SAVING THE OCEANS DETROIT CITY - Korn Ferry · 2020-01-28 · korn ferry briefings saving the...

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SAVING THE OCEANS

DETROIT CITY

COMEBACK LEADERS

pROTECTING A LOST EDEN

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COMPANIES,PEOPLE & EARTH

THE COMEBACK

TALENT + LEADERSHIP

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SAVING THE OCEANS

DETROIT CITY

COMEBACK LEADERS

PROTECTING A LOST EDEN

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COMPANIES,PEOPLE & EARTH

THE COMEBACK

TALENT + LEADERSHIP

Gary Burnison Chief Executive Officer

Michael DistefanoChief Marketing Officer

Joel KurtzmanEditor-In-Chief

Board of Advisors

Sergio AverbachStephen Bruyant-Langer

Cheryl BuxtonDennis Carey

Bob DamonJoe GriesedieckRobert Hallagan

Katie LaheyByrne Mulrooney

Indranil RoyJane Stevenson

Creative Directors

Robert Ross Roland K Madrid

Marketing Manager

Stacy Levyn

Project Manager

Tiffany Sledzianowski

Circulation Director

Jaye Cullen

Web Comm. Specialist

Edward McLaurin

Contributing Editors

Chris BergonziDavid Berreby

Lawrence M. FisherVictoria Griffith

Dana LandisStephanie Mitchell

Christopher R. O’DeaP.J. O’Rourke

Glenn RifkinStephen J. Trachtenberg

Adrian Wooldridge

KORN FERRY BRIEFINGS ON TALENT + LEADERSHIP

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Companies, People & Earth on the Rise.

How to Save The Oceans

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22 52 6660

Pollution has put our seas on life support. What can we do?

Comeback City Men at War Saving the Amazon Roaring BackOn Two Wheels

Four Comeback

LegendsDetroit on the verge of a new era.

Akamai and high-tech rising.

Photographer Salgado focuses his lens.

Companies, People & Earth on the Rise.

1

2 32 3B R I E F I N G S T A L E N T + L E A D E R S H I P

“As a leader, it’s not

about you, but it starts

with you.”

Setback or comeback. Failure or success. Luck or destiny.

The difference between them can be a very fine line. Look no further than this

year’s Winter Olympics, where the difference between the gold medal “thrill of victory” and the “agony of defeat” is measured in hundredths of seconds.

I have discovered that narrow bridge between failure and success to be learning and, then of course, courage. Similarly, what turns setback into comeback is determination coupled with perseverance.

In sports or in leadership, one of the most impor-tant lessons I have learned is that:

It doesn’t matter what you do at the moment of failure; it’s what you do afterward that counts most.

That’s what came to mind when I recently watched the NFL playoff game between the India-napolis Colts and the Kansas City Chiefs. The Colts had gone into the second half down 28 points, and the Indianapolis quarterback, Andrew Luck, was drawing boos from the hometown crowd, having thrown two interceptions. At that exact moment of the game, the statistical probability of a Colts vic-tory was a mere 3.6 percent, according to ESPN. But the improbable is exactly what happened, as Luck subsequently turned setback into the second-largest comeback in NFL playoff history, winning 45-44.

What was equally remarkable, however, was Luck’s demeanor throughout the game, even after a failed play: no slumped shoulders or panicked expres-sions. Instead, you could see the confidence in his eyes. When a Colts running back fumbled at the goal line after a long drive with little over 10 minutes left in the game, Luck instinctively grabbed the ball and

dived head-first into the end zone for a touchdown. For Luck, a Heisman Trophy winner (and previously featured on the cover of Briefings), this wasn’t a case of “luck” at all. Here was the “good fortune” that results when preparation meets opportunity.

The same applies to us, if we learn from failure and embrace setback as a temporary moment in which preparation and determination must collide to create opportunity. No matter how many times we “throw interceptions,” we almost always get another chance to play quarterback. The question then becomes, do you trust your own passing or hand the ball off to the running backs?

There are two endpoints in life, but the shortest path between them will not be a straight line. Simi-larly, leadership is not linear. You must have a Plan C for Plan B for Plan A, but none of those plans should include surrender. I recall former West Point Superin-tendent and Army Gen. Buster Hagenbeck telling me, “I’ve been in a lot of fights — never on the night be-fore a battle did I sit up with my sergeants and captains and say, ‘Gee, I hope we win tomorrow.’ Losing is just not an option.”

As a leader, it’s not about you, but it starts with you.

However, leaders don’t stage a comeback just for themselves. They are propelled by purpose, by others. Nelson Mandela came back from 27 years in prison to lead his nation, because he believed in a unified South Africa. Abraham Lincoln endured numerous setbacks in business and politics to become the greatest president in U.S. history because he had the strength and moral conviction to keep the nation from splintering apart.

And on the mountainous border between Af-ghanistan and Pakistan in late February 2002, Gen. Hagenbeck — now retired — led a mission known as Operation Anaconda, an intense battle against more than 1,000 foreign al-Qaeda. No matter that U.S. and allied troops were outnum-bered and the conditions were extremely harsh;

victory was never in question for Hagenbeck.

As the general told me the story, I was impressed by his quiet confidence and compassion for the soldiers under his command. His eyes dampened as he told of 28 soldiers wounded in the first 30 minutes of fighting — and of an Army Ranger who was captured

and killed. Hagenbeck’s concern for his soldiers was boundless. In return, his troops were inspired followers, not just soldiers taking orders.Just a few weeks ago after that NFL playoff game, Colts Head Coach Chuck Pagano (a comeback story himself, after missing nearly all of last season as he battled cancer) described the Luck-led victory as “one for the ages.” The quarterback, sounding an awful lot like a general on a battlefield, summed it up differently: This was his job, what he and the team had been trained to do. As one teammate told Sports Illustrated, “You see his eyes get focused and he says, ‘We are going to go on a drive [for a touchdown], right now.’ ” In other words,

Luck is a leader — making others believe and enabling that belief to become reality.

There is something about a comeback, about hardship, about overcoming the odds, about victory for the “little guy,” that is more sustaining and

holistically motivating than stories of riches, fame, celebrity and success. Why? Possibly because most of us can relate to an “underdog.” Or because arriving at the destination or achieving the goal is not as sustainable or impressionable as the memories and learnings of the trials and tribulations of the journey.

For these reasons, one must derive humbleness from success and allow failure to impart wisdom.

This should remind us that leading is less about strategy and decision making and much more about empowering, believing and connecting emotionally with others. If you are looking for others to believe in you, you will be waiting a long time for results — rather, believe in others, and you will be amazed by the results.

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Failure or Success—It’s a Grand Illusion

When something

ignites...

How Korn Ferryhas evolvedour brand:

While it’s true that great brands endure the test of time, they do so through periodic transforma-tion to reflect new realities, broadened visions. Over four and a half decades,

Korn Ferry has grown from a twinkle in the visionary eyes of our founders into a billion-dollar global organization.

Over time, our brand became an inadequate reflection

of the diversified and contemporary firm we had become. We needed a refreshed identity that honored our storied past while taking us boldly forward.

