The fast track to the top may look attractive, but people frequently are given new leadership responsibilities for which they are not ready, says Robert Joss, dean of the Stanford GSB. "Many companies don't think through when to put certain people in certain jobs, assuming that they'll be OK — and inadvertently setting them up for failure," Joss says. "That's a significant problem in many organizations."
The question of leadership, what it is and how to develop it — in organizations and in yourself — was the topic of a one-week seminar conducted by Joss. It was one of 11 small, innovative classes offered to second-year MBA students before the start of the 2001-2002 academic year. Each class revolved around a faculty member's favorite area of research and was limited to 10 students to provide an intimate, intensive learning experience. The aim of the seminars was twofold: to integrate research and teaching more strongly and to build community among students and faculty in an academic context. Stanford's low student-faculty ratio and cross-disciplinary approach to management allowed the experiment with this teaching form. Other seminars included How to Make Ideas Stick, Working for Change for Women in Organizations, Advanced Investment Strategies, and Strategy and Organization in the Brewing Industry.
The dean's Issues in Leadership seminar delved into several academic research papers and books but also confronted the students with some real-life conundrums. Should you aim for fast-track careers? Can intellectual ability make up for lack of work experience?
One key lesson is not to place too much stock in one's success as a student. "A student has been able to do nearly everything on his or her own, and that can be deceiving in terms of leadership ability," says Joss. "There's a big difference when you have to get work done through others. Learning how to inspire as well as control is a difficult thing, and you learn it through practice." The dean, who earned his MBA and a PHD at Stanford GSB, was chief executive officer of the Australian financial consortium Westpac Banking Corp. and prior to that served as vice chairman of Wells Fargo & Co.
The Pipeline Approach
The need for hands-on leadership experience is a key theme in a new book that was assigned as one of the readings in the seminar. The Leadership Pipeline, by Ram Charan, Stephen Drotter, and James Noel, criticizes companies that look for their leaders only among the "best and brightest."
"Businesses are full of intelligent, good-looking people from top schools who are failing because they don't know how to get anything done," the Pipeline authors argue. "Succession programs often place these people in leadership positions based on their potential — they look the part, they have the right pedigree, they impressed someone with their ideas and ability to articulate them." Such people often don't stay in one place long enough to learn from mistakes, master the right skills, or gain the experience they need for performance.
The right way to perpetuate an enterprise, they argue, is to fill the pipeline with people who can be drawn upon to fill the next leadership level up. The writers draw on their experience running training programs at General Electric and Citigroup, two companies known for leadership development.
This performance-based definition of potential turns the focus squarely on one's ability to do the job at one's current leadership level. Performance now becomes "the admission price" for future growth and development. The strategy permits few, if any, shortcuts. This is because the leadership hierarchy is not a series of undifferentiated steps that would allow the energetic junior executive to skip a couple of stops on the way to the top. Instead, each management level involves a major change in job requirements, time, allocation, and work values — all requiring new learning and demonstrated mastery.
In large, decentralized companies, the hierarchy may constitute as many as six such career passages, or bends, in the pipeline. These range from managing oneself as an individual contributor to managing a team, to managing managers, to managing a function, to managing a business, and ultimately to managing an enterprise.
The authors are critical of the fast-track career path. "The pipeline isn't a straight tube but one with six 90-degree bends or turns," they caution. "At each one of the bends, people need to slow down, reflect, learn, and develop."
To Joss, this doesn't mean that you should not try to speed up your progress. "The book suggests how you ought to fast-track," he says. "If you're in a hurry, you should try to shorten the time on each track or on each level, rather than skipping. If you skip the acquisition of experience, you're certainly taking on some risk of having a very large gap in your knowledge or skills."
But what if your boss tells you you're needed to fill a position two or three levels up? Most people would probably grab the chance without a second thought. Joss urges caution. "Either take it with your eyes open and figure out how you're going to cover that lack of experience — maybe through some coaching, maybe your boss can help you out — or do a realistic self-appraisal and say, 'That's too big a risk. I'm not ready and I'm just going to fail in that job because I don't have enough background.'"
He realizes that the latter option sounds unrealistic to most people: Why would you ever turn down a promotion? But he points to a parallel in college sports. "You see it all the time," observes Joss. "A good basketball player who is a junior could be encouraged to turn pro, but the kid says, 'That's a big risk.' In college, you get much more coaching and more chances to work on the fundamentals. When you go to the pros, you've got to be ready to play every night. So, many of them choose to stay another year, even though it may be at great short-term economic cost to them."
Level 5 Leadership
Consultant and former Stanford BGSB lecturer Jim Collins, MBA '83, reinforces criticism of the "star" system in another of the seminar readings. In the course of a five-year research project into hyperachieving companies, he chanced upon a counter-intuitive pattern. People generally assume that transforming companies from good to great requires big personalities who make headlines and become celebrities, he says.
Instead, he found that these companies' leaders were individuals who blend "extreme personal humility with intense professional will." Although fearless, they were also modest and shy, motivating others with inspired standards rather than inspiring charisma.
His study examined the 11 Fortune 500 companies between 1965 and 1995 that met his stringent definition of "good-to-great" transition. That is, after performing no better than the general stock market for 15 years, they steadily transformed themselves into dramatic and sustained overachievers, registering cumulative stock returns at least three times the market average over the next 15 years.
The 11 firms included paper company Kimberly-Clark under CEO Darwin E. Smith; Gillette under CEO Colman Mockler; Abbott Laboratories under CEO George Cain; and Wells Fargo under CEOs Dick Cooley and Carl Reichardt. All fit the profile of quiet, resolute leaders in contrast to more ego-driven CEOs of their less successful competitors. Collins' interpretation of his findings in his book Good to Great is that to build "enduring greatness" requires a "level 5" executive, whose ambition is for the institution, not for himself.
Joss agrees with Collins' observations. "It's a mark of all outstanding leaders that their egos get reasonably suppressed," he says. "They care more about other people and about the cause, which is to build a great company. And that shows through in discipline and will, and also in humility."
Other key seminar sessions involved discussion of emotional intelligence, personal renewal, and the tasks that leaders actually perform in their work. "Leaders are mostly made, not born," says Joss. "They are made by being put into challenging jobs that require them to earn followers in order to perform." This acquisition of experience and the related development of effective behaviors are essential complements to the acquisition of management knowledge, which is the central purpose of an MBA program. "Leadership is a performing art, just like diving or singing, and the instrument is you. It takes lots of practice and it takes considerable self-knowledge and self-management."