December 19 2006 by JP Donlon
In a recent online column Jack Welch, retired chairman and CEO of GE and Suzy Welch former chief editor of the Harvard Business Review were asked whether leaders should have charisma. Asking the Welch duo about charisma in leadership is like asking Hugo Chavez if he dislikes the U.S. It’s not whether, it’s how much. While allowing that on a larger scale “history is littered with charismatic leaders who have been ruinous,” the Welches were by and large in favor of leaders developing charisma. They reckon that it “just makes everything a whole lot easier.” It energies people, they say. “More commonly, you find smart capable people stalled because they lack the ability to win hearts and minds.”
Maybe so, but one wonders whether charisma as a leadership element isn’t well past its sell-by date. Dennis Kozlowski, Jeffrey Skilling, Andy Fastow, Bernie Ebbers and Richard Scrushy all had charisma to spare. Look where it got them. But forget about the felons. Consider folks like Jean Marie Messier, former CEO of the French giant Vivendi. His saga provides a startling look at a leader who rose rapidly to power and fell just as swiftly based on force of personality — and the unfortunate decisions that ended in his ouster. Messier’s charisma kept the skeptics at bay.
In 1998, Fortune named Carly Fiorina who was then an obscure president at Lucent’s network services unit, the most powerful woman in American business, a sobriquet she was given each year until 2004. When she was tapped to lead HP no one accused Fiorina as being unsure of herself or lacking in star power. One remembers her at the World Economic Forum in 2001 entering the hall followed by a retinue of aides and hangers-on whose job it was to keep lesser mortals at bay from the Queen of HP. The WEF had to wait another four years for the presence of Angelina Jolie to turn its worldly CEO members into groupies.
The defining decision of her career was her decision to buy Compaq, something that required retaining the top talent in the firm. Unfortunately many executives headed for the door and her autocratic style only hastened the rush. In “Ego Check, Why Executive Hubris is Wrecking Companies and Careers,” Mathew Hayward observes that “Fiorina’s actions and statements increasingly isolated her in the corner office and made her more susceptible to a false sense of confidence in her decisions and actions.” Hayward, a former UBS Warburg investment banker, conducted studies of overconfidence and hubris among hundreds of CEOs, entrepreneurs and other executives beginning with his doctoral studies at Columbia University. One of the consequences of hubris of which charisma is a component is the failure of a leader to get the right help or feedback for decision-making. In Fiorina’s case, he argues, fewer people were willing to tell her she was mistaken. “Subordinates became as concerned with how their initiatives would €˜play with Carly’ as they were about whether the firm needed them, ” he argues. “Whether she was unable to get the right information about her deteriorating position or whether she ignored it, one of her closest advisors told me that Fiorina remained €˜supremely confident, even borderline delusional about the actual challenges and the metrics of success.’ “
Even Jack Welch himself might agree that charisma has its dark side even when it isn’t pushed to excess. Former Citibank CEO Walter Wriston, who sat on GE’s board for many years and knew Welch well, observed that towards the end of Welch’s GE career “he started to believe his own press releases.” GE’s attempt to consummate its proposed acquisition of Honeywell failed in no small measure because Welch thought his personal charisma would overpower Mario Monti the EU competition minister who objected to the deal. The Italian regulator was unmoved by Welch’s arguments or his force of personality. Quite the opposite in fact. The botched merger is the one stain on Welch’s record which wouldn’t have happened if he hadn’t insisted on staying on after his original retirement date.
We can all think of leaders who had great charisma. But for every Roosevelt there’s a Hitler and a Stalin. We should not overlook that there are many leaders who were successful despite a sharp deficit of charismatic skills. Dwight Eisenhower was noticeably deficient in the charisma department. His position was analogous to a CEO or any business leader in a large and complex environment. In contrast to George Patton or Douglas MacArthur, Eisenhower did not posses a distinguished military pedigree nor did he have the panache of either general. In his recent biography of the World War II leader, “Eisenhower On Leadership,” Alan Axelrod writes that, Ike “was both leader and servant, expected to act as master while answering to many masters.”
Even Abraham Lincoln, who sits at the apex of the pyramid of great leaders, was said to have cut an uncharismatic figure by the bien pensants of his time. Contemporaries said he had a high-pitched tinny voice that commended little presence. As Doris Kearns documents in her excellent “Team of Rivals,” nearly all the men Lincoln picked for his cabinet like New York Senator William H. Seward (secretary of state), Ohio Senator Salmon P. Chase (secretary of treasury), and Missouri State House Representative Edward Bates (attorney general), all of whom had sought the White House only to have their dreams foiled by a gangly dark-horse candidate from Springfield, Ill., felt they were better equipped to run the country.
As the Greeks said, the poison is in the dose. If by “charisma” we mean some combination of intangibles that can inspire and elevate it is to be welcomed. Phil Rosenzweig, a professor at IMD, the International Institute for Management Development and author of “The Halo Effect€¦and the Eight Other Business Delusions That Deceive Managers,” is somewhat mistrustful of the concept. “Charisma,” he says, is what we say about leaders of successful companies, and thus is often in the eye of the beholder, and shaped by what we know about company performance. To have any validity as a concept, it has to be measured objectively, and independently of performance–which is possible, but usually not the case. Show me any successful company, and I can probably argue that its leader is charismatic, at least by some definition.
“My advice for leaders would be to develop two things: skills of strategic judgment and of effective interpersonal communication. If the latter is seen by some to involve “charisma,” so be it. But I would urge leaders not to try to be something that they are not. There are many ways to be effective in leading people in organizations.”