Tinkering with an icon, however, is not

something to be done lightly. Over the past year we have carefully crafted a new brand that is confident, classically modern and rich in meaning. Our brand conveys our ability to design,

build, attract and ignite talent, driving dramatic change in the organizations we serve. We hope you enjoy the Brand-Formation of Korn Ferry. —MIKE DISTEFANO

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Gary Burnison is CEO of Korn Ferry andauthor of the new book LEAD. LEADthebook.com

T H E L A T E S T

LOS ANGELES | +1 310 472 1211 l DORCHESTERCOLLECTION.COM

AN OASIS OF CALMAN ICONIC BRIDGE. A HIDDEN PARADISE.A LONG BREATH OUT. THE WHISPEROF FOUNTAINS. THE SCENT OF HIBISCUS.THE COMPLETE ESCAPE. HOTEL BEL-AIR.

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Women on Boards 6 Conversational Intelligence 16 Investing In Next-Generation Talent 18

T A L E N T + L E A D E R S H I P

The BriefingsInterview

CEO WESTPAC GROUP

Gail Kelly

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Becoming a Director Is a Career Choice

7

By Karen Kane

ary Agnes Wilderotter had a good job as vice president for sales at a small start-up technology company serving the cable industry. She had a good education and parents who encouraged her and her

three sisters to be successful. “Ambition is part of femininity,” their mother taught them, and each daughter was expected to find her own path to success. Early on, Maggie Wilderotter decided she wanted to be a director.

That approach has worked well for the chairman and CEO of Frontier Communications (NASDAQ:FTR) who has served on 23 public company boards in the past 28 years.

According to Wilderotter, just as an ambitious individual develops a career plan that builds upon each successive job of increasing responsibility as a stepping stone to the ultimate goal of being a C-Suite executive or CEO, the search for a board seat should follow the same path. Some begin with a private or nonprofit board, moving to a small public company board and ultimately a larger public company board.

Today, Wilderotter chairs her own board at Fron-tier Communications and serves on the boards of Xerox Corp. and the Procter & Gamble Company.

It’s clear that there’s nothing casual about be-coming a corporate director: It should be part of a larger career plan.

C. Kim Goodwin agrees. She joined Mellon Bank in 1987 and during her first week on the job, she was invited to attend a career strategy session for women and minorities. The Princeton graduate with an M.B.A. and a master’s of public administration from the University of Texas remembers seeing a diagram of a pyramid with “CEO/Board of Directors” at the top. She was surprised later to learn that she was the only course participant aspiring to rise to that level.

Like Wilderotter, Goodwin took charge of her career with the strategic goal of becoming a director. She sought more responsibility and harder jobs, which sometimes meant moving: from Mellon she went to Putnam Investments as senior vice president and portfolio manager, then to American Century In-vestments as managing director and chief investment o�cer, then to State Street Research as managingdirector and CIO. At that point, she decided to “check

in” with three CEO’s who knew her well. Was a board seat a valid objective for her? Not only did they endorse the idea, but they became active supporters of her candidacy.

Goodwin understood technology, as she had con-sistently picked winning companies in this industry for her clients’ investment portfolios. While presenting on a panel with the former CEO of Akamai Technolo-gies, George Conrades, Goodwin decided to make inquiries. She told the search firm partner who had organized the event that if Akamai were ever looking for a director, she would love to serve. Because of her initiative and simultaneous conversations at Akamai, the search firm formally proposed Goodwin for candi-dacy, and she joined the Akamai board at age 44.

Goodwin values what she has learned as a board member. She regards Conrades and director Martin Coyne as mentors and supporters. Coyne endorses Goodwin as “a model director who is well versed in business issues, well prepared and actively participates. Her financial, international, risk management and busi-ness experience adds considerable value to our board discussions.”

When Northwestern University’s Kel-logg School of Management decided that alumni clubs were a great tactic in strength-ening relationships with former students, Blythe McGarvie, then in her 20s, jumped in as one of the founders of the first club. “As program director, I did everything — ar-ranging programs, speakers, helping with membership.” Her raised profile caught the attention of the university, which sought to recruit her to the Board of Trustees in 1985, a remarkable achievement for a 29-year-old. When she asked what brought her to the board’s attention, she learned it was her passion for her graduate school and willingness to contribute.

A recruiter asked her to consider a director role at a private company that wanted to add her retail experience to its board. She declined, saying she would wait for a public board seat. But the recruiter persuaded her to talk to the CEO.

“The recruiter was right,” said McGarvie. “Dick Wood is an extraordinary leader. Wawa Inc. is private, yet they operate with all the discipline of a public company.” She joined the board in 1998 and is still on it, serving as the company has grown revenue from $1 billion to $9 billion. “Like my first marriage, it was my first board and I’m going to keep it.”

Bob Hallagan, vice chairman and managing director of board leadership services at Korn/Ferry

International, says his best advice for directors looking for a second board seat is, “Be an extraordi-nary director” on your first board.

When Hallagan talks to CEO’s and chairmen, he often asks, “Who is your best director and why?”

“Those rated as exceptional directors are bright, engaged and accessible; they challenge man-agement, but in a respectful way,” said Hallagan.

In light of di�culty in finding top talent for boards, Hallagan noted that more and more of his clients are doing long-term board succession planning. Anticipating future gaps in the board’s competency — because of changes in business model or upcoming retirements — has paid off for clients. “As one client noted, you can always expand the board by one for a short period of time if it means not losing an excep-tional candidate,” he said.

While CEO’s remain the most-recruited group, the talent supply is limited, according to Hal-lagan. His team is now going to highly suc-cessful companies, working with the heads of human resources and identifying high potentials. “They will be exposed to best practices, have histories of making good decisions, and through NACD [National Association of Corporate Directors] and other educational programs, we can help educate them on good governance.”

Human resources executives represent another new talent pool, said Hallagan. “Ensuring a company has the right CEO leadership and an environment that attracts

top talent is a key driver of shareholder value,” he said. “This topic increasingly has to be a top priority agenda for boards, and HR executives can certainly add value.”

To the uninitiated, getting on a board may appear daunting, but Wilderotter is fond of saying, “You’ve got to fish where the fish are.” By that she means, those seeking director positions need to get to know the current board members of the company. She also says it’s crucial to know what you offer. “It’s not an elevator speech, but it requires that you know where you are going and how you add value. It requires research and thinking of the matrix of skills that the current board possesses.”

Once again, Wilderotter made the Fortune Magazine list of the “50 Most Powerful Women. “ The magazine points out that nearly everyone on the list is “striving to reinvent her business,” but this group of executives is not sitting still.

The magazine noted that Wilderotter, at No. 40, ”remains a respected corporate voice.”

M

There’s nothing

casual about becoming

a corporate director: It should

be part of a larger

career plan.

taught them, and each daughter was expected to find her own path to success. Early on, Maggie Wilderotter decided she wanted to be a director.

chairman and CEO of Frontier Communications (NASDAQ:FTR) who has served on 23 public company

According to Wilderotter, just as an ambitious individual develops a career plan that builds upon each successive job of increasing responsibility as a stepping stone to the ultimate goal of being a C-Suite executive or CEO, the search for a board seat should follow the same path. Some begin with a private or nonprofit board, moving to a small public company board and ultimately a larger public company board.

