Wharton@Work

April 2020 | Senior Leadership

Today, We Need Leaders Who Create Leaders

The ability to develop the leadership potential of those on your team used to be a “nice to have” skill in your arsenal. Today, it’s a necessity. Wharton management professor Mike Useem says the need correlates with an increased interest in enterprise risk management. “The coronavirus pandemic is turning everything upside down. Leading is not just about setting the tone or creating cultural values, not just creating reward and reinforcement systems. We need to enable leaders at every level to think steps ahead and take decisive action, as the coronavirus is making clear.”

Useem, who serves as academic director of the Becoming a Leader of Leaders: Pathways for Success program, says companies are continuing to “push responsibility and authority down; they are relinquishing the ‘big boss’ model in favor of more engaging ways to get the most out of their people. People need to know how to lead themselves, and how to get the most out of the people a few notches down.” Ironically, it’s lessons from perhaps the most iconic “big boss” that continue to inform Useem’s — and Wharton’s — teachings on leadership.

Former GE CEO Jack Welch, who died on March 1, leaves what appears to be an incongruous legacy. “One side of his leadership model, the top-down ‘yank and rank,’ doesn’t work for employees in most companies today,” says Useem. “Today’s workforce, more than ever, wants to be part of the decision making, responsible for results, have a purpose, and know that their leadership counts.”

But there’s another side to his legacy that still resonates strongly. “Jack Welch is rightly famous for believing that leadership is not just at the top,” says Useem. “He wanted great people on his team, and he worked to develop their talent.” The deep management bench Welch created includes dozens of executives who went on to C-suite roles in other companies, including Robert Nardelli, former CEO of Home Depot and Chrysler; current and former Boeing CEOs David Calhoun and James McNerney; and David Cote, former Honeywell CEO.

“It’s important to understand what he did and how he did it,” says Useem, “because companies today dealing with the coronavirus need leaders at every level to help them respond and eventually rebound. At GE, Welch pioneered leadership education, coaching, feedback, and mentoring — all important components of the programs we teach at Wharton Executive Education. He believed that you are not born with leadership; you have to learn it along the way, and it is a continuous, lifelong process. Welch gave us the compelling argument that if someone came to GE’s Management Development Institute in Crotonville, New York (formerly known as the John F. Welch Leadership Development Center) at age 25, they didn’t ‘have it.’ As you move up and gain more responsibility, and as the world changes, you have to continue to grow as a leader.”

That’s the underlying lesson of Becoming a Leader of Leaders. “We are continuously evolving to meet new needs. The way people led in the 1990s, and even in the last 10 years, is not the same as it will be in the next 10. There are similarities, but also significant differences. Today’s leaders are dealing not only with a pandemic, but also with millennials in their ranks, markets driven by overseas buyers, and international supply chains — relatively new problems. We teach the parts of the existing leadership canon that are still true while also helping leaders master what is new.”

Useem says that what Welch did, and what Wharton is obligated to do, is to help people “become expert not only at leading themselves and building a great leadership team under them, but also appreciating that leadership in 2020 will be very different in 2025. After we get through the coronavirus pandemic, senior leaders will be much more savvy about developing leadership in their ranks so they are able to make decisions for minimizing risks and responding to crises.”

He continues, “Enterprise risk management — preparing for the worst while hoping for the best — is not always thought of as a leadership skill set. This moment is proving that it is. The leaders you want working for you in 2025 have to already be thinking about what to do before they read about what the World Health Organization is saying. Leadership for the long run calls for thinking about and planning for what needs to be done before being forced to do something.”