The New Leadership: Visions for the 21st Century
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Good morning. My name is Dick Cavanaugh, and I am the president of the Conference Board, and we are the happy, and proud co-sponsors of this important meeting on leadership -- leadership yesterday, leadership today, and tomorrow. The principal sponsor is Harvard Magazine which is celebrating its hundredth anniversary this year. We are also delighted that our principal sponsor for this is Booz, Allen, Hamilton, the consulting and technology firm. I'm not sure how old they are. We, the Conference Board, are eighty-three years old, and I'm feeling it more every day. As you look at the program, I think that we have had the great good fortune of assembling an extraordinary group of people, people who are leaders, either in practice, or are thought leaders, or are leaders in insight, or are experts on leadership. We have three CEOs of extraordinarily well-known and successful companies. We have professors, most of them from Harvard, not surprisingly. We have journalists, public officials, and I think that most importantly, we have you, because this is really a session that is not the session of the speakers, theirs to provoke thought, but the session is for you to provoke one another, and really get the most out of it. We at the Conference Board are happy to do this. I suppose we are probably best known for the people who gauge consumer confidence, or leading economic indicators. Although increasingly, our research efforts, and our outreach and conference efforts turn to issues of leadership and ethics, and corporate governance, because we think in the end that these issues of values are as important, if not more important, than the economic and societal measurements that we otherwise do.
We have a distinguished moderator for the whole day, and that is Jim Fallows, who will be standing up here in a moment. He is one of the nation's most influential journalists, although he is not a person who has maintained his view only in the United States. Indeed, he has lived in Asia, and has reported extensively on Asia. He is a former editor of U.S. News and World Report, and former Washington editor of the Atlantic Monthly. He worked for the Washington Monthly, as I remember, is a longtime commentator at NPR. He has written books, he has written articles on a wide-ranging set of issues. He also wrote speeches for President Carter. He went to Harvard, and was a Rhodes scholar, and despite that, has been a great success. I turn this to Jim Fallows.
Fallows: Thank you very much, Mr. Cavanaugh. Thanks to you all for coming this morning. I think we have an exciting day ahead of us. There is a richly varied panel. As you have heard already, as you can see on the program, and I think you will see more intently as the day goes on, we have an audience that is at least as varied in its background as the panelists, too. One sign of health for this session, which all of you have played your part in is that this was originally scheduled for, surprise, the Harvard Club. But it's been moved to accommodate the interest in the session. So for that, I think we owe thanks to the organizers of the conference, and the people who have agreed to speak today. What we share, despite the diversity of the backgrounds we all bring to this room today, is an interest in leadership, how it works, and how it does not work. Each of us, in his or her own way, is a leader in some realm in life, who are all affected by leadership. We all try to learn about how it can be practiced for better or worse. And we have people here who have studied it from all sorts of dimensions, who can express their views, and then draw out your views, and be challenged by you on what we can learn as we think about leadership for the future. As you've already heard, we do have people who will be speaking from the realms of academia, very distinguished business leaders, public servants.
Here is a somewhat delicate housekeeping point, which I figure I might as well make now. There is one leadership issue on many peoples' mind in America coming from the White House, and Washington. And this, this is an issue on which my view as a resident of D.C. at the moment is that there are no more unexpressed thoughts. There is no such thing as an unexpressed thought. With the rise of the Monica industrial complex on cable TV, we have all heard everything there is to be said. If there is a particular, focused, discreet, terse aspect of presidential leadership about which you would like to ask one of our speakers, please feel free. But this is not MSNBC, it's not CNBC. Err on the side of not asking about Monica-ology if you can. But if you must, you are allowed to.
With that, I will turn the stage over to Raymond Gilmartin, our first speaker, who for the last four years has been president, CEO, and chairman of the board of Merck and Company. And before that was for twenty-two years, I believe, with Becton Dickinson, and was its chairman, president and CEO there, too. Not only has Mr. Gilmartin been a leader himself in this industry of pharmaceuticals, of medical care, and his extensive involvement outside Merck itself in America's healthcare future, but of course he comes here representing an industry that itself is a kind of an epitome of leadership for America, and of research. Mr. Gilmartin graduated, got his degree from the Harvard Business School in 1968. I was an undergraduate at the same time. The Charles River was a fairly large cultural divide between the Business School and the college in those years. Nonetheless, we are friends today, and I'm glad. I welcome Raymond Gilmartin for his initial keynote presentation.
Gilmartin: Well, thank you very much, and good morning. It's a privilege to be here on behalf of Harvard Magazine, and the Conference Board, and to participate in this conference on leadership in the twenty-first century. This morning, what I would like to do is describe how Merck is pursuing a growth strategy that is grounded in the belief that innovation, core values, and ethics are keys to global success. And I will discuss the leadership implications and the leadership requirements of this strategy. All of us, leaders in academia, industry, government, operate at this point in a very dynamic environment that is growing more complex and more competitive. And this is particularly true in the pharmaceutical industry, which is highly regulated, from product approvals to negotiating reimbursement rates in other parts of the world. And is an industry that faces increasingly globalization, competition, and rapid advances in science and technology.
Within this environment, we make decisions that affect not only the men and women who work for and with us, but also those who rely on our medicines and services worldwide. To succeed, we need a winning strategy that will make us unique, and set us apart, and one that will give us a clear competitive advantage. At Merck, we believe that three principles are important for global success today. One, a commitment to innovation, to drive growth. Two, a consensus on core values that guide our decisions and actions. And three, an adherence to the highest standards of ethical behavior and integrity to inspire confidence and trust. Innovation of strategy is high risk, but as a means to grow and compete in today's global economy, innovation offers, I believe, the highest return. Core values motivate people to work to a higher purpose, ive them a sense of satisfaction about their work, and help set an organization apart from the competition. Adherence to the highest standards of ethical behavior, and integrity, inspires confidence and trust, both inside and outside the organization, and thereby helps to create the environment and the support necessary to innovate. Because Merck is a research-based pharmaceutical company, it should come as no surprise that innovation plays a central role in our strategy for growth. Our strategy, simply stated, is to discover truly innovative medicines through breakthrough research that are unique in class, and have proven health outcomes. We focus on medicines for diseases with large patient populations worldwide whose needs are not well served, taking advantage of new knowledge about pathways of disease, and using that knowledge to come up with a novel drug. And we look for drugs that are highly potent, and highly specific, and therefore well tolerated, safe, and that are oral and once a day, and therefore convenient to use. Now innovation has been the hallmark of Merck's success in the past, and we know that it will continue to be the driving force behind our success in the future. And I would say, speaking more generally, that innovation is emerging as a theme for the year 2000, and beyond. Innovation is now driving private sector growth as companies realize they must innovate to compete in the global marketplace. Compare this to the 1980s and the early 1990s when companies sought to strengthen their competitiveness by increasing productivity. And today, in addition to improving the bottom line, or profitability, through increases in productivity, companies are aiming to grow the top line, or the sales line, through investment and innovation.
Also, I think it's fair to say that governments all over the world are beginning to realize the value of innovation to the overall economic health and well-being of their nations through the creation of high value jobs and increased wages. The economic prosperity the U.S. enjoys today, despite the financial turmoil at this point, shows that we are reaping the benefits of innovation. And I believe there is no better case, or no better study, of the importance and value of innovation than the pharmaceutical industry. Pharmaceutical innovation offers, holds the greatest promise for providing long-term, sustainable solutions to our current and future healthcare challenges worldwide. Medicines offer not only hope to patients and families, but can be cost-effective alternatives to other forms of care, such as surgery and hospitalization.
During the past six decades, Merck has aspired to build a global research organization that rivals the leading academic research institutions, such as Harvard, worldwide, in terms of the caliber of research scientists and breakthrough medical research. Merck has discovered, as a company, over this time, more new medicines than any other research organization in the world. And in just the past three-and-a-half years, Merck has introduced fourteen new medicines and vaccines, five in just the past nine months--more than at any other time in the company's history. And since 1995, we have strengthened our commitment to innovation by doubling the rate of increase of spending for basic and applied research, compared to the rate in the early 1990s. And this year, we will expend almost two billion dollars, in R&D.
Clearly, innovation is not only driving growth at Merck, but it is benefitting millions of people worldwide. For patients, innovation by Merck has meant new medicines for HIV/AIDS, osteoporosis, asthma, migraine, and cardiovascular disease. For investors, it has translated into strong earnings growth, and stock price appreciation. And for our employees, it has brought meaningful work and advancement opportunities. But Merck's success is not based on innovation alone, and I would say that we believe very strongly that our core values and the adherence to high ethical standards have also been critical in our success. They support our ability to innovate and create a favorable environment for innovation. They motivate our people, and help to inspire confidence and trust among doctors who prescribe our medicines, regulators who approve them, health officials who decide whether or not to pay for them, and legislators and policy makers who can influence the cost and the timeliness of their discovery.
Like innovation, core values and high ethical standards have been critical to Merck's past success, and will be critical to our future success as well. But how does one make this happen? Most organizations make an effort to define their core values, but many find it extremely difficult to integrate them into their culture, and to make them more than simply words in a corporate brochure. However, when I arrived at Merck in 1994, I found an organization that had indeed been built over decades on core values, and ethical behavior. I had been on the job only two days, when someone handed me a speech. As this new CEO, the first one from outside the company in the company's history, I was handed a speech that was given almost fifty years ago by George W. Merck, who was chairman and CEO of the company from 1925 through 1950. He said, "We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear." Now that quote put George Merck on the cover of Time Magazine in August of 1952. And today, his words are more alive than ever throughout the company. In fact, earlier this year, in an article in the Financial Times profiling Merck and myself, they wrote that "Mr. Gilmartin reiterates with almost irritating regularity a famous company dictum that medicine is for the people, not for the profits." So I stand guilty as charged.
Fallows: What we call staying on message.
Gilmartin: Exactly. Staying on message. That George W. Merck quote is a succinct summary, I would say, of the core values, and the high ethical standards that guide Merck's day-to-day actions and decisions. These are embedded in the Merck culture. They have always been an integral part of the company's tradition, and Merck is widely recognized as having those traits. That recognition, which helps to inspire public trust and confidence, is particularly important today, as concerns among the public about confidentiality of medical information and how clinical trials are conducted, particularly outside the U.S., continue to grow. To maintain this confidence and trust, it is crucial that everyone recognize that our scientists have always been guided in their research, first and foremost by ethical considerations, and by their unwavering focus on improving patient health.
Our belief in core values and ethical behavior permeate all aspects of our organization, and influences how we operate. However, expansion into new global markets, with new people, new organizations, and the increase in the intensity of competition in the U.S., and all over the world, all present special challenges. The company is growing larger, more complex, more geographically dispersed. And competitive pressures are greater than ever before. Therefore, we believe that it is essential to be clear and explicit about the importance of our core values, and our high ethical standards, about how they are an integral part of our strategy, and that adherence to those values and standards are key to our global success.
We care a lot about the results we achieve: the drugs we discover, the growth in sales and earnings, how much the stock price goes up. But I think it is clear throughout the organization that we also care a lot about how we achieve those results, that we achieve those results in ways both inside and outside the company that are consistent with our core values and high ethical standards. How do we make this clear? We think the key is leadership, how we select leaders, how we develop them, and how we evaluate them. We are being very clear about the requirements for leadership at Merck in the twenty-first century.
The process began with the selection of the new management team shortly after I arrived as the new CEO, in June of '94. It was a time of great uncertainty, and not a little anxiety, at Merck and within the industry. The prospect of price controls in the Clinton healthcare plan, along with the emergence of managed care companies as powerful buyers, had driven down stock prices. Merck's ability to grow was in question and the company had made a controversial acquisition of Medco Containment Services, a pharmacy benefits management company. In the midst of this uncertainty, it was crucial to establish early on who the executive leadership of the company was going to be. And for that leadership, acting as a team to establish a clear strategy and direction for the company.
In selecting this management team, in naming this management team, and it turned out to be composed of all Merck people, it was important, I felt, that this team be recognized, not only for their competence and the results that they had achieved, but also for their commitment to Merck's values and standards, and their own behavior and actions. In other words, a team that would inspire confidence and trust. And as a new management team, we also knew that we needed leaders throughout the company who understood not only our strategy, but believed in the values underlying it. Leaders who would demonstrate an unwavering commitment to our values, and reinforce them to their people within their organizational units. So we launched a global leadership development program, based on values and ethical standards, that applies to all Merck people in all parts of the world, at all levels, and all divisions. From the start, we have been as specific as possible in what we mean by leadership. We defined a wide range of behaviors that support and demonstrate leadership, that run the gamut from setting clear objectives, and recognizing the performance of employees to responding to the needs of our customers, to training and developing our people, to supporting Merck's commitment to community responsibility. But heading our list of traits is the requirement that the leadership at Merck should demonstrate a high degree of integrity and ethics in all that they do, and that should create an environment that encourages fairness, teamwork, an environment where people are treated with dignity and respect.
