Corporate Leadership Paradigm Shift: Take Note

Economic developers must understand corporate leadership styles, and they must be aware of the subtle and dramatic changes that are underway in this arena.

New types of leaders in major companies are moving away from the old deal making and salesmanship leadership styles and moving toward creativity and invention as the driving leadership ethos in corporate America. At least, that is what Jeffrey Sonnenfeld said in a recent article in the MIT Sloan Management Review.

Two immediate areas strike me as important in their implications for economic development:

1. New types of corporate leaders will start appearing on ED boards and commissions. The ED CEO must know how to best relate to them and use their talents.

2. The new leadership styles have implications for how CEOs manage and therefore how they approach business investment and location decisions.

Here is a quick summary of Sonnenfeld's article.

Charismatic and controversial former CEOs like General Electric Co.'s Jack Welch and Tyco's Dennis Kozlowski are giving way to a new breed of leader dedicated to reviving the forward-thinking legacies of Old Economy titans, such as GE's ingenious Thomas Edison and IBM's visionary Tom Watson Jr. After years of focusing on the art of the deal, says the author, this renewed emphasis on innovation encourages corporate giants to again ground their organizations in what they do best.

Many of today's emergent corporate leaders, like MCI's Michael Cappellas, IBM's Sam Palmisano and GE's Jeff Immelt, emulate the legendary standard bearers of invention by emphasizing technological engineering over financial engineering, product over marketing and real science over junk science. Critical to their leadership is an unrelenting drive for self-improvement, a strong interest in learning, an appreciation of a motivated work community and longer time frames than those dictated by a preoccupation with the daily stock price.

For example, MCI is emerging from the years of WorldCom scandal by consciously drawing upon its legacy of telecommunications innovation. IBM actively seeks to again become the epitome of prestige, employee loyalty and innovation. GE creates a hothouse of R&D while sharpening its innovative capability in the media and medical sectors through advantageous acquisitions. In addition, executives at 3M, DuPont and Pfizer, who increasingly emphasize research and innovation over promotion and hype, have helped their companies reassert their leadership roles in their respective fields.

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