For Bud McFarlane, 1986 was the year lightning struck.
On October 12, the New York Times ran a short story giving a few details about a plane that had been shot down over Nicaragua, allegedly carrying weapons to Contras, anti-Sandinista rebels engaged in guerrilla warfare against the ruling communist government. The story might have blown over, had it not been for what happened a few weeks later: A Lebanese newspaper, Al-Shiraa, printed an article based on the testimony of an Iranian informant, detailing a U.S. scheme to sell American antitank and antiaircraft missiles to Iran to use in its war against Iraq. The scheme, which had been approved by National Security Advisor Robert “Bud” McFarlane, had carried with it the hopes of future release of Iran-held U.S. hostages. Over time, the situation had degenerated into an unsavory weapons-for-hostages deal run completely undercover. Further investigation revealed that the money from the arms deal was going to support the Contras. The arms sales to Iran had been carried out in secret, and the support of the Contras had illegally circumvented Congress's prohibition of Contra support. The so-called Iran-Contra affair became the biggest political scandal of the Reagan administration.
In the midst of the disgrace, McFarlane fell into a clinical depression driven by his deep regret of having embarrassed President Reagan and shamed his country. On the morning of February 9, 1987, the day he was supposed to appear before the panel investigating the scandal, McFarlane attempted to end his life by overdosing on Valium. He was rushed to the hospital, and doctors were able to save him. Just over a year later, he pleaded guilty to four misdemeanor charges of withholding information from a congressional investigation. He and the 13 others indicted in connection with the incident took the fall for a scandal that stretched from West Asia to Latin America.
Up until this situation, McFarlane's life had appeared to be charmed. After studying at the U.S. Naval Academy, he spent 20 years in the Marines, earned a master's degree in strategic studies at the Institut des Hautes Études in Geneva, became a White House Fellow, then served for three and a half years as the military assistant to Secretary of State Henry Kissinger. He was one of the men who helped put together the Strategic Defense Initiative, dubbed “Star Wars” by the media.
Like other public leaders, McFarlane served as a lightning rod for those under him, at times collecting the shining adulation when the organization was favored—at others bearing the brunt of the public's rage when he and those he led violated the nation's trust. We expect our leaders to take responsibility not only for their own actions, but for the actions of the institutions they lead. Even if it is not within their power to make things happen (or keep them from happening), the mantle of responsibility accompanies the privileges that leaders enjoy.1 The men and women I interviewed were those who had taken up the call to leadership with all its benefits—and burdens.
We want our leaders, like lightning rods, to heartily handle whatever strikes the organizations for which they are serving as sentry as well as commander. And we expect them to remain unscathed. Otherwise, we want them replaced. What good is a lightning rod that can't stand tall in severe weather? Further, the public assumes that leaders can really get things done—that they are agents of action. But do leaders actually believe this cultural narrative of their own capability and invincibility?
Robert McFarlane believed it, and it nearly cost him his life. His chain of early successes took him to the very pinnacle of achievement. However, as he tells it, his own sense of agency outgrew his actual power:
The notion of bringing down [the Nicaraguan] government, even though they deserved it, is far too ambitious a goal, and inappropriate when you don't have the staff or resources to really get it done. And thinking that we could was a hubristic overstretch and one which ended in great embarrassment for our country, let alone for me personally.
McFarlane's glorious past had not fully prepared him to cope with the sense of powerlessness he felt as all his efforts, even his attempt to end his own life, seemed increasingly futile: “This new failure [of not pulling] off the suicide, deepened the depression.”
A high sense of personal capability is not limited to those in government. One CEO told me about his long-standing belief on the matter: “If you work hard at something, you can make something good happen.… You make your own luck.” While he acknowledged that there had been others who had contributed to his success, he did not spend much time talking about their roles and seemed to feel that he had paid off any debts he might have owed to them for their help along the way. He told me, “Obviously a lot of people helped me.… I helped them, they helped me.”
