James O'Toole leader of the month

National Leader of the Month for August 2008

James O'Toole

LeaderNetwork.org has provided two mediums for you to explore the insights of National Leader of the Month James O'Toole: read them below and listen to excerpts from a conversation on leadership between Brian McCormick and James O'Toole. To listen to the podcast, copy and paste the following RSS link into your preferred podcast software: http://www.leadernetwork.org/leadership_podcast.rss. In order to begin playing the audio in a separate window, click here .

During James O'Toole's distinguished career, he has left his mark on the field of leadership. He has contributed to the field as a teacher, researcher, moderator, speaker, and author.

On the road to attaining such a broad-based and well-grounded perspective on leaders, managers, and organizations, Dr. O'Toole has worked with numerous organizations and been educated at one of the world's finest institutions (he was a Rhodes Scholar at Oxford).

For his contributions to the field of leadership, James O'Toole is the National Leader of the Month for August 2008.

Bio: serves as the Daniels Distinguished Professor of Business Ethics at the University of Denver’s Daniels College of Business; previously held the University Associates' Chair of Management at the University of Southern California’s business school and served as Executive Director of the Leadership Institute and editor of New Management magazine there; research and writings have been in the areas of leadership, philosophy, ethics, and corporate culture; has addressed dozens of major corporations and professional groups; has authored sixteen books: Vanguard Management was named "One of the best business and economics books of 1985" by the editors of Business Week; latest book is Transparency: How Leaders Create a Culture of Candor (with Warren Bennis and Daniel Goleman, 2008); has a doctorate in Social Anthropology from Oxford University; Rhodes Scholar; has served as Chair of the Booz/Allen/Hamilton Strategic Leadership Center; birthday: April 15; calls home: San Francisco and Denver

Max De Pree's Leadership is an Art. Over the years I’ve had the opportunity to meet a great number of leaders and have had chats with them about their philosophies of leadership. The one person who I think showed the most depth of thought--and also whose ideas and philosophies stand the test of time better than any other--was Max De Pree, who was the CEO of the Herman Miller Company. Max wrote a book (it’s been a long time ago now), and I still assign the book to my MBA students because it is full of so much wisdom. Max is really probably the best single example of a servant leader that I have ever seen in terms of "practicing what you preach." He was probably the first to understand the importance of truly empowering his people and truly understanding the importance of leaders creating the organizational context where people can grow and develop and make contributions. Everything that Max did was formed by the world principle of respect for people...Max really did a lot of very practical things at Herman Miller that institutionalized respect so that people knew where they stood and had a sense of security, knowing that they would not be treated in an arbitrary fashion. It was really a very liberating thing. I think that in Max’s little book, he really tells young and aspiring leaders what they can do to be more effective. He gives them some very, very sound advice.

Robert Townsend's Up the Organization. Robert wrote that book in 1969 when he was the CEO of the Avis Company, and he was the one who made Avis "try harder." The sub title of the book is How to Stop the Corporation from Stifling People and Strangling Profits. It’s a short book with very short chapters, and all the chapters are presented in alphabetical order. He makes a single point about leadership in each one of those chapters; he [conveys those points] with incredible humor and marvelous style. It’s an incredibly engaging book; it’s the sort of thing you don’t want to put down because you are not only nodding your head in agreement, you are also laughing your head off at the same time because it’s so funny.

Warren Bennis has a series of books that he does with Jossey-Bass, and they have just reissued the book in a commemorative edition within the last year. [In the book], Warren and I and a few other colleagues who knew Bob talk about what we learned from Bob about how to lead. I was very fortunate to be on the board of a corporation that Bob was also a member of the board on. I saw what it was like to actually work with a man who was a great leader: how he acted with great integrity and insisted upon our behaving in an ethical way. When you see what has happened to so many boards over the last couple of years, having served with Bob, you could see how all those problems really are avoidable if you have a really great and thoughtful leader like Bob as a member of the board.

Who are some mentors that have positively impacted your life and leadership? Warren Bennis and Mortimer Adler. Warren taught me about leadership, and Mortimer taught me the importance of disciplined thought.

