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One of Thinkers50's Ten Best Management Books of 2023
A timely, actionable book on the virtues that every great leader needs to learn.
—ADAM GRANT, #1 New York Times bestselling author of Think Again and host of the TED podcast WorkLife
Leadership is simply a series of moments, and this book gives you the tools to turn each moment into an opportunity to leave a positive legacy for those you lead.
In this ground-breaking book, award-winning leadership expert and business leader Kirstin Ferguson has written a much-needed practical guide for every modern leader. Whether you are the head of one of the largest companies in the world, supervising a small team, or guiding your family, it will be your ability to integrate your head and heart that will influence your success in leading others and navigating our complex world.
Combining studies from leading thinkers in the field with her own research, and more than three decades of personal experience, Kirstin explains the 8 key attributes of a head and heart leader and provides the tools to measure your own approach. Along the way, she shares her conversations with modern leaders from a broad range of backgrounds whose stories will surprise you, challenge your thinking and inspire you to be the type of leader the world needs.
More Honors for Head & Heart:
Royal Society of Arts Career Book Award
Next Big Idea Club ‘Must Read’
Shortlisted in the 2023 Porchlight Business Book Awards
Shortlisted in the 2023 Australian Business Book Awards
Named in HR Magazine Winter Reading list
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One of Thinkers50's Ten Best Management Books of 2023
A timely, actionable book on the virtues that every great leader needs to learn.
—ADAM GRANT, #1 New York Times bestselling author of Think Again and host of the TED podcast WorkLife
Leadership is simply a series of moments, and this book gives you the tools to turn each moment into an opportunity to leave a positive legacy for those you lead.
In this ground-breaking book, award-winning leadership expert and business leader Kirstin Ferguson has written a much-needed practical guide for every modern leader. Whether you are the head of one of the largest companies in the world, supervising a small team, or guiding your family, it will be your ability to integrate your head and heart that will influence your success in leading others and navigating our complex world.
Combining studies from leading thinkers in the field with her own research, and more than three decades of personal experience, Kirstin explains the 8 key attributes of a head and heart leader and provides the tools to measure your own approach. Along the way, she shares her conversations with modern leaders from a broad range of backgrounds whose stories will surprise you, challenge your thinking and inspire you to be the type of leader the world needs.
More Honors for Head & Heart:
Royal Society of Arts Career Book Award
Next Big Idea Club ‘Must Read’
Shortlisted in the 2023 Porchlight Business Book Awards
Shortlisted in the 2023 Australian Business Book Awards
Named in HR Magazine Winter Reading list
Dr. Kirstin Ferguson is a business leader, company director, keynote speaker, and executive coach. Beginning her career as an officer in the Royal Australian Air Force, Kirstin has held roles that have included CEO of an international consulting firm, and deputy chair of the Australian Broadcasting Corporation. Kirstin writes a weekly column on leadership and work in the Sydney Morning Herald, and is also a contributor to the Australian Financial Review and Forbes. Kirstin was included on Thinkers50 Radar List in 2021 and shortlisted for the Thinkers50 Distinguished Achievement Award in Leadership. In 2023, she was appointed a member of the Order of Australia, in recognition of her "significant service to business and gender equality."
1
LEADERSHIP LEGACIES
MODERN LEADERSHIP ON THE WORLD STAGE
I have asked hundreds of people to name a modern leader and two names come up time and again. The first is a former disc jockey who became the youngest-ever leader of her country. The other is a former comedian who found himself leading from a bunker in the middle of a war.