Now even though we believe these traits have been an unstated part of Merck's culture for many years, they are now, for the first time, part of a comprehensive management system that is applied to the selection, development, and performance evaluation of all the leaders at Merck. In addition to our leadership program, we're beginning the process of incorporating, as well, a formal ethics component into our corporate-wide training and development programs, based on an updated global code of business conduct. In this way, we are making sure that our core values and ethics are an integral part of how we do business, and to transform them, or to reinforce them, from mere words, into behaviors that Merck people worldwide can understand, embrace, and apply on a daily basis.
But in addition to our internal programs on leadership and ethics, we are striving to shape our external environment as well. One example is in the United Arab Emirates, where last year the Merck Company Foundation provided a million dollars to establish a Center for Excellence in Ethics, in collaboration with the Ethics Resource Center of Washington, and the UAE's Ministry of Health and Education. Our goal was to shape and improve the international business environment in the Gulf region, by developing a comprehensive business ethics program. The response was excellent, and based on what we have seen so far, in terms of the interest from other countries, such as South Africa, we're confident that we can continue to develop similar programs.
However, by making our core values and ethical standards an explicit part of our strategy at Merck, I think it's fair to say that we face three practical considerations. One, is it possible to create worldwide standards of ethics and values throughout a company of more than fifty-four thousand employees, who speak different languages, and come from many different cultures? And also, does our focus on core values, and adherence to ethics, truly create a global competitive advantage? Other countries have different standards, and different business practices. In some countries, bribes are tax deductible. And three, when applying those principles, what are the implications for how we do business in emerging and lesser developed markets that have fewer resources allocated to health care? First, are we succeeding in creating one set of standards and values worldwide? Are we reinforcing a global Merck culture? And I believe we are.
I was just in Singapore two weeks ago to attend the groundbreaking ceremony for our new manufacturing facility that we are building there. And I also took that opportunity to review what is going on in that region, given all the financial turmoil that is engulfing the Asia Pacific region. For each of the countries that I reviewed, the managing director talked about the importance of Merck's standards and values. These are brand new organizations, for all intents and purposes. They emphasize that in the midst of the current crisis, it was even more important to reinforce our ethical standards, and make sure that no one took the easy road. These managing directors believe that Merck is seen in their countries as being unique, and therefore having an advantage over competition. And based on the reception that I receive as CEO of Merck, when I travel in that part of the world, they are right.
In the U.S., our sales force is described by others as being science-based in their approach to physicians. And our reputation is that we play by gentlemen's rules, not always seen as being necessarily the most aggressive. The market in the U.S. has become extremely competitive. Advances in drug discovery technologies resulted in multiple competitors in each therapeutic category, each with patents, but who are seen as close substitutes by powerful managed care buyers. And some industry analysts wonder whether Merck needs to change. I don't buy that. We believe that our reputation and our approach to the marketplace is a competitive advantage.
Also while I was in Singapore, I was struck, once again, by how we vigorously adhere to Merck standards in all that we do. The engineers who are involved in building that building were emphasizing for me the safety systems that they had set up to ensure the health and safety of the construction workers who are on that site. And that when we operate that plant, it will also be according to our worldwide Merck standards, which are often higher than the official safety and environmental regulations in the countries in which we operate.
Now the other consideration. Have our core values and adherence to ethics truly created a competitive advantage, or have they caused us to lose business? I think it's fair to say we have lost some business, but not enough to notice. Our growth rates outside the U.S. have been excellent. Our reputation for values and ethics serves us well with regulators, health, and other government officials, physicians and opinion leaders, not to mention our own people. An important part of how we achieve competitive advantage is our ability to recruit, develop, and retain highly skilled people who have trust and confidence in the company, and who work to achieve its goals. Last year, in the first annual Best Companies to Work For survey in Fortune, ninety-seven percent of randomly selected Merck employees said they are proud to tell others they work at Merck. And Merck, in this survey, ranked in the top ten of best companies to work for. And Fortune's capsule summary was that, "the corporate credo is to put patients before profits, and that sense of mission permeates this drug company's culture."
Last year, Business Week magazine also captured the importance of our core values to our business with the following observation. They said, "When the partially constructed Virginia [plant] for Merck's new AIDS drug Crixidan got buried under four feet of snow, everyone from managers to lab workers, production operators, rushed in with snow shovels. That helped Merck get the life-saving drug off their production line just fifteen months after breaking ground, nine months ahead of schedule. You won't find a column," they said, "measuring that kind of dedication and resourcefulness on any kind of balance sheet." To me, that's the evidence that our ethics and core values have helped to create a competitive advantage at Merck. And I strongly believe that it's our core values and our diligent attention to ethics that make people want to work for Merck, drive them to achieve excellence, and propel them to discover and deliver medicines to the people.
And finally, the third practical consideration. When applying those principles, innovations, core values, and ethics, what are the implications for how we do business in emerging or lesser developed markets, that have fewer resources allocated to health care? All of us are familiar with the disparity in health care between the developed and developing worlds. The majority of the medicines available to treat, and even to cure diseases that are available in the developing worlds, are for the most part not accessible to people in the developing world. Now one way that Merck has addressed this issue is by giving medicines away. But this is not, as I'll return to later, a sustainable, or a realistic answer. It only makes sense in unique situations. For example, earlier this month, we announced the donation of a third of a million doses of our vaccine for measles, mumps, and rubella, to the people of Honduras, to help eradicate measles in that country. But we donate medicines on a case-by-case basis, and generally only for emergency situations, where there is a clear and immediate medical need.
A major exception to this is our Mectizan program for eradicating river blindness in Africa and in Latin America. In the late 1980s, after Merck gained regulatory approval for Mectizan, a medicine discovered and developed by Merck researchers to treat one of the worst diseases imaginable, river blindness. River blindness and its symptoms are caused by a parasitic worm that is introduced into the body by the bite of a black fly. Now the parasite causes horrible constant itching, and grotesque skin disfiguration, and eventually causes blindness when the parasite enters the eye. Millions are afflicted in sub-Saharan Africa, with more than a hundred million people at risk. And Merck had invested millions of dollars in more than a decade to develop and test this medicine. The problem that the company faced in the late '80s, was that no one was willing to pay for the drug. There was essentially no market. Now the company investigated third party payment options with the international organizations, and governments, without success. In the end, Merck decided to donate the drug, rather than let it sit on the shelf, for as long as needed to all who needed it, based in large part on George Merck's credo. And as you can imagine, this decision continues to be a great source of pride for everyone at Merck.
But Merck also based its decision on the fact that Mectizan was, and continues to be the only safe and effective medicine to treat river blindness. And the drug itself is truly an unusual medicine, in that it needs to be taken only once a year. With one tablet a year, the parasites are paralyzed, thus preventing the blindness, and stopping the constant itching. Compare that to drugs which need to be taken once or more times a day. And finally, that's got few side effects, doesn't require much medical supervision, and doesn't have any special requirements for storage, or refrigeration. But the donation of the drug itself was not sufficient to actually get to the people who needed it. When Merck decided to donate Mectizan to treat those at risk, it took a collaborative effort of the World Health Organization, the World Bank, the Carter Center, with the personal involvement of Jimmy Carter, and other non-governmental organizations, to develop a protocol, an infrastructure, to be able to deliver these tablets. Now today, more than a decade after we announced the donation program, about twenty-two million people each year, twenty-two million people each year receive free Mectizan. And last year during the program's ten-year anniversary, I signed, along with leaders from other organizations, a declaration of intent that recommitted our organizations to eliminating the disease as a major public health problem.
But Mectizan is a truly unique situation. Giving our medicines away, in general, is an unsustainable and realistic answer, because at the end of the day, we've got to be able to earn an adequate return on our investment in order to fund future research. Unfortunately, many government officials, and public health policy analysts frequently cite price as the main barrier to access. And the proposed remedy, therefore, is to set artificially low prices for medicine, or to eliminate patent protection, or both. This is not the solution. Fair pricing and intellectual property protection are crucial to support and to encourage innovation. Drug discovery development is an extremely high risk and costly endeavor. It takes a new drug twelve to fifteen years of laboratory trials, and development expenses, and costs on average about five hundred million dollars to get to market. And when you actually look at the experience, many basic vaccines that prevent disease, that costs as little as a dollar-fifty a dose, and antibiotics that cost even less, are not used widely in the developing world. So therefore, the real barrier, the major barrier to access, is inadequate health care infrastructures, and delivery systems, not price alone.
So what can be done? One model is to consider how we are working to improve access to medicines for HIV/AIDS. In the U.S. and Europe, the progression of AIDS has been dramatically curtailed during the past two years, thanks to the tremendous success of the new medicines, most notably the protease inhibitors used as part of a drug cocktail, including Merck's Crixivan. The U.S. Department of Health and Human Services reported earlier this month that the national death rate from AIDS fell forty-seven percent in 1997. However, twenty-seven million people with HIV, about ninety percent of those infected, live in the developing world. And in serious contrast to the developed world, the disease continues to run rampant. When Merck launched Crixivan worldwide in 1996, we priced it at twelve dollars a day. It's a very expensive drug. But it was priced at about thirty percent lower than the two similar AIDS protease inhibitors already on the market, even though we felt we could have commanded a premium, given the excellent efficacy profile. We felt that at this price, we could earn the adequate return on our investment, while still pricing it fairly to promote access to the medicine. And others agree, including widely respected AIDS activist, Martin Delaney, who sent me a fax on the day that we announced the price of Crixivan. And he said, first of all after saying, "I would never have sent a fax to a pharmaceutical before," but he said, "We find your actions particularly laudable in light of our knowledge of the serious expense and production challenges you have faced in scaling this drug up for market launch, as well as the wide range of studies, past and ongoing, which have contributed to the new drug application."
However, despite that statement from Mr. Delaney, and that recognition of what we had done from others, we knew that Crixivan would still be out of reach of the vast majority of people with HIV/AIDS in the developing world. But we also knew that Crixivan at any price would not solve the problem, because treatment for AIDS is extremely complex. For it to be effective, people should take a combination of (anti) retroviral medicines. Each has its own treatment requirements. For example, to take Crixivan, it requires two tablets every eight hours. You should take it with one-and-a-half liters of fluid each time, preferably water, and people need to have access to a nearby medical facility with a sophisticated laboratory, to evaluate the effect of treatment. But we're not just sitting back as a company, and saying, there is nothing we can do. We are actively working with international organizations, governments, and non-government organizations, to find ways to improve the medical infrastructure and standards of care for HIV in the developing world.
One example of our initiatives is the enhancing care initiative, a collaborative project that Merck is funding at the Harvard AIDS Institute, part of the Harvard School of Public Health. The initiative's long-term goal is to improve the overall care of people with HIV/AIDS in the developing world by forming teams of local epidemiologists, clinicians, economists, people who are living with AIDS, government officials, and human rights and public health experts. And these teams will assess the current status of medical care for people who are living with HIV/AIDS, and explore ways to improve care with the limited resources available. And finally, using these findings to develop practical, long-term strategies that reflect local needs and realities.
Now beyond that, to ensure that future medicines for HIV/AIDS are available, we continue to do research in the field, and to look for further advances, including the search for an HIV/AIDS vaccine, which public health experts agree, is the best hope for dealing with the epidemic in the developing world. Now to us, the biggest barrier here is science. There is a misperception in some quarters that, because of a lack of profit incentive, that there is no AIDS vaccine available. But our experience, and our perspective is, that science is the biggest barrier. In fact, several virologists question whether it is even possible to develop an AIDS vaccine. Nonetheless, Merck has pursued an AIDS vaccine for more than ten years. In the process, which has resulted in sort of failed experiment after failed experiment, we have learned a great deal about the virus. And I think, at this point, we have one of the largest AIDS vaccine research programs in the world, and probably one of the few remaining in the industry. And despite the formidable odds, and technical and scientific challenges that exist, we continue to work on discovering and developing an AIDS vaccine, because we think we can do it. That's based on our commitment to innovation. And because we know it's the right thing to do, based on our core values.
Now as we continue to expand into new therapeutic areas, and expand into other parts of the world, and as we have become even more complex and larger, and more geographically dispersed, we will continue to face very difficult scientific and competitive challenges. But based on our experience over decades, and reinforced by our experiences in just the last few years, we are clear in recognizing that the keys to overcoming those challenges, and the keys to our success are innovation, core values, and ethics. Together, they are what we believe set us apart from others, and create on our behalf a true competitive advantage. Applying those three principles, commitment to innovation, core values, and ethics, define the type of leadership we need at Merck to succeed in the twenty-first century. Thank you very much.
Fallows: Thank you very much, Mr. Gilmartin. That was, I thought, a wonderful speech. The Harvard Business School is famed for its case study approach to things, where we look at specifics and extrapolate principles from them, and I thought the speech itself was an excellent illustration of that, looking at the record of your company. While the microphones begin going through the room to take your questions, I'm going to begin with a question of my own. I would like to push this extrapolation a bit further. Staying on message with the original Mr. Merck quote about putting principles first, and profits will follow, I think you showed that for your company, that's worked very well. The question is, are you extrapolating to suggest that for most companies in most industries, this approach would apply? For example, I have come recently from an industry where it's not obvious that it applies. In the publishing industry, the easier way to get a lot of advertisements, at least in the short run, is to go the advertorial route. And there is the Merck-like approach, which I think is the right one. For any publication saying, no, we're going to resist that; and high quality will win the biggest returns in the long run, but it's not evident that's so. If you look at the high tech industry, over, for better or worse, Microsoft has been known for very aggressive marketing tendencies. Its executives have not given speeches like yours, but it's been very successful over the last fifteen or twenty years. So are you saying that your principle should be extrapolated to industry in general, and if it's not, what kind of leadership is appropriate? If you are in a different kind of industry, what kind of leadership does one apply?
