Borman sat before the cameras 26 hours after Continental Airlines filed for bankruptcy in 1983. He seemed by turns nervous, distracted, and angry. The first few minutes of his talk were an "I told you so" to the workforce that had scoffed at his dire predictions for the industry. The later half was a frightening, clammy-palmed, square-jawed threat to the machinists -- vote for the company's concession package or be prepared to lose your jobs.
It was an eerie performance, closer to The Caine Mutiny than The Right Stuff. By the time Masters Forum speaker John Kotter switched the Borman video off, session members were shaking their heads at the dreadful tone of the most important moment in Frank Borman's managerial career.
Kotter asked what words describing Borman's moment came to mind. "Self-justifying," "whining," and "terrified" were among the answers. "He acts like he's still in the military," was another. "He hates what this is doing to his reputation," another said. Then Kotter showed the audience his favorite chart, the X-Y graph at the bottom of this page. He uses this simple chart to poll people on strong leaders they have known.
The Y axis is leadership, from very poor at the bottom to very great at the top; the X axis is Management, likewise from poor to great, only from left to right. Each quadrant of the graph represents a mix of leadership ability and managerial skill.
Where did Eastern Airlines employees put space hero Frank Borman on Kotter's chart? One of them asked him to rescale the box so that instead of evaluating leadership on a scale from 0 to 10, it ranged from -10 to +10. Borman was consistently ranked at 0 or below. That's how much of a hit Frank Borman was with the people he "led."
Today's presenter, John P. Kotter, occupies the Konosuke Matsushita Professor of Leadership chair at Harvard Business School. Author of numerous books and creator of influential business videos, he does not spit out his ideas in bullet-point form. He prefers the anecdotal route, spinning out his thesis in a long narrative monologue. His Masters Forum session was no exception. One story, describing the rule-breaking atmosphere at the short-lived but remarkable People Express, went on for 28 minutes.
If Frank Borman was skewered for leadership failings, Kotter made sure he included in his sketches of leaders a handful of executives, each very different from the others, that together embody the attributes people value in leaders. While Kotter talked about abstract qualities, he did not pull them out of a hat. Rather, he showed the audience videos of leaders in action, including Frank Borman, and had the audience suggest the qualities good leaders have in common. Before he was done, he linked these abstract qualities ("openness," "team orientation," "willingness to take risks," "a vision of what their company should be doing") with hard bottom-line attributes (profitability, stock value, etc.) that kept their companies in the black and on the move.
Kotter's first example, nominated after hundreds of interviews with other executives, was Sir John Harvey-Jones, rumpled chairman of the British chemicals firm ICI, now retired.
Kotter's video clips showed associates and employees praising Harvey-Jones as a man who, when he makes a promise, never lets you down. One very charming union steward characterized him as "the sort of fellow who, when you have a pint with him, you don't have to look to see if he took your shoes off."
Sir John Harvey-Jones
When Harvey-Jones took over ICI in 1982 the company was a stagnant pool -- big, bloated, and living off its chemical cash cows. Harvey-Jones knew that the company needed streamlining, beginning at the top, where the senior management group alone had three levels of hierarchy. Talking two "vice chairmen" into going away was no easy task -- yet how could the company as a whole accept the medicine he offered if his own team did not?
Harvey-Jones attacked waste and nonproductivity at every turn. He chased employees out of their mahogany-paneled offices and installed them in more conventional, more economical work spaces. He terminated the company's tradition of "nondiscussions," and forced people to face the real issues of survival and competition.
Harvey-Jones replaced the existing cozy culture with a dynamic one of global competition, emphasizing value-added products over commodities, chemical services over chemical products, and tons of hard, honest communication. He appeared at dozens of meetings before hostile divisions, absorbing, in Kotter's words, "thousands of bullets from nonbelievers." Before retiring -- he is now active in helping outfit Polish and Hungarian manufacturing companies for competition with the West -- he led the group toward strategic acquisitions to bring the company closer to the global vision.
The acid test of leadership, of course, is results. In seven years under Harvey-Jones, ICI quintupled revenues worldwide.
Kazuo Inamori did not set out to be an "industrial shogun." His first dream, as a teenager during the dying days of World War II, was to become a kamikaze pilot. In the long run, he has had infinitely more impact on America than he might have achieved by bouncing a plane off a ship's bow section.
Kazuo Inamori
Inamori is the founder and chairman of Kyocera, the great Japanese ceramics and electronics company, makers of laser printers and many other products. He started the company in 1959 with $5,000 in borrowed cash. Today the company enjoys annual sales of over $1 billion. An internationalist, Inamori was one of the first Japanese industrialists to see the political and economic advantages of opening factories in other countries. His empire includes 16 separate companies on three continents, from Singapore to San Diego.
Inamori is seen in his country, and especially among his employees, as a unique breed of philosopher-king. His success is as much the product of his respect for the people he works with and deals with as of his shrewdness as a business person. Associates invariably describe him as inspiring. He has said that the genius of the Japanese is their instinct to "value the heart of people."
