LAME LEADER OF THE WEEK AWARD

“Lame Leader” of the Week? Does “lame” adequately convey the idiocy of Barclays recently resigned CEO, Bob Diamond?

I’m not even talking about whatever is his responsibility for Barclays’ role in the scandal over interest rate manipulation. Nor am I talking about how his own exorbitant pay packages were way out of line with Britain’s corporate culture. Nor, for that matter, am I talking about the rebukes he received from politicians and regulators, who objected to his behaviors regarding taxes.

What I am talking about is Diamond’s idiotic arrogance testifying this week before Britain’s House of Commons. Instead of doing what is right and proper, referring to his interlocutors by their full names, or by their titles, or even not at all, he called them by their first names! Can you believe it?! It’s as if the Solicitor General appeared before the justices of the Supreme Court and instead of referring to them in a manner befitting the occasion, he or she called them, “John,” or “Ruth,” or “Clarence,” or “Sonia.” It’s just not done!

That’s one of several lessons Bob Diamond apparently never learned. Listen to this exchange between Robert Siegel, host of NPR’s “All Things Considered,” and Teresa Pearce, a Labor Member of Parliament and of the Committee that questioned Diamond.

Pearce: “I was surprised that he [Diamond] continually addressed us by our first names . . . . It seemed inappropriate and showed a lack of respect.”

Siegel: “In previous parliamentary hearings, have you had witnesses who’ve addressed you as Teresa or the others by their first names?”

Pearce: “No, normally when people come before us, we give them the respect of giving them their full titles…. So, we all called him Mr. Diamond, but he called us by our first names, And as Members of Parliament in the chamber, we don’t even address each other by our names. We address each other as The Right Honorable Member of whatever you are, you know. So The Right Honorable Member for Hammersmith, or The Right Honorable Member for Oxford.… It was a very formal hearing, and [Diamond] was just inappropriate.”

Hard to imagine what Diamond was trying to prove by being so absurdly informal in this most formal of settings. That he was cool? That he was a free-wheeling American among stuffy old Brits? That he was confident and in control as his world was crumbling around him? Whatever it was, he failed dismally to do anything other than make himself look a fool.

Come Hither, Whistleblower

Do you know how dangerous it is to be a whistleblower – downright dangerous? Do you know how important it is that some number of men and women are willing to play the part?
Whistle blowing is at the margin of our collective life. We imagine whistleblowers to be brave but decidedly odd loners, foolishly far out on limb to right some grievous wrong. We imagine right: whistleblowers are followers who refuse to follow. As a result, they are, by definition, poorly positioned to protect themselves against those more highly positioned than they.
Whistle blowing is so risky an undertaking – whistleblowers get used, lose their jobs, get demoted or isolated or marginalized or in some other way penalized for speaking out – that in 1898 Congress passed the Whistleblower Protection Act, which was intended to protect against retaliation anyone who works for the federal government and reports agency misconduct. The act has been effective to only a modest extent – there is, moreover, no private sector equivalent.
There is, however, another federal law, the False Claims Act, which dates back to 1963, and is intended to be invoked by those reporting fraud against the federal government. In rare instances, these claims are successful, in which case whistleblowers benefit from whatever the financial settlement.
Just such a case was recently settled – the largest settlement ever involving a pharmaceutical company. As reported by the New York Times, “Glaxo-SmithKline agreed to plead guilty to criminal charges and pay $3 billion I fines for promoting its best-selling antidepressants for unapproved uses and failing to report safety data about a top diabetes drug.”
To read about this case is to be outraged – outraged at how one of the world’s leading drug companies sacrificed the public interest on the alter of self interest. But it is also to be reminded of the critical role of the whistle blower – in this case, four whistle blowers, employees, all mid level managers – who tipped off the government about Glaxo’s improper practices. To all appearances, this revolting story of corporate greed would not have come out without them – at least not now.
These particular whistleblowers will be rewarded for their efforts. But they are a tiny minority. By and large, for daring to tell the truth, whistleblowers are punished, sometimes severely, which is precisely why they merit fierce protection.

