The Effective Executive

Kim B. Clark, dean of the Harvard Business School (HBS), Boston, doesn't have a particular problem with revenue as a reflection of leadership -- as long as the perspective is long-term. "Great leadership doesn't show up necessarily just in one quarter or one year," stresses Clark, now in his fourth year as the leader of one of the world's most prestigious B-schools. What's more, despite the emphasis CEOs are putting on value creation -- and revenues are the top line from which it's ultimately determined -- Clark insists that financial performance is only one of the measures of business leadership, and not the most important. "The things that I look to have more to do with the creation of capacity and capability within the company for sustained superiority in performance," Clark emphasizes. "Yes, there's a financial dimension to it. But [I] actually look for other things that help you understand that this [company] is not something that is going to pass away -- that this is, in fact, something that is sustained, is fundamental, that there is true depth to what is being done." 'Stresses And Strains' "Leadership," asserts Clark, "shows up powerfully and in its most relevant context when you're talking about significant change -- when you are looking at the way that organization moves through time and how it adapts, grows, reacts, and responds to the stresses and strains and turbulences of life." And the business world that Clark sees in 1999, and for a decade beyond, is rife with tumult -- a place "where there are intense competitive pressures on all sides, where there will be a very high premium on speed, and where almost every company will need to be global, if not in all its operations certainly in its perceptions of its markets and its opportunities." This verbal picture stands in sharp contrast to the physical appearance of the HBS campus, a place where tree-lined walks and Georgian and neo-Georgian brick buildings abound, where even the absence of cell phones speaks to a certain civility. But as Clark sits in his wood-paneled, bookshelf-lined, first-floor Morgan Hall office and talks about six distinguishing characteristics of effective leaders, there's no doubt that he's addressing tumult, not tradition. To assess leadership "you look not just at what is the current operating system or the current performance," he says. "You look [as well] at how does [the] organization grow, how does it develop, how does it respond to challenge." Significantly, Clark's six distinguishing characteristics of effective leaders go beyond such perennial -- although he contends still necessary -- executive talents as the ability to successfully select, develop, and motivate employees. The six go well beyond Clark's own education in economics, a Harvard Ph.D. in 1978, and his continuing research in technology, product-development, productivity, and operations management. And when he talks about leadership, it's frequently of leadership with a small "l," of a quality that should be encouraged among all employees and not confined to a company's senior executives. "The great companies have lots of leaders," Clark says. "They have a CEO, but they've got leaders everywhere." Confronting The Challenges The first two of Clark's characteristics of effective executives (and other leaders) relate to the dynamics of the world of business and a leader's (necessary) ability to choose wisely among its opportunities -- both those that are extraordinary and those that are decidedly more limited. 1 -- Global perspective. Although a facility with foreign languages, some work experience abroad, and a working familiarity of world affairs are good things for executives to have, for Clark they don't translate into global perspective. People possessing a "true" global perspective not only appreciate differences across cultures but also find cultural common denominators, he contends. For example, in the rapidly consolidating global auto industry, the challenge "is not just to acquire, but to integrate, so that suppliers can offer global auto companies the same 'look and feel,' the same quality, the same reliability, and the same speed and response everywhere in the world," Clark illustrates. "To integrate, leaders must recognize critical differences across parts of the organization, learn from those differences, and identify opportunities to improve. But leaders also must find common ground and must create a coherent system. [And] my sense is that in the years ahead, this will become increasingly central to effective general management -- the capacity to appreciate the differences, learn from them, and find common ground." 2 -- Entrepreneurial spirit. It's "the ability to see value, often where others can't," says Clark. It's recognizing, he stresses, that "virtually no company" in the world -- even the largest companies -- has within itself all the resources needed to achieve its objectives. "It's a little bit shocking [to realize] that the critical knowledge that I require to succeed in my business is not in my company and that I've got to figure out how to get access to it and [then] pull it off," Clark observes. But leadership demands people who have "extraordinary entrepreneurial spirit, who are not afraid to do new things and put new combinations of things together to make it happen." Seeing And Seeking Value The third and fourth of Clark's characteristics of effective leaders relate to seeing and seeking value -- about knowing how to solve difficult problems and how to put a group together to move a company forward. 