What Would Winston Do? China's Steve Jobs Hillary Takes

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JUNE 2012

The leadership issue What Would Winston Do? China’s Steve Jobs Hillary Takes on the World N o .2

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The Leadership issue

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Washington’s foreign policy establishment. The picture we have of Henry Ford is of a revolutionary captain of industry who pretty much did as he pleased. But as Reuters’ own car guy, Deputy Editor in Chief Paul Ingrassia, shows us, Ford had to fight tooth and nail to build the Model T, even in the company that bore his name. The iconic Chevy Corvette and once ubiquitous Chrysler minivan would also have died in committee were it not for the tenacity of a few good leaders, remind- It’s easy to bemoan the scarcity of great leadership ing us that subduing one’s own corporate bureaucracy is in the world today. It’s more difficult, but also more sometimes a prerequisite to great deeds. useful, to explore what kind of leadership is likely to Not long ago, Chinese CEOs tended to be Commu- be most effective in this time of rapid change and ram- nist Party stalwarts—often intelligent, capable man- pant uncertainty. agers, but not exactly ones to shake things up. Today, When we decided to tackle this challenge in a spe- China boasts a growing stable of dynamic corporate cial issue on leadership, one of our first calls went to leaders—people like Zhang Yue, whose Broad Group Sir Harold Evans, our esteemed editor-at-large. We erected a 30-story hotel in just 15 days and whose own asked the longtime lion of British journalism to con- drive and ambition can call to mind a Middle Kingdom duct a kind of thought exercise: What would Winston version of Steve Jobs. Beijing correspondent Terril Churchill do faced with today’s seemingly nonstop Jones goes behind the scenes with Zhang and offers financial and political crises? a fascinating snapshot of how corporate leadership is The result is an elegant, insightful, and remarkably evolving in the world’s second-largest economy. inspiring rumination on leadership that begins with So what would Winston do? Sorry, no spoilers here. young Harry in short pants huddled with his mom and You’ll have to read Sir Harry’s piece to learn the an- two infant brothers in an air-raid shelter in Manches- swer for that one, but I am confident it will be worth ter. Even then, he was comforted by what he describes your time. For more insights into leadership and other as “The sound of exalted leadership in the growling timely global themes, along with trusted news and declarations of Winston Churchill.” commentary from Reuters’ 3,000 journalists world- Along with Sir Harry’s take on Churchill, the high- wide, please visit us at Reuters.com. lights of this issue include Susan Glasser’s shrewd as- sessment of Hillary Clinton’s performance as secre- All the best, tary of state. Who would have guessed four years ago that Clinton would be the most popular politician in the United States—and, like it or not, a capable prac- titioner of “soft power” diplomacy. Nonetheless, according to Glasser, editor in chief of Foreign Policy and a Reuters columnist, Clinton remains a puzzle to Stephen j. Adler, Editor in Chief

Editor in Chief Stephen J. Adler Executive Editor Chrystia Freeland Managing Editor Jim Impoco Creative Directors Grace Lee and Robert Priest, Priest+Grace Assistant Managing Editors Roger D. Hodge, Bob Roe

Senior Editors James Ledbetter, Paul Smalera hoeweler michael by Associate Editors Atossa Abrahamian, Peter Rudegeair Picture Editors Russell Boyce, Alexia Singh Info Graphics Maryanne Murray Copy Editors Lauren Casper, Prudence Crowther, Douglas Royalty n illustratio portrait

�o. reuters 2 june.2012 portrait illustration by michael hoeweler Table of Contents

Leadership June 2012

portfolio rebellion 101 infographic political economy Follow Me The Revolution Will Be Build Your Empire Well Are State-Led World leaders dominated Organized! Some of world’s most Economies Better? the headlines from the past The uprisings associated remarkable imperial reigns Unstable, destructive and year, and that’s both good with the Arab Spring gave were, relatively speaking, crisis-prone, laissez-faire news, and bad news. rise to the notion that historical blips. Here’s capitalism is under siege. 08 16 populist rebellions don’t 19 how they stack up. 20 by Ian Bremmer need leaders. And then by Maryanne Murray came Syria…by Hugo Dixon

News-Maker Best Practices Networking LEading indicators The Leadership Lessons of Whack ’em with a Board! Running Al Qaeda the ceo file Chairman Rupert Shareholders (and ethics) How Osama bin Laden CEOs don’t always enjoy The phone-hacking scandal demand that boards stop managed his far-flung the spotlight—just ask isn’t the first crisis the sleeping on the job. terror operation and Rebekah Brooks and resourceful NewsCorp by Lucy P. Marcus forced America to rethink Bernie Ebbers. 22 boss has had to grapple 24 26 warfare. by Zachary Tumin 28 with. by Jack Shafer

features

war-stories Diplomacy tall orders Investing Industry

WHAT WOULD Hillary vs. the made-in-china Killing them Car Czars 30 36 42 48 Some54 of the most WINSTON DO? the world ceo softly The world is in crisis-mode Secretary of State Clinton A bold new brand of CEO Marc Andreessen invented important breakthroughs because political leaders is among the most popular is pushing the Chinese the Internet as we know it. in the automotive industry refuse to lead, and “think” politicians in America. economy into the Now he’s trying to reinvent would have died in com- with their poll numbers. What has she actually stratosphere. Exhibit A is venture capital. mittee if it hadn’t been for a few extraordinary lead- We could look to the accomplished as the Zhang Yue, who has noble by Jonathan Weber heavens for a miracle. nation’s top diplomat? goals and grandiose ers with drive and vision. Or we could look to by Susan Glasser ambitions that include by Paul Ingrassia Winston Churchill. building a vertical version by Sir Harold Evans of the great wall. by Terril Yue Jones

Biography Movies Failure Cover illustration LEadership by the book Leading Ladies Fallen Leaders by You can’t get there Seven international stars It’s a tough time to be a Christoph from here. who are making box-office leader. Good thing Niemann by James Ledbetter magic. guillotines are out of 60 62 64 fashion.

�o. reuters 1 june.2012 Sprint is #1 among all national carriers and most improved in customer satisfaction, across all 47 industries, over the last four years. -2012 American Customer Satisfaction Index

sprint.com/expertsagree Contributors

Paul Ingrassia Sir Harold Susan Glasser Terril Yue Peter Rudegeair Evans Jones and Atossa The Model T, the Foreign Policy editor-in- Abrahamian Corvette, and the When Britain was chief Glasser traveled With his noble ideals Chrysler minivan under siege by the the world with Secre- and grandiose ambi- Ever wondered which are iconic American Nazis in 1940, Win- tary of State Hillary tions, Zhang Yue is part actresses are big in Iran, automobiles that almost ston Churchill insisted Clinton, observing of a new generation of or what Mao’s Little Red didn’t happen. In Car that his nation would America’s chief ambas- CEOs who are redefin- Book can teach us about Czars, Pulitzer Prize emerge victorious. Be- sador in real time and ing Chinese business. business leadership? winner and Reuters cause of his charismatic on dozens of diplomatic In The Made-in-China Or which CEO has the deputy editor-in-chief authority, writes Evans, engagements. In Hillary CEO, Jones explores most Twitter follow- Ingrassia tells three “we forgave Churchill vs. the World, Clinton Zhang’s plans to build ers, and how much of stories of great business for clutching at straws emerges as a natural the world’s tallest build- her time is spent in leadership. Ingrassia’s to cheer us up.” In What politician, a tough ne- ing in four months, his meetings? The world of new book, Engines of Would Winston Do? Ev- gotiator, and a woman war on waste, and the leadership is infinitely Change: A History of the ans argues that today’s of action. The question business plan that will quantifiable, and Re- American Dream in leaders, in thrall to the remains: What’s next save the earth. uters associate editors Fifteen Cars, was latest opinion polls, for the former first lady? Atossa Abrahamian and published by Simon & would fare far better by Peter Rudegeair are Schuster in May. taking their cues from keeping score.

the revered statesman. hoeweler michael by n illustratio

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JOB #: 10047935 10047935-1 • American Airlines Duped from A0461-1 by: jm TITLE: ADMIRALS CLUB REUTERS PRINT PRODUCER: NORITA JONES Path: Production 3:American Airlines:Jobs:Billable_Jobs:10047000_ Proof #2 PROJECT MANAGER: AMY HARRIS Trim: 8.5"w x 10.875"h Bleed: None Live: 7.5"w x 10"h ACCOUNT MANAGER: MATHEWS Page 1 of 1 Date: 5/8/12 ART DIRECTOR: WILLIAMS Inks: 4/C Revised by: jm CPS CheckOut: ______SHIP: 5/18/2012 PUBLICATION & INSERTION DATE: Agency Approvals: INITIALS DATE Supervisors: INITIALS DATE Reuters Magazine, 6/27/2012 Proofreader ______Project Mgr. ______Copywriter ______Acct. Sup. ______Art Director ______Prod. Mgr. ______Creative Director ______Client Approval: INITIALS DATE Account Exec. ______P hotograph by Vladimir Pirogov

kyrzygstan SHUTTLE DIPLOMACY BY OTHER MEANS U.S. troops on a tarmac near Bishkek prepare for a flight to Afghanistan, where they will continue to wage a war they—and the Taliban—know will end in 2014, when—win, lose or draw—President Obama has vowed to bring American soldiers home.

�o. Followreuters 8 Jan.2012 Me Portfolio

Some lead by example, some by guile, and too many, still, by the cudgel. The leaders dominating the headlines this year range from admirable to execrable—there’s Aung San Suu Kyi, who was forcibly sequestered in her home for 15 years and Kim Jong-un, a tin-pot despot perpetuating his father’s dream of keeping an entire country under house- arrest. There are other overlords propped up by varying de- grees of thuggery as well as a few moral exemplars, including one who toppled a murderous tyrant by persuading her countrywomen to withhold sex. And in the United States, the current presidential campaign has already spun off a new lesson in leadership: Lead, follow or get a super PAC.

afghanistan A FRIGID DARE He led U.S. forces in Iraq and Afghanistan and somehow kept his reputation shiny (helped no doubt, by having Osama bin Laden put out a hit on him), and now David Petraeus is running the C.I.A., where he recently said he favors more aggressive use of drones against terrorists in Yemen... and the use of smart appliances to spy on the rest of us.

�o. P hotograph by Paul Richards Follow Me reuters 9 Jan.2012une.2012 FOLLOW ME

P hotograph by Khaled Abdullah

YEMEN ESTROGEN SPRING Tawakul Karman—honored for her role in the Yemen uprising—shared the Nobel Peace Prize with two Liberians: Ellen Johnson Sirleaf, Africa’s first freely elected female head of state, and Leymah Gbow- ee, who led a sex strike that ended of that country’s civil war and helped oust Charles Taylor, recently sentenced at the Hague for war crimes.

�o. reuters 10 Jan.2012une.2012 FOLLOW ME

myanmar STUDENT SUMMER ABROAD For 15 years, Aung San Suu Kyi made news for what she didn’t do: leave the house. The junta controlling Myanamar lifted that prohibition in 2010, and she quickly got elected to Parliament. In June she was scheduled to address both houses of the British parliament, and visit her beloved alma mater, Oxford.

P hotograph by REUTERS/Staff

�o. reuters 11 Jan.2012une.2012 FOLLOW ME

iran MULLAH, MAY I? Pity Iran’s president, Mahmoud Ahmadinejad. During his tenure, he has denied the Holocaust, overseen the build-up of Iran’s nuclear program and called for the extermination of Israel. But he’s now mocked as a moderate by hard-liners who expect to replace him next year with a man more to their liking.

P hotograph by Morteza Nikoubazl

P hotograph by Kyodo

north korea DIM SON After the death of North Korea’s Dear Leader, Kim Jong-il, his favored son, Kim Jong-un, ascended to the throne. In his first stab at saber-rattling, his military launched a rocket for what was supposed to be a test of its capacity for carrying a nuclear warhead. Instead, the rocket �o. disintegrated a few moments after launch. Sometimes it is rocket science. reuters 12 Jan.2012 FOLLOW ME

russia REPEAT OFFENDER Former Russian President and then Prime Minister and now (again!) President Vladimir Putin seems disinclined to release his grip on Russia, but his reluctance to add to his resume is finally pushing some of his braver citizens into the streets. His inauguration in May brought violent clashes; 700 protesters were detained, and many of the younger ones were sent to military draft offices.

P hotograph by Alexander Demianchuk

�o. reuters 13 Jan.2012une.2012 FOLLOW ME

china IF NOT NOW, WEN? Chinese Prime Minister Wen Jiabao, expected to step down this year, is trying to push through economic reforms, warning that China could face a “historical tragedy” as bad as the Cultural Revolution, although he’s a little distracted by some high-level apparatchiks caught up in scandals involving corruption and an intriguing murder investigation.

P hotograph by Peter Andrews

P hotograph by Larry Downing

USA LET’S STAY TOGETHER? If presidential elections were decided like Ameri-

can Idol, there’s little doubt Barack Obama would swamp Mitt Romney, credit gutter credit gutter

who recites verses of America the Beautiful as though it�o. were Shakespeare, while POTUS killed at a fundraiser with a smoky version of an R&B classic. reuters 14 Jan.2012 FOLLOW ME india GRAFT DODGER A man in Mumbai waves the Indian flag to show his support for Anna Hazare, who has mobilized millions in his campaign to end political corruption in India. Hazare, who claims to have proof of corruption against 14 of the country’s 34 ministers, says crooked pols should be executed. gutter credit gutter credit gutter

P hotograph by Danish Siddiqui �o. reuters 15 Jan.2012une.2012 OUT-GUNNED “War by other means” is turning into just war in Syria, which is good for Assad.

Rebellion 101

in such struggles. What sort of by hugo Dixon leadership is needed in nonviolent uprisings? And in this The digital age, do rebellions even need leaders? The romanticized answer is Revolution that nonviolent struggles no longer require a charismatic leader—they can emerge spon-

taneously as oppressed people B ektas U mit Will Be / rise up and communicate through Facebook and Twitter. Organized! This lack of organization or hierarchy is said to be well suited The uprisings associated with to the goals of such move- the Arab Spring gave rise to the notion ments. Where insurgents are that populist rebellions don’t need fighting for democratic rule, leaders. And then came Syria… it is appropriate that nobody the head if there is no head. is bossing anybody around. A year ago, in the stirring What’s more, this alleged aftermath of the Egyptian arekji li J A li / is it possible that rebel uprisings around the world lack of leadership has a side revolution, that paradigm had REUTERS by photograph hoeweler; michael by leaders are overrated? In the against autocracy and corrup- benefit in that it precludes the resonance. But the Arab Spring wake of the Arab Spring, the tion, geopolitical analysts are authorities from destroying a has run into trouble. It took Occupy Wall Street move- asking fundamental questions movement by rounding up the a long and bloody struggle ment, and other populist about what leadership means ringleaders. You can’t lop off in Libya to depose Colonel n illustratio portrait REUTERS by photograph

�o. reuters 16 june.2012 Muammar Gaddafi, and Syria per.” The savviest analysts of bring down Slobodan Milose- follow-up plan, which allowed is being inexorably sucked the recent nonviolent move- vic’s dictatorship in 2000, now the Muslim Brotherhood to into a civil war. Even Egypt no ments never believed they had advises activists on how to step in and take control. They longer looks like a clear victory much chance unless they had organize similar movements. won an important battle, but for the Facebook revolutionar- leadership, unity, and strategy. He stresses the importance had their prize snatched from ies: the Muslim Brotherhood, Start with the most ba- of unity, and tells them one their hands. which has a more traditional sic tenet: No movement is of the main reasons Otpor suc- The problem in Egypt hierarchy and respect for likely to topple an entrenched ceeded against Milosevic was was getting beyond regime authority, is poised to scoop regime unless it has a strat- because it banged together the change, but most movements up the fruits of the populist oc- egy. This involves systemati- heads of a bickering group of even struggle to get that far. cupation of Tahrir Square. cally analyzing the opponent’s politicians and got them all to Again, that’s usually due to a weaknesses, devising a plan support one candidate. lack of effective leadership. for undermining them, and Leadership is required to Gene Sharp, a Boston-based Getting Beyond anticipating how the struggle plan the different stages of academic who has studied Outrage is likely to unfold. To forge a conflict. Helvey says there nonviolent struggle for over “This is a war by other such a strategy, a movement are usually three: removing 60 years, says it’s foolhardy to means,” says Robert Helvey, a needs leadership. And to fol- a regime; installing a demo- think you don’t need leaders. former U.S. army colonel who low such a strategy through cratic government, maybe History supports this argu- has devoted himself to study- the hard times ahead—during a transitional one; and then ment; few, if any, leaderless ing nonviolent combat and which nonviolent protests may defending that new govern- nonviolent struggles have trains activists in its methods. be met with violence—it will ment against coups. He points been successful, according “If you are going to wage a need unity. Srdja Popovic, a out that while the Egyptian to Adam Roberts, emeritus struggle, everybody needs to leader of Otpor, the Serbian students brought down Hosni professor of international be on the same sheet of pa- student group that helped Mubarak, they didn’t have a relations at Oxford Univer-