Leading in the face of tragedy
Jacinda Ardern, once a disc jockey and now the Prime Minister of New Zealand, is a leader who consistently demonstrates what it means to lead with the head and heart. For Ardern, kindness and empathy are critical. ‘We need our leaders to be able to empathise with the circumstances of others; to empathise with the next generation that we’re making decisions on behalf of,’ says Ardern.8 ‘If we focus only on being seen to be the strongest, most powerful person in the room, then I think we lose what we’re meant to be here for. I’m proudly focused on empathy because you can be both empathetic and strong.’9
Ardern’s approach as a modern, head and heart leader came to the world’s attention in wake of the 2019 Christchurch terrorist attack where a lone gunman entered two mosques, killing fifty-one people and injuring forty. In the days following the attack, Ardern gave a powerful speech to the New Zealand Parliament. She explained how she never anticipated having to voice the grief of a nation. Of the victims she said, ‘Those loved ones were brothers, daughters, fathers and children. They were New Zealanders. They are us. And because they are us, we, as a nation, mourn them. We feel a huge duty of care to them, and we have so much we feel the need to say and to do.’
In just a few sentences Ardern managed to create a sense of belonging and embrace the pain the nation was feeling. She also signalled to the nation that inclusion and compassion in this moment was critical.
This wasn’t a moment that was all heart. Ardern also captured the anger of the nation and set the tone for how the country, and the world, should treat the gunman.
‘He sought many things from his act of terror,’ said Ardern, ‘but one was notoriety, and that is why you will never hear me mention his name. He is a terrorist, he is a criminal, he is an extremist, but he will, when I speak, be nameless, and to others I implore you: speak the names of those who were lost rather than the name of the man who took them. He may have sought notoriety but we in New Zealand will give him nothing – not even his name.’
The day after the attack, Ardern visited the traumatised, grief-stricken Muslim community most deeply impacted by the violence. She said later that she wanted to be ‘face to face with their grief’ and knew she needed to ‘reach out and embrace them . . . It’s just who we are as humans.’10
In a simple act of kindness and with deep insight into the context she was leading in, Ardern borrowed a scarf and wore it as a sign of respect to Muslim traditions. Images of Ardern embracing members of the Muslim community were reproduced around the world, including on the side of the tallest building in the world, the Burj Khalifa. A simple act with profound consequences.
Ardern later said she didn’t remember thinking about how she was meant to react or how she was meant to be in that moment. ‘The only thing I did remember thinking was that I knew I couldn’t show every emotion that I was feeling; that wasn’t what everyone needed . . . all I did at that time was just reflect what I was seeing, among this horrific human tragedy.’11
Ardern demonstrated the power of leading with both wisdom and perspective while at the same time demonstrating self-awareness, empathy and humility. She was able to attend to the crisis not only intellectually but also emotionally.12 Ardern perfectly captured the ability to perceive the context in which she was leading – perhaps not even consciously – and then balance that with the natural empathy and humility she could draw upon in the wake of such an unspeakable tragedy.
Leading from a bunker
Far from New Zealand, another modern leader captured the world’s attention in 2022. The President of Ukraine, Volodymyr Zelensky, had a public life before politics that has become well known. Zelensky was a comedian and successful television producer who played a role as the nation’s president before undertaking the role in real life. In the television program, his character, a high school history teacher, is surreptitiously recorded by one of his students as he rants against corruption. The video goes viral and without campaigning or even wanting the job, he is elected president of Ukraine. The humble everyman, out of his depth in every respect, goes on to become a heroic leader of his country. It is hard to know where the fictional world ends and the real world begins. The popular television series was called Servant of the People and now Zelensky’s political party is also called Servant of the People.
It would be easy to critique Zelensky as an entertainer, staging his performance as a wartime president. But to do so would be a disservice to the modern leadership he has consistently displayed and the loyalty and combined sense of purpose he has built among Ukrainians in their darkest hour.
