THE LEADERSHIP ENGINE
How Winning Companies Build Leaders at Every Level
By Noel M. Tichy with Eli Cohen
HarperBusiness 367pp $26
Tired of reading leadership books that laud the same people? Heard more than you ever wanted to know about Jack Welch, Bill Gates, Andy Grove, and Roberto Goizueta? You're hardly alone. Truth is, most companies aren't headed by people like that. Besides, business leaders don't sit only at the top of organizational pyramids--they are scattered throughout every successful company. Yet most leadership tracts focus on the all-too-familiar top brass, paying scant attention to the folks in the trenches.
The Leadership Engine, a new study by University of Michigan Professor Noel M. Tichy, does not exclude the likes of General Electric's Welch, Intel's Grove, or Coca-Cola's Goizueta. But Tichy and co-writer Eli Cohen provide a novel take on a well-worn topic and, refreshingly, introduce us to a host of new leaders who don't yet wear CEO crowns. (They also provide a 100-page workbook to help managers act on their advice.) Tichy, drawing upon 25 years of experience as a consultant and teacher, asserts that successful organizations win because they are run by people who cultivate leaders. Markets, products, and technologies come and go, the authors write, but "a company that continually produces leaders at all levels is here to stay because it has people who anticipate and know how to deal with change."
At a time when many companies have cut back or abandoned their management-development efforts, this is a welcome message. As Tichy and Cohen see it, distinguished leaders are willing to assume direct responsibility for the development of other leaders. They are teachers who invest a lot of time imparting ideas, values, and emotional energy to others by telling stories about their experiences.
In the 18 months before Roger A. Enrico became CEO of PepsiCo Inc. last year, for example, he spent nearly one-third of his time running a personal "war college" for Pepsi's top executives and managers. In sessions that ran from early morning till late at night, Enrico would lead nine execs at a time through five days of dialogues and exercises at his house in the Cayman Islands or his ranch in Montana. He described his experiences, got them to reflect on their own operating styles, and shared his opinions on how to construct, expand, and change a business. Each participant was asked to take on a project that would have a major dollar impact. Then, months later, each would return for a three-day session with Enrico to review the project's progress.
All told, Enrico devoted more than 120 days to teaching up-and-coming executives in 10 separate programs. The upshot: He was able to assess the company's next generation of leadership and to coax from them many ideas that enhanced PepsiCo profits and productivity.
Few leaders, of course, can devote as much time as Enrico does to coaching. But the authors found many other CEOs who share their knowledge just as effectively. Ameritech CEO Richard C. Notebaert leads a two-hour, no-holds-barred dialogue with as many as 100 managers at regularly scheduled development programs. AlliedSignal CEO Larry Bossidy religiously holds "skip-level meetings"--or sessions that circumvent hierarchy--at breakfasts with 10 managers held at least once a week. This way, he listens, learns, and teaches staffers he would otherwise rarely meet. As Tichy and Cohen put it: "A leader who aspires to be a winning teacher organizes every meeting, makes every decision, and designs every organizational structure with developing others in mind."
Great teachers are not the only asset of what the authors label "teaching organizations." These companies also boast cultures that use carrots and sticks. Intel, for instance, takes stock of how well employees develop subordinates when evaluating and compensating its managers. At GE, Welch stripped power from executives who ignored his demands to develop leaders along with their businesses.
Tichy and Cohen also introduce us to people such as Debra Dunn, head of Hewlett-Packard's test-and-measurement business; Phil Myers, an account manager at ServiceMaster; and Mary Petrovich, general manager of an AlliedSignal factory that churns out auto seat belts. The authors show us how they and other leaders use stories to motivate, inspire, and provide guidance.
Myers, for instance, a former janitor, builds energy and morale by going out of his way to recognize the work of his hospital maintenance workers. He knows how commonly others ignore housekeepers, and he ferociously defends them against slights and demeaning incidents. When an administrator humiliated one of them, he threatened to pull all 21 off the job.
Unfortunately, not all the anecdotes in this book are so illuminating. It's not very helpful to read yet again about how Goizueta's family fled Fidel Castro's Cuba. Goizueta arrived in Miami with his wife and three children, $40, and 100 shares of Coca-Cola stock. The Coca-Cola chief, who wasn't interviewed for this book, has said this experience helped him understand that it was possible to survive and prosper even after you have lost everything. Tichy and Cohen's conclusion: "Castro taught him to be fearless about taking risks." That seems to be a bit of overreaching.
Yet the notion that a leader has an obligation not only to lead an organization but also to teach others to do so is powerful. Too few managers and executives understand the importance of mentoring. In elevating this role to the top of a leader's priorities, the authors offer managers a way of becoming ever more influential.