Gilmartin: I would say, based on the experiences that I have had, both in the medical device industry, as well as now in the pharmaceutical industry, that these principles can be generally applied, that the form they may take I think may differ by industry. We have the opportunity to produce great things through innovation. But I think in order to be successful in a sustainable way, over decades, that in addition to the sort of core competencies that you need to succeed in business, whether it's innovation or whatever, in the publishing field, I think without the attention to core values, and the adherence to high ethical standards, it's very difficult to build a sustainable advantage over a long time, and to have a company that is, in effect, built to last. And I think the reason that Merck has continued to be able to stay at this state, at the leading edge of science, is because these core values attract excellent people, and it generates a tremendous amount of support on the part of the physicians that we serve, the patients we serve, the opinion leaders. And I think that all of this combines really to make us successful. There is no question that we probably, in some parts of the world, take a hit in terms of sales and profitability in the short run, as a result of adhering to these standards, but we're confident that in the long run, the payoff is there.
Fallows: Let me invite questions, and Mr. Gilmartin will call on you directly, but wait for the microphone to come to you.
Questioner: What you describe about Merck is very laudable, and it's great to have your company provide a role model for ethics and for altruism. But there, as you said, are limitations to what you can do in developing a drug, and giving it away, and even working with NGOs and the World Health Organization, to build an infrastructure. And I just wonder about efforts that might be advisable, not necessarily for Merck, but for the world, and for health in the world, for companies to work as a consortium among many drug companies, working with these same organizations, and with government, to provide leadership, to be proactive, to look at what the institutional relationships need to be for health care in the world. And I know many companies usually work in that area, in a defensive way of making sure that laws don't pass that harm their profits, or pushing for a bill to pass that will allow them to make profits. But they don't move into that domain of looking at the bigger whole, that had been something that government was left with. And now as we see corporations being viewed as more effective than government, what role could you see for your company to lead other companies in health care to reform the overall process?
Gilmartin: A couple of things. One is that, as you indicate, it's been our approach and strategy to go on the initiative, not to be simply in the mode of how do we, more or less, defend ourselves against policies that we don't think are helpful to innovation. And so therefore, we have worked in consortiums, in effect, as in the case of the Mectizan program, which involved several government and non-government organizations, where it actually got that medicine to the people who needed it. So we have experience in that. We've undertaken, with the Harvard School of Public Health, the initiative as well, which is involving other organizations to find ways of improving the treatment of AIDS, and what kind of infrastructure delivery system has to be set up. We haven't extended that to the point of working with other companies that are trying to draw other companies into this. And I mean, that's an interesting idea. I think that the fact that we are competitors is sort of a natural barrier to be able to come together, and to do that very easily in a cooperative way. But I think that we're at the early stages of these kinds of initiatives. It may turn out that what you're suggesting will be very possible.
Questioner: My name is Mary Bandoh, and I work for DuPont Pharmaceuticals. The question I would like to ask you is about the first six months to one year of your leadership. What was it like for you to adopt these three issues that you talked about, the innovation, the core vales, and let's see, and ethics. And I would like to hear stories about how you've sort of bred that into your organization. How did you make it become the fabric of the organization?
Gilmartin: Well there were a couple of things. One is that, as the brand new CEO, it was important for me to let the company know at the time what I'm like, what to expect from me, and, more or less, introduce myself to the company. And at the same time, it was important for me to learn about the major issues that the company was facing from the perspective of those who had the most knowledge. And so for the first few weeks, I spent a lot of time, and I talked to about forty to fifty different executives, just asking two simple questions. One is, what do you think the major issues are that we face and if you had my job, where would you focus your time and attention? People were very candid, and I was able to collect a tremendous amount of information that I used, not only to get a sense of the issues, but also a sense of the leadership and the management within the company. And also, during this period of time, I felt a great sense of urgency, as I indicated in the talk. One was that I'm sure people were wondering, who is this guy going to bring in? Who is going to really lead this company? So I felt a great sense of urgency during this time to be able to identify who the new management team was going to be. So the first step, collect the data, second step, sort of like your case study. The second step, identify who is going to be the leadership and then use that leadership to establish a clear strategy and direction. So, and as I said, the thing that was important to me was that we send a message right away, in terms of the style of management of the company. So not only was I looking for people who were highly competent and had a great track record, but also looking for people who would be recognized by everyone within the company as being absolutely the right person for the job.
In my sense of the company, in my own criteria, the absolutely right person for the job was someone who also would be seen by everyone as having commitment to these core values, but also conduct themselves according to the high standards of integrity, and ethical behavior. Because in the midst of all of this uncertainty, not only was it the right thing to do, but it was important to get a team in place that would inspire confidence and trust. And then, finally, we went off site with this team, and we made a series of fundamental strategic decisions about the direction of the company, that we have stayed with since that time. During all this time, I spent a lot of time in face-to-face meetings with different parts of the organization, traveled extensively and, as I said, within two days, somebody had handed me this George W. Merck speech, and I saw that immediately as a way to basically describe who I am, that I was totally consistent and on board with that way of thinking, and then use that from that point on, to reinforce it within the company. Because as you know, being in the industry, there was a tremendous amount of turmoil at that particular time. Yes, right here.
Questioner: John Reidy, Salomon, Smith Barney. With two billion dollars in research, that does a lot, but it doesn't do everything. How do you prioritize your research? And I'm thinking, how important is something like malaria, which affects probably two hundred million people in sub-Saharan Africa, as compared to some of the diseases which were popular? Actually, AIDS only became of interest when it was a Hollywood/New York disease. How do you decide where the money is going to go, and which of the things to be most focused on?
Gilmartin: The criteria are there because we go for block-buster drugs and breakthrough drugs, things that haven't been done before, in effect. So therefore, we start off with a criteria that there be large patient populations, and that their needs are not well served. The other important criteria, is that there is new knowledge about the pathway of that disease, so we can actually come up with a new mechanism of action, and come up with a novel drug to do something that has never been done before. And we have small teams of basic research people who are continually monitoring the developments in a field where we think there is a breakthrough in knowledge about disease pathways. One of the barriers to something like malaria, which there is a team that continues to look at that field, is the science about, can it be done? And that is unknown at this particular time. But if those criteria are met: large patient populations and an opportunity for a breakthrough, I think there is the implicit confidence that the profits will follow. And on the AIDS vaccine, it is very much the process that we are following.
Questioner: I was interested in the core values of Merck, if you could name a couple of them, and if there was a possibility to get copies of the core values?
Gilmartin: First of all, in terms of the umbrella statement is a George W. Merck's statement that is medicines are for the people, and not for the profits. And therefore that puts a real focus on the patient. And that focus on the patient extends also to the people that lead say, for example, our research organization, where there is an emphasis on having M.D PhDs heading up the research organization. Because the M.D. has the sense of patient care and treatment, going beyond the pure science itself. Another core value is this commitment to excellence in terms of the kind of research that we do. It's conducted at the highest level, or we aspire to be at the highest levels of academic research. And we attract people into the company as a result of that. Those are really sort of the basic things. There is emphasis on the patient, and there is commitment to excellence in research. And then, on the ethical side, because of this patient orientation, there is a very keen sense of responsibility in what we are doing in clinical trials, about ensuring patient confidentiality, ensuring that we conduct these trials in a highly ethical way, and that we have, and we apply these standards worldwide. We do clinical trials in Brazil, for example, in the same way that we do clinical trials in the U.S.
Questioner: Does your work force, are they aware of these core values? I mean, do they carry them on a badge every day, or do they see them up in the workplace? Is it sort of in front of them all the time?
Gilmartin: I wouldn't say it's in front of them all the time but going back to the Financial Times, they hear with irritating regularity about the George W. Merck philosophy, so I say, that's sort of a summary statement, that this is what we are about. I mean, it was literally the case on a Friday night, about seven o'clock. We were pricing Crixidan, and we had a range of alternatives available to us. And we made the decision to price it at thirty percent below the two drugs that were out there at the time. And part of that discussion that led to the decision was that medicines are for the people. And it was actually our chief financial officer that raised that as one of the considerations, which is, for most CFOs uncharacteristic, perhaps. It is really embedded in how we think. And then an incident occurred on a Friday night and on the following Monday, I was out of the office. We had announced the launch of the drug and what its price was going to be. And I was talking to our head of research, Ed Skolnick, who is a terrific individual, and said to him, basically offered him my congratulations. The drug was out, it had been high risk, etc. But he wasn't interested because he had spent the entire weekend going over adverse event reports on another drug that we had, because as it turned out, there was erroneously a report that a serious side effect had occurred with one of our recently introduced drugs, and he was personally involved in making sure, by looking at the data himself, that there wasn't something that we had missed. And his attitude was, as an M.D., he had never hurt a patient. So this is by behaviors, and how the leadership acts. I'm just using him as an example, I think it's how this gets through, as opposed to what's on a card. That's why I come back again to this whole point about leadership. Who do you select, how do you evaluate, how do you develop?
Questioner: Bob Penoyer of of Patterson, Belknap, Webb, and Tyler. I knew George Merck well, and he was a close friend, and I would like to ask this question as a friend of the company. At the Cairo conference about three years ago, under the leadership of the United States, world governments agreed that for women of the world, it was important to have access to family planning, including contraception, and medical abortion. Does the company have a policy that would preclude your being involved in research in these areas?
Gilmartin: Basically I would come back again to where we do research being based on the kind of competence that we have, and where we see that there is an opportunity for a breakthrough in solving a medical problem that serves large populations. So that's really the driving force behind where we decide to work in research.
Questioner: Don Mitchell from Mitchell and Company. One of the things that you stated was that many of these values and ethical behaviors were already present when you arrived at Merck. What would be your advice for someone who was in a similar leadership role in a company where it didn't have that heritage?
Gilmartin: I would begin with the top leadership team. Basically, if I just reconstruct what we're doing, and try to put that into a totally new situation, that I had the advantage of those values already being in place. But if I had not started out with a top leadership team that reflected those values, and then took conscious actions through the leadership development program that we have, that as someone brand new into the organization, I think I could have successfully eroded them over a period of years. And in maybe not too long a period of time. So I felt that the way to get it, to reinforce them, was to select the right people, starting from the top, and then to permeate that through the organization. So my advice would be that you start out by having a team of people who basically share the same core values, and already, without thinking about it, subscribe to these standards of ethical behavior. What we then did as a management team, by the way, that I did not mention, is that we designed ourselves, or described to ourselves what we thought were the important attributes and characteristics of leadership at Merck. And we literally sat in a room together and just listed them, in a brainstorming type mode as the things that we think are important. And then later, the people in our human resources organization basically did the homework of categorizing them and making them into a form that we could act on, and then train, and turn that into our leadership development programs, our training programs. But it was basically the senior management of the company that determined the important attributes and characteristics that we want in leaders. Then collectively, we said to the organization, and this is part of the message, if you will, is something I touched on earlier. We care a lot about the results we achieve, but we also care a lot about how we achieve those results, what leadership characteristics and attributes do we exhibit as we go about discovering new drugs, and achieving our financial objectives? So I think it's by the behavior of leadership in the company, starting from the top and then extending that throughout the organization, that can bring about the kind of result that you are looking for.
Questioner: I'm Greg Koski from the Massachusetts General Hospital in Boston. Human research is one of the areas in which a great deal of scholarly work, as well as practical work, has gone into defining the fundamental ethical principles that underlie that particular endeavor. Do you have a formal training program that is required for all of your research scientists who are designing or participating in trials that involve human subjects?
Gilmartin: We have, it's not so much a formal training program, as that we have a very extensive internal review procedure in which every clinical trial is reviewed in depth as to how it is designed, and also how it is going to be carried out. So I think that rather than specific training on this, it has been an ongoing activity of the company for decades and that people who are new to the company get involved in, or immersed in this, it's through that process, and it's a very strict, if you will, internal process that we have for looking at how we do clinical trials. It's the primary means by which we ensure that they are done property and ethically. And I think we're known for how close we follow up, as well, on these trials, in terms of how effective we are in keeping track of what actually happens.
Questioner: Bob Wood with LMI. I have a follow-up question on putting together your leadership team. Did you bat a thousand, and if not, if you had to remove someone because your perception of their competence, or their devotion to core values, or ethics, didn't stack up, what was the process that you used to remove them?
