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The Teaching CEO

The CEO as educator is a CEO being educated to become a more effective business leader, both inside the corporation, and outside, as a teacher in business schools.

As business schools seek to update their programs and emphasize application skills, there has been an increasing demand for CEOs to teach. For me, the transition into teaching began in 1986, when I heard on the car radio that my company, closely held mattress and bedding manufacturer Sealy Inc., had been sold to publicly held Ohio Mattress. I had worked for Sealy for 27 years, 19 years as president and CEO, but the acquisition had sealed my fate: There would be no room for two chief executives in the “new” Sealy. So shortly after the merger papers were signed, I cleaned out my desk and started on a second career that included consulting and board work, and a position as lecturer at the University of Chicago‘s Graduate School of Business.

Frequently after class, students comment on the unique insights I bring to the table because of my experience as a practitioner. Similar reactions occur when I invite to class to discuss specific business problems such CEOs as United Dominion Industries’ William Holland, Dennis Chookaszian of CNA Insurance, and Idex Corp.’s Donald Boyce.

One point is that students are hungry for the extra dimension and expertise CEOs are uniquely positioned to provide. Ironically, however, many corporations crave and require the same tutelage: To keep pace with the competition in a borderless, downsized, cutthroat business environment, CEOs also must teach inside the organization, forging a vision and crafting a strategy to accomplish it, as they flatten the management hierarchy.

To be successful in business, of course, not every chief executive must teach inside and outside the corporation. Even so, there can be a valuable cross-fertilization between the two roles among those that do. Corporations and business schools alike can benefit from leveraging their intellectual capital in this way: Often, the payoff is greater corporate productivity, new and improved business leaders, and more capable MBA graduates. But a question arises: What sorts of skills are required by the teaching CEO?

THE NEW ECONOMY

The answer to that question depends partly on the nature of the change in today’s corporate culture and business environment. For one thing, we live in an era where pampering and perks for chief executives have dwindled dramatically. Palatial headquarters buildings and impressive air fleets are out, as are personal agendas driven by insecurity and self-seeking. No longer is the company viewed as a tool of the CEO; no longer do shareholders believe that he or she can do no wrong. No longer do many chief executives spend excessive amounts of time outside the business as statesmen, as did Lee Iacocca on the Statute of Liberty project.

Simultaneously, the economy also has changed: Information resources and technology play more of a part in corporate success, while physical capital-bricks, mortar, and machines-are relatively less important.

These changes pose a challenge, not only to the leaders of America‘s industries but to the MBA candidates who are our future business leaders. In the future, there will be an acute need for business practitioners with the capacity to analyze and create new visions and strategy-not just business missionary soldiers who are ready and willing to fight any war systematically without asking the tough questions.

Enter the experienced CEO/professor, who can push the envelope on MBA programs, imparting in the classroom a mix of performance and conceptual skills. Such executives have been trained not just to change a flat tire, but to change a flat tire on a moving car.

THE EDUCATED CEO

It has been said that you really don’t know something thoroughly until you can teach it to someone else. Talking about a solution is not enough. Urging people on from the sidelines is a cheerleader’s job, not that of a coach, leader-or chief executive. A CEO’s ultimate goal is to get people to solve problems by applying tools to business situations. The CEO as a teacher is also a guide who shares proficiency and expands ideas in both principles and processes.

There are some differences in the techniques used to teach inside and outside the organization (see graphic). But the end result is the same: a faster, smarter organization.

Sometimes logistical changes or modifications in a corporation’s physical surroundings are necessary to support a teaching initiative. When Sealy moved its headquarters into a custom-engineered facility, I designed a special meeting room that included a blackboard, a projection screen, and several bulletin boards. The room was created for the weekly, Monday morning meeting of the corporate operating committee. At the meeting, Sealy officers discussed the company’s status, its future plans, and competitive challenges. It was not a giant step for me to go from that meeting, attended by roughly 10 people, to a similarly appointed classroom with four times as many people.

PRACTICAL PROGRAMS

Inside the classroom, at the University of Chicago GSB and other business schools, I wasn’t the first to push for more applications-oriented coursework. In the early 1970s, Joe Kubert, a founding partner of the Booz, Allen & Hamilton consulting group, created and taught a course on business policy at the school. Joe, a longtime friend of mine, had valuable action skills to supplement GSB’s already-sound curriculum. When I was president of Sealy, Joe often brought his students to my office, where we spent time exchanging ideas about business problems, opportunities, and strategy.

Because of the positive response I received when I first began to lecture at GSB, Dean Harry Davis handed me a mandate to “teach anything you want as long as it’s not being taught now.” So I worked to develop a course on business leadership. I spent nine months, six days a week, eight hours a day, researching books on leadership written from 1907 to the present. Then I surveyed courses at the top 20 business schools to gauge the competition. None of these was what I had in mind.

I envisioned a course that would cover setting goals, working in teams, and accomplishing dramatic change in such diverse businesses as banking, insurance, and manufacturing, and in areas such as distribution, marketing, mergers and acquisitions, and corporate governance. I also wanted to address the role and responsibilities of top management and the special considerations of operating in a conglomerate. The academic vehicle to accomplish this, “Leadership in Business,” was launched in the spring of 1989. Besides Chief Executives Chookaszian, Holland, and Boyce, I have invited Serta President Edward Lilly, and Leo Mullin, president and chief operating officer of First Chicago Corp., to conduct at least one three-hour class. Such practitioners offer significant insights into the way business really works-not the way it is supposed to work as envisioned in a B-school textbook.

Less than a year ago, United Dominion’s Bill Holland came to class to present for discussion a case study involving ethics: Should United Dominion require one of its subsidiaries to cancel a contract with its South African licensee-distributor as requested by an associated company, whose $50 million-per-year contract to do business with the City of Los Angeles might be in jeopardy? The presentation had a tremendous impact on the class, each member of which was called upon to resolve the quandary before the session was over.

GRASS-ROOTS REVOLUTION

While it is difficult to conceptualize action skills-that is, to teach them in the classroom-practitioners who “have walked the walk,” as the students say, have the best shot at doing this. The same skills that make CEOs successful in business make them potentially successful educators. The crucible of the real world is the classroom that prepares most CEOs to teach. Because proficient chief executives display vision, take risks, and empower employees, they are uniquely positioned to present these concepts to students.

Becoming a credible educator/leader does not require superintelligence or the title of president or chairman of the board. It does require the ability to teach students how to evaluate conditions and simplify complex issues. A practitioner does not enter the academic environment simply to impart industry-specific wisdom.

If the right chemistry exists in the academic environment-and if CEO teachers are serious about their commitments inside and outside the corporation-we will see faster, smarter businesses, and more insightful MBA graduates. We also will see a revamped B-school curriculum that offers a balance of conceptual knowledge and action skills. A bridge will be built from business to academia, and we will see middle and upper management becoming partners in a training revolution.

Starting at the grass roots, this revolution already is underway at progressive B-schools. These institutions are counting on chief executives to help transform and re-educate them.


Howard G. Haas is a senior lecturer at the University of Chicago‘s Graduate School of Business and author of “The Leader Within: An Empowering Path of Self-Discovery.” He is president of consulting firm Howard G. Haas Associates in Chicago and a former CEO of mattress and bedding manufacturer Sealy Inc.

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