The title of Zelensky’s television program, and now the name of his political party, is reflective of his leadership style. He knows his role is to serve the people of Ukraine and he reinforces his role through the way he dresses, the way he communicates and the way he demands action from the Western world. And it is not just in wartime. During his inaugural address in 2019, Zelensky told the government, ‘I really do not want my picture in your offices: the president is not an icon, an idol, or a portrait. Hang your kids’ photos instead, and look at them each time you are making a decision.’13
During the Russian invasion of Ukraine, Zelensky was only ever seen in his trademark military green t-shirt and fatigue pants. He sought to stand alongside the people of Ukraine both metaphorically and physically and wear what millions of other Ukrainians, all volunteering to defend their country, were wearing. He rejected offers to flee the country at the start of the war with his now infamous comment, ‘The fight is here. I need ammunition, not a ride.’ Instead, world leaders visited Zelensky in war-torn Kyiv, at great risk to their lives.
Zelensky, who has been described as ‘Churchill with an iPhone’14 imbues his speeches with passion for the cause, empathy for his people and anger towards those he perceives are not helping Ukraine enough. He is masterful at ‘reading the room’, adapting his message to the greatest effect for his audience. When speaking to politicians in the House of Commons in the UK, Zelensky channelled Shakespeare. When he spoke to the US Senate, he reminded them the United States is the leader of the free world. When he addressed the European Council summit he invoked memories of the Second World War when Hungarian Jews were murdered on the shores of the Danube.15
Zelensky integrates his head and heart leadership seamlessly at every opportunity. He explains the tactical and strategic reasons he needs weapons to defend his country while also sharing stories of tragic war crimes against his citizens to build empathy and reinforce his message.
Integrating our public and private lives
While Ardern and Zelensky exemplify the style of modern leadership needed in the world today, remarkably this kind of leadership is rare. The reason Ardern and Zelensky’s actions are notable is because we don’t see modern leaders behave in these ways nearly often enough, especially not on the world stage. What stands Ardern and Zelensky apart is their ability to seamlessly integrate their personal qualities and authenticity with the authority invested to them through their formal roles.
Jacinda Ardern was one of the earliest world leaders to use social media to invite people into her home and talk about serious issues in an informal way. In November 2021, Ardern addressed the nation via Facebook Live to update New Zealand citizens on the COVID-19 response. Mid-sentence, the Prime Minister was interrupted by her then three-year-old daughter who was supposed to be in bed. Ardern’s reaction? Simply telling her daughter to pop back into bed and laughing about her bedtime parenting failure. What parent of a three-year-old hasn’t had that experience?
These are the moments we love most from modern leaders. They are real.
Ardern and Zelensky stand apart from polished career politicians and corporate leaders who curate an image of themselves for public consumption, different to that they have in their private lives. Modern leaders like Ardern and Zelensky realise integrating how they show up as leaders in public with the leaders they are in private is what makes them effective.
Modern leaders like Ardern and Zelensky realise integrating how they show up as leaders in public with the leaders they are in private is what makes them effective.
As impressive as the leadership of Ardern and Zelensky might be, their experiences as leaders still feel far from ours. These are two world leaders in roles we are unlikely to ever find ourselves. But the opportunity leaders like Ardern and Zelensky offer us in a very public way is a reminder that this style of modern leadership is the type we need in our businesses, communities and families. It is also a style of leadership within all our abilities because unlike the traditional leaders of the past, the art of modern leadership which Ardern and Zelensky have mastered relies on attributes we can already draw on at any time.
The idea that you can be one kind of leader at work – perhaps head-based and analytical, logical, capable and unemotional – and then a different type of leader at home or with your community, is one that history has ingrained in us for centuries but which needs to be firmly debunked. A modern leader understands both reason and emotion, or the head and heart, are important. The key to mastering the art of being a modern leader is knowing what is needed when. Being human and making hard leadership decisions are not mutually exclusive, but do require both wisdom and empathy.
The technical ‘head’ skills we develop as leaders are critical. No leader can effectively lead without being able to do whatever is needed to propel a situation, conversation, business or country forward. However, for too long the emotions of leaders and the impacts of their leadership have been ignored. The impact of stigmatising ‘soft’ leadership traits over the centuries has meant being vulnerable, compassionate, or even kind, has been seen as a weakness. Global leaders like Jacinda Ardern and Volodymyr Zelensky are restoring humanity and showing you can be strong and lead with empathy and emotion.
