorrow (Paperback)
Home Depot's Blueprint for Culture Change (HBR Article)
Paths to Power: How Insiders and Outsiders Shaped American Business Leadership (Hardcover)

Is John Mackey Still Great?

2007-07-17T19:02:59Z

One of the members of the list of 20th Century Great American Business Leaders that was compiled by the HBS Leadership Initiative is John Mackey. He transformed and built Whole Foods Market into a great competitor in the still-growing market for organic and health foods. His company changed the grocery industry, and it was his role in carving out this important niche that got him on our list. Recently, Mackey has received press coverage for very different reasons. From 1999 to 2006, Mackey, using the pseudonym "Rahodeb," posted disparaging comments about competitor Wild Oats on various Internet message boards. The postings were recently revealed as part of the Federal Trade Commission’s investigation of the proposed merger between Whole Foods and Wild Oats. The comments could be simply considered part of the new competitive landscape, in which you're supposed to use all media outlets and avenues to promote your brand -- even at the expense of a competitor. Or, they can seem more sinisterly as part of a market manipulation: essentially an effort to lower the market value of a potential acquisition target.

While it is unclear whether the letter of the law was broken, the actions of Mackey raise an interesting question on the definition and judgment of a great business leader. Does Mackey deserve to be considered a great business leader? One way I look at the legacies of business leaders is to consider the intent of their actions, the means they used in building or running their business, and the outcomes that they produced. There is considerable debate on which aspect should receive more weight. Are outcomes diminished if the intent or means to achieve them are considered suspect? Is it fair to evaluate business leaders on all three areas? When you're thinking about a great leader, where do you place the most weight? Should Mackey still be considered a great leader?

As I evaluate the legacy of business leaders, I tend to look at the totality of their careers. On the whole, have they contributed to the advancement of business, have they created new opportunities, have they broken molds? Looking at the totality of Mackey’s contributions to business, I still tend to believe that he belongs on our list of great business leaders.

What's your take? Does this misstep significantly tarnish his image?

HARVARD BUSINESS ONLINE RECOMMENDS:
John Mackey and Whole Foods Market (HBS Case Study)
Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility (HBR Article)
Your Leadership Legacy: Why Looking Toward the Future Will Make You a Better Leader Today (Hardcover)
What Makes a Leader? (HBR Article)

Defining Greatness

2007-07-10T13:39:52Z

Over the past five years, Nitin Nohria and I have been studying great business leadership in the United States. Students of literature read the great writers, students of political science study the lives of great politicians, and students of art examine the works of great artists. But students of business spend more time studying the functions of business than understanding the legacies of those who forged the field.

By developing of a canon of business leadership, we hoped to fill some of this void. In studying historical leadership, we hope to uncover the key lessons of success and what will be needed for success in the 21st century. And we are interested in learning which types of leadership styles and approaches should not be put forward. What, as a business society, do we need to unlearn?

When we set out on our journey to study great business leadership, we needed to define the term great. What makes a leader great? Is greatness defined by financial performance, the capacity to innovate or implement, or the ability to set a strategic vision that galvanizes a group of followers? We asked over 7,000 executives to define greatness in business by selecting from the following list or providing their own definition. Their task? Define greatness in the 20th century.

• Ability to set a strategic vision
• Ability to be an innovator or pioneer
• Impact on the way an industry has evolved or functions
• Impact on society
• Financial performance
• Development of others

Their responses looked like this:

A few years after this survey, when I talk with executives about their definition of greatness, they say developing others and managing the “impact that their company has on society” yet both of these areas scored fairly low on the evaluation of greatness of 20th century business leaders.

Maybe it's different now. If we conducted a survey of the definition of greatness for 21st century leaders, would the results change? Is great business leadership still about setting a strategic vision? Or do we care more about the way in which our business leaders treat their employees and the society in which they live? What is your definition of a great business leader?

HARVARD BUSINESS ONLINE RECOMMENDS:
Paths to Power: How Insiders and Outsiders Shaped American Business Leadership (Hardcover)
Unlock the Key to Great Leadership (Collection)
Your Leadership Legacy: Why Looking Toward the Future Will Make You a Better Leader Today (Hardcover)
What Great Leaders Do (HBR Article Collection)

Why Do Some Leaders Have More Influence than Others?

2007-07-03T18:14:09Z

Some business leaders have a more widespread impact than others. What distinguishes those who have the greatest influence? Are they simply lucky -- the right people at the right time? Or do these leaders possess at their core a common set of characteristics that gives them the potential to be great? How much is the person and how much is the situation?

This is a false debate. Like many exercises in the study of great leadership, no one answer can stand on its own.

To help unravel this mystery, I have looked to the past to see what we can learn or unlearn from great business leaders, and I have studied present leaders in various arenas to better understand what has worked and what has not worked.

Clearly, context is important. Business leaders who have been sensitive to context possess what Nitin Nohria and I call contextual intelligence. Not only do these leaders understand the implications of the contextual forces that surround them, they also have the ability to adapt and change their leadership style and approach as environmental conditions evolve. Success in one realm does not always translate into success in another. Indeed, relying on past models of success without being sensitive to the context of the situation has often yielded major disappointments.

While there has been much research on personal characteristics of leaders, there is considerably less focus on macro-level environmental factors which can impede or accelerate success. In this space, I hope to build a discussion on what it will take to lead successfully in the 21st century -- specifically what it will take to be a great business leader. Is our definition of great business leaders the same as it was 100 years ago? What about just a decade ago? How will the evolving context shift our definition of great leadership? What will it take to lead in a more globally diverse world? I hope you will join me and share your insights and opinions on great business leadership.

HARVARD BUSINESS ONLINE RECOMMENDS:
Paths to Power: How Insiders and Outsiders Shaped American Business Leadership (Hardcover)
In Their Time: The Greatest Business Leaders of the Twentieth Century (Hardcover)
Managing Authenticity: The Paradox of Great Leadership (HBR Article)
Zeitgeist Leadership (HBR Article)