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 / Winter 2009 / Issue 57(originally published by Booz & Company)


Best Business Books 2009: Leadership

Means to a Greater End

Kenneth Hopper and William Hopper
The Puritan Gift: Reclaiming the American Dream amidst Global Financial Chaos
(revised ed., I.B. Tauris, 2009)

Warren Bennis, Daniel Goleman, and James O’Toole, with Patricia Ward Biederman
Transparency: How Leaders Create a Culture of Candor
(Jossey-Bass, 2008)

Edgar H. Schein
Helping: How to Offer, Give, and Receive Help
(Berrett-Koehler, 2009)

Alan Deutschman
Walk the Walk: The #1 Rule for Real Leaders
(Portfolio, 2009)

C. Julia Huang
Charisma and Compassion: Cheng Yen and the Buddhist Tzu Chi Movement
(Harvard University Press, 2009)

If ever there was a time when leadership was badly needed and sorely tested, it was during the 12 months after October 2008. The financial crash that almost became a catastrophe was a self-inflicted wound. It did not need to happen. There were warnings enough from concerned observers of troubles ahead, but those in positions of power in leading organizations paid no heed until it was too late.

As financial journalist Gillian Tett put it in her book Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe (Free Press, 2009; see “A Wealth of Explanations,” by Clive Crook), the “social silence” around the explosion of derivatives, and around the wealth and influence of the banking cadre, encouraged financiers to regard their activities as detached from the rest of society, until they became “like the inhabitants of Plato’s cave, who could see shadows of outside reality flickering on the walls but rarely encountered that reality themselves.” Nor did they show interest in looking outside. Too many leaders, ensconced in their tall towers, insulated themselves from the world they were supposed to be serving and forgot what they were about.

Lesson from Our Forefathers

The best reminder of that underlying purpose comes from a book by brothers Kenneth and William Hopper — Kenneth, an engineer in business  in the U.S.; William, an investment banker in London. The Puritan Gift: Reclaiming the American Dream amidst Global Financial Chaos may have escaped notice when first published in 2007 because of its unusual title, but this year’s paperback with a new preface by that wise man Russell Ackoff deserves rediscovery at this critical time. “Puritan gift” refers to what the authors describe as the United States’ superb managerial culture as established by the descendants of the country’s early settlers. Those settlers sought to create God’s kingdom on earth in New England in the 17th century. As businessmen they also needed to earn a return on capital but saw no conflict between the two. Profit to them was the means to a greater end.

The Puritan gift, therefore, is that rare ability to create and manage organizations that serve a useful purpose in society. As the authors note, it later inspired the creation of a federal political culture that enabled 13 obscure colonies at the edge of the civilized world to transform themselves, with the passage of time, into a great power. This managerial culture was even successfully transplanted to Japan under the U.S. occupation after World War II and turned a poor country lacking natural resources into the second-richest in the world.

It was, the Hoppers suggest, the United States’ gift to the world until sometime around 1970, when profit-and-loss accounting began to take priority, a time they describe as “the years that the locust ate.” It was then that the cult of the expert and the rise of the so-called professional manager shifted the focus of management to money as the measure that mattered, for self and organization. The elevation of shareholder value as the main criterion of business success mistook the means for the ends, a classic category error for logicians, but a calamitous strategic mistake for leaders. This error was compounded when managerial reward was tied to share value.

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