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In June 2000, John Bogle, founder and former CEO of the Vanguard Group, spoke about leadership at the Wharton School of the University of Pennsylvania. As an avid group of executives listened to the man who popularized the principle of index-based investingand in the process built the Vanguard Group into a firm managing more than $550 billion in assetsBogle ended his speech quoting James Norris, a Vanguard manager, who wrote: "While it is revealing to consider...what constitutes a leader, your search for understanding, for some kind of leadership formula, is apt to end in frustration. It is like studying Michelangelo or Shakespeare: You can imitate, emulate, and simulate, but there is simply no connect-the-dots formula to Michelangelo's David or Shakespeare's Hamlet. I suppose, when all is said and done, it really comes down to this: People are leaders because they choose to lead."
The heart of leadership is as simple as that: It is a matter of choice and determination. It is equally true, however, that no two leaders are exactly alike. Gandhi and Churchill rallied millions behind them, but not quite in the same way or for the same reasons. In the business world, John Bogle's leadership of Vanguard might have something in common with the way Warren Buffett runs Berkshire Hathaway, but the two also have big differencesalthough both are involved, broadly, in the "investment" business. Andrew Grove and Bill Gates are chairmen of high-tech companies with commanding positions in their respective marketsbut while Gates grew up as the privileged son of a wealthy attorney, Grovespent his early years enduring the rigors of Stalinist Hungary. These vastly different backgrounds are reflected in their approaches to leadership.
If this is true, then people who choose and are determined to become influential business leaders can benefit from observing other leaders and using their observations to discover and nurture their own leadership style. The purpose of studying other business leaders is not so much to imitate their qualities as to discover which attributes resonate with one's own and, thus, can be cultivated to further enhance one's leadership skills and capabilities. Leaders are made, not born. Discovering the attributes of lasting leadership can help people increase their impact in their own spheres. Someone who does this might not become another Jack Welch or Mary Kay Ash, but he or she might become a better leader than would otherwise be possible in the absence of this knowledge.
Our book, Lasting Leadership: What You Can Learn from the Top 25 Business People of Our Times, is based on that premise. It is the result of collaboration between Nightly Business Report (NBR), the most-watched daily business program on U.S. television, and Knowledge@Wharton (http://knowledge.wharton.upenn.edu), the online research and business analysis journal of the Wharton School of the University of Pennsylvania. To celebrate NBR's 25th anniversary in January 2004, Wharton and NBR worked together to identify the 25 most influential business leaders of the past 25 years. NBR's viewers nominated more than 700 business people from around the world, and a panel of six Wharton judges selected the Top 25.
The winners are, in alphabetical order, Mary Kay Ash, founder of Mary Kay Inc.; Jeff Bezos, CEO of Amazon.com; John Bogle, founder of The Vanguard Group; Richard Branson, CEO of Virgin Group; Warren Buffett, CEO of Berkshire Hathaway; James Burke, former CEO of Johnson & Johnson; Michael Dell, CEO of Dell Inc.; Peter Drucker, the educator and author; William Gates, chairman of Microsoft; William George, former CEO of Medtronic; Louis Gerstner, former CEO of IBM; Alan Greenspan, chairman, U.S. Federal Reserve; Andrew Grove, chairman of Intel; Lee Iacocca, former CEO of Chrysler; Steven Jobs, CEO of Apple Computer; Herbert Kelleher, chairman of Southwest Airlines; Peter Lynch, former manager of Fidelity's Magellan Fund; Charles Schwab, founder, CEO and chairman of The Charles Schwab Corp.; Frederick Smith, CEO of Federal Express; George Soros, founder and chairman of The Open Society Institute; Ted Turner, founder of CNN; Sam Walton, founder of Wal-Mart; Jack Welch, former CEO of General Electric; Oprah Winfrey, chairman of the Harpo group of companies; and Muhammad Yunus, founder of Grameen Bank.
To arrive at this list from among hundreds of nominees, the Wharton panel searched for business leaders who created new and profitable ideas. They looked for people who had affected political, civic, or social change in the business/economic world; created new business opportunities or more fully exploited existing ones; caused or influenced dramatic change in a company or industry; or inspired and transformed others. The judges included Michael Useem, director of the Center for Leadership and Change Management; Peter Cappelli, director of the Center for Human Resources; Raffi Amit, director of the Goergen Entrepreneurial Research Program; Barbara Kahn, vice dean of the Wharton undergraduate division; Robert E. Mittelstaedt, Jr., former vice dean and director of the Aresty Institute of Executive Education (now dean of the W.P. Carey School of Business at Arizona State University); and Mukul Pandya, editor and director of Knowledge@Wharton.Andy Grove: Best of the Best
NBR asked the Wharton judges to pick the most influential leader among these 25. That honor went to Intel's Andy Grove. To understand why, consider this: When Grove got his Ph.D. from the University of California, Berkeley in 1963, he was a corporate recruiter's dream candidate. He had a number of job options, perhaps the best of which was with Bell Labs, at the time the Mecca of research in solid-state physics. But Grove made a different choice. Rather than head for Bell Labs, he joined Fairchild Semiconductor, a West Coast upstart, where he worked under the legendary Gordon Moore, who led the company's research operation. That was an early example of out-of-the-box thinking from Grove, who five years later left Fairchild with Moore and others to co-found Intel.
