CEOs in Context

For several years now I have maintained that leaders – all leaders – are getting weaker and followers, others, stronger. It’s hard sometimes to make the case, particularly as it pertains to chief executive officers of America’s largest companies, where the metric typically used is pay, which, equally typically, is excessive. In fact, the gap between the pay of chief executives and average workers has never been wider.   

However if instead of fixating on pay to the virtual exclusion of everything else, we take a more expansive view of the context within which leaders lead, especially in corporate America, we can more easily see the pressures under which they now operate. We can more easily see how obliged they now are, even those at the top, to respond to forces other than the ones that they themselves generate.  

From time to time this blog will identify some of these contextual pressures, if only to step back from both individuals and institutions in order to identify components of context with which even CEOs are obliged now to reckon.   

For today these three:

  • Public Opinion. No groundswell for sure. No groundswell by CEOs to cut down on their pay packages in response to the rising tide of anger by the 99 percent at the 1 percent, especially at the ultra rich. Still, it’s worth noting that recently several chief executives have chosen to say no to earnings to which they were entitled. A couple of examples: 1) IBM’s Virginia Rometty stood to collect an additional $8 million on top of her salary and other compensation. Instead she demurred, saying, “In view of the company’s overall full-year results, my senior team and I have recommended that we forgo our personal annual incentive payments for 2013.” Similarly, Barclay’s chief executive, Antony Jenkins, turned down his bonus for the second year running, announcing, “I have concluded that it would not be right, in the circumstances, for me to accept a bonus for 2013, and I have, therefore, respectfully declined the one offered to me by the board.” What? Who would’ve thunk it?!
  • Activist Investors.  Call them what you will – corporate raiders, if you like – the fact is that they are escalating in number and in the brazenness of their attacks on CEOs who would greatly prefer they go away and never be heard from again. A single example: Nelson Peltz, who for years has toyed with chief executive officers. Most recently he has again taken on the management of PepsiCo, insisting that although the company had recently undertaken an “exhaustive” strategic review, it was inadequate. According to the Wall Street Journal, Peltz’s company, Trian Fund Management, is demanding that PepsiCo split up, spinning off its struggling beverage business (2/21/14). Moreover it is threatening that if it does not, it will begin meeting with shareholders “immediately,” and might even conduct public shareholder forums to galvanize support for the proposed company breakup. Should we pity PepsiCo CEO Indra Nooyi? Not hardly. Should we take a more complex view of the context within which she is operating? Oh yes!
  • Shared Power. Big fuss recently over Mary Barra, the first female executive of a major American car company, General Motors. There’s just one teeny-weeny problem: signs are that GM’s board has no intention of letting her have free rein. Shared power – that is, the chief executive officer having to share decision making authority with a range of others, including board members and members of their own executive teams – is no longer anything new. But it is a very big deal. And it is a very big change from times past. And in some cases it is downright intrusive on leaders, CEOs, who would actually prefer leading without being monitored at every turn. It’s too early to tell how Barra will fare in her new position, but the early signs are that she will be kept on a short leash. Above all, while Barra is CEO of GM, she is not chair of GM’s board. That position is held by Theodore Soslo, former CEO of Cummins, who has something of a reputation for being “edgy” and “not afraid to make unpopular calls” (Reuters, 2/11/14). In other words, Soslo is anything other than shy and retiring.  Again, the arrangement is not new – by now nearly half of S&P 500 companies split up the roles of CEO and chair. But of course how it plays out depends on the individual players as well as the institutional arrangements. Even under optimum circumstances, though, inevitably the CEO’s role is, by definition, somewhat diminished.

You could argue that none of these contextual pressures are, of themselves, earth-shaking. But it would be hard to make the case that taken together they are unimportant or irrelevant.

 

Game(s) Over – Game On

 One could argue that until now President Barack Obama has not been forced to face a major foreign policy crisis. One could argue that the foreign policy crises he did face – for example, in Syria – he was able ultimately to skirt, in the case of Syria, ironically, by striking a deal (on chemical weapons) with the devil, that is, with President Vladimir Putin.