I was fortunate enough to meet Warren Bennis in Aspen in 1973 when he was president of the University of Cincinnati, and I was just beginning my career...At one point I had written a book, and I felt pretty good about the book, but I wasn’t sure as to where I was going to go from there. Warren looked at me and said, “You know, you’ve missed one very important thing in this whole book, and that is the whole concept of leadership. You are talking a lot about management and a lot about the organization, but imagine how much richer the book would have been had you talked about the leaders as well as the organizations and stressed the leadership aspect as much as you stressed the organizational and managerial aspect.” He was absolutely right. Somehow I had managed to spend a couple of years about a book on excellence in corporate management but without paying much attention to the role of leadership in it...Ever since, thanks to Warren, I’ve tried to see the organization and leadership as two sides of the same coin. I have tried to always talk about the leaders in the context of the organization and to talk about the organization in the context of the leaders. [I have focused on] how the leaders have created the cultures of those organizations and what the leaders do to create the values and the over riding purpose of the organizations.

I think that Warren...has enriched my work enormously because he has such an encyclopedic mind when it comes to thinking about leadership and organizations. He sees all facets of them in a very, very creative way. I’m always almost breathless when I speak to him because he always has some kind of an insight into organizations that is fresh and gives one an entirely new perspective of the problem being looked at.

Mortimer was of course the editor of the Encyclopedia Britannica, an editor of great books, an author of countless bestselling books, and very important in terms of forming the curriculum under Robert Hutchins at the University of Chicago...Like a lot of people I had a lot of information in my head, but I didn’t have a way to make sense of it. I didn’t have a framework for dealing with it or a [framework] to be able to call upon it and use it [in the most effective] way. Because Mortimer was such a disciplined thinker, spending a couple of weeks with him and actually listening to him allowed me to structure my thoughts in a way that provided a framework that I have been drawing on ever since. When I pick up a piece of information here and there, it isn’t just a random bit of information; I am able to categorize it in a way that I can recall it and use it. If it had not been for those couple of weeks with Mortimer, that would never have happened...

Were there specific techniques that he taught you or were they more general guidelines that you were really able to hone on your own? Mainly, he taught me that knowledge is not random: There is a structure to thought, and the more disciplined you are in terms of processing ideas, the more you see the relationships of those ideas. Further, when you are reading something, you understand what the author is attempting to say and you can critique it and [synthesize it into] useful information. When it comes to your own writing, because of the discipline that Mortimer imposed, I was allowed create my own kind of discipline for structuring my own thinking. It wasn’t that he provided a framework for it all--since his actual framework varies from the one that I could make use of--but I learned from him that you have to provide a framework for yourself if you are at all going to try to think seriously about difficult issues.

I think that Thomas Jefferson’s contributions to our nation are really probably the greatest any single individual has ever made. Possibly his own mentee, James Madison would certainly be in second place, but I think that really the framework and the vision statement that he gave the country [are so important since the] Declaration of Independence is the most important single founding document. It is far more important than the Constitution and far more important than the Federalist Papers in terms of getting our country off on the right foot.

Today, the Declaration of Independence is still providing us with its majestic words with the challenge that we have to create a good society. I think Jefferson was a man of incredible foresight and a man of incredible depth...I think we all today continue to be the beneficiaries of [his wisdom]. He was an Aristotelian by training, and I think the greatest philosopher of all is Aristotle. What Jefferson does in the Declaration is take Aristotle (and Aristotle’s wisdom), and he translates that into a framework for a nation of what it takes to create what a good society would be and would become. I think that his inspiring words are still as valid today as the day they were written, and I imagine that they are going to be timeless and will still speak to the next generation. I think there is no other country in the world that has a document like the Declaration: a kind of a vision statement for the whole nation, serving to inspire and unite. I think leaders do inspire, unite, and give vision: They give direction and they don’t micro manage. The beautiful part about the Declaration is that it doesn’t spell out the specifics of what you should do; rather, it lays out the big agenda and is marvelous leadership.

