Category: Digital Article

Business is booming. At least in the private sector. US spending on corporate training grew by 15% in 2013, and is on track to grow as much or more this year. The numbers are impressive: $70 billion was spent in the US and over $130 billion worldwide.* The biggest investment in corporate training is in leadership and management, confirming yet again the gap between the leaders that we think we have and the leaders that we think we ought to have.

Spending on leadership training, specifically in corporate America, is counter-intuitive. It goes down when the evidence suggests that leaders are bad and more training is needed. And it goes up when the evidence suggests that leaders are good and less training is needed. More precisely, corporate spending on leadership development is a reliable indicator of economic activity. When business slows it goes down; when business picks up so does spending on training.

Invariably, leadership training, or leadership development, or leadership education, raises the issue of leadership for what? What is the purpose of trying to teach leadership? The answer of course is, it depends. It depends on the context within which the question is asked.

Where I work – at the Harvard Kennedy School – the word “leadership” implies something good, as in leadership for the common good, leadership for public service. But in corporate America the meaning is different. In corporate America the word leadership suggests a context confined to the company. This does not imply that the interests of the company and the interests of the general public inevitably are at odds. In fact, there is more attention now than there used to be to corporate social responsibility. But it does mean that in corporate American leadership training is for the purpose of training leaders to turn a profit. They are trained to do right by the organization within which they work – not necessarily to do right by the community more generally.

The success of any single leadership training program is famously difficult to measure. It’s an issue about which I’ve written extensively, and it is not one easily amenable to amelioration. Suffice it to say here, for now, that on one level corporate leadership development in recent years has been successful. By many criteria the American economy is doing well, certainly in comparison with the economies of other Western democracies. But there are other ways of judging leadership training – about which more in subsequent posts.

*The figures are from Josh Bersin, “Spending on Corporate Training Soars: Employee Capabilities Now a Priority,” February 4, 2014.

George Santayana famously claimed that “those who cannot remember the past are condemned to repeat it.” To the extent that this is true, Germany is in no danger of repeating its 20^th century history. No place on the planet has done more to memorialize its own heinous past.

Since Germany was reunified and Berlin designated its capital in 1994, its attempt at redemption has been focused on the Holocaust. The question of how adequately to commemorate its victims has been addressed in part by the establishment of scores of Holocaust memorial sites, some of which are minor, and others of which are major, even monumental. Berlin’s Memorial to the Murdered Jews of Europe, designed by architect Peter Eisenmann, stretches 4.7 acres, with a centerpiece consisting of some 2,500 geometrically arranged concrete pillars, situated on a deliberately slanted slope.

Memorials like these have been called “counter-monuments” or “anti-redemptive” because they seek not to perpetuate the memory of a noble past, but to perpetuate the memory of an ignoble one. Never forgetting becomes tantamount to forever atoning – and to never repeating.

The memorializing of the Holocaust continues even now. Beneath the spanking new headquarters of the European Central Bank, in Frankfurt, is a basement just designated a monument. It consists only of rooms that between 1941 and 1945 kept captive some 10,000 Jews, until they could be deported to concentrations camps. The rooms remain bare – silent testimony.

While Germans have grappled with their Nazi past for decades, they are only now coming to grips with their Communist past. Between roughly 1945 and 1990 East Germany was a communist state. Some of the implications of this are mundane – lives that in some ways were cherished, but in other ways were difficult, grayer in any case and more meager than those of their West German capitalist counterparts.

There is, however, one aspect of life under communism that resembles life under Nazism, and that therefore requires similar  scrutiny. It was the Stasi, or Secret Police. The Stasi was modeled on the Soviet Cheka: it was famously oppressive and repressive and, equally famously, it was intrusive. It pried into people’s private lives and, if they were in any way suspect, spied on them, harassed them, and even arrested them. By 1989, on the eve of its dissolution, the Stasi had 91,000 full time employees, and a network of 189,000 informers.

In recent years, as former East Germans have aged and died, and as historical records, especially Stasi archives, have become available, Germany has begun carefully to examine this chapter in its history.  It now has exhibitions, museums, and memorials dedicated to exploring its Communist past, including, in Berlin, a Stasi Museum. With the passage of time, then, has come an unprecedented attempt by Germans to own their past – in its entirety.

Only time will tell what impact grappling with Germany’s recent past will have on Germany’s distant future – if any. We cannot now know if counter-monuments immunize against evil. What we can do, though, is to respect those intent not on burying their painful past, but bent instead on exposing it to the harsh light of day.

Three quarters of a year after General Motors finally began recalling millions of vehicles for a dangerously defective ignition switch – a danger it had known about for years – almost half have still not been fixed.

