NEW YORK CITY—Real leadership is rare, but the present circumstances of high unemployment, staggering debt, stagnant growth and record budget deficits calls for “bold, principled, far-sighted actions by America’s leadership class in both the public and the private sector,” said former U.S. Secretary of Defense Robert M. Gates.
Gates told attendees of the World Business Forum here Oct. 3, 2012, that it’s important to distinguish between leadership and management.
“Good managers are vitally important,” Gates said. “Every enterprise needs people with management skills—finance, marketing, logistics, human resources and more. They are all positions and endeavors that require real skill and competence.” But Gates said leadership is much more than the sum of those skills.
“In America today, we surely need good managers. But we are desperate for good leaders—people who are prepared to show the way,” he said.
As CIA director and later as secretary of defense, Gates sent men and women on missions from which many did not return alive. While most leaders don’t deal with life or death consequences, Gates said they likely will face crises and painful, complex situations in the form of legal issues, investigations or business setbacks. How they respond depends in large part on how well they cultivate seven important leadership traits.
What Successful Leaders Do
Gates said successful leaders:
Start with a vision for making a good organization better. The vision doesn’t spring suddenly or fully developed from the executive’s brain. The person should “listen to a broad range of internal and external stakeholders,” especially people who want to be part of a winning team, he said. Leaders should integrate that information with instincts, experience and judgment to increase the likelihood that the vision will be grounded in reality, achievable and inspiring.
Are transparent in decision-making. “If I could be transparent in decision-making at the CIA and Defense, two of the most secretive enterprises anywhere, surely you can do the same at your organization,” he said. Subordinates can live with, and even embrace, decisions they disagree with if “they feel like their views were given serious consideration,” he added.
Encourage candor. Executives often say one thing and do another when confronted with candor or criticism. Gates said when someone brought problems to his attention or got him to change his mind, he highlighted the fact publicly to show “that speaking truth to power is not career-defeating, but career-enhancing.”
Incentivize an organization to think outside the box. One of Gates’ early frustrations as defense secretary was getting urgently needed protective vehicles and reconnaissance “assets” like drones to the battlefield. “Too many people at the Pentagon had tunnel vision,” he said. In the end, he set up special task forces to break through the “bureaucratic concrete. The real task is to institutionalize processes and attitudes so the system is able to deal with out-of-the-ordinary missions as a matter of course.”
Demand and enforce accountability. Three months after becoming defense secretary, Gates read a front-page account in The Washington Post about shoddy conditions for wounded soldiers at the former Walter Reed Army Medical Center. He fired several top Army officials, not because of what was originally reported, since he said they couldn’t be expected to know everything that was going on, “but because of their dismissive reaction—trying to blame the media or minimize the problem.”
Have courage. In most academic curricula, business and government, there’s great emphasis on building consensus and group dynamics. But at some point, a leader has to stand alone and say, “This is wrong,” or “I disagree with all of you.”
Have common decency and treat those around you, including subordinates, with fairness and respect. The real acid test of true leaders, in the words of former president Harry S. Truman, is “how you treat those who can’t talk back,” Gates said.
Welch: ‘It’s All About People’
Later in the event, Jack Welch, former CEO of General Electric Co., noted that much has happened in the decade since he stepped down as CEO in 2001. But the management principles—the importance of human resources—still hold true today.
“It’s all about people,” Welch told attendees at the event. “It’s all about building great organizations. This whole game of business revolves around one thing—you build the best team and you win.”
Welch added, “A great leader is a generous coach.” And yet evaluations—candid performance reviews and appraisals—still seem to be “the absolute missing link in building companies.”
“I always tell managers, ‘You have no right to be leader if anybody who works for you doesn’t know where they stand,’ ” Welch said. He added that some still struggle to look “eyeball to eyeball” with people they supervise, saying they’re “too kind” or “I’m a good person.”
Welch’s response? “You’re not a good person. You’re a coward.”
Known for pioneering a “rank and yank” style, Welch said the best in the company, the top 20 percent, should be treated “with care and love,” while the middle 70 percent should be shown “what they have to do to get to the top 20 percent.” The bottom 10 percent should be told, “You’re not making it now, but here are the things you have to do. And if you don’t do them in a year, you’re gone,” he added.
Traits for Potential Leaders
If Welch were interviewing a potential leader, he said he’d test their commitment “to the purpose” and their passion, then assess their energy, how well they energize others, and whether they have the “edge” needed to make decisions and execute. He’d also see whether they possess “a generosity gene.”
“Every good leader I know has a generosity gene at every level. They’re excited to promote their people—they don’t hold all their good people back—and they’re excited when they come in with a big raise for their employees,” Welch said.
“But the skimpy SOB who holds back the good people and is cheap on the raises, find them and get them out—and never hire anyone who has those skimpy characteristics,” Welch said.
Are Leaders Made or Born?
Lastly, Welch was asked if leaders are made or born. Welch said it’s a little of both. Without question, you can train someone how to be analytical, how to measure and how to do strategy.
“But you can’t put fire in the belly with a training course,” Welch said, since great leaders need passion, drive and a commitment to excellence.
“Training is necessary, but training a dead fish is tough,” he added.
Pamela Babcock is a freelance writer based in the New York City area.
SHRM Online Business Leadership page
Risk Taking and Nontraditional Approaches to Business Success, Business Leadership Discipline, October 2012