Gandhi inspires very much in the same way as Jefferson. We see Gandhi as a man who was never the president of anything, never the prime minister of anything, and never the head of a party. He never had any wealth and didn’t have any of the normal trappings of power: no titles, no armies, no staff and nothing that we would associate with power. Yet he was able to overcome the greatest challenge that any leader faced in the twentieth century (perhaps in all times). He did it in a way that was infused with morality, and he was a person who brought practicality and morality together. He showed us really what it meant to lead without ego: to lead with humility and to be able to lead even without power. I can’t think of a greater example than Gandhi.

The reason I mention Barack Obama is that I have despaired ever since the time of Richard Nixon that we would never have a great leader in this nation: a person who really was capable of being like a Gandhi or a Jefferson or a Lincoln to unite us. We don’t know whether Barack Obama will be that person, but he certainly has more promise than anyone in my lifetime to achieve that. He has the inherent understanding of what it means to truly lead. It’s always a risk to predict how someone will do before one gets the job as it were, and he is far from getting the job. But if he gets the job, it’s going to be fascinating to see if he can continue to practice the kind of leadership that he has promised. If he does, I think it will have a profound and lasting influence not only on this country but on the status of our country in the world. I think a lot of people in the world look to the United States for leadership, and so I am very inspired by his potential--not by what he has done yet (because he hasn’t done anything yet)--but I have never seen any politician with more leadership potential than Barack Obama.

It comes back to some of the examples that I’ve given, whether it’s Max De Pree at Herman Miller, Gandhi, Lincoln or Jefferson. I think that these people are people who were not driven by ego: They were driven by the desire to serve to create conditions under which their followers could realize their dreams and their ambitions. All that starts with listening: with understanding what the true needs of the followers are. It really ends with the leader understanding that people will only follow you where they want to go. As a matter of fact, they will only follow you really where they need to go. What the leader does to create followers is to give them what they are missing, which is usually the structure or the context in which they can then do the hard work of achieving their own goals...Very few leaders are listeners. Once they get to be leaders, they start to be impressed with their own intelligence and brilliance and quit listening. That ego, of course, is what gets in the way of most leaders being successful. Therefore, that is the call for humility. Service means you are not doing it for yourself; leadership is something you do for other people.

What can organizations do to encourage or stifle leaders? Let them lead! In that regard how are organizations doing in general? How are they doing at letting people lead? I think they’re doing better. If you had asked me ten years ago during the era of the celebrity CEOs, I would say that most organizations were slipping back into command and control with one person at the top, whether it was a Jack Welch or a Larry Ellison sort of pulling all the shots with everybody down the line carrying out the orders from above. I think we’ve had a very healthy reaction to that over the last half dozen years or so, and I think in more and more large organizations you see shared leadership. You see that people don’t just talk about the CEO, they talk about the leadership team. Not only that, they talk about cascading leadership in which you try to build the overall leadership capacity of the organization.

The way you know that you are a successful leader at the top is when people are leading all the way down the ranks. That was very much what Max De Pree was trying to do. He said that you can’t tell how well the leader is doing by looking at the leader: You can only tell how well the leader is doing by looking at the followers [by seeing if the followers are leading]. I think that we are seeing that more and more corporations now are involved in an effort to create a strong cadre of leaders down throughout the entire organization...I think that a great number of corporations now are paying more attention to "leaderships" rather than having a single leader, and I think that is very healthy. I think leadership is a plural activity: It’s not a singular noun, and it’s not something done by a singular individual. I think that in the best-led corporations leadership is an organizational trait, not an individual trait.

Since you referenced celebrity CEOs, I am wondering if a lot of people who have been recognized for their leadership have been misidentified? If you look at the late 1990s, everybody talked about Jack Welch. If you looked at Jack Welch, everything was about Jack Welch. People didn’t talk about General Electric; they talked about Jack Welch. At the same time, Lou Gerstner was at IBM, and Lou Gerstner actually did a better job than Jack Welch did in terms of turning that company around: changing its direction, setting it in the right direction and then leaving it in a condition so that his successor would be as successful as he was. With Welch, it was all about him. After [he stepped] away, the legacy he left was not a very solid legacy. Gerstner was very quiet, and they almost made fun of him in the press because somebody asked him what was his vision and he said, “I don’t have a vision, I’m just trying to see this thing through.”

