ARAMARK Corporation is a $6.5-billion global managed-services corporation that daily reaches 15 million people through its food and facility management companies, uniform and career apparel companies, and childcare and private elementary school companies.

In the 15-years that chief executive Joseph Neubauer has been running the privately held company, its total shareholder return has averaged around 30% annually. "Not bad," Neubauer says, "for people who basically cook hot dogs and pick up dirty uniforms."

Neubauer believes the company's success is to be found in its leadership model. "Basically, we have 5,000 owner-managers managing 150,000 employees around the world," he observed. "In the service business, the 'product' is created at the moment it is consumed. There is no way you can centrally manage the kind of quality control you need to grow and expand. That's why we created an Executive Leadership Council."

The Executive Leadership Council includes the top 150 executives in the corporation, including the business unit presidents, staff vice presidents, top general managers, and corporate department heads. The Council's agenda focuses on key strategic initiatives, continuous professional development, and exchange of information and best practices.

The focus on professional development has lead to the creation of the Executive Leadership Institute (ELI). "We created the institute to help transform the company from a strong operations culture focused on cash flow to more of a growth-oriented company focused on market opportunities, most particularly our own customer base," Neubauer recalled. All members of the Executive Leadership Council are "graduates" of the institute.

CEO Neubauer is directly involved in every aspect of the institute program. "I approve the participants, the curriculum, the course materials, even the B-School business professors," Neubauer stated. "I regard this whole exercise as a leadership development exercise and, therefore, among the most important things I can do to help the company sustain its growth."

The ELI program builds on real-world business cases through a five-day classroom experience, with participants grouped into teams to balance function and experience. The teams are given seven-month projects and a budget, and at the program's conclusion they present their recommendations to the business unit presidents and the company's top officers, including Neubauer. The business unit presidents then have sixty days to accept or reject the recommendations, and they report their final decisions to Neubauer.

Neubauer sums up: "we're shaping a leadership team, not training managers. We tell our leaders they're free to make their own decisions and we encourage risk taking. But we're quite clear that, as leaders, we're all accountable to the corporation for results."

From the Wharton Leadership Digest, June, 1999.