The Three Ways of Great Leaders

First, there was technology. Iacocca understood that the Japanese threat stemmed from a fundamentally more productive way of managing manufacturing, which he'd have to mimic. Then came labor. Iacocca was among the first to recognize that there needed to be a more cooperative compact between labor and management. Under his leadership, Chrysler was the first American corporation to put members of the United Auto Workers on its board. And finally, Iacocca leveraged America's radically changing demographics. His genius was to see that the baby boomers were starting families, so he bet Chrysler's future on the minivan. Ultimately, Iacocca succeeded at turning around Chrysler because he acted on all three fronts simultaneously.

Some say that we've developed a dangerous infatuation with charismatic leaders. And they're right. But that doesn't mean we were wrong to believe in these people in the first place. You can't put your faith in the institution when it's crumbling. You don't trust Chrysler. But you do trust Iacocca."

. . . and the way ahead

"I can't predict what the next 25 years of business will look like, but I do know that demography, technology, government regulations, geopolitics, labor conditions, and social mores will powerfully influence the opportunities available. And already, we can see some clues to the future. We clearly know that government is playing a bigger role than it used to. We have certainly gone through a major shift in geopolitics. We don't know how this new struggle will pan out, but history teaches us that geopolitics will have a more profound consequence than we might immediately recognize.

In terms of technology, breakthrough innovations in IT and pharmaceutical development may have run their course. We think of these as growth industries, but they might well be maturing. In demographics, what will happen as retiring baby boomers start withdrawing their money from the market? And then there are the dramatic changes in Asia. Just as Japan created lean manufacturing, is there a new management innovation that's coming from India or China, but hasn't yet been given a name?

In each of these dimensions, there are very important changes afoot. They will coalesce and create opportunities for entrepreneurial leaders to launch new businesses, for managers to maximize the value of existing businesses, and for leaders of change to rescue businesses that have fallen into decline. The one thing that we know for certain is that context is vitally important; it will shape the opportunities in these new times."

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