Fed-Up Followers of the Week – II

Impossible to go another day without taking note of what’s been happening over the last six months – and now, again, over the last 24 hours – in Russia!
Think of it as the people against Putin. Not all of the people, of course. In fact it’s only a very small minority that has had the temerity to take on the Russian strongman.
But their persistence against all odds, and against Putin’s increasingly heavy-handed attempts to silence them, is as remarkable as it is notable. There’s much more to be said about all this – and I will. For today though, a tip of the hat to followers far from home who refuse to be cowed by the man claiming to be their leader.

Fed-Up Followers of the Week – Leadership Conference of Women Religious

The Vatican’s hold on contemporary American Catholics began to weaken on January, 6, 2002, when a headline in the Boston Globe read. “Church Allowed Abuse by Priest for Years.” It was the start of a sex abuse scandal in the Catholic Church from which it has not yet, and likely never will fully recover.
But as it’s turned out, the church’s problems run far deeper and wider than a single scandal. While Pope Benedict XVI made belated efforts to apologize for priestly abuse, it’s becoming clearer by the year that whatever his efforts they were too little too late. It’s becoming similarly clear that his conservative papacy is badly out of touch with its Western constituency. Let me put it this way: when nuns begin publicly to speak out, to claim even a modicum of independence from the Vatican, the church has a crisis of authority.
Two months ago church officials condemned American nuns for what they considered the nuns failure properly to uphold Catholic doctrine. Six weeks of silence followed – that is, six weeks passed before the nuns responded. When they finally did, they did not mince words. In fact they departed dramatically from their traditional image as domesticated and docile. Through their main coordinating organization, the Leadership Conference of Women Religious, the nuns claimed first that the Vatican’s assessment of them was based on a “flawed process” and second, that it consisted of “unsubstantiated accusations.”
Moreover when the Vatican recently chastised Sister Margaret A. Farley for her six-year-old book, Just Love: A Framework for Christian Sexual Ethics, Farley, a reputable scholar who was past president of the Catholic Theological Society of America, vigorously defended both herself and her work, claiming it drew from “present-day scientific, philosophical, theological, and biblical resources.” (Ironically, amusingly, the brouhaha transformed Just Love into a best-seller!)
No surprise that American Catholics are standing firm, defending American nuns against attacks by the Vatican. The days when church officials can expect laity simply to afall into line are over – as, now, are the days when church officials can expect nuns simply to stay mute.

Puritans in the Boardroom

Depending on how you count, Harry Stonecipher was the first to be canned because of Cupid. Stonecipher was 68 at the time (in 2005), married, and chief executive officer of Boeing. What did Stonecipher do that was so bad he was summarily dismissed? He had an affair with a female subordinate.
It was not, swore the board, the affair itself. Rather, said a board representative, it was “the circumstances surrounding the affair, we just thought there were some issues of poor judgment that … impaired [Stonecipher’s] ability to lead going forward.”
Mark Hurd was fired for similar cause (in 2011). He too was married and he too was chief executive officer of one of America’s best known companies, Hewlett Packard. Hurd was ensnared in a relationship with an “adult” movie actress, who ostensibly was hired as hostess at HP client events. In this case too the board denied it dismissed Hurd because of the affair per se. Rather it concluded that Hurd had used HP’s resources inappropriately – and lied in the process.
Nor, despite his best efforts, did the former CEO of Stryker , Stephen MacMillan, fare any better . MacMillan was forced out (in 2012) because the board was unhappy with how he handled his relationship with former flight attendant, a company employee, while he and his wife were getting a divorce. The board made clear MacMillan had “never violated any company policy nor any code of conduct.” Moreover, unlike Stonecipher and Hurd, MacMillan had explicitly sought the permission of the board to pursue his new relationship. To no avail – MacMillan was obliged by Stryker to resign.
What’s going on here? Are board members so straight-laced they cannot conceive of a leader who strays from his marriage? Hardly. What they worry about in new and different ways are the new and different ways personal behavior can become a professional liability. The thought of even one scandalous Facebook post is enough to convert 21st century boards into 17th century puritans.