Today, Wilderotter chairs her own board at Fron-tier Communications and serves on the boards of Xerox Corp. and the Procter & Gamble Company.

It’s clear that there’s nothing casual about be-coming a corporate director: It should be part of a

C. Kim Goodwin agrees. She joined Mellon Bank in 1987 and during her first week on the job, she was invited to attend a career strategy session for women and minorities. The Princeton graduate with an M.B.A. and a master’s of public administration from the University of Texas remembers seeing a diagram of a pyramid with “CEO/Board of Directors” at the top. She was surprised later to learn that she was the only course participant aspiring to rise to that level.

Like Wilderotter, Goodwin took charge of her career with the strategic goal of becoming a director. She sought more responsibility and harder jobs, which sometimes meant moving: from Mellon she went to Putnam Investments as senior vice president and portfolio manager, then to American Century In-vestments as managing director and chief investment o�cer, then to State Street Research as managing director and CIO. At that point, she decided to “check

the search firm formally proposed Goodwin for candidacy, and she joined the Akamai board at age 44.

Goodwin values what she has learned as a board member. She regards Conrades and director Martin Coyne as mentors and supporters. Coyne endorses Goodwin as “a model director who is well versed in business issues, well prepared and actively participates. Her financial, international, risk management and business experience adds considerable value to our board discussions.”

When Northwestern University’s Kellogg School of Management decided that alumni clubs were a great tactic in strengthening relationships with former students, Blythe McGarvie, then in her 20s, jumped in as one of the founders of the first club. “As program director, I did everything — arranging programs, speakers, helping with membership.” Her raised profile caught the attention of the university, which sought to recruit her to the Board of Trustees in 1985, a remarkable achievement for a 29-year-old. When she asked what brought her to the board’s attention, she learned it was her passion for her graduate school and willingness to contribute.

A recruiter asked her to consider a director role at a private company that wanted to add her retail experience to its board. She declined, saying she would wait for a public board seat. But the recruiter persuaded her to talk to the CEO.

“The recruiter was right,” said McGarvie. “Dick Wood is an extraordinary leader. Wawa Inc. is private, yet they operate with all the discipline of a public company.” She joined the board in 1998 and is still on it, serving as the company has grown revenue from $1 billion to $9 billion. “Like my first marriage, it was my first board and I’m going to keep it.”

Bob Hallagan, vice chairman and managing director of board leadership services at Korn/Ferry

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Leaning In,Not Blending In.

The BriefingsInterview

Gail Kelly. Chief Executive Officer, Westpac Group, Sydney.

B R I E F I N G S T A L E N T + L E A D E R S H I P

10 11

The Briefings Interview: Gail Kelly


and the sun is streaming

in through the glass

to Westpac Group

chief Gail Kelly’s office

in the city’s Central

Business District. The

boss of Australia’s

second-largest bank

has a spectacular view

of the sparkling harbor

and the company’s new

office tower rising up

in a revamped historic

docklands area below. But Kelly’s rapid-fire

mind is elsewhere. With trademark smile and almost infectious enthu-siasm, she is recalling re-lentlessly busy Shanghai and Mumbai and the port of Chengdu. The western Chinese port, 13 hours’ flight north, ships in a week what Sydney does in a year, all mecha-nized efficiency and throughput.

The bank from Down Under is boosting its

institutional presence in Asia, to help support the increasing number of Australian customers building their businesses there. Pretty much ev-eryone is trying to home in on the emerging mar-kets in this Asian century, including rivals from Australia’s bank-heavy market, including Com-monwealth, ANZ and NAB.

Just shy of its 200th anniversary in 2017, Aus-tralia’s oldest company is setting itself up for a third century, knowing it will have to adapt to dramatically different circumstances and com-petitive terrain. It is a long list: sluggish credit growth, the disruption caused to bricks-and-mortar businesses by digitization, the need to rebuild trust and meet new capital rules after the reputational pasting the banks took during the financial crisis, and aging demographics, are just for starters.

Kelly drives all this, a business with 36,000 staff and $A696 billion in assets, from a CEO’s office that feels homey,

that somehow under-scores a generosity of spirit she believes leaders require in these disrup-tive days for business.

Budding vases of yellow roses, woven rugs, stuffed brand mascots and splashes of bright paintings, including a famous naive of Aussie bushranger Ned Kelly (no relation), soften the neat corporate furniture. Family snaps hint at the journey of the South African-born teacher and bank teller, M.B.A., mother of four (including triplets) and sports nut, to become Australia’s first female bank chief in 2002.

After overseeing an audacious and controver-sial merger in 2008 with St. George, the smaller rival she previously headed for five years, Kelly is making her mark, as one of the world’s most influential women leaders.

To use Facebook COO Sheryl Sandberg’s line of the moment, Kelly is leaning in. She aims to make Westpac one of the world’s most admired companies. The bank is

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a signatory to the United Nations Global Com-pact, the world’s largest voluntary corporate responsibility initiative. Having learned by harsh experience that it is not enough just to keep your head down and do your best, she’s also setting up Westpac as a model

of what’s possible when a company sets its mind at achieving gender balance.

Kelly recently sat down with Narelle Hooper, former editor of the Aus-tralian Financial Review’s BOSS Magazine. What follows is an edited ver-sion of their conversation.

12 13



You’ve had a fascinating life and career journey — from growing up in Pretoria, South Africa, to running Australia’s second-largest bank. You seem to adapt well to change. How did that come about?

KELLY I’m not entirely sure! A combination of luck, hard work and taking opportunities that came my way, I think. I am fortunate to have had an excellent education, to have had parents who encouraged me to give my best and to back myself. I think growing up in South Africa was a help, too – I was given real accountability at a relatively young age and learnt how to deal with change. The 1980s and 1990s, when I was starting out in my career, were really interesting and challenging years. Once in Australia [the family migrated in 1997], I was fortunate to have been given great opportunities which I threw myself into. I really do love what I do.

How do you get that responsiveness in a big organization? That hierarchical struc-ture is so strongly ingrained in the way we operate.

KELLY Culture is one of the things I’ve pushed really hard, in all my stay in Westpac, and it has been a theme for me through all of my leadership career. It is what I call a One Team approach, which is different from team-work by the way.

Teamwork is one team working together, a One Team is all of us across the whole operation think about pulling together for the customer. It involves teamwork, but it means different teams will support each other so they will put the outcome for the customer and the outcome for the corporation first be-fore the outcome for their own business unit and the individual.

A lot of organizations aim for that, but how do you make that real for people who go in every day but who are not as con-nected to it as you and your top team?

KELLY You start at the top — role modeling at the very top of the organization. We take our values very seriously. I talk about the values wherever I go, so there is a big piece of leadership in terms of communication and embedding and showing, by your own actions, that the values actually matter.