FLOWER POWER? Syrian rebels made a mistake by going to the streets too soon, exposing supporters to reprisals. mit B ektas U mit / arekji arekji li J A li / by michael hoeweler; photograph by REUTERS by photograph hoeweler; michael by n illustratio portrait REUTERS by photograph

�o. reuters 17 june.2012 sity. The Occupy Wall Street tation is to flip to the opposite 2005. Even when there is a the anti-apartheid movement movement may be a case in extreme—a powerful, charis- single strong leader, that per- in South Africa, young leaders point. It was a public rela- matic leader. History seems to son is unlikely to possess all were trained at Gandhi’s old tions sensation early on, but have smiled upon this tactic: the qualities required to bring Phoenix Settlement near Dur- the participants didn’t appear India’s independence move- a struggle to a successful con- ban. Sharp’s Albert Einstein to have any strategy beyond ment had Mohandas Gandhi; clusion. Movements require Institution has run workshops pitching tents in public the U.S. civil rights movement both brilliant propagandists for some resistance struggles, spaces, and public interest had Martin Luther King; the and shrewd strategists. In very as has Popovic—his new Cen- fizzled. The ongoing Syrian anti-apartheid movement few cases—such as that of tre for Applied Non-Violent revolution is another example had Nelson Mandela. More Gandhi, who was both a mes- Action and Strategies (CAN- of the perils of revolt without recently, Aung Sang Suu Kyi sianic leader and an intuitive VAS) has trained activists in sound strategy. The activists has been the face of Burma’s there didn’t seem to have struggle against dictatorship, any plan for what to do when and Anna Hazare the leader President Bashar al-Assad’s of India’s anti-corruption cru- “You can’t have a democracy regime fought back with tor- sade. Inspirational leaders, all. to run a war.” ture, detention, and mass kill- “Charismatic leadership ings—even though that brutal makes all the difference in the response was predictable. world when you are running a strategist—are both qualities several countries, including The Syrian activists made revolution,” says Helvey. It’s found in one person. Egypt, Ukraine, and Georgia. another strategic error: They good to have a strong leader The opposite is more There are also a few aca- initially placed too much who can knock heads together typical. For example, Martin demic courses. One is a gradu- and get everybody to stick ate program on the strategies emphasis on demonstrations Luther King’s brilliant oratory 0 1 against the regime, and while to a plan. “You can’t have a was married to Bayard Rus- and methods of nonviolent public protests are crucial in democracy to run a war,” he tin’s tactical genius, accord- social change started by revolutionary movements, explains. “Once a decision has ing to Roberts. Rustin, who CANVAS at the University they expose the participants been made, everybody has to had travelled to India in 1948 of Belgrade. Another is the to brutality. Alternative get on with it.” to learn the lessons of Gan- Fletcher Summer Institute for tactics, such as boycotts and Still, it would be wrong to dhi’s campaign, taught King the Advanced Study of Non- strikes, can be a better way to jump to the conclusion that a lot of what he knew about violent Conflict, held at Tufts challenge the regime while successful leadership has to nonviolent struggle. (One of University in Boston. keeping your casualties low. It come from a dominant figure. his mottos: Never do the same More and more academics takes leadership to coordinate A leadership team has multi- thing twice.) are also studying the field.

that kind of strategy. ple advantages: It will survive Their books and articles are 5 1 To be fair, the activists in if any single leader is captured filtering down to activists on Syria can’t organize or even or killed; it can stop a leader An MBA the ground, and what those communicate effectively with from getting too egotistical or in Nonviolent books are telling them is this: anything larger than small even turning into a new dicta- Revolution? To win a nonviolent struggle cells because as soon as they tor; and it may lead to more Is it possible to teach people you must have leadership put their heads above the innovation, because having an how to run a nonviolent revo- and solid strategy. Over time, parapet, they are arrested, tor- excessively powerful leader lution? For traditional warfare, such initiatives will get the tured or killed. After months can prevent new ideas from there are military academies— relevant know-how to more of being bludgeoned by the percolating. such as West Point in the and more emerging lead- regime, the Syrian activists What’s more, not all of United States and Sandhurst ers and make them better have increasingly turned to those movements we think in Britain—dedicated to teach- nonviolent fighters. And that violence themselves. of as fronted by charismatic ing the strategies of engage- sharing of knowledge makes leaders were one-man (or ment. After training at such it more likely that the next one-woman) bands. Often a college, young officers then nonviolent uprising will not Propagandists and there were several inspira- get an apprenticeship work- just overthrow a dictator, but Strategists tional leaders. Think of the ing on military campaigns for will replace him with a viable What sort of leadership is combination of Jawaharlal senior leaders. There is no democratic government.

required to sustain a nonvio- Nehru and Gandhi in India; or nonviolent equivalent of Sand- 5 lent revolution? Since headless Viktor Yushchenko and Yulia hurst, but there have been Hugo Dixon is the editor of Reuters 2 Tymoshenko in Ukraine’s Breakingviews, which he started in 1999. social-media revolutions ap- attempts to train leaders for Before that, he spent 13 years at the Finan- pear to be doomed, the temp- Orange Revolution in 2004- nonviolent struggles. During cial Times, the last five as Head of Lex.

�o. reuters 18 june.2012 Infographic Chart by Maryanne Murray

Despite its influence on the modern world, the Roman empire was a pipsqueak next to the Han Dynasty’s Chinese Build Your empire. The two largest empires—the Mongol and the British—held that title for only a century, a reign shorter than that of the long forgotten Sassinad empire. In this graphic, Empire Well you can see how much territory the world’s three top imperial powers controlled at the dawn of each century. Some of world’s most remarkable imperial reigns were, relatively speaking, historical blips. Here’s how THE THREE LARGEST EMPIRES, BY AREA they stack up. Largest second third Year s Largest Largest mile are qu Britian Russia France 1900 n s io ill Russia Manchu Spain 1800 m 5 Russia Spain Manchu 1700 Russia Spain Ottoman 1600 Ming Inca Russia 1500 Timur Ming Golden Horde 1400 Mongol Delhi Mali, Khmer 1300 Juchen Sung Tibet 1200 Seljuk Sung Tibet 1100 Sung Liao Tibet 1000 Tibet Samanid Kiev 900

0 1 Muslim Tibet Uighur, T’ang 800 Muslim T’ang Tibet 700 Tu Chueh Sassinad Byzantium 600 Sassinad Toba Byzantium 500 Sassinad Huns E. Chin 400 Rome Chin Sassinad 300 Han Rome Parthia 200 Han Rome Parthia 100

The Earth has

57.5 million square 5

1 miles of land.

0 2

SOURCE:

5 2 Rein Taagepera, “Size and Duration of Empires: Systematics of Size.” Social Science Research, Volume 7, Issue 2, June 1978, Pages 108–127.

�o. reuters 19 june.2012 Political Economy stability and protect the ruling choose between public wealth elite’s political control. and political survival, state China is not the only state capitalists will always protect capitalist economy produc- their own interests first. In Are ing impressive results. As China, as elsewhere, commer- the Arab world continues cial activity depends on access to contend with the risks of to information, and the Inter- State-Led political turmoil, Saudi Arabia net provides the best and most and the United Arab Emirates efficient access to it. Yet if the have stockpiled the cash they Internet threatens to enable Economies need to maintain stability by popular resistance to China’s controlling much of the wealth authoritarian government, produced by national oil and if political officials have Better? companies. Even some emerg- the means to shut the Internet ing democracies have begun down, even temporarily, they Unstable, destructive and crisis-prone, to flirt with limited forms of will do just that. laissez-faire capitalism is under siege managed capitalism. Brazil’s State capitalism’s greatest private sector remains crucial weakness lies in its intoler- for the country’s expansion, ance of “creative destruc- but its government leans tion,” a process that invests by Ian Bremmer prognostications, accurate or on state-owned energy firm liberal capitalism with vital not, have led to dire warnings Petrobras and privately owned self-regenerating momentum. that liberal capitalism’s best mining champion Vale to help The liberal capitalist model days are behind it, that the create jobs. President Dilma makes it possible for the future lies with authoritarian Rousseff’s government won’t workers, resources, and ideas market managers who are able milk cash from these firms as invested in a dying industry to relocate populations and President Hugo Chávez has to spontaneously recombine move mountains by decree. done with state-owned oil in novel configurations to For the moment, at least, company PDVSA in Venezu- produce goods and services state-managed capitalism ap- ela, but Petrobras is already that satisfy emerging demand. pears to be triumphant. at risk of becoming a much But the economic engineers of Such appearances, however, larger, less efficient, and thus state capitalism fear any form are misleading. The appeal less profitable company. of destruction that develops of state capitalism lies in its State control is not the beyond their control. This is ability to withstand the occasional crises that afflict market As Europe’s leaders systems, thus shielding the struggle to restore confidence general population from politi- As a system and by design, in the single currency and cally inconvenient disruptions. state capitalism ensures that America’s economy limps It is a system in which the state wealth creation does not threaten the ahead at a painfully slow pace, uses state-owned enterprises, China’s economy continues national champion firms, leadership’s hold on political power. to power forward at its now sovereign wealth funds, and characteristically strong clip. politically loyal banks to domi- future of capitalism. It is a why state-owned companies, For the past three decades, nate the process of domestic dead end from which China which build influence within China has been the world’s wealth creation. To be sure, will have to free itself if it is government over time, often fastest growing economy— this is not communism; signifi- truly destined to dominate the succeed in resisting the need and within the next several cant segments of state capital- world economy. As a system to adapt to changing times. years, the People’s Republic ist economies are in private and by design, state capitalism Then there is the question will overtake the United States hands. But the state plays the ensures that wealth creation of openness. Within autocratic as the world’s largest. Some largest role in ensuring that does not threaten the leader- state capitalist systems, govern- hoeweler michael by economists have even argued market forces serve political ship’s hold on political power. ment-owned companies like that, measured by purchas- ends—by ensuring that, profit- Its ability to stimulate growth China National Petroleum Cor- ing-power parity, China has able or not, businesses invest and general prosperity is a poration and some of the Arab already pulled ahead. Such in projects that bolster social secondary benefit. Forced to world’s sovereign wealth funds n illustratio portrait

�o. reuters 20 june.2012 illustration by heads of state

shun the transparency that falls short when it comes to officials never value assets and economic growth must be less long-term resilience and adapt- exploiting innovation, though allocate resources as efficiently dependent on exports to Euro- ability demand. This opacity government-directed invest- as market forces can. peans and Americans; creating can benefit a country’s ruling ment can play an important Even in China, state officials domestic consumer demand elite by hiding unsuccessful role in the development of new understand that citizens are is crucial. Thus the process of investment decisions, but it is technologies. The Internet the engine of economic vital- empowering Chinese consum- very harmful for the system’s arose from a U.S. government- ity. That is why the state has ers will undermine state capi- long-term health. When such subsidized defense project, but embarked on an historic and talism’s appeal even within the

by michael hoeweler michael by institutions can hide their it was profit-driven companies ambitious plan to shift wealth country that has made this failures, they are free to inflict that developed and reimag- from China’s largest compa- system so seductive. much more lasting harm than ined the Internet and thus nies to the country’s consum- Ian Bremmer is the president of Eurasia they otherwise could. transformed the world. History ers. China’s leaders know Group, the leading global research and con- Managed capitalism also shows that over time state that the next generation of sulting firm specializing in political risk. n illustratio portrait

�o. reuters 21 june.2012 News-Maker strategy that stretches across A second maxim identified decades, not quarters. Yes, he’s by Auletta—Public Memo- impulsive, but creatively so. ries Are Short, So Apologies I asked Ken Auletta, who has Are Inexpensive—explains The covered Murdoch for almost his performance before the 40 years, to distill manage- phone-hacking committee last ment maxims from the CEO’s summer, when he said, “This Leadership adventures. He offered Ideol- is the most humble day of my ogy Is for Amateurs, which life.” This very insincere regret Lessons of captures Murdoch’s political made headlines around the Chairman Rupert

The phone-hacking scandal isn’t the first crisis the resourceful NewsCorp boss has had to grapple with

by jack shafer was close to insolvency. He has survived two divorces, the purchase and sale of MySpace. com, a bunch of other digital disasters, and even the preda- tions of John Malone, who threatens Murdoch family hegemony with his purchase of the NewsCorp. stock. And now, referencing his media empire’s latest fiasco, the Brit- ish Parliament has deemed Murdoch “not a fit person” to run an international company. If Murdoch were the sort of pompous captain of industry Rupert Murdoch has who collected leadership max- endured more crises dur- ims, Look for Trouble would ing his 80-plus years than likely top his list. He craves Richard Nixon and Odysseus competition, and has repeat- combined, so the CEO and edly bet his company on new agnosticism. He leans right in world and bought his company Chairman of News Corpora- ventures like 20th Century Fox, his utterances, but subscribes a breather as it scrambled to tion can be forgiven for seem- the Fox network, NFL football, to the politics of expediency, rebuild its defenses. ing nonplussed by his current and his satellite operations. which explains how easily he Michael Wolff spent hun- predicament. He took over the Most chief executives think shifted in the U.K. from sup- dreds of hours with Murdoch family newspaper business rewarding stockholders is their porting the Tories to support- for his 2008 biography, The drew W i nn n g An drew / in Australia at 21, when his primary job. Not Murdoch. The ing Labour and back again. Au- Man Who Owns the News. hoeweler michael by father died, and expanded it. Murdoch family owns the con- letta says Murdoch’s genuine “Loyalty is the most important He fought the British unions trolling shares in the company, identity is that of a business- virtue in an employee—hire in 1986 and won. He repelled so the chairman can largely man. If he has any ideology, it’s only people who think you did the bankers in 1990 when he ignore Wall Street to pursue a What’s Good for Me? them a favor by hiring them, n illustratio portrait REUTERS by photograph

�o. reuters 22 june.2012 i.e. not people with a lot of to say this, but I’m going to... “ The Worst Murdoch’s agenda, his selfish- other options,” Wolff writes and proceeded to confess to a Old Toffs ness trumps all. in explanation of Murdoch’s “cover-up” of phone hacking Although Murdoch is said to Rupert Murdoch posted practices. If your employees at News of the World. “Rupert his first tweet on December be a good boss, whenever one share you primary values and famously doesn’t take advice,” 31st, 2011, and he’s been of his executives grows too big, feel they owe you, you can lead one news story quoted an prolific ever since. he becomes an expendable them with a flick of your pinky. anonymous source. rival. Roger Ailes, the master- “Seek Leverage over every- A fourth maxim from Wolff mind behind Fox News, is the body you do business with—be- makes a virtue of Selfishness. only existing exception—and ing able to punish people is an “Make it yours; keep it yours; he could go at any time. Former broadcast journal- ist Adrian Monck, who briefly He’s generous with his worked for Sky News (which political opinions: Paul too extreme, but right News Corp. co-owns), detects to draw attention to Fed. a current of Machiavellianism flowing through Murdoch’s ca- Printing zillions can only cause inflation—the coward’s reer, specifically the sentiment way out of this mess. expressed in this line from The Prince: “Whosoever desires He often frets about the American economy: constant success must change Unemployment: US official his conduct with the times.” figures greatly underestimate “Throughout his commer- real situation plus millions with part time jobs. cial career, from Adelaide aristocracy to Manhattan And he’s pretty sure everything’s moguldom, he has convinced not okay in the U.K.: UK entitlement society. No every major protagonist that wonder rich layabouts contrib- he is somehow the answer to ute nothing when immigrants their prayers,” Monck says. “At work harder better. Honest Brits work and resent system. every step he has somehow managed to recast himself for He really, really likes austerity: the opportunity. Even appear- Economic problems made by waves of politicians making ing before British legislators, impossible promises. Now the each appearance has been bills are arriving . subtly different. So that would But takes swipes at the 1%: be my lesson—appear consis- Social fabric means all. Must tent and conservative, succeed wake up before coming apart through shape-shifting.” more. That includes closing tax loopholes for rich people and Only a madman would companies. embrace the Murdoch strategy in its entirety. Only the brave INK-STAINED MACHIAVELLI He can get reflective: Murdoch’s an expert shape-shifter, Looking at Arianna H self por- would apply even three of the and a master of expediency. trait. Aren’t we all evangelists? maxims at once. For managers If we don’t propagate our who find opportunity instead beliefs why bother thinking? of terror in turmoil and don’t incredibly effective currency,” make sure everyone knows it’s And overly reflective: mind being denounced by Wolff continues. “Listen to the yours—be the one and only, “all that is and has been is ex-employees as a betrayer, but the twilight of the dawn”. voice in your own head more the singular, the irreplace- H.G. Wells Murdoch’s way might work. than to anyone else—every- able,” Wolff writes. The News Just make sure the corporate body else will recommend Corp. firings, his brisk shut- He even shows a glimpse of his bylaws keep you in control of days at Oxford, when he had a caution; only you will take real tering of News of the World bust of Lenin on his mantel: the board of directors. It’s easi- drew W i nn n g An drew /

by michael hoeweler michael by risks.” Murdoch exhibited his when the phone-hacking Enemies many different agen- est to lead when you own. faith in his own voice at the scandal crested last summer, das, but worst old toffs and right wingers who still want Leveson hearings in late April, and his cavalier treatment of last century’s status quo with Jack Shafer is a Reuters columnist cover- his children (and heirs) prove their monoplies. ing politics and media. He was honored when he said, “I’m under strict recently with an award from the Society of instructions by my lawyers not that when loyalty collides with —Anthony De Rosa American Business Writers & Editors. n illustratio portrait REUTERS by photograph