Diehards

As I write in one of my books – Followership – Diehards are as their name implies. They are followers, ordinary people, prepared to die if necessary for their cause, whether an individual, an idea, or both. Diehards are deeply devoted to their leaders; or, in contrast, they are ready to remove them from positions of power, authority, and influence by any means necessary. Diehards are defined by their dedication, including their willingness to risk life and limb. Being a Diehard is all-consuming. It is who you are. It is what you do.
It’s rather an old story by now – which explains why we’re inured to its implications. But of the approximately 12,000 people who died in Syria in the last 15 months, a good number were Diehards, willing to risk it all to try to overthrow President Bashar al-Assad. Assad is a brutal dictator, the son of another brutal dictator, Hafez al-Assad. The Assads, father and son in succession, have ruled Syria for over forty years. So far as Diehards are concerned, that’s long enough. They are so fed up they figure they have nothing to lose.
As the violence in Syria continues, the world dithers. Neither NATO, nor the loose coalition known as the Friends of Syria, nor the United Nations with its misplaced assist from former Secretary General Kofi Annan, has stopped the strife. Why? Because every one of the various leaders is risk averse.
Nothing has made this as blindingly clear as the most recent meeting of NATO in Chicago this week. Nearly every NATO leader has publicly condemned Assad, and called for him to step down. But when they met in Chicago the subject of Syria never even came up. Instead the alliance simply stuck to its previous position, that it has “no intention whatsoever to intervene.” How heartening to hear – how heartening to Assad! And what a contrast between NATO’s leaders and Syria’s Diehard followers! The latter are willing to die for what they believe, while the former are satisfied to let the killing continue while they stand by and do nearly nothing.

Mea Culpa

Love might mean never having to say you’re sorry. But leadership does not. In fact, leaders feel so vulnerable right now they can’t say sorry quickly enough. Most don’t even bother trying to explain themselves or to justify what happened.
This week alone there have been three high profile apologies. Mitt Romney insisted he didn’t remember bullying anyone in high school (though there was good evidence he did), but that did not preclude him from apologizing anyway. I don’t remember all the pranks, he said, but “if I did stupid things, why, I’m afraid I’ve got to say sorry for it.” Joe Biden apologized to Barack Obama for putting him in a position in which he just about had to promptly and publicly declare his support for same-sex marriage. And Jamie Dimon apologized for JPMorgan’s $2 billion blunder.
In fact, Jamie Dimon apologized once, and then twice, and then thrice, and then again, having apparently concluded that frequent displays of contrition were in his best interest. Once Dimon admitted that he himself had been “dead wrong.” More often he couched his apology in the collective, deflecting personal responsibility by resorting to the proverbial “we” or to an abstraction such as “the bank” – as in “we made a terrible, egregious mistake” or the bank’s strategy was “flawed, complex, poorly reviewed, poorly executed, and poorly monitored.”
Apologies quickly and apparently authentically tendered tend to defuse the situation. But make no mistake. People might, if they are so inclined, forgive a leader. But they will not forget – which is why apologies must be strictly rationed. Leaders who choose to accept blame and express regret should consider their apology a chip that can be used only once. For publicly to confess to a serious mistake or to wrongdoing is to expose yourself the world over as ineffectual or unethical (or both) – which is why no 21st century leader is likely to survive an apology a second time.