THE PROBLEM WITH HEROIC LEADERS
So much of what we think, feel and believe about leadership has been crafted through centuries of thinking about leaders in a certain way. We have been educated, particularly in Western cultures, to think of great leaders as someone other than ourselves. Understanding the legacy of where we have come from in our views of leadership in the Western world is important in helping us rethink leadership in a modern context.
Just as our personal histories – including our origin stories, educational background, gender, sexuality, disabilities – define us as leaders today, so too does the history of who we have celebrated as leaders in the past. We are going to explore why the influence of ideas from more than two centuries ago still drives our thinking of what it means to be a ‘great leader’ and why we have seen, even in relatively recent times, a resurgence of ‘great leaders’ who turned out to be anything but the kind of leaders we should revere. This history will help us understand Western ways of thinking about leadership which dominates the kind of leaders we find in the world today.
The question of who is classified as a leader and what leadership involves has stumped researchers, companies, institutions and others since leadership research began in the Western world. There are more than 200 different definitions and theories of leadership – it has become an industry of its own.
Why so many Great Men?
Before the academic field of leadership took hold, historians were already gathering the stories of men who conquered foreign lands, explored vast seas, commanded empires or made scientific discoveries. Mere mortals were educated to believe leaders needed to emulate grand historical figures of the past – men such as Julius Caesar, Alexander the Great, Napoleon Bonaparte, Isaac Newton and Christopher Columbus. It is both fascinating and infuriating that well into the twenty-first century we are still living with this legacy.
The idea that only some men were entitled to lead has driven our views of leadership for the past two centuries. We have nineteenth-century Scottish historian, essayist and philosopher Thomas Carlyle to thank. In the eyes of men like Carlyle, leadership was only capable of being demonstrated by men, and great ones at that. Carlyle argued that leaders (although he called them ‘heroes’) were born and not made and were certainly not capable of being trained. Only those men endowed with heroic potential could become leaders. It was these men who had superior intellect, heroic courage and extraordinary leadership abilities. Some, according to Carlyle, had even been inspired by God.
While Carlyle was prepared to accept even great men had flaws, he believed it was their ability to overcome these difficulties that made them such heroes. Heroic leaders ‘were naturally endowed with supreme intelligence, coming up with brilliant ideas and directives from the mountaintop that lower echelons were then expected to execute’.16 After all, according to Carlyle, the history of the world was but the biography of great men.17
Carlyle’s Great Man theory of the mid-nineteenth century rested on the assumption that all great leaders are born with certain traits that allow them to lead on instinct and wield authority and power. So unique were the traits these men were born with, and so strong their power to inspire, these men deserved to lead; the world needed great men at the helm.
There is little doubting that Carlyle’s work would have been a welcome philosophy at the time for men in positions of influence in business, academia, the military and the sciences. It was confirmation of their entitlement to lead. These were precisely the men Carlyle proposed were Great Men in possession of special, unique or extraordinary attributes (even physical characteristics) that others did not have.
Thinking of leaders as a small group of entitled, privileged men had a profound impact on how we viewed the leaders who shaped our world.
Some men, but not all men
There are clearly many issues with the Great Man theory when considering it from a twenty-first-century perspective. Not only were women excluded, but the theory also excluded many men, not to mention that Carlyle considered the Anglo-Saxon race as superior to all others.18 It seemed not just anyone could assume the role of a leader.
When Harvard MBA programs officially began in 1908, courses focused on the ‘hard’ skills of management – such as accounting, finance and strategy – since it was assumed good leaders would have an innate ability to lead and would learn that on the job.19 Technical skills mattered because, according to the views of the time, leaders were born with a long list of lofty traits such as integrity, competence, intelligence, vision, decisiveness, self-confidence, trustworthiness and motivation.
