Leaders have a significant role in creating the state of mind that is society. They can serve as symbols of the moral unity of the society. They can express the values that hold society together. Most important, they can conceive and articulate goals that lift people out of their petty preoccupations, carry them above the conflicts that tear a society apart and unite them in pursuit of objectives worthy of their best efforts. —John W. Gardner No Easy Victories
The world’s hunger for leadership has been growing for years. There is no doubt that a charismatic new leader took the world stage on November 4, 2008, with the election of Barack Obama as president of the United States. On the night of his victory, millions of Americans wept with pride in their country and relief that he had triumphed over old prejudices. Watching on television, children cheered in the Indonesian grade school the president-elect had attended as a child. Brits raised pints in countless pubs, and Kenyans danced with Obama’s relatives in the village where his father was born. But Barack Obama’s presidency is in its earliest days, and what we have now in the hope that he will become one of the giants. One result of Barack Obama’s extraordinary election is to remind us of just how thin our leadership bench is.
Most of the leaders we once revered are gone. FDR, who challenged a nation to rise above fear, is gone. Churchill, who demanded and got blood, sweat, and tears, is gone. Schweitzer, who inspired mankind with a reverence for life from the jungles of Lambaréné, is gone. Einstein, who gave us a sense of unity in infinity, of cosmic harmony, is gone. Gandhi, the Kennedys, Martin Luther King, Jr.—all were slain. The stage is littered with flawed and disappointing leaders. Ronald Reagan, the “Teflon president,” was stained by the Iran-contra disaster and other scandals. Bill Clinton was dogged by rumors of personal indiscretion even before he took office and was impeached (and acquitted), the first elected U.S. President to be censured in so spectacular a fashion. Unlike the 2008 election, the 2000 presidential contest was notable less for the contrast of the candidates than for the rollercoaster ride of the process, which ended in George W. Bush being declared the winner, in spite of his trailing Al Gore by a half-million popular votes. The election was decided, for the first time in American history, by the Supreme Court, leading to an unprecedented diminution, in the minds of many, of a body once thought to be above partisan politics. And while President Bush responded forcefully, if belatedly, to the terrorist attacks of 9/11, his administration quickly devolved into a string of disasters—the unwarranted, protracted war in Iraq; the shameful symbolism of Guantanamo and Abu Ghraib prisons; the bungled rescue of hurricane-battered New Orleans; the outing of C.I.A. agent Valerie Plame; the unprecedented politicization of the Justice Department; and not one but two economic crises.
The 2008 meltdown was the worst since the Great Depression. Stocks plunged almost 1,000 points in a single day, and 1.2 million American jobs vanished in the first ten months of the year. If political leaders disappointed us, corporate leaders proved even worse. As evidence emerged of greed and wrongdoing at such once-esteemed institutions as Lehman Brothers and major banks, the public and the media called for new leadership and greater regulation. Without drawing much attention to themselves, capable people continued to keep our institutions afloat— able university presidents, city managers, state governors, heads of non-government organizations, and others. But we increasingly perceived authentic leaders to be an endangered species, buffeted by events and circumstances over which they seemed to have little or no control.
A scientist at the University of Michigan once listed what he considered to be the ten basic dangers to our society. First and most significant is the possibility of some kind of nuclear war or accident that would destroy the human race. The second danger is the prospect of a worldwide epidemic, disease, famine, or depression. The third of the scientist’s key problems that could bring about the destruction of society is the quality of the management and leadership of our institutions. Today we must add global warming, the widening gap between rich and poor, and international terrorism to that list of major dangers. But the relative lack of leadership continues to be an enormous threat. The simple truth is that 304 million people cannot long abide together without leaders, any more than 304 million people can drive on our roads and highways without certain rules, or eleven men can play football without a quarterback, or four people can hike from X to Y unless at least one knows where Y is.
One person can live on a desert island without leadership. Two people, if they’re totally compatible, could probably get along and even progress. If there are three or more, someone has to take the lead. Today we have a more nuanced view of leadership. We no longer think in terms of the Lone Ranger or the Great Man. But no matter how collaborative our organizations, someone still needs to choreograph the players and make final decisions. Leadership might rotate among the three inhabitants on a desert island, as it does in three-engineer teams at Google, but leadership is needed nonetheless. So let’s admit it: in a nation, in a world, as complex and fluid as ours, we cannot function without leaders. Our quality of life depends on the quality of our leaders (as the sorry economy of 2008 reminded us so painfully). And we need more than one. As never before, we need leaders in all our organizations and all our institutions.
We need leaders in every community, corporation, and country. That leadership vacuum creates an enormous opportunity. If you’ve ever had dreams of leadership, this is the place, now is the time. There are three basic reasons why leaders are important.
