Leadership and fame

Fortune (Nov 2004) has an article by Nicholas Varchaver discussing how executives went from being virtually invisible to celebrity status back to being executives but remaining of significant reputational value.

• Before Chrysler boss Lee Iacocca, the vast majority of corporate managers were virtually invisible, although entrepreneurs like John D. Rockefeller, Andrew Carnegie, Henry Ford, and Thomas Watson loomed large in American mythology.
• In the 1950s the business of America may have been business, but that hardly conferred glamour on big corporations.
• The antiestablishment mood of the '60s only made that image worse.
• Then came the economic doldrums of the '70s. Charismatic and straight-talking, Iacocca was a star. All of a sudden, you couldn't turn on your television without seeing a CEO.
• Still, in the early '80s managers remained hesitant to be too visible. As the '80s wore on, the tone would begin to change. The rise of high-tech companies was focusing attention on another group of leaders.
• By the mid-1990s, CEOs were praised for their decisiveness when they instituted layoffs. Where once stocks had fallen after such announcements, now they climbed. Just hiring a celebrity CEO made a stock spike.
• Today, buffeted by scandals and the restrictions of the Sarbanes-Oxley law, CEO charisma is almost a liability.

Yet the new restraint may not last long: to the outside world a CEO still embodies his company. A recent survey suggests that 50% of a corporation's reputation is attributable to that of its CEO. Stock prices still routinely rise and fall with the news of a CEO hiring or firing.

Just enough L.

Henry Mintzberg argues in HBR of November 2004 that in many companies there exists a cult of L. that is dragging business down. These companies embrace the notion of the single, isolated leader who is supposed to charge heroically ahead, formulating the grand strategies, making the tough decisions, pulling off the great mergers, while downsizing left and right.

That is not to say Mintzberg does not recognize the importance of being engaged. Leaders engage others by, above all, engaging themselves. But he says leaders should care a lot more than they cure, connect a lot more than they control, and demonstrate a lot more than they decide. He calls this "Just enough L." or appropriate L., supporting the direction setting of others. A participative L. style.

I believe many modern CEO's will sympathize towards Mintzberg's thinking of moving a bit more to the democratic side of the L. continuum. However a complication Mintzberg does not mention in his short article is that mass media and certain shareholder groups may push leaders into unwanted heroic L. roles. Leaders should consider once they give in to this, even in a specific situation, it might be difficult to assume a democratic role in other circumstances. Heroic L. works like Opium of the People.