Building America’s Most Innovative Brands
One of Harvard Business School's most-beloved classes, Entrepreneurial Leadership in Turbulent Times, is taught by Nancy Koehn, a historian who serves as HBS's James E. Robison chair of Business Administration. She's the author of a host of books on American entrepreneurship, leadership, and branding, including The Story of American Business: From the Pages of the New York Times and Brand New: How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell. She's written case studies on everyone from Marshall Field to John Mackey to U2's Bono. Koehn spoke with Inc.com's Christine Lagorio about the country's most ingenius brands, the challenges of Groupon-era consumer empowerment, and why Oprah is a great boss.
You've written about the leadership of everyone from Abraham Lincoln to Henry Heinz to Oprah Winfrey. What are some common misconceptions of what makes a great leader?
First, the idea that great leaders are born is a very powerful and common misconception. Leaders are made. Everyone is born with gifts, and has experiences along the way, and how they learn to use those gifts, and their experiences, is what makes them a great leader.
The second misconception is that leadership is mostly about charisma and how ones presents themselves. It is not primarily about a certain kind of style or presentation mode, and there is no single template for either of those things. What I've learned studying leaders past and present is that charisma isn't actually charisma, it's simply the ability to engage others, and doing the hard work it takes to do that, and being responsible by keeping the enabling energy toward that end. When leaders are able to pick out a point on the horizon, pick out people to help them do that, and keep the focus through the insanity of modern life, then you simply have someone who seems to have good style.
The third misconception is that leadership is something you learn how to do and then can put it on cruise control. That's just not how it works. You look at Milton Hershey, the chocolate king: he failed something like 12 times, but he didn't give up. He was down on his knees, shamed to his family—and then he discovered that milk chocolate was something people wanted. Leadership is as much about navigating through the valleys as it is looking out from the peaks. I think the best definition of leadership I've heard is from author David Foster Wallace's book Up, Simba. "A real leader is somebody who can help us overcome the limitations of our own individual laziness and selfishness and weakness and fear and get us to do better, harder things than we can get ourselves to do on our own."
Are great leaders generally good bosses?
I think in general yes. They're always very demanding. Think about Oprah Winfrey–she's a tough boss. She knows delegation, but she knows when the Is aren't dotted and Ts aren't crossed. But she works people hard, and then lets them rest in months-long breaks, like athletes coming out of a hard competitive segment of their life. She's good at understanding what peoples capacities are, and using them.
John Mackey of Whole Foods is a different kind of leader, though no less effective than Winfrey. He is very effective at staging out a vision and keeping the company and his top team focused on that vision. He's great at delegating—he lets his store teams do their own structuring and hiring. He has an open-book policy, such that any employee can go into the break room and look in a black book and see any executive's salary. That aspect of transparency creates the perception at Whole Foods that the company is an equitable place to work. Ultimately, Mackey has great capacity to know when it has to come from you as a boss, when the reins need to be pulled tight, and when to give your people lots of agency and room.
Winston Churchill, on the other hand, was hard to work for. He had loyal people, but he was prickly and cantankerous, demanding, had a rigid schedule. He was not a person of great suppleness or outward empathy, but no one would consider leaving his side.
For your book, Story of American Business: From the Pages of the New York Times, I imagine you spent hundreds of hours reading the newspaper—and a lot of time on obituaries. Are there any lessons on leadership tucked in the obituaries pages?
It becomes clear that the age in which the leader lived frames how we think about him or her, whether it is Rockefeller or Estée Lauder. Even in how the paragraphs are ordered–how much attention is put on good works, how much attention is put on the blood stains of their careers. Occasionally you get some juicy gossip you wouldn't get anywhere else—something about their children, something about their education.
We at Inc. have written about Coca Cola's Asa Candler, saying "Candler wasn't an inventor; he didn't come up with a great company name or even a distinctive logo. Rather his greatest achievement was as a marketer." Are there other examples of entrepreneurial leaders of great companies whose strength was mainly in advertising or marketing?
