Although a number of business scholars have explored the psychology of executives, Manfred F.R. Kets de Vries has made the analysis of CEOs his life's work. In this article, Kets de Vries, a psychoanalyst, author, and Insead professor, draws on three decades of study to describe the psychological profile of successful CEOs. He explores senior executives' vulnerabilities, which are often intensified by followers' attempts to manipulate their leaders. Leaders, he says, have an uncanny ability to awaken transferential processes--in which people transfer the dynamics of past relationships onto present interactions--among their employees and even in themselves. These processes can present themselves in a number of ways, sometimes negatively. What's more, many top executives, being middle-aged, suffer from depression. Midlife prompts a reappraisal of career identity, and by the time a leader is a CEO, an existential crisis is often imminent. Not all CEOs are psychologically unhealthy, of course. Healthy leaders are talented in self-observation and self-analysis, Kets de Vries says. The best are highly motivated to spend time on self-reflection. Their lives are in balance, they can play, they are creative and inventive, and they have the capacity to be nonconformist. "Those who accept the madness in themselves may be the healthiest leaders of all," he concludes.
Managers and leaders are two very different types of people. Managers' goals arise out of necessities rather than desires; they excel at defusing conflicts between individuals or departments, placating all sides while ensuring that an organization's day-to-day business gets done. Leaders, on the other hand, adopt personal, active attitudes toward goals. They look for the opportunities and rewards that lie around the corner, inspiring subordinates and firing up the creative process with their own energy. Their relationships with employees and coworkers are intense, and their working environment is often chaotic. In this article, first published in 1977, the author argues that businesses need both managers and leaders to survive and succeed. But in the larger U.S. organizations of that time, a "managerial mystique" seemed to perpetuate the development of managerial personalities-people who rely on, and strive to maintain, orderly work patterns. The managerial power ethic favors collective leadership and seeks to avoid risk. That same managerial mystique can stifle leaders' development-How can an entrepreneurial spirit develop when it is submerged in a conservative environment and denied personal attention? Mentor relationships are crucial to the development of leadership personalities, but in large, bureaucratic organizations, such relationships are not encouraged. Businesses must find ways to train good managers and develop leaders at the same time. Without a solid organizational framework, even leaders with the most brilliant ideas may spin their wheels, frustrating coworkers and accomplishing little. But without the entrepreneurial culture that develops when a leader is at the helm of an organization, a business will stagnate and rapidly lose competitive power.
When asked to define the ideal leader, many would emphasize traits such as intelligence, toughness, determination, and vision-the qualities traditionally associated with leadership. Such skills and smarts are necessary but insufficient qualities for the leader. Often left off the list are softer, more personal qualities-but they are also essential. Although a certain degree of analytical and technical skill is a minimum requirement for success, studies indicate that emotional intelligence may be the key attribute that distinguishes outstanding performers from those who are merely adequate. Psychologist and author Daniel Goleman first brought the term "emotional intelligence" to a wide audience with his 1995 book of the same name, and Goleman first applied the concept to business with this 1998 classic HBR article. In his research at nearly 200 large, global companies, Goleman found that truly effective leaders are distinguished by a high degree of emotional intelligence. Without it, a person can have first-class training, an incisive mind, and an endless supply of good ideas, but he still won't be a great leader. The chief components of emotional intelligence-self-awareness, self-regulation, motivation, empathy, and social skill-can sound unbusinesslike, but Goleman, cochair of the Consortium for Research on Emotional Intelligence in Organizations, based at Rutgers University, found direct ties between emotional intelligence and measurable business results. The notion of emotional intelligence and its relevance to business has continued to spark debate over the past six years, but Goleman's article remains the definitive reference on the subject, with a detailed discussion of each component of emotional intelligence, how to recognize it in potential leaders, how and why it connects to performance, and how it can be learned.
In the winter of 2000, at the height of the dot-com boom, business leaders posed for the covers of Time, BusinessWeek, and the Economist with the aplomb and confidence of rock stars. These were a different breed from their counterparts of just 10 or 20 years before, who shunned the press and whose comments were carefully crafted by corporate PR departments. Such love of the limelight often stems from what Freud called a narcissistic personality, says psychoanalyst and anthropologist Michael Maccoby in this HBR classic, first published in the January-February 2000 issue. Narcissists are good for companies in extraordinary times--those that need people with the passion and daring to take them in new directions. But narcissists can also lead companies into disaster by refusing to listen to the advice and warnings of their managers. It's not always true, as Andy Grove famously put it, that only the paranoid survive. Most business advice is focused on the more analytic personality that Freud labeled obsessive. But recommendations about creating teamwork and being more receptive to subordinates will not resonate with narcissists. Narcissists who want to overcome the limits of their personalities must work as hard at that as they do at business success. One solution is to find a trusted sidekick who can point out the operational requirements of the narcissistic leader's often overly grandiose vision and keep him or her rooted in reality. Another is to take a leap of faith and go into psychoanalysis, which can give these leaders the tools to overcome their sometimes fatal character flaws.