While McFarlane was recovering in his hospital bed, he received an unexpected visitor: former President Nixon. Also in poor health, he had taken the time to come down and encourage McFarlane. He told him:
“You are blessed with intellect and opportunity, and you vindicated much of that, but there's a lot more you could do.… This trust, this special trust given you as a person of above-average intellect must be vindicated. You have a blessing that you cannot ignore, and to ignore it is to sin.” And then he was quite stern. He said, “You are similarly blessed. You have had a huge endowment of love of others, of your parents, mentoring, in scholarship, to bring you to an ability to do great things.” And he said, almost verbatim, “Get your butt out of bed, get back into mainstream life, and find a way to do something worthwhile.”
McFarlane is an example of the heights and depths a leader can reach as a result of the unique role of leading an institution. Like Icarus flying too close to the sun, leaders in crisis can plummet quickly. These crises can result from their own pride and misconduct or simply the unavoidable events of the world around them. But the crucible of crisis does not always destroy. It also provides an opportunity for leaders to prove their mettle and emerge stronger than before.
Many times, the toughest decisions and crises occur totally off the radar. In 2000, Warner Music Group made a bid to buy EMI Group, which would have “created the best music company in the history of the world,” as former CEO Richard Parsons described it to me. The attempted merger occurred at the same time as the AOL merger, and it largely fell under the radar, even though it would have substantially changed the music industry. The deal never went through, as the European Commission denied the merger amid concerns of market dominance. Parsons put a tremendous amount of time and energy into trying to appease the European Commission and make the merger work—only to watch it fizzle into obscurity. The failure will not be mentioned in histories of the recording industry, but to Parsons, it's the big catch that got away.
Indeed, I found that platinum leaders spend a plurality if not a majority of their time working on projects that go entirely unnoticed by the public. Sometimes they are working extra hours to keep bad news from becoming public scandals. The situation can range from legal challenges to disgruntled employees to major blunders committed by executives. Often the top leaders have to marshal all their political and relational resources to keep a lid on the boiling pot. The other category of work that drains their time is good things that never materialize. Leaders can spend months pursuing an acquisition that falls apart at the last minute, like Parsons. Or their work could entail a massive restructuring that, in the end, is not feasible for one reason or another. They never announce what they had been working on, because, why bother? It failed. This is one of the biggest burdens of senior leadership—receiving no appreciation for some of the things that you put your heart and soul into.
Ralph Waldo Emerson said, “To be great is to be misunderstood.”2 Leaders sense a huge communication gap between themselves and members of the public—who do not have their knowledge base, experiences, or inside information, and who are being directed by the media. Many of the factors that go into a leader's decision-making cannot be easily explained to the masses in a sound bite. Dozens of the people I talked with long for the chance to set the record straight on particular issues that had affected their reputations, but because of confidentiality standards, they are not able to speak freely. This is another cost of leadership—knowing more than you can share and enduring the uninformed who think they know better.
For example, in the mid-1980s, a major issue on many college campuses was student pressure to end apartheid in South Africa. At the time, Nannerl Keohane was the president at Wellesley College, her alma mater. Regarding South Africa, Wellesley had adopted the Sullivan Principles, a set of human rights standards for companies, and the list included things such as nonsegregation of employees. But this was not enough for Wellesley students; they wanted total divestment in places like South Africa while apartheid was still active. After a “very upbeat, positive teach-in” hosted by Wellesley faculty, Keohane herself became personally convinced that total divestment was the right thing to do. But the decision was in the hands of the trustees, not hers. At a trustee meeting, Keohane tried to sway the board:
Quite a few trustees came over to this view, but not enough. We lost by one vote. The students were all gathered out in front of the library where we were meeting, waiting for the news, because they were all hoping for divestment but sort of expecting we wouldn't do it. So when I announced that we were sustaining the Sullivan Principles, this great groan went up from the students, and they all dispersed according to a plan.… They immediately dispersed and blocked both exits to the campus [by lying in the road].
Meanwhile, the trustees escaped campus by a footbridge at the president's house and had cars pick them up. While Keohane was sympathetic to the students' cause, she could not let them close off campus in this way. Campus and local police joined her in trying to persuade the students to move off the road, but they refused. Having no other choice, the police arrested the students. Had the students cooperated and given their names, they could have been released, but the students all claimed to be named “Winnie Mandela.”
