WHARTON LEADERSHIP DIGEST 

May, 2000, Volume 4, Number 8

Contents 

Leadership Program:  Building Future Leaders at Entergy Corp.
Leadership Program:  “Be, Know, Do” at the U.S. Military Academy 
Leadership Portrait:  Marine Commanders
Leadership Book:  Corps Business
Executive Program: Wharton Fellows in E-Commerce: To E or not to Be?
Leadership Quotes:  Leading with Speed 

Leadership Program:  Building Future Leaders at Entergy Corporation 

By Michael Grabarek, Director, Developing Great People at Entergy 

Headquartered in New Orleans, Entergy Corporation is a $9-billion energy provider employing more than 13,000 people.  It furnishes electric power to 2.5 million customers in the U.S., runs power plants worldwide, and markets and trades wholesale energy.

Entergy provides opportunities for all employees to further develop themselves, and it creates additional developmental opportunities for a targeted group of people who are expected to play a significant leadership role in the company's future. 

To identify the factors that helped its current leaders succeed, the top 120 executives at Entergy were asked to reflect on their past and to identify the one to three “most significant things that made a difference” for them to get where they are today.  Five leading factors emerged during the interviews, and the percentage of the executives identifying each are as follows: 

92%    Variety of experience
59%    Risky and visible assignments
56%    Coaching by leaders
42%    Personal qualities
42%    Education and training 

In elaborating on the primary value of diverse career experience, the executives emphasized a variety of assignments in different functions, business units, companies, and even countries. From these experiences, they said they acquired a better understanding of how the whole business operates, the ways their decisions affect others parts of the organization, and methods for transferring best practices from one area to another. They also singled out the value of building strong networks both inside and outside the company. 

Drawing on this study, Entergy identifies a select group of high-potential managers through its annual appraisal process for immersion in a variety of learning events and targeted work assignments. The learning events include 360-feedback, executive education programs, and personal coaching. At least half of the learning process entails the direct application of concepts to real business challenges. 

As managers are developed, Entergy believes it is important for them to experience a variety of fresh challenges. To assess its progress, the company has created a metric entitled “propelling careers.”  It focuses on the top ranks comprised of some 700 managers, directors, and vice presidents.  The metric is first calculated by summing the annual number of (1) top people who moved into new positions, (2) professionals, supervisors, and superintendents who rose into the management ranks, and (3) top people hired from other companies.  This summary number is then divided by the total number of managers, directors, and vice presidents. 

In 1995, prior to the development initiative, the measure stood at only 11 percent. Since initiating its development program, however, Entergy has elevated that faction in 1996 to 19 percent, and in 1997, 1998, and 1999, respectively, to 41, 40, and 40 percent.  From its experience, the company has concluded that the ideal range is 30 to 40 percent.  When less than 30 percent, strong managers are in their positions too long for effective utilization and further development of their talents; when more than 40 percent, they are not there long enough to see an impact and live with the results.

Michael Grabarek, Director of Developing Great People, can be contacted at <mgrabar@entergy.com>, and information on Entergy is available at <http://www.entergy.com>.

Leadership Program:  “Be, Know, Do” at the U.S. Military Academy   

By Dano M. Jukanovich, Wharton MBA Student, Class of 2001, and U.S. Military Academy Graduate, Class of 1993 

How does an organization turn an entry-level employee into a “leader of character” committed to a “lifetime of selfless service?”  Sound impossible or maybe a function of chance?  Neither, learned a group of Wharton students, faculty, and staff that recently visited the United States Military Academy at West Point, New York. 

The officers of the Academy’s Behavioral Sciences and Leadership Department help structure an experience to build that character and selfless service among the 4,000 cadets enrolled at the Academy.  They achieve this through a three-legged, “Be-Know-Do” model. 

The “do” part of this equation is ready-made for West Point.  Since its founding in 1802, the Academy has built a range of experiential courses to prepare its soldiers for warfare.  The “know” piece comes readily from the many courses in engineering, military history, and battlefield history required of the cadets.  

The “be” part presents special challenge, but the Academy takes advantage of the fact that its cadets form a captive audience for 47 months.  Requiring academic, military, and physical training among all cadets, it consistently weaves moral and ethical development into each. 

