Lessons from business leaders of today

Industrial Management, Jan-Feb, 1990 by Robert Oeh, Brian H. Kleiner

Lessons From Business Leaders of Today

Are there common attributes that make a great leader in the world of big business today? Why are these leaders where they are? Not surprisingly, many of the world's top CEOs are what they are because of hard work. Others are destined for the top job, and still others have taken initiative and made opportunities for themselves in tough situations. It is not evident that there is one and only one recipe for being a great business leader. However, it seems that the great business leaders of today share strong personalities and the ability to communicate, delegate, plan, and restructure.

All are extremely proactive. None of these men got where they are by being passive and letting things happen. Ross johnson of RJR Nabisco once made a comment about those who make it to the top and maintain the status quo: "You don't need a lot of time to decide that the corporate structure doesn't seem to be working. The easiest thing is to sit and do nothing, and you can do it at a corporation of our size and not see much effect. But your successors will sure inherit that world."

The MBA, which is much more common now than it was 30 years ago when the present CEOs were in school, is surprisingly lacking in these top positions. Most CEOs of the top 50 industrial companies in the world have graduate and doctorate degrees in engineering. Out of this group of 500, only 3 have MBAs, and some have no post-high school education at all. It is always refreshing to hear about those who made it to the top through hard work and no education. The CEO of Bayer, Hermann Strenger, started out as a relentless salesman with no formal education. He was first asked to rebuild Bayer's sales office in Sao Paolo, Brazil, which he did successfully after four years of lugging two enormous sample cases down unpaved roads in 100 degree weather. That someone would reach the position of CEO with no college education whatsoever--especially in Germany--is almost unheard-of.

Akio Tanii of Matsushita Electrical Industrial is another CEO with only a degree from an industrial high school and no college education. What's even more amazing about Tanii's success later in life is that earlier he had failed to make it into the Japanese Naval Academy, and he flunked the entrance exam to a textile company. Tanii joined Matsushita at age 28 and took over the helm at the comparatively young age of 57. Although Tanii's early life was filled with failures, he eventually triumphed through perseverance and determination. These are essential attributes in a leader and were attributes he needed when he took over Matsushita's VCR division. He spent seven years converting their oversized, expensive VCR into a small, affordable one and simultaneously received positive exposure and developed the reputation in Japan as "Mr. VCR." There seem to be some skills that are not taught in school that are exactly what the head man needs to succeed. For Tanii this was his leadership. People have always wanted to follow him, and when he was the coxswain on rowing expeditions, the rows always moved in perfect unison. The reason he is so good at leading Matsushita and part of the reason he was chosen for the top job is that he is very good at listening to workers and subsequently explaining the best way to attack the problem.

Most of the CEOs of the largest industrial corporations seem to be very tough in nature. Lawrence Rawl of Exxon is an exmarine who still carries that image with him and Raymond Levy of Renault has been known to snap colleagues off in midsentence, a style that you wouldn't learn in most management classes. One of these tough bosses who exhibits extreme competitiveness is Cor van der Klugt of the Dutch electronics giant Philips. He is an intense competitor in tennis and chess; and as far as the company goes, he is completely engrossed in beating the Japanese. However, there is an interesting lesson to be learned from van der Klugt with respect to his competitiveness and keeping Philips successful. Philips had invented the videocassette recorder years ago but lost the entire U.S. market to the Japanese firms, which adopted a different technological standard. In 1978, when van der Klugt was put in charge of consumer electronics, Philips had just developed a CD prototype and he wanted to avoid a catastrophe similar to that of the videocassette recorder. Van der Klugt could have adopted a fight-to-win strategy with respect to the CD, which would not have been surprising given his keen sense of competition. Instead, he took more of a problem-solving approach and negotiated with Sony's chairman, Akio Morita, to share Philips technology with Sony. Once Sony adopted Philips' technological standard, all other Japanese and European electronics firms followed suit. Now Philips has a 20 percent share of the world CD market and the other companies pay Philips royalties for its technology. Although van der Klugt wants to beat the Japanese at the electronics game, he is wise enough to know that sometimes the best outcome can be reached through compromise and sharing technology.