HBS was created after the banking crisis of 1907 to deal with the American businessmen lack of skills to manage economic growth. Now after 100 years of the existence of this cradle of the American business elite its still a hot topic. Harvard Buinsess Summit in mid-October once again stimulated the debate.
Drawing conclusions from some of the Summit speeches Fortune Magazine senior writer Jennifer Reingold on November 14th in the article Meet Your New Leader consolidates some most recent comments and ideas on the subject.
In particular she sites Jim Collins, author of Good to Great, and Harvard Business School professor Rakesh Khurana, which see the crisis as an opportunity for the shift to the new era in corporate leadership.
"Stanley O'Neal took over as CEO of Merrill Lynch in 2002 with the express mission of catching up with the more aggressive trading firms. He bet - and ultimately lost - his nearly century-old firm on subprime and outsized leverage (and when the bet went bad took a $160 million severance package on the way out the door)" - this seems to be a typical behavior of old time leader (probably the Visionary CEO) according to the author.
Company founders, Organization Man and Visionary CEO are the three levels of corporate leadership genesis according to Khurana. Among others Alfred P. Sloan is mentioned as a representative of "Organization Man" generation and Jack Welch exhibited as a "Visionary CEO".
So let us see what is new about the new Lifeguard leader:
- The new leader should be able to create the conditions for things to get done rather than hand down orders.
- The CEO of the future is going to have to be someone who deals well with government.
- The ability to look beyond the short term to the horizon and inspire employees is another must.
- This new breed will have to be comfortable admitting what they don't understand and asking for help.
- These leaders will need the courage to tear up the plan in case of a sudden squall.
After reading this very interesting article I still have some questions: What from the above Alfred P. Sloan or Jack Welch couldn't do or didn't do during their GM and GE CEO tenures? Is it really about Lee Iacocca's or John D. Rockefeller's inability to do something of above listed things?
May be, instead of drawing conclusions on outstanding examples and outstanding leaders we should focus on those HBS and other business schools MBA's who never had talent neither drive to become a true leader but still wanted to make a lot of money and found their own clever ways of to reach this goal? What if it is up to their bright mind and knowledge obtained from best business schools that we have financial products which even Bill Gates or Warren Buffet can't understand? May be the question is not about how well these people are trained but, on the contrary, about how well they were selected in the first place?
"These things were way too complicated!" J.P. Morgan Chase CEO Jamie Dimon exclaimed at a Harvard Business School summit in mid-October. "Investment bankers' balance sheets, - Bill Gates commented at the same event, - should be footnoted, "None of us are smart enough to understand this."
Despite his scathing condemnation of business school education, Khurana was awarded tenure at Harvard. His recent suggestions are that the management should be a profession with licensing tests, a code of ethics à la law or medicine, and a stated commitment to improving the well-being of shareholders and society. May be much longer training, licensing and oaths will help.
I don’t have answers but we will be seeking them in our leadership lessons.
Test if you are the new breed of leader here.
Read Fortune article here.
Learn more about the new guru Rakesh Khurana here.
Read and watch CEO speeches on the Harvard Summit here.