After he succeeded Moore as Intel's CEO in 1987, Grove took other steps that shunned conventional logicperhaps most visibly during the "Intel Inside" campaign of the 1990s. Back then, the most recognized brands in the computer industry were hardware makers, such as IBM or software firms like Microsoft. Intel, though it supplied more than 80% of the microprocessors to the world's computers, was hardly known outside a small band of industry insiders. Determined to change that narrow perception, Grove led Intel into an aggressive branding campaign that made the company a household name by the end of the decade. Today, as its products play an increasingly critical role in stitching together a globally networked economy, Intel has emerged as one of the world's top technology companies, with 2003 revenues of more than $30 billion.
Grove's leadership of Intelmarked as it has been by unconventional thinking, imagination, and integritywas instrumental in his being named the most influential business leader of the past 25 years. "My life has been intertwined with Intel," Grove told NBR co-anchor Susie Gharib. "My proudest accomplishment has been to contribute to the creation of a company that has helped put a billion PCs into people's hands."Learning from Leaders
In addition to identifying these individuals as influential leaders, the Wharton judges discussed aspects of their character that contributed to their success. In Grove's case, for example, his openness to unconventional ideas was a critical factor. In his or her way, however, each of these leaders has traits from which others could learn.
Consider Warren Buffett, whom Michael Useem describes as "a man for all seasons." According to Useem, not only is Buffett "an investor extraordinaire" who has delivered enormous returns to investors in Berkshire Hathaway, but he was also highly successful as the hands-on CEO of Salomon Brothers, helping restore confidence in the Wall Street firm when it faced a severe management crisis. These days, "Buffett has become the conscience of the Street, offering great wisdom on contentious topics like expensing stock options," Useem says. In other words, in addition to his genius at spotting good investment opportunities, Buffett's influence derives from his moral stature and integrity. In the aftermath of accounting and governance scandals that have rocked U.S. companies in the past few years, it is difficult to overemphasize the importance of ethics as a factor in leadership.
Bogle, like Buffett, owes his influence to having delivered great value to investorsthough his approach was strikingly different. The former CEO of the Vanguard Group has long argued that "owning the entire stock market at very low cost is the ultimate investment strategy." This belief led him to launch the Vanguard Group in 1975. Bogle was a pioneer in introducing and helping popularize index fundswhich kept fees extremely low for investors. Says Peter Cappelli: "One of the reasons why Bogle is on this list is because of the enormous impact he had on the average person."
Sam Walton's approach to Wal-Mart's customers was similar, according to Robert E. Mittelstaedt, Jr. The goal of making a wide range of products available to average people at the lowest possible price enabled him to take the retail company from a single store to a megacorp that is now ranked No. 1 on the Fortune 500. "Walton's legacy is that a single person can make a huge difference in an industry," says Mittelstaedt. "It doesn't happen overnight, especially in an industry like retail, but it can happen over a period of years. Walton believed in delivering great value at low prices to his customers."
Jack Welch's leadership delivered great value to GE's shareholders. One measure, according to Useem, is that GE's stock price saw a 40-fold increase during Welch's tenure, consistently outpacing the S&P 500. But his greatest strength, says Useem, was spotting and nurturing other leaders. "Welch has written the textbook on leadership. He has often said that he doesn't know how to make jet engines or produce Tuesday night television shows at NBC, the GE subsidiary. But he does know how to pick people with leadership potential, give them the resources to meet their goals, and get rid of them if they cannot. As a result, Welch built one of the best leadership teams anywhere."
Mittelstaedt notes that team-building also counts among Bill Gates's strengths as a leader. Gates saw the potential of the PC to transform the world, and he built Microsoft into a software powerhouse. In addition, he is among those rare entrepreneurs whose abilities have expanded to keep pace with the growth of his enterprise. "Very few successful people who have started as entrepreneurs have led their companies until they grew to a very big size," says Mittelstaedt. In Gates's case, he has had the vision to bring in people and then let them serve the company "in a way that most entrepreneurs are not capable of doing."