�o. reuters 23 june.2012 illustration by Josh Cochran

Best Practices

doors. Ignoring this new call by lucy p. Marcus for transparency is futile, and will lead to accusations of being out of touch—tone-deaf in Whack ’em a soundproof room. This year brought a rude awakening for boards. HP, with a Board! Yahoo, News Corp., Facebook, Goldman Sachs, MF Global, Shareholders (and ethics) demand AstraZeneca, Barclays, Olym- that boards stop sleeping on the job pus, RIMM, Kodak, and many others were in the headlines for all the wrong reasons. Boards were criticized by Boardrooms around the The Shareholder Spring, as investors and other stakehold- world are going through an ex- the recent period of share- ers on a wide range of issues, traordinary transition. There holder activism has been including their composition, son is clear: Organizations suf- is a greater understanding of dubbed, shows that inves- competence, diversity, voting fer greatly when independent the power and responsibility tors, stakeholders, regulatory control, and dual stock struc- board members don’t ask hard hoeweler michael by of boards, and they no longer bodies, governments, and the tures. No sector is immune, no questions, and refuse to hold operate in a black box. The general public are taking a director untouchable. executives accountable for not message from investors now greater interest in what goes Gone are the days of the just the profit margins but also is: We’re watching you! on behind closed corporate rubber-stamp board. The les- the ethics of the company. A n illustratio portrait

�o. reuters 24 june.2012 Boards feel for the organization. structure, technology, interna- to go, rather than waiting to Behaving The best boards have chairs tionalization, communication, be pushed by the nominations Badly and members who are truly in- and the balance of continuity committee or the board chair. dependent and engaged, who and change. There are several reasons There are lazy boards, inept boards, even work hard to get a complete Better boards require better to leave a board, includ- corrupt boards, but for pure understanding of the business leaders around the table, and ing: you’ve served too long, entertainment value, their organization is in—and being a leader in the board- your expertise is no longer nothing beats HP’s board. the one it wants to be in. As room isn’t just the job of the required, you’re not pulling In 2002, CEO Carly Fiorina’s board members, we should be chair or lead director—it is the your weight, you’re obstruc- $19-billion merger with assessed on how well we fulfill responsibility of every board tively disruptive, or your Compaq spurs a long proxy fight led by HP’s board direc- what I call our “grounding and member. Leadership means actions, inside or outside the tor. The board pushes her out stargazing” responsibilities: not bowing to peer pressure boardroom, bring distraction in 2005. A year later, Patricia making sure the company or groupthink. It means not or disrepute. No one wants Dunn, the non-executive chairman, hires P.I.s to plug a leak. manages its risks prudently acquiescing when you are the to be the person everyone They monitor personal calls and operates at all times in a only “obstacle” that stands around the table feels is not by HP directors and journal- responsible, legal, and ethical between clarifying a point and contributing, and you never ists; Dunn is forced to resign when this is leaked. In 2010, manner, while at the same breaking for lunch. It is about want the board to have to take the board pushes CEO Mark time making sure it is ready being the voice of caution formal action because you Hurd out over hinky expense and able to respond shrewdly when the rest of the board is in have outstayed your welcome. reports. Oracle CEO Larry Ellison calls this “the worst to future challenges. a state of euphoria. Although humbling to admit, personnel decision since the It is also clear from reading Being a good leader also no one is irreplaceable, and idiots on the Apple board the stories accompanying all requires active engagement sometimes the best service fired Steve Jobs...” Board members pick Leo the recent headlines about Apotheker as new CEO, boards behaving badly that although most have not met they need to be more diverse him. He lasts 11 months. Meg Whitman, one of five directors in every way—gender, profes- Showing great leadership in the Apotheker recruited, replaces sional expertise, ethnicity, boardroom also means knowing him—she’s the sixth CEO since age, international perspec- 1999. In May, 2012, following when it is time to leave. a quarter in which net income tive, and more. A truly diverse dropped 31%, HP announced it board will present more opin- would lay off 27,000 employ- ions from more perspectives, inside and outside the board- you can give is to walk away. ees. “It has got to be the worst board in the history of busi- have fewer common assump- room. When you first join a The Shareholder Spring ness,” renowned Silicon Valley tions (and misconceptions), board, get to know the people has been a good thing for investor Tom Perkins recently and is more likely to under- you will be working with, and investors, and a good thing told the New York Times. stand the various needs of all the business your organiza- for boards, even though many of the company’s customers, tion is in—its competitive directors might not feel that employees, and investors. landscape, its stakeholders, way right now. It has fos- It is critical to have the right employees and customers, tered a long overdue public complacent board jeopardizes group of people sitting around and even the communities in conversation about the role of a company’s future. the boardroom table, but those which it operates. Indepen- boards and board members. Boards need to change, and directors will only be useful dent knowledge is power. A good board—one that is serving on a board needs to be if they are allowed to operate Showing great leadership engaged, transparent, and considered a job, not an an- with complete candor. Inde- in the boardroom also means accountable—is a tremendous nuity. As board members we pendent board members have knowing when it is time to asset to an organization. The are treated very well. We are to be comfortable asking hard leave. Keeping a board fresh evolving boardroom requires sent manicured board papers questions; in fact, it needs to be is important, but it is a topic every board member be a in advance of board meetings. clear that asking tough ques- too often discussed in hushed great leader, from the mo- We are collected at the airport, tions is a basic requirement. tones. There is a real danger ment we are appointed to the transported to meetings, treat- In such an environment board of board seats being treated day we step down. ed to lovely meals, and given members can discuss a wide like sinecures. As companies

by michael hoeweler michael by slick and painstakingly pre- range of topics essential for grow, boards need new faces, Lucy P. Marcus is CEO of Marcus Venture their organization’s short- and new ideas, new perspectives, Consulting, a board chair and director, pared presentations. If we are Professor of Leadership and Governance at not careful, we can become long-term success, including and new expertise. As board IE Business School and a Reuters columnist sustainability, the changing members, it is our individual focused on the intersection of boards and too comfortable, complacent, leadership. She host the Reuters TV show, and we won’t have a fingertip workforce, innovation, infra- responsibility to know when “In the Boardroom with Lucy Marcus.” n illustratio portrait

�o. reuters 25 june.2012 Networking Running Al Qaeda

How Osama bin Laden managed his far-flung terror operation and forced America to rethink warfare

by Zachary Tumin management task was clearly holding everyone to a solitary vision, staying true to values (Islamic law, as he read it), and aligning deeds with words. Across his network bin Laden had little command or control over who operates in the name of Allah or even al Qaeda. As a result, nothing bugged him more than dum- mies among al Qaeda’s formal franchisees, loose affiliates, or allies getting distracted from killing Americans; or butch- ering innocent Muslims; or We now have the first blowing chances for alliances public release of goodies from he sorely wanted to create. Osama bin Laden’s redoubt at Bin Laden’s advisers were as- Abbottabad: 17 letters to and tounded, for example, when al from bin Laden and his crew Qaeda in Iraq attacked Catho- that spell out vision, plans, and tactics for the global ji- al Qaeda central (a term he had. The letters span a decade heard used by the media and, and outline the dimensions of The letters reveal that bin Laden amazingly, appropriated). a would-be caliphate—a truly was struggling with the Bin Laden was no pushover. global theater of war con- In fact, the letters show that ceived, plotted, and executed challenges of collaboration. he was hands-on and prickly by bin Laden. They also reveal about all such organization bin Laden to be a highly ac- lics in an attempt to pressure relations. Getting second-rung matters, going so far as to complished orchestrator of a Coptic Christians into releas- leadership right is important require memoranda of un- global network struggling with ing prisoners. It’s as if, one for any enterprise, and for al derstanding with affiliates. As the challenges of collabora- wrote, someone took Sunnis Qaeda that meant assuring the for appointments, bin Laden tion. Three issues consume hostage to pressure Shias— brand and building network was a stickler for a good ré- him, and they happen to be “Does this satisfy any sane capacity for terror. Bin Laden sumé that detailed education, the classic political tasks in the person?” The sheer horror of was careful about decid- battlefield experience, and hoeweler michael by management of collaboration. the geopolitical and historical ing who would be anointed religious training. First, and most important: error left bin Laden’s deputies with two powerful gifts—his “How excellent would it keeping everyone on track. shaking their heads. blessing of leadership, and be,” bin Laden wrote, “if you For bin Laden, the primary Second: managing franchise formal affiliation of groups to ask brother Basir to send us n illustratio portrait M asood A hmad by photograph

�o. reuters 26 june.2012 flatfooted in 2001. United locals. “Human terrain” teams States forces were disinclined built webs of partisans and did to collaborate, share infor- battle with al Qaeda for hearts mation, or innovate fast on and minds. “Sensitive site the battlefield. But the 9/11 exploration” teams became attacks changed all that, in part of every operation and three ways. scooped up computer harvests First, 9/11 created an at-war from countless raids, just like mindset for war planners the one at Abbottabad. Teams where collaboration became of intelligence, surveillance, the default strategy, not the and reconnaissance specialists last resort. Massive invest- ate that data like Wheaties for ment in new technology plat- breakfast, and used it to whip forms allowed military and networks of drones, satellites, intelligence services to share and operators on the ground

Bin Laden was hands-on and prickly about all organizational matters.

data. New “network-centric” into a lethal, agile blend. doctrine envisioned every war The “Battle of Manhattan,” fighter—alone on a hilltop or as bin Laden called 9/11, had massed in planes, ships, and the effect of forcing the United tanks—to be super-empow- States to investigate its failures ered by data and imagery. Or- and to transform its war- ganizations like Joint Special fighting capabilities. Wherever Operations Command beefed Muslims lived, the letters up on operators, authorities, show, bin Laden claimed a and shared missions that right and an interest to make In the new world of warfare, victory is a function of crossed boundaries. war, cast out Americans and network flexibility. Second came rich technical apostates, and restore the ca- innovations, some of which liphate. Following bin Laden’s saved lives, like IED-resistant lead, the United States also the résumé, in detail and was right-sizing terror. Too trucks and armor; others took claimed the right to make lengthy, of brother Anwar much wrist-chopping would lives, like Predator drones. war anywhere on earth. On al-Awlaki.” And don’t forget serve only to alienate the First deployed during the May 2, 2011, at the Battle of the career goals and cover street, whereas anemic targets Kosovo campaign, then Abbottabad, those iron-bound letter. “Also ask brother Anwar would demoralize his men in perfected and scaled in Iraq, American bureaucracies, ca- al-Awlaki to write his vision in the field. Violent, cataclysmic, those innovations—equip- pable of astonishing scale and detail in a separate message.” high-value American kills like ping Predator with lasers for persistence, and their newly This, for the man nominated the Twin Towers, the USS targeting and eventually with agile networks, collaborated to run al Qaeda in Yemen. Cole, and the Nairobi embassy Hellfire missiles for shoot- and defeated bin Laden’s Third: delivering on the bombings worked for both, ing—compacted the kill-chain own, which proved unable promise of his brand and stay- and for bin Laden. from hours to minutes and to survive the rigors of the ing in the headlamps of his po- All this negotiation and produced devastating effects. networked world and the new litical support. Managing both persuasion—the essence of And third, the total battle- modes of warfare they helped

by michael hoeweler michael by the Arab street, upon whom he political management—oc- field integration of people, bring into being. counted for support, and his curred while American and machines, and procedures Zachary Tumin leads the Information franchises, who were tasked NATO forces were hacking occurred. New units stood and Communications Technology project to execute plots, required away at bin Laden’s networks. up to soften the boundar- at the Belfer Center for Science and International Affairs at Harvard’s John F. careful negotiation. The key He’d caught the Americans ies across services and with Kennedy School of Government. n illustratio portrait M asood A hmad by photograph

�o. reuters 27 june.2012 Leading Indicators

The Percentage of Number of Number of American female women who chief CEOs heading ran a executives Fortune 500 Fortune 500 who are companies company CEO FILE women: in 2012: in 1996:

In 2011, John H. Hammergren o f 25.4 18 1 McKesson was the highest-paid American CEO, earning $131 million executive in total compensation. compensation among the 500 largest Amount that American companies Aubrey increased 16 percent McClendon, last year. CEO of The highest-paid female CEO Chesapeake was Irene Rosenfeld of Kraft Foods. Energy, earned She earned during the The average Ratio of first four American $25.4 million months of 2012 worker’s salary CEO-to-worker pay in the S&P from sales of went up by 500 in 1980: company well assets: 42/1 Minimum number Brooks of occasions $108.6 on which and Prime million 3% former News Minister International CEO David Cameron Rebekah Brooks sometimes CEOs spend about 60 percent has met with texted each of their time in meetings. British prime other 12 times a day. ministers: Ratio of Former WorldCom CEO CEO-to-worker 40 Bernie Ebbers pay in the S&P (prisoner number 500 in 2011: 56022-054), 380/1 currently serving 25 years Percentage JPMorgan Chase CEO for fraud, holds the of people Jamie Dimon dismissed record for the longest worldwide rumors of his bank’s jail sentence handed a who view dangerous exposure in Fortune 500 CEO. CEOs as credit derivatives as a credible “tempest in a teapot” 5 weeks before he sources of CEO with the most Twitter announced a trading information: followers: Oprah Winfrey a t loss of at least 38 $2 billion. 11,378,538 = 10 s by peter arkle peter by n s illustratio

�o. reuters 28 june.2012 Reason says: go with the well-known.

Instinct says: go with the know-how.

At Grant Thornton we specialize in helping dynamic organizations like yours, because we are one too. We know how to confront the challenges you face and bring a real, competitive advantage of senior staff time, short decision-making chains and sound processes. To help unlock your potential, visit GrantThornton.com/Growth. s by peter arkle peter by n s illustratio Grant Thornton refers to Grant Thornton LLP, the U.S. member ﬁ rm of Grant Thornton International Ltd. WINSTON WOULD WHAT DO?

ILLUSTRATIONs heavens for amiracle. Orwe could because politicalbecause leaders refuse to lead, and with “think” their poll numbers. W by The world incrisis-mode is look W to DAVID by Sir Harold Evans FOLDVARI W e could look the to ar S inston C tories hurchill

gutter credit WINSTON WOULD WHAT DO?

gutter credit Disasters he confronted head-on; minor error he Christmas 1940 in wartime Britain was not much fun. On Sun- day, December 22, still a schoolboy in short pants, I sat in a small, brick air-raid shelter in our back garden in Manchester, huddled washed away with irony. in the cold with my mother and two infant brothers; Dad was out in the darkness somewhere driving a steam train. We were lonely and very afraid, isolated in a vast cavern of echoing noise—the drone of wave after wave of German bombers overhead, the America. This welcome news came a crump-crump! of our ack-ack guns, the blast of the bombs. year after many of our cities had been I didn’t know it at the time, but we had been marked for ex- pulverized. Churchill’s beloved House tinction. Three months earlier, the Luftwaffe had flown stealthily of Commons had been hit in the moon- at high altitude, photographing our neighborhood. I came across light blitz of May 10-11, 1941, its cham- their pictures only recently, crystal-clear and marked with black ber reduced to a smoking shell. rectangles enclosing the factories down the street from our home, Making predictions is risky for lead- where Lancaster bombers were being made for the Royal Air ers. President Herbert Hoover lost what Force. The German Heinkels dropped 272 tons of high explosives little of the American people’s trust he and 1,032 incendiary canisters over that Sunday-Monday. Next still had when he told a delegation to the morning, when we emerged from our shelter, fires raged in the White House worried about the econom- city, but the bombers had missed the factories, and us. ic crisis engulfing the nation: “Gentle- We’d been lucky. And Britain was lucky in another sound that men, you’ve come 60 days too late. The comforted us when the air-raid sirens wailed and the headlines Depression is over.” Chamberlain could from the battlefront got ever grimmer: the sound of exalted lead- not hope to survive after having told rap- ership in the growling declarations of Winston Churchill. “You turous crowds upon his return from Mu- ask what is our aim? I can answer in one word: it is victory, victory nich in September of ’38 that Herr Hit- at all costs, victory in spite of all terror, victory however long and ler had signed his name to a document hard the road may be… ” guaranteeing “peace in our time.” He’d We believed him, were inspired by him. Does it matter that he been duped and people felt like dum- was deceiving us and maybe deceiving himself? Leadership has mies for believing him. The “Mission Ac- come to be defined as the organization of competence; inspira- complished” banner strung up on the deck of a U.S. Navy aircraft tion is devalued and every “animating vision” cost-analyzed to carrier in 2003 became a bad joke for the rest of the presidency of the point where nothing is worth attempting. But at that time of George W. Bush. supreme peril, inspiration was more relevant than calculation. How did Churchill manage to retain our trust? Disasters he Morale mattered more than arithmetic. confronted head-on; minor error he washed away with irony. On the evidence, all too plain to see, it was ridiculous for us “The marks of a politician,” he said, “are the ability to foretell to think of victory, still less plausible to proclaim it achievable. what is going to happen tomorrow, next week, next month, next Survival was the goal. When Churchill succeeded Neville Cham- year. And to have the ability afterwards to explain why it didn’t berlain as prime minister on May 10, 1940, at the age of 65, the happen.” It counted a lot that he had huge credit for insisting French Army was in rout, a shredded British Army was abandon- throughout the ’30s that appeasement was a confidence trick. ing its weaponry as it staggered toward Dunkirk, and we were in So many politicians had turned tail that we forgave Churchill a humiliating retreat from Norway. The skeptics had every fact for clutching at straws to cheer us up. We felt we could count on on their side, but the new prime minister boldly assured us that him. He had what the sociologist Max Weber called charismatic the German Army would be stalled soon—that the spring harvests authority—people saw him as special, possessing extraordinary across Europe would fail; that a mass, uncontainable uprising energies and prescience, not bound by rules. Whether he actually

of the French was imminent; and America would enter the war had those qualities is not the point. It was how he was perceived. M elville oby T “in the near future.” Churchill’s citations for optimism proved / unfounded—the harvests were safe, the French were easily sub- dued, and the United States did not enter the war in Europe for another 18 months. That only happened on December 11, 1941, Today, we are mired in a global leadership vacuum. Our poll-driv- after the Japanese attack on Pearl Harbor, which prompted Hit- en politicians are in another place altogether from Churchill—he

ler, in a mad—and for us, marvelous—moment to declare war on did not have one ear to the ground listening for the tremors of eva- REUTERS by photograph

�o. reuters 32 June.2012 Disasters he confronted head-on; minor error he washed away with irony.