Gilmartin: I came close to batting a thousand. It was one person who, after about a year-and-a-half, almost two years, had decided to retire. And that process was one in which the person had reached age 55, and was at the point, I think, where they wanted to take on new challenges. So it was more or less an agreed-upon parting of ways, if you will. And it wasn't a question of not meeting the requirements in terms of subscribing to the core values. It was more a question of the fact that we were undertaking a major initiative that was going to require a change, that was going to require a lot of energy to go into it. And I think this person had just reached the point that they were not prepared to make that kind of commitment. So we basically had an amicable parting of the ways at that point.
Questioner: My name is Jeff Thinnes and I'm with Daimler Benz. You spoke about the importance of having all of your employees buy into the values, and also integrating your core values and principles into your recruiting, and promotion, and retention of your leadership. But most of your comments, I think, came from the position of a CEO who is a sole leader of one company. Now hypothetically, suppose there are two very large companies that are merging. And both of their employees, in fact, have bought into core values, and for example, hypothetically, suppose one company places a lot of emphasis on environmental leadership and alternative fuel usage. And another one places a lot of value on getting quickly to market, from design to market. What would your advice be to two CEOs who serve together for a three-year period in terms of setting forth a vision of core values that could be adhered to enthusiastically by all employees?
Gilmartin: There are some things well beyond my experience, clearly. Yes. That's tough. And I really, I don't have anything to add to that, I don't think.
Questioner: Mike O'Brian. I'm in the electronics design space, and one of the real challenges to innovation is the sort of balancing between protecting intellectual property, and on the other hand, the sort of sharing and licensing, and all these great ideas out there published in the world, and then you keep innovating on top of those. So hopefully looking at the pharmaceutical industry as maybe a little bit ahead of us in the electronics space, to figuring out how do you balance all of that, and how do you work with your competitors, again to not sort of use a patent portfolio as something to thwart new ideas and competition, but make the pie grow larger and faster for everyone.
Gilmartin: I don't think any industry, including the pharmaceutical industry, has resolved that problem. Because basically, we're competitors. But I will say that first of all, I think one of the reasons that Merck is able to attract the kind of scientific talent that it attracts is because we have resolved this conflict, inherent conflict, between intellectual property protection, and the desire to publish. And we solve that by supporting publishing as soon as possible, and resolving the intellectual property conflict by being very good at, and very quick at filing patents, and filing the applications. And so therefore, we encourage putting scientific knowledge into the public domain. And in fact, when Merck scientists came up with the fact that the protease was an enzyme involved in the replication of the HIV virus, that was before my time, but it was put in the public domain so others could work on it. We also have a program in which, because there is a lot of battles over intellectual property rights that have to do with the human gene element, and there are efforts to try to hold that as proprietary information. Merck's response to that has been to fund research at various universities with the idea of putting as much of that information into the public domain as possible, so that it's available to all.
Questioner: My name is Allen Boorstein, and I work in the field of system dynamics, and intellectual property at a major university. And I'm particularly interested in those first few days when you got to the company, and how you encouraged the feedback, the honesty, from the employees from whom you had to choose, to speak up and take the risk with an unknown person.
Gilmartin: Well, one, I think that there was enough uncertainty and anxiety about what was going on around the company, or within the company, and that people were genuinely concerned about what was going to happen to the company. And in that kind of environment, I think I felt that it was important to be very candid and straightforward about what the issues were. I think the other advantage was that being new, and from the outside, in no way would I be defensive about any of the questions or issues that were raised, I think helped set up an environment where people were comfortable in expressing their viewpoints. And one of the things that is hard for me to measure is my own response during these conversations. But I would think that how I reacted made a big difference, in terms of how I took in the information, and how I responded to that. And I'm sure that people who would talk to me also talked to others who were about to talk to me about what that experience was like.
Questioner: My name is Andy Snider from VIS Development in Boston, and we build computer-based systems to communicate knowledge through companies. And we've done a number of programs where we've communicated ethics standards, ethical guidelines, core values, throughout very large companies. And what we've found is, if there isn't some kind of reinforcement at the bottom for those values, that no matter how wonderful the communication, it often doesn't affect behavior. So I would be interested if you could talk a little bit about, when someone is making line decisions, not your core leadership group, but in the middle of the company, how do they understand that it's a good idea to follow these guidelines? Or how do you reward or recognize that?
Gilmartin: Well, for one thing we've instituted, as part of the performance evaluation process, a leadership assessment rating. And that started at the top of the company, and is working its way down throughout the various levels. So once again, starting at the top. And so therefore, there is a very conscious discussion at various points through the year, and particularly at the end of the year, when it comes time to assigning bonuses and so on, about what the results were, but also what leadership attributes and characteristics were displayed? Now one, that has served as a very useful way to bring together all of the various pieces of information that you, that I think any of us have about the people that work for us, and organize it in a way so that it could be used very constructively. As is talking about, where are areas of improvement. So that's one thing. It's evaluation, and so it's got teeth in it. Second is that, in part of our leadership development program, we do a three-sixty type exercise where information is gathered from direct reports, and peers, and also from the direct supervisor. On that three-sixty exercise, which is based on our leadership attributes, there is a section that has to do with ethics. This is, as a leader, has this person set up an ethical environment? If they saw something that they considered to be not consistent with those standards, would they act on it quickly? So as a leader, you get very direct and clear and anonymous feedback from the people who are around you, whether or not you are seen as acting consistently with those principles and attributes. Some people who are ethical but unaware of some of the impact that they have, I think have been somewhat surprised by the kind of feedback that they got, that they were not putting as much emphasis as they should. So it's the development part of it as well.
Questioner: Yes. My name is Anita Jensen. I'm from Citibank, and I have a succession question. And that is, it's very clear that you walk your talk. At least it's apparent here. As you think about your own legacy, what are you most concerned about being vulnerable to? And what are you doing about that?
Gilmartin: I guess I haven't thought so much about it in terms of being vulnerable, so much as I've been thinking about what we have to be sure to have in place over the long term. And in thinking in terms of legacy, that I'm very conscious as someone who came in from the outside, and who, even after four years, is, I would say, still a relative newcomer. I'm very conscious of the legacy that I have in this research organization and capability. And rapid changes in technology are taking place, science is advancing very dramatically. It's important that we stay on the forefront of science. The head of research is about the same age that I am. I would say that the more critical succession is that head of research, rather than me. I think that, so therefore, in terms of what I want to make sure that we have in place, and he is on board with me, is that over the next five to eight years or so, that we make sure that we have provided not only succession for me, but more significantly, succession for him. It's the core of the company, and we've got to be able to continue to perpetuate that. Well, I'm sorry that we don't have more time for questions. I really have enjoyed this, and thank you very much for your active participation.
Fallows: And that was, I thought, a first rate job by Mr. Gilmartin, and first rate engagement from the audience. I think this augers well for the rest of the day.
Fallows: I thought there were two really positive signs of the ongoing success of the conference already. One is, questions for the keynote speaker, Raymond Gilmartin, were going on until about three minutes ago, and he was patiently standing here with a large crowd of people around him, pressing for even more information. Also, you'll be touched to know that our audience today includes a person who was given attendance to this conference as a birthday present by her mother. I will leave the person unnamed, but she is particularly fortunate. We all are fortunate to have the kind of panel we do now to continue the discussion that Mr. Gilmartin kicked off earlier today, where we have people who have very different backgrounds of experience, but all are quite eminent and are very well positioned to discuss the lessons of leadership. They are generically and categorically somebody from the world of public service, who spent most of his life in public service. A leading scholar of different forms of intellectualism, and ways of, habits of mind. An academic specialist in ethics, and, on the other extreme, a journalist. And we'll have them make their presentations in that order, and I will introduce each of the speakers for his or her seven-minute introductory presentation, as he or she takes the stage.
The first of the four is the public servant, Mark Gearan, a person distinguished as having what is clearly the best job in Washington, or in the federal government. For the last three years, he has been the director of the Peace Corps. He was confirmed by the Senate and sworn in as the fourteenth director. He has worked in a variety of other public capacities since graduating from Harvard twenty years ago. He was Vice President Gore's campaign manager, executive director of the Democratic Governor's Association, and has worked as a press secretary for Governor Dukakis' presidential campaign. In addition to his having the best job in Washington, he is seen as being one of the best people to have had that job. And he is going to take the approach that each of our panelist's has been suggested to take, for this session of reflecting on what are the lessons of leadership that have occurred to him, as he thought about his own job, his own institution, the people who have had this role before, and what he has learned about leadership. Mark.
Gearan: Thank you, Jim. Thank you very much. You doubly put the pressure on us with those introductions, as well as to delivering to the attendee's mother that this was worth the birthday present to attend here. But we also are fortunate in that one of our fellow panelists here has her own birthday today. Dr. Nash is celebrating her fiftieth birthday today. So we're, sorry to put you on the spot there, doctor.
Nash: I'll get you later.
Gearan: You'll get me later, yes. Well, I am delighted to come here as the director of the Peace Corps to talk about the challenges that leaders will face in the twenty-first century. As I travel around this country, and am privileged to travel around the world to see our volunteers, I often tell people, as Jim remarked, that I think I have the best job in Washington, certainly, because it's a privilege to be able to represent the Peace Corps around the world. It is well known as an organization that does an awful lot of good work. And sadly, unlike many government agencies, it is still a very popular government agency these days in Washington. So I'm pretty fortunate, and feel very grateful to have this position. The political support in the Congress is very good. We have six members of the Congress who themselves were Peace Corps volunteers, starting out their life in public service. Wonderfully divided, three Republicans, three Democrats. So we have everything figured out down there at the Peace Corps. But more importantly, I say that the Peace Corps is such an important institution of our own country's history, because it's a place filled with people who possess the kind of qualities and personal attributes that make important leaders, and will make very important leaders into the twenty-first century.
I've been asked to give some reflections on lessons of leadership, three lessons of leadership we've been narrowed to. And I will draw upon my experience for the past three years at the Peace Corps, because it still stands today as such a gem in the constellation of federal agencies doing important work with high regard given to it. I was thinking, though, in reflecting on the lessons of leadership, on my very first trip as the director of the Peace Corps, I went to Poland to visit with our volunteers there that are doing great work in education, in the environment, and health, and business. And the U.S. ambassador to Poland hosted a reception in my honor, invited all of our volunteers to come in, our education volunteers in health, as well as members of the diplomatic community posted to Warsaw. And during the course of the reception, a diplomat came up to me and he said, "Well, will you be teaching English?" And I said, "Well, no, actually, I am the director of the Peace Corps, I am not a volunteer. And I am going to be visiting with the volunteers, and then I go back to Washington." He was a little puzzled, but he said, "Well, are you going to be doing any environmental work, or business work?" And I said, "Well, no, actually, I'm the director of the Peace Corps, and I am going to be visiting with volunteers, and then I go back to Washington." And he was somewhat confused, and he looked at me and said, "Could you tell me, who is this reception for, anyway?" And I said, "Well, actually, it's for me. I'm the director of the Peace Corps." So that's how I started my tenure as director of the Peace Corps, and I've worked very hard in the past three years at looking older in my job. That is the most important test for leadership, I've decided, in my position. Fortunately, in Washington these days, it's not that hard to look older, given the climate.
But I will do my best to give some reflections on the test of leadership at the Peace Corps, because of, frankly, the early architects of the Peace Corps: Sargent Shriver, Harris Wafford, Bill Moyers, Bill Delano, the early people who put together the Peace Corps, and did it in such a creatively brilliant way, and were true leaders, that they organized an agency that still withstands the test of time thirty-seven years later. The first observation of leadership and lesson of leadership that I would offer is the importance of staking out the vision of the agency, the effort, the organization, and setting clear priorities, and remaining focused on them until they are accomplished, in spite of the pressure to be all things to all people. When President Kennedy and Sargent Shriver established the Peace Corps in 1961, they and the Congress, gave it three simple goals: to give Americans the chance to help people in developing countries to gain the skills that they will need to develop for their own families, lives, communities, and their countries. To help the people of those countries to gain a better understanding of Americans, our people, our culture. And third, to help Americans gain a better understanding of the world overseas, and other people, and other cultures. So for the past thirty-seven years, the Peace Corps has held tightly to those three goals. They are the same simple but powerful ones that our Peace Corps volunteers today learn before we send them out to work on projects in education and the environment, in business, and health, and agriculture. And in many ways, it's really the genius of the Peace Corps, to have this massive vision, the power of this very simple idea, and to clearly state the goals and priorities. Moreover, by remaining true to these three goals, I think the Peace Corps has also made it possible for our volunteers to be very successful in their jobs. Today there are sixty-five hundred Peace Corps volunteers working around the world in eighty-two countries. And I have traveled to twenty-five or so countries to visit with our volunteers, and I can tell you that the simplicity of their mission, the clear ability that they have to understand the responsibilities that they have been given, and the priorities and values of this effort of the Peace Corps have been integral to their own success, and has allowed the kind of admiration and respect and goodwill that has been a part of the Peace Corps' history
So the Peace Corps, at the very beginning, until today, has chosen to stick with these goals. We focus on them, we train our volunteers to that effect, and they, in turn, carry them out. And this is one of the reasons why I think the early leadership of the Peace Corps put us on a very wise path from the start. Secondly, I think leadership requires the careful attention to communication, both internal and external to the organization. All too often we see a good idea, or a cause, or an initiative, stumble because of a failed communication effort. Sometimes that's within the organization, the communication, and certainly outside the organization. Able leaders recognize the value and importance of identifying key constituencies, key stakeholders, and regularly and fully communicate with them about the progress of the energy, the vision of the energy, the direction of the agency, and or an effort, or idea, or cause, and where it's going. Leaders that fail their organization, either take for granted the genius of their own idea or initiative, or take for granted the fact that their stakeholders may support this idea or initiative. Or sometimes both. They take both for granted. In any event, I think leadership requires the focused attention on that communication.
