What's needed next: a culture of candor.

If there's one thing that the past decade's business disasters should teach us, it's that we need to stop evaluating corporate leaders simply on the basis of how much wealth they create for investors. A healthier yardstick would be this: the extent to which leaders create firms that are economically, ethically, and socially sustainable. The first step toward accomplishing that task is to create a culture of candor. Companies can't innovate, respond to stakeholder needs, or run efficiently unless the people inside them have access to timely, relevant information, point out professors O'Toole, of the University of Denver's Daniels College of Business, and Bennis, of the University of Southern California. Increasing transparency can be an uphill battle against human nature, however. The obstacles are numerous: macho executives who don't listen to their subordinates or punish them for bringing bad news; leaders who believe that information is power and hoard it; groupthink among team members who don't know how to disagree; boards that fail to question charismatic CEOs. Nevertheless, leaders can take steps to nurture transparency. By being open and candid, admitting their errors, encouraging employees to speak truth to power, and rewarding contrarians, executives can model the kind of conduct they want to see. Training employees to handle unpleasant conversations with grace also will break down barriers to honest communication. To avoid being blinded by biases, leaders can diversify their sources of information--an obvious measure that's rarely taken. Perhaps the biggest lever for cultural change is the executive selection process--choosing leaders for their transparent behavior, not just their ability to compete. And a few companies have even gone so far as to share all relevant information with every employee.

Making judgment calls. The ultimate act of leadership.

According to the traditional view, judgment is an event: You make a decision and then move on. Yet Tichy, of the University of Michigan's Ross School of Business, and Bennis, of the University of Southern California's Marshall School of Business, found that good leadership judgment occurs not in a single moment but throughout a process. From their research into the complex phenomenon of leadership judgment, the authors also found that most important judgment calls reside in one of three domains: people, strategy, and crisis. Understanding the essence of leadership judgment is crucial. A leader's calls determine an organization's success or failure and deliver the verdict on his or her career. The first phase of the judgment process is preparation--identifying and framing the issue that demands a decision and aligning and mobilizing key stakeholders. Second is the call itself, And third is acting on the call, learning and adjusting along the way. Good leaders use a "story line"--an articulation of a company's identity, direction, and values--to inform their actions throughout the judgment process. Boeing CEO Jim McNerney, for instance, focused on a story line of Boeing as a world-class competitor and ethical leader to make a judgment call that launched the company's recovery from a string of ethical crises. Good leaders also take advantage of "redo loops" throughout the process, reconsidering the parameters of the decision, relabeling the problem, and redefining the goal in a way that more and more people can accept. Procter & Gamble's A.G. Lafley and Best Buy's Brad Anderson have both used redo loops--in preparation and execution, respectively--to strengthen not only support for their calls but also the outcomes.

The challenges of leadership in the modern world: introduction to the special issue.

This article surveys contemporary trends in leadership theory as well as its current status and the social context that has shaped the contours of leadership studies. Emphasis is placed on the urgent need for collaboration among social-neuro-cognitive scientists in order to achieve an integrated theory, and the author points to promising leads for accomplishing this. He also asserts that the 4 major threats to world stability are a nuclear/biological catastrophe, a world-wide pandemic, tribalism, and the leadership of human institutions. Without exemplary leadership, solving the problems stemming from the first 3 threats will be impossible.

How business schools lost their way.

Business schools are facing intense criticism for failing to impart useful skills, failing to prepare leaders, failing to instill norms of ethical behavior--and even failing to lead graduates to good corporate jobs. These criticisms come not just from students, employers, and the media but also from deans of some of America's most prestigious B schools. The root cause oftoday's crisis in management education, assert Warren G. Bennis and James O'Toole, is that business schools have adopted an inappropriate--and ultimately self-defeating--model of academic excellence. Instead of measuring themselves in terms of the competence of their graduates, or by how well their faculty members understand important drivers of business performance, they assess themselves almost solely by the rigor of their scientific research. This scientific model is predicated on the faulty assumption that business is an academic discipline like chemistry or geology when, in fact, business is a profession and business schools are professional schools--or should be. Business school deans may claim that their schools remain focused on practice, but they nevertheless hire and promote research-oriented professors who haven't spent time working in companies and are more comfortable teaching methodology than messy, multidisciplinary issues--the very stuff of management. The authors don't advocate a return to the days when business schools were glorified trade schools. But to regain relevancy, they say, business schools must rediscover the practice of business and find a way to balance the dual mission of educating practitioners and creating knowledge through research.

The seven ages of the leader.

Leaders go through many transitions in their careers. Each brings new crises and challenges--from taking over a damaged organization to having to fire somebody to passing the baton to the next generation. These moments can be wrenching--and can threaten your confidence--but they're also predictable. Knowing what to expect can help you get through and perhaps emerge stronger. In this engaging article, Warren G. Bennis, professor and founding chairman of the University of Southern California's Leadership Institute, reflects on leadership, recounting his own experiences as a young lieutenant in the infantry in World War II, as the new president of a university, and as the mentor to a unique nursing student. Bennis also describes the experiences of other leaders he has known throughout his career. Drawing on more than 50 years of academic research and business expertise--and borrowing from Shakespeare's seven ages of man--Bennis says the leader's life unfolds in seven stages. "The infant executive" seeks to recruit a mentor for guidance. "The schoolboy" must learn how to do the job in public, subjected to unsettling scrutiny of every word and act. "The lover with a woeful ballad" struggles with the tsunami of problems every organization presents. "The bearded soldier" must be willing--even eager--to hire people better than he is, because he knows that talented underlings can help him shine. "The general" must become adept at not simply allowing people to speak the truth but at actually being able to hear what they are saying. "The statesman" is hard at work preparing to pass on wisdom in the interests of the organization. And, finally, "the sage" embraces the role of mentor to young executives.

Crucibles of leadership.

What makes a great leader? Why do some people appear to know instinctively how to inspire employees--bringing out their confidence, loyalty, and dedication--while others flounder again and again? No simple formula can explain how great leaders come to be, but Bennis and Thomas believe it has something to do with the ways people handle adversity. The authors' recent research suggests that one of the most reliable indicators and predictors of true leadership is the ability to learn from even the most negative experiences. An extraordinary leader is a kind of phoenix rising from the ashes of adversity stronger and more committed than ever. In interviewing more than 40 leaders in business and the public sector over the past three years, the authors discovered that all of them--young and old alike--had endured intense, often traumatic, experiences that transformed them and became the source of their distinctive leadership abilities. Bennis and Thomas call these shaping experiences "crucibles," after the vessels medieval alchemists used in their attempts to turn base metals into gold. For the interviewees, their crucibles were the points at which they were forced to question who they were and what was important to them. These experiences made them stronger and more confident and changed their sense of purpose in some fundamental way. Through a variety of examples, the authors explore the idea of the crucible in detail. They also reveal that great leaders possess four essential skills, the most critical of which is "adaptive capacity"--an almost magical ability to transcend adversity and emerge stronger than before.