This educational focus did not mean early business schools ignored the broader responsibilities of leaders altogether. In fact, the original aims of the Tuck School of Business, founded in 1900 at Dartmouth College, was to educate ‘the man first and the businessman afterwards’.20 Unfortunately, this sense of social and public responsibility crumbled over the century, particularly in the 1970s and 1980s when the world witnessed corporate leaders who saw themselves as leading only to grow shareholder returns.
The search for the mystical traits of leaders dominated the twentieth century and left a powerful legacy in the way we think about leaders even today. Ironically, it was the idolisation of great men and the desire to replicate these traits that eventually opened the leadership door for anyone other than a great man to walk through. Sadly, it would take a world war and the desperate need for a replenishment of leaders to prompt the change.
AN UNLIKELY MOTHER–DAUGHTER DUO EMERGES
By the 1940s various lists of leadership qualities had been developed to try to capture what made some great men great leaders. The longer the list became, the more the search grew to try to predict who would be a good leader.
Katherine Cook Briggs and her daughter, Isabel Briggs Myers, lived a simple life in Pennsylvania, far from the boardrooms of power or battlefields of war. These women were not leaders or heroes in any sense of Carlyle’s definition, yet we owe much to the influence of these two women in rethinking who was capable of being a leader at all.
Briggs was born in 1875 into a family who, somewhat unusually for the time, had promoted education for the girls in the family as well as the boys. Homeschooled until she was fourteen, Briggs earnt a degree in agriculture, later becoming a teacher. When Briggs met her future son-in-law, Clarence, who was a lawyer, she noticed he had a different way of seeing the world to the rest of her family and she wanted to understand why.
Inspired by the work of Carl Jung, Briggs and her daughter Isabel Myers soon sought ways to turn Jung’s theoretical positions into practice. Myers knew she needed to understand statistical methods, so she became an apprentice to a personnel manager in a large bank, where she learnt about statistical modelling and how to score and validate the results.
The onset of World War Two and the urgent requirement for jobs to be filled provided the opportunity for the mother-and-daughter team to test their work. Myers and Briggs believed understanding personality preferences would help women enter the industrial workforce for the first time by identifying the wartime jobs that would be most suited to them.21 From humble beginnings, the Myers-Briggs Type Indicator (MBTI) became one of the most widely used leadership psychometric tests around the world. Still available today, millions of people have taken the test to find out their Myers-Briggs personality type.
The MBTI opened the door to a view that everyone had the potential to be a leader. The idea that you had to inherit leadership traits from your father, or you needed to have some special attribute like physical fitness to be a leader, desperately needed rethinking and this unexpected mother-daughter combination prompted people around the world to do just that.
In recent years, the MBTI has received considerable justified criticism and been called a ‘fad that won’t die’.22 The MBTI was based on untested Jungian theories and ignored the fact most personality traits fall somewhere on a spectrum, rather than into sixteen neat pigeonholes. Even more concerning, more than 50 per cent of people who take the test get a different result on a second attempt.
What is extraordinary about the work of Myers-Briggs, is that two women were able to influence thinking about leadership for more than half a century at a time when leaders were still widely considered to be great men. They did so largely without any relevant formal education and without any formal leadership experience themselves. There is no doubt they were both leaders – formal and informal – and their work has had a profound influence on the way we think today.
THE ORGANISATION MAN
In the wake of World War Two, leadership theories boomed alongside a strong focus on leadership behaviours. The idea that leaders were born and not made was being turned on its head. Employers understood leadership could be taught. Even more importantly, it was accepted that it was vital to understand the impact of a leader’s behaviour on those they led. It was this behaviour, rather than any traits they may have been born with, that would determine whether a leader was effective.
At the same time, layers of management were a hallmark of large corporations. Middle managers, often known as ‘organisation men’, were trained by their companies to rise through the ranks. The idea of a job for life, where employees moved from the mail room to the upstairs corner office, gained popularity as workers, primarily men, aspired to progress through the ranks to the most senior formal leadership roles. In 1952, two-thirds of senior executives in the United States had more than twenty years’ service with their employer.23
The 1960s may have been all about the Vietnam War, landing on the moon and Woodstock for some, but for those attending university or working in the corporate world, there was a different kind of revolution underway. MBA programs were opening more widely and there was a hankering to understand what made one leader more successful than another.
