Advanced Management Program
No Leader is an Island

CEOs dominate the covers of business magazines. They have become synonymous with their companies. Yet no CEO stands alone. During a session on leadership at the Wharton Advanced Management Program (AMP), Wharton Professor Mike Useem pointed to research showing that the quality of management teams is a better predictor of company performance than the CEO alone. "The team, who's on it, how well they relate together — all add up to what great leadership should be defined as, as opposed to being a great individual," Useem said.

Strong followers are essential to successful leaders, said David Berg in a second AMP session. Think about Lord of the Rings ring carrier Frodo Baggins without Sam Gamgee, the Lone Ranger without Tonto, Star Trek's Captain Kirk without Spock, John Lennon and Paul McCartney without George Harrison. In each case, followers complemented and completed leaders. "We act as if leadership is a characteristic of one person that can be developed independent of any relationships," Berg said. "The same person is not going to have the same success depending on who the followers are. Why don't we spend any time, energy, or money on the other side of the relationship – followership? Did you ever go to a ‘followership' conference?"

Building Leadership Relationships

How are these relationships created and sustained to deliver successful leadership? Among the approaches suggested by Useem and Berg:

• Mobilize your organization with a persuasive vision and strategy, and clearly communicate your strategic intent: Useem recalled the speech to Lotus employees by IBM CEO Lou Gerstner when Big Blue acquired the smaller software company. In the speech, Gerstner laid out his vision for the company in meeting customer needs and gave honor to the employees. He also demonstrated his character and humor. During a question and answer session after the presentation, an employee challenged the button-down IBM culture by asking if Gerstner would wear a woman's dress to their annual company party. "For a few seconds, he stood like a deer in the headlights. Then he said, ‘If you deliver 20-percent growth, I'll wear anything you like.' Say it so it sticks," said Useem. "Offer vision and strategy and give honor to the vision, so they don't forget what was said."
  
  
• Recognize that leadership is relational: Berg noted that early studies of leadership characteristics found that U.S. leaders were primarily white, male, tall, and with military experience. It was the wrong question. This is not a theory of leadership but a description of the qualities of leaders at the time. "I don't think it is possible to be successful as a leader in any organization if you just stick with looking at the personal characteristics of leadership," he said. "Leadership is relational. We need to get out of the brain rut that certain characteristics adhere to the leader. There is a relationship between the leader and follower. Leaders might have blindspots. There are certain things they cannot see. The follower's role is to see the things the leaders cannot see." Berg urged AMP participants to ask themselves: What does a leader need to do to create a strong relationship with an exemplary follower?
  
  
• Build leadership and teamwork now to anticipate challenges ahead: Useem offered the negative example of Wagner Dodge who led a band of smoke jumpers to one of the worst disasters in forest fire fighting history in August 1949. Because he failed to communicate and build teamwork earlier in the day, when Dodge called to men to enter the burnt circle of an escape fire that could have saved their lives, they didn't follow him. They rushed past and 13 men were killed in the raging fire. "Dodge never communicated," Useem said. "If we don't talk the vision, some people will begin to wonder, is there a strategy? When he really needed it, his leadership failed him terribly. A great time to build your leadership and your team is now, before you need it later on."

The Value of a CEO

The perceived effectiveness of a CEO can add or detract significantly from the value of a firm. When John Walter was appointed President of AT&T in October 1996, the company lost $6 billion in market capitalization within 5 trading days. On the other hand, when James McNerney, Jr., was appointed CEO of 3M in December 2000, the stock gained $3 billion in 5 days.

Leaders count now more than ever. A study of 48 Fortune 500 firms found that the leadership capabilities of the CEO made the greatest difference in performance when the firm faces an uncertain and fast-changing environment. "In uncertain and fast-changing environments, that is when leadership capabilities make the greatest difference," Useem said.

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