“The real challenge,” Keohane said, “was if we arrested them and they won't give their names, according to the law, they had to be held overnight.” There were not enough jail cells in Wellesley for the dozens of arrested students, and Keohane thought that the female students would have to be sent to the Framingham women's prison, which Keohane said was “as bad as it sounds.… The idea of putting 56 Wellesley undergraduates in that prison was one of the most horrible things I've ever contemplated.” But the chief of campus police arranged for the students to stay overnight at the Massachusetts National Guard armory, where Wellesley provided them with cots, blankets, hamburgers, and breakfast the next morning.
“I think in retrospect, I made a wise decision at each stage,” Keohane told me. But the crisis was made all the more complicated—and agonizing—because she did, in fact, agree with the students. She was both their advocate and jailer, ultimately subject to the board of trustees. The trustees had made the decision and then sidestepped the students' protest, leaving Keohane with the responsibility of managing the mess. Sometimes leaders are forced by outside circumstances to act against their personal judgment, but because of the responsibilities of their symbolic role, they cannot make their real sentiments known.
A dramatic, unexpected event that throws an organization into chaos will either prove or refute a leader's strength. Senior leaders constantly work to maintain the value systems of their organizations, develop strategies to deal with uncertainty, and find ways to maximize the efficiency of their decision-making process. A crisis differs from a leader's everyday tasks more in degree than quality, and thus it serves as an intense test of the systems these leaders have already put in place.
Ronald Heifitz and Marty Linsky define the life cycle of a crisis in three stages: the preparation phase, the emergency phase, and the adaptive phase.3 The preparation phase is the time before the crisis, when a leader has the opportunity to lay the groundwork for response and to anticipate what is needed for what looms ahead. In the emergency phase, leaders deal with the immediate problems through short-term solutions, focusing on the momentary survival of the organization. In the adaptive phase, the leader charts the long-term course of the organization to bring it back to stability.
No crisis in our lifetime has impacted American life as dramatically as the 9/11 attacks. The stories of the leaders involved show us how executive habits and the organizational cultures they build come to the fore during crisis.
As national coordinator for security, infrastructure protection, and counterterrorism in 2001, Richard Clarke, who had served in one senior leadership position or another in the White House for 16 years and through four presidential administrations, was known informally as the counterterrorism czar. It was his responsibility to anticipate and prepare for the possibility of terrorist attacks. Clarke later claimed that he had communicated fears about a terrorist attack from al-Qaeda but that his warnings had fallen on deaf ears in the Bush administration. He was unable to prevent the crisis during the preparation phase, but as will be seen, he was certainly up to the task during the emergency phase.
Clarke was away from the White House when the first plane hit the World Trade Center, but upon hearing via phone what had happened, he had his assistant convene an emergency videoconference with the various Cabinet departments, to be underway upon his quick return. When Clarke arrived, the principals of the National Security Council (NSC) had gathered in the Situation Room, and the deputy national security advisor, Steve Hadley, had taken charge. But when Clarke came in, “still [with] his overcoat on” (in the words of a person present), Vice President Cheney and National Security Advisor Condoleezza Rice gave him the authority to manage the proceedings: “There was no dissension; there was no combativeness. It was just that Dick [Clarke] had been there for nearly 12 years; he had been through many different crises, so [everyone was clearly] deferring to him.” Cheney and Rice hurriedly moved through the White House corridors to join the other upper-level staff in the President's Emergency Operation Center (PEOC), in a bunker under the East Wing. Meanwhile, Clarke led the NSC staff in information gathering in the Situation Room.
The NSC was anticipating that another plane would hit the White House. As we now know, this crash was ultimately forestalled by the brave actions of the passengers of United Airlines Flight 93, but the expectation at the time added an additional layer of tension to the NSC's work. In his interview, Clarke told me they were “beyond being nervous” and that nothing could have truly prepared them for that experience. “No matter how much you make those exercises realistic, you know they're not,” he said. “People were dying; people I knew were dying, had died. [We in the White House] thought we would. But it focuses the mind.”