In the couple sentences that follow, O'Toole is speaking facetiously. What a lousy leader [Gerstner was] because he wouldn’t talk about himself, he wouldn’t boast, and he didn’t offer grand plans. He was very humble with what he talked about, but he was working on the inside to build the organization’s strengths and capabilities. He was particularly building the next generation of leaders in the company who could take over. I think we missed [accurately identifying Gerstner] when picking out who the top leaders of that time were...

People don’t hear about Jim Sinegal (founder and CEO of Costco), but Costco is kicking the heck out of Wal-Mart. [Furthermore], Sinegal is doing it in a way in which the unionized workforce is paid well, trained and developed, treated with respect, and given health insurance. [Consequently, Costco employees] take care of their customers in a very, very positive way, but hardly anybody hears about Jim Sinegal. You hear about Wal-Mart every single day, and you hear about the CEO of Wal-Mart and his statements because it’s all about him...If you look at philanthropy, too, it’s not the noisy philanthropists--the ones who are giving away a lot of money and putting their names on buildings--who make the greatest contribution. Rather, it is the people whom you and I have never heard of who are giving their money anonymously and giving it thoughtfully in ways that are truly affecting people’s lives. It’s the same with leadership: I think people doing the best work are not always the ones who are in the limelight.

What and where are the best training programs that exist for leaders? There are no good ones other than experience and a solid liberal arts education. Do you think that notion of the importance of a solid liberal arts education is getting its due in this day and age? [You will find that] we’re in real trouble if you are in business schools like I am. You can see the pressure from universities to grow undergraduate business programs and to start taking in MBA students when they are juniors or seniors. It used to be that an MBA program is something that you would take after you had completed a liberal arts education had worked for a few years. Then, you would come back in your late twenties or early thirties, and you would get the degree because you had a lot of experience to build upon. At that point, the MBA experience would be something that would be very useful to you. Now, you see people literally just out of high school jump into business education without getting any life education.

[Some of the people] haven’t learned how to learn: They don’t know about history, they don’t know about philosophy, they don’t know about literature, and they don’t know about human nature. All they know about is accounting and finance. That is not good for them as human beings, and it’s not good for companies to hire people like that who are so narrow. It’s bad for the society because we need broadly-educated people since we have to be citizens and parents as well as business people. I think if you ask most business professors, they will tell you that they don’t want to teach business to 17 year olds and 18 year olds and 19 year olds because those students are not ready for it. What is rewarding for a professor is to teach somebody who is in their thirties or forties. That person has some real experience to bring to the table, and you can deal with some tough issues. That person understands what organizational life is like and what the problems are. The person can make use of his or her education in a very positive way--not just in a technical way in terms of applying a financial technique but rather in the broader context of good leadership.

I was offered the job to be the chief staff person to President Nixon’s domestic council and I was very young at that time (probably 26 or 27). I would have reported to John Ehrlichman who reported directly to the President, so I would have been two steps away from the President, basically coordinating all of domestic policy for the Nixon administration.

I also had another job offer which was to be a special assistant to the Secretary of Health, Education and Welfare, Elliot Richardson, and it was the lowest possible political appointment that you could get. I interviewed at HEW, and I really liked the people who were working for Senator Richardson, and then I went and met John Ehrlichman. Ehrlichman said he wanted to hire me, and the only thing I had to do was go out and have lunch with his staff (seven or eight of his top staff people in the White House). I went out to lunch with them, and I was nervous as you can imagine. They were all very famous people; as a matter of fact, you’ve heard of them all because almost every one of them was indicted in Watergate.

I was sitting there and kept trying to get into the conversation, but all they wanted to do was talk about football. I kept trying to turn it around, trying to show off. I knew a little something about government and about national policy, and they only wanted to talk about football. It ended up that I came back, and I told my wife, “You know, I have a bad feeling about this. I don't like these guys, and I don’t think are very serious. I expected these people who are so close to the President to...want to talk to me about policies, issues, healthcare, education and all the challenges that the country faces. You know we sat there for two hours and I couldn’t get them off football.”