In some cases the reasons for the inaction are the fault of the owners themselves. Many have not gone to the shop for the necessary repair. But in other cases – the numbers are opaque – “even owners who requested repairs months ago have been waiting, with dealers managing wait-lists and dozens of drivers writing to federal regulators in recent weeks asking why it was taking so long.”* This is no trivial matter. The defect in question has been linked not only to serious injury but also to deaths.

The continuing wait for repairs is unconscionable, certainly in those cases where drivers are aggressively prodding GM to take prompt remedial action. The question then is why is GM getting away with it? Why is there no public outrage targeted directly at the company – hey, how about a boycott of all GM products?! – in order to force it to act today, not tomorrow?

To this question are two answers, neither of them satisfactory. First, the overwhelming majority of us don’t care – or, at least, we don’t care enough to lift a finger. Second is the atomization, the isolation of individuals around the country who have been hurt by GM’s outrageous negligence, but have no idea what to do about it. They don’t know others in similar situations. And they don’t know how to organize a public protest that is loud enough and lasts long enough to make a difference – to fight General Motors until every last car that has a defective ignition switch has been repaired.

There is reason to revolt against GM until it gets all of its customers out of harm’s way.  Connecting through social media would be a way to begin the rebellion – if only one or two angered Americans would step up to the plate and take the lead!

*http://www.nytimes.com/2014/11/04/business/Recalled-GM-cars-remain-unrepaired-as-safety-concerns-persist.html?_r=0

It’s the morning after the night before and the Democrats are down. While there are some exceptions to this general rule, the most visible among them – Barack Obama, Bill and Hillary Clinton (both of whom campaigned hard for Democratic candidates), and Harry Reid (who will not for much longer be Senate majority leader and who was in other ways humiliated) – tended to fare poorly.

However one highly visible Democrat could, and should, come out of this electoral mess stronger than before – Joe Biden.

Joe Biden has often been a figure of fun. He’s easy to tease, not only because he’s prone to making gaffes, but because his generally good and even buoyant nature suggests that he’s not likely to take offense.  But he has been a fixture in American politics for decades. He has been both a legislator and an executive. He knows the ways of Washington and is content to play by its social and political rules. He has served the president loyally for six years. He does not shy from the wheeling and dealing that is critical to political work – and from which president has steadfastly shied.  Finally, and importantly, he has a longstanding and strong relationship with Mitch McConnell, soon to be Senate Majority leader.

Much has already been made of McConnell’s gracious victory speech last night, over his opponent Alison Lundergan Grimes. Properly so – it signals that McConnell is ready to play ball with the Democrats. But, even if he and the president can still establish a decent relationship, Obama would be wise to let Biden carry some of his water. For there is nothing that Obama can do at this late date to make up for lost time, while Biden has worked closely with MConnell for over thirty years, often productively. If the president is determined to get something done during his final two years in the White House – on immigration, say, or on tax reform, or on infrastructure – at least so far as the Congress is concerned he would do well occasionally to follow while his Vice President occasionally takes the lead.

I have long been leery of Vladimir Putin. Rather like Mitt Romney, who warned during the 2012 presidential campaign that Russia was “America’s number one political foe” (a position for which he was at the time widely derided), Putin has never done other than make me fearful of what one day he might become, of what one day he might do.

I wish I could say with certainty this day is now. I wish I could say with certainty that what he is now he will be in a year. I wish I could say that his level of threat will remain the same – rather than escalate. But if the West does nothing significant to stop him, my best guess is that he will become ever more ominous a menace.

Consider these three stories, each of which broke just in the last week.

1. The Russian government announced that it would recognize the results of the coming elections in Eastern Ukraine. Since this region is controlled by Ukrainian/Russian separatists, the tensions between them and the legitimate government in Kiev can only escalate. As it is even now, Eastern Ukraine is more or less autonomous.
2. More than two dozen Russian aircraft flew along the edges of NATO territory in Europe. They stayed over international waters, but it was clear nevertheless that these exercises were part of broader Russian aggression, in which it is testing the West with a determination and regularity not seen since the Cold War. This includes, I should add, cyber-attacks, targeted particularly at American interests, in both the private and public sectors.
3. Putin’s pressures on his own citizens, on Russians, to toe the line, his line, continues unabated. Just this week (11/2) the New York Times printed an extensive expose on how the printing of schoolbooks is increasingly being centralized, put under the control of a single publishing house, headed by one of Putin’s closest and oldest friends. “By the time the school year began this fall, the number of approved textbooks for Russian’s 14 million schoolchildren had been slashed by more than half.”

At this rate the worm is turning faster than the West – faster than the United States – dares to or cares to keep up. Whatever became of “the leader of the free world”?