Each leader on the list offers similar leadership lessons. While most of them are recognizable names, a few are less well known or are simply no longer in the public eye. James Burke, for example, was J&J's CEO when the company faced its well-known Tylenol crisis in 1982. Seven people died after taking the pain killer, and it turned out that someone had introduced cyanide in the pills as an act of sabotage. Burke's handling of that has become a textbook case for companies facing crises. Bill George, the former CEO of Medtronic, has recently written a book about Authentic Leadership that draws upon his experiences. Yunus, the founder of Grameen Bank in Bangladesh, has been a pioneer in the field of micro-finance, providing loans as small as $10 to impoverished people. His great innovation was recognizing that lending could be separated from collateral and still be the basis for operating a sound financing business. Micro-lending programs modeled after Grameen's have now spread to more than 100 countries.Themes and Structure
Of the 25 leaders profiled in this book, two have diedSam Walton in 1992 and Mary Kay Ash in 2001. We were able to get interviews with 15 of the other 23, including Jeff Bezos, John Bogle, James Burke, Michael Dell, William George, Louis Gerstner, Lee Iacocca, Herb Kelleher, Andrew Grove, Peter Lynch, Charles Schwab, Fred Smith, Ted Turner, Jack Welch, and Muhammad Yunus, in addition to Mary Kay Ash's son, Richard Rogers. We would like to thank all of them for their willingness to talk to us openly about their companies and themselves. We were not able to interview Richard Branson, Warren Buffett, Peter Drucker, Bill Gates, Alan Greenspan, Steve Jobs, George Soros, and Oprah Winfrey. For information on these leaders, we relied on books about or by them, speeches and interviews, and newspaper and magazine articles.
Our book explores the theme of lasting leadership in ten chapters. The first takes a close look at Grove's approach to leadership and discusses the attributes that helped him and Intel succeed. It includes a timeline of Grove's life and discusses the biggest challenge he faced in his careerthe Pentium flaw crisis of 1994and how he dealt with it. The eight chapters that follow provide brief introductions to all the leaders through short chronologies that cover the major tipping points or milestones in their lives. These are accompanied by articles that describe a major challenge in their business careers and how they tackled it.
What is fascinating about these challenges is their enormous variety. For example, Kelleher's challenge was getting Southwest Airlines off the groundliterally. Gates's challenge was dealing with regulators on both sides of the Atlantic so Microsoft could continue to grow. Ash had to motivate a sales force of thousands. Walton wielded pricing strategy like a fencer wields a saber to keep Kmart, his main rival, at bay. Jobs had to contend with a large rivalIBMwhich threatened to put a fledgling Apple Computer out of business. Eight Attributes of Lasting Leadership
In Lasting Leadership, we identify eight attributes or qualities that have enabled the 25 individuals to overcome major challenges as well as to nurture their own leadership styles. These attributeseach of which has its own chapter in the bookinclude
- Building a strong corporate culture
- Truth telling
- Finding and catering to under-served markets
- "Seeing the invisible"that is, spotting potential winners or faint trends before their rivals or customers do
- Using price to build competitive advantage
- Managing and building their organization's brand (which, in some cases, may be their own name)
- Being fast learners
- Managing risk
None of the leaders in this book has all these attributes. If that were a requirement of lasting leadership, the world would have no leaders at all. At the same time, one attribute alone is not enough to ensure long-lived leadership. A leader with a single attribute may succeed briefly, but the success will not be sustained unless other qualities exist to keep the momentum going.
Which combinations of attributes are most effective? That question has no easy answer: The combinations are as varied as the leaders, which is why all 25 individuals in this book are so unlike one another. What makes Michael Dell or Jeff Bezos prosper in their industries is different from what makes Peter Lynch or Oprah Winfrey thrive in theirs. In that reality lies great cause for optimism: If countless combinations of leadership attributes are possible, each person reading this book should find at least a few qualities in himself or herself that, properly nurtured, can be cultivated into a deeper and more effective leadership style. In short, there is hope for the rest of us.
Yet if there is one trait that each of these leaders shares, it is tenacity. Unlike so-called serial entrepreneurs who cash out of their companies after a few years and move on to their next venture, these leaders have had a long-term vision. They have been willing to ride out the lows with the highs. This willingness to slog it out and stay in the game for the long haul has been reflected in the success of their enterprises and in the endurance of their own influence as leaders.
Asked why he never left Intel to start another company, Grove replied: "Intel is like a river. It changes every day and behind every bend there is a new start, a new challenge. I cannot think of any place where I would rather have worked."
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