Clarke had the experience and the know-how to lead the National Security Council—and indeed the White House—in its important work of gathering information for the decisions that needed to be made. In the midst of a crisis, leaders like Clarke, with a lifetime of preparation, take control and keep their staff focused by deploying necessary authority. Most of their influence in that moment, however, has already been secured through the moral authority they earned over years of hard work and diligent preparation.
The authority that Clarke easily assumed in the hours after the tragedy did not extend into the adaptive phase of the crisis. While he continued to work in the Bush White House for two years, he was a contentious figure in the post-9/11 conversations. Clarke resigned from the Bush administration in 2003, published a book detailing his perspective, and testified at the public 9/11 Commission hearings. He denounced what he considered the president's disregard for his repeated early warnings and criticized the administration's decision to go to war with Iraq. Many Republicans and members of the Bush administration responded by attacking Clarke's credibility. While Clarke was the obvious leader in the midst of a national terrorism crisis, when the moment of crisis had passed, such stark authority was no longer required (or wanted), and Clarke became a more ambiguous figure, moving from hero to scapegoat. He was unable to transition his authority from one phase to another. The most effective leaders are ones who transcend single phases of a crisis and lead through multiple stages.
Clarke was just one of many people in the White House who responded on September 11. Mike Fenzel was an Army major serving under Clarke as a White House Fellow from 2000 to 2001. While the 32-year-old did not have such a high-profile role as Clarke, he still served an important purpose. Starting out the day with Clarke and the other NSC staff in the Situation Room, he helped manage the information as it came in. But eventually Fenzel realized that Vice President Cheney, whom he could see in the PEOC through one of the videoconferencing screens, was not getting the information required for his duties:
I knew I needed to go somewhere where I could be more useful in creating an open line of communication and to possibly be the translator for the vice president [and] the national security advisor for what was transpiring in the subgroup meeting (it was called the Counterterrorism Security Group). Because all of the information for all of the decisions that had to be made was bubbling up through that subgroup, with Dick [Clarke] pulling it out of people, demanding information, needing answers to questions that he had. And it was amazing how effective he was at getting it. I mean, it was very streamlined. And so here you have all this great information, and it was not going anywhere.
Fenzel left the Situation Room and—after some trouble—gained access to the PEOC: “I got down there, to what is basically a large safe door, and there's four guys all with submachine guns and suits on. It was surreal. And it's sort of when the gravity of all this is striking you.” Once in the PEOC, Fenzel turned up the volume on the Counterterrorism Security Group meeting feed and turned down the volume on CNN. He also established a phone connection between Cheney and the Situation Room. Fenzel introduced himself to Cheney and explained that he would take notes and help provide the vice president with the relevant information he needed. Fenzel realized that he was playing a unique and necessary role. “Here are all these important people. This is what struck me,” he said. “Amazing talent. Great leaders. But they can't make a decision if they don't have information. So I realized my job is going to be to provide them the information they need.” Fenzel stepped up in a variety of ways that day—from penning lines for the president's national address to crawling under the table to retrieve Mary Matalin's glasses. He did not wait to receive orders but stepped in to ameliorate the situation in which he found himself.
Another person who stepped forward in the emergency phase of the 9/11 crisis was Brenda Berkman, a New York City firefighter. In 1977, 24 years earlier, Berkman had been one of hundreds of women who first tested to become NYC firefighters. Like all the other women, she failed the physical test. Berkman, who had recently passed the bar, issued a lawsuit against the state of New York, claiming the exam was discriminatory toward women in that it required the testers to perform feats of strength that were unnecessary in actual firefighting. Berkman won the suit and was in a cohort of 41 women who became the first female firefighters in the state of New York. As she told me when we sat down for an interview, Berkman's life has been defined by this accomplishment:
Most of my adult life revolved around that event, and because there was such an intense and long-lasting opposition—which continues to this day against women firefighters in the New York City Fire Department—it isn't something that I just sort of did for two or three years, and then it was an issue that resolved itself and I went on to something else. No, it was always in the background and in the foreground no matter what I was doing in my professional life. So I would say that that event certainly is my proudest accomplishment.
