Where Have all the Leaders Gone? (Part I)

The U.S. is going through a crisis of leadership in both business and politics. And it won't be solved until we look at ourselves in the mirror

by Bill George

Everywhere I go these days, from gatherings of corporate executives to Q&A sessions with large groups, everyone is asking the same questions: "Where can we find leaders we can trust?" "What happened to all those great leaders of the past?"

Some are bemoaning the paucity of statesmen at the top of corporations, while others are fed up with political leaders. The lack of trust in our leaders in virtually every sector of U.S. life is palpable. Recent Gallup polls indicate that only 18% of the American people trust the values and ethics of business leaders; even fewer—15%—trust their elected officials. That's not just a temporary problem. It is a formula for disaster.

Trust is the coin of the realm in both democracy and capitalism. Without trust, the system cannot function effectively. People become cynical, disengaged, and even prone to anarchy and rebellion.

Unlike others who bemoan the leadership shortage, I do not believe the problem is a lack of leaders. Rather, in the corporate realm and in the voting booth, we are choosing the wrong people to lead us—and choosing them for the wrong reasons.

Style Over Substance

Corporate boards, shareholders, and voters—and the media that influence all of us—give far too much weight to leaders' charisma and far too little consideration to their character. They tend to favor style over substance; image over integrity. If we choose our leaders for their charisma, style, and image, why should we be surprised when we fail to get leaders with character, substance, and integrity? Only the latter qualities can build trust.

Many of the chosen leaders want to lead only for their own ego aggrandizement—for money, fame, power, and glory. They want to take as much from the system as they can. They aren't genuine leaders at all. They are just glory-seekers. Yet we set these leaders up as role models. When they prove they have feet of clay, as all leaders do, we take pleasure in their destruction.

No leader is perfect, so we should stop expecting them to be. Genuine humility, the ability to be vulnerable under pressure, and admitting when you're wrong can go a long way toward building trust.

Marks of the Authentic Leader

Authentic leadership is about serving others. And serving others, not seeking glory, is what leaders in both the corporate realm and political arena are selected to do. As the late Peter Drucker said: "Leadership is not rank or privileges, titles or money. Leadership is responsibility."

Authentic leaders take responsibility for their actions and the results of their organizations, but they don't try for perfection. In fact, they surround themselves with other leaders who know more than they do. They openly admit their mistakes. They acknowledge their weaknesses and shortcomings. They ask others to help them through crises. When things go well, they give the credit to others. When they go poorly, they are the first to accept responsibility.

In the past decade many of our leaders tried to pass off responsibility for failure and corruption on their accountants and lawyers, as Jeff Skilling of Enron and Bernie Ebbers of WorldCom did. Leaders like Phil Purcell at Morgan Stanley (MS) rationalized their poor results and fought to the bitter end to hang onto their jobs. Then they demanded—and received—huge termination settlements from their boards. Many of the leaders of failing enterprises such as AT&T (T), Sears (SHLD), and K-Mart got so caught up in playing the short-term stock market game that they wound up destroying their enterprises.

Unrealistic Expectations

The notion of finding a savior who can turn around moribund organizations in a short time has proven to be flawed. The only solution to the current leadership crisis is to select highly experienced, battle-tested leaders from within the organization or the political realm. We need leaders who have had years of proving their character and integrity in the most difficult circumstances and who have achieved results by empowering people, not by using them.

Until we choose leaders who are more interested in serving everyone in the system than they are in taking from it, we will continue to ask plaintively: "Where have all the leaders gone?" without ever acknowledging that we, with our unrealistic expectations, are the source of the problem.

George, professor of management practice at Harvard Business School, is the author of two best-selling books, True North and Authentic Leadership. He writes his "True North" column every other week at businessweek.com/managing/.

Where Have All the Leaders Gone? (Part II)

Yes, there is a dearth of genuine leadership in business and politics. But there are examples we can look to for inspiration and guidance

by Bill George

Since Enron's demise in 2001, a new generation has assumed the helm of U.S. corporations. Very different from their predecessors, they recognize that for the 21st century a new kind leadership is required (BusinessWeek, 09/21/07).

As one current CEO told me, "Many of us followed iconic charismatic CEOs who were used to ruling their enterprises. To get things done in this century, we need organizations that lead by values, not directives, and collaborate with other companies, governments, and nonprofit organizations."