Douglas McGregor, the head of the organisational studies department at the MIT Sloan School of Management, was one researcher interested in how employees were impacted by the management styles of their leaders. In his book The Human Side of Enterprise published in 1960, McGregor argued there were two ways managers could think about the people they led. He argued these thinking patterns, whether conscious or not, impacted decisions managers made.
Don’t be a Theory X manager
Theory X managers were, according to McGregor, the most common type of manager of the time. They believed human nature to be fundamentally corrupt and that people hated to work. Theory X managers believed people were primarily motivated by fear and a desire to cut corners because they were inherently lazy. Armed with these beliefs, Theory X managers saw their role as needing to supervise worker performance because workers were only motivated by money. They believed workers wanted job security, not responsibility.24
As extreme as these views sound, they were not uncommon, and you may know a traditional leader who shares some of these beliefs. Elements of Theory X thinking patterns remain in leaders today who use financial incentives to drive individual or cultural change, or feel they need to lead by showing they are the smartest person in the room.
Theory Y, the modern leader of the time
McGregor suggested managers could instead aspire to be Theory Y managers who saw work, in its most noble sense, built into human nature. They understood that while some people might behave poorly on the job, including being disengaged or even selfish, this was simply a result of the way Theory X managers treated them.
McGregor argued people ‘can’t be goaded, cajoled, threatened, or even bribed with money into giving their hearts and souls to an enterprise’.25 Instead, managers could create an environment where workers rose to the occasion and became committed to the cause. Theory Y managers believed that individuals craved responsibility and would readily accept it.
While this view is more common now, it was revolutionary thinking in 1960. McGregor’s Theory Y ideas contradicted the hierarchical structure and culture of virtually all organisations at the time, including the curriculum being taught in most business schools. In his work consulting to some of the largest American companies, McGregor had seen that the most effective leaders had led with Theory Y at the centre – those leaders believed in their hearts that people had the motivation, potential to develop and capacity to assume responsibility.
Courage to experiment
Businessman Bill Gore was one business leader heavily influenced by the emerging leadership ideas of McGregor. After an early career at DuPont, Bill Gore had branched out to build his business, W. L. Gore & Associates. The company, which began in 1958, now has US$3.8 billion in revenue and more than 11,500 employees across twenty-five countries in the world.
While you may not know him by name, you most likely have worn or used something Gore developed. In 1969 Gore discovered a new polymer which we now know as Gore-Tex and is found in virtually all outdoor wear. From that discovery, the company known as Gore has developed more than 3400 unique inventions in a wide range of fields including electronics, medical devices and polymer processing.
In the 1960s, Bill Gore and his wife, Genevieve, who was the Gore company’s first human resources manager, were heavily influenced by the Theory Y work of McGregor but were unaware of any new company built using these principles from the ground up. The Gores were intrigued by whether you could have a company with no hierarchy where employees felt free to talk with anyone else. At the time, this was unheard of.
The Gores were intrigued by whether you could have a company with no hierarchy where employees felt free to talk with anyone else. At the time, this was unheard of.
Gore set out to create a ‘lattice’ rather than a strict hierarchical structure. Even today at Gore, while there is a CEO and divisional leaders, there are no management layers and no organisational chart – a tool Gore called a façade of authoritarian hierarchy. Few people have titles at the company, and no one has a boss. These kinds of radical ideas in the 1960s, when men in grey suits in the corner office dominated the corporate landscape, were rare.
Bill Gore embraced the idea that everyone, not just those in formal positions, could lead. Due to a distributed leadership model, even today many employees at Gore refer to themselves as leaders, regardless of their formal title. As a result, the company has an entire workforce of leaders ready to step up and be called upon as the situation requires.
