- - Wednesday, August 29, 2012


By Cleve W. Stevens

Beaufort Books, $26.95,

381 pages

Reviewed by James Srodes

Sometimes it is salutary to restate the obvious. That is essentially what this reasoned, imaginative and easily digested prescription for a modern management strategy accomplishes. I cheerfully predict you will begin to notice copies of this book in airport lounges across the country being devoured by the new generation of business go-getters.

The obvious point being offered by business leadership-development guru Cleve W. Stevens is that something is terribly wrong with most corporate management in today’s United States and most especially within the kleptocracy known as Wall Street.

“We must face up, and when we do, what we see is that much of our business dealings, our financial dealings in particular, have been corrupted, and in some instances have become thoroughly rotten, so rotten that we cannot hope that a few meager reforms (reregulation) are going to rid us of that rot,” Mr. Stevens states.

It takes a moment’s reflection to recall how subtle the corruption has been. I have been a financial reporter long enough to recall a debate at a Business Council meeting between Henry Ford II and Roger Smith, the CEO of General Motors. It was not about some arcane financial scheme but about the relative technical merits of their two pet products — the Mustang and the Corvette. And CEO Charles J. Pilliod Jr. once took me onto the Goodyear factory floor in Akron to show me how to mount the belt in its new design for steel-belted radial tires. These men certainly were motivated by profits, but they also had a visceral pride in the products they made.

When he decries today’s bottom-line (and compensation-package) morality, Mr. Stevens knows whereof he writes. He is one of the world’s leading business psychologists and an authoritative consultant to global Fortune 500 executive suites on how to make the leadership team more effective.

Mr. Stevens draws a sharp distinction between what he calls today’s flawed “transactional” leadership ethic and what he advocates as a “transformational” leadership standard. The “transactional” ethos, he argues, is the root of the current corrupt dysfunction that grips the economy.

“This corruption is the unavoidable result of the ascendant business and business leadership rationale, a mindset that over the past forty to fifty years has become increasingly strident and self-assured, indeed certain that it is the only basis for business leadership. That rationale claims that extrinsic rewards and results — monetary rewards in particular — are the sole reason for the organization’s existence, and the people are, de facto, merely the means to that end. It doesn’t matter if that extrinsic result is profit, market share, new products, or even helping the have-nots of the world,” he argues.

“When we begin to buy into an ethic that declares shareholder value as the only value, we have set ourselves on a course, as we are now seeing, that ultimately and inevitably leads to bust,” he adds.

Mr. Stevens does not question the profit motive as a driving force in economics. To the contrary, profits are proof, he argues, that the other main objectives of successful leadership are functioning optimally.

As he describes the other required leadership priorities, “The first is the growth of the people, and the second is the achievement of excellence at all levels as the result of this development. To achieve these objectives, a third element must be present: The leader must be committed to his or her own growth, both as a leader and as a human being,” he says.

“Finally, profit, or more generally, objective results, are understood as the quantifiable measure of the leader’s effectiveness in the growth of the people and his or her own growth as a leader. Profit is extremely important in the transformative approach, but not as an end in itself. Rather it is the by-product,” he concludes.

I will not spoil for the reader the trek Mr. Stevens leads through the list of techniques of how to achieve such a leadership paradigm that is transformational rather than transactional.

But among the key elements of that technique, the primary one, and the one most problematical, is his emphasis on a leader’s focus on the people who work for the organization in question. I say problematical, because so much of modern management under the old transactional model involves replacing human beings with technology — computer programs, robots and other “labor-saving” devices.

In addition to having a clear vision of just what the organization can optimally achieve, Mr. Stevens mandates that a successful leader must create an environment where all the members of the workforce feel an intense team membership but also that their own personal development is being enhanced in both a business and a human sense.

Other essential ingredients that seem to have dropped out of the American economic experiment are re-injected by Mr. Stevens’ prescriptions. One is an enhanced environment that fosters risk-taking, creativity and innovation. But coupled with the emphasis on innovation is an equally enhanced standard of accountability.

So this book is both an instruction manual for the new age of doing business as well as a battle cry for a new standard of leadership.

“What we need are a few strong, smart, courageous leaders who are willing to commit themselves to the possibility that there might be a better way — a more sustainable way of making a profit (huge profits, at that), a more meaningful and productive way of working together, a better way of leading others and leading our own lives,” Mr. Stevens argues.

Agree with his conclusions or not, the author has given the reader much to think about in this accessibly-written call to arms.

James Srodes has been the Washington bureau chief for both Forbes and Financial World magazines.

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