Where the tendency in the mid-20th century has been to fashion organizations from defined departments and divisions -- "titanium building blocks," in Kotter's phrase -- Inamori chose an improbable organizational metaphor: the amoeba. Flexible, autonomous, continuously changing shape, able to absorb and duplicate at the drop of a hat, and tiny -- the amoeba unit never exceeds 40 people -- the organization Inamori built at Kyocera manages to be simultaneously immense (120,000 employees) and intimate.
They used to call Jack Welch "Neutron Jack." The quintessential downsizer, Welch in the 1980s was like the neutron bomb: it leaves buildings standing but the people are gone.
But Welch has changed. He has become one of the most effective leaders in business today. Most successful people invent themselves -- but it is invention through continuous learning.
In the video Kotter showed, Welch tells students that if he had one decision to make over again in his career, it would be to be braver, more willing to make hard decisions alone.
"I was at times too cautious, too timid. I wanted too many constituencies aboard."
That doesn't sound like the Jack Welch his associates know. To them he was always the point man, unafraid of risks, even huge ones. He was the first business leader to speak of a "boundaryless organization," emphasizing core competencies and outsourcing the corporation's secondary tasks.
In 1981, when Welch came aboard as GE CEO, the company was ranked fourth among U.S. corporations by market value, at $13 billion. A little over a decade of chaos later, Welch has led his company to the top of the list, with market value of $89 billion.
Welch is not the perfect leader, Kotter said -- no one is. But it would be hard to find another American executive of the past decade who has provided more vision and better results.
A good leader doesn't need to assume a "leaderly" pose. One of Kotter's favorites is Charles Harper, retired CEO at ConAgra.
Way back in the 1970s, Harper imparted a breathtaking vision -- for the agribusiness industry at least -- of companywide empowerment. It was that intelligent decisions cannot all be made by management. "It's no good me telling quality inspectors, 'I don't want one bad piece of bacon leaving our Armour plants ever.' They may not agree with me what a bad piece means. And what happens if I change my mind the next day and tell them to move that bacon through to meet production targets?"
ConAgra's Mike Harper, before he retired
In a company employing 55,000 people, about 500 million decisions must be made daily. Harper did not feel up to making all of them. Instead, he chose to transform the culture of the company from the ground up, so that people at every level would make quality decisions.
"I can't do their jobs," Harper said. "I can be most effective as a coach, helping them to the point where they can do it all themselves."
"He's got no charisma. He's fat, he's bald, and he stutters," said Kotter. "But he is a brilliant leader." He trained his workforce to be the best in the industry. He globalized the entire company. He sought out and identified opportunities in markets every expert assumed were mature and saturated.
Once again, the numbers tell the story. In 1974 ConAgra had annual revenues of $450 million. In 1992, the year Harper retired, revenues had risen to $21 billion -- one of the most impressive growth curves in the history of business.
Of all the portraits of leaders Kotter drew, he clearly most enjoyed discussing Mary Kay Ash, founder of Mary Kay Cosmetics.
Mary Kay is an inspiring figure to hundreds of thousands of her sales force. She turned them into businesspeople, helped them create livelihoods for themselves, and gave them recognition when they succeeded. Beyond that, she is a source of boundless enthusiasm and wisdom about life. Her sales rallies are like religious revivals.
To other people, especially at first glance, she seems gaudily ridiculous in her sequins and Dallas bouffant. Kotter was delighted when Ash was invited to speak to students at Harvard a few years ago -- it was a chance to see America's coastal highbrows confront head-on the native genius of its middle.
As she spoke, the Harvard students slowly melted at her charm, sincerity, and obvious intelligence. "She was like a heat-seeking missile," Kotter said. "She tried different approaches with the students, and each story, each idea brought her closer to their interests."
When one agitated graduate student in the back row challenged her on accounting and inventory problems, she gracefully turned the question over to her traveling financial officer, who quickly answered the nuts-and-bolts question, and allowed Ash to return to her specialties -- motivation, recognition, and entrepreneurialism.
There is certainly no arguing with Ash's accomplishments. She started the company 30 years ago. In 1980 it was selling $100 million in wholesale goods, $200 million retail, with 50,000 people out selling. By 1993 wholesale sales reached $720 million, or $1.4 billion retail, with an excited horde of 220,000 people selling.
As Ash was triumphally exiting the auditorium, Kotter collared one of her lieutenants and showed her his famous graph. Where did she think Mary Kay belonged on the chart?
The executive frowned. "Do you mean how do I rank Mary Kay for leadership, or how do I rank the leadership of the management team she leads?"
To hear Kotter tell it, he stopped and his mouth fell open.
"Because," the executive said, "if we're solely ranking individuals, I might have to put Mary Kay extremely high on leadership and not very high on personal management skills. But as the leader of the entire management team, she has created a leadership and management entity which is extremely, extremely powerful in both dimensions.
"In fact," she continued, "she has created a situation where the team is more powerful and more effective together than its members might be individually. Individually, I might show the team as being a spray across the middle of the top right quadrant. But as a team, I believe we push ourselves even further, to the top of the very top."
Speaking as one attendee at Kotter's session, I sensed an actual gasp coming from the audience as Kotter concluded with his description of the Mary Kay lieutenant's observation.