However those days might now be over. The surly statement made this morning by Russian Prime Minister Dmitry Medvedev, in the immediate aftermath of the closing of the Olympics in Sochi, might be the opening salvo in a contest between East and West, between Russia on the one hand and the U.S. and Europe Union on the other, that takes us back literally to the days of the Cold War.

Let’s be clear: for various historical and contemporaneous reasons Russia’s stake in Ukraine is huge. And, let’s be equally clear: for various historical and contemporaneous reasons Europe and America’s stake in Ukraine is similarly huge. It will therefore require restraint on Russia’s side to prevent this crisis from escalating further. And it will therefore require activism on the part of the West, by the US in particular, to preclude the possibility that Russia has its way with the former Soviet Socialist Republic. Trouble is that restraint is not Putin’s strong suit. Trouble is that activism in international affairs is not Obama’s.

A Tale of Two Cities – Sochi and Kiev

I cannot prove it. But here is what I believe to be true.

We all know that there have been protests in Kiev for months. For months opponents of Putin-backed Ukrainian President Viktor Yanukovych have taken to the streets, insisting that his government shift away from Russia and toward Europe. This then raises a question: Why did the opposition suddenly up the ante this week? Why did it choose this particular moment to mount an attack on the authorities so fierce that it finally drew the attention not only of the Europeans, who had been shilly-shallying, but of the Americans, who had been pretending there was no problem?

I am convinced that it was to make certain that the Olympics in Sochi did not pass unmarred, did not allow Putin to close the games on a note of unmitigated triumph. I suspect, in other words, that the escalation of the last week was orchestrated by the Ukrainian opposition to remind the world that while Putin’s fantasy was Sochi, his reality was Kiev.

As I write, the outcome of this week’s standoff in Ukraine remains uncertain. An agreement was struck to end the violence and to hold early presidential and parliamentary elections. Yanukovych, meanwhile, is said to have fled his large and elaborate palace.  But whether the government, the opposition, or even Putin will actually adhere to the agreement is undetermined. Moreover while the American president warned of dire consequences in the event the standoff is not favorably resolved, his track record of issuing such warnings and then being ready, willing and able to back them up, is not reassuring. (See under Syria.)

What the deaths this week in Kiev have again made clear is how loathe are leaders to take on other leaders. Had the people of Ukraine not resisted their government, for sure their country would have regressed to the days of the Soviet empire, firm again in the claws of the Russian bear. For the truth of it is that until this week’s massacre, Obama, Hollande, Cameron, Merkel and their like stood by and, in effect, did nothing while Kiev simmered.

I will have more to say about leaders as Bystanders in a future blog. For the moment it’s clear that if Ukraine does manage to escape Putin’s iron grip it will not be because of leaders but because of followers, because of ordinary people who dare to speak truth to power.

 

Hooked

 

OK, I admit it. I’m a junkie. I can’t get clean. I cannot rid myself of the craving, at least one time a day, for the latest on the scandal ensnaring New Jersey Governor Chris Christie. 

Weeks ago family and friends shared my addiction. But they have shaken the habit while I have not. I remain fascinated not by the man, not by the blatant abuse of power by him and/or by his closest aides, not even by New Jersey politics which, fairly or unfairly, has long been reputed to be, shall we say, gamey.

No, what fascinates me is us, how one moment we’re in love and the next we’re not. How from one moment to the next our feelings about a man long in plain view can change from fascination and admiration to fascination and abomination.

It’s not as if Christie was one thing and now is another. He has changed not in the least – he always was rude and crude, straight-talking to the point of being offensive, forceful to the point of being a bully, arrogant to the point of being a know-it-all. Moreover had we given him even a moment’s serious thought, we would have known there’s no way in hell a man like that could so brilliantly have succeeded in New Jersey politics without striking some suspect deals.

No, it’s not the governor of New Jersey who has changed it is we who have changed. It is we who have been forced to see clearly – forced by Bridgegate – the man behind the everyman mask.