About the Bushes these days the burning question is will he, or won’t he? Will Jeb Bush decide to run for president in 2016 or will he not?

Texans know better. They know that though Jeb Bush might someday be president of the United States, the Bush to watch on Tuesday is not the father but the son. The Bush to watch on Election Day is not Jeb, but his oldest offspring, George Prescott Bush, candidate for Texas land commissioner.

George P. is not unfamiliar. Notwithstanding his youth – he is 38 – as the son of a former governor of Florida, and as the grandson of one former president and nephew of another, he has been on the margins of national politics for years. What’s different now is that he is poised to move from the side to the center, to play in his own right a prominent part.

I do not for a moment dismiss the importance of his last name – any more than I dismiss the importance of Hillary Clinton’s last name. It is not an attack on Hillary, or an assault on her own enormously impressive credentials to point out that she too was given an inestimable assist up the top of the political ladder by a former chief executive – who happened to be her husband. Similarly, it’s fair to say about George P. that notwithstanding the advantages of family ties, he is, on his own merit, positioned for political success.

Bush has in addition to his last name and family heritage on his mother’s side – she is originally from Mexico and he speaks Spanish as he does English – an impressive professional resume and a persona perfectly poised for the national spotlight. He has been a teacher, and a businessman, and he remains an officer in the U. S. Navy Reserve.  (Notably, Bush served eight months in Afghanistan.)  He has already raised money in ten states and Washington DC, and if he wins he will take office with a nifty $3 million in his campaign account. Moreover he is good looking and personable, with a good looking lawyer wife, Amanda Williams, and a one year old son to round out the family picture.

It’s easy enough to rail against the nepotism that threads through our national politics. But it’s also easy enough to explain – candidates with a familiar last name have advantages ranging from name recognition to (relatively) easy fundraising. So one way of looking at it is this. In a perfect world electoral politics would be a meritocracy. The best man or woman would win; second best would lose. But in this imperfect world, in which nepotism has played a role in American politics since the beginning of the Republic – our sixth president, John Quincy Adams, was the son of our second president, John Adams – we can consider ourselves fortunate if the beneficiary of family ties is, in his or her own right, worthy of our collective consideration.

Among the experts there’s a perennial debate – sometimes called the hero in history debate – about whether the times make the leader or the leader the times. In general, it’s agreed it’s an amalgam, so that, for example, while Barack Obama bears some responsibility for the state of the nation, he is not solely to be credited with what goes right or solely to be faulted for what goes wrong.

To most rules, however, there are exceptions, including this one. There are cases in which the passage of time confirms that a single individual changed the course of history. This is not to exempt even in these cases the importance of other actors, or to minimize the significance of context. But it is to say that leaders can be and sometimes are the dominant explicators.

In a recent essay in the New York Review (11/6/14) titled “If Stalin Had Died…,” Princeton historian Stephen Kotkin makes the case for Stalin. He argues persuasively that had Stalin died decades earlier (death came in 1953) the history of the Soviet Union would have been dramatically different. It would have been dramatically less deadly.

When Americans think of leaders who are villains they tend to think first of Adolph Hitler, not of his World War II contemporary, Joseph Stalin. But years before Hitler even came to power (1933), Stalin was already culpable in the deaths and deprivations of millions. Kotkin: “Countrywide, nearly 40 million people would suffer severe hunger or starvation and between five and seven million people would die in the horrible famine, whose existence the regime denied.”

The numbers are not new. What is new – or, more accurately, freshly argued – is the vigor of Kotkin’s argument that had it not been for Stalin, many of these deaths not only could have been avoided, they would have been avoided. Other countries – including fascist ones such as Italy – modernized differently. Fast-paced industrialization did not require that people be brutalized.

Stalin though was different, as fiercely determined and ferocious as ultimately impactful. Kotkin: “If Stalin had died, the likelihood of coerced wholesale collectivization… would have been near zero…. Stalin made history, rearranging the entire socioeconomic landscape of one sixth of the earth. Right through mass rebellion, mass starvation, cannibalism, the destruction of the country’s livestock, and the unprecedented political destabilization, Stalin did not flinch.”

Does this settle the “hero in history” debate? No. The argument about when exactly individuals matter more than does anything or anyone else will continue. But Kotkin makes a strong case: some of the time some leaders are all-powerful.

I have written before about “the glass cliff.” It’s a term coined in 2004 by two British researchers who suggested that women were especially likely to ascend to top leadership roles during times of corporate crisis or downturn.  The implication is that women more than men are set up for failure.