And we’re very clear on the behaviors that are evidence of One Team and the behaviors that are not. We call them out, and we recog-nize and reward through o�cial performance reviewing. We evaluate individuals’ perfor-mance relative to their values; it’s a specific piece of the performance review.

What about removing employees if they don’t adhere to the behavior?

KELLY We absolutely do that. I have ex-amples, and we make sure people understand exactly why that has occurred. Silo mentality, silo behavior … we really do call that out.

I run processes twice a year with my team where we sit down as a team and spend time to explicitly address how we are performing as a team and reviewing each. I’m part of that team, and I receive the same feedback and I give the same feedback. It’s very powerful.

It is a very open and constructive environ-ment, but it is very candid. Out of that, we each devise our own set of things we are going to work on for the next six months.

In that, there is an issue around trust. It doesn’t come naturally to a lot of people.

KELLY It doesn’t happen overnight. You keep on working on it. It boils down to a few things. One is deep respect for people and a belief people make a difference. If you don’t have a deep respect for individuals and a view that people make a difference, you are not going to get trust. You are not going to get a One Team set of behaviors. You are not going to drive a “generosity of spirit” ap-proach towards leadership, which I feel very strongly about.

When did you come to that? Was there a moment it clicked?

KELLY Many years ago, I listened to Jack Welch. It was after he left G.E. He was asked about leadership lessons he reflected on and things he might have made more of. He spoke of a generosity gene. That struck me and I thought “That’s it.” I inherently believe leaders need to evidence generosity of spirit.

That’s where it clicked for me because I in-herently believe in the power of the individual to make a difference. You need to create an environment where individuals can flourish, where they can be the best that they can be.

He says it’s a gene in you. I’m not so sure — I think you can develop this empathy through learning, observation and experience, and there are some leadership dynamics.

I picked up on this in my research report on my M.B.A., in 1986. I’d spoken to these South African CEO’s, leaders. … If you want to be a good leader, you need to like people. Leadership is about people. If you like people, you take time to understand them, what that person’s individual motivators and drivers are and therefore how to create an environment where that person can thrive…. And to be pre-pared to develop that relationship to the point where you can have a conversation: “I’ve no-ticed … and I’m concerned, so perhaps you can help me understand why this is occurring.”

And the flip side is when they need stretching?

KELLY Correct. You see it in sport as well. I love sport. I have several passions in life, one of them is sport. My father represented South Africa and in team sports. I grew up on sports fields. I’ve watched and been involved in team sports, and I’m interested in the psychology of team sport and competitiveness.

Some people need daily feedback and others are, “Let me be. I know what I’m doing and when I’m ready I will bring it to you.” My kids are like that: “Mum, don’t keep asking me how I am. I am fine,” and other kids are different.

14 15B R I E F I N G S

How does that influence your day and how you do your job?

KELLY A big part of my job is assisting in the process. I’m playing a leading, steering, guiding and cheerleading role in lots of ways.

My job is in lots of ways to take all the fantastic work, input and thinking and make sure I can distill it in really clear ways that have meaning. That is so people can identify with it and say, “I’ve got it.”

For example, we have a question on our [employee] survey on whether I as an indi-vidual understand how my work connects to the vision of the organization — 97 percent said yes.

I talk a lot about the elevator speech. They tease me about it. So you get in at level 1 and by the time you get out at level 21 between the two of us we can nail the elevator speech. You want people to have a simple, clear understanding.

What are your main objectives as a leader?

KELLY You have global goals — to be the [one of the] most highly respected companies in the world. That’s why our sustainability metrics matter. It is about deep respect. That’s why I was so chuffed with the World Economic Forum where they choose 100 com-panies as best in sustainability. We came out 10th this year. We were the leading bank on the survey and the leading Australian com-pany on the survey. It is about being respected and helping our customers, communities and employees prosper and grow.

And other goals?

KELLY We set clear frameworks. We want to achieve at least 15 percent ROE because it is important to be strong first, if you are going to play this role in society. We’ve all seen what happens when banks fail, they can’t support customers, or provide an adequate return to

shareholders. We have EPS and TSR metrics. We talk about four quadrants. We seek to achieve a balance on financials. We need to be strong first, so we set clear goals on capital liquidity. Then the growth quadrant — we’re looking to target the growth in segments where we get the best return — so increasing in Asia, wealth, insurance and focus on deposits, transactional banking, SMEs and strength. Then there’s the productivity quadrant. It is really important, and we have to keep simplifying and standardizing and eliminating waste.

The last quadrant is return. It goes to margin management and ROE. And they’re trade-offs: you want the appropriate level of capital to be really strong and driving the growth piece to really drive the return met-rics. You are balancing them, knowing there are trade-offs.

Part of my job is balancing resources that are finite – people, money, time — to best bal-ance that set of outcomes.

How does that sit on your shoulders?

KELLY I don’t feel alone. I have a fantastic board — and it provides great input and sup-port, understanding and guidance — and a great relationship with my chairman.

And I have a fantastic team. … Having the right people in the right roles is the single most important factor for achieving business success. And that includes moving the wrong people out of the wrong roles.

So I have a great team and we are all marching to the same agenda and we are all really clear about what success looks like and that balanced scorecard. We’ll sit as a team and make prioritization decisions, and that comes to the One Team, because not everyone will have their wish; there are always many more requests for funding than we can do. It’s not just funding—it’s often people and change. You can’t put too much change into a system at once.

“Leadership is about people. If you like

people, you take time to understand them,

what that person’s individual motivators

and drivers are and therefore how to create

an environment where that person can thrive.

—Gail Kelly


1616

However, none of these assumptions turned out to be the whole truth. By digging below the surface, each company uncovered another obstacle that was holding them back. It wasn’t simply that they couldn’t execute, market or sell. The bigger problem was a lack of Conversational Intelligence™.

Conversational Intelligence is an organization’s ability to communicate in ways that create a shared concept of reality.

Having worked with these companies and many more of the world’s largest businesses over the past 30 years, I’ve learned that Conversational Intelligence

can be cultivated in individuals, teams and organizations.

Conversational Intelligence is the hardwired ability in all humans to connect, engage and navigate with others. It is the most important intelligence that gets better when “we” do it together. While the other types of intelligence are more “I-centric” in nature, Conversational Intel-ligence is a collaborative effort. We can raise the Conversational Intelligence level in personal relationships as well as the teams

and organizations we are a part of. Conversations are not always what we think they

are. We’ve grown up believing in a narrow view of conversations, thinking they are about expressing thoughts, observations and opinions. Many see con-versations as “persuasion” or “getting others to think the way I think.”

In our early research, we watched conversations under different circumstances, everything from first meetings to major negotiations. It wasn’t di�cult to see the patterns emerge. We found that as many of 95 percent of verbal exchanges were “telling” statements. “Asking” statements were rare, as was quality listening.

Conversational Intelligence is about closing the gaps between your reality and mine. As such, it can yield improved business results and create a frame-work for enhancing relationships and partnerships, releasing new energy for growth and transformation.

For many, it may be a new concept to think that what we hold in our head — as our reality — is not nec-

essarily what others see. Each of us maps the world through our experiences. We create the meaning, and then we share it with others. Conversations provide the tools for talking about what we think and feel, and if the conversations are healthy and robust, we will come to see how others view the world and learn to work successfully with them.

