Leaders to Leader

Lessons from the Great American Leaders & How They Apply Now

Leadership: When We Need It, Why Has It Failed?

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Ulysses Grant – General, President of the United States

America has experienced similar periods of economic stress, and from them leaders emerged. Great ones arise in the face of crisis and adversity. History is replete with examples of military, political and business leaders, who have emerged from the crucibles of their times.

  • Cincinnatus arouse from a humble exile to defend Rome from invasion in 460 BC, returning to his farm once he successfully defeated the enemy.
  • George Washington was deeply affected by Cincinnatus’ example, when he refused to be named emperor during his tenure as first President of the United States, returning home after serving his country as both a soldier and political leader.
  • Ulysses Grant was a store clerk and was considered a failure in 1861, when the Civil War started. After experiencing the ineffectual leadership of many generals, Lincoln appointed him General of the Army. He defeated Robert E. Lee in 1865 and ended the Civil War.
  • Dwight Eisenhower was a colonel in 1940, at the beginning of the Second World War. Within two years he commanded the Allied Forces in Europe, which resulted in the defeat of Germany in 1945.
  • Already firmly established as a financial power, J.P. Morgan stood in the gap during the Financial Panic of 1907, infusing capital into banks and financial institutions, calmly meeting with key industrialists, and ultimately reassuring an anxious economy.

Leaders like Carnegie, Rockefeller, Gates and Bezos took advantage of major economic shifts and turmoil to build and expand their financial empires.

Why then and not now? In 1981 Jack Welch (GE) gave a speech entitled “Growing Fast in a Slow-Growth Economy” in which it was suggested that shareholder value should be the primary goal and focus of corporate leaders.

This philosophy was widely embraced, which resulted in an emphasis on short-term profitability as the primary measure of performance, setting the stage for the high levels of fraud exhibited by individuals who “gamed” the system to their advantage.

Ken Lay (Enron), Bernie Ebbers (Worldcom), Al Dunlap (Sunbeam) and a host of other self-serving individuals have been fundamentally responsible for the economic mess the country is now in. Utilizing a “results justify the means” philosophy, they knew by focusing only on shareholder value, investors would not likely watch the actions they were taking to destroy the long-term valuation and sustainability of their businesses. And they were right. Each of these unethical leaders was a darling of Wall Street, before the destruction of their businesses transformed them into a villain.

In light of the economic havoc caused by this philosophy Welch modified his position in a 2009 interview with the Financial Times, “On the face of it, shareholder value is the dumbest idea in the world,” he said. “Shareholder value is a result, not a strategy... “

Unfortunately this original misplaced attitude has filtered down into the leadership development programs in many companies. Typically, leadership development programs focus on the wrong aspects of leadership. They tend to concentrate on the pinnacles of leadership, and what individuals like Jack Welch (GE), Bill Gates (Microsoft) and Warren Buffet (Berkshire Hathaway) are doing to manage their companies and financial empires.

The lessons of a highly successful CEO are difficult to transfer to an emerging leader, especially when shareholder value is the strategy. Many fail to see the connection to their jobs and responsibilities.

While this information is important to understand, it does a disservice to the students of leadership. In essence, many current leadership development theories espoused by many leadership development programs are a study of outcomes and results, and not a detailed study of the underlying factors that produced them. These are often difficult, if not impossible, for the average manager to comprehend and put into practice, and because of it, are thereby, lost.

For more information on this topic, refer to Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It by Timothy F. Bednarz (Majorium Business Press, Stevens Point, WI 2011).

 

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Adapted from article published on the Examiner.com on October 12 2012.

Copyright © 2012 Timothy F. Bednarz, All Rights Reserved

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Written by Timothy F. Bednarz, Ph.D.

October 24, 2012 at 11:53 am

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