“V” IS FOR EVOCATIVE Churchill understood and used the power of icons, which is why he often appeared in one of his many military uniforms. Even his stogie conveyed strength, fortitude and defiance.

nescent public opinion as the current crop in the U.S. Congress so He also knew the value of icons. By the time he was prime min- dispiritingly do. It was said that FDR played public opinion like a ister, he was entitled to wear umpteen military uniforms and ap- musical instrument, but that was somewhat similar to what Nel- peared in all of them. He sported an aggressive stogie, his taste son Mandela once described as “leading from behind.” When for Havanas acquired while reporting on the Spanish-American Hitler marched into the Rhineland in 1936 in breach of two trea- war from Cuba. Everywhere he went he flashed index and middle ties with America, FDR went fishing. That’s understandable. In an fingers in a V-sign (it would be nice to believe the legend that the era with less polling, FDR sensed that America wanted to stay out gesture derived from English long bowmen showing their arrow- of “Europe’s war” and he needed the isolationists in Congress to shooting fingers to the French at Agincourt). support his New Deal. But Churchill didn’t lead by subtly guiding When I became a daily newspaper editor in 1962 in the north of public opinion to a better place. In this, he was more like Theodore England, I wrote to Churchill and asked his permission to depict his than Franklin. He believed himself to be a man of destiny. adventurous early career in serial drawings, on the basis of his ex- Like Theodore Roosevelt, Churchill dramatized his romantic citing and very funny book, My Early Life. He gave it gladly. It was self in politics. In 1900, when he was not yet 30, the descendant typically generous of him—there was no fee involved. His interpre- of the first Duke of Marlborough became the member of Parlia- tation of history as acts of heroism, which our drawings reinforced, ment for my parents’ industrial constituency of Oldham on the was an essential element of his genius for leadership; the English

oby M elville oby strength of his exploits as a soldier and writer. He was the young language was another. Both skills require further examination, T / cavalry man with the 21st Lancers who’d charged the Dervishes but in the vivid observation of Isaiah Berlin, Churchill’s triumph at Omdurman, the war correspondent who’d escaped a Boer pris- was rooted in his ability to impose “his imagination and his will on camp, and the officer-reporter on India’s northwest frontier upon his countrymen.” He saved the future by invoking a vision of who’d come close to death in the Swat Valley that is still making the past that encouraged us to see ourselves as brave as the legends bloody headlines, isolated with a handful of Sikhs who were am- of British history. Churchill had a profound sense that he was at one

photograph by REUTERS by photograph bushed by hundreds of Pashtun tribesmen. with the tribe of the ordinary British.

�o. reuters 33 June.2012 There was a huge gap between popular opinion, which was reso- drive one to despair when he works himself into a passion of emo- lutely with Churchill for fighting on, and the British patricians, who tion when he ought to make his brain think and reason.” were in a funk over the victories of the German Army on the Con- Say this for emotion—it gave him the physical and moral cour- tinent. In the spring of 1940, it was fortunate that the remnants of age to stand fast. The weakness of the defeatists made him more the British army, the RAF pilots in the Spitfires and Hurricanes, determined. He had made three dangerous trips to France to the Royal Navy destroyers hunting U-Boats in the mid-Atlantic, stiffen French resistance, and ordered a small British force at Cal- the machinists working all hours in the factories didn’t know that ais to fight to the last man to give a chance of escape for the hun- in Parliament and the London dreds of thousands fleeing to the beaches clubs the establishment talked of Dunkirk —and then was physically sick not of victory but of surrender. at the thought of the slaughter he’d willed. The British establishment— On the evening of Monday, May 27, with meaning the senior civil ser- the War Cabinet still deadlocked, he called vants and the mainly upper- a meeting of 25 ministers of Cabinet rank class Conservative majority but not in the War Cabinet. On whether it in the House of Commons— was chance or a cunning tactic, his mem- didn’t for a moment believe oirs are maddeningly silent, but the effect that victory was possible. They was profound. “Of course,” he told them, saw no point in a gallant last “whatever happens at Dunkirk, we shall stand that would destroy their fight on…” According to one minister, green and pleasant land. And Churchill said, “If this long island story of they didn’t trust Churchill. ours is to end at last, let it end only when They could hardly ignore the each of us lies choking in his own blood fact that his condemnation of upon the ground.” That sounds a little appeasement in the ’30s had purple for Churchill, but it was true to his been cruelly vindicated, but character to summon images of Britain’s they regarded him as a party- mythic history: Queen Elizabeth I and changing hot-head with soar- ing ambition, erratic ability, and too many ideas. Emperor Joseph II may never have said Mozart’s Il Seraglio had too At that time of supreme peril, inspiration was more relevant than many notes, but Churchill certainly had more ideas than his exasperated military calculation. Morale mattered more than arithmetic. chiefs could manage. (One he fathered was the floating Mulberry Harbor, which proved vital for sustaining the D-Day Francis Drake seeing off the Spanish Armada; Admiral Nelson at invaders. Pressing its importance, he wrote: “Don’t argue the Trafalgar flag-signaling to his battle fleet that “England expects matter. The difficulties will argue themselves.”) every man to do his duty”; the Iron Duke Wellington dethron- ing Emperor Napoleon at Waterloo. Whatever the exact words, Churchill’s pronouncement stirred the group. Cheers erupted; ministers shouted and jumped from the table to run to his chair The spokesman for surrender was the “Holy Fox,” Foreign Sec- and pat him on the back. retary Lord Halifax, a landowner who’d been a moderate appeas- It was very much Churchill’s style to march toward the sound er. King George VI would have sent for him to succeed Chamber- of gunfire, but my view is that he had made a calculated gamble lain—Tory MPs favored him—but Halifax preemptively demurred that evening, betting that declaring a “fight-on” decision—one on the grounds that he wasn’t qualified because he wasn’t in the that hadn’t been declared—would shame the doubters. A buoyant House of Commons. In War Cabinet meetings, Halifax begged Churchill went from that encounter to a 20-minute War Cabinet for the approval to have Mussolini act as a mediator to secure a meeting. Chamberlain now sided with Churchill; Halifax retreat- negotiated peace with Hitler. It would have meant accepting Nazi ed. There would be no capitulation. dominance of Europe, but Britain could have hoped it would be left alone across the Channel. In just three days—May 26, 27, and 28—there were nine long, tense meetings of the coalition War Cabinet of five men: the Conservatives Churchill, Chamberlain, “Magnanimity in victory” was a Churchill watchword. As his and Halifax, and Labor Party stalwarts Arthur Greenwood and sympathetic biographer Roy Jenkins noted, it was a breathtaking Clem Attlee. Churchill and Halifax were both battling for Cham- piece of mendacity for Churchill thereafter to pretend that there berlain’s ear, since he still led the Conservatives. Halifax’s diary had been unanimity in the War Cabinet over the decision to “fight note says that “Winston talked the most frightful rot... it does on.” He was only 5-foot-5, but he was a very large human being.

�o. reuters 34 June.2012 He didn’t nurse grudges. He wore his heart on his sleeve. When Europe sorely misses having someone with Churchill’s grand FDR’s emissary, Harry Hopkins, made his first visit to London in vision. We like to say God is in the details, but if we always look early 1940, he ended his visit with a memorable speech at a state down we are liable to stumble in the weeds, as the euro zone dinner. He said that he would like to sum up what he’d learned has stumbled in the debt and currency crises of 2011-12. It is 60 on the trip by using the words from the Book of Books: “Whith- years since Churchill campaigned for a United States of Europe. er thou goest, I will go, and where thou lodgest, I will lodge: thy He would have been ardently for closer political union, provided people shall be my people, and thy God my God.” He paused and it did not in any way impede Britain’s special relation with the then added very quietly, “Even to the end.” Churchill was in tears. United States (after all, his mother was born in Brooklyn and the He felt he had FDR at his back. United States had made him an honorary citizen). He recognized It’s too often said Churchill succeeded by oratory, but oratory full well that closer economic and military cooperation in Europe without substance is flatulence. President Warren Harding was a necessitated “some sacrifice or merger of national sovereignty.” grand orator, his alliterative speeches an army of pompous phras- I think he would have distrusted the embrace of austerity for the es moving across the landscape in search of an idea. Language, to masses as he distrusted the British establishment’s appetite for borrow a presidential verb, is a misunderestimated force in lead- a return to a new gold standard in 1925. When I recently visited ership. When Churchill wanted war aid from America, he told the current young Chancellor of the Exchequer, Mr. George Os- FDR, “Give us the tools and we’ll finish job.” If he’d said, “Do- borne, we talked in the paneled room where Chancellor Churchill nate the implements to us and we will finalize the assignment,” heard out the arguments, but his best contribution was a minute he might have received a dusty answer from Roosevelt, himself he wrote: “The Treasury has never, it seems to me, faced the pro- a master of the telling phrase (he sold the Lend-Lease program found significance of what Mr. Keynes calls ‘the paradox of un- to the American public with a homely metaphor of lending a fire employment amidst dearth,’” he wrote. “The Governor [of the hose to a neighbor). Churchill, too, was adept at framing a situa- Bank of England] shows himself perfectly happy in the spectacle tion by metaphor so that people would not only understand it, but of Britain possessing the finest credit in the world simultaneously also be able to adopt it. He invented the language of the Cold War: with a million and a quarter unemployed. Obviously if these mil- An Iron Curtain has descended across Europe. The aim is peaceful co- lion and a quarter were usefully and economically employed, existence. We must solve our differences at a summit. they would produce at least 100 pounds a year a head, instead of In the memoir of his early life, Churchill attributes his linguis- costing at least 50 pounds a head in doles.... It is impossible not to At that time of supreme peril, inspiration was more relevant than

regard the object of full employment as at least equal, and prob- calculation. Morale mattered more than arithmetic. ably superior, to the other valuable objects you mention...” Churchill ultimately bowed to the overwhelming weight of conventional wisdom—with disastrous results for Britain in deep- tic skill to flunking Latin at school. He saw no reason to learn the ening the gathering storm of the Great Depression. correct way to speak to a table (O Mensa). “Thus,” he wrote, “I He is portrayed so often as the indomitable war leader that one got into my bones the essential structure of the ordinary British might forget that what he desired above all was peace and free- sentence—which is a noble thing.” He had devoured Gibbon and dom. He considered Britain’s 1956 invasion of Suez “the most Macaulay. One of his most famous passages, written out like a ill-conceived and ill-executed imaginable.” He thought he could poem in the original, bears scrutiny for its monosyllabic simplic- have ended the Cold War in a face-to-face summit with the top ity and rhythmic insistency. Just before the fall of France, speak- Soviet leader—“To jaw-jaw always is better than to war-war.” He ing in Parliament, he summoned up the spirit of St Crispin’s Day: was appalled that U.S. President Dwight Eisenhower even for a “We shall not flag or fail. We shall go on to the end. We shall fight moment considered using the H-bomb in Indo-China in the ’50s. in France, we shall fight on the seas and oceans, we shall fight He would have been stalwart after 9/11 in taking out the Taliban with growing confidence and growing strength in the air. We shall and al Qaeda, but he knew too much about Afghanistan to have defend our island, whatever the cost may be, we shall fight on the been sanguine about any prolonged military involvement there, beaches, we shall fight on the landing grounds, we shall fight in and with his deep personal experience of what war meant, I doubt the fields and in the streets, we shall fight in the hills. We shall he would have backed the invasion of Iraq as one of his succes- never surrender and even if, which I do not for a moment believe, sors, Tony Blair, did so eloquently. this island or a large part of it were subjugated and starving, then “The statesman who yields to war fever,” Churchill wrote, “must our Empire beyond the seas, armed and guarded by the British realize that once the signal is given, he is no longer the master of Fleet, will carry on the struggle, until in God’s good time, the New policy but the slave of unforeseeable and uncontrollable events.” World, with all its power and might, steps forth to the rescue and the liberation of the Old.” Winston Churchill’s most famous words will resound at the Morgan Library, New Only words—but as he once remarked, “words are the only York City, from June 8 through September 23 in an exhibition, “The Power of Words,” curated by Declan Kiely and Allen Packwood, with guest curator British historian things which last forever.” Andrew Roberts.

�o. reuters 35 June.2012 Diplomacy Hillary by Susan B. Glasser v s.

A coalition of the jet-lagged. Secretary of State Hillary Clinton arrives in Paris on April 19—by way of Colombia, Brazil, and Belgium—to attend a Friends of Syria meeting. Ten days later she was off to China. photograph by Jacquelyn Martin/Pool Hillary v s. the World Secretary of State Clinton is among the most popular politicians in America. What has she actually accomplished as the nation’s top diplomat? Secretary of State Hillary Clinton was talking about one of her heroes,the Burmese dissident Aung San Suu Kyi, a longtime human rights icon lately turned into a parliamentary powerbroker.

“She could have been on a pedestal her entire life,” said tics entirely but instead launched a whole new career Clinton, “but she wants to be in the real world and see if as an ambitious United States senator turned combat- she can make a difference.” We were sitting in Clinton’s ive presidential candidate before morphing yet again suite, high above the Beijing skyline, after a frantic week over the last few years into the most globetrotting top of diplomacy to secure the release of a blind Chinese law- diplomat in American history. “When I was first lady,” yer who sought American protection, when I asked Clin- recalled Clinton, “I could say anything I wanted to say, ton to reflect on the perennially tough set of choices she and I often did.” Here she stopped for one of her trade- faces between the human rights advocacy that means so mark deep laughs before adding, “for better or worse.” much to her and the pragmatic politics that is often re- It’s a laugh that makes her very human—and also one quired of a hard-headed American secretary of state. that immediately calls to mind the many controversies Instead, Clinton chose to answer by recalling an emo- of Clinton’s long career. Remember “the vast right-wing tional three-hour meeting she recently had with Suu Kyi, conspiracy” that was out to get her husband during the who won a Nobel Peace Prize for her brave defiance of Monica Lewinsky scandal? And her defiant taunting of the military junta that kept her in prison and under house Barack Obama during the 2008 primaries, when she said arrest for most of the last two decades and then made a her future boss wasn’t nearly experienced enough to take surprising shift to politics this year, deciding to cooperate that 3 a.m. phone call? with the reforms of Burma’s new leader. What a psychic Now Clinton has a different role and a different set journey that has been, marveled Clinton, a transition of dilemmas: If she speaks too forcefully about human “from this icon-advocate to now sitting in the parliament rights, she’ll be chided for letting wild-eyed activism get with men who she knows have blood on their hands.” The in the way of America’s economic interests. But if she fails journey is all the more remarkable, Clinton said, because to bash the Chinese over their harsh treatment of dissi- “politically now she cannot be immune from the criticism dents and brutal suppression of free speech, then she’ll be that will come because she is playing a political role.” called a sellout. Her shape-shifting career guarantees that agolj

She was right, of course, but the more Clinton waxed Clinton will be criticized at every turn, but it also gives her S amir D on about Suu Kyi, the more I thought that she was also the opportunity, as she notes about Suu Kyi, “to put into / talking about herself—a celebrity first lady with a trou- practice everything she’s been thinking about and work- bled marriage who could have chosen to opt out of poli- ing on her entire adult life.” photograph by REUTERS by photograph

�o. reuters 38 June.2012 Good Morning Burma. On November 30, 2011, Hillary Clinton became the first United States secretary of state to visit Myanmar in more than 50 years.