On the academic front, West Point seeks renaissance leaders and provides a comprehensive curriculum with 31 core courses ranging from philosophy to physics.  On the military front, it joins classroom education with hands-on small unit leadership experienced both at the Academy and during summer service as “intern” leaders in regular army units around the world.  

On the physical front, West Point builds on General Douglas MacArthur’s dictum that “Upon the fields of friendly strife are sewn the seeds that upon other fields on other days will bear the fruits of victory.”  It requires that all cadets participate in either intercollegiate or highly competitive intramural athletics while also carrying core physical fitness courses.  

The cadets live out all of these experiences within the confines of a strict written code of honor and respect, the violation of which can lead to dismissal.  At the end of their four-year experience, West Point intends with these elements that all cadets have internalized the mission of the Academy, “be”coming leaders of character committed to a lifetime of selfless service. 

Most organizations don’t have 47-months and few can offer the total experience provided by the Academy.  But companies still face the same challenges that confront the officers of the Academy:  How to create a reflective environment in which to foster leadership development among all new employees and to instill the values and principles of the organization in each? 

Drawing on the experience of West Point’s Behavioral Sciences and Leadership Department and the Academy’s other leadership components, companies may want to eschew quick fixes in favor of the long-term investment required for building an army of employees who are committed leaders of character.  By allowing all new managers to experience leadership and learn from that experience through dialogue with veteran mentors, they are likely to foster not only “know”ing and “do”ing but also “be”ing.  

Past practice speaks for itself.  The roster of the more than 50,000 graduates of the U.S. Military Academy lists Dwight David Eisenhower, Ulysses S. Grant, Robert E. Lee, George Patton, and Norman Schwarzkopf.  

Dano Jukanovich can be reached at <Dano.Jukanovich.wg01@wharton.upenn.edu>.  The homepage for the U.S. Military Academy is <http://www.usma.edu/>, the Behavioral Sciences and Leadership Department can be found at <http://www.dean.usma.edu/bsl/>, and the latter’s leadership program can be viewed at <http://www.dean.usma.edu/bsl/Leadership/index.htm>.

leadership portrait:  Character and Caring: Business Lessons from Three Military Leaders 

By Aneesha Capur, Wharton MBA Student, Class of 2001, and
      Mukul Pandya, Editor, Knowledge@Wharton 

Military metaphors abound in the world of business.  Companies rarely enter new markets; they usually “invade” them.  When businesses ponder geographic expansion, they make “forays” into new territories.  Consultants no longer speak of assignments for clients – the preferred term is “engagements.” All this martial lingo serves a purpose:  At a time when global business rivalries are intensifying, competition often resembles combat.  This fact was forcefully borne home to the CEO of a high-tech company who recently sold his start-up to Microsoft.  Speaking to the Wall Street Journal about his reaction when the Seattle-based giant let 50 of his 100 employees go, he said: “Though I felt that we had won, some got killed, [and] some got wounded...” 

Such parallels between warfare and business formed the theme of a recent seminar at Wharton. Titled “From the Battlefield to the Boardroom: Applying Military Leadership to the Corporate World,” it featured three former military officers who spoke about their experience in the armed services and how it prepared them for their present roles in corporate America.  What they said might surprise those who may have expected to hear about guerrilla strategies or take-no-prisoners tactics.  Their fundamental message:  Character counts; leadership means caring for your troops; and those who accept the status quo will probably die. 

General Charles Krulak, a former Marine Corps commandant who once led troops in Vietnam, is now senior vice chairman of MBNA Bank, an independent credit-card issuer that manages more than $70 billion in loans.  He spoke about character as the most important trait of a leader.  “It doesn’t make a difference whether you are in the boardroom or the battlefield,” Krulak says. “Many people are brilliant, articulate, charismatic, innovative and tough. But if they lack character, they will not succeed as leaders.” 

