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 / Winter 2003 / Issue 33(originally published by Booz & Company)


Best Business Books 2003: Leadership

Finally, Gerstner describes four kinds of people: those who make things happen; those to whom things happen; those who watch things happen; and those who don’t even know that things are happening. The book offers useful advice to would-be leaders on how to be in the first category.

Leadership (Miramax, 2002), by former New York City Mayor Rudolph W. Giuliani and Ken Kurson, attempts to describe leadership techniques and principles useful to executives in both government and industry. Some of Giuliani’s principles sound like Gerstner’s: He says leaders should surround themselves with great people, see things for themselves rather than relying on others, and organize around a purpose. Like Gerstner, he stresses accountability, stating that leaders need relevant data, performance indicators, and regular meetings to probe results. Both authors stress the importance of understanding enough of the fundamentals and details of a business to distinguish between authentic and make-believe experts, between those who are truly competent and those who talk a good game: “You can’t fake expertise.”

In a chilling chapter on the events of September 11, 2001, Giuliani discusses how relentless preparation, a tradition of working across departmental boundaries, and scenario planning helped his team react positively to the almost unimaginable. “You must prepare for everything you can think of, because no one, no matter how gifted, can perform without careful preparation,” he writes.

Giuliani’s advice tends to be sound, if not original. His advice to leaders is raise the bar, underpromise and overdeliver, “don’t assume a damn thing,” always sweat the small stuff, stand up to bullies, and control your emotions when under pressure. Leadership is an important book for leaders in government, and it offers a few useful lessons to those in business. Unfortunately, all Giuliani’s experiences and examples are from government, and not all translate to the private sector.

Academic Perspectives
Compared with the memoirs of CEOs and mayors, leadership books by scholars tend to be derivative and deadly dull. Yet, because their authors bring impressive credentials to the subject, four books among this year’s crop promised to be different. Harvard professor Rakesh Khurana is a new voice in the field; he offers data to support unconventional and controversial conclusions. Pulitzer Prize–winning historian James MacGregor Burns is the most distinguished scholar of our era to address the subject of leadership. Mihaly Csikszentmihalyi’s notion of “flow” is one of the hottest ideas in psychology today. And organizational theorist Edward E. Lawler III, recipient of the Michael Losey Award — the closest thing there is to a Nobel Prize for management — brings 40 years of quality research to his subject.

Khurana’s Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs (Princeton University Press, 2002) takes the unorthodox position that the CEO labor market is inefficient because it has too few buyers and sellers. He argues that most CEO search processes have lost legitimacy and are not transparent to outsiders and investors. Khurana claims that boards and executive search firms look for outsiders as saviors, valuing charismatic attributes more highly than relevant skills and experience. Using data on CEO turnover at 850 U.S. firms, the author concludes that top executives have no significant impact on performance. That being so, searches for outside CEOs are a waste of money.

Khurana lumps people who study executive performance into three categories: those who believe CEOs are important, those who feel CEOs are so constrained in what they can do that they have little impact, and those who say it all depends. Citing the national fixation on Alan Greenspan’s supposed impact on the economy, he argues Americans have a cultural bias toward the first category and thus overestimate the contribution of individual business leaders.

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