Conversational Intelligence begins with trust. Consider the challenges Angela Ahrendts, who heads Apple’s retail businesses, faced when she stepped into her previous job as CEO of Burberry in 2006. How did she transform this tradition-rich British clothing line, founded in 1856, so that it outpaced all other brands in the luxury apparel sector? Ahrendts put it this way. “Trust is truly at the heart of it all. If trust is your core value, you hire accordingly. I interview

a lot of senior management people, and at this level competence and experience are a given. Trust is the difference-maker. When I look them in the eye, I’m asking myself: Do I trust them, and do I get the feeling that they trust me? Do they get the vision?”

Distrust leads to defensive listening; trust leads to intelligent listening. Creating a healthy, trusting en-vironment is the first step to gaining Conversational Intelligence. When intentions are set on bridging our realities, being open and transparent, focusing on re-spect and relationships before tasks, listening to un-derstand, discovering shared success and consistently working to narrow the reality gaps, we are exercising our conversational muscles. When we do that, we are much more likely to achieve organizational goals and perhaps our personal ones as well.

What is Conversational Intelligence?

17B R I E F I N G S T A L E N T + L E A D E R S H I P16

he corporate battlefields are littered with the burnt-out, rusting hulks of auspicious strategies that failed in spectacular fashion

and companies that — despite having novel and promising ideas — constantly trail their peers in profits and shareholder returns. A while back the drug company Boehringer Ingelheim suspected its underperformance sprang from a lackluster sales force. New Wave Entertainment blamed conflicting egos in the executive suite, and Clairol believed inconsistent marketing efforts led to the company’s poor numbers.

T

Judith E. Glaser, CEO of Benchmark Communications Inc., is chairman of the Creating We Institute. She is an organizational anthropologist and author of seven books, including her latest best seller, “Conversational Intelligence: How Great Leaders

Build Trust and Get Extraordinary Results.”

www.conversationalintelligence.com

By Judith Glaser

Ignoring Other

Perspectives

Many people err by spending most

of their time de-scribing their views

of reality rather than learning how

others assess a situation. But the more we focus on

the “realities” that others perceive,

the more we con-nect with them.

Fixation on “Being Right”

Neuroscientists are discovering that hu-mans have a passion for being “right” — more than a pas-sion — a compulsion. People “get high” on being right — and are rewarded indi-vidually for having “correct” answers. But, the more a speaker pushes his or her “reality,” the more the listeners will seek to protect their positions or points of view, which reduces their con-nection with others and raises the risk of conflict.

Tell-Sell-Yell

It’s a mistake to think that more talk

always translates into better

communication, understanding

and influence. The truth is, the more

we try to align others around “our” point of

view, the more we create groupthink,

resistance or grudging

obedience driven by fear. To

employees, this comes across as “my way or the

highway.”

Disengaged Listeners

Those who nod their heads while others talk aren’t always paying attention. Leaders need to learn to practice engagement strategies with others to ensure they are truly connecting, sharing and learning.

Allowing Emotions to Affect Listening

Every conversation has emotional content. Fearful listeners may misinterpret friendly advice or warnings as threats.

Five mistakes that lower Conversational Intelligence

Illu

stra

tio

n: M

AR

IA C

OR

TE

more we focus on the “realities” that

others perceive, the more we con-

nect with them.

conflict. others around “our” point of





highway.”

Tell-Sell-Yell


Five mistakes Conversational Intelligence

truth is, the more we try to align others around “our” point of






Every conversation has emotional content. Fearful listeners may misinterpret friendly advice or warnings as

Intelligence

Ignoring Other

Fixation on “Being Right”

Neuroscientists are discovering that hu-mans have a passion for being “right” — more than a pas-sion — a compulsion. People “get high” on being right — and are rewarded indi-vidually for having

19

Moreover, a reliable succession process — with as few surprises as possible — is something for which companies are increasingly rewarded in the market-place. It is being demanded by shareholders, required to be reported in the proxy, and is a metric of “good governance” for shareholder proxy services that vote companies up or down as solid investments.

Demonstrate commitmentAny company that wishes to be known — inside and outside — as a development-oriented culture should start at the top. The board and CEO must make it clear that growing and advancing talent is a priority, and that message should be understood in every corner of the company, particularly with high-potential executives who know their career and their future matter.

It’s easy to repeat platitudes about the importance of leadership and valued employees — as many com-panies do — but the real priorities quickly become apparent to insiders through the words and actions of those at the top.

Companies that do it right understand that man-agement succession is not an occasional exercise, but muscle that must be flexed regularly and continually strengthened. Further, leadership planning should be closely linked to the organizational strategy.

Focus on the critical fewFor those who will add the greatest value as leaders, long-term, boards and CEO’s should look beyond the most obvious choices. The goal is to build the best talent, and many CEO’s get consumed with the “what,” not the “who” and the “how.”

Consider tapping the organization for input on future internal successors. The best may be highly capable and respected by their colleagues, but “hidden” from leadership. And it’s important to engage the organization in identifying promising leaders for another reason. When you make a lead-ership change, of course you want the market to respond positively, but you want company insiders to be enthusiastic, too. That can be a powerful moti-vator throughout the organization.

To mobilize the critical few who will become the future leadership of the company, the first step is identifying them, but the more important part is en-gaging them in regular communication about their development progress. It’s crucial to gauge what the individual en-visions for the future, including interest in a plan to prepare him or her for a lead-ership role.

Cross-train, maintain flexibilityWhere “development” may previously have had a reme-dial ring to it, those who know they may be tapped for leadership roles are now more likely to view coaching as a signal that they are headed for bigger things and that the organization is investing in their future.

Global leaders today need a wide range of skills and often, because of the sheer speed of change, boards and CEO’s may not know precisely the mix of capabilities and experience required in a successor until fairly close to the transition.

So it’s important not only to ensure that any de-velopment gaps are addressed for leading contenders, but also to maintain a range of candidates. The goal is not to pit one candidate against another like jockeys in a horse race, but to ensure the right CEO for a par-ticular stage of the company’s growth, as well as for a particular industry and global environment. Let the strategy lead the way, keep options open, and don’t choose a successor until the timing is right.

The board at the centerThe board’s role in every phase of the succession and management development process is crucial.

On the most elemental level, while the board doesn’t manage development day-to-day, it should make sure that these topics are regularly on the agenda. The board should identify an immediate, emergency successor — which may change over time — who can step in on a moment’s notice, as well as promising next-generation leaders who will be critical to the future. Most companies that have implemented a rigorous succession process ensure that the board has ample opportunity to get to know future leaders, both in board meetings and in less formal settings.

While CEO succession and passing the baton from one star CEO to another is the sort of news that regu-larly makes headlines, the less glamorous process — the plain old hard work — that ensures successful transi-tions gets far less attention.