3 -- Technical literacy. A leader doesn't need to be a software programmer, or have a Ph.D. in electrical engineering, or be a materials scientist, Clark emphasizes. "But I believe that, particularly in information technology, you've got to be technologically literate." You must have "done the work, paid the price, to become knowledgeable about the basic language, the kind of lingua franca of the world, which is increasingly [dominated] by information technology," he says. "Leaders are going to have to be literate in the stuff so they know how to use it, and deploy it, and make it work in their organizations." 4 -- Enterprise-design capability. "One of the key differentiators for the highly successful organization" will be the ability "to configure the appropriate set of resources, capacities, and capabilities to go after the opportunity you can see in front of you," says Clark. This kind of industrial design, which extends beyond structuring companies to crafting contracts and finding funds, is needed "even in tried-and-true manufacturing businesses like auto parts or any kind of old-style metal-bender-type things [such as] a stamping plant," he insists. "Even if you are in what appears to you to be a historically stable or low-growth kind of business, you've got to develop the skills of an investment banker, you've got to be able to put deals together, you've got to be able to structure contracts and relationships -- and build new kinds of organizations." Inspiring Trust And Confidence The fifth and sixth of Clark's characteristics relate to creating the basis for trust and confidence and establishing leaders as anchors in a turbulent world. 5 -- Leader as teacher. "As organizations confront an increasingly turbulent and uncertain kind of environment, as the competitive pressures build, there is a great need in the organization for new understanding of the task at hand and for new approaches to things. And the only way that can happen is for the people in the organization to learn new things -- not in the traditional learning-by-doing mode, but at as a result of someone teaching them," Clark says. In a turbulent business world, "We're talking about fundamentally redefining the nature of the business, and, I think, the only credible way for that to happen is for the leaders in the organization to teach." Clark is loathe to name the leaders and companies he most admires, concerned that their very mention could be inappropriately construed as some kind of Harvard Business School endorsement. But by calling attention to a Jacques Nasser interview published in the March-April 1999 Harvard Business Review, Clark signals that he is intrigued by the Ford Motor Co. president and CEO's nontraditional approach to teaching at the Dearborn, Mich., automaker. Nasser's efforts have included executives being both students and teachers, team-oriented community service, and 100-day projects aimed at adding to the top and bottom lines. 6 -- Fundamental values. Clark believes that in the high-stakes business world beyond his office windows "we need leaders who are absolutely anchored, firmly anchored, in [three] fundamental values." First, he relates, is integrity: being a person whose word is firm and sure, a person who's honest, a person who can be trusted. Second is respect for the dignity of other people. A leader needs to live his or her life "with the idea that the people you work with are precious, that they are worthy of your care and devotion." Third is personal responsibility. "When you're a leader, you can't say to the people, 'It wasn't my responsibility. It's someone else's fault; it's not my problem.' As a leader, you have to say, 'I am responsible. I am prepared to take responsibility for this,' " Clark states. Climbing The Mountain Clark has been at Harvard for nearly 30 years, as an undergraduate, a graduate student, a professor, and now dean of the business faculty. But perhaps because he came out of the western U.S. (Washington and Utah), a fact his bio on the HBS Web site notes with pride, it seems appropriate that ultimately he compares leading in business to taking charge of a group of mountain climbers. "Part of what it means to be a leader is to identify the mountains people should climb -- and this is no easy task [because] the mountains of true value are not well-climbed or thoroughly mapped," he states. "Then actually climbing the mountain involves change -- taking people from here to there, where 'there' is at a much higher point and requires significant effort. Climbing . . . inevitably will entail innovating, using new tools, solving hard problems, and doing things differently," he says. So "leadership in this context is not just about rhetoric, but the capacity to solve challenging problems." Finally, "the people who embark on this journey need to have trust and confidence in their leaders -- they need a sense that if they run into a rough patch, their leader will know what to do, and if hard choices need to be made, their leader will make the choices well," Clark states. "In sum," he says, "leaders must know how to choose which mountains to climb, how to solve real problems, and how to inspire groups to go -- and stay -- with them."