While Berkman has received a good deal of attention for her commitment to gender equality in firefighter ranks, her commitment to the field is about much more than taking a stand. “I don't consider myself to be particularly heroic,” Berkman said. “I just think that I'm a person who is very stubborn, and I had an idea that … I believed in, and so I wasn't going to take no for an answer.” For her, this is not just another career made open to women, but it is the opportunity to fulfill her life's calling. She remained a New York City firefighter for 25 years after the lawsuit, long after most of the initial female cohort had retired or moved on. She worked her way up to captain in the New York City Fire Department, but she loved being a simple firefighter; she avoided roles that would take her away from the physical challenges and daily labors of the job.
So when the towers went down on September 11, Berkman responded in the way that was instinctive for her—as a firefighter. That historic morning, she was off-duty but borrowed the extra gear of another firefighter—a man who would die that day—and joined the fray as she made her way to the burning World Trade Center complex. When Berkman saw the smoke from the towers, she did not sift through possible responses and their various repercussions. She did what she had been doing every day for the past quarter-century. When sacrificial actions such as pulling people out of burning buildings are repeated daily, they become automatic. They cause a firefighter—whether man or woman—to run toward the smoking tower rather than away.
In times of crisis, organizational leaders must similarly look to the needs of their community over their personal needs. And as long as an emphasis on the common good has been well entrenched, this response will feel automatic, not foreign.
But as a crisis switches from the emergency to the adaptive phase, leaders have to make sure they maintain a healthy balance of care for the community and care for themselves, in order to thrive over the long haul. Berkman described to me how many firefighters never sought help for emotional and psychological struggles caused by the event. “The organization was completely unprepared to handle both the event and the aftermath of the event, and so the damage just sort of continued along, rather than being helped,” she said.
While Berkman spent the days following 9/11 sifting through debris, Andy Rosenthal was working 10 blocks from the scene at the Times Square Building. Today, Rosenthal is the editorial page editor at the New York Times. Not only has he worked at the Times for more than 20 years, but in Rosenthal's words, “I've been at the New York Times since I was born.” His father, A. M. Rosenthal, was executive editor, giving Rosenthal a long and personal history with the paper.
In 2001, Rosenthal was the assistant managing editor at the Times, and he was responsible for what appeared on the front page. After 9/11, “The biggest part of my job,” Rosenthal said, “was editing the special section we created called ‘A Nation Challenged,’ …and that was the best and most important journalism I've ever been involved in.” In the months after 9/11, “A Nation Challenged” covered all aspects of the tragedy and profiled every one of the victims. “I worked 'til 9, 10, 11 o'clock at night, almost every night, and it was very consuming,” Rosenthal said. He decided which pieces made it in the section, a responsibility he took so seriously that he stayed away from the Ground Zero site in order to prevent his emotions from clouding his judgment.
During this period, the work was hard and the hours were long, but it also revealed something to Rosenthal that he had not realized in his whole length of service to the Times:
For the first time in my professional life, I get it. People are waiting for this paper to come out every morning. They need us. They need the news; they need the comfort.… This is the service that journalism provides.… I had a pivotal job to do, and it was thrilling.
The staff of the New York Times won the 2002 Pulitzer Prize for public service for “A Nation Challenged,” and the Arthur L. Carter Journalism Institute at New York University selected the section as the top work of journalism in the 2000 to 2009 decade.4 Even though Rosenthal had dedicated his career to journalism, it took a crisis (specifically its adaptive phase) for him to realize the true meaning of his life's work.
Like Rosenthal, Gerard Arpey had dedicated his career to one company. But Arpey spent his time in the travel business, rising up through the ranks at American Airlines. By 2001, he was the executive vice president for operations after spending 20 years with the company. His ascent had been slow, but Arpey was in no hurry:
I was always a hard worker, always driven in good ways to do my best, so I think the progression of my career was not some arc of ambition.… I was just someone who … used their God-given abilities to do their best, and that just resulted in bigger jobs along the way.