Why this should be so is not entirely clear. The total number of CEOs who are women remains, of course, dismally low. So is it that women are so eager to become chief executive officers that they settle for circumstances that are far from optimum? Or is gender bias at some level of consciousness responsible for putting women in unusually precarious positions? Or is it perhaps that they are not given the resources needed to surmount difficult situations?

These questions come to mind in the wake of the revelations this week that under the leadership of Virginia Rometty, IBM has performed particularly poorly. Not only has the company failed to develop a successful strategy, it has, apparently, “propped up” its stock price in recent years by “buying back shares by the carload.” The implication, in other words, is that not only has IBM failed to perform well under Rometty’s leadership, it has concealed its weaknesses by “financial engineering.”* How long IBM’s board members and, especially, shareholders will tolerate this downward drift remains obviously to be seen. But no doubt about it: Rometty is precariously perched.

The same has to be said about the much ballyhooed Marissa Mayer, who famously was pregnant when she became that rare bird: a female CEO of a prominent tech company. But her sailing since then has hardly been smooth. As of this writing she is trying to fend off a challenge from an activist investor (Starboard Value) by preparing to detail her plans on the one hand for cost cutting, and on the other hand for acquiring one or more tech startups. Like Rometty, Mayer might survive the hard times. But whether her new plan “will appease shareholders, who are growing impatient with the CEO’s lack of progress in her more than two years at the company,” is uncertain.**

As to the CEO of General Motors, Mary Barra, it’s possible that she has already weathered the crisis. The question is whether there’s another shoe to drop at GM or whether the worst of the news – its culpability in covering up vehicle defects, with calamitous consequences – is already out. Whatever the future, there can be no gainsaying that she took over the helm at GM at a low moment in its history.

Bottom line is that in less than one year all three of these generally highly esteemed chief executive officers have come under heavy fire.

It’s enough to make a woman feel paranoid.

—————————————————

*See Andrew Ross Sorkin, “The Truth Hidden by IBM’s Buybacks,” New York Times, October 21, 2014.

** See Douglas MacMillan, “Yahoo CEO Set to Refresh Turnaround Plan, Wall Street Journal, October 20, 2014.

Must be in the ether. In this past week’s Economist (10/11) is another article similar to the one referred to in my most recent blog. This one, by “Schumpeter,” is titled “Beware the Angry Birds.” It makes the same point as does the Times piece by Steven Davidoff Solomon, though for a different reason. “Bosses’ careers are more vulnerable than ever” in this case not because of shareholder activists, but because they live “in the social media age.”

We’re back to technology which, as I pointed out a couple of years ago in The End of Leadership, is changing forever the balance of power between leaders and followers.

The Economist: “Today’s bosses still need to worry about the … press. But as big a threat to their careers these days is the risk of being pecked by Twitter’s swarm of angry birds. Thanks to the digital revolution, chief executives now live in glass houses. An ill-judged remark can be broadcast to the world in an instant. An unwise ‘reply all’ can provide sensitive information to a competitor. An exasperated complaint in the midst of a crisis can seal your doom.”

As I wrote previously, business leaders are now like political leaders. For that matter, they are like virtually all other leaders – vulnerable to arrows shot from every direction.  What seems finally to be changing is the growing recognition that things now are different – even for chief executive officers. Turns out that all their money and power cannot protect them against the tide of the time. To the contrary. Just like  leaders in other sectors they “make perfect click-bait.”

For some years I have written about “the end of leadership” – about leaders becoming weaker while followers, others, are becoming stronger. This shift has been most evident in the political realm, where in the second decade of the 21^st century democratically elected leaders everywhere have a famously hard time getting others to go along.  Even the most powerful political leaders seem more often controlled by other players or, for that matter, by the course of events, than in control of them.

This shift has been less obvious in the corporate realm or, at least, less screamingly obvious. In other words, while there has been for some time evidence that what applies to government applies equally to business – and of course to other sectors as well, such as education and religion – the change has been more subtle, less public and less easy, therefore, to see.

This has not, however, meant that business is exempt – a case that was made particularly persuasively in yesterday’s New York Times, in an article by Steven Davidoff Solomon. I’ve provided the link, so need here for detail. Suffice it to cite a few lines from the piece, which argues in no uncertain terms that the heyday of corporate leadership and management is over.

• “Corporate America may try to hide from its shareholders, but two recent shake-ups … show that escape is no longer possible.”
• “Corporate America, previously ruled by chief executives and boards, is racing to do shareholders’ bidding.”
• “As shareholder activists, backed by institutional shareholders, grow stronger, no company is safe.”

It’s a striking argument not because what Davidoff Solomon says is new – but because he says it so forcefully. If he is to be believed, business leaders have just about caught up with political leaders. Like the latter, the former better watch their backs at every turn.

——————————————————————————