The would-be analyst of leadership usually studies popularity, power, showmanship, or wisdom in long-range planning. But none of these qualities is the essence of leadership. Leadership is the accomplishment of a goal through the direction of human assistants-a human and social achievement that stems from the leader's understanding of his or her fellow workers and the relationship of their individual goals to the group's aim. To be successful, leaders must learn two basic lessons: People are complex, and people are different. Human beings respond not only to the traditional carrot and stick but also to ambition, patriotism, love of the good and the beautiful, boredom, self-doubt, and many other desires and emotions. One person may find satisfaction in solving intellectual problems but may never be given the opportunity to explore how that satisfaction can be applied to business. Another may need a friendly, admiring relationship and may be constantly frustrated by the failure of his superior to recognize and take advantage of that need. In this article, first published in HBR's September-October 1961 issue, W.C.H. Prentice argues that by responding to such individual patterns, the leader will be able to create genuinely intrinsic interest in the work. Ideally, Prentice says, managerial dominions should be small enough that every supervisor can know those who report to him or her as human beings. Prentice calls for democratic leadership that, without creating anarchy, gives employees opportunities to learn and grow. This concept, along with his rejection of the notion that leadership is the exercise of power or the possession of extraordinary analytical skill, foreshadows the work of more recent authors such as Abraham Zaleznik and Daniel Goleman, who have fundamentally changed the way we look at leadership.
Businesspeople tend to be extroverts, taking a lively interest in others and preferring action to introspection. But to be fully effective as leaders, they must learn to navigate the twists and turns of their emotions and those of the people around them.
Ed Davidson is on top of the world, literally and figuratively, at the beginning of this fictional case study. He's in the Swiss Alps, headed for Davos and his first experience as a delegate to the World Economic Forum's annual conference. And he has reason to believe he is about to be made president of his company, Carston Waite--and, therefore, heir apparent to the CEO position. Then his phone rings. It's his mentor, Frank Maugham, the CFO and a board member at Carston Waite, calling to inform him of a major setback. "David asked me to let you know you are not going to be named president," he says. "At least not yet. He wants to stay close to the business." But Frank has a plan to change the CEO's mind. Meanwhile, Ed feels betrayed and humiliated--and his desire for revenge against the CEO mounts. When the news comes that Frank's plan has failed and has cost Frank his job, Ed is already deep in a plot of his own. He's in Davos because David had to back out; Ed is supposed to deliver the CEO's remarks in his stead. But why not use this opportunity on the world stage instead to deal a parting blow? In R0401A and R0401Z,a psychoanalyst, a psychiatrist, an executive coach, and a governance expert comment on Ed's state of mind and his best course of action. They are Kenneth Eisold, the president of the International Society for the Psychoanalytic Study of Organizations; Dee Soder, the founder and managing partner of the CEO Perspective Group; Jeffrey P. Kahn, the CEO of WorkPsych Associates; and Charles M. Elson, the Edgar S. Woolard, Jr., Chair of Corporate Governance at the University of Delaware.
Ed Davidson is on top of the world, literally and figuratively, at the beginning of this fictional case study. He's in the Swiss Alps, headed for Davos and his first experience as a delegate to the World Economic Forum's annual conference. And he has reason to believe he is about to be made president of his company, Carston Waite--and, therefore, heir apparent to the CEO position. Then his phone rings. It's his mentor, Frank Maugham, the CFO and a board member at Carston Waite, calling to inform him of a major setback. "David asked me to let you know you are not going to be named president," he says. "At least not yet. He wants to stay close to the business." But Frank has a plan to change the CEO's mind. Meanwhile, Ed feels betrayed and humiliated--and his desire for revenge against the CEO mounts. When the news comes that Frank's plan has failed and has cost Frank his job, Ed is already deep in a plot of his own. He's in Davos because David had to back out; Ed is supposed to deliver the CEO's remarks in his stead. But why not use this opportunity on the world stage instead to deal a parting blow? In R0401A and R0401Z, a psychoanalyst, a psychiatrist, an executive coach, and a governance expert comment on Ed's state of mind and his best course of action. They are Kenneth Eisold, the president of the International Society for the Psychoanalytic Study of Organizations; Dee Soder, the founder and managing partner of the CEO Perspective Group; Jeffrey P. Kahn, the CEO of WorkPsych Associates; and Charles M. Elson, the Edgar S. Woolard, Jr., Chair of Corporate Governance at the University of Delaware.
Bakra Beverage is a two-party, nonscorable negotiation between a beverage manufacturer and a soft drink distributor over the terms of a potential distribution contract. BebsiCo is a multi-billion-dollar, multinational soft drink manufacturer interested in expanding its operations into the Middle Eastern country of Kumar. The distributor that was supposed to handle BebsiCo's new distribution campaign, Kabir Cola, decided suddenly last week to close its Kumari operations and focus on other Middle Eastern countries. BebsiCo is eager to sign a new distribution contract with the Kumar-based Bakra Beverage, a financially troubled but reputable soft drink distributor. Bakra wants this contract, which would put it back on the map, attract additional clients, and give the company confidence and certainty about its future. The simulation includes a range of possible criteria for determining the fee as well as numerous possibilities for value-creating options.