Arpey was at American's headquarters near the Dallas–Fort Worth Airport early on the morning of September 11 when he got a fateful call from the airline's Systems Operations Control (SOC). He was told that someone alleging to be a flight attendant had called American's SOC and claimed that Flight 11 out of Boston had been hijacked. Arpey was incredulous at first; false reports are common in the airline industry, and the identity of the caller had not yet been confirmed. But right before he hung up the phone, his colleagues mentioned that the caller had said that the “bad guys” had taken control of the flight deck. Arpey had never heard that phrase used in this context; he immediately felt a strange chill. That sense of foreboding prompted him to head directly to the SOC, where his fears were confirmed: that flight had indeed been hijacked. American Airlines was in the midst of reporting the incident to the FBI when they heard the reports of a plane hitting the World Trade Center.
Things moved rapidly from that moment: American confirmed that the first plane had hit World Trade Center One and that United had lost communications with two aircraft.
“I think instinctively I started thinking like a pilot,” Arpey told me. A licensed pilot himself, he decided that if he had been scheduled to fly that morning, “I wouldn't want to be in the air.” He made the call to divert all flights in the air and ground the entire airline without waiting for a directive from the government or American's CEO, Don Carty. Arpey recalled the intensity of the moment: “That was the first moment when I thought to myself, truly, ‘What the hell am I doing?’ But Don arrived at the SOC right after we made the decision and immediately concurred.” They then received word that American Flight 77 was hijacked and that the second tower of the World Trade Center had been hit.
When we discussed the events of that day, Arpey was remarkably low-key about it, insisting that he did not play a particularly heroic role and declaring that he did not want to dramatize his experience in light of the day's tragedy. “I did what anyone with any common sense would have done,” Arpey said. “It was the wise, natural thing to do under the circumstances, [but] I don't think it was anything extraordinary.”
Extraordinary or not, things changed that day for slow-and-steady Arpey. Within two years, he was the president and CEO of American, and his outlook had been radically altered:
[Before 9/11], I had drive, but I think a tremendous amount of passion came along with that drive after 9/11. And I just became even more determined, convinced that I wanted personally to do everything I could to help this company, that these murderers would not destroy our company.… It's given me something beyond just my business career, beyond just doing my job. It's given me a passion and a drive to try to do something to help this institution and its employees and its constituents.
A crisis can spiritually or existentially wound some leaders as they struggle with questions of identity and purpose.5 But the best leaders—like Rosenthal and Arpey—emerge stronger from the crucible, leveraging crisis for greater strength, personally and organizationally.
Andy Card, one of the longest-serving White House chiefs of staff in U.S. history, summarized his position for me by saying, “Most of the job is putting out fires.” Card defined his primary role as making sure the president was never “hungry, angry, lonely, or tired.” As gatekeeper for the world's most powerful man, Card fiercely protected the president's time. “I don't believe,” Card said, “the president should ever make an easy decision. If the president is making an easy decision, the chief of staff probably hasn't done his or her job. Presidents make only tough decisions.”
This is true not only for the president of the United States. A leader is someone to whom the hard decisions fall. While everyone in an organization has important responsibilities, a leader must focus on the toughest decisions and leave the smaller ones to be handled by others. Indeed, decision-making (and knowing when not to make a decision) is the most vital activity of a leader.
Of course, getting the right information is fundamental to making good decisions in the crucible. “With the ascendency of leadership there are the development of blinders,” one U.S. Navy admiral told me. “So the way you take information and look for answers requires a lot more initiative and ingenuity maybe than what you were thinking about as a subordinate.” Leaders must “sort through what is noise and what's an indicator of a real problem, and that oftentimes means that you rely on instincts in judgment,” he said.