Once again, at the Peace Corps, Sarge Shriver's tradition and imprint of communicating with our volunteers, their families, our far-flung staff now in eighty-two countries, the administration, the Congress, and the public at large, was given a high priority, and succeeding directors followed in that regard. So after thirty-seven years, the goodwill, and the respect that the Peace Corps enjoys today, is certainly due to the enormous contribution of the new hundred and fifty thousand Americans who have entered the Peace Corps. But also, I think, to a leadership tradition that places a very significant importance to appropriately communicating within the organization, and beyond the organization. Leaders in the twenty-first century will in some ways have it easier, with an enhanced communication and technology. But they will also have no excuse for failing to adequately communicate in this regard. E-mail, cell phones, faxes, overnight mail, Internet, conference calls, videoconferencing, can all facilitate internal communication efforts. Web access, the one hundred channel televisions that we now have, the proliferation of various news outlets, enhance external communication opportunities.
Third, for leadership observations, I would offer that leadership, and good leaders, can set the tone and the culture of an organization. And this is perhaps the most difficult test, but certainly the most important. Leaders have a unique opportunity to utilize the tools that they have at their disposal, whether it be personal involvement in intervention, policies, statements, speeches, personnel practices, to enhance or create a culture or a climate that is ethically responsible, that fosters community service, that is fair to its workers, and that brings great excitement for the vision and the direction of the effort. Again, based on the Peace Corps experience, Shriver set to create a non-bureaucracy bureaucracy. He implemented a personnel rule, the five-year rule. You can only work at the Peace Corps for five years. Everyone. Secretaries to the director. He would not have, or stand for, a static, bureaucratic organization. We have term limits at the Peace Corps, effectively.
So he also wanted, then, to involve the culture of the organization. Our volunteers are involved in grassroots development. He wanted to make sure that the culture of it was a clear part to foster new ideas, to reward innovation, fresh thinking. To literally push the edge of the envelope. So leaders, I believe, can bring high standards of moral and ethical conduct to their organizations, perhaps through their own personal experience and comportment, but also through where they take the organization, its rules, its practices, its procedures. And that amorphous leadership trait, I think, is highly personal, but very replicable, and certainly crosses both the private and public sector. So those would be my three observations. The only other thought I would offer is, as Tip O'Neill used to say, "All politics is local." I happen to share that view. But when it comes to the subject of a panel today, I also believe that all leadership is not political. You don't have to be involved in politics, certainly, to be a leader. You don't have to be a member of Congress, or head of a party, or an agency. Moreover, I don't think you have to be a titan of industry, or head of an academic institution, or a foundation, to be a leader. Certainly, we hold a lot of respect for leaders in those fields, but I think what we are seeing today, particularly among young people in our country, is one of the most unremarked upon developments in our country today, and that is the burgeoning service movement that is taking part around our country. There was a very interesting poll done by Public Allies, a very good group by Peter Hart, who looked at young Americans eighteen to thirty years old, about their views of public service, and volunteering, and leadership, and who young Americans are looking up to. And their survey was a rich one for some of our discussion here today.
He found that two-thirds tried to put their personal ideals into action through volunteering and community involvement. We see that at the Peace Corps with our inquiries going up ten percent last year. Indeed, a resurgence of interest in the Peace Corps. But Peter Hart also found that, rather than looking up to the popular charismatic, or persuasive leaders, today's youth say they admire those who can get along with other people, who have high personal integrity, and are comfortable with diverse points of view. Less than one-fifth of young Americans think that they can effectively foster change by furthering political or social causes. That's a sharp contrast to the baby boom generation, who, in the aftermath of Vietnam, and Watergate, and other issues, looked to government as the source to solve some of our nation's social and political ills. So the leaders in the twenty-first century, I believe, will have to reconcile those differences for the younger generation. But I look forward to the discussion. I appreciate the opportunity to offer these reflections. Thank you very much.
Fallows: Thank you very much, Mark. Our next speaker is Howard Gardner. Professor Gardner is the John H. and Elizabeth A Hobbs professor of cognition education at the Harvard Graduate School of Education, and I am informed, I hope reliably, that John H. and Elizabeth A. Hobbs are present here today. Is this true? If they are, will they please stand and be recognized with applause? (Applause). Professor Gardner has a long list of academic affiliations, which I will not go through, and an even longer list of honors which, starting with the MacArthur Prize,. The way I will sum up his importance here is, that he is one of the few people who can claim to have introduced a genuinely new idea, or at least a change, to have changed public thought, in the last decade or so, with his ideas of multiple intelligences, he has, I think, revolutionized both academic and lay thought about what intelligence is, how people are competent, the different ways in which people have skills. And I think that to have changed the public mind that way is a remarkable thing, and he can claim to have done that. In recent years, he has been carrying out studies of creativity, of leadership, of how people achieve in different fields. And now Professor Gardner will tell us his three lessons of leadership.
Gardner: Thank you. As indicated, I am a psychologist, and I am going to talk about leadership from the point of view of cognitive psychology. That's the field that studies how the mind works, how we think. And the key idea of cognitive psychology is that the mind works by building and changing mental representations. Descartes was right in observing that we think, but what we cognitivists are is interested in is, what is the stuff that we think with? And we believe that people think in words, images, pictures, bodily impulses, and perhaps especially in stories. Sometimes we change the way in which we think, and also the way in which we feel, and the way in which we act, and it's in fact the job of leaders, from my perspective, to help bring about the changes and the representations which ultimately lead into these behavioral changes. It's useful to make the distinction that many people in this field do between leaders and managers. I would say the leaders are in the engineering business. They change the way that people represent the world, and effective leaders bring about major changes in mental representations. And as an effective leader, I am going to nominate Margaret Thatcher, and I will get back to her in a couple of minutes.
I've cited Descartes. Now let me cite John Locke. John Locke said that we are born as blank slates, as a tabula rasa. Now in fact, if we really were blank slates, it would be easy to create and change representations, because we would just imprint them on the blank slates. Yet in one of the most interesting discoveries of cognitive psychology, it turns out that by the age of four or five, all human beings already have very powerful mental representations. Even young kids are pretty clear in their own mind how the world works, and how they think about that sort of thing. A potent and easy to describe early mental representation is the Star Wars mental representation. The Star Wars representation says the world is composed of good guys and bad guys. The good guys and bad guys are in a struggle. Hopefully the good guys, which is us, or we, will win. Now not only do four or five-year-olds believe this, presidents have believed it, movie makers have believed it, and I think if we were to go down to the (Wye?) plantation, we would find that that way of thinking is one of the chief impediments for a settlement in the Middle East. In attempting to change representations, leaders have two principal weapons. The first one is stories. Leaders create powerful narratives, dramas, ones in particular which help the people who they are involved with have a sense of identity, of who they are, what they are trying to achieve, what the obstacles are. When Mr. Gilmartin spoke about Merck serving people, and not pursuing profits, I would say that that is a message which can be readily elaborated into a story, if you talk about why you do this sort of thing, what the obstacles are, what the alternatives are.
Similarly, the second weapon of the leader is what I call embodiment. And the best measure for embodiment is the kind of life that the leader leads, the kind of thing that the leader does from one day to the next. If the story and the embodiment are more or less (consonant?) with one another, then leadership can proceed pretty well. If, however, the leader tells story A, but leads life B, then the story is basically a hypocritical one, and ultimately the leadership is difficult to sustain. I understand we are being bipartisan today, so I am going to quote stories told by two leaders. One story was, I am not a crook. If you are, that is a difficult story to sustain. Another story is, I believe in family values. If, however, you don't embody that, then again, it's a very weak story to try to sustain.
I mentioned Margaret Thatcher before, and I am going to propose that she is one of the most effective leaders of the second half of this century. Now, Margaret Thatcher did not arrive in Britain in 1979 with Britain's having a blank slate. On the contrary, there was what I would call a postwar consensus, which was kind of soft socialism, unions powerful, market controls being pretty powerful, England not trying to be a great power anymore, soft in internationalism. And Margaret Thatcher told and embodied a simple but powerful story, and that was that Britain has lost its way. The wrong way was the Socialist way that I mentioned, which even the non-Socialist leaders were sympathetic to. The right way was a return to a market model relatively laissez-faire, individual initiative, pride, the Great Britain of the Falklands. And Margaret Thatcher not only told this story brilliantly, but she also embodied it. She appeared to be the self-made kind of person who didn't take flak from anybody, and who was straightforward and serious, and really a grocer's daughter, which is what she was. And this embodiment, I think, made her story very, very convincing. The way that we cognitivists think about these things is that there are many stories around, and they are competing with one another in a kind of a Darwinian way, and perhaps there had been previous critiques of the postwar consensus, but Margaret Thatcher was the first one to create a representation that it was so powerful, that it wrestled with, and ultimately defeated that postwar consensus. The best evidence, I am sure you will agree, is that even now, virtually a decade after she left office, Margaret Thatcher's ideas still dominate the debate, they color the mental representations in Britain, and as if made for my talk today, the New York Times this past weekend had an op ed piece called, "Tony Blair, Thatcherite." And you don't have to read the story. You know what the argument was. It is that basically Margaret Thatcher's mental representations have been so powerful in Britain, that they really affect the way people think today.
Now I use Margaret Thatcher as an example, but as Mark indicated, leadership is not restricted to great national and international figures. And indeed, whether you are leading a family, or a small business, or any other kind of an organization, still you have to have the narrative that you want to convey, and the capacity to embody that narrative in your own behavior, so people really know what you are talking about. When we heard Mr. Gilmartin answer questions, it's quite clear they don't simply have a story at Merck, but they try as much as possible for everybody to embody that story in the way that they face difficult decisions. I would even go on to say that stories don't have to be carried by individuals. They can be carried by groups. And they can be carried by monuments, by media. Indeed, I will randomly pick two examples. A leadership role in a news magazine, this is played by Time Magazine, a leadership role in university magazine, this is played by the Harvard Magazine. And what I mean by that is, that the representations which they create, if they are effective, will influence what other news magazines, or other university-based magazines do.
One final point is that nowadays, with the eruption of all the forms of information that Mark (Gearan) referred to, we are literally exploding with stories. There are so many stories that people can hardly keep track of them. This makes it very difficult for a new story to gain the ascendancy. And I said about Bill Clinton, long before the current troubles, that Bill CIinton was an incredible storyteller, but he had too many stories, and it wasn't quite clear which ones he believed. And I think that is a problem which is not restricted to Mr. Clinton. We were asked to give three lessons. I will conclude with three lessons, and a caveat. Lesson number one is that leaders need to be able to tell stories if they want to create new representations, which will get people to think and act differently. This is the communication point that Mark (Gearan) was emphasizing. Number two, that storytelling, communicating, is important, but if you don't walk the talk, and if your organization doesn't embody the story, then it eventually loses its potency. Third of all, a story that people have always been interested in, but I think particularly today, is what I would call the identity story, the story of who we are, why we are here, what at the end of the day we are trying to achieve, what the obstacles are, and how we can make progress toward that goal.
My caveat is that being an effective leader is not necessarily being an ethical leader. Few would question whether Margaret Thatcher was effective, but people would probably debate on the extent to which she was ethical. I think ethics is another issue. It's one that Laura Nash will talk about. But if I can plant a question, I would happy to try to apply my ideas to ethics later on. Thank you.
Fallows: Thank you very much, Howard Gardner. Our next speaker is indeed Laura Nash, who is one of the most experienced, influential thinkers, and leaders on the intersection of leadership ideas, and ethical values, and organizational life, in particular corporate life. She is the director, and I think the founding director of the Institute for Values Centered Leadership of the Harvard Divinity School. Are you the founding director of that?
Nash: Yes.
Fallows: There is a Harvard connection theme that runs through many of these panels. She has taken this to some kind of extreme. She got her PhD in classical philology from Harvard, and was on the faculty of the Harvard Business School, and she has also been a program director for the Conference Board ethics conferences. And she just finished a book, looking closely at a corporate culture of an unnamed corporation. And perhaps you will name the corporation for us, who knows? So please welcome our birthday girl, Laura Nash.
