by Kathryn Morrison
“The financial bubble was not a result of subprime mortgages, but of subprime leadership.”
Bill George, Harvard Business School Professor, author, and former CEO, Medtronics
Fellow Harvard professor, author, and CNN analyst David Gergen quoted his colleague during a one-hour keynote discussion before the annual Critical Issues Forum sponsored by the Council for PR Firms late last month. Drawing upon his many years as an advisor to four US Presidents, journalist, educator, and board member on various corporations, universities and organizations, Mr. Gergen shared his views on topics ranging from the American psyche and the media to the current political scene and the future of America.
But Gergen was especially eloquent on what he calls the “national deficit of leadership” in every field, and the resulting lack of public trust and confidence.
“Four years ago, our annual Harvard survey indicated that two-thirds of respondents thought we had a crisis of leadership, not just in politics but across the board,” Gergen said. “Last year, it was 80 percent, and the two institutions dragging the bottom were Wall Street and the media. Neither is seen as working for the public good.”
How serious is the negative public perception of business? Gergen reminded us that when nine bank presidents from New York visited him earlier this year, President Obama told them, “I’m the only thing standing between you and the pitchforks.” Chilling! Gergen believes that the pitchforks have merely been put in the closet for now … that business is very much on probation.
“Smart business leaders need to understand the depth of anger out there, and take steps to hold off the pitchforks,” Gergen said. “If business misbehaves, if it’s seen as greedy and self-interested, say on bonuses, I can tell you there’s a group of people in Congress who would like nothing more than to stick it to them. If big bonuses are paid out by companies that were bailed out by the government, and no jobs come back, it’s going to rub those wounds raw.”
The key to restoring trust in business is “principled leadership at the top that radiates throughout the corporation – CEOs that we can look up to. They don’t have to be superstars who are treated like Gods. We need more leaders like Ann Mulcahy, formerly of Xerox, Jeff Immelt of GE, and Jim Rogers at Duke Energy. They aren’t terribly flashy, but they have enormous personal integrity, a sense of mission, an ability to persuade and inspire, and an ability to listen, communicate honestly, and work with others. They understand that it’s not just the frequency of communication, but the quality, and the importance of actions to back up what they say. These leaders are showing a commitment not only to the bottom line, but to the social good.”
Equally important is leadership from below. “I believe that leadership is not only a top-down activity,” Gergen said. “Learn how to manage up. It’s a skill. It requires a lot of emotional intelligence and people skills to figure out how to bring the top team to a position you can live with.” Gergen concedes that ‘leading up’ is not easy, and he cited several instances where Presidents Nixon, Ford and Clinton refused good advice until the damage was done, sometimes irreparably. “It’s hard, and you have to be ready to walk sometimes, but it’s one of the most important things you can do – lead up, and manage up.”
Among the best examples of leading up was demonstrated by last year’s graduating class of Harvard MBAs. “In contrast to the Jeff Skilling generation, who believed their job was to make money for shareholders ‘any way I can,’ the graduating students self-organized to take an oath that said: We promise as we go into the business community we will stand for something more than the bottom line for shareholders. We have a larger set of commitments and we want to serve the larger public good. This was organized at the last minute, but 70 percent of the class took the oath. I was there, and it was an unbelievable experience,” Gergan said.
“Max Dupree once said that the most important thing a leader has to do is help people understand reality … and the second thing is to say, ‘Thank you.’ I think those are really important things. Given the current leadership deficit in America, smart people and smart companies will recognize it as a golden opportunity to step forward and lead. Given our history of rising to every crisis, I have no doubt those leaders will soon emerge,” Gergen concluded.
This opportunity to lead – both up and down – to restore public and customer trust while setting your organization apart from the crowd exists in every industry today, but the opportunity may be greatest in the financial sector. Is your company trusted and admired? Are you brave enough to lead? What do you think?