CEO’s and their boards are finally waking up to the fact CEO succession is not an event, or even a process that exists in isolation, but part of a larger development effort that reaches deep down into the organization. By focusing on succession planning, boards are executing their most important fiduciary duty: ensuring a steady flow of leadership for their

organizations. How fortunate that doing the right thing for shareholders also helps to burnish the organiza-tion’s credentials as a leadership de-velopment culture and a magnet for management talent.

Investing in Next-Generation

Talent Reaps Rewards

By Nels Olson & Megan Shattuck

here are clear benefits to “homegrown”

talent — including lower cost and less turnover — but perhaps the most important reason to invest in up-and-comers is a simple and logical one: The best managers, those who can make a real difference in corporate performance and are wooed by many employers, are attracted to companies that excel at development. They seize the opportunity to build their portfolio of skills and experience, whether ultimately to use in a senior position at that company or to pick up and take with them to apply elsewhere.

T


Nels Olson is Vice Chairman and

Co-Leader, Board & CEO Services Practice,

and Megan Shattuck is Client Partner,

Korn Ferry.

Illustra

tion

: JO

HN

HE

RS

EY

“ Washington and the American public need to get educated on energy and the tremendous poten-tial we have in America to be energy secure. Joel Kurtzman’s book is a great educational read. Now

what we need is leadership. And a plan.”

—T . B O O N E P I C K E N S

“ Fasten your seat belts. If Kurtzman … is right, the American economy is fueled for an unprecedented takeoff into a new era of economic growth.”

—K I R K U S

ALL THE TALK ABOUT THE

RELATIVE DECLINE OF THE UNITED STATES

IS NOT ONLY BASELESS —IT’S DEAD WRONG.

“ America is not a spent power, not by a long shot … [and if you] ask me

where the country is headed.… I can answer with a single word: Up.”

—JOEL KURTZMAN, in Unleashing the Second American Century

Available now in hardcover and e-book, wherever books are sold

www.secondamericancentury.us

Unleashing ad.indd 1 12/11/13 1:10 PM

THAT WAS

SINCE LAZARUS.

SID WADDELLENGLISH SPORTS COMMENTATOR AND TELEVISION PERSONALITY

21T A L E N T + L E A D E R S H I P

Four Legendary Turnarounds

THE GREATESTCOMEBACK

THE GREATESTCOMEBACK

sk any executive or leadership guru to name the leaders they most

admire, and the majority will place NELSON MANDELA among

the top three, along with G andhi and Martin Luther King J r. As a young and vocal leader of the African N ational Congress, Mandela, a lawyer, was determined to bring justice and eq uality to black South Africans, who made up 8 0 percent of the country’s population but were denied almost all freedoms by the white Afrikaners’ ruling government. Determined, charismatic, brilliant and resourceful, Mandela became a leader in the AN C and was arrested on treason charges and later on charges of sabotage and conspiracy to overthrow the state. At 44 years of age, he was sentenced to life in prison and sent to R obben Island prison near Cape T own. He spent the nex t 2 7 years in prison, most of it at hard labor. During his time in prison, he never stopped believing in the cause, and his name became the rallying cry for the anti-apartheid movement around the world.

W hen he was released at age 7 1 in 1990, andela emer ed as an iconic world fi ure

who symbolized the strength of self-determi-nation and forgiveness. R ather than ex press hatred and anger at his unjust imprisonment, Mandela spoke of the importance of reconcili-ation without retribution as the only hope for the future of a South African democracy with eq uality for all of its citizens. He became a master negotiator and spent his last years in prison and first years outside of prison formulating a plan to work with the white government, repair the fractures within the AN C, and to set the stage for majority rule in South Africa. In 1994, by an overwhelming ma ority, andela was elected as the first blac president of South Africa. He served just one term, though he could have easily won again and again. His statesmanship and leadership skills kept South Africa from descending into a bloody civil war, and he became a symbol of hope for oppressed people around the world. In a 2 007 interview with the N ew York T imes for his own obituary, Mandela was asked, “After such barbarous torment, how do you keep hatred in check? ” His answer was almost dismissive: “Hating clouds the mind. It gets in the way of strategy. Leaders cannot afford to hate.”

23T A L E N T + L E A D E R S H I P

THE REAL GLORY IS IN BEING KNOCKED TO YOUR KNEES & THEN COMING BACK.

VINCE LOMBARDI:

History is replete with stories of

monumental failure followed by inspired

redemption. One can’t enjoy the

full measure of success without

experiencing the pain and education of failure, and most

leaders, whether in business,

politics, sports, entertainment or the military,

will acknowledge that victory is far

sweeter coming on the heels of defeat.

What follows are some examples of

inspired leadership comebacks.

LEADERSHIP COMEBACKS

G L E N N R I F K I N

Nelson

Winston

A

MANDELA

CHURCHILLConsidered perhaps the 20th century’s most inspiring leader, Winston Churchill, an icon of staunch and exceptional steward-ship as Britain’s resolute prime minister during World War II, endured a decade or more in which his career appeared to be in terminal decline. As a young man, Churchill began an upwardly mobile climb in Britain’s turbulent political scene. He had gained fame as a military officer who displayed exceptional valor during fighting in India and the Boer War. He wrote best-selling books about his exploits, and when he returned to England, he was easily elected to a seat in Parliament as a conservative MP. He was made home secretary in 1910 and later first lord of the admiralty. He fought in the trenches during World War I and returned even more admired to his home in England. When the war ended in 1918, Lloyd George named Churchill secretary of state for war and air. But his promising career stalled when he lost his seat in 1922 and found himself

outside the political world for the first time.

During what he called “The Wilderness Years” Churchill spent time writing and painting, but after another short stint in Parliament, he was swept out, along with the Labour Party in 1929. The stock market crash left him in financial straits, and he all but vanished from the po-litical scene. As Hitler rose to power, Churchill spoke out from the backbenches and issued warning after warning of a coming crisis with Germany.

Well past the typical age of retirement in his era, Churchill emerged from political exile and became prime minister in 1940. His unwavering courage and inspirational voice during the Battle of Britain and throughout World War II brought that beleaguered nation through its darkest days. After much effort, he persuaded President Franklin Roosevelt to provide support for the Allies, and as the U.S. en-tered the war, F.D.R. and Churchill steered the Allies to victory.

22Illustrations: DAVID JOHNSON

B R I E F I N G S T A L E N T + L E A D E R S H I P24

ee Kuan Yew, the father of Singapore, is one of the world’s most respected statesmen.

He served as that nation’s first prime minister and held office for more than

three decades—from 1959 to 1990—one of the longest tenures among democratically elected heads of state in the world. But LKY, as he is known, had to endure an agonizing period of uncertainty and instability early in his tenure before building Singapore into one of the most successful and admired Asian economies.

Lee, born a British subject when Singapore was a colony, studied at the London School of Economics and Cambridge Uni-versity. He began his political career when he and a group of fellow English-educated Singaporeans founded the People’s Action Party (PAP) in 1954. He rose to prominence along with his party, and when Singapore merged with Malaysia in order to end British sovereignty in 1963, Lee believed he had put his country on a path to a successful future. But the merger proved to be short-lived as the Malay-sian ruling party grew increasingly concerned about Singapore’s Chinese majority. By 1965, the coupling fell apart and a formal separation was signed. Lee was devastated. In a televised press conference that day, he was nearly in tears.