First, they are responsible for the effectiveness of organizations. The success or failure of all organizations, whether basketball teams, community-action groups, moviemakers, makers of video games, auto manufacturers, or lending institutions, rests on the quality of their decision-makers. Stock prices rise and fall according to the public perception of how good the leader is. But, just as important, the leader is responsible for who is hired, the organization’s goals and aspirations, working conditions, who has authority over whom, morale, allocation of resources, transparency, and ethical standards. Second, the change and upheaval of the past years have left us with no place to hide. We need anchors and guides. The very best of our leaders serve in that way. They inspire us and restore our hope. Third, there is pervasive national concern about the integrity of our institutions. It is hard to imagine that there was once a time when Wall Street was a place where a man’s word was his bond (until Muriel Siebert bought a seat on the New York Stock Exchange, there were few women on Wall Street). Its reputation tarnished in the 1980s by the white-collar crimes of Ivan Boesky, Michael Milken, and others, Wall Street was gravely damaged in the first years of the twenty-first century by the greed and double-dealing of a series of CEOs who received imperial compensation even as they bilked both shareholders and their own employees. Starting with the discovery that the energy firm Enron endorsed bookkeeping practices that would have embarrassed Al Capone, the nation watched as once trumpeted corporate leaders did the perp walk, led in handcuffs from their homes as TV cameras rolled. In quick succession, criminal charges were brought against top executives at Tyco International, ImClone Systems, and Adelphia Communications. WorldCom, Global Crossing, and other former stars of the New Economy tumbled into bankruptcy amidst allegations of fiscal improprieties. A cry immediately went up for the wholesale reform of corporate boards, accounting practices, executive recruitment, and employee retirement plans, a call for sweeping change in how America does business unlike any since the Great Depression.
These scandals were especially troubling to all of us who have been engaged for decades now in training future leaders. Business schools responded quickly to the debacle by adding cautionary case studies of Enron and ImClone to their curricula and beefing up ethics courses. But, clearly, not everyone learned the lessons on transparency, accountability, and fair play contained in these case studies and reform-minded courses. If they had, there would have been no subprime mortgage crisis of 2008, which shook world markets and left the American public with a $700-billion tab. And American business was not the only institution that showed itself to be gravely flawed. The Roman Catholic Church in the United States experienced an unprecedented series of scandals involving the molestation of children and young adults by priests. The revelation that some priests betrayed and abused children were shocking in its own right. But almost as disturbing was the revelation that members of the Catholic hierarchy had known of the abuse and covered it up, often by reassigning dangerous priests to new parishes where they molested anew. No major American institution seemed unblemished, including the prestigious Ivy League. In 2002, Princeton University staff hacked into admissions records at Yale, apparently to gain information that would help it steal top applicants away from its rival.
The scandal also touched government agencies. Where was the Central Intelligence Agency, the public demanded to know, when terrorists with expired visas were taking lessons at American flight schools in order to crash into the World Trade Center and the Pentagon? Where was the C.I.A., for that matter, when two of its agents spied for years for Moscow? And the Federal Bureau of Investigation didn’t fare any better. It, too, failed to prevent the terrorist attacks of 2001 and the deadly mailing of anthrax-laden letters that followed. Perhaps most shocking was the failure of the Federal Emergency Management Agency, or FEMA, to provide services for the mostly poor minority residents who remained in New Orleans after Hurricane Katrina. Bodies floated in the flooded streets for days, while clueless public officials congratulated each other on a job well done. We see these things, and we lament them, but what do we do about them? What can we do about them, caught up as we are in the context of our own professional and personal lives? For the most part, our lives are busier and more demanding than those of any generation in recent history. Thanks to ubiquitous cell phones and other forms of instant communication, we are tied to our workplaces as never before, immersed in a context that is volatile, turbulent, ambiguous, and all but impossible to escape. That we often feel oppressed by that context is evident from the desperation with which so many people dream of simplifying their lives. But we must master that context if we are to solve our own problems, let alone societal ones, and to do that we must first examine it. Unfortunately, looking at our own context is as difficult for us as it is for fish to look at the water.
Everything’s in motion. Digital technology and international competition are altering the shape and thrust of American business. Changing demographics and the ability to use new technology to identify and serve slices of the population are altering the marketplace where, increasingly, the niche is all. Certain venerable industries, such as print journalism, teeter on the verge of extinction, while new “green” businesses open every day. We now live and work in the global village that Marshall McLuhan predicted. In the European Union, national borders no longer confine workers. In recent years, Eastern Europeans poured into newly wealthy, high-tech Ireland. When the Irish economy sagged, Poles working in Ireland returned to their own reinvigorated economy.
