'One Terrible Cost of Leadership'

It is interesting how J. Crew's Mickey Drexler identified a classic leadership characteristic as one of the things he wished he knew when he started out in business (as per my earlier blog post) — the need to ease an executive out of the organization once it is determined that he or she is not up to the job. As Drexler put it, "Let those who aren't working out go quickly."

I first came across this counsel in an interview I edited that Warren Bennis conducted with Dr. Franklin Murphy, which was published as a Q&A article in Directors & Boards in 1982. Dr. Murphy is not a household name today in the annals of corporate leaders, but he was a major figure in the 1960s into the 1980s. He had a most unusual route to the top of a major corporation. Trained as a medical doctor, he began his management career at the University of Kansas, serving as dean of the medical school and then, at age 35, chancellor of the university. He subsequently spent eight years as chancellor of the University of California at Los Angeles. In 1968 he was personally recruited by Norman Chandler, then chairman and CEO of Times Mirror Co., to be his successor.

In 1982 Murphy was chairman of the executive committee of Times Mirror when Bennis spoke with him on “Starting Corporate Life at the Top,” as we titled the article. Here is the key question and answer that identified a classic test of a leader's ability to act:

Bennis: You’ve been in very responsible positions virtually from the start. Are there any costs of responsibilities?

Murphy: Yes, there’s one terrible cost and it’s the one thing in administration that I find the most distasteful by far — and that is when you have to fire somebody. Having to let go a loyal and capable person who just isn’t up to his job is so painful. I brood about that, but it is a price you pay. You’re not just disemploying an individual, you’re affecting a wife, children, a whole group. I must say, if I’m indecisive about anything it’s in that area. But I’ve learned over time that the quicker it’s done, the better it is for all parties.

As Murphy implies, the removal, while it must be done, can be done with a human touch —another classic characteristic of a leader.

Franklin Murphy died in 1994. Portrait of him shown above was done by Directors & Boards to accompany his 1982 article.

Sidney Harman on 'The Most Overlooked Skill'

Here is an insight into Sidney Harman, new owner of Newsweek, that you won't find in the coverage of his purchase of the magazine this week. I think it explains a lot about why he is making this huge investment.

Harman has been aces in my book since I read his 2003 memoir "Mind Your Own Business" (Currency Books). It was just what its subtitle promised: "A Maverick's Guide to Business, Leadership and Life." I published an excerpt in Directors & Boards. Not only that, I then took that excerpt and made it a reading assignment in a course I have been teaching for several years at Temple University.

I wanted my Directors & Boards readers as well as my students to appreciate how much an impressive corporate leader such as Sidney Harman regarded the ability to write as crucial to success in life. Here are a few of his observations:

• "Sadly, writing is lightly regarded in business and often dismissed as unnecessary. Executives frequently declaim, 'I do not write. I'm a people person. I like to look the other fellow in the eye.' That's a clever rationalization. There is a time to look the other fellow in the eye, of course, but writing is a unique and powerful instrument."

• "The person who invests in writing, who exercises the discipline to do it well, and who uses it frequently, will possess a matchless instrument for discovery, clarity, and persuasion."

• "My own experience persuades me that it is the most overlooked skill in the business arena, and one that rewards the executive in many ways. It helps clarify one's thinking. It improves all other means of communication by enhancing vocabulary and promoting the ability to formulate thoughts in coherent and creative ways. It is first cousin to public speaking, because it helps frame the material in a fashion that makes it explicable and communicable. That is essential in public speaking."

• "Writing, like public speaking, does not come easily. You must invest in it. You must tolerate frustration and disappointment. You must persevere. But hanging in and learning from one effort to the next pays dividends."

• "It will come as no surprise that I have promoted writing at Harman [International Industries, the maker of audio equipment that he founded in 1953]. Today in our company virtually every executive of any consequence writes. I would wager that virtually all of them agree that it is one of the most productive tools they have acquired at the company."

If you have 13 minutes, spend it watching Harman address the Newsweek staff. You will see up close a leader of great grace, charm, wit, intelligence and, yes, courage. Dire predictions are still being leveled for Newsweek's prospects, but it seems to me that the publication is in sound ownership hands for writing its next chapter.

Ask

As much learning as there is to be gained at the Wharton Leadership Conferences (see my blog post of June 17th below), not all of it is one way — dispensed from the podium outward.

A few conferences ago, I was sitting nearby a fellow participant. We may have exchanged a few pleasantries at some point — program leader Mike Useem favors having all the attendees get up from their seats and do a 360 turn of hellos right at the beginning of the day. But any exchange was inconsequential. Until, that is, late in the afternoon session. Here is what transpired.

Sitting in the same row of seats, we listened to a CEO of a venture-backed company give a presentation on his leadership of the firm. Conditions in his industry were tough at that time — tough as in fairly dire. His leadership mostly had to do with keeping the firm afloat.

In the CEO's telling, there came a point when there was no way to avoid it — he was going to have to suck it up and ask his venture backers for more funding. He didn't want to do it. He really did not want to do it. He sweated and fretted about it for days on end. If he could have found any way out of having to make that request, he would have jumped at it with alacrity. Alas, a cash call was the only option for salvation. With fear and trembling, he reached out to the moneymen.

And guess what? They said okay. They didn't say,"No problem," but they didn't carve a pound of flesh off the CEO's hide. He got his needed extra funding, and all was well with the world and, eventually, the business. He lived to tell the tale at Wharton.

Here is where the real learning from that CEO's story came for me. This fellow near me looked over at me and said, "It just goes to show — you have to give someone the opportunity to say 'Yes.' "

What a lesson in leadership. For anyone. At any level of the organization. And in life itself.

Give someone the opportunity to say "Yes."