“Every time we look back on this moment when we

Diana NYADDistance swimmer Diana Nyad refused to give up her dream of swimming the 103 daunting miles from Cuba to Key West, Fla. Having failed in four previous, excruciating attempts, Nyad finally conquered the ocean, the currents, the wind, the sharks and the jellyfish and staggered ashore on Sept. 2, 2013, to the cheers of friends and fans. That she accomplished this feat at age 64, when most serious swimmers are happy to do 50 laps in the pool at the Y, was testament to her mantra, “Find a way!”

Nyad first tried to swim

the Florida Straits at age 29 in 1978. She made her next four attempts after the age of 60. She was beaten on her previous tries by rough seas, a brutal asthma attack and an overwhelming barrage of jellyfish stings. This time, inspired by the recent death of her mother, Nyad wore a suit and mask to protect her from jellyfish. “I got three messages,” she told re-porters on the beach. “One is we should never, ever give up. Two is you never are too old to chase your dreams. Three is it looks like a solitary sport, but it’s a team that gets it done.”

Lee KUAN YEW

signed this agreement which severed Singapore from Malaysia, it will be a moment of anguish,” Lee said. “For me, it is a moment of anguish because all of my life…I have believed in merger and the unity of these two territories.”

But rather than dwell on the past, Lee began to transform his nation, focusing directly on economic development and creating a strong culture and society in this once-downtrodden colony. In one of history’s great comebacks, Lee single-handedly forged a new

Singapore—using such controversial tactics as corporal punishment in the form of caning, and making such vices as chewing gum or spitting punishable offenses—to create a formidable legacy. He also created an ef-ficient, well-paid and corruption-free bureaucracy and spent heavily on education and innovation. Despite a small population, limited land and no natural resources, Singapore has become a much-envied and respected nation. Lee, now 90, continues to write and participate in the political process. He is among the most widely praised and revered world leaders.

EnDuring SEtbacKS

whiLE maintaining

thE abiLitY to Show

othErS thE waY to go

forwarD iS a truE

tESt of LEaDErShip.

NitiN Nohria, deaN of the harvard

BusiNess school:

26

Every Sunday in the warm months,

from May to October, we clean the beach.

It’s about 40 feet of shoreline, sandy at

low tide and all pebbles in high water,

next to a pier in New York City (techni-

cally, that makes it part of the estuary

that is Upper New York Bay). It curves

from that pier to a pile of rocks and

boulders, where crabs scuttle and kids

clamber. Just a stretch of once-industrial

shoreline, whose waters are now free of

the sewage and industrial wastes that

poisoned them in the 20th century.

What can we do?

How to Save the

Oceans

By David Berreby

Pollution, debris,

and waste have put our seas

on life support.


that comeback story, which has made old urban water-fronts so attractive in this century, is not all there is to say about the shoreline. These urban waters, though safe for boats and even swimmers, are also packed with trash. And so every Sunday the group comes down with garbage bags and work gloves and picks up: crumpled bags that once held potato chips or candy bars, plastic cups, bits of Styrofoam, “Coney Island whitefish” (as New Yorkers call floating condoms), liquor bottles, soda cans, tampon applicators and syringes. Once, we found a dead white rat with a huge tumor. Once, we found a grocery-store plastic bag wrapped tight around some clothes, an inhaler and release papers from a Long Island jail. However much we haul away, there’s always more the next week.

Almost everything we beach cleaners pick up was thrown away on land, well out of sight of the sea. Then the trash was carried by wind or rainwater into the sea. It wasn’t malice that put the garbage in the water — it was an “out of sight, out of mind” attitude that can’t see how even the smallest actions we take on land will have an effect on the oceans.

In fact, when something human beings produce or use “disappears,” it often ends up in the world’s oceans. “People in Iowa are affecting the coastline hundreds of miles away, whether they know it or not,” says David Samuel Johnson, a marine ecologist at the Marine Biological Laboratory’s Ecosystems Center in Woods Hole, Mass.

As is often the case, the garbage we can see isn’t nearly as harmful as the stuff that is invisible. For example, the world’s o�cially named oceanic trash heaps — the Great Pacific Garbage Patch, the Indian Ocean Garbage Patch, the North Atlantic Garbage Patch and others — are not dramatic collections of junk on the surface but rather vast clouds of tiny bits of plastic and other materials, much of it below the surface. Krill, the small creatures that feed many fish and whales, choke on tiny plastic “nurdles” floating in the sea; seabirds swallow plastic fragments and bits of fishing line; loggerhead turtles mistake plastic

Krill... choke on small plastic

“nurdles” floating in the sea;

seabirds swallow plastic fragments and bits of fishing

line; loggerhead turtles mistake plastic bags for

jellyfish, swallow the bags, and

die of intestinal obstruction.

Pa

ge

s 26

-29

; 36

: CO

RB

IS

Unfortunately,

30 3130

bags for jellyfish, swallow the bags, and die of intes-tinal obstruction.

In fact, the product with which we do the ocean most harm is odorless, tasteless and invisible. It is carbon dioxide, added to the atmosphere by indus-trial civilization and agriculture.

Increases in carbon dioxide in the atmosphere are changing the climate and the biogeochemical exchanges among land, sea and air that determine the weather. For decades, the ocean has been absorbing a lot of the heat that excess carbon dioxide traps, moderating its effects on land. And the ocean is also absorbing a great deal of carbon dioxide directly, keeping it out of the atmosphere and, again, pro-tecting us. (Oceanographers estimate that the global ocean has absorbed some 525 billion tons of carbon dioxide from the atmosphere over the past two centuries, including about a quarter of all the CO2

generated by humans.) This protective effect helps perpetuate our “out of sight, out of mind” mentality about both our cast-off prod-ucts and the effects of global warming.

But recently, signs have been accumulating that this era of ignorance cannot continue — the things we are doing to the ocean are now having such severe consequences that it appears bound to change for the

worse. And among those changes is the possibility that the ocean’s capacity to serve as a great mantle of soft armor — an absorber of excess heat and excess CO2 — has reached its limit. It is in trouble. And that means we — not just the billion people around the world who depend on seafood for their protein, but all of us — are in trouble.

The most severe effects of rising carbon dioxide in the atmosphere have combined into a three-part assault on the global ocean, according to the Interna-tional Programme on the State of the Ocean (IPSO), a collection of scientists who study the global sea. First, there is global warming itself, which is causing average temperatures of seawater to rise. Second, there is an ongoing re-duction in the amount of oxygen in seawater worldwide. Third, the pH of seawater worldwide is changing, making the oceans less alkaline and more acidic. Each of these effects, in isolation, could

have horrendous consequences for world weather and for life in the oceans — and thus for the billion people who depend on seafood for their protein. But they are all occurring simultaneously, and each one is made worse by its interaction with the other two.