At this intuitive level, judgment has a lot do with who the leader is—is she naturally a risk-taker? Does he prefer to avoid conflict? Former Purdue University President Martin Jischke started as a physicist and engineer, and as a result of his background, he said, “I tend to think of things technically and quantitatively.” But he acknowledged that decisions on the executive level are rarely technical or cut-and-dry matters. “Very bright, hardworking people would often have to make a value judgment or a leap of faith. That is, at some point you couldn't reduce this to a calculation.” Jischke learned about the challenge of making these executive decisions when he worked with Judith Connor, an assistant secretary of transportation in Washington, preparing for a presentation on emissions and noise issues. The presentation was to be given to the secretary, who would decide the proper course of action. Connor taught him the best way to help senior leaders when they need to make a decision:
She said she was looking at this strategically from the perspective of the secretary. She was asking herself, “What would I want to know if I were the secretary making this decision? And how do we, in writing this report, shape it so that he has real options that he might have to exercise?” It was such a revelation to me as a young professor of engineering who thought you get all the facts down, you do the analysis, and that information will just point you in the right direction. I thought at that time what we had to do was help the secretary come to the right decision—that is, to find the decision, whereas Judith was saying, “No, we have to present him with options. There's no [correct] decision or single answer; there are multiple answers. And he may have to bring to bear a set of considerations that either we don't know about or we can't fully understand.”
As a college president looking back on that experience, Jischke told me that Connor had been absolutely right. It is the job of a leader's inner circle to provide all the information they have and to present choices, and it is the leader's responsibility to decide what to do. Effective senior leaders train their subordinates not to make the tough decisions, but to bring them viable options when a tough decision must be made.
Robert Rubin's work as U.S. Treasury secretary in the Clinton administration is widely admired.6 Describing his approach to decision-making, he said to me:
The more time you can allow to gather from others—information, analysis, points of view, and everything else, the better. But then at some point you have to make a decision.… The real trick is to know when you've got to the point where deferring the decision has more marginal disutility than utility.
When I asked leaders about the hardest decisions they made at work, 41 percent—a plurality—told me they involved personnel matters. That response was nearly double that of every other decision type. No matter how black-and-white the credentials or offences of a subordinate, each hiring and firing decision is not only subjective; it's personal. New York Public Library Chief Tony Marx said that his most agonizing decisions had involved denying tenure to faculty when he was president at Amherst College. At the small institution, Marx knew all the tenure candidates personally. But, as he explained, “In order for the college to keep getting better, its standards have to be maintained, if not raised. And that means that in cases that are on the edge, my job is to go negative on them.” Marx put the long-term health of his college over personal connections, but with such talented professors, those borderline cases were never clear either way. “You don't tenure based on promise; you tenure based on delivery,” he said. “But it's hard when you see great promise.”
One senator admitted to losing sleep over big decisions, as did over half of the leaders I interviewed. Many others had trouble eating. But periods like these were usually brief; leaders knew the anxiety was getting them nowhere. Once a decision is made, the leaders I interviewed tended not to look back. The vast majority told me they do not apply a lot of hindsight to their own decision-making. One university president put it directly: “I don't look back. If things go wrong, or didn't work out quite the way I thought, I try to learn from that mistake and think about what I would do differently next time. But I don't spend a lot of time second-guessing myself.” It is not worth their valuable time to feel self-regret or to wonder what might have been. Senator Tom Daschle said, “I have a philosophy that the windshield is bigger than the rear-view mirror, which means that you always do most of your best effort looking forward rather than looking back.”
This face-forward perspective is prevalent in large part because top leaders have very high self-confidence. They need it to do their jobs. A leader with a ready catalog of mistakes and transgressions would be too doubt-filled to take the risks associated with decision-making. One CEO described his “mental defense mechanism” as saying, “Well, I can't think of where I made a real mess of things.” Leaders cannot move forward if they are mired in the past. As one military leader told me, “I don't spend a lot of time in the regret locker.… I'm careful about what I let rent space in my head.” But sometimes, under intense criticism or personal guilt, a leader has to admit that something has gone wrong—even if it is not his fault. I found over two-thirds of the leaders I asked were willing to accept blame for personal and collective failures under their leadership even if the issue did not happen as a direct result of their actions. Leadership means taking responsibility, regardless of whose actions are at fault, and then moving on. Former Housing and Urban Development Secretary Henry Cisneros left office after a sex scandal and found he still faced challenging decisions:
When you make a mistake, whatever it is … you face a decision. Do you hide under a rock the rest of your life in embarrassment? Or do you turn cynical and angry and pursue just private interests? Or do you understand the tension in the world, and try to either overcome it or use it to continue to do the good things you were trying to do under more favorable circumstances? I think I've tried to do the latter. It's not as glorious, rewarding, high-profile an existence, but we do the best we can.
