Boston Consulting Group (BCG) founder Bruce Henderson never imagined his simple strategy called the BCG Matrix would play a starring role in the movie Wall Street. The main character, Gordon Gekko, ruefully admitted the reason he planned to destroy a company was a line borrowed from Henderson, “because it’s a dog…with different fleas.”
The BCG Matrix recognized that different companies in a portfolio reflect different rates of growth. To figure which had the best chance of earning a good return, Henderson captured their prospects in a diagram that labeled them a star, question mark, cash cow, or a dog. As Gekko made clear, no one wants to be a dog.
The sheer genius and simplicity of the BCG Matrix became fodder for corporate honchos like Jack Welch. When the GE chief told his troops, “if you are not number one or two, either fix, sell, or kill it,” he was saying if your business is not a star, it’s a dog and get rid of it. It struck me as ironic that Welch and Gekko were saying the same thing, yet ruthlessness in one was the stuff of legend while in another became the road to prison?
This was truly a leadership paradox.
The New Leadership Matrix
What my discovery boiled down to was that much like the Portfolio Matrix imagined by Bruce Henderson, there is a portfolio of leadership. Every CEO starts either as an Ace, Wizard, or Centurion, and hopes to find extraordinary success by excelling in that approach. A very special few, the equivalent of Nobel Prize winners in business, rise to the level of stars.
In defining the types of leaders, I had to make a few changes to the BCG Matrix imagery to reflect leadership styles: Star, Ace, Wizard, and Centurion. Each type has positive and negative attributes as discussed below, which reflect what certain types of leaders will do to gain success, glory, or wealth. That dichotomy is what separates the leaders from fallen angels. It’s also how you end up with Elizabeth Holmes, Bernie Madoff, and Andy Fastow.
For someone to be a true leader, it doesn’t matter in which quadrant you start, as long as you are genuinely superb — one who inspires those around them. Taking the fictional example of Gordon Gekko, whose character was based on a composite of Michael Milken and Ivan Boesky, and compare him to the real-life Jack Welch, they were both “Aces” that possessed superior technical skills. But Welch transformed himself into a leader so he could build GE into the stratosphere. Gekko found the only thing he was good at was killing companies, much like the greenmailers of the ’90s who were eventually went to prison.
Where do the paths diverge, I wondered?
The Super Manipulators
When people commit vicious misdeeds that cause inordinate suffering, the cause can spring from an unlikely source: a simple desire to conceal incompetence. They often have backgrounds that would predict anything but malfeasances, like Enron’s Andy Fastow, a financial whiz who graduated from Tufts and Northwestern, or Holmes, a Stanford engineering student who also spoke Mandarin for fun. Bernie Madoff was pulling down $100 million per year when he ran a simple brokerage, long before the Ponzi got started. If you look at their resumes, it doesn’t make sense. Their stealing is like marrying for money if you’re already rich?
But eventually, even these super manipulators run into road bumps, and to get back on track, they veer towards ruthlessness, concealment, or even criminality; if they in a position of power, you better watch out as only Shakespeare could write a more convincing plot for a tragedy. While these attributes may sound as true of Napoleon as they do Hitler, there is a definable difference between super manipulators and superstars.
Leaders like Warren Buffett possess qualities that make them want to rise above the world of transactions. When necessary, they are ruthless, but never for the sake of just changing the scoreboard. Leaders like Buffett focus on building something noble that changes outcomes for the world. They focus on what they leave behind, not just what they conquer.
The problem in business, and it extends to society as well, is telling the superstars from the super manipulators. Because the perps share the same technical skills as the genuine leaders up to a point, they can camouflage their deficiencies quite effectively. In our success worshipping world, when we see a flamboyant Madoff or a stunning young, blond Holmes, we tend to look the other way and miss the negative signals. Then the long spiral towards infamy begins. It is why our Leadership Matrix looks for both positives and negatives. If you can identify the potential for a super manipulator, as Jack Welch would say, fix it or kill it.
• Definition: If there were a Nobel Prize for business, the finalists would be here. As golfer Bobby Jones said about Jack Nicklaus: “he plays a game with which I am not familiar.” They have exceptional longevity because they are not replaceable.
• Best example: Warren Buffett, Berkshire Hathaway. The test of stardom is whether a crisis helps or hurts their reputation. Buffett was the only financial CEO to come out of the financial crisis of ’08 with his reputation enhanced.
• Potential negative: They may have a hard time admitting setbacks or dealing with challenges to authority.
• Potential positive: Buffett is notorious about creating transparency in the face of mistakes.
• Definition: Technical genius that can figure out probabilities better than anyone, and we like to say, “they cracked the code.” They win games of chance like investing, hedge funds, and biopharma, and that’s where you will find them.
• Best example: Tim Cook, Apple
• Potential negative: Can be prone to egotism or arrogance due to technical superiority.
• Potential positive: They realize they are gifted and they are often transparent and are willing to undergo scrutiny.
• Definition: They are the ‘pull a rabbit out of a hat’ CEOs and appear to have near-magical powers to avoid disaster. They excel in businesses where “feel” is critical, like Hollywood or venture capital.
• Best example: Elon Musk, Tesla
• Potential negative: They trust their instincts to the point they may feel infallible.
• Potential positive: True wizards do their best work outside of the glare of publicity, and they rarely do things just for the sake of getting their name in print.
• Definition: They are the tortoise in the race. If there is something they don’t know, they will learn. People worship Centurions because no one sacrifices more or works harder or cares more about their people. You will find them running retail and consumer product companies that require more substance than flash.
• Best example: Mary Winston, Bed Bath and Beyond
• Potential negative: They may resort to cutting corners if threatened with defeat.
• Potential positive: they develop people to lead because their style demands delegation.