Wednesday, January 10, 2007
Posted by Jeff Lipshaw
Several days ago, Alan invited me to comment on Ben Heineman's lecture on lawyers as leaders. I think it's particularly appropriate to do so in view of Alan Murray's column in the Wall Street Journal this morning "When Firms Turn to Lawyers."
The subject is the recent succession of two lawyers, both of whom happen to have been Ben Heineman proteges from GE, who have ascended to the top job in major corporations in recent weeks: Frank Blake (right) replacing Bob Nardelli at The Home Depot, and Jeff Kindler replacing Hank McKinnell at Pfizer. I think something has gotten buried or conflated by the circumstance that both of these lawyers have replaced CEOs whose severance packages have inflamed shareholder activists and business journalists.
Murray's thesis is that these companies have turned to lawyers because they are in trouble: "Lawyers are trained to foresee risk, making them well-suited for times of trouble. Perhaps more important, they understand what it means to be a fiduciary, acting in trust on someone else's behalf. Messrs. Nardelli and McKinnell clearly failed to grasp that basic tenet of leadership."
I think the comment is, in some ways, a cheap shot, but not at Nardelli and McKinnell. (I am less outraged than many by the severance packages, but that is another subject for another time.)
It's something of an insult to Blake and Kindler to suggest they would take the reins of two huge corporations with their primary skills being their ability to bail water out of the sinking corporate canoe. Indeed, the boards of the respective companies must have thought so much of their abilities that it would counteract the natural presumption, embodied in Murray's piece, that something is sorely amiss for a LAWYER to attain a position of leadership. A personal note: back in 1994 or so, when we were looking to institute major six sigma productivity changes within AlliedSignal Automotive, a senior executive was to be the "champion" (that's corporate lingo for a person who doesn't really do the work, but who acts as visionary, spokesperson, cheerleader and barrier-remover). I volunteered, and was told by our division president, who had previously been the corporation's chief financial officer, that the business would think it odd and troubling that a non-operational type like him had appointed not only a non-operational type like me, but a LAWYER no less, to this critical position. But he did appreciate my cojones.
More below the fold.
Here's where I endorse Ben Heineman's lecture. His was the vision of the modern in-house law department; before Ben Heineman got to GE, in-house lawyers were, generally, a disrespected and uninspired crew. There is something of a lineage between Heineman and me. Jack Welch hired Ben Heineman. When Larry Bossidy, Jack Welch's best friend and the Vice-Chairman of GE left in 1991 to take over AlliedSignal, he replicated what Welch had done: he hired a great lawyer with varied experience like Heineman, about whom I have blogged here before: Peter Kreindler. In 1992, Peter hired me. So, as a matter of expectation or possibility for what lawyers can do as leaders, this is, to me, like reading the hymnal.
But what Heineman gets, and Murray does not, are the additional following attributes, nay, professional skills, that a lawyer just might bring to the table:
- An ability to cut to the core of arguments, particularly those being made to the CEO by the leaders of the various business units, that are pleas for the allocation of the corporation's investment capital (my characterization of annual strategic planning sessions).
- An ability to communicate and persuade
- A hands-on style of leadership
Having said all that, there is often some kernel of truth at the core of a stereotype. The image of lawyers as backward-looking, ass-covering, word-smithing, risk-averse, non-value generating, fine-distinction-drawing deal killers, who spend most of their time trying to separate the pepper from the fly poop, and the rest of the time saying "no you can't do that" to their clients, probably has some empirical basis. That's why we don't naturally think of lawyers as entrepreneurs, something I have begun to think and write about more recently.