Hillary submitted some joke texts of her own to the site’s twenty- something creators, signing them, ”Thanks for the many LOLZ. Hillary ‘Hillz.’” illary Clinton has All this publicity has inevitably given rise to a new round of the been an inescapable American public figure for more than 20 old Clinton parlor game: Will she run in 2016? Although Clinton years now. She’s so famous that the tabloids still put her on the will turn 69 on the eve of the next presidential election and has front pages whenH she changes her hairstyle, or when she ap- said she’s leaving the Department of State exhausted after two pears in public without makeup or takes her staff out for a beer decades in the public spotlight, no denial is likely to put such in Cartagena, Colombia. Now in a whirlwind final year as secre- speculations to rest. tary of state, Clinton has become the most popular politician in Despite all the hoopla, what’s most striking about the current America—with approval ratings standing in the high 60s—and Hillary boomlet is how little it’s based on substance. Few Americans she is increasingly celebrated as a class act who has managed to have any idea what Clinton’s been up to as secretary of state, or even reinvent herself from losing presidential aspirant to world-class what a secretary of state is supposed to do. It’s a paradox: Clinton is agolj problem solver. A bad-ass photo of her in sunglasses from Time, more popular than ever, widely acclaimed for her performance in a

amir S amir wielding her BlackBerry like a power tool, recently went viral on job when no one knows what she’s actually done. D / the Internet. The picture even spawned a popular Tumblr site of In the rarefied circles of the Washington foreign policy estab- what purported to be “Texts from Hillary,” in which the putative lishment, where they’ve been paying closer—if occasionally be- secretary of state offered sharp witty comments on photos of oth- mused—attention, Clinton gets big points for style and for taking er famous people. (Mitt Romney asking, “Advice?” Clinton reply- her brand of “people-to-people” diplomacy international at a ing: “Drink.”) The old Hillary wouldn’t have known what Tumblr time when America desperately needed just her kind of star pow-

photograph by REUTERS by photograph was, or would have feared she was being mocked by it. The new er to revive an image tarnished by eight years of George W. Bush’s

�o. reuters 39 June.2012 cowboy diplomacy. But aside from that, as one of Washington’s All this timistically vowed to open direct mandarins put it to me recently, in one of numerous nearly identi- talks with enemies such as Iran cal conversations with various leaders of the international affairs publicity and North Korea, make a major set: “What has she done?” The old poobah reeled off a long string push on a long-term peace deal of Important Global Issues, from Middle East peace to negotiat- has between the Israelis and the Pal- ing a political end to the long-running war in Afghanistan, from estinians, and forge new global which Clinton appears to have been sidelined by the Obama inevitably diplomacy on climate change— White House, or is simply out of the picture. all while winding down the To the traditionalists, Clinton is something of a puzzle. Clear- given rise American-led wars in Iraq and ly she’s a success in the “soft power” department, a relentless Afghanistan, closing the Guan- cheerleader for Brand America. But they can’t help disdaining to a new tánamo Bay prison, and ad- her focus on issues like women’s rights and development eco- dressing other lingering excess- nomics—surely not the stuff of real diplomacy—and they see her round of es of George W. Bush’s “global attention to them as proof of how marginalized she’s been by the war on terror.” Obama White House on the geopolitics that count. And it’s true the old Needless to say, it wasn’t at all that if you travel with Clinton, every trip will include a seemingly clear at first how Clinton would endless procession of talking-points-ridden events at which the Clinton factor into that ambitious list of secretary smiles and nods while promoting cut-rate cookstoves goals. Obama had personally infor the developing world or hailing the work of women’s empow- parlor vited her into his cabinet after the erment initiatives. The members of her traveling press corps roll election, a move that was greeted their eyes; her exhausted aides barely look up from their battered game: with suspicion by many of his BlackBerries. But there she is, smiling and chipper. campaign insiders still wary from Which is why it’s so striking to talk to Clinton away from the Will she their bitter primary battle. Clin- perky photo ops and anodyne press conferences. She may be re- ton herself was a novice in inter- lentlessly on message, but she’s no automaton. Ask anyone who’s run national affairs. She had no back- watched her work backstage politics on the global stage these ground in diplomacy, spoke no last few years, and they’ll tell you the same story: Clinton is an in 2016? foreign languages, and was wide- adept behind-the-scenes operator, a tough negotiator not afraid ly derided during the presidential to play the bad cop—or to make fun of the macho posturing of her campaign for claiming that her many tough-guy interlocutors. international trips as first lady qualified her as a bona fide -na tional security expert. Plus, she would be dealing with a White House National Security Council that quickly earned a reputation as hyper-controlling. From the start, she appeared to be marginalized, especially after Obama named a series of czars designated to handle most hen I met Clinton in Bei- of the toughest issues of their shared agenda—diplomatic heavy jing, it was clear she saw her job as a nearly endless series of ne- hitters like her old friend Richard Holbrooke for Afghanistan W and Pakistan, seasoned envoy Dennis Ross for Iran, and former gotiations over what she wanted to get done and what she could actually accomplish. Nearly every person I spoke with for this Senate Majority Leader George Mitchell for the Mideast peace article called Clinton a pragmatist, a doer, a person who likes to talks. Even some of her advisers told me it was a steep learning make things happen. Diplomacy is not always a great fit for such curve—the carefully calibrated language of diplomacy, said one, people. Grand, sweeping deals that change the world with the was a “language she wasn’t fluent in.” Besides, Clinton was still stroke of a fountain pen are in short supply these days. It’s been personally reeling from the embarrassing 2008 defeat. Not only 40 years since Henry Kissinger secretly flew into Beijing to open had she squandered a frontrunner’s lead, and more than $13 mil- talks with the Chinese—and besides, as Clinton herself noted re- lion of her and Bill’s hard-earned money, but sordid accounts of cently, can you imagine Kissinger getting away with secretly fly- her campaign’s self-destructive infighting and poor management

ing off from Pakistan to China and simply disappearing from the seemed to reflect directly on her leadership abilities. As a result, R eed public radar for two days? Such clandestine diplomacy is just not Washington was primed and ready for the fireworks to start as n aso J possible in the age of Twitter. soon as Clinton and Obama took office in January 2009. / So Clinton has had to content herself with a different set of ac- The explosion never happened. Three and a half years later, complishments. She has played the hand that she, and the presi- there have been remarkably few accounts of feuding between dent who drafted her for the job, were dealt. For both Clinton and Obama’s White House and Clinton’s State Department—and vir- Obama, that has meant transitioning fairly rapidly from the ide- tually none between the president himself and his celebrity dip-

alistic promises Obama made on the campaign trail, when he op- lomat. Even so, no one even attempts to claim that Clinton and REUTERS by photograph murray nn e marya by i n fographic

�o. reuters 40 June.2012 Obama have forged anything other than a solid professional re- ten replies by saying she has to do it all. She has to watch, as she lationship. If there’s an inner circle of Obama decision-making, puts it, “the trend lines and the headlines.” Clinton is not in it. And the optimistically ambitious foreign policy agenda of early 2009 has inevitably collided with reality; long since jettisoned are many of the early ideas about reshaping the world for the Obama era—from talking directly to Iran’s ayatollahs to forging a durable Mideast peace built on an Ameri- can-led push to end Israeli settlements in the West Bank. On the campaign trail, Obama has transformed himself instead into an unlikely tough guy, emphasizing his decision to launch the risky special ops raid that killed Osama bin Laden (which Clinton sup- ported), as well as his moves to draw down the American pres- hen I met not long ago with ence in Iraq and Afghanistan. (Clinton and then-Defense Secre- one of Clinton’s top deputies, he reflected on the different models tary Bob Gates argued in favor of Obama’s 2009 troop surge.) America has had Wfor its secretaries of state in recent years. There’s For her part, Clinton tends to tout a list of accomplishments that the global statesman, like Henry Kissinger, and the presidential are somewhat short of transformative, if still substantial—from confidant, like James Baker or Condoleezza Rice. Some secretaries of state play an inside game, like Colin Pow- ell, who was widely popular with the foreign policy bureaucracy for his perceived willing- Spanning the Globe ness to stand up for the professionals and his Hillary Clinton lives out of a suitcase. As secretary of state she has logged more than 800,000 insistence on bringing the stodgy department Country visitedmiles, by Secretary visiting at Clinton least 96 during countries. her tenure Total daysin the on State the departmentroad so far: 320 into the information age. (Incredibly, Powell, in 2001, was the first secretary of state even to have a computer on his desk.) Others, like her close friend Madeleine Albright, are known for their swagger on the world stage. By those standards, where does Hillary Clinton fit in? This adviser was one of several who pointed out that Clinton is the first secretary of state to have gone directly to the job from the U.S. Senate since the brief tenure of Edmund Muskie, during Jimmy Carter’s Countries visited by presidency. In many respects, Clinton re- Secretary Clinton during her tenure in mains a politician, both in terms of “connect- the State Department ing the dots with American audiences about why foreign policy and national security pol- All figures as of May 2012. Source: U.S. State Department icy matters,” as a top career diplomat put it, and in her relationship with other world lead- her leadership in pushing a strategic “pivot” to Asia, announced ers—politicians with whom she does not hesitate to discuss what last fall in an article for Foreign Policy, to the extensive personal they really care about: the acquisition and maintenance of power. diplomacy she poured into quickly mobilizing the NATO coali- Several times during our interview, Clinton returned to this tion that launched air strikes to topple Libyan leader Muammar theme. Whether or not she runs again in 2016, it’s clear that she has al-Qaddafi. More broadly, if less tangibly, she has put new empha- never stopped thinking of herself as a politician first and foremost. sis at a time of global financial crisis on the role of what she calls This came through very clearly when I listened to her interrupt the “economic statecraft,” including the appointment of the State story about Aung San Suu Kyi to speak about her own trajectory Department’s first chief economist. She has launched a major re- from first lady to first diplomat. As first lady, Clinton said, when she boot of American development efforts modeled on the Pentagon’s spoke out, “some of it was strategic and part of my husband’s agen- quadrennial strategic reviews and has called for an “Internet free- da, and some of it was just what I thought and felt and strongly be- dom agenda” that would mobilize new technology on behalf of lieved. When I was a senator, I had to represent the people of New democracy activists and dissidents the world over, an agenda that York but I also got to be an advocate on their behalf and on behalf

R eed has seemed both problematic—bad guys have these tools too— of the issues and interests that they had. And so I feel,” she contin- and prescient in anticipating the technology-fueled protests that ued, “like the roles that I have been playing and the outcomes that n aso J / swept the Middle East during last year’s Arab Spring. I’m seeking require different tactics all the time.” Then there’s managing her in-box, where never a day goes The point was nuanced, a consummate politician’s answer, and by without some new global headache being added to the mix, one that inevitably provokes a question: Just what will be Hillary a headache that will inevitably require a Clinton phone call, or Clinton’s next role? a meeting, or a flight halfway around the world after having just

photograph by REUTERS by photograph murray nn e marya by i n fographic gotten off a plane. Asked how she approaches the job, Clinton of- Susan B. Glasser is the editor of Foreign Policy.

�o. reuters 41 June.2012 Tall Orders the made-in-china ceo

ILLUSTRATIONs by edel rodriguez

by Terril Yue Jones

A bold new brand of CEO is pushing the Chinese economy into the stratosphere. Exhibit A is Zhang Yue, who has noble goals and grandiose ambitions that include building a vertical version of the great wall

Z Zhang Yue fondly caresses the blueprints as he slowly flips GREEN PROFIT MACHINE through them, occasionally pausing to stare at a drawing as he explains his Zhang walks it like he talks it: The lights in new project. The plan seems impossibly ambitious: build a 220-story building, his office are dimmed, he drives a smart car, and has only one child. He constanltly the tallest in the world, in just four months by using the rapid-construction preaches environmental awareness to techniques his company has developed. Zhang, a slight but wiry and intense his employees, and all his buildings are man of 52, says “Sky City”—as he has dubbed it—can fix many of the world’s earth-friendly. pollution, congestion, transportation and even disease problems by com- pletely purifying the tower’s air. The 838-meter-tall building (10 meters taller than the Burj Khalifa in Dubai, currently the world’s tallest) will hold schools, a hospital, 17 helipads and some 30,000 people. It will, indeed, be a city in the sky. pany; and 3) an outsized ego to drive the CEOs have been there every step of the His dreams don’t stop there. Pinned up process and overwhelm the skeptics. way, and their vision has been what’s driv- on his office wall are plans for a project Chinese founder-CEOs such as Zong en the company.” even more audacious—an almost prepos- Qinghou of drinks-maker Wahaha (until These entrepreneurs are all known for terously massive building two kilometers last year China’s richest citizen), automak- thinking big… and then bigger. Zhang high. When asked to estimate the odds of er Geely CEO Li Shufu, and Huawei chief Yue’s Very Big Idea is to save the world this 636-floor giganto-scraper ever being Ren Zhengfei all have compelling, almost by conserving energy, reducing conges- built, Zhang responds without hesitation, mythic personae that color most facets of tion and pollution, and making homes “One hundred percent! Some say that it’s and offices much more healthful places sensationalism to construct such a tall by purifying stale air he says is responsible building. That’s not so. Land shortages are for 68 percent of human illnesses. “Each already a grave problem. There’s also the Last December, era had an issue of its time; each era had very serious transportation issue. We must Zhang erected a mission of its time,” Zhang says in an bring cities together and stretch for the sky interview in his headquarters on the out- in order to save cities and save the Earth. a 30-story hotel skirts of Changsha, the capital of south We must eliminate most traffic, traffic that in just 15 days. China’s Hunan province. “Our era’s prob- has no value! And we must reduce our de- lem is not productivity and it’s not wealth. pendency on roads and transportation.” It’s not even politics or democracy. In so- Tenaciously pursuing a lofty vision is their companies. “In these entrepreneur- ciety today—including China and all the a hallmark of Zhang’s success at Broad ial firms, the products and services are the countries of the world—we’re facing the Group, but also that of many entrepreneur- passions of the founder,” says Chris Mar- increasingly grave problem of environ- ial Chinese chief executives in these days quis, a professor of organizational behav- mental pollution.” of heady growth in the world’s second- ior at Harvard Business School who stud- Zhang, who ranks No. 186 on the Hurun largest economy. The recipe for success for ies Chinese business executives. “They Report of wealthiest Chinese, built his es- all these CEOs includes: 1) the vision and were employee No. 1, and now have hun- timated $1.19-billion fortune on industrial guts to seize upon a bold, even outlandish dreds of millions or billions of dollars in cooling systems and air conditioners. He idea; 2) a relentless drive to build a com- sales, and thousands of employees. These started his company on the back of some

�o. reuters 44 June.2012 changing ideas, prefer not to rock the boat, and would find the appellation “disruptive”—one embraced by so many western CEOs—to be anathema. “This kind of career path tends to be more system- oriented, in pursuit of steady growth for the organizations,” says Katherine Xin, a professor of the China Europe Interna- tional Business School in Shanghai. “They are more attuned to government policies, to the political, geopolitical environment. These CEOs tend to be promoted through a well-established ladder of career-path, step by step.” China Construction Bank, the world’s second-largest lender by market capital- ization, illustrates the SOE model well. Recent Chief Executive Guo Shuqing had stints as vice governor of Guizhou province and as China’s foreign currency regulator, and was appointed last year to become head of China’s stock market regulator. His favorite saying is, “Listen to both extremes and take the middle course,” reflecting his desire to please as many people—and irk as few—as possible.

patents for non-electrical air condition- to set up franchises so such buildings can ing, and later expanded into industrial- go up anywhere; he has seven in China so strength chillers and air purification sys- far, and is aiming for 150 around the world. tems that have been installed in Madrid’s airport, a U.S. military base, and throughout Europe and the Americas. The no-school CEOs The devastating 2008 earthquake in Si- chuan province that left more than 87,000 A new breed of Chinese CEO has people killed or missing was a turning sprung up in the wake of China’s economic point for him. Horrified at the widespread reforms since the 1990s. Entrepreneurial collapse of buildings, including many CEOs in China share few personality traits shoddily built elementary schools, he China’s Old-School CEOs or management techniques with those set out to design safer, environmentally SOE CEOs. They are keen to innovate and sounder buildings. He realized that by pre- Broadly speaking, there are two seize opportunity, are eager to leave a leg- fabricating building-floor slabs with pipes types of chief executive in China. The tra- acy, and are legendary for their tenacity. and wires built in, ready to be connected ditional one is the bureaucrat head of one Wahaha’s Zong leapt at an opportunity to once modules are in place, buildings could of the traditional state-owned enterprises develop a market presence in the beverage go up much faster, and with only 1 percent (SOEs)—mammoth, lethargic behemoths, business. Establishing a distribution chan- of materials discarded as waste. Last De- often monopolistic, including the telecoms nel deep into China’s countryside to supply cember Broad Sustainable Building, his operators, banks, insurance companies, oil remote towns with Wahaha products was construction unit, erected a 30-story hotel and steel producers. Their leaders are gen- one of his biggest accomplishments. He is in Hunan province in just 15 days. (A time- erally intelligent and capable managers, also renowned for his persistence, and his lapse video of the build has notched almost but most are Communist Party stalwarts willingness to delegate to his talented staff. 5 million views online.) Zhang next plans a who have served quietly in local and cen- Many of these entrepreneurial Chinese 50-story building, and perhaps a couple tral government agencies or ministries. CEOs were hardscrabble businessmen more with 30 floors while he drums up They are generally not looking to shake who started making and/or selling prod- funding for Sky City 220. He’s also hoping things up. They don’t have any game- ucts on a small scale—furniture, real es-

�o. reuters 45 June.2012 and flush with cash and ambition, but in- experienced outside of China. “They are very sensitive to their envi- Business Advice From ronments, very alert to new opportunities Chairman & CEO Mao and extremely flexible to pursue these new scattered between aphorisms about class war and insurrection in The opportunities,” says Xin. “And one of the Little Red Book ARE valuable Tips for Capitalist leaders. most important characteristics is that they are very pragmatic: ‘Whatever works.’” down at once, there is no melody.