THE DARK SIDE OF LEADERSHIP
By the 1980s the business of teaching people how to become leaders had boomed. Our understanding of what makes a leader effective was being studied in universities and trained in workplaces around the world. There was a belief that someone who was successful, confident, wealthy and assertive was the kind of leader needed to run big business. Think of the Gordon Gecko character in the movie Wall Street or the property mogul Donald Trump. Consequently, business leaders with charismatic personalities, flashy promises and autocratic methods emerged.
During the 1980s these leaders focused on the importance of charisma and saw a significant increase in social status, much like Hollywood stars or professional athletes. Prominent business leaders of the time were described as idols, heroes, saviours, warriors, magicians and demi-gods.26 Socially elite CEOs became the focus of news stories, society pages and bestselling biographies, as we fixated on the personas and characteristics of the leaders themselves.27 Whereas in the mid-twentieth century, the CEO of a typical large company may have been paid twenty times a line worker’s salary, a CEO thirty years later soon began to make nearly 300 times as much.28
Before author Michael Lewis’s successful books Moneyball, The Big Short or The Blind Side were published, he had been a bond salesman with Salomon Brothers. His first book, Liar’s Poker, was published in 1989 about his time on Wall Street. In it, Lewis recalls how, on his first day at Salomon Brothers, he and other new traders were told the trading floor was like a jungle and the guy you ended up working for would become your jungle leader. Surviving at Salomon Brothers depended on your ability to know how to survive in the jungle. Being a Salomon trainee, according to Lewis, was like being beaten up every day by the neighbourhood bully. Not surprisingly, within three years, three-quarters of all new graduates had moved on.
Speaking in 2022, Lewis said that in the 1980s Wall Street ‘tolerated a range of human behaviour and a range of characters that corporations don’t today. The corporate culture was almost anything goes.’29
What mattered most to charismatic leaders during this period was power and making money. There was a popular prevailing belief that leadership meant motivating employees to do what they otherwise would not do, possibly through inspiring, emotionally charged visions, which helped perpetuate the cult of such leaders.30
Neutron Jack
Jack Welch, the only son of a homemaker and a railway conductor, rose through the ranks of the multinational corporation General Electric (GE) to become the company’s youngest-ever CEO and chairman. It was a role he would hold for the next twenty years as he profoundly reshaped GE, increasing the market value of the company from $12 billion in 1981 to $410 billion when he retired. By 1999, Welch had been named ‘Manager of the Century’ by Fortune magazine. When he led GE throughout the 1980s and 1990s he epitomised the strong, decisive, charismatic leader of the period who was focused on increasing shareholders’ returns.
Not surprisingly, there was a cost to all this business growth. In a period of four years, Welch cut 100,000 jobs and his critics questioned whether the short-term pressure he applied to employees may have led GE to cut corners and contribute to the many scandals and environmental issues that arose during his reign. In the early 1980s Welch received a nickname that stuck, but one he was known to dislike: Neutron Jack. He had become famous for ‘vaporizing people but leaving buildings intact’.31
People who worked for Welch described it like being at war. ‘A lot of people get shot up; the survivors go on to the next battle.’32 Welch was famous for his explosive temper and would argue his way from one decision to another, causing those he led to cower in fear. He fostered a cutthroat culture including a process of ‘stack ranking’ where managers were required to sort their workers into A, B and C employees – A workers were the top 20 per cent of performers, B workers were 70 per cent of workers who were average, and C workers were the bottom 10 per cent. Every year anyone graded as a C was fired. This edict was implemented across GE regardless of how well the company was doing; tens of thousands of employees would be shown the door every year. It left most workers afraid for their jobs and colleagues in competition with one another.33
The culture Welch led and created within GE was destructive and left a legacy the company never overcame. This legacy also extended beyond the confines of GE. For a time in the early part of the twenty-first century, five of the top thirty companies in the Dow Jones Industrial average were run by men who had worked for Neutron Jack.34
The traditional-leader model Jack Welch represented is still evident in the corporate and political world today. His leadership has had a lasting influence on how workers are treated, how shareholders are prioritised and how CEOs see their role. Interestingly, Kenneth Lay was another business leader who enjoyed a rise to public fame during the 1980s as the CEO and chairman of Enron, a company which would later collapse in the face of significant financial crimes and fraud.