Nash: You know, it's hard enough to talk about ethics in business, but to talk about ethics, business, and your birthday is really just about impossible. Thank you very much, Jim. Gee, with that introduction, I ought to sit down and shut up, I think, but I won't because I think this is really an important topic, and we had some extremely interesting conversations before this conference among the speakers about just what energized us to get up here and do this. And I have to say at one extremely stimulating luncheon with John Rosenberg and Cathy Chute someone finally remarked, you're going to talk about whatever is on the front page yesterday when you get up here, because we're so preoccupied with seeing leadership in the context of the current political situation. I know we are trying not to focus totally on that situation, but I think it, I would like, for a moment, to use it as a sounding board for what I would like to suggest are some important areas of thinking about ethics, and its relationship to leadership and visions for the twenty-first century, especially for large organizations like business organizations.
I think when we say whatever is on the front page is going to influence a conference like this, what we're really saying is that our understanding of leadership right now is undergoing radical revisions, that somehow we are in a period of self-reflection about the role of values in leadership, that it's very important, and somewhat confusing. And I am sort of uneasy with the way we frame the question publicly. The way we framed it publicly is, can a leader lie and still be effective? And that's a pretty good question for a talk on leadership and ethics. But I think it's a bad question, it doesn't take you as far as it might, because it makes us somehow feel we have to choose between ethics, effectiveness and ethical values. And I don't think any of us really like that choice. I think that kind of a choice posed for us has created an enormous crisis of confidence in leadership. So the short answer is, no, we really still want both. We still want effectiveness and an ethical foundation for effectiveness. And I think the kind of unease we have been feeling, we can also see in corporations when people don't walk the talk. Howard, I think you are absolutely right. It's very hard to be an effective leader, if there isn't some enormously strong connection between moral values and effectiveness. And I think we heard that in Ray Gilmartin's speech this morning, as well.
So the need for values is not new, and it hasn't changed. The good news is, it hasn't changed. But I think what has changed very much is the way in which a leader can communicate values, and the ways in which values are now communicated in large organizations. And that is really what I would like to talk about, is some of the moral issues facing us, not just that we have values, which values, but how we effectively lead with values into the twenty-first century. And just a few comments, and then we will pick it up later again, the common way is something Howard has already mentioned, I think, which is for the leader to embody values. And this was a classic formulation from George Washington deliberately using the images since Cincinnatus, a Roman leader of high integrity, and great courage in battle, with a belief in strong government, as his own model for his leadership in the first presidency. And idealizing that form, even imitating, I think, in some of the statues, some of the iconography of Washington, this same image. We have a few embodiments today. I would say Nelson Mandela is the best example we have of the embodiment of a vision, and of values. And if any of you were fortunate enough to be there when he received the Harvard doctorate, what struck me most was how everyone smiled, just in the presence of this man, and everyone knew immediately what he stood for. We don't have many of those people around. We also don't have people who have been forced to live a single issue in their lives, in the way that he has.
We also have lost all sense of privacy. I don't particularly like the fact that we are in everyone's bedroom, I don't think it's terribly good for a society. But we are there, and whether it's Bill Clinton, or the (Wendt?) divorce, privacy is no longer an option for corporate leaders, or political leaders. Therefore, the superhero model is almost an impossible model. This embodiment of a vision, of a large vision, requires an image of somebody larger than life, and that is something we are not capable of creating right now in the current context. So first we saw, I think, a disappearance of the super power in the world, and now we are seeing the disappearance of the superhero. And it leaves us with some very deep questions about how we create and communicate values and leadership? And I just like to think of this as the context of the little events. Leadership is now in the context of little events, and the challenge for leadership, I think, is to create that larger context, once again, where it is not obvious, where it stands amidst great chaos. And one way, and I agree with Howard here, is through narration. The narrator hero may be our next model. By telling a story, who we are, where we're going, why it's worth sacrificing, is in a sense the creation of an image.
Setting a larger context. Setting that larger context, I think, through narration, is an extremely important function, and it's something I have been trying to track inside corporations. It doesn't just happen at the top. The large corporation whose stories I've been following is Electronic Data Systems, with a hundred thousand employees around the world. And what was amazing to me was how that company moved beyond its found stories into a different set of stories that are being told at every level of the firm, that still go back to some of its founding values, but are evolving very rapidly. I can talk about that more at another time, but let's go to the visions of the twenty-first century, and the role of the story there. I think that values come in in a kind of millennial hope, and the millennial hope that I think I keep hearing among employees, among college students, and in the public at large, is that we have leaders who will engage us in a good cause. I think we heard it from Merck today, that there is a powerful leadership responsibility to engage people in the good cause.
Having said that, I think we also have to say is that many people who have engaged in good causes have done horrible things in the world. The big cause, in a Democratic society, is always balanced by reasoned dissent, and that goes against a lot of corporate cultures. So I think the challenge, one of our big challenges is to create leadership that can both define the good cause, and who we are as we pursue the good cause, but also create channels for constructive dissent. And that is, obviously, a pretty paradoxical position to be in. And here is where values come in. Some of the values that will support that paradoxical challenge: a belief in honesty. Okay. Creative dissent, when it's honest, usually takes a company forward, whether it's a research team, or a strategic team, assessing the finances of a firm. The value of, I don't know how else to put this, disinterested passion for excellence. Tap any good innovative firm, and what do you see but these kind of larger professional standards about creating excellent products, excellent research, excellent performance, and the leader's role is somewhat disinterested in that. In other words, the excellence is larger than the leader, and the stories are about creating the excellence, not about creating the coronation of the leader.
Third value, I think it's very important to create a context of inclusiveness, versus tribalism. Nowhere is that clearer than in companies who are seeing their competitors now becoming their customers at the same time. The old tribalisms that we created around competition just don't stand up in the current market conditions. So we're in a new kind of more fomenting stage, where the lines aren't as clear. And that's why the imperative to create the context, the larger story, is so important for leadership.
Let me give you one example of a person I think really has demonstrated this new kind of leadership, because I know I am talking in fairly general terms. Unfortunately, this person recently died, and I was delighted to see him eulogized today in the Financial Times, and that is a fellow named John Postel. Does the name ring any bells with anybody? Yes, yes. Am I saying his name right, Postel? We know him so little, that even the pronunciation of his name is difficult. John was the person who controlled the named access to the Internet. You got your address from him, okay? A person with a passion for excellence in a university setting, didn't try to commercialize his own interest to the degree he could have, although he believed in the commercial power of the Internet. And in addition to being the gatekeeper for web addresses, the other thing he did was stand on the board of the committee that is defining Internet protocol. And you can imagine what chaos that world is like. Thousands of people, unattached to organizations, with a very deep opinion, and a commercial interest in how the Internet structures its protocol, and through it all, over the last five years, John Postel managed to come up with that protocol. And the way he did it was by keeping the doors open to freedom of voice, inclusiveness in how they gathered information. But most of all, he tied the creation of that protocol to a larger ideal, and people bought into that ideal. And that was that if you could create this communication device, you were opening up enormous opportunities, enormous commercial opportunities, and as he insisted, non-commercial opportunities as well. And the people who believe in freedom of speech, and who believe in commercial innovation, could buy into that. And I think that is the kind of person quietly, consistently, and telling that story, John was able to do that. I think that is the kind of leadership we are going to see more and more of. And I will sit down.
Fallows: Thank you very much. Our final panelist for this introductory presentation is Walter Isaacson, who I am proud to say, is a friend of mine, and somebody who knows about leadership, both as a student and as a practitioner. I think Howard Gardner earlier used Time Magazine as an illustration of leadership in the press. It is genuinely true. I am uniquely positioned to, or at least I am especially positioned to talk about this. When I was at U.S. News, we often had an internal joke that looking at Time Magazine was like looking at America from some impoverished country, and in the Balkans, because so much of what it seems is so adept in so many ways, has such a strong institutional identity, so many of the same culture emphases on excellence that you heard about from Mr. Gilmartin with Merck. For nearly three years, Walter has been the managing editor of Time, which is what they call the boss of Time. For twenty years, I guess, he has been with the Time organization, coming from the wonderfully named Times·Picayune of New Orleans. He comes from an institution that does embody leadership in the news field. Personally, he has had an enormous leadership influence within the magazine. If you read the recent book, "Burn Rate," you hear Walter described in God-like terms, the person who throws his weight around in the news business. The program you have gotten omits the Harvard affiliation for Walter. I know that he started Harvard. I believe he graduated. Is this true, Walter? He also, you heard earlier today, surmounted the handicap of going to Harvard, and being a Rhodes scholar, to still succeed in life. And he is going to talk about the lessons he has observed of leadership.
Isaacson: Thank you, Jim. With Mark talking about trying to overcome looking so young, and all these birthdays, I always worried about that when I first came, that people thought I looked a little bit too young. And I was at my daughter's school this morning for the usual parent-teacher meetings, and some kid came up to me and said, "Oh, are you Betsy's grandfather?" So that's gone now, I've lost it. The hell with it. Look, leadership faces a really great problem now, and I think we have to confront it in a seminar like this, because we're threatened with the loss in this country, and in this society, of what leadership can be. There are two causes for this great threat to leadership. One is the investigative culture that we find ourselves in today. And the second, if I may say so with Jim at my side, is the press, and the press's propensity to pull down leaders. Both of these, I think, are legacies of Watergate. They both have some merit. I think the investigations into Watergate, and the investigations that have come subsequently, alas, all have some merit to them. But we have to dispassionately look at how they have helped undermine the possibility of leadership in America, as we move into the next century.
When we talk about leaders needing to embody the values and the goals that they propound, that's particularly difficult in an investigative culture, with the press as part of that. It is no excuse for Bill Clinton's defenders to be saying, well, other presidents did it. However, as we look at it clinically, we can look at leaders of the past, and say that John Kennedy would not have been able to operate as the effective and charismatic leader he operated as, had he been in such a culture where his personal life would have been exposed the way is now true in politics. When you talk about family values, and Clinton is preaching it, people in the past preached it, too, had their problems, but didn't get exposed the way they do. Likewise, the "I am not a crook" thing. Lyndon Johnson was one of the most effective leaders we have had in my generation, or my time, yet certainly he had his backgrounds that, had they been in this current culture, would have been exposed as crookedness. All the radio licenses he gave himself and his family, and the way he and (Brown and Root?) worked in Texas, and the money, and the kickbacks that came from that, all of which form fodder for very long chapters in Robert Caro books, and are very interesting, but nowadays would form fodder for independent counsels, and we would not allow that type of leadership.
Why do we wallow and engage in this type of practices? I think most people would say that we in the press do it because it's good for ratings, and it sells magazines, whatever. I think we like to think we are engaged in some of these things because we feel that the public should know, that that's why we got into journalism, that we should expose the powerful and be part of an information culture that allows people to make their own decisions. And I can actually say that this type of approach is not done simply to sell magazines, or to get ratings, because it doesn't sell magazines all that well, or get ratings these days. I mean, you can get better ratings and sell more issues with more upbeat stories. So we have to look a little deeper into ourselves and say, why are we doing this to ourselves? I think the main reason is that it's the result of a culture that has developed over the past twenty or thirty years, that is sort of, and Jim has said it in his book in some ways, the crossfire culture. The notion that everything has to be antagonistic, that if we're going to discuss an issue, it's going to be a debate in which two sides go at each other's throats, as opposed to truly discussing the issue.
Conflict is relished in this society, and we tend to treat politics and leaders as if it was an adjunct to world championship wrestling, or something. It's, hey, let's watch it. Let's watch them go at it. They amuse more the more they go at it. That's true of campaign advertising. That's true of campaigns, it's true of the press, it's true of the television, and it's true of the investigative streak that has become the fifth branch of government after the press. I'm not just talking about Bill Clinton, but I'm talking about anybody who has considered going in to government. Look at Richard Holbrooke. I'm not quite sure exactly what he did. I've looked at a variety of the accusations made against him, but I do know that he has been caught up in the web of the investigative culture, and has trouble being nominated and confirmed to the United Nations.
And we tend to treat our political dialogues so that MSNBC's shows in the evening are almost indistinguishable from Jerry Springer's shows. It's all, let's go at each other's throats. When we look at how this affects people going into leadership, we look at people who, to most of us, would embody great leadership and see why they are sort of afraid to go in. Let me ask, is this off the record, some of this?
Fallows: Oh, of course.
Isaacson: Yes, okay.
Fallows: Who are the organizers here?
Isaacson: Well, I just wondered, I was at dinner --
Fallows: You can trust us all (inaudible).
Isaacson: I was at dinner for a book, actually a book written by somebody who has fired you, sorry, Harry Evans' book.
Fallows: (Inaudible).
Isaacson: That's right. But I sat next to Alma Powell, the wife of General Colin Powell. If there is one person we all on the panel had to agree on who embodied the values that he was a leader for, as a personal embodiment, Colin Powell would pop to mind, I would think. It certainly pops to my mind. And I was surprised at how open Mrs. Powell was during this dinner conversation, where we were just talking for about an hour, about why he chose not to run, how he might decide to run in the future, or get involved again in public life, but the entire Clinton fiasco, and for that matter, the twenty others from Holbrooke on down, fiascoes that have come about, means that when they sit around in the evening and talk, they say, yes, we were right, and they say, I told you so, to people who said that they should have gotten involved. But she was talking about the possibility that he would get involved in public life again, and the challenges that this new culture poses for that.
