Working Up

by Dwayne Phillips

One group of leaders can ruin a decades-old organization in only a couple of years. I have seen several examples personally. Harvard University is one example in the recent news. Leadership is difficult. It seems wise to limit the power of any one group of leaders.

One group of leaders can do much for an organization – for good and for ill. In particular, one group of leaders can cripple or ruin what has historically been a successful organization.

Example (no names in the first two examples to protect the guilty): In the 1980s, a successful West Coast Defense contractor (several decades old) brought in a new CEO. The new CEO had a vision for the future of
the company. He pushed his vision into the company changing its technical direction completely. In two years the company was almost bankrupt.

A similar example: In the 1990s another West Coast company – this one building computers – that has been successful for several decades brings in a new CEO. This CEO changed the direction of the company, and (you guessed it) in two years the company was almost bankrupt.

Yet another example: A community organization continues to thrive after several decades of steady growth. The president of the organization retires and moves out of the community. New officers are elected. In two years, the organization struggles to function.

Yet another example from the news: Harvard University struggles. The endowment (still the biggest for any school in the world) has shrunk in half of what it was three years ago. Risky investments and bad interest-swapping schemes have proved catastrophic. Sure, lots of people have lost money in investments in the last 18 months, but compare Harvard now to the Great Depression. Harvard’s endowment grew during the Great Depression.

Every time a hundred-year-old private college closes, every time a decades-old business declares bankruptcy, every time an organization with a history of success fails – look at the current leadership. What can take decades to build can be ruined in just a couple of years.

Leadership is difficult and fraught with many perils. Choosing leaders is more difficult. Who knows where a new leader will take an organization? By the way, one of the leaders of Harvard during its financial fall is Larry Summers. He is now chief economic adviser to the President of the United States. I trust that he will do better in his current position.

Perhaps those men who wrote the Constitution were right in putting in all those checks and balances and limiting the powers of any branch of government.