“Grasp firmly” One can get a grip on something only when it is grasped firmly, without the slightest slackening. Not to grasp firmly is not to grasp at all. Naturally, one cannot get a Steve Jobs in a Smart Car grip on something with an open hand In his work and in his personal life, “Have a head for figures” Zhang Yue seems to have a desire to com- That is to say, we must attend prehend everything. Back when he was to the quantitative aspect of an art student he wanted to understand a situation or problem and Leonardo da Vinci’s Mona Lisa. An in- make a basic quantitative structor told him that to do so, he would analysis. have to paint it himself. So he did. What is work? Work is He is a hands-on manager. “Zhang Yue struggle. There are difficul- is really passionate about the research ties and problems in those and design of the products, and creating places for us to overcome objects,” says Harvard’s Marquis. “It’s and solve. We go there to about the ability to create these different work and struggle to over- products that have driven him. … That’s come these difficulties what he saw as his big role—interact- Place problems on the table Do not talk As for criticism, do it in good time; ing with designers.” Marquis knows that behind people’s backs. Whenever problems don’t get into the habit of criticizing arise, call a meeting, place the problems makes Zhang sound like the late Steve only after the event. on the table for discussion, take some deci- Jobs, and he thinks it’s a fair comparison. sions and the problems will be solved. Zhang preaches an altruistic, almost as- The Eight Points for Attention cetic life, and he is a sage and paternal are as follows: Don’t wait until problems pile up and figure to his workers, offering free dorm- cause a lot of trouble before trying 1. Speak politely. rooms and cafeteria food for all. Employ- to solve them. Leaders must march ahead 2. Pay fairly for what you buy. ees wear white shirts and dark pants, and of the movement, not lag behind it. 3. Return everything you borrow. 4. Pay for anything you damage. everyone’s nametag bears a motivational Learn to “play the piano” In playing the 5. Do not hit or swear at people. slogan, such as “Innovate Life Now.” piano, all ten fingers are in motion; it will 6. Do not damage crops. Zhang’s ID card says, “Wanshen Ziwo” not do to move some fingers only and 7. Do not take liberties with women. (“Perfect Oneself”). not others. However, if all ten fingers press 8. Do not ill-treat captives. The honor code rules at Zhang’s corporate campus—Broad Town, where some 1,000 of his 4,000 employees work. The tate, auto-parts—and added bits and piec- estate, construction, hotels, fiberoptics, supermarket register is unmanned; people es along the way. That’s how Du Kerong, software and other high-tech fields. The swipe payment cards. Dorm-room doors head of Tianjin-based Xinmao Group, charismatic but fiercely private Du sprang are always unlocked. All employees are built his closely held conglomerate. He to prominence in late 2010 when he made expected to abide by guidelines laid out started with a construction materials com- a billion-euro offer for a Dutch cable man- by Zhang in a booklet called Life Attitude pany which evolved into a real estate firm ufacturer, muscling in on an all-European of an Earth Citizen. Tenets in the book and eventually into the Xinmao Group, deal that had already been agreed upon. include, “Whenever possible, travel by which today employs more than 30,000 His bid failed, but it exemplified the style bicycle or public bus,” and “Unless abso- and has more than 100 subsidiaries in real of this new strain of Chinese CEO—brash lutely necessary, do not fly.” Broad em-

�o. reuters 46 June.2012 ployees are urged to use energy-efficient lightbulbs, buy more local and less packaged and frozen food, and “Most impor- tantly, only have one child. This will allow want our population to return to a level that the cisely what I earth can bear.” “That’s pre convention— Zhang leads by example. He and his wife have one son, who graduated last to do: break with year from Carnegie-Mellon University outrageously, without cost, in Pennsylvania. Zhang lives on campus without risk!” and drives a tiny Smart car—gas-guzzlers are scorned at Broad Group. “We have to transform!” he explains. “If China con- developed. Broad’s systems purify 100 per- sized management efficiency,” Zhang tinues down this path, by 2030 it will look cent of a building’s air, and Zhang proudly says. “I think these American and Euro- just like the U.S. Practically everyone will shows visitors that the particulate matter is pean management experts made contri- have a car, and China’s farmland will all be extremely low there. He has a large floor- butions to man’s productivity. That’s why parking lots and highways.” model purifier in his office in addition to I included them.” Asked what appeals to him about West- the central air purification—perhaps be- Zhang hopes the monuments that live ern business management techniques, cause he chain-smokes Kent cigarettes. on after him will be structures of a differ- Zhang scoffs. “I’m not going to talk man- ent kind. Can those monster sky cities re- agement,” he says. “Listen to me: Everyone ally be built? Could they withstand a 9.0 must learn integrity, to be an honest per- earthquake? “My guess is that it probably son. If people are honest you don’t need to is possible,” says Steven Moore, professor manage them. Where people are the most of sustainable design at the University of dishonest is concerning the environment. Texas. “But what’s missing from this con- It’s the over-consumption problem.” versation is a civil-society conversation That explains his war on waste. Life At- about how it is that we really want to live, titude of an Earth Citizen includes exhor- Statues Facing West and what will it take technologically to do tations not to buy disposable products or that. Just because we can build two kilo- books or newspapers that will be quickly The recent Steve Jobs biography is meters [up] doesn’t mean we should.” discarded. Wasting food is a cardinal still displayed in bookstores in China and Zhang insists that his towering towers sin. One employee ruefully recalls being touted on the occasional bus stop ad, but are the solution to Earth’s converging cri- fined 200 yuan for not finishing his din- Chinese executives rarely look to the West ses of land, overpopulation, pollution and ner—his picture was also posted in the for business philosophy. Japanese execu- transportation. “Many people will hesitate, cafeteria and he was banned from eating tives revere the teachings of quality mas- and say, ‘You broke free from convention, there for two days. ter W. Edwards Deming and management but you’re taking on how much risk and at Employees say all these rules have guru Peter Drucker, but there are no such what cost?’” he says. “No! That’s precisely made them more conscious of conserv- widely admired figures among Chinese what I want to do: break with convention— ing soap, recycling plastics and shying executives. outrageously, without cost, without risk. away from taxis. “We need to adopt rules, Zhang, however, has studied the great Everything Broad does is breaking with but it’s good for me, like to save hot wa- writers and intellectuals of Western cul- convention. My buildings will be extremely ter, save energy, be honest,” says Charles ture, and in Broad Town he has erected stable, as solid as a mountain.” Qiang, 26, who has been working at Brand 43 statues honoring some of his favorites. Perhaps it is not surprising that in this for three years. “I could learn how to be a Confucius, Aristotle, Socrates, Plato and land where emperors long ago did the man, and how to be a gentleman.” Pythagoras stand with Abraham Lincoln, seemingly impossible by building the Office lights are turned off during lunch- Winston Churchill and Robespierre near Great Wall over thousands of miles of roll- time, so any employees who stay at their Broad’s Versailles Palace-like Economic ing mountain ranges that another Chinese desks must work by natural light. Those Management Institute. Also on pedestals leader plans even more extraordinary mon- desks, as well as the office shelves, are are inventors da Vinci, James Watt and uments in another direction—up, instead of made of wood recycled from the boxes in the Wright brothers. There is the Chinese out. If Zhang Yue’s Sky Cities are erected, which Broad Sustainable Building receives poet Li Bai, as well as¬Balzac and Shake- they will be the towering legacy of a CEO copper tubing from Japan. Zhang’s office is speare. Napoleon and Deng Xiaoping whose ambition was not to keep the world dim, with remote-controlled curtains that stand vigil nearby, as do Alfred P. Sloan, out, but rather to save it from itself. block heat-creating sunlight and the lights Jack Welch and inventor/consultant Fred- are off. He frequently checks an air-purity Terril Yue Jones is xxxxxDunt aut occus minimet pari- erick Winslow Taylor. “Sloan, and Taylor, beatem sunt la nonsequam, sanditaquae non plab ium monitor built into a cellphone his company and Jack Welch were good; they empha- ium conectum faccupta doloreste rest escid ut occum

�o. reuters 47 June.2012 Investing

photographs by robyn Twomey / Corbis outline �o. Marc Andreessen invented the Internet Killing as we know it. Them Now he’s trying to Softly reinvent venture capital. by Jonathan Weber Twitter, along with a startling volume and variety of smaller deals. Venture investors play a singular role in the unique business culture of Silicon Valley, and the great ones are powerful and revered figures in their own right. But Andreessen Horowitz as- pires to create a new type of venture firm, one that puts the technical founder in the driver’s seat and provides a host of services beyond mere dollars. As with any startup, success is hardly assured. It’s rare that new firms break into the top tier of venture capital, and rivals grumble that Andreessen Horowitz is moving recklessly fast and will never be able to generate the fat investment returns that the blue-chip venture firms often achieve. The specter of the great dot-com A bust of 2000 also looms large. For now, though, Andreessen is in his element, indulging his endless intellectual curiosity even as he orchestrates deals and proselytizes about how “software is eat- As the embodiment of all that is great ing the world.” With Horowitz, he has an intimate business part- and good about Silicon Valley, Marc Andreessen is surprisingly nership that, by all accounts, is exceptionally effective. He works unassuming. He is the earnest, clean-cut Midwestern boy made near Stanford University, out of a gleaming office complex on good, the state school grad who built a better mousetrap—the Web Sand Hill Road that was built by his wife’s father, a prominent real browser—and saw the world beat a path to his door. If being on the estate developer. (His wife, Laura Arrillaga-Andreessen, teaches cover of Time magazine at age 24 ever went to his head, he didn’t philanthropy at Stanford and is the founder of two nonprofits; the show it. Andreessen simply did what great entrepreneurs are sup- family foundation is just next door.) posed to do: start new companies, again and again. His subse- “When we started this, people asked, ‘Why are you shifting to quent ventures never achieved the notoriety of his first, Netscape the dark side—why not start another company?’” Andreessen re- Communications, but they put to rest any suspicions that his early calls. “It feels like I’ve been in training my whole career to do this. triumph was a fluke. I don’t think I’d be qualified to be an investor if I hadn’t spent the Over the years, Andreessen has earned great respect around last 20 years trying to build these companies myself.” Silicon Valley as a true visionary who understands where the technology world is going. He sits on the board of leading companies such as Facebook, Hewlett-Packard, and eBay, and serves as a mentor to up-and-coming entrepreneurs, notably Facebook CEO Mark Zuckerberg. And he’s a nice guy to boot, unpreten- tious and always excited to engage intellectually on technology, finance, company creation, and just about any other topic. What Andreessen has not done, though, is the one thing required for admission to the top tier of the Silicon Valley pantheon: build and lead a great company that defines the technology landscape for generations. Think of Apple, Hewlett-Packard, Intel, or Micro- soft, and you will also conjure up the names that head any list of A great technology industry leaders: Steve Jobs, Bill Hewlett, David Packard, Bob Noyce, Andy Grove, Gordon Moore, and Bill Gates. Andreessen’s response to such observations is that he has no At 6 feet, 5 inches tall, with a gleaming desire to run a big company. “I’m not psychologically wired for bald pate, Andreessen has a commanding physical presence, it,” he says. “All the people and process aspects of it, I can force but his personal style is anything but domineering. His default myself to do but I don’t really like. When I was in management I demeanor is cheery and chatty; he carries his fame lightly and never really loved it. I found it very stressful.” But even though doesn’t much like to talk about it. What he does like to talk about, he might sometimes claim to like nothing better than curling up though, is his philosophy of entrepreneurship and his detailed with a good book, Andreessen still has big goals. One might even theories about the nature of Silicon Valley and what’s necessary say he is out to show that the very particular type of Silicon Valley for a startup company’s success. role-player that he embodies—the entrepreneurial technologist Andreessen begins a long conversation one recent afternoon whose strength is vision rather than management—can be just as by recalling a seminal story about the early days of Silicon Valley, influential as the Fortune 500 CEO. an Esquire magazine article by Tom Wolfe entitled “The Tinker- The vehicle of his ambitions is a venture capital firm, An- ings of Robert Noyce.” “When I discovered that piece it was really dreessen Horowitz, which he launched in 2009 with his longtime eye-opening to me,” he recalls. “It was the story of the Midwest- collaborator, Ben Horowitz. In less than three years, Andreessen ern values transplanted to California.” In his rapid-fire speaking Horowitz has shaken up the venture world by raising $2.7 billion style, he lists the Midwestern virtues—practicality, self-reliance, and adopting an unconventional approach that includes big, ex- hands-on work, egalitarianism—and then the promise that Cali- pensive bets on relatively mature companies like Facebook and fornia represented for someone raised in that culture. “Califor-

�o. reuters 50 June.2012 nia, a new frontier, new horizons, entrepreneurism, the gold rush, some money, that was high on my list of goals,” he told me. we can do anything, we can create things from scratch, we don’t “The minute I realized it was possible to build a business I said, have to be held back by the conservatives in the rest of the coun- ‘Oh yeah, that’s what I want to do.’” What he didn’t want to do, try—for 150 years people have been coming to California to do though, was actually run a business. “The people shit,” as he new things.” He notes that Philo Farnsworth, the inventor of tele- once called it, was not his thing. “I’m more of an introvert and vision, was also a Midwestern boy who moved to San Francisco more of an abstract thinker. Reading and learning and talking to change the world. “When I read about those guys I see a lot of to people and thinking and writing—all of the intellectual side myself. I came to California and I was like, wow, you can do a lot of it I love more than the emotional side.” It might seem a bit more here. What you don’t learn in the Midwest is that you can of a paradox, then, that Andreessen Horowitz as a firm believes really have an impact.” strongly in the idea of the founder-CEO. The traditional Silicon Andreessen’s move west is a well-known tale. He’d studied Valley model is that the visionary entrepreneur starts the com- computer science at the University of Illinois at Urbana-Cham- pany, and if it is successful, adult supervision then arrives in the paign and led the group that created Mosaic, the first real Web form of an experienced CEO. But Andreessen points out that a browser, a software program that made the then-nascent Inter- large percentage of the truly great companies—IBM, Hewlett- net relevant for the masses. Packard, Apple, Microsoft, Upon graduation, he went Oracle, and now Facebook— to Silicon Valley to look for a were run by their founders job, and fielded a handful of for a long time. inquiries from top-tier tech- Andreessen himself is the nologists who recognized classic technical founder, the the possibilities in what he person who carries the vi- had done. One of those who sion, and, crucially, drives got in touch was Jim Clark, the product strategy, which as founder of computer graph- Horowitz notes is a function ics pioneer Silicon Graphics, that is often misunderstood. and before long the Young In technology, product strat- Turk and the wizened indus- egy is everything, and execut- try veteran had joined forces ing it well requires an acute to start Netscape. sense of the industry land- The launch of Netscape in scape and how it is evolving, 1994 marked the beginning the needs of customers, and of the Internet era as we know the technical and organiza- it, but it’s easy to forget that tional capabilities of the com- little of what happened sub- pany. If you have the vision- sequently was foreseeable. ary, you can do pretty well Big telecom, media, and soft- as long as you have someone ware companies thought the else who can actually run the Internet was, at best, a useful business. In Andreessen’s utility for scientists. The in- case, that person is Horow- cipient “information super- itz. “We have complementary highway” would be a closed skills,” says Horowitz. “I’m system that they would con- not a technology visionary trol. “Interactive television,” in his class, but on how an to be delivered by the cable Venture investors organization works and is ef- companies, was all the rage. fective, how you build a com- “Everybody thinks the In- play a singular role pany—I’m more intuitive and ternet was obvious, but that more knowledgeable.” was not the case at the time,” in the unique business The two men have known says Horowitz, who first met each other for 17 years and Andreessen at Netscape. culture of Silicon did some investing together— “Nobody saw it coming. But “beta-testing” the concept, Marc saw it as a college kid, Valley, and the great as Andreessen says—before and figured out how it would they started the firm. Togeth- become mainstream.” ones are powerful er they developed the model Andreessen says his per- for Andreessen Horowitz, sonal goals were clear enough: and revered figures which involves providing a “I didn’t grow up with a lot of broad suite of services to the money, so I was going to make in their own right. companies in their portfolio. �o. reuters 51 June.2012 Unlike most venture firms, Andreessen Horowitz has a professional staff of headhunters, finance experts, public relations pros, and corporate sales gurus who can help young companies fill the inevitable gaps in their expertise and introduce them to the right people. One of the inspirations for this structure, interestingly, was Creative Artists Agency, the Hollywood talent agency where Michael Ovitz, whom Andreessen considers a mentor, pioneered O the idea of a full-service firm that packaged all of the talent necessary to make a movie. At Andreessen Horowitz, the decision of whether to invest in One might think that when it comes to a particular deal is made not by a vote of the partners (there are raising investment capital, everyone’s money is equally green. But now six), but rather through a formal debating process in which in Silicon Valley that is most emphatically not the case. There are people are assigned to be critics or supporters of a particular scores of venture capital firms, but just a handful are considered top- point of view. Andreessen is always persuasive, say those who tier. For the entrepreneur, having a blue-chip name behind the com- have engaged with him, but as a matter of principle does not pany is a huge advantage, as it confers instant credibility and thus impose his own view. “He wants to make sure that he is heard, makes it much easier to recruit good employees, convince early cus- and that his point of view is considered, which is different from tomers, network with the best and brightest, and raise more money him having to have his way,” says Eric Vishria, cofounder of a when the time comes. The mirror of this dynamic is also critical: in startup called RockMelt, in which Andreessen has invested. “He order to be in the top tier, venture capitalists need to be able to invest always respects a counter-opinion.” With Horowitz, debate is a in the best entrepreneurs and get in on the best deals. The truth is, daily sport. “It’s hard to de- if you have already done a suc- feat Marc in an argument,” cessful startup and you have a Horowitz says with a smile. good idea, or if you are an ob- “Sometimes I’ll just say, ‘I’m viously brilliant technologist losing this argument but I’m and you have a great idea, the right, and you just have to venture capitalists will come trust me on that.’” calling. What results is a not- Both men have a friendly so-virtuous circle in which the mien that masks the excep- top-tier firms get all the best tional aggression and com- deals, which enables them to petitiveness that’s critical for remain top-tier. Almost all the business success. These days, money that is made in venture it is Horowitz who takes cen- investing comes from a hand- ter stage in any public spat, ful of investments. as with a recent incident in The key to starting a big-time which he responded to critics venture firm, then, is to some- who said Andreessen Horow- how be a big-time venture firm itz had mishandled its invest- right out of the gate. It helps ment in a startup called Insta- quite a lot to have Andreessen gram, which was acquired by in your name (Horowitz said Facebook in April for a shock- he had to convince Andreessen ing $1 billion. “Despite Insta- that his name should go first, gram’s awesome performance for branding reasons). Hav- and our monstrous return, a ing Andreessen in the name, number of articles have come and having the large fund that out criticizing us for not mak- the Andreessen name helped ing even more money on our raise, also enables the com- the thoughtful investor investment,” Horowitz wrote Venture capitalists have a reputation for being cowboy gunslingers; pany to elbow its way into big- on the firm’s blog. “Ordinar- Andreessen takes a more considered approach. time, reputation-building deals ily, when someone criticizes like Facebook and Zynga and me for only making 312 times Groupon and Twitter, albeit at my money, I let the logic of their statement speak for itself.” very high prices. Andreessen Horowitz might triple its return on the His original post, Horowitz says, was “more aggressive” than 2010 investment in Facebook, as opposed to the 1,000 times return what was ultimately published, but Andreessen “toned it down that Accel Partners stands to reap on its 2005 Facebook investment. a little.” What was perhaps most surprising was that the post All the services that Andreessen Horowitz provides—and the appeared at all. But being more visible, more vocal, and more aggressive public relations strategy that has helped the firm build blunt than most venture capitalists is also part of Andreessen its visibility—are also designed to make the firm an appealing

