HARD TIMES … For Leaders in Business (not only in government!)

It’s relatively easy to see how hard it is for political leaders to lead. While some political leaders in 21st century America have it easier than others, it’s obvious that from the president on down that times are tough.

What’s less obvious, relatively more difficult to determine, is that corporate leaders are in a similar situation. They too are experiencing hard times, finding it more difficult to lead now than they did just a decade or two ago. I don’t exactly pity them – among other famous, or infamous reasons, CEOs of large public companies tend to be extravagantly well compensated. But, make no mistake. Leaders in business are not immune from the same slings and arrows that are directed at leaders in government.

The similarity between the two is a hard case to make. While I’ve argued for decades that the differences between leaders in government and leaders in business – or, for that matter, among leaders anywhere else – are less powerful than the similarities, we still tend think them two different species, leaders in the public sector one thing, leaders in the private sector another. But followers, others, in both domains are more recalcitrant than they used to be, and quicker to pull the trigger on leaders who fail to make the grade. Moreover leaders everywhere are situated in the same larger context, in this case this particular country, the U.S., at this particular moment in time.

Consider this tidbit from the Financial Times (6/23/14): “The annual meeting [of publicly held companies] has become a venue for debate where campaigners… raise hundreds of proposals to challenge imperious chief executives on issues ranging from their pay to the environmental sustainability of their operations…. 2014 shows continuing elevated levels of activism, with many companies acceding to proponents’ demand before they reach the ballot.”

In the past few weeks alone, shareholders at Gannet voted against the use of golden parachutes for executives; Harley-Davidson lost its attempt to block the introduction of majority voting for directors; and over 50 percent of votes at Valero Energy demanded greater transparency in its lobbying. Moreover the breadth of citizen or investor activism seems to be widening. Whereas in the past it was mainly banks that attracted these sorts of high-profile campaigns, now contentious industries such as those in the energy sector receive an outsized proportion of investor attention. Even consumer companies have joined the fray; they and those who lead them are growing in popularity as targets of activists.

CEOs most vulnerable to punishment or even banishment if they make a major misstep are those who are new on the job – and to the job. Impatient boards are quicker to lose patience with recent hires, and quicker to push them out if they fail to perform. Nearly 21% of U.S. and Canadian CEOs of public companies forced out in 2013 had served less than three years, compared with just over 10% of those holding office longer. Moreover about 76% of top bosses departing for any reason last year were first time chief executive officers, up from 58% only a couple of years earlier.

Of course none of this is to say that private sector leaders should be pitied. It is simply to point out that they are anything but protected against the temper of the times, anything but protected from the same exogenous forces that put at risk their public sector counterparts.

The Rain in Spain

As if he didn’t have enough on his plate!

Poor, beleaguered King Filipe – he’s now got an errant sister in the headlines! And I don’t just mean the tabloids! Only yesterday Princess Cristina (and also her husband) was indicted on charges of tax fraud and money laundering. If convicted, she faces up to 11 years in jail.

What can a king to do?  Filipe is like any other leader. He is vulnerable now not only to the slings and arrows of the media, but of public opinion.  In consequence  of the times in which he lives his hold on his throne is destined to be shaky – unless of course he can walk on water.

 

 

The Reign in Spain

One of my first blogs ever, posted in April 2012, was about King Juan Carlos of Spain. I pointed out that though he once was a king much admired, he now was a king much reviled. He was reviled because of his own bone-headed behavior; because the royal family had been tainted by ineptitude and corruption; because his subjects, ordinary Spaniards, were fed up; and because Spain itself had been badly hit by the financial crisis. As I wrote in 2012, “The economy is near double-dip recession and the level of unemployment is frighteningly high…. So for the King to choose this moment to vacation in Africa, rifle in hand, to kill elephants, water buffaloes, and other large animals, suggests a cluelessness that is appalling.”

It did not take long for the King himself to conclude that his time had come and gone. That he would do his country a service if he abdicated the throne in favor of his son. And so last week was the formal if low key installation of the new King, Felipe VI, who subsequently paraded through the streets of Madrid, along with his attractive wife and two young daughters.

Not all European royals have functions that are only ceremonial. In fact, Spain’s 1978 constitution allots to the king an array of powers, including the right to “arbitrate and moderate” affairs of state. But, however appealing may be the new royal family, however relieved are Spaniards to be rid of the old royal family, King Felipe VI is inheriting the throne in a time when Spain is taut with tension.