By the end of the twentieth century, our fascination with larger-than-life leaders gave way to feelings of frustration and anger. There was widespread recognition that a new type of leader was needed.
Hula skirts on Wall Street
While there has been much written about the 1980s as a period of leader worship and excess, it was not the case that all leaders during that time were in the mould of Jack Welch or Kenneth Lay. In 1984 the second wealthiest man in the United States, and the leader of one of the country’s largest businesses, took to Wall Street in a hula skirt.
Samuel Moore Walton was a highly respected businessman and chairman of the Wal-Mart group of companies. He had bet his chief operating officer that Walmart could not achieve a pre-tax profit of 8 per cent on sales at a time when the industry average was 3 per cent. When the company went on to exceed the target, the question on his leadership team’s lips was whether Walton would follow through on his agreement. You can imagine a man as powerful as Walton, who had just battled a bout of leukaemia at the age of sixty-five, could have passed on his commitment. After all, Walton was said to be genuinely embarrassed by what he had agreed to do. Nevertheless, Walton followed through. He donned a bright-green Hawaiian shirt, grass hula skirt and headpiece in freezing temperatures on Wall Street. It wasn’t a quiet, subtle event. A troupe of three Hawaiian dances and a two-piece Hawaiian band with ukulele and a xylophone joined him, along with a media pack of more than one hundred people including journalists from Good Morning America, CBS and CNN.
Professor Richard Tedlow from Harvard University has studied the great titans of industry and considered this event in detail. Walton had been preaching to his 65,000 employees for decades a belief in leadership that opposed the Great Man theory and excesses of the 1980s. He believed rank did not have its privileges and salespeople on the floor were just as important as top executives. Tedlow believes Walton’s dance signalled he was a down-to-earth guy who didn’t have any inflated view of himself.35
Walton led with humility and had the self-awareness to know the impact such a moment of leadership could have on his wider employee group. And the response to the event reflected how his leadership was viewed by those who worked for him. ‘He’s a really great guy that carries through on his promises,’ said one employee.36
It is too simplistic to say that a leader as powerful as Walton could create a new wave of leaders in the 1980s simply by donning a hula skirt on Wall Street. While a token of humble leadership, centuries of thinking of leaders as heroic idols persisted. Leaders were still those with formal positions of power and titles with great authority and remained powerful, white, rich men.
It has only been since the start of the twenty-first century that we have ushered in a new era of leadership. Modern leaders like New Zealand’s Prime Minister Jacinda Ardern and Ukraine’s President Volodymyr Zelensky represent a new style of leadership on the world stage. They also represent a new model of leadership for us all.
KEY TAKEAWAYS
• Understanding the legacy of where we have come from in our views of leadership in the Western world is important in helping us rethink leadership in a modern context.
• The people we think about and celebrate as leaders have been shaped by centuries of Western tradition which have largely excluded all but the most powerful and privileged of men.
• Modern leaders like Prime Minister Jacinda Ardern and President Volodymyr Zelensky have demonstrated a new model of leadership on the world stage through successfully integrating their head and heart.
FURTHER READING
Susan David, Emotional Agility: Get unstuck, embrace change and thrive in work and life (2016).
David Gelles, The Man who Broke Capitalism: How Jack Welch gutted the heartland and crushed the soul of corporate America – and how to undo his legacy (2022).
Art Kleiner, The Age of Heretics: Heroes, outlaws, and the forerunners of corporate change (1996).
Michael Lewis, Liar’s Poker (1989).
Richard S. Tedlow, The Emergence of Charismatic Business Leadership (2021).