Most Helpful Customer Reviews
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5.0 out of 5 stars
Portrait of a results-driven CEO with impeccable integrity, 27 April 2009
In his previously published book, Value Leadership, Peter Cohan identifies five qualitative factors and six quantitative factors of "Value Leaders" and examines several companies that exemplify the concept and principles. They include Goldman Sachs, Johnson & Johnson, J.M. Smucker, MBNA, Microsoft, Southwest Airlines, Synopsys, and Wal-Mart. Agreeing that "what you cannot measure, you cannot manage," Cohan offers a way to quantify and manage "the amorphous topic of values": what he calls the Value Quotient (VQ) "which is predicated on a set of four or five activities that companies can perform within each of the seven Value Leadership principles." I mention this book and provide this brief excerpt from it to suggest that, as in You Can't Order Change, Cohan is not prescribing specific methodologies, strategies, and tactics for his reader to adopt; rather, he provides information, insights, and suggests that he asks his reader to consider. Then, when applying any material that is directly relevant to the reader's own organization, Cohan assumes that necessary modifications will first be made.
Jim McNerney and his leadership style and practices offer an excellent case in point, first at GE as group president and CEO and later as chairman and CEO at 3M and then Boeing. Throughout his narrative, Cohan identifies more than a hundred "leadership" lessons to be learned from McNerney's distinguished career thus far. However, it should be noted that how McNerney would apply them to challenges at GE would almost certainly differ from how he would apply them at 3M or Boeing. In fact, how he would apply them at GE in 2009 (if he were still there) would differ from how he would have applied them at GE 10-15 years ago.
According to Cohan, "McNerney's a smart leader: He's very smart about motivating people; crafting business strategies that spark profitable growth; making operations more efficient and effective; and creating harmony within communities." The focus in this book in on McNerney's leadership of Boeing but the aforementioned "leadership lessons" accurately indicate McNerney's style and practices at GE and 3M. Cohan organizes his material in terms of eleven leadership challenges and devotes a separate chapter to each. All of these challenges are familiar to C-level executives (including but not limited to CEOs) in almost all organizations, whatever their nature and extent may be. Here they are, expressed as questions but they could also be expressed as imperatives:
1. How to increase individual performance?
2. How to increase the performance of a team?
3. How can executive compensation be tied to increasing long-term value?
4. How can technologies help meet customers' specific needs?
5. How to use strategies that achieve decisive competitive advantage?
6. Which acquisitions (if any) will help to achieve organizational objectives?
7. How can new leaders "hit the ground running" and produce results quickly?
8. Which management methodologies (e.g. Lean) will increase productivity?
9. How to manage global product development?
10. How to create a culture of ethics, candor, transparency, and compliance?
11. How can an organization have positive and significant environmental impact?
As Cohan explains, McNerney is convinced that responsibility for responding effectively to each of these challenges must be shared by (a) the organization and its CEO, (b) the supervisor if other than the CEO, and (c) the individual executive. Chapters 1-3 explain how McNerney develops leaders (e.g. linking compensation to profit and process, not stock price); Chapters 4-6 explain how he develops organic growth strategies (e.g. investing in an organization's strengths, especially in its people); Chapters 7-9 explain his approach to productivity improvement (e.g. partner with global suppliers to reduce risk and accelerate time to market); and Chapters 10 and 11 explain how McNerney's approach to "harmonizing" Boeing's relationships with its community. To repeat, all of the material in these chapters offers real-world examples of McNerney's leadership and suggests what lessons can be learned from it. However, had Jack Welch, Jeff Immelt, or Robert Nardelli been hired to become chairman and CEO of Boeing rather than McNerney, they would have no doubt demonstrated a different style, and perhaps taken a different approach when seeking to achieve the same objectives.
Of special interest to me is the material provided in Chapter 5, "Invest in Your Strengths," in which Cohan explains how McNerney has demonstrated (at GE, 3M, and Boeing) the ability to create and execute strategies to satisfy customer requirements better than competitor', to attract and retain the best managers and other employees, and to create a more compelling work environment than competitors' by focusing on big, growing markets; by investing in existing strengths while eliminating weaknesses; and by analyzing and then exploiting competitor weaknesses. Under his leadership, Boeing completed extensive research on its customers' needs before making a $10-billion initial investment in the 787; he also made certain that the design and production of the 787 would have maximum systems integration to ensure "seamless" engineering throughout the entire process; and McNerney took full advantage of every opportunity for Boeing to exploit Airbus' corporate mission and ownership structure. "With his pure business knowledge, McNerney helped push Boeing's board to unlock the capital needed to go after a large, growing market in which it had competitive advantage over Airbus." And in so doing, his leadership reveals four lessons that Cohan lists on Page 95.
With regard to various ethical problems at Boeing that occurred two years prior to McNerney's election to serve as CEO, they are discussed in Chapter 10. Cohan suggests that these problems "helped propel" him into that job. He then settled a series of lawsuits against Boeing (for a total cost of $615-milkion), decided not to take a tax deduction (of $200-million) for the settlement payment, and while testifying to members of the U.S. Congress in 2006, he said that "I hope to discuss why, going forward, the Congress and the taxpayers of this country can place their trust in Boeing. Companies doing business with the U.S. government are expected to adhere to the highest legal and ethical standards. I acknowledged that Boeing did not live up to those expectations." The six specific steps taken, all guided and informed by McNerney's "moral compass," are listed on Pages 171-172. The "ethical lowlights" themselves are listed on Pages173-174. How McNerney guided Boeing through the transformation process, re-establishing ethics and compliance as a clear competitive advantage, reveals four leadership lessons that are listed on Page 180. McNerney's five behaviors are listed and briefly discussed on Pages 185-186.
Those who share my high regard for this brilliant book are urged to check out Cohan's previously mentioned Value Leadership, as well as David Magee's Jeff Immelt and the New GE Way: Innovation, Transformation and Winning in the 21st Century and William Rothschild's The Secret to GE's Success: A Former insider Reveals the Leadership lessons of the World's Most Competitive Company.
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by Alice Schroeder
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