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Warren Bennis
Scholar

Warren Bennis

Warren Bennis is University Professor and Distinguished Professor of Business at the University of Southern California. His newest book is 'Still Surprised: A Memoir of a Life in Leadership.'

Our 'shut-eye' corporate sentries

Q: Tony Hayward, once credited for BP's "green" turnaround, is forced to resign in disgrace. Michael Dell, the revolutionary high-tech entrepreneur, is sanctioned for misleading investors. Wall Street titans, once lionized, are now reviled. Where have all the CEO heroes gone?

In just about every decade -- it started in the late 50s -- I have written a heated screed mimicking the 60's flower song wondering where all the "leaders have gone."

In the 70s, my peg was the one memorable word, "plastics," from "The Graduate." I entitled that one, "Where have you gone, Joe DiMaggio...hey, hey, hey." My latest attempt was in 2002 when Enron and Ken Lay were making the headlines. I started with a long-forgotten Kipling poem:

But I'd shut my eyes in the
sentry-box.
So I didn't see nothin' wrong.

The gist of my '02 piece can be stated simply, and its thesis is, if not identical, then remarkably similar to the BP disaster. Ken Lay's failing was not simply his myopia or cupidity or incompetence. It was his inability to create a company culture open to reality, one that discourages workers from delivering bad news, just like Tony Hayward who didn't want to hear the concerns of the oil drillers marooned on that catastrophic rig, Deepwater Horizon.

How can an organization be honest with the public if it is not honest with itself? I asked. I do not believe that the CEOs of today are any worse or better than they were, let's say, a hundred years ago. It's just that the stakes are higher and more of us are affected by the dominance of free market economy.

In 1936, for example, only 16% of American households were invested in the market. The last time I looked it was about 70%. That includes a lot of stakeholders and lobbyists. So keep in mind that for every Michael Dell, there is a Howard Schultz of Starbucks, who went through the same dos-e-dos and appointed a CEO to replace him.

When Starbucks hit the skids two years ago, Schultz reclaimed the CEO role but, unlike Michael Dell, did not blame his predecessor and instead told the world he was complicit during the decline and took full responsibility for it. For every Tony Hayward, there is a Bill George, former CEO of Medtronic who now sits on the Chevron board and speaks out -- shouts out! -- when concerned about the energy giant's safety issues.

There are CEOs like Daniel Vasella, who just resigned his position but retained his role as non-executive chairman, and who insists that a culture of candor is what leads to a healthy bottom line. He has created that culture of transparency at Novartis, the world's third largest pharmaceutical company.

The question still remains: Will our corporate heroes or villains of the future learn from the sentries who didn't see nothin' wrong?

One piece of good news, and somewhat reassuring, is that most business schools I know about are paying close attention and revising their curricula to emphasize the significance of ethics and morality in the workplace. I don't think it's any accident that the recently appointed Dean of the Harvard Business School is Nitin Nohria, a fierce proponent of how values, ethics and morality inflect and inform leadership. I can say with some degree of pride the same thing about my own business school, here at USC. Let's see. It's still the best of times and the worst of times.

By Warren Bennis

 |  July 28, 2010; 6:00 PM ET
Category:  Corporate leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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CEOs are rewarded for short term profits. In the medical field, J&J and Baxter, Abbott, and American Red Cross pay their fines for cheating and blame it on the CEO of 2-4 years ago, and then the current leader does the same thing. Until the USA government and investors hold companies and their leaders accountable for 10-year projections (not the next quarter or the next election cycle), there is no incentive to tell the truth. In fact, they only get paid if they lie.

Posted by: saymyname | July 29, 2010 2:19 PM
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Where have they gone? I wish we could say under a rock, never to be heard from again. The last 30 years have seen the greatest robbery in history, wherein these men have outsourced jobs, engineered self-serving compensation boards that rubber stamp thievery, and torpedoed their own companies. Aided by a corrupt Congress, their lobbyists destroyed the middle class, while ensuring that the top 1% gained ever more wealth. And that's the view of a conservative veteran with a world class education.

What did YOUR business school do to assist them?

There are no leaders in business. Just "managers" and profiteers.

You can find a leader at Parris Island or Fort Bragg. Or, more likely, pulling down $35,000 a year while deployed to Afghanistan, while the "CEO"s pick out furniture for their third vacation home.

Posted by: hf34346434335 | July 29, 2010 1:36 PM
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