No organization can do better than the people it has.
People decisions are the ultimate—perhaps the only—control of an organization. People determine the performance capacity of an organization. No organization can do better than the people it has. The yield from the human resource really determines the organization’s performance. And that’s decided by the basic people decisions: whom we hire and whom we fire, where we place people, and whom we promote. The quality of these human decisions largely determines whether the organization is being run seriously, whether its mission, its values, and its objectives are real and meaningful to people, rather than just public relations and rhetoric.
Any executive who starts out believing that he or she is a good judge of people is going to end up making the worst decisions. To be a judge of people is not a power given to mere mortals. Those who have a batting average of almost a thousand in such decisions start out with a very simple premise: that they are not judges of people. They start out with a commitment to a diagnostic process. Medical educators say their greatest problem is the brilliant young physician who has a good eye. He has to learn not to depend on that alone but to go through the patient process of making a diagnosis; otherwise he kills people. An executive, too, has to learn not to depend on insight and knowledge of people but on a mundane, boring, and conscientious step-by-step process.
“A Chief Executive Officer who has ‘friendships’ within the company… cannot remain impartial.”
Rarely has a chief executive of an American corporation been as respected and revered as Alfred P. Sloan, Jr., was at General Motors during his long tenure at the top. Many GM managers felt a deep personal gratitude to him for this quiet but decisive acts of kindness, of help, of advice, or just warm sympathy when they were in trouble. At the same time, however, Sloan kept aloof from the entire management group in GM.
“It is the duty of the Chief Executive Officer to be objective and impartial,” Sloan said, explaining his management style. “He must be absolutely tolerant and pay no attention to how a man does his work, let alone whether he likes a man or not. The only criteria must be performance and character. And that is incompatible with friendship and social relations. A Chief Executive Officer who has ‘friendships’ within the company, has ‘social relations’ with colleagues, or discusses anything with them except the job, cannot remain impartial—or at least, which is equally damaging, he will not appear as such. Loneliness, distance, and formality may be contrary to his temperament—they have always been contrary to mine—but they are his duty.”
What Churchill gave was moral authority, belief in values, and faith in the rightness of rational action.
The last reality of the thirties, which The End of Economic Man clearly conveys, is the total absence of leadership. The political stage was full of characters. Never before, it seems, had there been so many politicians, working so frenziedly. Quite a few of these politicians were decent men, some even very able ones. But excepting the twin Princes of Darkness, Adolf Hitler and Joseph Stalin, they were all pathetically small men; even mediocrities were conspicuous by their absence. “But,” today’s reader will protest, “there was Winston Churchill.” To be sure, Churchill’s emergence as the leader in Europe’s fight against the evil forces of totalitarianism was the crucial event. It was, to use a Churchillian phrase, “the hinge of fate.”
Today’s reader is indeed likely to underrate Churchill’s importance. Until Churchill took over as leader of free peoples everywhere, after the retreat at Dunkirk and the fall of France, Hilter had moved with apparent infallibility. After Churchill, Hitler was “off” for good, never retaining his sense of timing or his uncanny ability to anticipate every opponent’s slightest move. The shrewd calculator of the thirties became the wild, uncontrolled plunger of the forties. It is hard to realize today, sixty-five years after the event, that without Churchill the United States might have resigned itself to Nazi domination of Europe. What Churchill gave was precisely what Europe needed: moral authority, belief in values, and faith in the rightness of rational action.
But this is hindsight. Winston Churchill appears in The End of Economic Man and is treated with great respect. Indeed, reading now what I then wrote, I suspect that I secretly hoped that Churchill would indeed emerge into leadership. I also never fell for the ersatz leaders to whom a good many well-informed contemporaries—a good many members of Franklin Roosevelt‘s entourage in Washington, for instance—looked for deliverance. Yet in 1939 Churchill was a might-have-been: a powerless old man rapidly approaching seventy; a Cassandra who bored his listeners in spite (or perhaps because) of his impassioned rhetoric; a two-time loser who, however magnificent in opposition, had proven himself inadequate to the demands of office. I know that it is hard to believe today that even in 1940 Churchill was by no means the inevitable successor when the “Men of Munich” were swept out of office by the fall of France and the retreat at Dunkirk.
