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The Matter With the Mainstream

U.S. World & New Report - October 30, 2006

By Rosabeth Moss Kanter

Here we celebrate excellence. We bask in the radiance of America's Best Leaders, learning from their inspiring examples. Kudos to these men and women who change the world by leading with honor. They make us proud.

Thank goodness. Otherwise, we would never get relief from the other news about putative leaders: sordid sex scandals, costly wars waged on false pretenses, backdated stock options, or corporate ethics officers arrested for ethical violations (the HP privacy case). Name a big mainstream institution-Congress, the federal government, major corporations, churches, universities-and it's a good bet that at least one of its top executives has recently entered the Hall of Shame.

Perhaps that's why so many of the candidates for Best Leaders 2006 come from outside the establishment. In our selection committee meetings, we shared enthusiasm for social entrepreneurs who create organizations enabling others to serve society. We praised heroes of wars or natural disasters who offer selfless aid and comfort. We lauded physicians and scientists whose actions improve lives. But we struggled to find candidates for best-leader laurels from the traditional large institutions that dominate America, such as government and business.

We rejected household names, because celebrity is not leadership. We steered away from high positions, because command over resources is also not leadership, unless resources are used courageously to improve the state of the world. Thus, we netted few well-known members of the establishment.

So what's the matter with the mainstream?

Leadership was once equated with big responsibilities for the direction of big institutions. Today that connection is lost and even reversed. To be a large company's CEO, for example, is to be suspected of earning too much, promising too much, hiding too much. Only 18 percent of Americans responding to the Edelman Annual Trust Barometer survey find CEOs or CFOs the most credible source of information about companies; 68 percent place more trust in colleagues, family, and friends.

Think about that one for a moment-your neighbor is a better source of business information than the businesses themselves? Unless you live next door to Warren Buffett, that says a great deal about how strongly Americans feel that some corporate executives have joined other establishment bosses in letting us down. Some feel that Internet gossip is more credible than the mainstream media; others assume political candidates lie to gain power.

Ethical lapse. To give the folks at the top of mainstream institutions their due, it is increasingly hard to run a large organization flawlessly, even for the many excellent, ethical CEOs. In recent years, enterprises have become more complex, the world has generated more shocks and surprises, the public has been more polarized, and the Internet has produced more instant watchdogs and attack dogs. Mistakes and problems are inevitable in complex enterprises. Lapses from efficient, rational, law-abiding, or virtuous behavior are a constant danger. Sometimes this occurs because of flawed people, but more often it's because of ambiguous situations that require the juggling of competing demands (pay raises for workers or price cuts for customers?). We shouldn't expect heads of established organizations to be perfect, but we should expect them to catch and correct their mistakes quickly. When fumbles occur, denial is tempting, especially when people are pressured to promise strong results regardless of circumstances.

Establishments create an appetite for power that can become an addiction. Powerful people who are driven to turn their domains into empires begin to feel that they are above the rules, that what applies to ordinary people does not apply to them (they don't even have to stand in line at airports). They think they can use their power to suppress criticism and force their will on others, whether employees, customers, suppliers, regulators, or the public.

The arrogance of success is well known. Imperial presidents, party leaders, and CEOs have always been with us. A few decades ago, I first encountered members of this class as a newly minted professional applying social science skills to business. One imperial chief, the head of the largest subsidiary of a New York conglomerate, was candid about commanding obedience. He asked me to help "whip his management group into shape," which I thought meant team-building around shared goals and which he thought meant public flogging. Napoleonic in his short stature and enormous ego, he frequently told his staff that "business is the last monarchy." (We soon parted company, and he was later ousted by the corporate parent.) Today there is a preference for nice folks at the top (such as American presidents with whom you could drink a beer), but a down-to-earth manner can mask the continuing abuse of power.

The cult of the heroic leader itself plays a role in elevating people beyond what mere mortals can achieve, creating a power addict's high. In the booming 1990s, as in other growth cycles and winning streaks, success was attributed to individuals at the top; they must be geniuses if we're doing so well, the public thought-even if they were merely riding on momentum. Some lionized chiefs suffered from the Curse of the Magazine Cover, coming to believe their exaggerated press (witness the Enron bunch). Proclaimed heroes at their peak, they fell precipitously because sycophants hadn't looked too closely at the basis for their success. Disappointment was inevitable when flaws (and worse) were uncovered in the post-crash, post-9/11, sober 2000s. (Memo to America's Best Leaders: Watch out.)

Role models. We judge leaders not just by their own behavior or the results achieved on their watch but by the culture they shape and the behavior they elicit from others. Michael Dell built a great company and handed the reins to a successor; did his leadership go up in flames when Dell computers caught on fire? Can we still call Steve Jobs a great leader because he was not personally involved in Apple's stock option problem?

Leaders' responsibilities for institutional values go beyond the walls of a single organization. It's not enough for ethical chiefs to run a flawless enterprise while maintaining silence on the problems of the sector as a whole. A recent Public Agenda Foundation survey found that both business leaders and average citizens have experienced a general decline in values, which they feel has contributed to recent scandals. They were particularly angry that some executives enrich themselves while allowing their companies to decline-and that their peers let them get away with it. Where are the courageous voices of enlightened CEOs who run excellent companies offering their solutions to what the public feels are excesses and abuses? We could ask the same question about Congress or the Pentagon or members of political parties who fear losing power if they expose and deal with mistakes by partisan peers.

Great leaders are purpose-centered, not power-hungry. They work for a cause larger than themselves and grander even than the particular organization they head, as America's Best Leaders 2006 demonstrate. Their legitimacy comes not from the power they wield but from what they do for others. They are humble in the face of the magnitude of their tasks, so they temper the inherent self-confidence of accomplished people with glances at the mirror of accountability held up by those they serve. They reinforce confidence in the institution as a whole-by demonstrating that they are accountable to stakeholders, work with them collaboratively, and empower people inside the organization to speak up, speak the truth, and take initiative.

The courage to challenge conventional wisdom, to confront an establishment with its flaws, can change closed empires into collaborative marketplaces of ideas, with all the accompanying messiness of dissent and all the promise of better days ahead. Challenging the status quo is the beginning of leadership.

We should be wary of establishments. But if that's all we conclude, we would miss the opportunity to turn the mainstream into streams of opportunity. The principled, innovative leaders we celebrate as America's Best show that there is more to leadership than high office. Perhaps those at the top can learn a lesson or two from leaders who emerge from the middle. Their values-based leadership can replace any hunger for power with the deeper satisfaction that comes from a lasting legacy of service to the world.

Rosabeth Moss Kanter is the Arbuckle professor at Harvard Business School, author or coauthor of 16 books, including Confidence: How Winning Streaks & Losing Streaks Begin & End, and a member of the Best Leaders selection committee.


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