For all I know, King Felipe VI is the cleverest and most politically skilled of all European royalty. Moreover, as just indicated, he has some power as well as considerable authority. But here is just a short list of what he faces: levels of unemployment that remain alarmingly high; a looming constitutional crisis because of the many Catalonians who want nothing so much as to secede from the Spanish state; an urgent need for political and institutional reform; increasing extremism, a monarchy that has been tarnished; a populace that is depressed; and a soccer team that just suffered (at the feet of Chile) and its most ignominious World Cup defeat ever!

What can any king do? What can any leader do when followers are so quick to find fault and when the context is so complex?

I am not saying that leaders are doomed to fail. I’m just pointing out that leading in a modern democracy is exceedingly hard – notwithstanding a royal mantle newly inherited and notwithstanding a royal title that actually packs a bit of punch.

What is ISIS?

Whoever even heard of ISIS – until a week or two ago?  Whoever even heard of the Islamic State of Iraq and Syria (or, in some translations, Iraq and the Levant) – until a week or two ago? Who knew that in the proverbial blink of an eye ISIS would occupy large swaths of Iraq as well as Syria, and seem to the government in Baghdad to be an existential threat?

I certainly did not. But I should not have been surprised. ISIS is precisely the sort of non-state actor that in the 21st century has become a major player in the international system.

Consider only the two most recent international crises. To be sure, it was Vladimir Putin who made the decision to seize Crimea. But he did so only as a response to the people’s uprising in the Maidan – the upending of leaders (primarily Putin’s putative puppet, President Viktor Yanukovytch) by followers in Kiev. Moreover once Crimea was Russian, Putin was prepared to pick up his marbles and go home. But, he was precluded from doing so by separatists in Eastern Ukraine – again, non-state actors – who continue to agitate for a further break-up of the Ukrainian state. Similarly, this most recent implosion of Iraq. It was triggered not by any leader of any nation-state, but by a non-state actor, ISIS, that though previously unknown, nevertheless changed the direction of the global conversation.

One of the interesting things about ISIS is that it is not, as most would depict it, a ragtag band of furious fundamentalists.  Rather it is a well-organized group, even organization that for several years now has had a structure and a strategy – both of which have been carefully documented in annual reports.

You read that right! Since 2012 ISIS has issued annual reports similar to those with which Americans are familiar: they describe how the organization has performed in the last year and its goals for the next year. Of course the content of ISIS reports are a smidgen different. For example, in 2013 ISIS recorded nearly 10,000 operations in Iraq that included, among other things, 1,000 assassinations and the planting of 4,000 explosive devices. Nor has ISIS been old-fashioned in its operations. Quite the contrary. It’s been adroit at fund-raising, by any means necessary. And its use of social media platforms including Facebook, Twitter, and YouTube are reputedly remarkably deft.

None of this is to say that ISIS will eventually triumph in either Iraq or in Syria. (Our new BFF is Assad!) It is likely in fact that an array of state actors, including the United States and Iran (our second new BFF!), will see to it that in the end ISIS is relegated to bit player. However… the frequency with which state leaders, and nation states, are compelled to cope with non-leaders and non-states is mind-bending.

Bad

Walter Russell Mead just wrote a timely piece for the Wall Street Journal (link below) in which he stated the now nearly obvious: that not since the “end of the Cold War have so many crises erupted in so many places.” Russia’s seizure of Crimea (which redrew the map of Europe); continuing conflict in Ukraine; China’s aggression in the South China seas; terrorism in Nigeria; and the surge in jihadist violence over a land mass that stretches from Syria to Iraq – all indications the liberal world order faces challenges daunting to the point of overwhelming.

What is less obvious is Mead’s second point, which is that mayhem and murder the world over fly in the face of the American disposition, which is to believe that in this best of all possible worlds everything will be for the best. It’s true: for various reasons, both historical and contemporaneous, Americans are congenitally disposed to believe that people are good and that, again to quote Mead, “win-win solutions are easily found and that world history is moving inexorably toward a better and more peaceful place.”

