My friends at the Washington Post, where I’m a member of the newspaper’s “On Leadership” panel, posed a provocative question to the group that is perfect for the times in which we live. Here’s what the editors asked: “Tony Hayward, once credited for BP’s ‘green’ turnaround, is forced to resign in disgrace. Michael Dell, the revolutionary high-tech entrepreneur, is sanctioned for misleading investors. Wall Street titans, once lionized, are now reviled. Where have all the CEO heroes gone?”
I offered the Post a (necessarily) short answer to its big question, as did a terrific collection of other panelists. I want to use this post to reckon more deeply with the question, and to offer some answers that I hope will prompt you to develop your own answers as well.
So let me start by rephrasing the question. As we try to make sense of the sorry state of American business leadership today, the real issue isn’t, Where have the corporate heroes gone? The issue is, How do we know a corporate hero when we see one?
I have spent more than 20 years–first as a young editor at Harvard Business Review, then as a cofounder and founding editor of Fast Company, and now as someone who writes books and interacts with business audiences around the world–studying organizations and leaders that are setting the idea agenda for business. I’m not looking for “heroes” per se, but for role models from which the rest of us can learn. And I’m always amazed by the fact that the companies and leaders I most admire are rarely the ones that show up on the front pages of the business section or on the covers of business magazines.
Here’s why: So much of the way so many of us think about business remains rooted in the logic of power. How big has a company become under its hard-charging CEO? How much wealth have its shareholders amassed as a result of strategic calculations made in the corner office? But as my friend and publishing-industry legend Harriet Rubin likes to say, and as I’ve written before on this blog, “Freedom is actually a bigger game than power. Power is about what you control. Freedom is about what you unleash.”
In other words, the real heroes of business are leaders who are more concerned about unleashing freedom than amassing power–about creating economic value based on the values they espouse and that their colleagues live and work by every day. Business heroes aren’t defined how many cool gadgets their companies make or how quickly their stock price appreciates. They are defined by the quality of the ideas around which they build their organizations, the depth of the humanity with which they guide their colleagues, and the humility with which they approach the truly difficult challenge of making positive change in perilous times.
So based on those criteria, who are a couple of my business heroes? I’d start with Arkadi Kuhlmann, founder and CEO of ING Direct, the Internet-based savings bank, about whom I’ve written before. Arkadi didn’t just start a company. He invented a completely different kind of bank, with no brick-and-mortar branches, no traditional checking accounts–but a genuine strategic commitment to reimagine what it means to be a bank and why you’d want to be in the banking business in the first place.
His company has taken the U.S. market by storm. In less then 10 years it has signed up nearly 8 million customers, attracted more than $90 billion in deposits, generated big annual profits–all with 2,500 employees. It is literally a money machine, signing up 100,000 new customers and collecting a billion dollars in new deposits every month. It is an amazing technology story, an amazing business-model story.
But when I went to visit Arkadi for the first time in Wilmington, Delaware, he didn’t want to talk about his company’s technology or its business model. He wanted to talk about its value system–the ideas it stands for, what makes the company different. The core purpose of ING Direct, he said, is to “lead consumers back to savings.” The company exists to challenge a financial culture that it believes encourages people to spend too much, save too little, and borrow too heavily. That wasn’t a popular point of view back in 2000–but it certainly is now.
Almost everything the company does–the products it offers, the customers it targets, the ads it runs, the political positions it takes–stands counter to how established banks do things. ING Direct has won big because it has changed the game. When it comes to strategy, ING Direct is more than just a company, it’s a cause.
Another case study in business heroism is the remarkable turnaround of a company called DaVita, the largest provider of kidney-dialysis services in the United States, under the leadership of CEO Kent Thiry. At one level, this is a classic business comeback. CEO Thiry took over in October 1999, when DaVita was on the verge of bankruptcy and its share price had sunk to $2. Today, the company is growing fast, generating big profits, and has a share price of around $60.
But the real story isn’t about numbers, it’s about people–its 35,000 employees and its 125,000 patients. The first thing the new CEO did was to send the message, “We are going to flip the ends and the means. We are a community first and a company second. If we figure out how to treat the patients right, and treat each other right, the business side of things will take care of itself.”
That’s precisely what happened. This is an organization that wears its values on its sleeve–that is more interested in creating “ripples of citizen leadership” than an army of cut-throat dealmakers. I’ve spent hours in various DaVita dialysis clinics, and it’s hard to describe the level of personal identification and emotional engagement between staffers and patients.
This is not the kind of language that gets lionized by the business press–even if DaVita’s market cap has increased from $200 million to some $6 billion over the last decade. It’s too “soft,” too “human,” not “tough enough” for the tough times in which we live and work. But to me, this is what true leadership sounds like–and what meaningful business success looks like.
So how do we know a business hero when we see one? When we see CEOs who understand the direct connection between human values and economic value. When those CEOs build organizations in which everyone has a voice. And when those organizations don’t just outcompete their rivals, but redefine the sense of what’s possible–what really matters–in their fields. With those metrics in mind, there are plenty of corporate heroes out there–if you know what you’re looking for.
So now I put the question to you. In these troubled times, we can all use a few tales of heroism. How do you define what it means to be a business hero? And who are one or two of the heroes from which you try to learn how to do business? Leave your answers in the Comments area below, and we’ll get a conversation going.
Reprinted from Harvard Business Review