I described to her a couple of other things that they said--which were in hindsight quite alarming--but everybody [encouraged] me to take the job on President Nixon's domestic council because why would you not want to have this big important job in the White House as opposed to the very low-level job at HEW. My wife looked at me and said, “I would lose all respect for you if you went to work for the White House.” So I took the job at HEW; of course, I probably would have gotten sucked up into that Watergate mess, and it would have ruined my career right at the beginning. I really owe it all to my wife for not allowing my ego to get in the way of my instinct [which told me] that these were probably not very good people. I learned the lesson that first of all you’ve got to trust your gut; even more important than that is to trust your wife.

James O'Toole speaks about his most recent release, Transparency: How Leaders Create a Culture of Candor (with Warren Bennis and Daniel Goleman, 2008):

Warren Bennis, one of the great scholars of leadership, has been a colleague of mine for a very long time. Warren wrote an article with Daniel Goleman (the person famed for writing about emotional intelligence). The two of them were struck by the fact that in governments, in corporations and even in non-profit organizations all around the world attempts have been made over the last few years to suppress information and to try to hide things within the organization...The conclusion they came to is that the free flow of information both inside the corporation and to external stakeholders is really necessary to have a healthy organization.

They started asking the following questions: What is a culture of candor? What does it mean to be a truly transparent organization in which the right information gets to the right people at the right time? What are the costs to the organization when that doesn’t happen? What are the benefits that accrue to an organization when it does get the right information to the right people at the right time?

Warren Bennis and Daniel Goleman identified a whole set of characteristics of organizations that are really characterized by transparency and candor. Then it occurred to them that the lesson in all of this was that transparency is really inevitable...They found that, given the technology today--particularly with the internet and computers--you can’t keep secrets anymore. Yet organizational leaders still attempt to do so. There is just one example after another of leaders doing things that are really very self-defeating to the organization through trying to cover up or hoard information.

When I had a chance to talk to Warren about this topic, I realized it was very much a part of the work I had been doing on speaking truth to the people in power. It’s incumbent upon people in organizations to speak up when people at the top are doing something that is damaging to the organization, whether it’s unethical or merely bad management. It is important for leaders to make sure that they...truly have an open ear when people down the ranks bring them news that perhaps they don’t want to hear.

So Warren, Dan and I came up with Transparency: How Leaders Create a Culture of Candor. It talks about why leaders need to be able to create organizations in which everybody feels free to speak the truth to power...We have examples from [inside and outside of the United States in both the public and private sectors] where the leaders have attempted to hide the truth to keep people from getting information. That action just blows up in their face in a way that really destroys their careers and their organizations. But we also have examples of leaders who have done the right thing and have created this really free-flowing culture inside their organizations. Those leaders and organizations have reaped enormous benefits from having done so.

During your time of researching [the importance of transparency], did you ever come across any instances when too much candor was negative, or was all the evidence in support of more candor and more transparency?

There are obviously certain kinds of secrets that are legitimate; for example, Coca Cola doesn’t tell everybody what the ingredients are for Classic Coke. That is a legitimate business secret, and we are not talking about things of that nature. Nor are we talking about when you are doing research and need to keep the company's competitive advantage. Obviously, you don’t give that out to the world. With [those situations] aside, most things actually can be disclosed. My colleague Ed Lawler has done research showing that it really makes sense to post everybody’s salaries in an organization. It used to be that in every company the biggest secret was how much everybody was making. That really creates far more problems than when you actually let everybody know what everybody is making. It sounds counterintuitive, but it really benefits the organization in the long haul.

You also have to be careful with how you give people information, and you have to practice having difficult conversations. There are harmful ways of telling people news that they need to hear, and there are certain kinds of ethical considerations that you must make to protect innocent people. Those are a lot of the things we cover in the book about the ethical tests so that when you do speak truth to the power, [you do it right]...