This congenital disposition was reinforced during the last decade of the 20th century – in hindsight a holiday from history. The Soviet Union had collapsed. Communism was dead and gone. The U.S. was prosperous and at peace – and it seemed destined indefinitely to remain the sole superpower in a world increasingly liberal and democratic.

Curiously, America’s founders were not so blinkered. They knew better. They knew to structure a government based not on the assumption that man (woman) was good, but that he (she) was likely as not to be bad. Not only was the system replete with checks and balances to preclude any single individual or small group from seizing power. More important was the underlying assumption: it was that human nature was, at best, fickle. As James Madison put it the Federalist, “If men were angels, no government would be necessary.”

I wrote a book titled, Bad Leadership. And, a handful of my colleagues, experts in leadership, did something similar: they wrote about the dark side of leadership and, yes, followership, in order to explore and explain situations such as the one the U. S. is in now. In order to explore and explain the gamut of being bad, from being a bad boss to being a totalitarian tyrant; from being a Bystander follower, who stands by and does nothing, to being a Diehard follower, who freely, willingly, even eagerly supports a leader who is evil.

But we are much in the minority. Overwhelmingly the leadership industry is, like Americans more generally, disposed to focus exclusively on developing good leaders, while ignoring altogether the question of how to stop or at least slow bad leaders. In a time such as this one, in a time in which the United States is beleaguered on all sides, such a lop-sided approach to leadership education is misguided as it is misleading. Those of us who till this soil owe it to our students, to our clients, to those who turn to us as experts, to see the world as it is – not as we would prefer it to be.

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http://online.wsj.com/articles/for-americans-a-world-of-disappointment-1402704752

Dear Barack,

 

What a week!  You must be wiped! No wonder those gray hairs on your head are multiplying at such a rapid clip!

I am by no means among your greatest fans. But I respect your intelligence and integrity. And I admire your dedication to service as president of the United States. Moreover I do not doubt for one moment that what you do do and do not do is being done or not done in what you judge the best interest of your country.

This last week has in the event been daunting. Given the contextual complexities, I for one am starting to doubt whether any single individual can lead from the White House over any protracted period of time without being regularly, relentlessly, pilloried.  But some weeks are more challenging than others – and this past one has been a  whopper. There is no way you could have anticipated one week ago that which came to pass. To be sure, you’re hardly the first president of the United States who has had to cope with a bolt out of the blue. After all, your much derided immediate predecessor had to face a mind-bending attack on American soil. But, it is also true that by and large leadership work is like other sorts of work: it is predicated on a set of presumptions that enable us to function reasonably coherently. So, when these assumptions are upended, when our game plan for any given day not to speak of week is derailed, it complicates our task.

I don’t know, Barack, if you read my blogs. In the event you do, you’re aware that my most recent one was about how our domestic politics was turned on its head from one day to the next by the unceremonious and wholly unanticipated defeat of  Eric Cantor. What was it like then for you to discover only a day or so later that our foreign politics too had been upended, this time by a turn of events in Iraq that included a series of stunning victories by Islamic extremists. Five minutes ago your biggest foreign policy challenge was to tame Vladimir Putin. Now, suddenly you’re being asked to deal with a large swath of the Middle East that seems to have become overnight an existential threat – not merely to moderates in the area, but to the United States as well.

 

It’s not easy being a leader these days, least of all American president. What this means is that whatever the deficits of your presidency, you’re likely to shoulder some of the blame – but by no means, no stretch of the political imagination, all of the blame. Times are tough, very tough – an objective fact that is independent absolutely of who sits in the Oval Office.

So make sure on this warm, lovely Saturday in Washington to go out and play golf, to hang with family and friends, to have a cold beer.  You need to chill out and check out, at least one day each inordinately taxing week.

Best,

Babs

 

Surprise, surprise!!!

Don’t you just love it when plain people perplex plutocrats?

Don’t you just love it when those without obvious sources of power, authority, or influence upend those with?

Don’t you just love it when those without deep pockets upend those with?

Don’t you just love it when experts look like dopes because they were unable altogether to anticipate the future?

Don’t you just love it when someone you’ve never heard of pushes off his perch one of the most prominent persons in America?

If the answer to all of these questions is yes, this morning’s made for you! Republican leader Eric Cantor was ousted by Republican nobody-ever-before-heard-of, Dave Brat. And no one, absolutely no one, saw it coming.