Horowitz’s plan. choice for entrepreneurs who have a choice. And then of course J by photograph

�o. reuters 52 June.2012 there is Andreessen himself. “Working with Marc was an intrigu- The launch of ing notion because of the kind of leader he is, and that he was a hard-core entrepreneur himself,” says Osman Rashid, who start- Netscape in 1994 ed the successful textbook rental company Chegg and was seeking funding for his new education startup, Kno, around the time marked the beginning Andreessen Horowitz was launched. Chegg had been backed by Kleiner Perkins, and Rashid had little doubt that he could again of the Internet era get funding from a top-tier firm. He was introduced to Andreessen by one of Chegg’s angel as we know it, but investors. “The idea of working with an entrepreneur turned investor was extremely appealing,” says Rashid. Still, Andreessen it’s easy to forget Horowitz was a new and unproven firm, so it wasn’t an obvious choice. But Rashid was persuaded almost instantly. “It was 15 that little of or 20 minutes into the meeting when I saw that this was a different kind of meeting, based on the questions they were asking,” what happened he recalls. “They were the kind of questions I would have asked. It became clear to me that this would be a different kind of relationship than the typical investor-entrepreneur relationship.” subsequently Andreessen Horowitz has now invested more than $30 million in Kno, and Rashid’s enthusiasm is unabated. “I can go to him and was foreseeable. say, ‘Marc, I want to tap into this big beautiful brain of yours.’ He really helps us think through the strategy.” kers, and they have a structural position of influence.” Andreessen Horowitz has made more than 100 investments. People who know Andreessen always speak of his intelligence Other venture capitalist firms, while griping that Andreessen and his track record of seeing around corners. Netscape aside, Horowitz is stealing their deal flow and driving up prices for ev- his second startup, Loudcloud, anticipated the cloud computing eryone, have now begun investing more heavily in recruiters and revolution, and his third, Ning, was to serve the nascent explo- other professional staff too. sion in social networking. When he declares that any talk of a new tech bubble is wrongheaded, and that in fact we’re still at the front edge of the changes to be wrought by advanced software and vir- tually unlimited computer processing and communications capabilities, it’s hard to dismiss him as an engineer of hype. But what Larry Summers, the former U.S. treasury secretary and now an adviser to Andreessen Horowitz, calls his “capacity for aggressive commercial focus” may be less obvious but equally important. Building companies that have a big impact on the world, and making lots of money in the process, is more than a blood sport in Silicon Valley, after all; it’s the very essence of the place. Venture capitalists usually possess a cold-blooded side that enables them P to unplug the dreams of an entrepreneur the minute the business dynamics don’t look right. That part of the game doesn’t seem an easy fit for an intellectual Midwesterner like Andreessen, but he’s People in Silicon Valley like to talk thought it all through more carefully than one might think. about the “ecosystem” that makes it unique. Technology is driven At dinner, he sips his Scotch delicately, a measure, perhaps, forward and money is made by a continual process of combining of his thoughtfulness in all things. Honesty and directness—that and recombining talent—technical talent first and foremost, but Midwestern thing again—can provide a simple basis for the tough also financial, legal, design, marketing, and sales talent. A com- decisions. “It’s better to stab someone in the front than to stab pany like Facebook emerges, people enjoy great personal success, them in the back,” he says. “There’s a big difference.” He’s also and then they leave and start their own companies. An ecosys- hardened by some dark days—at Loudcloud, which almost did tem, by definition, doesn’t have a leader. But it does have what not survive the dotcom bust, and at Ning, which didn’t fulfill its one might call agents of fecundity, who feed nutrients across the promise, and even at Netscape, ultimately crushed by Microsoft landscape. The equivalent engineering metaphor would be the and sold for scrap to AOL. In fact, for all his accomplishments and network, and Andreessen likens himself to a hub on a network, the enormous respect they command, Andreessen has yet to have with the definition of an effective hub being one that “adds value an unqualified success. If he can prevail with Andreessen Horow- to every node on the network.” Bob Sutton, a professor of man- itz—establish the first new top-tier VC firm in a generation and agement science and engineering at Stanford University, agrees: nurture some of the companies that lead the new digital revolu- “Andreessen in particular and venture capitalists in general are tion—he may just define a new type of business leadership. in so many overlapping networks that they are in a position to see

photograph by J by photograph and understand things, and make connections, and act as bro- Jonathan Weber is the West Coast Bureau Chief for Reuters.

�o. reuters 53 June.2012 Industry

Some of the most important breakthroughs in the automotive industry would have died in committee if it hadn’t been for a few extraordinary leaders with drive and vision

illustration by Nick Trifunovic

�o. reuters 54 Jan.2012une.2012 CZARS

by Paul Ingrassia

�o. reuters 55 Jan.2012 Had Ford attempted such a scheme a century later he would have found himself making license plates in prison instead of making cars.

gation that continues to this day. Determination and self-belief have fos- Then there’s John Z. DeLorean, whose tered hubris among automotive innovators 1970s effort to build an “ethical sports over the years, sometimes with disastrous car” in Belfast collapsed amid financial results. But history shows that they’re also overreach. Most guys would have tried to the critical ingredients behind the most rescue their company with an IPO or junk spectacular automotive successes. bonds, but DeLorean tried selling cocaine. Though he was acquitted at trial when a jury judged that the FBI entrapped him, enry Ford his career and his company were finished. had to fight to build the Model T, even But both Cole and DeLorean enjoyed The Model T, perhaps the most revolu- within the company that bore his name. enormous success before their signature tionary product ever made, was hardly a The Russian immigrant engineer who saved the Chevy Corvette bucked the General Motors brass to do it. Lee Ia- cocca and Hal Sperlich built the minivan at Chrysler only after the vehicle—and they—had been rejected at Ford. Those three cars were not just huge commercial successes—each also placed its stamp on American life, much as the iPad has today. Two were utterly practical while the third was ostentatiously stylish, but what they all had in common is this: The people who created them overcame formi- dable obstacles to put them on the road. Unblinking determination is a common theme in the biggest American business success stories, such as Ray Kroc’s damn- the-odds effort to build McDonalds and Steve Jobs’ audacity in reshaping Apple. Luck and timing are involved too, but they aren’t enough. The special sauce (apologies to Kroc) is a strain of determination re-birth of a nation that blends self-belief with belief in the “The theory of the Anglo-Saxon home became so warped that it never recovered,” is how Steinbeck commercial potential of a product. described the pervasive influence of the Model T on early 20th century America. Determination and self-belief sometimes goes awry in the auto industry, as in failures. Cole created a small-block V8 no-brainer to the people supplying capital other arenas. Exhibit A is the Chevrolet engine that powered the legendary ’57 to Henry Ford when he proposed it. It was Corvair, introduced in 1960 with an in- Chevies and was a key figure in the suc- the world’s first “people’s car,” but with novative air-cooled, rear-mounted engine cess of the Corvette. DeLorean created an initial sticker price of $850 wasn’t the that produced 29 miles a gallon, more than the Pontiac GTO, which launched the most affordable car of its day. That distinc- double most cars of its day. Despite the muscle-car craze of the 1960s and still tion went to the $500 Brush Runabout, d S huster a n d weight concentrated in the car’s rear, Ed invokes strong emotions among one- which had a chassis, axles and wheels Cole, the Corvair’s creator, stoutly rejected time boy racers. A sign on a restored GTO made of wood. The Runabout’s detractors putting a weight-stabilizing bar under the displayed in suburban Chicago a few quipped: “Wooden axles, wooden wheels car’s front end. The result was a plethora of years ago declared: “This car was built in and wouldn’ run.” In contrast, reliability accidents and a muckraking 1965 book by honor of Almighty God, in memory of my made the Model T an overnight success— an unknown lawyer named Ralph Nader: dad, and of my fellow hometown veter- quite unlike the man who built it. Unsafe at Any Speed. The Corvair scandal ans who did not have the chance to live Henry Ford was the proverbial late

prompted a boom in product-liability liti- these memories.” bloomer. Raised on a Michigan farm, he S imo n of courtesy photographs:

�o. reuters 56 june.2012 Had Ford attempted such a scheme a century later he would have found himself making license plates in prison instead of making cars.

left home at 16 to work in Detroit’s ma- that a horse-drawn vehicle will go.” But described a man who named his Model chine shops. By 1893, at age 30, he had many of his other investors saw more profit T the Teddy Roosevelt because, he ex- become chief engineer at the local electric potential in big, expensive cars aimed at plained, it was the “Rough Rider.” Henry company, but his mind was turning to the luxury buyers. As the debate grew intense, Ford preferred another joke, the one newfangled automobile. He started tin- Ford and his allies played hardball—they about the farmer who asked to be buried kering in his shed (like Steve Jobs in his ga- formed their own company, Ford Manu- in his Model T because it had gotten him rage 80 years later) and in 1896 produced facturing, to make and build parts for Ford out of every hole he’d ever been in. his first car. Three years later he got back- cars, and charged outrageously high prices The car was so popular that Henry Ford ing from local investors to start the Detroit for the parts, plunging Ford Motor into red started exploring ways to boost produc- Automobile Company, but it went broke ink while keeping Ford Manufacturing’s tion. He found inspiration in the slaughter- in less than two years. In 1901, he raised profits for themselves. Had Ford attempt- houses of Chicago, which were basically money to start the Henry Ford Com- ed such a scheme a century later he would big disassembly lines. In 1913 Ford started building on a moving assembly line. The efficiencies were so great that in 1914 the company was paying factory hands $5 for a day’s work, more than double the prevailing wage. In just six years Henry Ford had put America on wheels, invented mass manufacturing and spawned America’s middle class. He continuously increased manufacturing efficiency and passed the savings on to consumers. In 1921 Ford’s market share topped 60 percent. The Model T’s influence on early 20th- century America was pervasive. “Most of the babies of the period were conceived in Model T Fords and not a few were born in them,” author John Steinbeck later wrote. “The theory of the Anglo-Saxon home became so warped that it never quite recovered.” In America, personal mobility became a cornerstone of personal freedom. But as the Roaring Twenties unfolded, A painful vetting process many Americans wanted style and status, The original Corvette looked great, but was riddled with problems—from a leaky roof to a gutless not just a low price. “Slowly at first, then acceleration—and was mocked as a car mainly suited “to impress the hillbillies.” more rapidly, people passed up the fliv- ver for more ornamental machines,” la- pany—he was one-sixth owner and chief have found himself making license plates mented the Bismarck Tribune. In May 1927 engineer. But he soon squabbled with his in prison instead of making cars. But the Henry Ford conceded that his car had investors and quit. By age 38, Ford had dissident investors capitulated, selling fallen behind the times, and the Model T formed two car companies and lost both. their stock in Ford Motor and leaving was discontinued. Pretension trumped He vowed that his days as an employee Henry Ford with a 58 percent stake. practicality, and “more ornamental” au- were over. He assembled another group of In October, 1908 Ford Motor intro- tomobiles lay in America’s future. d S huster a n d backers and on June 16, 1903 formed the duced the Model T, so named because it Ford Motor Company. Within 10 months followed Models N, R and S. It used a new it sold more than 650 cars. Finally, Henry kind of steel—vanadium—that was lighter Ford was successful, or so it seemed. and stronger than traditional carbon steel. In 1906 he wrote to an automotive mag- Other cars of the day had heavy frames to nineteen fifty-three was a pivotal azine describing his vision of “a light, low- withstand America’s primitive roads, but year in America. The Korean War ended. priced car with an up-to-date engine… ca- the agile Model T flexed with the road, a Elvis Presley started recording music.

photographs: courtesy of S imo n of courtesy photographs: pable of carrying its passengers anywhere blessing with certain drawbacks. One joke Hugh Hefner started Playboy. A real-life

�o. reuters 57 june.2012 Duntov argued that a four-seat Corvette would be like a sprinter carrying a backpack. playboy, John F. Kennedy, went to the U.S. who gets pushed in the subways, elevators, blend of immigrant English and corpo- Senate, prompting a Saturday Evening Post department stores, cafeterias, [and] lives in rate-speak, he pleaded for the Corvette’s headline: “Jack Kennedy—The Senate’s the same house as the next fellow,” he told life. “If Ford makes success where we Gay Young Bachelor.” the Society of Automotive Engineers. “The failed, it may hurt,” Duntov wrote. “With Americans who had been raised through ownership of a different car provides the aggressiveness of Ford publicity, they the Depression and a few wars were finally means to ascertain his individuality.” In his may turn the fact to their advantage… letting loose. It was the perfect year, then, own awkward way, Duntov had expressed We will leave an opening in which they for Chevrolet to launch America’s first the vast potential of the Corvette. can hit at will. ‘Ford out-engineered, out- true sports car, the Corvette. There was Nonetheless, European sports cars were sold, or ran Chevrolet’s pride and joy off just one problem: The Corvette looked the market.’ In the bare-fisted fight we are great, but it wasn’t a great car. Its anemic in now, I would hit at any opening I could six-cylinder engine accelerated with more find and the situation where Ford enters hope than horsepower, and the indifferent and where Chevrolet retreats, it is not an two-speed automatic transmission didn’t opening, it is a hole!” help. The convertible top leaked, so some It was a brash memo, even for a man early owners drilled holes in the floor to let who had survived the Russian Revolu- rainwater drain out. tion and escaped the Nazis. But the bosses By late 1954 the Corvette’s sales had relented. The Corvette’s leaks got fixed stalled, and General Motors was con- and in 1955 it got a V8 engine that was templating killing the car. Rumors of its lighter than the Thunderbird’s, but just as impending demise reached Zora Arkus- powerful. In 1957 the Corvette got a fuel- Duntov, a middle-aged, middle-manage- injected engine that produced nearly 100 ment engineer at Chevy. His journey to hp more than what it had under the hood that job at GM had been adventuresome. two years earlier. That March, a Corvette Duntov was born in 1909 to Russian gave Maserati a scare at the high-profile Jewish parents and raised a Bolshevik auto races in Sebring, Florida. “The seeds in St. Petersburg, where he learned to of a storybook tale were sown,” gushed struggle early in life. As a boy he once Sports Illustrated. “A Detroit sports car, of Russian sly brandished a pistol to threaten a doctor all things… contending in a world champi- Duntov wasn’t deferential—he once who was refusing to come treat his ailing waved a pistol at a doctor reluctant to make onship race.” mother. The doctor changed his mind. a housecall—so when he heard the In 1958 Ford added a back seat to the Corvette was to be axed, he took his argument By the mid-1930s Duntov’s parents had straight to the top. Thunderbird, sharply boosting sales. GM been posted to Berlin as Soviet trade at- was tempted to do the same with the Cor- tachés. Later in the decade he moved to clearly superior to the Corvette, and crit- vette, but Duntov argued that a four-seat Paris, where he married Elfi Wolff, a Folies ics wrote withering reviews. “The Austin- Corvette would be like a sprinter carrying Bergère dancer from a well-heeled German Healy will eat it alive and so will the Jag- a backpack. He got a break when GM Pres- Jewish family. When the Germans overran uar,” wrote one, adding that the Corvette ident John Gordon had to be pulled out of Paris in 1940, the couple fled across France was mainly suited “to impress the hillbil- a four-seat Corvette prototype because and Spain to Portugal, where they caught a lies.” By the fall of 1954 more than 1,000 the back seat was so small. boat for New York. He started a small en- Corvettes, one-third of those made, lan- It was just one more battle in the war gineering company, specializing in compo- guished unsold on dealers’ lots, like or- Duntov fought for three decades to keep nents for high-speed roadsters. phan puppies waiting for an owner. the Corvette from becoming a bloated bou- d S huster a n d In January 1953 Duntov visited GM’s When word spread that the Corvette levard-barge, as the Thunderbird eventual- Motorama display at the Waldorf-Astoria would be discontinued, Duntov by- ly did. Through sheer determination and a Hotel, where the company unveiled the passed GM’s rigid chain of command and willingness to buck his bosses, a Bolshevik Corvette. He was so enthralled with the penned a memo to Chevrolet chief Ed boy saved the great American sports car. car that he got a job at GM, starting in De- Cole. He warned that with Ford on the “Zora Arkus-Duntov is so firmly iden- troit on May 1. Four months later he gave a verge of launching its own two-seat road- tified with Corvettes they could bear his speech that would define his life’s work. “In ster, the Thunderbird, a retreat by Chev- name,” wrote Car and Driver in 1962.

our age… the average person is a cogwheel rolet would be disastrous. In an awkward When Duntov died in 1996, columnist S imo n of courtesy photographs:

�o. reuters 58 june.2012 soccer-mom moguls Iacocca (left) and Sperlich knew baby-boomers were now painting the nursery rather than painting the town, and needed a car that suited their suburban lifestyle.