The economy of the United States is also in flux. Just as millions of blue-collar jobs went overseas in recent decades, more and more white-collar jobs are being exported. Using the Internet, a couple can save money on their nuptials in Des Moines by hiring a wedding planner in Bangalore. Aided by their fluency in English, now the universal language of business, professionals in Southeast Asia read American X-rays and vet American contracts. Instant communication and digitally-enabled social networking are changing the political as well as the economic map. Markets are freer everywhere, and so are people, as the Internet magnifies voices of dissent in such authoritarian nations as Myanmar and Iran. While mergers and acquisitions continue to create international megacorporations, small, agile companies now generate more new jobs than big traditional industries. Today, Google, Pixar, and other idea-driven firms that know the worth of their creative talent get the first to pick of top-notch new graduates.
The once-dominant Big Three television networks are now owned or controlled by large corporations, and all three are scrambling to keep market share in a growing field of rivals. Cable networks such as HBO and Showtime produce much of the best original programming. And more and more viewers get their news from such alternative sources like CNN, Fox (on the right), MSNBC (on the left), and Comedy Central, home of two of today’s most trusted and unlikely newscasters, Jon Stewart and Stephen Colbert. Thanks to Tivo and other means of recording programs for later viewing, people watch their favorite shows whenever they choose, and only the masochistic need to sit through commercials, a development that threatens the very economic basis of commercial TV. Deregulation changed the airline industry forever, giving birth to new cut-rate airlines and driving Pan Am and other venerable carriers out of business. But the use of airplanes as flying mega bombs in the 2001 terrorist attacks was a devastating blow to the airline industry, and the Draconian tightening of security procedures afterward made flying less attractive than ever. In 2008, soaring gas prices caused airlines to raise ticket prices, trim schedules, and impose fuel surcharges and bag-checking fees. To avoid burgeoning travel costs, more and more companies turned to new videoconferencing technology, putting even more financial pressure on the troubled airline industry. America’s aging population is changing its economy—indeed its culture—in ways that are only beginning to be felt. American demographics are shifting in other ways. Latinos have an increasingly powerful voice in American life, as evidenced by the significant role Latino voters played in the election of Barack Obama.
Globalization is shaping American life at every turn. American business once owned the American market and much of the European market as well. Today publishing and other sectors of the American economy are largely European-owned, a trend that is likely to continue as the European Union begins to exercise its true collective clout. European nations will increasingly do business with each other, thanks to the elimination of internal trade barriers and the increased use of an almost universal currency, the euro. China would have a major impact on the United States if only because it holds trillions of dollars of American debt. But China impacts us in many ways. Once primarily an exporting nation, China is now a billion-person market for the rest of the world’s goods. Its rapid modernization has caused global shortages of concrete and steel. And China, India, and other ascendant giants are the great unknowns in the life-and-death question of whether the world will find a way to balance the conflicting needs for growth and limiting greenhouse gasses. One result of these global changes is that Wall Street, once the only player, is now one among many financial centers, one subject to such unpredictable forces as overseas investors, currency fluctuations, and an American public that increasingly mistrusts what the Street says and does.
The new order is so insane that it’s hard to satirize, but former Salomon Smith Barney analyst Julius Maldutis captured the madness some years ago when he said: “I have it on good authority that Delta is buying Eastern, Eastern is buying Pan Am. Pan Am is really going after United now that it has all of United’s cash, and American’s Bob Crandall, who has been devilishly silent all along, is getting ready to make a tender offer for the whole industry once he reaches an agreement with his pilots. Furthermore, I spoke to Frank Lorenzo this morning, and he assured me that his next targets are Peru and Bolivia, which he plans to merge into the first low-cost country.” That two of those airlines are long gone only underscores the point. The business world has undergone a series of sea changes in recent decades. Remember the futurist speculation that was all the rage forty years ago? Despite the flurry of prognostication, no one foresaw the profound impact Japan would have, for a time, on the American economy. For much of the 1980s, Japan—a clutch of distant, overcrowded islands with no basic resources, devastated by World War II and once renowned for producing junk—caused America to have an economic identity crisis. We began to question our vaunted know-how, our conviction that we are the most creative nation on earth—the birthplace of such practical geniuses as Edison and Ford—and our claim to the most robust and successful business practices. There were days when we felt that the Japanese did everything better than we did, from designing appealing new automobiles to finding new ways to guarantee quality. Japan soon bested us in manufacturing and marketing what we used to think of as basic American goods, not just cars, but TV sets, even steel. It was only a vicious recession in Japan, and the wholesale adoption of the best Japanese practices by our own firms, that allowed us to forget the sense we once had of being humiliated by Japanese economic superiority