Churchill’s emergence in 1940, more than a year after the book was first published, was the reassertion of the basic moral and political values for which The End of Economic Man had prayed and hoped. But all one could do in 1939 was pray and hope. The reality was the absence of leadership, the absence of affirmation, the absence of men and values and principle.
Keep your eye on the task, not on yourself. The task matters, and you are a servant.
Most organizations need somebody who can lead regardless of the weather. What matters is that he or she works on the basic competencies. As the first such basic competence, I would put the willingness, ability, and self-discipline to listen. Listening is not a skill; it is a discipline. Anybody can do it. All you have to do is to keep your mouth shut. The second essential competence is the willingness to communicate, to make yourself understood. That requires infinite patience. The next important competence is not to alibi. Say: “This doesn’t work as well as it should. Let’s take it back and reengineer it.” The last basic competence is the willingness to realize how unimportant you are compared to the task. Leaders subordinate themselves to the task.
When effective leaders have the capacity to maintain their personality and individuality, even though they are totally dedicated, the task will go on after them. They also have a human existence outside of the task. Otherwise they do things for personal aggrandizement, in the belief that this furthers the cause. They become self-centered and vain. And above all, they become jealous. One of the great strengths of Winston Churchill was that Churchill, to the very end, pushed and furthered young politicians.
The most successful leader of the twentieth century was Winston Churchill. But for twelve years, from 1928 to Dunkirk in 1940, he was totally on the sidelines, almost discredited—because there was no need for a Churchill. Things were routine or, at any rate, looked routine. When the catastrophe came, thank goodness he was available. Fortunately or unfortunately, the one predictable thing in any organization is the crisis. That always comes. That’s when you do depend on the leader.
The most important task of an organization’s leader is to anticipate crisis. Perhaps not to avert it, but to anticipate it. To wait until crisis hits is abdication. One has to make the organization capable of anticipating the storm, weathering it, and in fact, being ahead of it. You cannot prevent a major catastrophe, but you can build an organization that is battle-ready, that has high morale, that knows how to behave, that trusts itself, and where people trust one another. In military training, the first rule is to instill soldiers with trust in their officers, because without trust they won’t fight.
An executive should be a realist; and no one is less realistic than the cynic.
Integrity may be difficult to define, but what constitutes lack of integrity is of such seriousness as to disqualify a person for a managerial position. A person should never be appointed to a managerial position if his vision focuses on people’s weakness rather than on their strengths. The person who always knows exactly what people cannot do, but never sees anything they can do, will undermine the spirit of her organization. An executive should be a realist; and no one is less realistic than the cynic.
A person should not be appointed if that person is more interested in the question “Who is right?” than in the question “What is right?” To ask “Who is right?” encourages one’s subordinates to play it safe, if not to play politics. Above all, it encourages subordinates to “cover up” rather than to take corrective action as soon as they find out that they have made a mistake. Management should not appoint a person who considers intelligence more important than integrity. It should never promote a person who has shown that he or she is afraid of strong subordinates. It should never put into a management job a person who does not set high standards for his or her own work.
All the effective leaders I have encountered—both those I worked with and those I merely watched—knew four simple things: a leader is someone who has followers; popularity is not leadership, results are; leaders are highly visible, they set examples; leadership is not rank, privilege, titles, or money, it is responsibility.
When I was in my final high school years, our excellent history teacher—himself a badly wounded war veteran—told each of us to pick several of a whole spate of history books on World War I and write a major essay on our selections. When we then discussed these essays in class, one of my fellow students said, “Every one of these books says that the Great War was a war of total military incompetence. Why was it?” Our teacher did not hesitate a second but shot right back, “Because not enough generals were killed; they stayed way behind the lines and let others do the fighting and dying.” Effective leaders delegate, but they do not delegate the one thing that will set the standards. They do it.