The next morning, I was in our morning meeting at Time, and I said to the political team we have, by the way, we've got to keep an eye on General Powell. I sense that they are once again chewing on the possibility. And somebody said, yes, but I've gotten something somebody sent to us that talks about, and I won't even say what it is, but something about General Powell. Just a personal thing. And it sort of took my breath away for a moment, and I said, well this will come out. And I said is it true? And they said, probably not, whatever, I don't know, we don't know. And I said, should we look into it, and I said, no. I mean, it was just an instinctual thing, which is, we've got to pull back from the brink here. If we don't start saying, no, we don't want to investigate something that is basically private and personal, and you shouldn't be trying to guess what this is. It's not some horrible thing, but it's just, it was just something personal about his family or something. And I said, no, no, no, steer clear. Maybe I'm getting soft because I just sat to next Mrs. Powell, but maybe all of us have to take a breath and say, no, we will not print that story even if it lands in our lap. And, but that's a difficult thing to do, because we live in a competitive, conflict-oriented media, and the media is not just the press, but the general media and environment in which we live. And you worry about people who embody leadership, and the desire of others to rip them apart and tear them down.
I think in a situation like this, what we have to get back to is understanding now just the value of investigations and pulling people down, but the importance of common ground, a concept that has been lost in our investigative, antagonistic, political, investigative, and press culture that we have now. And the notion of leadership as part of that common ground, meaning, we share certain values, let's look for the ground in which we share. By common ground, to go back to Harvard for a moment, I mean, what the Puritans did when they sort of said, okay, this will be called the commons. It will be the common ground. We can all meet there, we can talk there, we can graze our cattle there, or whatever. And symbolically, America has been built around the notion of common ground, and that's what we've lost today in the notion of leadership. We've tried to do that at Time when we were turning to what we were going to do for this century. We said, let's look at leadership, let's look at the hundred most important leaders that have happened in this century, and why they were good leaders. And it's somewhat gimmicky. I mean, Time magazine has had gimmicks its whole life, from person of the year, to this sort of thing. But the Time one hundred leaders is a series we've been doing where people looked at everybody from Gandhi to Louis Armstrong to say what made them change the field that they are in. And to me, that was a notion of a way of getting leadership back to the notion of common ground, rather than leadership as pure conflict.
It also ties in a little bit to how I think we have to lead in our organizations. When I came back to Time magazine, I had been working in new media for a while. There had been leadership at that magazine that kind of relished the notion of creative conflict, which is a form of leadership I am sure you are more familiar with than I am, but people are pitted against each other, and different editors were each given assignments to see who could, and you would argue against each other, and it would be sort of the competition amongst the editors. And out of that creative conflict and ferment was supposed to come edgier, better ideas. It did not make me feel comfortable, especially because I felt that the leadership we had within the magazine was going to be reflected in the type of stuff we put on our pages, and therefore, I tried to create a more of a sense of management by community, where everybody should feel very clear about their ability to argue ideas, to disagree on ideas, and on substance, but that the goal was to create a sense of community, not a sense of conflict, at the magazine.
So to get to the three lessons I would take out of this problem that I think is a severe problem for this nation as we go into a new century, lesson number one is that conflict is important. Challenging people, investigating people, having real conflict is important. If you talk about Margaret Thatcher as a leader, she couldn't have done it if she hadn't broken some china, and really had some conflict, conflicted with the Tory party leadership at the time, and ran against them. In the city, Mayor Giuliani is an example of leadership by conflict. And sometimes conflict means standing up to authority. If we look at the hundred great leaders of this century, you look at Gandhi marching to the sea. Rosa Parks, refusing to get off the seat, off of her seat in the bus. People like John (Lewis) on the (Edmund Pettis) bridge, refusing to turn back from the authority, or that kid standing in front of the tank in Tiannenman Square, refusing to get in front of the tank. That is conflict. But the lasting leaders, Gandhi, Rosa Parks, John (Lewis), Martin Luther King, and one hopes the students in Tiannenman Square, ended up being leaders not through the conflict by bringing people along, having people march with them across the (Edmund Pettis) bridge, until people were holding hands, and being part of a consensus, or a common ground. And we have to remember that the importance of conflict is the lead to common ground, not to preclude the search for common ground.
Number two is, I think leadership has to be constructive, which means constructing communities. You have to build a community within a magazine, within a political organization, within our towns, and neighborhoods, and villages. And the notion of communitarianism has been quite an academically discussed one over the past twenty years. It's at the root of the third way, and neo-liberalism, and many other things. But truly building communities is not something we exalt, when we exalt leadership. We exalt the loner instead of the communitarian, and I think we have to start thinking of communitarian values.
And finally, I do think that leaders have to reflect values, that as Dr. Gardner said, it is quite possible to be an effective leader, but not be an ethical one. But I think Dr. Nash also made a good point, which is that in the end, the truly effective leader is one whose values are shared, and is able to help people come to share those values. People like Nixon and Kissinger, when they were leading U.S. foreign policy, America played a very strong leadership role in this world. But that leadership was based very much on a realist view of our national interests, and somewhat of a disdain for an idealist view of our values. And that's why I don't think it was a sustained foreign policy in that period. And so, by only by reflecting the values do I think leadership can be truly effective in the long run. Thank you.
Fallows: Thanks very much to Walter, and to all four of our panelists. I wanted to ask one of the large number of questions on my list, which I will ask later on, if there is a lull in the action. This would be for Howard Gardner. One of your points is that leaders have to talk the talk through the stories they tell, but they also have to walk the walk, or walk their talk. And there are obvious implications of sort of family values, I am not a crook, etc. In a different way, when we think of many people who have risen to positions of real, international, historic leadership, there is something weird about them as people. Winston Churchill, from his biographer's point of view, was not a normal person. Nor was Martin Luther King. Nor was Abraham Lincoln. Nor was Franklin Roosevelt. Walter and I, in our own business, Maynard Parker died several days ago, the longtime editor of Newsweek. He was a wonderfully effective leader of Newsweek. Nobody thought of him as a completely normal person. Would you back me up on this, Walter? I mean, he was really, he was driven by wanting to scramble the jets, and get the magazine remade several times a week, if possible.
Would this suggest that leadership will require some kind of abnormal personality trait, and indeed, is walking the walk an unreasonable thing to ask of leaders, if by definition they are different from the people they are leading?
Gardner: I do think, that as Walter Isaacson said, one thing that leaders have to do is to be willing to take risks, stand alone, go against the tide. That's very, very difficult for most of us to do. We are usually not socialized that way, and it's painful. And perhaps it's the case that many of these people, when they were young, were not that unusual, but the course which they took eventually toughened them, so to speak, so that by the time they get to be in the president's chair, or prime minister's chair, or the editor's chair, they have a kind of a carapace, if that's the word, which the rest of us don't. But looking at each of your examples, Jim, I think that being weird isn't enough. Your weirdness has to intersect with the circumstances. Roosevelt, I think, could never have been the president that he was without his polio, and the experiences surrounding that. If Churchill had died in 1939, he would have been seen as an individual of tremendous ability, but never really intersecting with where the country was and what it needed. Martin Luther Kind lost most of his effectiveness when he tried to become a national, international figure, rather than a figure that was rooted in southern segregation, and the effort to overcome it. I don't know Maynard Parker. And I'll mention something very frightening. I think Adolf Hitler is a very good test case for those of us who claim to have theories of leadership which talk about effectiveness, and not ethics. I mean, certainly he would be the anti-hero for most of us. Yes, he was a very effective leader, and he actually did embody the values, which he helped to push in a certain direction. I read a statement that may even have been in one of your magazines recently, that said if Hitler had died in 1938, he would have been considered the greatest German statesman. Now that's a debatable point, but it's a very interesting one, and we can even say, if at Munich things had been very different and Hitler had realized that he couldn't simply walk over countries and realize his goals, he wouldn't have been a hero, but he would not have been one of the great disasters of all times. So it was not the individual as all, weird as they may be, and Hitler was as weird as any of them, but it's what other people do in the historical moment. And Hitler could not have been possible without the debacle of the first world war.
Isaacson: Yes, there is a wonderful book by Ron Rosenbaum, trying to explain Hitler in that regard. I think it was our magazine, it was Elie Wiesel who wrote it, when talking about the hundred leaders. He did Hitler for us, and explained that, yes, in 1938, etc. What he would blame it on, though, is not just World War I, but the whole notion of what Germany became at the time. We like to personalize leadership and personalize evil, especially evil leadership in this century, everything seems to be personal. We talk about Hitler, or we talk about Pol Pot's holocaust, or we go down the list. Stalin's purges and collectivizations, but it was whole societies, including well-progressed western civilizations, such as Germany and Russia, who went mad at those times. And the interplay between leadership and public attitudes is a tricky one. The other aspect of this, which I think was in Jim's question, and one I don't have an answer to, but I have always found it a fascinating question is, leaders tend to have larger than life appetites. Jesse Jackson's famous line about Bill Clinton is, once you strip everything away and look deep inside, all you find is an appetite. And those appetites tend to be personal as well. I mean, they tend to be. Lyndon Johnson, John Kennedy, or Bill Clinton, or others--it's an appetite for affection, for fame, for power, for women, at times, for getting away with things, whatever it may be. I sometimes wonder, is this some, I mean we almost need a biochemist, but is there some dopamine receptor in the brain that allows you to quest for leadership, but that desire for the dopamine rush also allows you to do things off the Oval Office that the rest of us would not have done.
Fallows: Questions from the audience.
Questioner: Yes, Anna Duran from the Duran Group. Dr. Gardner, I read your work many, many, many years ago. And just to preface my remarks, I studied with (Flavel), and Tom (Trebasso), etc., back when. So I am extremely interested in your cognitive framework, but I'm wondering if I can just up the discussion a little bit here. You presented what I think is a very dualistic definition of embodiment, and I hear from this panel, that there is always a right and wrong useful definition, but not always the best condition. And we know from some research, and I think some of you have alluded to it, that many leaders have had traumatic early childhood experiences. I'm also trained as a psychoanalyst. And that these early life experiences may become the source of representation, as a result of resolving these conflicts that occurred early. So now here is the question. What do you think about seeing leadership from a technical cognitive point of view, as embracing contrasts, and resolving contradiction or paradox? And let's move away from this idea of dualism as a way of explaining leadership. Real leaders are those that can live and create value for paradoxing contradiction, and along with that, which I would like to add to some other comments here, is not the goal to share values, but, which may be useful, but to actually have leaders lead on building a community of reciprocity.
Gardner: I think that the two scenarios that you sketched, in fact, reflect different kinds of leadership. I think there are people who have tremendous conflict in their own lives, and who revel in that. And as Walter Isaacson said, that their leadership style, is conflictual. Margaret Thatcher was preternaturally an us-versus-them kind of person. She always said, is he or she one of us? And there are other kinds of leaders, which everybody on the panel has endorsed, who are more common ground kinds of leaders. These people may have equally tremendous struggles going on inside themselves but if they haven't resolved them they have at least found a kind of equilibrium and they tried to put forth a leadership style which creates the common ground, rather than exacerbates the leadership. One of my ethical criteria for a leader is somebody who tries to emphasize inclusion, rather than exclusion. But, and this gets to some of the points that were raised earlier with regard to Mr. Gilmartin and the Merck presentation, I used to think that it would be easier and better to be an inclusive leader, because then more people will support you. But in fact, it's much trickier than that, because to the extent you become inclusive, you lose your core constituency. And I think that's in a sense what happened to Martin Luther King, Jr. And when you look at some of the assassinations, they are quite fascinating. I mean, Gandhi was not assassinated by a Muslim, he was assassinated by a Hindu, who felt that he wasn't loyal enough to the cause. And many of us were very surprised when we turned on the television, or heard on the radio, that Yitzhak Rabin had been assassinated, that he had been assassinated by somebody who felt he wasn't a good enough representative of the Jewish people. So what you're describing is, in a sense, a balance everybody has to achieve. I didn't mention the name of my own teacher at Harvard, Erik Erikson, who I'm sure some of the older people here studied with, but his whole notion was that the best embodiers were people who had actually wrestled with the issues that the rest of the population was wrestling with, and that could articulate that wresting, and come to some kind of a resolution.
Questioner: I'm Tom Slate from A.T. Kearney, and my question involves how, we've talked about leaders as leaders. Now most leaders, and I think Colin Powell is probably a good example, go through stages of being followers, and being leaders, and go through a process that take them through a career path. And I think Powell is an example of that. It's also an example that is instructive for people in an industrial situation. Like Ray Gilmartin spent twenty-two years at the Becton Dickinson company. His predecessor spent his entire career at Merck. So you go through a period of time where you are a leader and a follower. How do you see leaders handling that transition back and forth between roles?
Fallows: Who would like to respond to that?