But are there not instances of leaders – including presidents of countries – who seem to succeed despite their apparent lack of character?  True, admits Krulak, but their power is fleeting because success without character rarely stands the test of time.  “It doesn’t serve to inspire anyone – and as leaders, you are in the inspiration business,” he says.  Unlike talents such as intelligence, which is a “God-given gift, character is a choice,” says Krulak.  “And it’s not an easy choice like whether you should have Pop Tarts for breakfast – it’s the kind of choice where your palms get clammy, sweat pops out on your brow, your guts begin to turn, and you know that the decision you are about to make will have an impact that people will not want to hear.  But it is the right decision.”  When people learn to make right decisions over and over again, no matter how difficult they are, that process helps build character. 

If character matters, caring is character put into action, according to General Thomas Draude, former assistant commander of the First Marine Division in Desert Storm, who is now senior vice president of USAA, a $40 billion financial services company.  “Early on, marine officers are taught to do two things: Accomplish your mission, and take care of your troops,” he says.  How does an officer take care of troops? By showing that he or she cares about them – which involves knowing their names, their backgrounds, and even what makes them tick.  Quoting Sun Tzu, author of the Chinese classic The Art of War, Draude says:  “Regard your soldiers as your own children, and they will follow you into the deepest valleys. Treat them as your own beloved sons, and they will be with you even unto death.” 

Does corporate life lend itself much to caring? Draude believes it does.  “The attitude of caring is important because, first, it is the right thing to do,” he says. “Your character is demonstrated by the way you care about those for whom you are responsible.  Caring cannot be delegated…it is not an HR requirement.”  Secondly, as the U.S. economy changes from one that was dominated by manufacturing to one that is driven by services, a caring, nurturing environment is crucial to engage the minds and hearts of all employees.  “How can managers expect employees to care for customers unless they feel cared for?” he asks.  “You can’t become a leader unless you care for your troops.  You can’t fake it.” 

Colonel Robert E. Lee, former commanding officer of the Marine Corps’ officer basic school, is now an advisor to the Secretary of the Navy.  He points out that business is changing so rapidly that all leaders need to ask why they are doing things the way they are.  “If you accept the status quo, you will die,” he says.  “When you ask why something is being done in a certain way, you are not belittling tradition or the past – you are learning something new.”  Asking such questions helps create agile organizations that can respond quickly to changes in the market. 

Following the nostrums that Krulak, Draude and Lee prescribe may not necessarily bring V-Day to all business executives. It could help them, however, avoid the most destructive landmines. 

Aneesha Capur can be reached at <acapur@wharton.upenn.edu>, and Mukul Pandya can be reached at <pandyam@wharton.upenn.edu>. 

Leadership Book:  Corps Business in a High-Speed Environment  

Business writer David H. Freedman visited the leadership school of the U.S. Marines based at Quantico, Virginia.  His article about how the Marines develop leadership became a cover story for Inc. Magazine, and the attention it attracted lead Freedman to write Corps Business: The 30 Management Principles of the U.S. Marines.  

Freedman observed Marine urban combat exercises, mission planning sessions, and amphibious landing operations.  He interviewed high-ranking commanders and front-line soldiers.  And with an eye for what business can learn from an organization that puts a premium on strategic response to fast-changing conditions, he has extracted lessons for leading in any organization, whether combat or commerce, that faces a rapidly evolving environment.  

While Marine commanders retain unambiguous top-down authority, they and their troops are trained to ensure bottom-up action.  Officers learn to communicate and explain unambiguous objectives, and then leave their subordinates to work out all the details.  They also master the art of announcing provisional plans, inviting everybody to shoot holes in them, and then plugging the holes before it really counts.  Mistakes are tolerated, even encouraged, if they point to stronger performance next time.  Subordinates know to salute once the plan is finalized, but until then they also know their job is to resist and challenge all ideas that may not work.  This may even entail going over the head of an immediate commander.  Freedman observes:  “High-risk, high-speed, high-focus assaults tend to be unforgiving on bureaucratic or autocratic management styles.  Commanders who refuse to distribute decision-making power to their men quickly find themselves with few men left to command.” 