I think most of the people I study have significant gifts for communication and market-building. [Josiah] Wedgwood was as good of a marketer as a potter. Michael Dell was as good of a communicator as he was a technology geek. What got that company off the ground—and keep in mind this is not how we think of it typically—but it's a story of extremely strategic marketing by Michael Dell. Heinz knew pickles, he made them himself, but he was a much better marketer. He promoted Heinz 57, he did some of first factory tours to show customers how clean and organized his facilities were, and lobbied for the food and drug act, so that his competitors would have the same high bar to cross as he did.
What about innovators? Who do you consider the most fascinating American innovators from the past few decades and why?
Everyone is going to say Steve Jobs, and I'm going to say Steve Jobs, too. But he's not classic innovation. He doesn't start from square one. He wouldn't have worked for NASA, or the government. That's not what he does. He says, "here's technology, here's consumers and their aspirations for their lives and what they want," and he puts them together. It's a different type of innovation, but it's important.
Les Wexner of The Limited Brands is someone whom I also think was innovative in a unique way. We don't think of The Limited or Victoria's Secret or any other niche shore as innovative, but that's because they are everywhere now. But Wexler's were the first.
I'd probably put Oprah Winfrey in there too, because she created a whole new genre of television when she found her sea legs in the Oprah Winfrey Show. She went head to head with Phil Donahue and she kept breaking boundaries. One day she could have on how to find a bra that fits, and the next day Nelson Mandela. Oh, and P.S.: she built one of the most popular brands in the world along the way.
What do you see happening in brand development right now?
I think the great challenge for builders of young brands and companies with existing brands right now is that the customer, a household, is changing much more rapidly than a corporation is right now. The transition from one world to another happened in two months. It was shock and awe. And consumers know we're not going back. The ways consumers buy is changing extremely quickly, and their perceptions of institutions is changing. Their brand loyalty is changing, even with brands as prominent as Tide. You can see companies like Proctor & Gamble responding to this, for example. Even brands that have been around forever have to think about "How do we reach more environmentally-conscious consumers who have a wealth of information, and who are empowered?" What's more, customers now with eBay and Groupon think about every purchase as a bargaining opportunity.
Howard Schultz did a Harvard Business Review interview recently about how you have to be perceived as humane and decent and clean. People are not afraid to say "no thank you." Consumers have a lot more firepower than they used to. All that comes down to that you better find some brand new ways to get close to your customer. Fast.
I was just reading your Washington Post blog and saw a video of Donna Karan talking about how both fashion and philanthropy tap into a feminine instinct to create, care, and collaborate. From the work you've done studying women entrepreneurs, is there anything to that?
Very much so—women have a kind of suppleness and ingenuity, and can put out fires all day. Women are the major actors in about 75 percent of all household decisions—and I'd say that applies to decisions in and outside of the household. Women have been managing and leading for a long long time, and are particularly adept at knowing how to keep people on the same page, to deal with emergencies, that women have been socialized to have. That's so valuable in the workplace.
The story is bigger than education. It's about what we need to run institutions, hospitals, and governments, in a decade or two where there's going to be nothing but turbulence. Also, keep in mind that a workplace comprised increasingly of Millennials is increasingly diverse and emotionally aware. You look at those needed abilities, and what is the source of those assets? Women have those naturally.
Since maller enterprises are one of the most important drivers of economic growth, we are going to have to pay more attention to the gifts, abilities and talents of women as entrepreneurs for national prosperity.
What corporate scandal from the past decade is going to have the most lasting impact?
The banking issue. This is bigger than anything we've seen in almost 100 years. It's not bigger than Watergate, because Watergate threatened the U.S. Constitution. The game isn't over, either. If that happens again, then the game is up, and that industry will be destroyed. Nothing compares to it in how peoples perceptions of leadership were soiled, and the way fiduciary responsibility, to leadership responsibility, to customer responsibility, were played fast and loose with. And the repercussions of that are not ending anytime soon.
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