Nash: I'll start it off, since everyone is being so quiet here, uncharacteristically. I think that we had a hint of it in the first speech today, which is that that transition from follower to leader means picking up a story. And sometimes that story needs to be radically changed. At other times, it simply needs to be picked up and moved into the new context. And I think that rather than seeing leadership hierarchically as, now I've got the power and before I didn't, I think that's a really naive way to look at leaders. It's a pretty lonely position to be the head of a company. It is, rather to say, what is this journey we are embarking on that I am now at the helm of? And that's where the values and the stories of the organization can be interpreted as sources of strength. And an example of that really was at EDS when Perot left, because it certainly had a very different leadership style at that point. Perot then became a competitor to his own company, which he had founded. And the leadership at that point picked up the story, not of Perot, but the story of a company that had always been emphasizing some of the values that Perot talked about, self reliance, not standing on ceremony, pragmatism, and was able...So I think one of the challenges that leaders face is not to say, now I'm not the follower anymore, but where do I take this story? How do I shape it for everyone?
Gardner: If I can make a quick addition. I think you are raising a question which will probably come up with Ron (Heifetz's) presentation this afternoon, and that's the issue of authority versus unauthorized leadership. It's very different if you are in an organization for many years, or you come into an organization which is very well established, like the U.S. Army. There is a different career path, so to speak, than if you start your own organization, or are an iconoclast. I think the outsized egos that Jim Fallows was referring to were probably never very good followers, and they were rather different than somebody who, when after twenty years, comes into a point of authorized leadership. I will say about Powell, based on my own studies, the early marker of leadership is the ability to challenge authority without getting killed, and I simply do not know enough about Powell to know whether he went through that. If he didn't, he would have a difficult time being an effective national leader.
Isaacson: Let me add one point that, at least in my generation of people coming up, you can sort of divide the leaders into two types. You can always divide anything into types, but let me try on this one, which is, those who would climb, who become leaders by climbing through the ranks, and those who are more entrepreneurs. And if you want to look at business, that's the difference between a Bill Gates, who was never really a follower, was just an entrepreneur from the get-go, and a Lou Gerstner who climbed the ranks at many companies, and kept moving up. Likewise, Colin Powell is one of these lifers who climbs the ranks, gets to the top. I happen to be one myself. I moved up from being a lowly correspondent in our Washington bureau to the ranks. Whereas a Bill Clinton never was somebody who climbed the ranks. He was more of an entrepreneur when it came to politics, and he started running for things, and never was that much of a follower. And we're seeing a great shift, because the meritocracy that developed in the 1920s through the '50s and '60s in particular, helped organizations create a meritocratic rise through ranks that was sort of the way, I think, most leadership emerged. And nowadays, I think you're seeing a little bit more of a shift. I'm not an expert, and I haven't studied it enough, but it is a question I have in my mind. And maybe the experts here at some point can talk about it. I've seen more of a shift to leadership being people who have never really been followers, but the Bill Gates model.
Fallows: Susan Charendoff from Joseph E. Seagram and Sons. This is an open question, you've all talked about embodiment, and I'm interested to hear your thoughts. There are many corporations today, large corporations, investing significantly in leadership development. What are your impressions of how effective that is, and how can corporations be more effective in developing leaders?
Nash: That's a good question.
Fallows: Perhaps there are, are there any views on this? If not, this could be a subject for lunchtime discussion.
Nash: I will say one thing about that. I mean, I think we are struggling with leadership training right now, partly because we are struggling to understand what is, what are the new requirements for leadership in the twenty-first century? And there is enough training out there to sink a ship. But I think it's important to remember some of the ironies that we've seen about leadership in the past. I don't have the answer to the exact way to train leaders. My own institute says, at some point you are going to have to dig down deep into the personal resources you bring to any problem from your value system. And you need to grow that just the way you grow other skills. But I have to say, sometimes we don't. Embodiment can work the other way around, where a vision will find its embodiment in a leader who may not be worthy, but ends up being very effective. An example of it is Joseph Kennedy, when the SEC was created. FDR tapped Joseph Kennedy, a bootlegger, because he knew how to evade everything. And if he had pried into his private life, I think it wouldn't have stood up very long. But he was extremely effective in taking on that vision, and seeing it as a very pragmatic means to building, rebuilding the American economy, and casting the creation of the SEC as a cause of creating trust in our society. And he did very well with it, he did surprisingly well with it, and created a pretty good legacy.
Gearan: One thought, not to the point of corporate training, because I am not expert enough to comment on that, but training leaders for the twenty-first century from a governmental point of view is a very concerning trend, and certainly Walter hit this head on in terms of the investigative culture. But there is a very significant challenge I think we have for leaders in the public sector, and people actually running for office in the climate that we have. This is not directly on point at leadership training, but clearly, as a society we have to face the fact of people actually going into elected office in this climate. I just attended my college reunion at Harvard, for twenty years out, last June. And the number of people who sat around, and thought that when we graduated everyone was going to run for Congress. And there was one elected official in our class. Now, I'm sorry.
Nash: That's amazing, yes.
Gearan: And one would have thought, Harvard class, twenty years out, that this would be the younger generation of the new younger members of Congress, or mayors, or whatever. And the trend is disturbing when you look in my party, or the Democratic party around the country. And so whether that is leadership training specifically for the public sector or whether, perhaps the future is more entrepreneurial, as Walter suggests. We have a significant challenge for people going into elected office, given the climate, the resources, and the actual political culture that we're living in.
Gardner: When introducing me, Jim Fallows referred to the theory of different intelligences that I developed. And when I talk about leadership development, I talk about enhancing three different kinds of intelligence. And they relate to my talk, on the one hand linguistic, because so much of leadership is effective communication. The second is what I call interpersonal, which is coming to understand the people that you are dealing with, both those close to you and those that are more remote. It's two different kinds of skill. And the third, a new kind of intelligence that I have been very interested in, called existential intelligence. It's new in the sense that I think there is some evidence for it, but there isn't brain evidence yet, and I'm very attached to the notion of neural representation of these intelligences. But existential intelligence, I think, does speak to the fact that, human beings, unlike other animals, do ask very big questions about our existence, who we are, and so on, and that ultimately, I think we look to leaders for the answers to those questions. There is one other thing, though, which actually was my major thought when Mr. Gilmartin was speaking this morning, about their leadership development at Merck. And that is, it's very different if you think about leadership development as primarily a selection process, where you are figuring out the people who already have the traits, so to speak, and you are just going to nurture them. That's the easy form. What do you do when you are in an organization, and many of us are in organizations where you don't really have people who already show the right species characteristics, so to speak, and you have to form that? And that is extremely difficult to do, because if our theory of mental representations is correct, you are dealing with the kind of obstacles that have been developed over twenty or thirty years, like, I get to the top, and everybody else be damned. That's a very powerful idea. How do you change that, and move it toward a more common ground view? It's extremely difficult to do, and maybe the paradox of a meeting like this, because obviously, if everybody was already in training to be a good leader, there would be no problem.
Questioner: My name is Scott Eblin, I'm with Columbia Gas Transmission. This is an opening question for Dr. Nash, and I would really like to hear any of the other panelists comment on it. In your bio, Dr. Nash, your latest research is on the business person's search to integrate faith and work. I would like to hear a little bit about what you are thinking about that, and the early conclusions. And particularly, Mr. Gearan, you mentioned a poll of young people today, and that somewhere in there, I think there is a connection perhaps between the results of that poll, and Dr. Nash's work. Maybe there is not, but I would like to hear a little discussion around that.
Nash: I guess I have to give you the short answer. It's dangerous to ask people writing books about their research, because they might give you a lecture. But I appreciate the interest in it. It's been an important topic to me for a while. I really felt that there was a taboo on the discussion of religion and leadership, because religion is such a very controversial, and sometimes threatening topic in large organizations, which value diverse opinion and freedom of choice in a big way, both reinforced by a number of laws. And so it's hard to talk about that role of religion in leadership thinking when you are talking to business leaders. And as doers, they are not always the most philosophical people about it. So it's a tough area, and that is something I felt we really needed to shed some light on. What are we seeing? I think we are seeing a surprising resurgence of religious commitment, but as always, and this is nothing new, you mentioned the Puritans. Our fair city used to be called the Bible Commonwealth, before it was called Boston. And we've always, in America, structured our economies and our governments based on some religious world views. But the other side of American religion is that it is always changing, and we are always negotiating that world view. And I think we're negotiating it today. The good news is that it is more out on the table, that there are responsibilities about the common ground that may have a religious base, that there are traditions that need to be revisited because they shore us up, and they create community, and we feel an obligation to them. I think what CEOs not just CEOs, but representatives of any organization, are wrestling with in their leadership is that issue of inclusiveness. How do you create a common language? How do you create both the sincerity of the tradition, and the openness to discussion? And I think we are searching for the forums for that. I know we're talking about creating sabbatical spaces where people can do that outside of the business. But we fully expected them to ask questions about how they go back to their own leadership.
Gearan: The only thing I would add from the poll that Peter Hart did, that I mentioned, is what I see on a lot of college campuses. In my position recruiting for the Peace Corps, I was at Yale last night speaking to students there. And it is very striking, because what Peter Hart has found is, this is not particularly a cause driven generation. There aren't the big, major causes, the '60's and '70's of environmentalism, or feminism, or the war, or Watergate. But there is not lack of the idealism or service to community that might have existed in previous generations. But what will be the challenge, I think, in the twenty-first century, is for governmental leaders, political leaders, to reconcile the fact that young people today are not looking to traditional leaders for their inspiration. It is very local. And that's why I think we are seeing a resurgence in the Peace Corps, because it's very pragmatic. 18 to 30-year-olds would much rather volunteer for Habitat for Humanity, or work for the Nature Conservancy, or join the Peace Corps, because it's pragmatic idealism. That's what is turning them on. There will be a challenge, and there is an Indiana professor, Leslie (Linkowski?), who has written on this quite well, about the challenge for governmental leaders, and political leaders to reconcile this relationship. Because when these generation Y come of age they are not looking to governmental leaders. A United States senator told me that he was speaking at a high school, urging people to get involved, and in public service, and a student stood up and said, respectfully, "Senator, we really don't look to political leaders as our heroes anymore." No disrespect, but I have tremendous respect for my parents, my schools, at the local level, what they are doing to make a real world difference. I don't think I'm going to change the world, I don't think you can change the world. But I think individual efforts will be an important test of leadership to reconcile some of those dimensions, to figure out ways to --
Nash: This is that death of the superhero.
Gearan: Right.
Nash: This is the disappearance of the superhero as a model, and it's already been rejected, I think.
Gearan: I think it's that, but it's also fostering non-governmental ways. Our civic life is in very good hands for the next generation. They are involved, they are volunteering, they are idealistic, they are very committed. But it's not in the traditional streams of leadership, in my view.
Questioner: Professor (Puchunik?), professor of molecular biology. I, too, studied under Erik Erikson, and also Kissinger, at Harvard, even though I didn't go into those areas. Erik Erikson said that leadership, especially in Gandhi's case, was a knowledge and a competence in his technology. He didn't, wasn't able to handle the telegraphy. At the time, he wouldn't have gone on a hunger strike, because he would have died before the rest of India found out what was going on. And it's competence in that technology that creates our leadership. When you look at the music industry, and the comics, they amplify their royalty return because of the technology. That's the only generation when court jesters and troubadours are the richest people in the country. And it's because of an amplication. They get paid on the technology. But I have a question for Walter Isaacson, a much more serious one. You wrote a book, The Wise Men, and there is a hidden leadership, i.e., not the Harvard guys, but the Yale guys that went to Skull and Bones. Could you discuss all the Yale guys in government, and particularly McCloy, and what his role was during the war, and how powerful he was, and basically not handling the correct moral issues when he was confronted. He was responsible for the internment of the Japanese during the war, he was responsible for blocking the bombing of Auschwitz, he was responsible for the release of (Crup?), and he was also accepting royalty payments from Pfarben industry, for Standard Oil of New Jersey, for Zyclon B during the war. And there is Skull and Bones for you. Go ahead.
Fallows: In answering this question, Walter, you might bear in mind that this is the last question of the session, and we will --
Isaacson: I will be very quick. To defend Yale for a moment, Don McCloy didn't go there, but the Wise Men generally were of that ilks that we wrote about. I will try to make it a little bit more general, because there has enough been written about McCloy, including in my own book, about the good and bad and basically leadership that is extracted from, or not connected to, ethical roots or values, as in the case of an elite cadre of people who felt that they knew what was best for the country, and didn't have to tap into the Democratic impulses and values that were there. And that's not supposed to be a sweeping indictment of them all. The reason the book was so damn long is that there were nuances of something. I do believe that if you want to look at what leadership has to do, is that its' got to believe in the basic wisdom and values of the people, of Americans. And America has succeeded for so long as it has, not because elitists told them what to do, but because the people who were trusting instead of secretive, trusting of the wisdom of the people, ended up succeeding, ended up being right. And what you went through was a certain period of people who were unaccountable. By the way, we wrote that book before the investigative culture really kicked in. Those people were, I was worried that those were unaccountable people. These were people who didn't get investigated, whose private dealings, they formed an elite that was part of secret societies, from Skull and Bones to whatever, that held them unaccountable. And so as much as we talk about the problems of the investigative culture, we also know that people have to be accountable to the values of the people that they hope to lead.