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  H. Lawrence Culp Jr.
  H. Lawrence Culp Jr.  Photo © Nathan Mandell
  Arne Duncan
  Arne Duncan  Photo © Nathan Mandell

Kellogg summit reveals leadership keys

Conference attracts array of experts to exchange ideas, practices for managing crisis

"The Boeing Co. is a textbook example of how an entire company can go into crisis by the misdeeds of a few," said Harry S. McGee, vice president of finance and corporate controller for Boeing, who was among several distinguished executives sharing insights during the Kellogg School Leadership Conference on Oct. 18.

The annual student-run initiative drew hundreds of faculty, students, alumni and guests for discussions including best practices honed through challenging situations.

In "Leadership Through Crisis," a panel moderated by Kellogg Clinical Professor of Management and Strategy Harry Kraemer, former CEO of Baxter International, McGee discussed the ramifications of Boeing's 2002 hiring practices scandal. In the scandal's aftermath, employee morale and public trust in the company were weakened, and the company was forced to pay more than $600 million in fines.

"Ethics cannot be traded for performance," said McGee, who added that Boeing discovered the breach of ethics and reported it to the government, launching an investigation that later led to charges for two and a conviction for one of the executives involved. The scandal's lessons resulted in Boeing implementing ethics training and code-of-conduct agreements. 

Other panelists included Professor Thomas E. Zelibor, dean of the College of Naval Leadership, Naval War College, and retired Rear Admiral for the U.S. Navy; and Patrick J. Gnazzo, senior vice president, business practices, and chief compliance officer for CA.

"Plan for business continuity during crisis, know that you can't do it all alone, and understand that you may need to step aside to let crisis teams handle things," said Gnazzo.

Kraemer said reflection helps leaders discover the values they will apply in crises.

"Determine what you think is right and ask yourself if your employees know how you would react in a crisis," said the Kellogg professor, who is also partner at Madison Dearborn.

In one of two keynote addresses, H. Lawrence Culp Jr., president and CEO of Danaher Corp., shared lessons learned through several senior executive roles.

"Leadership is about seeing around corners," he said. "It's about having integrity and vision, passion that inspires others, and humility" — characteristics developed through experience.

"It's hard to learn leadership in an advisory role. You've got to be out in the field ... where you have an opportunity to make mistakes and learn what works," Culp said.

Also important for leaders, he said, is understanding the distinction between growing and winning, and ensuring that everyone in the organization knows the expectations for winning.

"When you're growing, it's very easy to think that you're winning. But the numbers can lie," Culp said. "I'd rather be up two in a flat market than be up 12 in a market that's growing 15."

Another leader mindful of statistical influence is Arne Duncan, CEO of Chicago Public Schools (CPS), and the conference's second keynote. He told attendees that when he assumed his role in the 1980s, some critics considered CPS the worst school district in the country. Today, three of Illinois' top high schools are in CPS.

"Now we're really [creating] a management overhaul," said the Harvard University sociology graduate who serves on the Kellogg School Dean's Advisory Board. CPS is recruiting principals from outside its system and is reducing the overall principal applicant pool by raising qualifications.

Working with stakeholders from diverse backgrounds, such as union leaders, parents, the mayor's office and local residents, is challenging, said Duncan, so setting clear expectations and listening well is critical.

To help participants gain these tools, the conference offered two interactive leadership development exercises and two additional panels.

Participants left the event armed with new insights, and perhaps recalling panelist Zelibor's sobering words: "A leader cannot afford to have a bad day. And in a crisis, that applies tenfold." — RH

©2002 Kellogg School of Management, Northwestern University