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Tuesday, December 01, 2009

Charisma vs Character: Style vs Substance : What Kind of Leaders Do We Need in 2010?

The stock market seems slowly on its way to recovering from the financial crisis, but a deep scar from the recession remains.

In the USA, many Americans lack confidence in the nation's leadership to address the challenges the country currently faces. The Harvard Center for Public Leadership's 2009 National Leadership Index reveals that 69% of Americans think there is a leadership crisis in the country. 67% believe that "unless we get better leaders, the United States will decline as a nation."

At the bottom of the index's ranking of confidence in leadership are Wall Street leaders, closely followed by news media, Congressional, and business leaders. It is tempting for leaders to view these dismal results as a public relations issue emanating from the economic downturn. But this is not a PR problem: It's a leadership problem.

We opened this decade with a wave of appalling leadership failures. Ken Lay and Jeff Skilling of Enron, Bernie Ebbers of WorldCom, Joseph Nacchio of Qwest, and Dennis Kozlowski of Tyco blatantly disregarded the ethical and legal responsibilities entrusted to them by their shareholders. We are closing the decade with another wave of leadership failures. Dick Fuld of Lehman, Alan Schwartz of Bear Stearns, Angelo Mozillo of Countrywide Financial, and Chuck Prince of Citigroup (C) sacrificed financial prudence for the possibility of extraordinary short-term gains. Their decisions obliterated billions of dollars of economic wealth and almost destroyed the world's financial system.

This crisis won't be over until a new generation of leaders emerges that understands that long-term institutional stewardship and maintaining public trust are the two imperatives of 21st century leadership.

Far too many leaders fell into the trap of believing that the purpose of business is to maximise shareholder value and reap personal rewards, rather than serve customers and the society they operate in. However, those that focus primarily on maximising shareholder value—usually with a short-term focus—are more likely to wind up destroying the value they create.

Bill George is a professor of management practice at Harvard Business School, where he has taught leadership since 2004. In this speech he discusses the kind of leaders we need in 2010:

In this conversation with The Washington Post (Embed link), he explains why leaders should be "vulnerable" with followers, even at the risk of losing their jobs and why integrity ('doing the right thing') really matters in business today.

Bill George is the author of Seven Lessons for Leading in Crisis (JB Warren Bennis Series)


In the main the issues behind the more spectacular and well known falls from grace of leaders in the public eye could be grouped under a lack of competence, a lack of support or loyalty from those they sought to lead and a lack or failure of integrity.

Of all of these the last is the most egregious, the most fatal. We so much want our leaders to be unfailingly decent, an obvious or perceived flaw in integrity can be the toxin that kills them off. All of us have a reputation, something we are known for, sometimes different from what we would like to be known for.

At the core of this is the simple but fragile heart, our integrity; always under challenge, under tests both trivial and profound every day of our lives. In business, integrity is just as important as in any of the great public offices.

It is interesting to observe that many of the modern corporate failures in leadership have come from a failure in integrity by the leaders in question or, equally serious, a failure to diligently protect the integrity of the business, on which the owners rely.

Some may argue that this is more a case of incompetence but surely one of the first and fundamental obligations of competent business leadership is above all to protect the reputation and integrity of the business; to that degree the integrity of the business is the integrity of the leader.

During the past couple of decades the business community has seen an exponential increase in compliance-based regulations. These regulations have grown from a raft of incidents where corporations and their leaders behaved poorly, leading to great losses among shareholders. While many of these regulations seem to business to be burdensome and frustrating, their imposition is certainly a logical outcome of some outlandish corporate behaviour in the past. In some ways this framework of regulation can lead to a culture of "integrity by compliance", whereby corporate leaders (boards and chief executives) can increasingly feel that if they abide by the letter of the law (or regulation) then they have behaved with integrity.

The subtle shortcoming is that no system can ever describe the limits of obligation that must be self-imposed on the behaviour of men and women of integrity. And, of course, a business culture that assumes that within the regulatory envelope, anything else goes is obviously flawed.

Make the Impossible Possible

Make the Impossible Possible: One Man's Crusade to Inspire Others to Dream Bigger and Achieve the Extraordinary

This is a very special book about a man who has lived, and continues to live, an extraordinary life.

Over the past 30 years, Bill Strickland has helped change the lives of thousands of people through the creation of Manchester Bidwell, a jobs training centre and community arts programme located in Pittsburgh. The centre works with corporations, community leaders, and schools to help give disadvantaged kids and adults the opportunities and tools they need to envision and build a better future:

“We greet them all with the same basic recipe for success: high standards, stiff challenges, a chance to develop unexplored talents, and a message that many of them haven’t heard before – that no matter how difficult the circumstances of their lives may be, no matter how many bad assumptions they’ve made about their chances in life, no matter how well they’ve been taught to rein in their dreams and narrow their aspirations, they have the right, and the potential, to expect to live rich and satisfying lives”