For the record, I came to learn that this wise commentator was Alan Berson, an executive and leadership coach with his firm Pulse Point Coaching.

What Steve Wynn Reads

Speaking of Steve Wynn (see my blog post of April 13th below), Joel Kurtzman tells a good story about the casino mogul in his new book, Common Purpose [Jossey-Bass].

The culture at Wynn Resorts, Kurtzman explains, rewards heroic efforts by employees to take care of the company's customers, and then to share these experiences with fellow staffers. The company has an internal website for employees to tell their stories of what they did to make guests happy. The objective in sharing their stories is to transfer the experiential learning so that each employee more fully grasps the essence of the Wynn Resorts experience.

Stories like the one of the bellman who helped an elderly guest to her room, upon which the guest realized she left some needed medication back home. Not to worry. Here is what happened next, as Kurtzman recounts:

"The bellman wrote down the woman's address in Los Angeles, and at the end of his shift and on his own initiative, he changed his clothes, went down to the employee parking lot, and got into his car. He filled the tank with gas and proceeded to drive four and one-half hours through the desert to the Los Angeles suburb where the woman lived. He knocked on the door of the house and was let inside by the woman's son, who handed the bellman the bottle of pills.

"The bellman then climbed back into his car and drove another four and a half hours to Las Vegas. When he arrived, he put on his uniform, rode the elevator to the guest's floor, and delivered the pills to the astonished, delighted, and relieved woman.

"When he was finished, he went to the employee lounge and posted his story on the website so other people could learn from his actions on behalf of a guest."

There are hundreds of such stories on the company website. The No. 1 reader of the site is, you guessed it, Steve Wynn. Kurtzman notes: "Bellmen, clerks, waiters, and maintenance people know the company's founder is seeing and thinking about their stories of heroism at work."

I call Wynn an impresario — someone who makes things happen with an extra bit of zing and swagger — in my blog posting below. Kurtzman in his book calls Wynn "a consummate hotelier, showman, casino operator, and real estate operator." I think we both have it right. And we both know, as do most boards of directors, that Corporate America needs more leaders of this kind — CEOs who, as Kurtzman's book is subtitled, "get organizations to achieve the extraordinary."

Get Up and Get Going!

December 1. Start of a new month. A special month, with the holiday season underway. Here on the East Coast it's a bright morning marked by a bracing chill. A feel of promise is in the air.

For all of the above, or for some other subconscious reason entirely, I am reminded of the story that Gerald Long told in the pages of Directors & Boards 20 years ago. Shortly after he retired as chairman and CEO of R.J. Reynolds Tobacco USA, Long wrote a piece for us titled "Leadership and the Pursuit of Excellence." It was full of wonderfully inspiring stories. Here was one of them:

"Analyzing leadership is a lot like studying the Abominable Snowman: You see the footprints, but never the thing itself. Leadership is like electricity. You can't see it, but you certainly can't miss its effect. And yet, this elusive, intangible thing we call leadership might very well be the most essential ingredient in personal and business success.

"Louis XIV [pictured], pursuing his dream of becoming a global leader, neglected his people and started a revolution. But a wealthy young Frenchman named Count St. Simon heeded their cries for food and justice by devoting his time and fortune to his countrymen. The count told his servant to wake him each morning by grabbing his shoulder and shouting: 'Get up, monsieur, you have great things to do today!' "

Now that's the way to get up and greet each day.

A Perfect Time to Be Optimistic

It's a new month ... but old fears linger. Some economic indicators appear to have touched bottom over the summer, hinting that the nightmare of the Great Recession may be ending. Still, many people — senior executives, as well — are haunted over whether a prosperous future can be regained.

Donald Keough (pictured) is just the guy to turn to for an uplift in these fearful times. This corporate leader wrote a book last year called The Ten Commandments of Business Failure [Portfolio]. Keough is a longtime Coca-Cola executive who, upon retiring from the beverage company in 1993 as president and COO, became nonexecutive chairman of Allen & Co., the investment banking firm (and still sits on the Coca-Cola board).

Here is one of his commandments of failure: Be Afraid of the Future.

"To aspire to any kind of leadership in business you simply have to be an optimist," Keough writes. "One optimist in a sea of pessimists can make all the difference." What all great leaders, in politics and business, have is "the ability to sense a mood," he says. "They know what the prevailing mood is and, when it is negative, they sense how to change it."

That's what Keough did in another "bleak year" in our nation's history — 1974. "What a time!" he writes in his book. "President Nixon was named a co-conspirator in the infamous Watergate case and resigned in disgrace. The Mideast oil-producing countries embargoed oil shipments to the United States. Gas shortages popped up all over the country. There were bloody IRA terrorism attacks in Belfast and London, even at Harrods department store. We had our own homegrown terrorism, such as the kidnapping of Patty Hearst by some group called the Symbionese Liberation Army. India developed the atomic bomb. And we were still trying to pull out of the Vietnam War. In short, it was not a good time for America."

But ... "Therefore, it was a perfect time for Coca-Cola to be optimistic."

The company rolled out a new advertising campaign that aspired to help raise the sagging spirits of the country. That theme became Look Up, America. The "wonderfully uplifting series of commercials," Keough says, triggered a huge response, demonstrating how "Coca-Cola had an ability, in a small way, to influence the national mood."

As the economy tries ever so grindingly to leave the bleakness of the Great Recession behind, let's follow Keough's example. Let's not fear the future. Even better, let's be the valiant optimist, and try to find a way, even if it's a small way, that we can contribute to raising the spirits of those around us and, perhaps, even help influence the national mood.

Surely that is something that directors can bring into their board meetings with the CEO and management teams. Be a leader. Be optimistic. It's the perfect time.