Good-Bye to the All-Powerful Leader

Let me take this one step further: The era of the all-powerful leader who commands people to follow is dead—or it should be. Today's leaders have to lead differently because the people in their organizations have changed.

• Today's organizations are filled with knowledge workers who know more than their bosses.

• Those workers want the opportunity to step up and lead now, rather than wait in line for 10 years.

• They have lots of options, as most will work for multiple organizations during their careers.

• They are highly skeptical of image-oriented leaders who say one thing and do another. They want leaders they can trust, leaders who will empower them, not direct them.

A New Definition of Leadership

Successful organizations in the 21st century—those that sustain superior results year after year—will be led by authentic leaders who know how to motivate this new group of employees and gain their full commitment.

I would like to propose some new definitions for the 21st century leader who can "align, empower, and serve":

• Alignment: uniting the entire organization around a common purpose and values;

• Empowerment: motivating employees to step up and lead to fulfill the organization's purpose;

• Service: dedicating themselves to all the organization's constituencies—customers, employees, investors, and communities.

Serving All the Constituencies

Academics call this approach the "soft" side of leadership. It is anything but soft. It is a lot more difficult to gain alignment of employees around mission and values than it is to meet quarterly numbers or to cut expenses.

Empowering people is hard, but far more effective in getting people to sustain peak performance. Serving all your constituencies is more difficult than a singular focus on short-term shareholder value, but it is the only way to sustain success over the long term.

The good news is that today's most prominent CEOs are authentic leaders who practice 21st century leadership. They are highly competitive individuals dedicated to building organizations for the long term. They engage actively and deeply in their businesses. They have the courage to resist being pulled off course by short-term pressures of the stock market.

Charisma Isn't Everything

Who are these new leaders? They include A.G. Lafley of Procter & Gamble (PG), General Electric's (GE) Jeff Immelt, Andrea Jung of Avon Products (AVP), IBM's (IBM) Sam Palmisano, Xerox's (XRX) Anne Mulcahy, Target's (TGT) Bob Ulrich, and dozens more like them. All these leaders were chosen from within their organizations. By the time they reached the top, they knew the business, people, and culture intimately.

As good as these leaders are—and they are really good—none of them is especially charismatic. But they are genuine and trustworthy, and they have character and integrity.

Let's look at some specifics:

• Lafley, Jung, and Mulcahy were passed over initially, but stuck around until their boards turned to them to lead their companies out of difficulties.

• Facing disappointing results for the first time at GE's plastics division, Immelt recognized that this was a test and a chance to solve the problems his way. Immelt has said, "Leadership is a long journey into your own soul." As CEO, he is applying that philosophy to transforming GE for the next 20 years.

• Palmisano engaged all 350,000 of IBM's employees in an online "values jam" to determine the company's values. Now he is using "leading by values" to create IBM's integrated global organization.

• When Avon Products' stock dropped 30% after years of rapid growth, Jung reinvented herself as CEO by cutting organizational layers dramatically and reinvesting the savings in future growth, which is paying off in Avon's resurgence.

• Mulcahy took over Xerox with $18 billion of debt. Urged to declare bankruptcy, she refused and instead rallied her employees around "restoring Xerox to its former greatness." Not only did she stave off bankruptcy, she also turned Xerox into a highly effective competitor once again.

• Target's Ulrich is not nearly as well known as the famous Target Bull's Eye. Named Chief Executive magazine's "2007 CEO of the Year," Ulrich claims, "It's not about me. It's about this team…the greatest team in the world."

If they want to succeed in the 21st century, corporations would be well-advised to develop authentic leaders like these, who can build and sustain their long-term success.

George, professor of management practice at Harvard Business School, is the author of two best-selling books, True North and Authentic Leadership. He writes his "True North" column every other week at businessweek.com/managing/.

Where Have All the Leaders Gone? (Part III)

Move over, baby boomers. The emerging leaders have a different set of experiences, expectations, and rules

by Bill George

When Jimmy Connors reached the top of the tennis world, reporters asked whether he could continue to beat the veterans. His blunt response: "I'm only worried about the young guys coming up behind me."