So what does this say about us? It says that we are so desperate for leaders who are new and different, honest and direct, fearless and forward-looking, centrist and collaborationist, that we are willing to take at face value someone who seems to us to embody these attributes. Unless and until we’re hit over the head with the truth, we prefer to settle for someone who seems to be what we’re looking for – rather than to first do our homework and then to wait for someone who really is.

Whatever the ultimate outcome of this scandal, Chris Christie has already been revealed a grievous disappointment. The thing of it is this says less about him and more about us.

 

The End of Leadership, Military Style

One by one the pins are falling. One by one members of the leadership class are being demeaned and diminished.

High ranking members of the military were among the last to be so leveled. Until recently in fact their stock remained rather high, certainly in comparison with other American leaders, most obviously but by no means exclusively CEOs and members of Congress.

But those days are now over. In the last year multiple members of the military elite have been raked over the coals. It began with David Petraeus, the most admired American general in over a generation. Once he was humbled in consequence of an extra-marital affair, not only was he taken down a peg or two or more, but so was the military more generally. (Petraeus apologized publicly for his transgression, but still he resigned from his post at the time, Director of the CIA.)

Recently have been a slew of other scandals involving U. S. generals and admirals, leading to headlines like this one in the Washington Post: “Military Brass Behaving Badly: Files Detail a Spate of Misconduct Dogging Armed Forces.” (1/26/14) The alleged offenses run along the gamut of wrongdoing, from sexual misconduct to cheating (on tests) to bribery to gambling to drinking. One case involving the Air Force is a cheating probe that already has implicated nearly 100 officers responsible for land-based nuclear missiles ready for short-notice launch. 

But the problems transcend transgressions of individuals. The military has also been under attack for its inability to do what it is expected to do as an institution – fight smart. For example, military historian Max Boot has charged that even as America’s military finds itself increasingly engaged in guerilla wars, its “ignorance” of such struggles “runs deep.” And veteran military reporter Thomas Ricks has similarly concluded that by almost every measure the soldiers and marines who went into Iraq and Afghanistan “were grossly unprepared for their missions, and that the officers who led them were often negligent.” 

There is no satisfaction in any of this – in the drip, drip, drip of information that cumulatively debases America’s military establishment, especially those at the top. But it is worth pointing out that it is part of a piece, in which culture and technology twin to tear down the previously high and mighty. When the Post describes America’s armed forces as “struggling to cope with tawdry disclosures about high-ranking commanders” you know times have changed. 

  

Happy New Year!!!

 

Can’t walk and chew gum at the same time.

Can’t close out my book and blog at the same time.

Can’t resist telling title of my forthcoming – in September 2014 – book. It’s Hard Times: Leadership in America – and yes, I’m aware my last book was The End of Leadership, which given this one’s  again all about leadership – and followership and context – makes me a target for teasing.  

Can’t resist sounding off one last time (one last time in in 2013!) about Putin – though this time I’ll let spot-on Bill Keller do it for me. See his column in today’s New York Times, “Russia vs. Europe.” 

Can’t resist pointing out one last time (one last time in 2013!) the world is changing, with leaders everywhere enfeebled by others who lack any compunction about taking them on.

Can’t resist mouthing off one last time (one last time in 2013!) about how anyone with any interest in leadership must take a holistic, systemic approach. A single-minded focus on a single individual is, well, hopelessly dated.

See you next year!!!

 

 

 

 

Putin Patrol continued…. Kiev, December 2013

I wonder. Could he be shaking in his boots?

Not bloody likely. This is not a man who scares easily. Quite the contrary –   he’s one tough son of a bitch. 

Still, what’s happening in Ukraine is highly atypical. Usually when people take to the streets to launch a massive political protest, they’re protesting their own, their own leadership cadre. But in this case the activists are not so much opposing the president of Ukraine, Viktor Yanukovich – though they do want to oust him – as they are opposing the president of Russia, Vladimir Putin. It’s Putin they’re railing against. It’s Putin who’s been trying to shove his interests down their throats. It’s Putin who’s pushed them – much against their will – away from Europe and toward Russia.

