In my program Leadership, Empathy and the Power of Persuasion (www.LEAPPAhead.com), I speak about the importance of leadership. Here’s an example.
General Electric has been in business for more than 125 years. When Jack Welch was CEO, success was achieved year after year. After Welch retired the Board selected Jeffery Immelt as the new CEO. During the Immelt years:
- Sales declined,
- Net income fell,
- Market cap dropped from the $600 billion range to less than $200 billion
- What caused this debacle?
LACK OF LEADERSHIP!
I define leadership as
The ability to achieve the right objectives. On time, through people!
During his time as General Electric’s CEO, Mr. Immelt made a series of mistakes. For example, buying back stock at a high price that consumed cash, and deploying a flawed acquisition strategy.
Board of Directors
As GE’s business declined, one could ask, “where was the Board of Directors?” Eighteen people were sitting in the board room reviewing Mr. Immelt’s lack of results every three months. They said or did nothing as salaries and bonuses went up while the company fell further and further behind.
Now, a new CEO is trying to turn the company around. He may have to sell off assets and totally restructure the company.
What should happen under the new CEO’s leadership?
- The entire board should be dismissed (many have already left.)
- New people with strong business expertise should be added.
- The new board should be kept to a manageable number.
- Board members should be required to spend at least one day a month visiting GE’s various business units to better understand the challenges they face…and LISTEN!
- Each board member should have to own at least $250,000 worth of GE stock, making them stake holders in GE’s success or failure.
Leadership vs. Charisma
Obviously, business isn’t the only sector where leadership is needed. We are witnessing a dreadful lack of leadership in Washington, DC where our politicians seem more concerned with their image and political livelihood, than solving our nation’s problems.
At election time, many voters confuse charisma with leadership. Charismatic people look good and sound good, but they often don’t accomplish much. In time, their appeal is lost.
True leaders solve problems!
Charismatic people talk about problems, But may not solve them!
What we need now, more than ever, are government leaders who can propose thoughtful solutions to our vast range of problems, and make difficult decisions to address them.
In business and politics, leadership is the key to getting things done for a stronger America.