The Greatest Business Leaders of the Twentieth Century
Volume 19, Number 4 Article by Shiva Kumar Srinivasan December, 2007
In Their Time: The Greatest Business Leaders of the Twentieth Century : By Anthony J Mayo and Nitin Nohria, 2005, Boston: Harvard Business School Press, pp 444, USD 35. :
While there are many theories of leadership, a perennial question in business history is whether someone who has been identified as a leader will be successful ‘in all possible worlds’ (to invoke a formulation from the work of the logician, Saul Kripke) or whether leadership is deeply embedded in the problem of historical context. Mayo and Nohria, who teach at Harvard Business School, argue in favour of a theory of ‘contextual intelligence’ in leadership studies. The essence of their thesis is that great leaders are characterised by a ‘profound sensitivity to macro-level contextual factors in the creation, growth, or transformation of businesses.’ Leaders characterised by ‘contextual intelligence’ are not idealists, but, in fact, realists who understand the scope and scale of historical change demanded by the ‘felt needs of the time.’ While these leaders may have personality traits that bear a resemblance to leaders from other eras, that alone will not suffice to explain their success. The intention of the authors is to rectify the lack of appreciation for business history both in the world at large and, by implication, in management curricula. While an intelligent engagement with the case method will give students of management a glimpse of contemporary business history, that in itself is not sufficient since decision making is generally taught as a synchronic exercise without a diachronic dimension to help students understand where exactly a firm is coming from, where it is headed, or even how it relates to other firms. One way of appreciating the role of business history in management studies then is by developing ‘a canon of business legends’. While the role of a ‘canon’ is well-established in the humanities, it is still novel in management studies. This book is a result of a project that Mayo and Nohria embarked on in 2001 ‘to begin to develop a canon of business leaders.’
The argument being developed here on the role of ‘contextual intelligence’ in leadership is not necessarily reducible to business history, but is of relevance to economic history as well, especially in the context of economic reform by ‘dream-teams’ such as the ones headed by Manmohan Singh, P Chidambaram, Montek Singh Ahluwalia, C Rangarajan, Y V Reddy and others in India1. However, just as literary studies can be structured around the notion of a literary ‘canon’ (consisting of the most important writers), so too can the history of business and, in my extrapolation, the history of economics. The term ‘leader’ is used here in an inclusive sense: it comprises the prototypes of ‘the entrepreneur, the manager, and the leader’. These three categories of leadership help to drive the activity of the business enterprise (especially its executive function). The parameters used to identify the candidates serving the executive functions listed above include the ability to strategise and pioneer new products/services; the compulsion to make an impact on industry and society; the energy to sustain financial performance; and, finally the capacity to help develop employees and other relevant stakeholders. The goal is to draw up a list of the top one hundred business leaders in twentieth-century America.
There are interesting value differences however in terms of how entrepreneurs, managers and leaders have been described by not only the popular imagination but by management scholars like Joseph Schumpeter, Alfred Chandler, Jr, and Warren Bennis respectively. While the entrepreneurs are the ones who dominate American ‘folklore,’ the others don’t do too badly either. All three represent forms of the professional ‘drive’ that must be harnessed not only to chart a successful course for a firm, but for a resilient economy as a whole. The business life cycle is America then is synonymous with the ability of these three forms of leadership to drive a capitalist economy: ‘entrepreneurs create new businesses, managers grow and optimize them, and leaders transform them at critical inflection points’. These business leaders however work in historical contexts, whose parameters have to be spelt out. These contextual parameters are as important as the ones identified earlier to understand those of leadership. These six parameters include the role of government intervention, attitudes towards global affairs, demographic implications of the work force, the influence of social mores, the impact of technology, and the pressure of labour movements. The organisation of the historical data in the ten chapters of this book is structured through the category of the ‘decade.’ Two important justifications are adduced for this: decades serve as ‘a good temporal proxy for an era’ and ‘have the benefit of being natural markers in how we characterize the passage of time.’ Each of the decades is examined through the parameters given above. Needless to say, the role that any of these parameters play will vary depending on the decade in question.
The chapters can therefore be read either sequentially or as independent units. They reflect the conceptual scope of key themes in American business history ranging from the depiction of the United States as the ‘land of business opportunity’ at the beginning of the twentieth century through the years of the Great Depression, the New Deal, and so on till the return to ‘glory’ towards the end of the Cold War and its ‘roaring’ aftermath (during the administrations of Reagan, Bush, and Clinton). There is also a list of the emerging challenges for both American business and business schools in matters pertaining to ‘corporate accountability, ethical decision making, law, and board governance.’ The authors conclude the historical narrative by wondering whether American business will be able to continue to harness the business-friendly policies of the current Bush administration by self-regulating its activities in order to prevent corporate and financial scandals such as those of the early 90s. The importance of this cannot be overstated since the on-going attempts to moderate the more severe provisions of Sarbanes-Oxley and other forms of regulation may suffer a setback and thereby ‘dramatically alter the opportunity structure for business’ in the years to come.
In addition to the ten chapters, the book has an epilogue that sets out a formal theory of contextual leadership and an appendix on methodology. It summarises the lessons learned through this project in terms of how great leaders interact with the zeitgeist. The authors list as many as seven attributes of contextual intelligence in leadership which include the following: sensitivity to context, understanding that there is more than one way of attaining greatness, developing adaptive capacity, betting on the right people for the right period of time, knowing which company to bet on, respect for business history, and the willingness to develop a strong feel for the zeitgeist. The term ‘contextual intelligence,’ incidentally, is borrowed from Robert J Sternberg, who defines it as ‘the ability to adapt well to one’s environment but also modify this environment in order to increase the fit between the environment and one’s adaptive skills.’
The criteria for inclusion in this study include the following: CEOs must have led a firm in the US for at least five years as its chief decision maker and ‘demonstrate at least four consecutive years of top financial performance, or lead a business or service that changed the way Americans lived, worked, or interacted in the twentieth century’. Not all the CEOs included in this list are from the top Fortune 100-type companies; the authors point out that they have tried to ‘capture impact beyond simply size,’ since they have also sought to ‘capture individuals outside the normal or traditional business realm.’ The significance of this book is two fold. Not only is it a riveting introduction to the concept of contextual intelligence in American business leadership, it is also an excellent example of how to handle the problems of methodology in business history without compromising on the overall readability of the volume. This book should be compulsory reading not only for graduate students of business, but also for bureaucrats, economists, historians, journalists, managers, management instructors and for anyone else fascinated by the historical dynamics of a culture whose ‘business is business’.
References
- See Srinivasan, Shiva Kumar, 2007, ‘Please Work from Home: The Immobility of Labour in the Age of Globalization’, Vikalpa: The Journal for Decision Makers, Vol 32, No 1, Jan-Mar, pp 1-13.
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