If Putin is dumb or in total denial he’ll delude himself into thinking that what’s happening in Kiev has nothing whatsoever to do with what’s happening in Moscow. But if he’s not dumb and not in denial he’ll realize the stakes are high, not only in the former Soviet Socialist Republic, Ukraine, but in Russia itself. Ideas have always been contagious – and they are more so now than ever before. Fighters for freedom in one place can connect in an instant to fighters for freedom in another … and before you know it a fuse is lit.

I’m not saying Putin is sleepless in the Kremlin. But it’s not out of the question he’s taken an Ambien.  

Hero in History

Among students of leadership there is a timeless debate: does man (or woman) make history or does history make the man?

A nineteenth century writer, philosopher and “prophet” by the name of Thomas Carlyle, was, famously, extreme in his position. “Universal History,” he wrote, “the history of what man has accomplished in this world, is at bottom the History of the Great Men who have worked here.”

Herbert Spencer in contrast, an English philosopher closely associated with Darwin and his theory of evolution, took strong exception to Carlyle’s view. “If dissatisfied with vagueness,” Spencer wrote, “we demand that our ideas shall be brought into focus and exactly defined, we discover the hypotheses to be utterly incoherent. If, not stopping at the explanation of social progress as due to the great man, we go back a step and ask whence comes the great man, we find that the theory breaks down completely.”

It was left to the great American philosopher, William James, to play the part of diplomat, to reconcile the extremity of Carlyle’s view with the extremity of Spencer’s. “Thus social evolution is a resultant of the interaction of two wholly distinct factors – the individual, deriving his peculiar gifts from the play of physiological and infrasocial forces, but bearing all the power of initiative and origination in his hands; and second, the social environment, with its power of adopting or rejecting both him and his gifts. Both factors are essential to change. The community stagnates without the impulse of the individual. The impulse dies away without the sympathy of the community.”

We have no way of knowing, of course, whether in another set of circumstances Nelson Mandela would have emerged a great man. What we do know is this: that in his particular circumstance, in South Africa in the second half of the twentieth century, he was among the rarest of men. He was a hero in history whose name now is forever etched in the annals of time.  

Gender Bender

Whatever you think of John Kerry’s performance as Secretary of State – for example your view of the controversial interim nuclear agreement with Iran – it’s impossible to deny he’s been fearless as well as tireless. Not every one of his efforts has succeeded, of course. In fact, some would argue that his enormous investment of time and energy in trying to broker an understanding between the Israelis and Palestinians is a fool’s errand. But the agreement with Iran, along with several other done deals (or nearly so) in his first year as Secretary, including interceding to preclude the president from bombing Syria, reaching an agreement to destroy that country’s chemical weapons, and negotiating a (likely) long-term security arrangement with Afghanistan’s impossibly recalcitrant President, Hamid Karzai, is surely the start of what could turn out a remarkable record.

Now for the counterfactual: imagine that the incumbent Secretary of State is not a tall, imposing man by the name of John Kerry, but rather his immediate predecessor, a not so tall though similarly imposing woman by the name of Hillary Clinton. Would the administration’s record over the last year have been the same?

Nearly no one has argued that Clinton’s tenure as Secretary of State was in any way remarkable. True, she logged countless miles on the nation’s behalf. True she visited no fewer than 95 different countries even before her final year. And true she promoted good causes, especially the welfare of women. But hanging around her neck is the albatross of Benghazi – four men were murdered on her watch, including the U. S ambassador to Libya – and she is unlikely to be remembered either for her strategic brilliance or for any particular program or policy.

So here is my question: Did the fact that Clinton is a woman inhibit her from undertaking the types of bold initiatives with which Kerry is already being associated? Would it be harder for a woman than for a man to negotiate with, for example, the Russians, or the Afghans, or the Iranians? This is not to say that no woman has ever before played poker with the big boys. In fact, a woman participated in the negotiations with the Iranians – Catherine Ashton, representing the European Union.* Rather it is to point out that historically the number of women at the highest levels of foreign policy has been woefully low. And it is to suggest that if only for this reason, being a woman in this role could be internalized as a handicap.

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Ashton herself has not felt immune to gender bias. She once blasted the “latent sexism” in Brussels.