September 21, 2007

Where Have All the Leaders Gone (Part I)

The U.S. is going through a crisis of leadership in both business and politics. And it won’t be solved until we look at ourselves in the mirror.

Everywhere I go these days, from gatherings of corporate executives to Q&A sessions with large groups, everyone is asking the same questions: “Where can we find leaders we can trust?” “What happened to all those great leaders of the past?”

Some are bemoaning the paucity of statesmen at the top of corporations, while others are fed up with political leaders. The lack of trust in our leaders in virtually every sector of U.S. life is palpable. Recent Gallup polls indicate that only 18% of the American people trust the values and ethics of business leaders; even fewer-15%-trust their elected officials. That’s not just a temporary problem. It is a formula for disaster.

Trust is the coin of the realm in both democracy and capitalism. Without trust, the system cannot function effectively. People become cynical, disengaged, and even prone to anarchy and rebellion.

Unlike others who bemoan the leadership shortage, I do not believe the problem is a lack of leaders. Rather, in the corporate realm and in the voting booth, we are choosing the wrong people to lead us-and choosing them for the wrong reasons.

Style Over Substance

Corporate boards, shareholders, and voters-and the media that influence all of us-give far too much weight to leaders’ charisma and far too little consideration to their character. They tend to favor style over substance; image over integrity. If we choose our leaders for their charisma, style, and image, why should we be surprised when we fail to get leaders with character, substance, and integrity? Only the latter qualities can build trust.

Many of the chosen leaders want to lead only for their own ego aggrandizement-for money, fame, power, and glory. They want to take as much from the system as they can. They aren’t genuine leaders at all. They are just glory-seekers. Yet we set these leaders up as role models. When they prove they have feet of clay, as all leaders do, we take pleasure in their destruction.

No leader is perfect, so we should stop expecting them to be. Genuine humility, the ability to be vulnerable under pressure, and admitting when you’re wrong can go a long way toward building trust.

Marks of the Authentic Leader

Authentic leadership is about serving others. And serving others, not seeking glory, is what leaders in both the corporate realm and political arena are selected to do. As the late Peter Drucker said: “Leadership is not rank or privileges, titles or money. Leadership is responsibility.”

Authentic leaders take responsibility for their actions and the results of their organizations, but they don’t try for perfection. In fact, they surround themselves with other leaders who know more than they do. They openly admit their mistakes. They acknowledge their weaknesses and shortcomings. They ask others to help them through crises. When things go well, they give the credit to others. When they go poorly, they are the first to accept responsibility.

In the past decade many of our leaders tried to pass off responsibility for failure and corruption on their accountants and lawyers, as Jeff Skilling of Enron and Bernie Ebbers of WorldCom did. Leaders like Phil Purcell at Morgan Stanley (MS) rationalized their poor results and fought to the bitter end to hang onto their jobs. Then they demanded-and received-huge termination settlements from their boards. Many of the leaders of failing enterprises such as AT&T (T), Sears (SHLD), and K-Mart got so caught up in playing the short-term stock market game that they wound up destroying their enterprises.

Unrealistic Expectations

The notion of finding a savior who can turn around moribund organizations in a short time has proven to be flawed. The only solution to the current leadership crisis is to select highly experienced, battle-tested leaders from within the organization or the political realm. We need leaders who have had years of proving their character and integrity in the most difficult circumstances and who have achieved results by empowering people, not by using them.

Until we choose leaders who are more interested in serving everyone in the system than they are in taking from it, we will continue to ask plaintively: “Where have all the leaders gone?” without ever acknowledging that we, with our unrealistic expectations, are the source of the problem.