The most important quality of a great boss is tenacity, not intelligence
7 September 2010
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Capital: Do you approve of Capital's choices in establishing the list of the 50 greatest bosses in history?
Frank Brown: Yes. The common denominator among the bosses whose stories you tell is that their company and ideas prospered after their departure. It is this source of inspiration left as a legacy that makes them not only remarkable managers, but exceptional leaders. You present them by emphasizing their greatest talent, thus distinguishing visionaries, marketing geniuses, strategists... But in my opinion, all those who have been included in your ranking possess both a long-term vision and a formidable power of motivation. My only regret is that there is only one woman, Estée Lauder. But this reflects reality, since in 2009 there were only 12 women among the CEOs of the top 500 companies in the United States.
Capital: More than half of these bosses are American. Does this surprise you?
Frank Brown: No, because for nearly a century the success of the American economy has been mainly due to its capacity for innovation, in the fields of technology and management. The founders of Ford, Motorola, Time Inc., Wal-Mart, Microsoft, Apple, Google... were thus at the origin of revolutions that have changed our way of life. I note, however, that Europe is not only represented by its great business leaders of the 18th and 19th centuries. Bernard Arnault, Ferdinand Piëch, Carlos Ghosn or Dietrich Mateschitz symbolize its willingness to bounce back. Finally, Asia is present on your list with Japanese, Chinese, Korean and Indian bosses. On this continent, it is likely that exceptional CEOs will multiply.
Capital: No South American or African CEO is among the 50. Why?
Frank Brown: The elites of these continents prefer to expatriate to work as executives in international organizations or companies, like Tidjane Thiam, from Côte d'Ivoire and CEO of Prudential. In Brazil and Mexico, Roberto Marinho (founder of TV Globo) or Carlos Slim (Telmex, Grupo Carso) have nevertheless experienced fantastic success. In these two countries, as well as in South Africa, the development of the economy is beginning to slow down the brain drain.
Capital: Reading their stories, the way of thinking and acting of great bosses has not changed since the 19th century. Have management revolutions changed the way companies are managed very little?
Frank Brown: The greatest bosses all know how to bring about change and convince their employees and customers that things can be done differently. This was the case yesterday, it remains so in 2010. If Henry Ford were alive today, he would have invented micro-informatics or developed the Internet!
Capital: It is also striking to note that many great CEOs did not have brilliant studies and experienced failure before succeeding...
Frank Brown:That doesn't surprise me. To become a great boss, will and tenacity count more than pure intelligence or diplomas. Thus, I don't remember that Insead students who became important executives - Helen Alexander, the boss of British bosses, Marius Kloppers, the CEO of the mining giant BHP Billiton, Philippe Houzé, president of the Galeries Lafayette group... - were at the top of their class. Another very important quality is interpersonal skills. Recent research shows that the most innovative executives are those with the largest network of relationships; it consisted of asking bosses who they would take advice from if a problem threatened the existence of their firm. Bill Gates and Richard Branson presented the longest and most diverse contact list (according to age, nationality, sex, activity...). It is this all-round openness to the world that provides them with the ideas that make the activity and organization of their company evolve.
Capital: Among your students, do you spot those who will become CEOs?
Frank Brown: I think so. Once again, those who will go far are not the most gifted or the brightest. But they are brimming with energy and enthusiasm, communicate easily, really say what they think and have a precise idea of the sector of activity or the group in which they want to work.
Capital: What is the difference between top-level managers who become CEOs and those who remain number 2 or number 3 in the hierarchy?
Frank Brown: Commitment. Reaching the supreme level most often means giving up having passions other than work. Not everyone wants to lead the life of a general. But there are two kinds of lieutenants: those who aspire to take the general's place - some succeed, others, more numerous, fail - and those who are content with the status of number 2. The latter, often less comfortable in public, do not wish to embody the company's communication with the media, employees and shareholders. Their role is nevertheless essential. They inform their CEO, discuss strategy and take charge of operations. Without them, the boss would have no team and the work would not be done.
Capital: The age difference between bosses who found their companies very young and those who become CEOs late in their careers is impressive
Frank Brown: This difference tends to decrease, because boards of directors are increasingly choosing CEOs in their forties - this was the case for Carlos Ghosn (Nissan-Renault), Jeffrey Immelt (General Electric) or Indra Nooyi (PepsiCo) -, or even younger, like Jochen Zeitz, who became head of Puma at 29. Conversely, young company creators sometimes hire an older CEO to take care of day-to-day management: Pierre Omidyar, the founder of eBay, thus relied on Meg Whitman, and Sergey Brin and Larry Page, the creators of Google, on Eric Schmidt.
Capital: In your book "The Global Business Leader", you state that a great boss must be optimistic. Why?
Frank Brown: If you want to motivate your employees, it is essential to constantly convey the message: "We can achieve the very ambitious objectives we have set ourselves, it is possible." But this is not a question of seeing everything through rose-tinted glasses. The worst thing would be to say "it's possible" while knowing that it will be extremely difficult to succeed.
Capital: Can we measure a CEO's contribution to the success of their company?
Frank Brown: No. One often has the impression that it is enormous, because he makes the crucial decisions. But, most often, he announces them after they have been jointly approved by the management team. A boss must listen to the views of his seconds before deciding. And the more diverse his team is, the better informed he is. The bankruptcies of Lehman Brothers or Merrill Lynch banks are largely due to the fact that the management teams were monochrome: everyone was cast in the same mold and thought like the boss. The only case in which the CEO sometimes has to make a decision without consulting all his deputies is the occurrence of a serious crisis that must be dealt with as a matter of urgency.
Capital: The bankruptcy or difficulties of certain groups are sometimes due to the fact that their CEO was not up to the job. How can such costly selection errors occur?
Frank Brown: We come back to diversity, this time within the boards of directors. If these are made up of older executives, who have known each other for years and are specialists in the same sector, they tend to choose a CEO who resembles them and with whom they are comfortable, neglecting their mission: to assess the risks that such an appointment poses to the group and its shareholders. This has been too often the case in the recent past. But the main criticism that must be made of boards of directors is that they do not force CEOs to prepare their succession. And this, not five years before their departure, but from the day they are appointed. Smooth transitions - as at Michelin and McDonald's, where the boss who died suddenly was replaced by a member of the existing team - are the exception. In at least half of large companies, such an event would result in a power vacuum and a succession battle.
Capital: In your opinion, humility and integrity are essential qualities for a CEO. The public, on the other hand, perceives bosses as arrogant and self-interested. What about that?
Frank Brown: The desire to accumulate power, to retain it and to display it leads CEOs to make mistakes, because they then tend to decide alone. Humble great bosses (and there are many in your list, François Michelin, Sam Walton, Eiji Toyoda, Ratan Tata...) don't care about displaying their power and knowing what traces they will leave. Their only concern is to do the job well with their teams. As for the perception of CEOs as lacking integrity, it comes from certain scandals (Madoff, Enron...), but also from their often excessive remuneration. Moreover, many of them are offered a golden parachute on their departure, even in case of failure. It is normal that this affects the image of all bosses, because it is shocking.
Capital: Is the fault, once again, with the boards of directors who set these financial conditions?
Frank Brown: Yes. But the current trend towards lower CEO pay is going in the right direction. As is the expansion of the club of American bosses who set their salary at $1 a year, following the old example of Lee Iacocca at Chrysler. Steve Jobs (Apple), Eric Schmidt (Google), Richard Kinder (Kinder Morgan) or John Mackey (Whole Foods) thus want to show that a CEO's remuneration should depend only on his results. Let's hope this initiative will snowball.
Posted online on September 7, 2010
capital.fr