It was precisely what people needed to hear, after all the years of talk we have heard about leadership and management and which is important, blah blah blah.
Both are, of course, exceedingly important. Leadership -- personal leadership by top management -- is the sine qua non of dealing with change. As Kotter said, if the world were static, then we would all graduate from college as skilled and as knowledgeable as we would need to be all our lives.
But the world isn't like that. Organizations are caught up in a maelstrom of turmoil as globalization and increased competition, and the constant roll of new technology keeps us all in a perpetual state of reinvention.
Managerial talent is what gives an organization consistency, measurability, and some sense of control as we swirl from change to change.
Leadership so often requires the opposite of what we think. It seems to require a huge ego, and it probably does -- but it must be an ego pressed into the service of the organization and its goals.
The moment a "leader" thinks he or she has figured it all out and can coast on leaderly genius, Kotter said, is the moment the catastrophe fuse is lit.
Kotter urged participants to identify leaders like the five he cited -- Lord John Harvey-jones, Kazuo Inamori, Jack Welch, Mike Harper, and Mary Kay Ash -- and to notice how different they are, and yet what they have in common.
In the course of his talk, he cited other leaders he admired. He contrasted the managerial behaviors of two Xerox managers in the early 1980s.
One was Renn Zaphiropoulous, a maverick business unit chief at Xerox. Zaphiropoulous, whose Versatec unit was located in California, light years from the corporate campus in Rochester, NY, was so frantic to get employees conscious of the bottom line that he once set up a circus tent in the division parking lot and had everyone leave the building and sit in the stands while he, perched on the head of an elephant, followed the Stanford University marching band into the tent, slid off the giant animal -- with some difficulty, according to Kotter -- and commenced to read the first paragraph of the division's quarterly report!
Barely subliminal message: "Everyone here must know we are in the business of making money, and this is how much we made last quarter. The tent, the band, and the elephant are not important; our profit goals are."
Kotter was withering in his portrait of another Xerox manager, Fred Henderson, head of the U.S. Marketing Group in Rochester. Kotter's video crew followed Henderson from one meeting to another throughout a typical day. Meeting after meeting, Henderson smugly discussed upcoming promotions, solicited the counsel of his subordinates, and seemed to achieve "pretend consensus."
At no time, not even for a moment, did he indicate an awareness that Xerox -- this was 1982 -- was locked in mortal competitive combat with Japanese interlopers.
To damn Henderson with his own words: "I feel pretty good [about what we achieved today]. We tackled some real serious problems, some tough issues, and I believe we made a little progress. As long as you can inch this thing forward a little bit each day, I feel like I'm accomplishing my primary objective."
Henderson was clearly set up to make Zaphiropoulous look good. But even he did not look as bad as the great American eagle, Frank Borman, looked as he stood before his own video cameras and threatened his own workforce with economic death if they failed to OK his concession packages.
"I told you this would happen," Borman said, a half smile momentarily cutting across his face.
Kotter asked workers at Eastern Airlines to rate Borman, and Borman scored all-time terrible numbers.
Perhaps the worst thing that was said, though, was anecdotal. An employee was asked if Frank Borman was more of a leader, or more of a manager.
The employee thought for a moment, and said, "Neither. He's an astronaut."
One of the reasons Frank Borman turned out not to have exactly the right stuff for leadership was the environment he had to work in. On the dark side of the moon, where Borman flew in his Christmas 1968 Apollo 8 flight, top-down command was of life and death importance.
But the environment at Eastern Airlines must have made him homesick for the airless void of space. He had competitors few of us would want to deal with -- cutthroats Bob Crandall and Frank Lorenzo on the right and People Express -- before it went down in flames -- blithely occupying the left.
Today, looking back, it is hard to believe there ever was a People Express. Where Eastern charged $139 for a ticket from Newark to Buffalo, People Express charged $39. Later, People realized its mistake and changed its price -- to $29.
It was a business with a phantasmagorical vision -- that an airline did not have to be run like an airline. Eager people could be hired to do in a jiffy tasks that took regular industry professionals glacial aces to perform.
Where Borman's Eastern charged $299 to fly from Baltimore to Cleveland, People Express charged -- $19.
The organization was flatter than a pancake. It had three job classifications -- customer service manager, maintenance manager, and flight manager.
It was no frills all the way. Planes landed, emptied, filled up, and took off. No waste, and no delays. Plane seats seemed scavenged from a selloff of old Trailways buses. The kid selling your ticket was the kid who pushed the ramp up to the side of the plane.
On the plane, the steward would point a banana and ask you if you wanted to buy one. "They're only 50 cents -- a good deal!"
Eventually, the amateurishness of the operation brought the plucky airline down. The vultures descended and gobbled up the remains, leaving the air travelers to the unsmiling likes of Crandall, Lorenzo, and Frank Borman.
But while it was flying, people bought the banana, and they flew People Express loyally. It was an experience, like rooting for the Mets. Revenues went from $0 to $1 billion in five years. "Of the ten zillion businesses in the history of the galaxy," John Kotter said, "People Express was among the top five in success."
The Masters Forum, advance intelligence for organizations.