Ed Kopko and Jeffrey Sonnenfeld

8/07/2007 @ 2:00PM

What's In A Leader?
Recent focus on board activism and chief executive turnover would have
you believe that these are particularly difficult times for CEOs and that the
job of a CEO is more challenging than it has ever been. The fact is, the job
of a CEO has always been a highly complex task.

In our over 30 years of experience in dealing with leadership issues and

education, we have always emphasized the importance of innovative and
flexible leadership that is adept at adjusting to changing times and
circumstances. As such, over the years, weve selected and awarded leaders
based on their ability to take calculated risks and alter an industry, all the
while delivering continued shareholder value, built on a strong ethical
foundation. Good CEO leaders have operated like this for years.

In 1989, Donald Petersen, CEO, of Ford Motor (1981-1990), received Chief

Executive magazines CEO of the Year Award for exactly these reasons.
Typical of the standard-bearer of the 80s-style combative leadership,
Peterson transformed a whole industry by launching the first-ever SUV
while achieving record low-cost production techniques and beating the
intense Japanese competition.

We are of the belief that great leaders are those that are able to exercise the
right leadership traits at the right time to realize the best results. Fred
Smith started Federal Express in 1971 on a premise that was found to be
highly improbable by one of his business school professors. Foreseeing the
business need for reliable overnight delivery in a computerized information
age, he went ahead with his idea regardless.

In its first two years, his company lost $27 million and soon after was on
the verge of bankruptcy. Smith took a legendary gamble when he went to
Las Vegas and bet the payroll to win more capital to keep his fledgling
company going. While this kind of decision might seem unthinkable today,
CEOs regularly face major risk choices. Smith was the winner of our 2004
CEO of the Year award for his exemplary courage, hands-
on management style, and continuous commitment to employee and
customer satisfaction.
As leaders, we all know that there are times when we need to take risks, and
there are times that we ought to avoid risks. Then, there are times we have
to be firm and lead with conviction, and there are times when we need to be
a team player. Great leaders know when to balance these traits based on
company circumstances.

One of the most well-known traits of Jack Welch, former chairman and
CEO (1981-2001) of General Electric , was his no-nonsense style, which
won him a reputation for ruthlessness. Yet Welch, also a winner of the CEO
of the Year Award (1993), turned an otherwise ordinary conglomerate into
an overachieving growth engine. As the visionary leader that he was, Welch
recognized the need to demand top performance from every division and
every manager if he was to streamline and reinvent a global giant. As a
result, his ethic of constant change and boundarylessness became a model
for every company.

Contrast Welchs style with this years CEO of the Year winner, Bob Ulrich,
CEO of Target , and you get the picture that there is no single trait that
makes great leaders. Ulrich received our award for reinventing the norms of
the discount retailer industry by playing behind the scenes and giving his
team the chance to shine and thrive. As such, despite his 40 years at Target,
he is representative of a new generation of team-oriented leaders who are
more cognizant of their employees and their stakeholders needs.

At the same time, Ulrich has had predecessor game changing leaders who
also have kept our economy robust. The economic realities of the 80s and
90s, and intense international competition, required a visionary leadership
and cult-like personality. However, the positive changes in the economic
environment and the advent of the Internet age in the mid-90s prompted
changes in the nature of leadership itself. Organizational leadership came
to be revered as an art form in which innovative, entrepreneurial guidance
inspired employees.

Bill Gates could arguably be considered the poster child of this eras
maverick leadership. Not only did Gates foresight and innovative vision on
personal computing alter the way we work today, but his active involvement
in key management and strategic decisions, as well as his devotion to
customers and employees, has also earned him genuine respect from
employees, customers and the public alike.
These days, stakeholder relations, business ethics and corporate social
responsibility are top of mind. However, those of us who have been in the
business long enough know that personal accountability and brand
reputation have always been vital leadership concerns. As such, theres
never been a time where ethical leadership was not a part of our evaluation
criteria.

Todays activist boards are often blamed for the high CEO turnover. The
fact is, todays boards are doing what they should have been doing all along:
identifying the right leadership for the right times and spotting problems
before they can damage the company. We believe that the reason there is
more CEO turnover todaywhile CEOs are more than ever aware of their
keen ethical responsibilitieslies in the fact that boards are more attentive
to the other traits of leadership required.

For instance, in times of trouble, a company needs a leader who has the
courage and the conviction to make some hard decisionand make it
quickly. This means that leaders sometimes have to act on their own
without necessarily building consensus. Yet in other circumstances it is that
very consensus-building that is key to success. The skill is in knowing the
difference.

We believe that being a great leader does not necessarily mean you embody
all the leadership traits listed here. Being a great leader means that you
have the strategic vision to reinvent yourself and your business depending
on what the times require.

At the end, in business, there is only one constant and that is performance.
It is the archetype of successful leadership and the main criterion we use
when evaluating candidates for the CEO of the Year Award.

There may be a lot of pressure on todays leaders, but that has always been
the case and is how it should be. CEOs who have stood the test of time
prove that great leadership requires resilience, integrity, strong values and
a relentless commitment to all stakeholders.

Each year, as we go through the exercise of selecting the honorees for our
awards, we are once again amazed by the pool of incredibly talented
business leaders our nation generates. As we celebrate this years winner,
Bob Ulrich, we are confident that American business can continue to grow
many more world-class leaders for decades to come.
Ed Kopko is chairman and CEO of Butler International and CEO and
publisher of Chief Executive magazine. Jeffrey Sonnenfeld is senior
associate dean of the Yale School of Management and CEO of The Chief
Executive Leadership Institute at the Yale School of Management.
Both Kopko and Sonnenfeld were on the judging panel of this years CEO
of the Year Award.
For more info on the CEO of the Year Award click here.
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