The Three Ways of Great Leaders

Post also seized on publications such as Ladies' Home Journal. They were perceived as credible purveyors of information, and Post used them to reach this new national consumer. He started off selling door-to-door, but he used changing demographics and social mores to launch a product that was nationally distributed, nationally advertised, and nationally consumed. He was one of the first to recognize the power of a national brand.

An entrepreneurial leader's genius lies in bringing things together in a combination that no one has ever seen before. Post was one of this country's great business visionaries, but he failed at the managerial act -- which is to build a system in the organization that routinizes the entrepreneur's creation. Post eventually disengaged from the business and ultimately committed suicide. But the company he created, Post Cereals, thrives to this day. Another leadership prototype -- the manager -- stepped into the breach and through discipline, structure, and organization expanded the platform that Post created."

2. The Leader as Manager: Louis B. Neumiller

"Whereas entrepreneurs are company creators and charismatic leaders are agents of change, managers are value maximizers -- they make the most out of something that already exists. Such is the case with Louis B. Neumiller, who rose through the ranks of Caterpillar and became its chief executive in 1941. Two months later, Japan attacked Pearl Harbor. Just as C.W. Post used changing demographics to launch the cereal industry, Neumiller seized on the massive geopolitical event that was World War II to build Caterpillar into a global organization.

Soon after the country was plunged into war, the U.S. military called on Caterpillar to retool its operations for artillery production. But Neumiller feared that when the war ended, Caterpillar would be left with the challenge of reconverting itself back to producing heavy earth-moving equipment. He convinced the Army that it was better served by letting Caterpillar continue to manufacture bulldozers and tractors. In the end, his steadfast strategy paid off. The bulldozer in particular was critical to clearing roads and building makeshift landing strips throughout the Pacific islands. Over the next four years, Caterpillar doubled its employment and increased its sales fivefold.

Neumiller volunteered to deliver Caterpillar equipment to all of these different theaters, and several executives inside the company thought he was crazy to do so. But his instinct was to believe that when the war ended, Asia and Europe would become markets for Caterpillar equipment as battered countries set about rebuilding. And he was right. Caterpillar established dealerships and service centers in these areas for maintenance of the old equipment -- and, more important, for new purchases. Neumiller took this fledgling infrastructure and used it to build an international presence for Caterpillar in almost every corner of the world.

Neumiller really didn't build anything new. By the end of his era, Caterpillar's product portfolio didn't look all that radically different. What changed was the corporation's scale and scope. Neumiller capitalized on the war effort and then the rebuilding effort to transform Caterpillar into a global giant. And like all great managers, he took his identity out of the business -- he let his company become a hero instead of himself."

3. The Charismatic Leader: Lee Iacocca

"Our fascination with the CEO as a celebrity leader dates back to Lee Iacocca. He captured the moment because he saw and seized on a series of secular changes that crept up almost unnoticeably.

By the early 1970s, the major U.S. carmakers seemed unassailable. Then came the OPEC oil embargo and the energy crisis that followed. Many people thought that the oil shock was just a temporary, macro interruption. But this geopolitical event revealed a larger set of coalescing forces that allowed the Japanese carmakers to erode Detroit's dominance. By 1980, Japan had become the world's largest automobile producer and all of the major U.S. automobile companies lost money. The biggest loser of all was Chrysler, which posted a record loss of $1.7 billion.

Then comes this larger-than-life figure, Iacocca. He was the first modern leader to use the force of his persona to turn around an American icon. Iacocca pledged that he would take an annual salary of $1 until he returned Chrysler to profitability. He persuaded the government to authorize a $1.5 billion loan guarantee using taxpayers' dollars. But he knew he couldn't keep going back to that well. And so Iacocca seized on three forces that were reshaping the American business landscape and yoked them to his advantage.