Well, baby boomers, watch out, because the emerging leaders are coming up fast behind you. Their approach to leadership is entirely different than yours. They don't care about position power, status, and organizational hierarchy, or even having followers. Instead, they are superb networkers who find collaborators to create opportunities and businesses. They are on line 24/7, always networking, always in touch. That's why Facebook and You Tube are so popular.

The emerging leaders are knowledge workers who typically know more than their bosses. They collaborate with people who have skills they don't. Growing up with diversity as the norm, they understand the benefits of diverse people working together to solve the world's most pressing problems.

Detest Corporate Politics

When considering large, well-established organizations, they see bureaucracy, layers of management, policies and procedures, and rules—all things that scare them. At their core they are flexible, fast-moving, and innovative, and they don't want their creativity stifled. They detest corporate politics, as they want to be judged on their merits and have freedom to get things done.

Most important, they want to lead now and use their considerable skills to make a difference. They are highly confident about their abilities and won't wait in line for years to get their chance. They are willing to make great sacrifices to accomplish their goals. If current opportunities aren't satisfying, they won't hesitate to move to more appealing situations.

They anticipate long, active lives—living well beyond 100—but want to make it now. They have a passion to change the world and aren't prepared to settle for less.

The Next Generation

Who are these new leaders? The leading edge includes fortysomethings like Randy Komisar, former chief executive of LucasArts, now at Kleiner Perkins; John Donahoe at eBay (EBAY); Donna Dubinsky, founder of Handspring and Numenta; Kent Thiry, who infused kidney-dialysis company DaVita with new life in 1999; Chip Conley, founder of Joie de Vivre Hotels; and Bruce Chizen, CEO of Adobe (ADBE). They follow in the footsteps of role models such as Howard Schultz, Bill Gates, and Michael Dell.

Let's take a closer look at some younger leaders who are ready to step onto the big stage:

• Wendy Kopp had such passion for improving inner-city education that she founded Teach For America at only 22. With no money or management experience, she overcame enormous obstacles, including resistance from the educational establishment.

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Related Items

• Where Have all the Leaders Gone? (Part I)
• Where Have All the Leaders Gone? (Part II)

Nevertheless, she survived early financial crises and created the most successful educational initiative in the past quarter-century, for which she was recognized as one of America's Best Leaders by Harvard's Kennedy School.

• At 33, Jaime Irick already is a division general manager at General Electric (GE). He was a star at the U.S. Military Academy, served in Kuwait, and got his MBA from Harvard before joining GE four years ago. Irick observes: "Leadership isn't about you. You've got to flip that switch and understand that leading is serving the folks on your team."

• Social entrepreneurs Alan Khazei and Vanessa Kirsch are a high-powered couple. Khazei co-founded City Year, the successful urban Peace Corps and was also named one of America's Best Leaders. Kirsch founded Public Allies and now heads New Profit, a venture fund for nonprofits.

• Dina Powell is one of the new global leaders who move comfortably between sectors. A native of Egypt, she made her mark as head of the White House Personnel Office, became special assistant to Secretary of State Condoleeza Rice, and recently joined the executive office of Goldman Sachs (GS).

• With six colleagues, 27-year-old McKinsey consultant Matt Hemsley founded Minneapolis-based LEAD, dedicated to engaging the younger generation in personal philanthropy. LEAD has already signed up 400 young leaders.

• A senior at Seattle University, 19-year-old Seattle entrepreneur Brayden Olson founded Novel Conceptions (NC) two years ago to create virtual-world experiences that contribute to human development.

These emerging leaders understand that it takes collaboration among people with broad perspectives and passion to address the world's most challenging problems: health care, education, energy and the environment, poverty, and global peace. They are likely to become global citizens who can move comfortably among three major sectors—government, for profit, and not-for-profit—to get things done. Their passion for changing the world keeps them from letting established organizations or bureaucratic barriers stand in their way.

To that I say, Bravo! We need all of your energy, enthusiasm, and idealism to make this world a better place. The very best time for you to step and lead is now!

As anthropologist Margaret Mead said, "Never doubt the power of a small group of people to change the world. Indeed, it is the only thing that ever has."

George, professor of management practice at Harvard Business School, is the author of two best-selling books, True North and Authentic Leadership. He writes his "True North" column every other week at businessweek.com/managing/.