Bakra Beverage is a two-party, nonscorable negotiation between a beverage manufacturer and a soft drink distributor over the terms of a potential distribution contract. BebsiCo is a multibillion-dollar, multinational soft drink manufacturer interested in expanding its operations into the Middle Eastern country of Kumar. The distributor that was supposed to handle BebsiCo's new distribution campaign, Kabir Cola, decided suddenly last week to close its Kumari operations and focus on other Middle Eastern countries. BebsiCo is eager to sign a new distribution contract with the Kumar-based Bakra Beverage, a financially troubled but reputable soft drink distributor. Bakra wants this contract, which would put it back on the map, attract additional clients, and give the company confidence and certainty about its future. The simulation includes a range of possible criteria for determining the fee, as well as numerous possibilities for value-creating options.
Two-party or two-team, multi-issue, integrative/distributive negotiation between representatives of a new low-cost airline and a potential headquarters city over an incentives package and airport facilities. Fresh Air, a new low-cost airline, is looking for a headquarters city. It is negotiating with the city of Boston, its top choice for a headquarters location, over an incentive package and airport facilities. Fresh Air plans to build on the brand reputation of its parent airline, which stands for innovation, fun, unparalleled customer service, and empowered employees. It believes that a unique corporate culture and happy customers will allow it to charge lower prices, to fill its planes, and to run profitable operations. Boston seeks to reinvent itself as a center of American business after years of business decline. The opening of a low-cost carrier would be an important part of this effort. However, in these tight fiscal times, Boston is limited financially.
Two-party or two-team, multi-issue, integrative/distributive negotiation between representatives of a new low-cost airline and a potential headquarters city over an incentives package and airport facilities. Fresh Air, a new low-cost airline, is looking for a headquarters city. It is negotiating with the city of Boston, its top choice for a headquarters location, over an incentive package and airport facilities. Fresh Air plans to build on the brand reputation of its parent airline, which stands for innovation, fun, unparalleled customer service, and empowered employees. It believes that a unique corporate culture and happy customers will allow it to charge lower prices, to fill its planes, and to run profitable operations. Boston seeks to reinvent itself as a center of American business after years of business decline. The opening of a low-cost carrier would be an important part of this effort. However, in these tight fiscal times, Boston is limited financially.
Two-party or two-team, multi-issue, integrative/distributive negotiation between representatives of a new low-cost airline and a potential headquarters city over an incentives package and airport facilities. Fresh Air, a new low-cost airline, is looking for a headquarters city. It is negotiating with the city of Boston, its top choice for a headquarters location, over an incentive package and airport facilities. Fresh Air plans to build on the brand reputation of its parent airline, which stands for innovation, fun, unparalleled customer service, and empowered employees. It believes that a unique corporate culture and happy customers will allow it to charge lower prices, to fill its planes, and to run profitable operations. Boston seeks to reinvent itself as a center of American business after years of business decline. The opening of a low-cost carrier would be an important part of this effort. However, in these tight fiscal times, Boston is limited financially.
Since 1981, the U.S. federal government has operated a price support program to help sugar beet and sugar cane producers and processors. This complex program works through a combination of loans, import quotas, and duties. As a result, sugar prices in the United States are significantly higher than world prices. For example, in December 2001, U.S. consumers paid 22.9 cents per pound, while the world price was just 9 cents per pound. The General Accounting Office estimates that the total cost to consumers is $1.9 billion a year. Uses a simple demand-and-supply framework with real-world data to assess the economic and political consequences of the U.S. sugar program.
In early 2000, Asahi's senior management was under considerable pressure to launch its own brand of happoshu, a low-end form of beer that enjoyed certain tax benefits under Japanese law. Unlike its major rivals, all of whom had launched happoshu brands in the previous few years, Asahi steadfastly refused to enter the happoshu category.
Between May 2000 and January 2001, the recently deregulated electricity market in the state of California experienced what many commentators have characterized as a meltdown. Over that period, wholesale electricity prices increased over 500%, power emergencies and the threat of rolling blackouts became daily occurrences, and the state's largest investor-owned utility was thrust into bankruptcy. Details California's attempt to deregulate its wholesale and retail electricity markets.
Chuck Smith, senior brand manager of A.1. Steak Sauce, learns that Lawry's will soon be launching a steak sauce product. He has to determine whether A.1. should defend its business and, if so, what A.1. should do. In formulating the recommendation, he has to consider competitive dynamics and work through the financial implications.
Examines the launch of FluMist, the first significant innovation in influenza vaccines in over 50 years. The head of sales and marketing for MedImmune is working through the launch plan for FluMist. In particular, he is struggling with the question of how best to position FluMist. To determine the correct positioning, he has to consider business objectives, competitive set, differentiation, and pricing.