Harvard Business School's mission is to "educate leaders who make a
difference in the world." This motto is vastly more ambitious than the
previous one — to educate leaders who "make a decent profit — decently" —
and ambition, as Nitin Nohria (now HBS's Dean) and James Champy wrote
in The Arc of Ambition,
is usually a valuable quality. The problem with the new mission,
though, is that it's missing one word: positive. Of course, HBS hopes to
educate leaders who make a positive difference in the world, but that's
harder to do than it might seem.
Most leaders don't have much of an impact (as I wrote about in my first post) and picking someone who will is risky. It's hard to anticipate which leaders will be great and which ones will be awful because both the best and the worst leaders do things that normal leaders, in the same situation, would not do (as I described in my second post). So to choose the right leader you need to know the answer to two questions: When is it a good idea to gamble? How do you maximize your chances of picking someone who will do well?
When Gambling Is a Good Idea
When deciding whether or not to search for a high-impact leader, ask yourself: How desperate am I? No matter what you do, picking someone whom you believe has a very high chance of transforming your organization is a gamble. Such big changes are leaps into the unknown — always. You can never know for sure what you're going to get.
If your company or country is in a good situation, then your normal processes are working and you're usually better off not taking the risk. If you're Apple trying to replace Steve Jobs, for example, you know you're already one of the most successful companies in the world. You probably don't want an unknown when you employ an insider, Tim Cook, whom you have every reason to believe will do the job well.
A company in a lot of trouble, on the other hand — like IBM in 1993 — should gamble. IBM knew it was in trouble so it brought in Lou Gerstner from outside the company. He was a complete outsider — in fact, he had never worked in the computer industry. Gerstner, of course, led IBM to a historic turnaround. IBM knew it was on the precipice so its best option was to take the risk.
The other thing to consider is how vulnerable you are to very large gains and losses. A start-up, for example, has little to lose and everything to gain. Most start-ups fail. So there's no reason to think a conventional leader is the right choice. An unconventional one, though, might be the next Bill Gates who will turn your fledgling company into a Microsoft.
How to Maximize Your Chances
If you're looking for a high-impact leader who is likely to succeed, you must rule out the candidates who will certainly do poorly, then sort through the rest to find the right candidate. The best way to do this is to stay away from people whose rise was aided by false signals. It's difficult, for example, to discern the true capabilities of someone from a wealthy or influential family. No matter how impressive his or her résumé seems, you know unearned advantages made each accomplishment easier, so each tells us less about what he or she is truly capable of. The sociologist Robert Merton dubbed this "The Matthew Effect," where the rich (in every sense of the word, from money to status to fame) get richer just because advantages beget more advantages.
Another key strategy is to match the person to the situation. Winston Churchill was the right person — probably the only person — who could have faced down Hitler in May 1940. But earlier in his career he made mistake after mistake, and these missteps discredited him so thoroughly his prescient warnings against Hitler were ignored during the 1930s. So looking for the "best" leader is the wrong way to go about your search. There's usually no such thing — there are just leaders who are or are not suited to a particular situation. What you need to look for is the "right" leader — the one whose particular skills and predispositions match the problems facing your organization.
Additionally, you need to think about temperament. Truly great leaders (I wrote about this in more length in Fast Company) are, simultaneously, self-confident and humble. They can reject advice and they can listen and reverse course when they are wrong. Each of those characteristics is rare, and finding a person who exhibits both is enormously difficult, but it is from this alchemy of seemingly antagonistic traits that truly great leaders are made.
Most leaders don't have much of an impact (as I wrote about in my first post) and picking someone who will is risky. It's hard to anticipate which leaders will be great and which ones will be awful because both the best and the worst leaders do things that normal leaders, in the same situation, would not do (as I described in my second post). So to choose the right leader you need to know the answer to two questions: When is it a good idea to gamble? How do you maximize your chances of picking someone who will do well?
When Gambling Is a Good Idea
When deciding whether or not to search for a high-impact leader, ask yourself: How desperate am I? No matter what you do, picking someone whom you believe has a very high chance of transforming your organization is a gamble. Such big changes are leaps into the unknown — always. You can never know for sure what you're going to get.
If your company or country is in a good situation, then your normal processes are working and you're usually better off not taking the risk. If you're Apple trying to replace Steve Jobs, for example, you know you're already one of the most successful companies in the world. You probably don't want an unknown when you employ an insider, Tim Cook, whom you have every reason to believe will do the job well.
A company in a lot of trouble, on the other hand — like IBM in 1993 — should gamble. IBM knew it was in trouble so it brought in Lou Gerstner from outside the company. He was a complete outsider — in fact, he had never worked in the computer industry. Gerstner, of course, led IBM to a historic turnaround. IBM knew it was on the precipice so its best option was to take the risk.
The other thing to consider is how vulnerable you are to very large gains and losses. A start-up, for example, has little to lose and everything to gain. Most start-ups fail. So there's no reason to think a conventional leader is the right choice. An unconventional one, though, might be the next Bill Gates who will turn your fledgling company into a Microsoft.
How to Maximize Your Chances
If you're looking for a high-impact leader who is likely to succeed, you must rule out the candidates who will certainly do poorly, then sort through the rest to find the right candidate. The best way to do this is to stay away from people whose rise was aided by false signals. It's difficult, for example, to discern the true capabilities of someone from a wealthy or influential family. No matter how impressive his or her résumé seems, you know unearned advantages made each accomplishment easier, so each tells us less about what he or she is truly capable of. The sociologist Robert Merton dubbed this "The Matthew Effect," where the rich (in every sense of the word, from money to status to fame) get richer just because advantages beget more advantages.
Another key strategy is to match the person to the situation. Winston Churchill was the right person — probably the only person — who could have faced down Hitler in May 1940. But earlier in his career he made mistake after mistake, and these missteps discredited him so thoroughly his prescient warnings against Hitler were ignored during the 1930s. So looking for the "best" leader is the wrong way to go about your search. There's usually no such thing — there are just leaders who are or are not suited to a particular situation. What you need to look for is the "right" leader — the one whose particular skills and predispositions match the problems facing your organization.
Additionally, you need to think about temperament. Truly great leaders (I wrote about this in more length in Fast Company) are, simultaneously, self-confident and humble. They can reject advice and they can listen and reverse course when they are wrong. Each of those characteristics is rare, and finding a person who exhibits both is enormously difficult, but it is from this alchemy of seemingly antagonistic traits that truly great leaders are made.
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