More than anything else that’s what’s news. It’s not so much that power turned out useless,or that money turned out irrelevant. It’s that the conventional wisdom, the received wisdom, was wrong. However clever the talking heads, however sophisticated the political analysts, however experienced the politicians themselves, none can get it through their heads that leaders can be decapitated in a heartbeat by followers who are fed up.

 

Consider the Customer a Follower

In general, the system works like this. Company A makes a particular product. In order to survive, Company A must sell its product to a sufficient number of buyers to make at least a modest profit. In turn, in order to sell, Company A must persuade would-be customers to purchase its particular product rather than that of any of its competitors.

In this sense the seller is the potential leader; the buyer the potential follower. If the seller can influence the buyer to do something that he or she might not do otherwise, then the former has gotten the latter to follow its lead. Of course the buyer in turn is free to not buy the product, to ignore whatever the seller’s blandishments and buy elsewhere.

All this especially applies to the United States of America in the second decade of the 21st century. We are inundated every day by consumer choices – to buy a can of tomato soup means to decide among several different brands of tomato soup. Again, in this sense we are free agents, that is, no one is obliging us to buy any particular brand; we not only have choices, we have the right to decide among them.

Given this, I was stunned, really stunned, to read that General Motors sales have been, to quote from a headline in USA Today, “unfazed by recalls.” Not only were sales of General Motors vehicles up 13 % in May 2014 from one year earlier, May 2014 was GM’s best month since August 2008!

Give me a break! What the hell is going on here? Does no one know the news anymore? Is the American consumer oblivious to the fact that not only has GM in the last few months recalled millions of vehicles, GM has been in the last few years demonstrably guilty of wrongdoing, possibly criminal wrongdoing? Or does the American consumer know and not care? Are we willing simply to disregard what General Motors itself admitted was corporate neglect with “devastating” consequences?

GM reports that it has already dismissed 15 employees as a result of what went wrong, and disciplined 5 others. Moreover this story is ongoing – before it’s over the federal government, the law, and the victims themselves will get their pound of flesh.  But this does not absolve us, American consumers, from letting a company know in no uncertain terms what we think of it. When a company and those who people it are so self-interested as to ignore for years a potentially fatal defect, it’s up to us to boycott their products, to prove with our pocketbooks that we consider such behavior unconscionable and intolerable. For us blithely to ignore what GM did, to treat it as we would a good corporate citizen by buying what it has to sell, is to succeed bad leadership with bad followership.

Leadership Without Followership

When I try to persuade people of the importance of followership my effort is often in vain.  It’s hard to make the case that leaders without followers likely will go nowhere. Notwithstanding the logic of the argument, notwithstanding the objective evidence, in general people are still persuaded that the leader is all. We remain, in other words, leader-centric, reluctant to accept the proposition that without sufficient numbers of followers the leader is nothing.

This fundamental principle came again to mind when reading Dale Russakoff’s suburb article in the New Yorker title, “Schooled.” (See link below.) It is a carefully researched, thoroughly persuasive piece about how and why schools in Newark have remained so resistant to change, so miserably poor in their overall performance. This in spite of the fact that behind recent reform efforts has stood a sparkling cast of characters including former Newark Mayor Cory Booker, incumbent New Jersey Governor Chris Christie, and Facebook Mogul Mark Zuckerberg – the last of whom has put a lot of money where his mouth is.

At least one of the major problems – arguably the major problem – is that all those lustrous leaders from on high have failed to bring in, bring along, bring on board followers from below. The people were left out of the process or, at least, they themselves did not feel part of the process – so they fought and they balked. In other words, notwithstanding all that talent and all that money, the process itself was experienced as exclusionary.

Russakoff makes clear that all is not lost – some solutions may be closer than any of the warring sides is willing to acknowledge. But until the various leaders, many of whom are outsiders, engage the various followers, all of whom are insiders, in tough and open conversations even the best-intentioned efforts are likely to stay stalled. As one close observer put it, all too often education reform “comes across as colonial to people who’ve been here for decades. It’s very missionary, imposed, done to people rather than in cooperation with people.”

Bottom line is that those days are now over. However frustrating and cumbersome sometimes the process, leaders engaging followers is part of the deal – unless, of course, the system is autocratic, not democratic.

 

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https://www.google.com/?source=search_app#q=dale+russakoff+%22schooled%22