Cisneros left politics, and he now works in the private sector as CEO and chairman of Cityview, an urban institutional investment firm.
Sometimes the toughest decisions are the inevitable ones, where all a leader's efforts and talent cannot stem the tide of fate. September 11 was not the beginning of troubles for the airline industry. It was a dreadful blow in the larger drama of a decades-long downturn. Things had been tough for the so-called legacy carriers since the Airline Deregulation Act of 1978, as they had been pulled in opposing directions by customer demands for lower fares and labor demands for higher wages. The events of 9/11 further shook up the industry, and they were closely followed by the oil crisis and the recent recession. As airlines reported record losses, American Airlines' Gerard Arpey did not back down from these challenges. He translated the passion inspired by 9/11 into a specific goal for the airline: “If possible, the word bankruptcy would never be associated with American Airlines.”
His goal was lofty; since Congress had deregulated the industry, every legacy carrier had either ceased operation or regrouped under the temporary shelter provided by Chapter 11 bankruptcy. Continental had filed in 1983 and 1990, United in 2002, US Airways in 2002 and 2004, and Delta and Northwest in 2005. In each situation, bankruptcy had given the airline the chance to cancel its debt, eschew responsibility for employee pensions, and renegotiate more favorable contracts with labor unions. “[American] and Alaska and Southwest are the only airlines that have not gone bankrupt,” Arpey told me when I interviewed him in the spring of 2011.
“Our bankrupt colleagues all made net profits, good net profits last year, and we didn't,” Arpey acknowledged. “And you can mathematically pinpoint that to termination of pensions, termination of retiree medical benefits, changes of work rules, changes in the labor contracts. That puts a lot of pressure on our company, not to be ignored.” Despite the pressure, Arpey remained convinced that bankruptcy was not the right choice for American:
Many people view [bankruptcy] as a business tool, but I have a view that if you borrow money, you should pay it back, and that if you can fund your employees' pension plans, you should do it.… We want to be successful; we want to reward our shareholders. But we also want to be mindful of all of the stakeholders in the company.
But after being the only major airline with a net loss in 2011 and with dismal prospects ahead, American joined the rest of its major competitors when the board voluntarily declared bankruptcy in November 2011, only six months after I interviewed Arpey. Given what I knew of Arpey's personal convictions about bankruptcy, I was unsurprised to hear that the declaration was immediately followed by Arpey's resignation as chairman, CEO, and president. The American Airlines board requested that Arpey remain at the helm, but as he wrote to American's employees, “Executing the board's plan will require not only a re-evaluation of every aspect of our business, but also the leadership of a new chairman and CEO who will bring restructuring experience and a different perspective to the process.” Arpey resigned and stepped away with no special severance package and nearly worthless stock holdings.
When I spoke to Arpey again after the bankruptcy, he was gracious about American and positive about the leadership of his successor, Thomas Horton: “I really believed then, as I do now, that he was a better man for the job.”
While Arpey was able to translate the devastating impact of 9/11 into moral purpose, the subsequent crises his airline faced were too much. This is the reality of leadership in the crucible; it is complicated and does not always end well. But Arpey's efforts were not in vain. He is remembered as a leader who held true to his moral convictions, perhaps the only airline CEO who regarded bankruptcy not simply as a financial tool but also as a moral failing. In a day and age of outrageous executive compensation and protest movements justifiably spawned by the self-serving nature of the elite, it is refreshing to see a CEO leave a position with honor even as he loses a long-fought battle.