Lame Leader of the Week Award: Jamie Dimon

Boring, boring, boring. I know, I know. But what could I do? I had no choice. I had no choice but to give another Lame Leader of the Week Award to another CEO of another Too Big to Fail American bank, this time to Jamie Dimon of JPMorgan Chase. As recently as April, Dimon was dismissing reports his bank was making bets so big they were distorting a market in credit derivatives. Such reports were, he insisted, “a complete tempest in a teapot.” But just a few weeks later Dimon was forced by facts to eat crow, to publicly admit JPMorgan’s losses of more than $2 billion were a wound that was “self inflicted.”
Whatever Dimon’s previous reputation as one of the few leaders on Wall Street to have escaped the financial crisis nearly unscathed, there’s no escaping blame for losses this size. There are only two possibilities. Either Dimon was ignorant of what his subordinates were up to. Or he knew what they were doing and approved of bets that turned out a colossal mistake. Either way his heyday – if not his pay day – is over. Either way there’s blood in the water and sharks nearby.

The Canary in the Coal Mine

The defeat of French President Nicolas Sarkozy by Socialist candidate Francois Hollande was long predicted. What was not foretold even as recently as a year ago was the astonishing fragility of European governments more generally. Since the start of the debt crisis, no fewer than 16 nations in the EU – well over half the total – have seen a change of government. Defeats, resignations, and votes of no confidence pockmark the continent, with no apparent end in sight. Even Europe’s stronger leaders, such as England’s David Cameron and Germany’s Angela Merkel, are in precarious positions as voters in both countries threaten their ability to cut a deal. This is not, moreover, a manifestation of a particular political sentiment. Governments from both the left and the right have been forced to relinquish power.

So what’s the problem? Is it, as many argue, a lack of leadership? Is it, as European Parliament member Udo Bullmann claims, “too few people leading European governenments who have the courage to appear in front of people at home” and tell them the hard truth? Not at all. In fact, most of those who have fallen furthest fastest have done just that, telling their people there is work to be done, work that necessarily includes their own willingness to sacrifice.

Rather the problem lies with fed up followers, with ordinary people too many of whom want something for nothing, with ordinary people who have the patience of a gnat, with ordinary people whose level of tolerance for anything other than instant gratification is low. I do not for one moment dismiss the fact that since the financial crisis times have been tough, particularly for those who are out of work and for those having a hard time making ends meet. But this is not their problem – our leaders’ problem. It’s our problem – it’s a problem that requires collective, collaborative solutions in which large numbers of people will have to play their part. 

Meantime, on this side of the Atlantic, I venture to guess that Barack Obama is watching with trepidation his European counterparts toppling.  Voters refusal to cut their leaders some slack cannot be said to bode well for his own political future.      

 

Lame Leader of the Week: Aubrey McClendon

Not quite fair to tag Chesapeake Energy CEO Aubrey McClendon Lame Leader of the Week – at least not without making clear he did not act alone. In the shenanigans that apparently constittute business as usual over at Chesapeake, McClendon’s board was manifestly complicit in what went wrong, if not explicitly, then implicitly. Hard questions are finally being asked about McClendon’s personal financial transations with firms that have a relationship to his company. More to my point, members of Chesapeake’s board are finally distancing themselves publicly from the CEO who, while ostensibly accountable to them, nevertheless was allowed to go his own way, largely unmonitored and uncontrolled. From this distance, there seems little question that McClendon was, at the least, guilty of bad judgment. Why then did his board play puppy dog for so long? Why did it, like so many other boards of so many other organizations, abdicate its responsibility and turn a blind eye to its own fiduciary responsibility? Why did board members follow the leader – rather than lead the leader? Chesapeake’s board finally got fed up all right, but only after Chesapeake’s stock plunged 27% in one month, only after pressure from shareholders, and only after their own personal well being was threatened . So in this case the most knottty question is not why McClendon strayed but how. How was he allowed for so long to be left home alone? What can and should be done about problems of corporate governance that persist – and that have their genesis in small group dynamics about which members of these small groups, boards, remain largely ignorant?