Since time is of the essence, Marine commanders seek a “70-percent” solution, not 100 percent consensus.  By learning how to stop well short of the perfect plan, they act before it is too late.  Freedman writes:  “In environments were conditions can quickly flip and where the opposition can regroup and take advantage in a heartbeat, the Marines consider indecisiveness a fatal flaw – worse that making a mediocre decision, because a mediocre decision, especially if swiftly rendered and executed, at least stands a chance….. [The] point is constantly brought home to Marines that fast and bold is where it’s at.”   

Seasoned Marines repeatedly offer accounts of their prior experiences to fresh recruits, teaching through one of one of the oldest but still most effective methods of any.  “Sea stories,” concludes Freedman, “are not merely an important means for transferring wisdom from experienced Marine officers to younger ones; they are the primary means.”  By exposing young soldiers to prior events, they acquire a repertoire of previous scenarios, and from them are built templates, guidelines for action general enough to be widely applicable and specific enough to imply operational steps.  The most famous of all is captured in the Corps motto:  Semper Fidelis, “always faithful.”   

In a foreword to the book, former Marine Commandant Charles C. Krulak writes, “Marines have long recognized the unequivocal link between battlefield success and leadership….  Every Marine is at heart a teacher and mentor, obliged to pass on his knowledge and the benefit of his experience to his subordinates….  I am convinced that…versatile leaders of character are the linchpin of all successful enterprises.”  During an event at the Wharton School on March 30, 2000, Krulak also informed a group of MBA students that in his 30 years in the Marines Corps, Freedman’s book was the best he had ever read on leadership.  

Source:  David H. Freedman, Corps Business: The 30 Management Principles of the U.S. Marines.  New York:  HarperBusiness, 2000.  David Freedman can be reached at <www.freedman.com>. 

For a related article that also draws on Marine experience for management lessons, see Jon R Katzenbach and Jason A. Santamaria, “Firing Up the Front Line,” Harvard Business Review, May-June, 1999, pp. 107-117.
 

EXECUTIVE pROGRAM:  Wharton Fellows in E-Commerce –
                                                To E or Not to Be? 

Wharton has created a new post-MBA program to prepare senior executives to lead in the transformation of their organizations in the changing global e-business environment.  The program begins this fall with its first group of fifty executives, and it brings them together with faculty for a week at the Wharton School, in Silicon Valley, and abroad. 

The program provides hands-on learning based on a combination of electronic education, customized modules, and intensive face-to-face sessions.  Fellows identify emerging issues and collaborate with other participants and faculty to develop actions projects within their own companies.  They also learn through “reverse mentoring” from Wharton MBA students already immersed in e-business.  After four months, participants join the Wharton Society of Fellows, a lifelong learning community of Wharton faculty and business peers. 

For information on the program, contact Barbara Gyde at <gydeb@wharton.upenn.edu> and see its website at <http://www.wharton.upenn.edu/efellows/>.
 

Leadership Quotes:  Leading With Speed  

In Silicon Valley, “life is measured in dog years, not human years.” – Kathryn Eisenhardt, Stanford University professor, consultant, and author 

 “Speed is not only a competitive advantage, it is one of management’s most critical weapons.”  – Ram Charan, management consultant and author 

“We decided who would be managing before – not after – the change of control (in the 1999 merger of Bankers Trust into Deutsche Bank).  We concluded that the merger was finished within three months of the change in control, and this ensured that our customers did not leave, headhunters did not succeed, and newspapers did not write scandalous articles.”  – John Ross, chief executive officer, Deutsche Bank Americas.  

“If you expect to develop leaders, you had better have a teachable point of view.”  – Noel Tichy, University of Michigan professor, consultant, and author 

“Leading with speed means you are focused on people since you have to trust others.”  – John Byrne, senior writer, Business Week 

“Speed it what it is all about.”  – William Pasmore, management consultant and author 

“You can’t stop a freight train moving 70 miles an hour.”  – Sherif Abdelhak, chief executive of the Allegheny health system that bankrupted in 1998 after expanding too rapidly, quoted by Lawton Burns, director of the Wharton Center for Health Management & Economics.  

“My employees expect me always to be ‘up’ and to be increasing our stock price.”  – Mark Walsh, chief executive officer, VerticalNet 

Source:  Wharton Leadership Conference on “Leading with Speed:  Developing Leaders for Fast-Moving Organizations,” May 18, 2000.