George Will wrote: “If you do not mourn irritated by Sperlich’s persistent lobby- minivans debuted, Chrysler paid divi- his passing, you are not a good American.” ing for it. In 1976 he fired Sperlich, and dends to stockholders for the first time in two years later he fired Iacocca. Both men five years. By February 1986 the compa- landed at Chrysler, and couldn’t have ar- ny’s stock had surged above $48 a share, rived there at a worse time. a 1,500 percent increase since the dark In 1980, the ailing company was saved days of 1980. Minivans quickly replaced When Lee Iacocca and Hal Sperlich only by Congress’s Chrysler Loan Guaran- station wagons as America’s family ve- launched the Ford Mustang in 1964, they tee Act. That fragile lifeline gave it enough hicle of choice, thanks to their copious caught America’s baby-boom generation cash to launch the K-cars—the Dodge Aries interiors. A Kansas City homemaker told coming of age. By 1984 both men were at and Plymouth Reliant—in 1981. The huge- the local newspaper that she shuttled her Chrysler, and the boomers were entering ly successful K-cars were built on front- kids among doctor appointments, piano a new phase of their lives—they had gone wheel-drive platforms, which Ford didn’t lessons and soccer games, making the to college, gotten haircuts, taken showers, have. They were lighter and roomier than minivan the family’s home-on-wheels gotten jobs, gotten married and started rear-drive cars because they didn’t need a between 3 and 7 p.m. “My kids eat in the families. Not always in that order, of course. bulky drive shaft. The K-car platforms also car, they change clothes in the car, they do Thus the stage was set for Iacocca and provided the ideal chassis for the vehicle their homework in the car,” she said. Sperlich to capture the mood of America’s Sperlich had been pitching for years. SUVs have since replaced minivans in largest generation once again. The two The cover of Car and Driver in May 1983 many suburban driveways, but Sperlich’s men responded with a totally new type of showed five members of the Detroit Pistons “mini-max” remains an enduring symbol vehicle. Like the Mustang, this one would basketball team posing in front of a new of American family life. It also speaks to help define the lifestyle of a generation, or Chrysler to be launched that fall. It had a the sheer determination sometimes re- at least the lifestyle of baby-boomers now short hood and a large passenger compart- quired to push an innovative idea through painting the nursery instead of the town. ment. The headline read: “A Van for All a big corporate bureaucracy. Iacocca once d S huster a n d Ironically, the Chrysler minivan could Seasons,” and dubbed it a “minivan.” said Sperlich approached product develop- have been Ford’s. Sperlich pitched it to “Picture a van that is three inches short- ment as if it were hand-to-hand combat. CEO Henry Ford II in the early 1970s as er, ten inches narrower and fifteen inches Sperlich took that as a compliment. the “Mini-Max”—minimal exterior length lower… than the next-smallest [van] on but maximum interior space, and deemed the market,” the magazine wrote, “yet Paul Ingrassia, who won a Pulitzer Prize in 1993 for his it the perfect vehicle for families in an era has enough room for the Detroit Pistons coverage of Detroit’s auto industry, is deputy editor- and their luggage… ” in-chief of Reuters. This article is adapted from his new of high gas prices. But Henry II deemed book, Engines of Change: A History of the American photographs: courtesy of S imo n of courtesy photographs: the idea too risky and grew increasingly In February 1984, five months after the Dream in Fifteen Cars, published by Simon & Schuster.

�o. reuters 59 june.2012 Biography

read epic poems or romances, subjects in a didactic manner; tales of gods and heroes and they are attracted to the com- their mysterious ways. plexity of depicting a leader If it’s true that biographies in his or her natural habitat. of great leaders constitute “I don’t directly try to turn Leadership a higher form of leadership my biographies into how-to literature, several questions re- books,” insists Walter Isaac- main: How do the biographers son, author of several biog- By the Book deal with the subject? Do they raphies, including last year’s take lessons from leadership blockbuster Steve Jobs. On a you can’t get there from here books or leadership theory? leadership scale from 1 to 10, And do they agree—as many of Isaacson says Jobs should be the how-to books maintain— given a 10 as perhaps the most that leadership lessons can be inspiring technology leader of

by James Ledbetter

Every year publishers release dozens, if not hundreds, of books about leadership. These books range from how- to books written by tenured

professors of management C o n gress of L ibrary . S . theory at Harvard Business U School to inspirational tracts . A rmy/ . S .

generated by motivational U / speakers and longtime high etkey (margaret T hatcher) (margaret L etkey oy school football coaches. While R it’s evident that an eager tive wisdom from reading biog- distilled and presented inde- all time, adding, “But I’d take audience exists for leadership raphies of great leaders, people pendently of the leaders them- away two points for being so books, how useful could they who were not only influential selves, and transferred from abrasive.” And that’s the point: actually be? After all, if it were but who actually succeeded in one field of accomplishment to biographical subjects “are real possible to become an effec- changing the world. Biog- another? Seeking instruction, people who have strengths tive leader simply by reading raphies, moreover, have the I turned to three distinguished and flaws,” says Isaacson. a stack of books, then presum- advantage of being real stories biographers for guidance. Here “Those of us who write biogra-

ably there would be a lot more and, unlike leadership self-help are a few lessons I learned phies of leaders understand R euters/ J obs), (steve W hite K imberly good leaders in the world. books, are often composed by about leadership lessons. that it’s a much richer topic REUTERS by photograph hoeweler; michael by Assuming it’s possible to excellent writers. They appeal than can be synopsized into a learn leadership lessons from a to a much broader class of Biography isn’t self-help. few bullet points.” book, it seems even more likely reader, including the kind of Almost no professional biog- Leadership is nature plus that one could glean authorita- people who might once have raphers set out to portray their nurture, but mostly the right n illustratio portrait reuters/ by photographs

�o. reuters 60 june.2012 to this must be “yes.” Yet what terms, Eisenhower ended his people typically want to know career as a relatively undistin- when they ask this question is: guished president of Colum- Can leadership be taught from bia University. the same script to everyone? And there the answer So what is leadership? Uni- is more likely to be “no.” formly, the biographers agree Isaacson insists that context that leaders must take on huge and personal style matter a tasks that others may perceive great deal. Perhaps the most as impossible—for Eisen- important leadership mo- hower, prevailing in the Cold ment in Isaacson’s biography War; for Thatcher, rolling back of Benjamin Franklin is the the state; for Jobs, overhauling Constitutional Convention of multiple industries—but that 1787, when Franklin resolves it’s equally important to main- the conflict between large and tain focus on a small number small states through compro- of tasks or values. Wapshott

Where do leaders come from? mise and consensus. “Frank- praises the “narrowness of Dwight Eisenhower cut a mediocre lin accomplished things by Thatcher’s vision,” while figure as a young soldier; Steve Jobs always knew he was intensely listening to all the Newton quips that Eisenhower genius; and Margaret Thatcher people around him and be- “was not someone who was proved that sometimes a woman can be more like a man. ing very tolerant of different accused of being stretched too views,” says Isaacson. That thin.” As for Jobs, Isaacson would have been impossible tells of a signature moment formative childhood experi- for Jobs—“Steve’s way was at a corporate retreat, when ences. Take Dwight Eisen- to absorb all the information all the Apple employees were hower, who commanded and then set goals in a clear, lobbying for their projects and perhaps the largest military stubborn, intense way”—but pet topics to make it onto a force in human history to win that doesn’t mean one was a whiteboard that had a mere 10 World War II and went on to less effective leader than the slots. When the list was finally become a two-term president other, only that leadership can whittled down to 10, Jobs told kind of nurture. Leader- of the United States. Jim New- always take different forms. them they had to cross out the ship skills must come from ton, author of Eisenhower: The somewhere, and few modern White House Years, notes that authors would argue that they there was little in Eisenhow- are genetically inherited. So er’s early life—he barely made If it were possible to become an the top half of his graduating

ibrary of C o n gress of L ibrary . biographers often look to early, S

. effective leader simply by U character-shaping experi- class at West Point and had ences. Nicholas Wapshott, a series of lackluster military reading a stack of books, then . A rmy/ . S .

U author of two books on Mar- jobs through his 30s that failed

/ presumably there would be a lot garet Thatcher, points to her to impress even him—that T hatcher) (margaret L etkey oy

R more good leaders in the world. upbringing as a shopkeeper’s suggested the emergence of a daughter in a one-party great leader. “I didn’t start my Lincolnshire town as forging a book thinking I was writing Can leadership be trans- bottom seven. “It was his abil- combative outsider’s personal- about an effective leader,” ferred? A conceit of many ity to stay focused, a commit- ity that she would later need as Newton says. “It’s only when leadership books is that les- ment to a Zen-like apprecia- she launched her attack on the [U.S. Army Major General] sons derived from one arena— tion of simplicity” that made entire British establishment. Fox Conner gets hold of him say, business—can be applied him effective, says Isaacson. “She was brought up a bit like that he recognizes his own to another. Biographers mostly And that might be the only

obs), R euters/ J obs), (steve W hite K imberly a boy,” Wapshott says, “knew potential, and develops the dismiss this idea. Newton leadership lesson anyone re-

by michael hoeweler; photograph by REUTERS by photograph hoeweler; michael by she had to do well, and always knowledge and confidence notes matter-of-factly that ally needs. believed she was right.” that he could be a leader.” after Eisenhower’s crowning Taking the nurture point Can leadership be taught? achievement in World War James Ledbetter is the op-ed editor of Based on the nurture argu- II and before his two usually Reuters. He is the author of Unwarranted even further, some biogra- Influence: Dwight D. Eisenhower and phers reject even the idea of ment, on some level the answer well-regarded presidential the Military-Industrial Complex. n illustratio portrait reuters/ by photographs

�o. reuters 61 june.2012 Movies China // Gong Li Chinese superstar Gong Li is more than an actress; she’s also China’s Food and Agriculture Organization Leading Goodwill Ambassador and a French Commander of the Legion of Hon- or. One of her films, Farewell My Concubine, was initially banned in China because it was too critical of Ladies the government; another, Ju Dou, was banned for being too sexy. north american box office was down Memoirs of a Geisha brought in 4 percent last year, but global theatrical $162 million. receipts hit a record $32.6 billion, mostly thanks to surging growth in Latin America, Asia, and the Middle East. Much of that demand was driven by international superstarlets whose appeal transcends language and culture. Here are seven of our favorites.

australia // Nicole kidman

Naomi Watts C harisius Kidman and Watts attended the same high school in Sydney, Australia, and both dropped out. Watts worked odd jobs, including stints as a papergirl and a model; Kidman took a job as a massage therapist to help support USA // Jennifer Lawrence her family while training to be a dancer and actress. They met again In Winter’s Bone, Lawrence at acting school, again in Sydney. plays Ree Dolly, a down-and-out After working in television and star- teenager from the Ozarks who ring in a series of low-budget films, struggles to keep her family the schoolmates went on to become alive by hunting and fishing. two of Hollywood’s highest-paid That role was the perfect audition actresses. Watts earned $19.1 million for The Hunger Games, in in 2011, compared with Kidman’s which Lawrence plays Katniss n C hristia R euters, M a n gla i, M a n av C harisius, $18.6 million. Everdeen, the bow-wielding, squirrel-killing, boy-saving heroine. The film has grossed more than

$635 million worldwide. n C hristia , n ackso ucas J ucas , L , n ackso iran // leila hatami ucas J ucas Hatami won accolades for her performance in A Separation, playing a strong-willed young woman trying to leave Iran and give her daughter a better life. The film took home the Oscar for Best Foreign Film (and grossed almost $13 million globally), but Iranian audiences knew Hatami long before she india // vidya balan became an international sensation.

Balan’s short career has taken her well beyond Bollywood’s familiar France // Marion Cotillard song-and-dance routines. Last year, she starred in two major dramas, Cotillard won an Academy Award No-One Killed Jessica, based on for her 2007 portrayal of Edith the real-life murder of Delhi model Piaf in La Vie en Rose, a first for Jessica Lal, and The Dirty Picture. a French-language performance. In her most recent movie, a thriller The film has made $86 million. called Kahaani, Balan plays a In 2009, Cotillard was the face pregnant woman who searches of Dior in the luxury brand’s ad for her missing husband. Kahaani campaigns, and in 2010, she was was made for just $1.5 million—but the highest-earning French actor, grossed more than $20 million. male or female. L L eem, T ruth by PH otographs li) go n g with n g starti (clockwise

�o. reuters 62 june.2012 (clockwise starting with gong li) PHotographs by Truth Leem, Lucas Jackson, Lucas Jackson, Christian Charisius, Manav Manglani, Reuters, Christian Charisius THE RIGHT INFORMATION IN THE RIGHT HANDS LEADS TO AMAZING THINGS. THAT’S THE KNOWLEDGE EFFECT. SEEHOW PROVING WE’RE ITEVERY DAY AT THOMSONREUTERS.COM provide fuller context. Real-time analysis that saves money — and lives. And predictive research systems that detect the undetectable. undetectable. the detect that systems research predictive And lives. and — money saves that Real-time analysis context. fuller provide With With intelligent information, Thomson Reuters helps over 20 million and businesses professionals impact the world ways. in extraordinary It’s possible using our advanced information tools and services. Seamlessly integrated databases that integrated databases Seamlessly dig deeper.algorithms that Smart and information services. tools using our possible It’s advanced Leading scientists to greater discoveries, making financial markets fair and transparent, and promoting the rule of law. When harnessed, ofthe rule law. harnessed, promoting and When fair markets transparent, and financial making to greater discoveries, scientists Leading knowledge helps professionals spark ideas and actions that extend everywhere. And affect everyone. affect And everywhere. that extend actions and ideas spark professionals helps knowledge Art: 85731_Reuter_P4C_01_v6_874ppi.tif (CMYK;1258ppi;Up toDate),TOM- ThomsonReuters wTag-4C.ai (Upsmall circles.ai toDate), (Up toDate),Knowledge effect.ai (Up toDate) FINANCE & RISK Delivery Support: 212.237.7000 Delivery Support:

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Failure Fallen Leaders It’s a tough time to be a leader. Nine euro zone countries and four Arab Spring nations have lost their heads of state to economic and political upheaval in the past couple of years, and the most recent batch of victims suggests that managerial misfortune is only spreading. Joe Paterno, Penn State’s football coach, died in January after being implicated in a sexual abuse scandal, while Jon Corzine scrambled to locate MF Global’s missing billions. Bo Xilai was dismissed from the Chinese Communist Party for alleged embezzlement and murder, and Rod Blagojevich began his 14-year corruption sentence in March. In France, Nicolas Sarkozy was dethroned by rival Francois Hollande. Good thing guillotines are out of fashion.

Nicolas Sarkozy Rod Blagojevich

Bo Xilai

Joe Paterno

Jon Corzine

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