Default Leadership: How the Last Century Became Management's Century

By Nason, Ken | Ivey Business Journal Online, March/April 2013 | Go to article overview

Default Leadership: How the Last Century Became Management's Century


Nason, Ken, Ivey Business Journal Online


Only somewhat arguably, the shiftfrom a firm's purpose to its performance began in the 1950s, when Robert McNamara, then Ford's manager of planning and financial analysis, decreed that performance would trump purpose, especially quarterly performance. Consumed by meeting metrics, leaders began to lose their way. In this thoughtful article, the author describes what leaders must do to restore faith in themselves and their organizations.

Asked about the art of managing, a certain former manager of the New York Yankees replied, "Managing is getting paid for home runs someone else hits."

- Casey Stengel (1890-1975) (The Little Brown Book of Anecdotes, p. 523)

For the past three years I have devoted considerable time to studying the relationship between leadership and governance. In examining these topics I have attempted, in part, to understand how it is that many experienced and well-educated corporate leaders have so utterly failed to grasp their role, to lead with integrity and to do so with a sense of stewardship or corporate social responsibility. After all, since the dawn of the 21st century we have witnessed a series of colossal missteps on the part of corporate leaders, as reflected in leadership failure at Enron, WorldCom, Tyco, Wall Street investment banks, and more recently, the Libor scandal. In short, many corporate leaders have defaulted on their obligation to lead. As it happens, my research has taken me into the last century and, indeed, the latter part of the 19th century in an effort to understand the prevailing lack of public confidence in corporate leaders, especially that being demonstrated by young generations.

Background

Before retracing history, allow me to recount something I learned in graduate school many years ago. If I recall correctly, the year 1950 marked an interesting point in time. It marked a new beginning, not only in terms of alliances, but also because, in large measure, business had spent the first half of the 20th century searching for and securing capital, while it spent the latter half of the century very much devoted to the use and flow of those funds. It is no secret that the last half of the 20th century was remarkable by any yardstick, as evidenced by phenomena such as the race for space; the development of atomic submarines; the introduction of the microchip and the computer; the widespread use and commercialization of the Internet; the expansion of food distribution via a network of global transportation systems, and the increasing interconnectedness of global finance.

RETRACING HISTORY

What made for such rapid development in the back half of the 20th century? It turns out that the answer to this question might well lie in the innovative ideas of management. Recently, I read an article by Water Kiechel III entitled, "The Management Century" in which the author traces the emergence of a continuous stream of management ideas and concepts that began as long ago as May, 1886 (Harvard Business Review, November 2012). I was very interested in the article as I had only just reviewed the origin of American business schools (ABS) and schools of management (SOM) dating back to the latter years of the 19th century. I now realize that the ABS and SOM, while attempting to define and differentiate themselves by discipline, e.g., finance, economics and the like, had become relatively mature institutions by the middle of the 20th century. By comparison, it would be reasonable to suggest that Canadian business schools, while taking root in the first half of the 20th century as Schools of Accountancy (e.g. Alberta) or Departments of Commerce (e.g. UBC), didn't really gain traction as mature graduate schools in their own right until post 1950. (Note: Western University's Ivey School of Business would be the notable exception). Hence, numerous faculty and many ideas initially migrated to Canada from the universities of this country's closest and largest trading partner. …

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