Ocean warming is well documented — over the past century, the average temperature of ocean water at or near the surface rose by more than half a degree

centigrade. The reason it matters is also well known: The acceleration of this trend is likely to play havoc with fisheries, as many species head north, or go deeper, to find temperatures in their comfort zone. Competition for livable environments will be severe. Moreover, the changes will open up new opportuni-ties for pathogens, so that diseases are expected to spread to new ocean regions and new species. Many species will not survive the disruption (some esti-mates say more than half will die out).

Coral reefs around the world — which, in addi-tion to their natural beauty, are essential to the life cycles of about a quarter of all marine species — are especially ill equipped to withstand changes in ocean temperature. The reefs are created by small, soft-bodied animals called polyps, which use calcium car-bonate from seawater to build themselves an external skeleton. (The hard forms of a coral reef are actually the exoskeletons of countless polyps.) To eat, many of these polyps depend on sugar made by algae that

live within their bodies. The algae get protection, thanks to the hard exoskeleton made by the coral; the coral get nutrition from the algae (which are also the source of the reef ’s gorgeous hues — polyps by themselves are nearly colorless).

Rising temperatures disrupt this relationship: When waters warm, polyps expel their algae. This is known as “coral bleaching,” because it leaves the normally colorful reef looking chalky white. With their main source of nutrition gone, the polyps go on to die. Bleaching is thus a major reason why some 20 percent of the world’s coral reefs are already dead, why another 15 percent are likely to be gone by 2030, and why coral could be extinct by the beginning of the next century.

Warmer oceans are also altering the chemistry of oxygen in water: The warmer water is, the less dissolved oxygen it can contain. A typical million molecules of water will harbor a few molecules of ox-ygen, like the carbon dioxide in a bottle of soda (the

The things we are doing to

the ocean are now having such severe

consequences that it appears

bound to change for the worse.

32 33B R I E F I N G S T A L E N T + L E A D E R S H I P

“The Gulf of Mexico’s dead

zone in 2013 was the size of a small

country. And that’s only one

dead zone.”

gas in the soda escapes into bubbles when you lessen the pressure on the liquid by flipping the cap, but the air and water pressure that hold oxygen in water can’t be altered). This dissolved oxygen supports billions of creatures (which absorb it through their gills or, if very small, through their skin).

The trouble is not simply that warmer oceans will harbor fewer oxygen molecules per gallon. It’s also that warmer water tends to stay at the surface, be-cause it is lighter than cold water and because it is fed by fresh water from rain and melting ice. (Fresh water is lighter than saltwater.) Unfortunately, the oxygen supply for deep-dwelling fish and other creatures depends on the sinking of oxygen-rich surface water. If less surface water sinks, less oxygen gets to animals

at depth. “Deoxygenation” is thus another serious threat to the well-being of many individual species and a menace to the food chain as a whole.

As if this weren’t bad enough, human activity is compounding the problem on the coastlines. There, over the past 60 years, we’ve been pouring vast amounts of fertilizer into the ocean. This leads to gigantic algae blooms. When all those algae die, the bacteria that consume them also consume all the available oxygen in the water. If you can imagine a stagnant pond on a hot summer day, covered with green algae and completely divested of fish, you can see the problem. Except the “dead zones” we cause extend for thousands of miles. The Gulf of Mexico’s dead zone in 2013 was 5,800 square

miles (about the size of Connecticut), Johnson told me.No one intended to kill or drive millions of fish off

the coasts. It’s “out of sight, out of mind” thinking that unintentionally promotes algae blooms. First, we fer-tilize our crops ine�ciently. Of the 200 million metric tons of nitrogen applied to farmland each year, 140 mil-lion are washed away into streams and rivers, and then into nearby seas, according to Johnson.

Second, we grow animals for food, and those animals produce what we can politely term manure. Those wastes are also rich in nitrogen (which is why they were used as fertilizer, before the discovery of chemical means to get nitrogen from air). Despite our efforts to contain and use animal waste, a lot of it also washes down to the sea. “A cow standing in a stream in Tennessee is affecting the coastline

in Louisiana,” Johnson told me. Third, after they’ve eaten, humans themselves produce nitrogen-rich waste. When we flush it down to the local sewage treatment plant, that waste is cleared of smelly solids and disease-bearing pathogens. But until recently sewage systems did not concern themselves with removing nitrogen before emptying treated sewage into the nearest river or harbor.

The “dead zones” near coasts are dismaying enough but over time the “deoxygenation” of the oceans far from coastlines may prove the larger problem. Fish and animals can, after all, move out of a “dead zone,” even one that is bigger than Lebanon. But if the entire world ocean harbors less oxygen, they may find no place to go.

Finally, there is another way in which excess carbon in the atmosphere is changing ocean chem-istry. Absorbed from the atmosphere, excess carbon

dioxide reacts with seawater to create carbonic acid, which makes the water less alkaline and more acidic. Already, according to the National Oceanic and Atmospheric Administration, the pH of ocean surface waters has declined from an average of about 8.21 to 8.10 since the beginning of the Industrial Revolution. On current trends, that pH could drop to 7.8 by 2100. One effect of higher acidity is that carbonate ions become scarcer in seawater. Unfortunately, those ions, when they bind with calcium to form calcium carbonate, are the building material of seashells,

coral reefs and plankton. The more acidic the ocean, in other words, the harder it is for all these creatures to maintain the structures they need to live.

Pondering this triple threat — warming, deoxy-genation and acidification — can make the ocean seem beyond repair. Yet geology offers some good news: The last time the ocean acidified in response to excess carbon in the air (after volcanic eruptions 120 million years ago), it eventually returned to the pH levels we are used to. On the other hand, geology also offers some bad news: That recovery took 160,000 years. That fact clarifies that human-ity’s ocean problem is one of time. We don’t just need a recovery; we need a recovery that is, in the context of millions of years of geology, practically instantaneous.

34 35B R I E F I N G S T A L E N T + L E A D E R S H I P

Up to 75% Is Fake

Is That Tuna Fish

You’re Eating?

Probably Not.W

ith existential threats to ocean

species mounting and overfishing a worldwide problem, fish stocks face enormous pressure. One sign of that pressure is the mislabeling of fish by food retailers.

From 2010 to 2012, the nonprofit advocacy group Oceana genetically tested fish bought from 674 retail outlets (stores and restaurants) around the United States and found that one-third of the samples were mislabeled. In sushi restaurants, the study found, nearly 75 percent of samples were not what they were supposed to be. At other restaurants, the mislabeling rate was close to 40 percent. (Grocery stores came out better, with only 18 percent of samples bearing false labels.)

Often this involved misrepresenting an

unfamiliar or unpopular fish as a better-known species that consumers prefer. For instance, 59 percent of the tuna samples nationwide were actually some other fish; in New York City, almost all the fish samples called “tuna” (94 percent) were not. Some of these substitutions raise questions about health impacts. For instance, tilefish is so high in mercury that the government advises pregnant women and other sensitive groups not to eat it. Yet the Oceana study found tilefish frequently being passed off as red snapper, for which no such warning has been issued. And in Chicago, the study found, one sample of supposed “red snapper” was a slender pinjalo — a Southeast Asian fish that is not even on the Food and Drug Administration’s list of seafood sold in the United States. Up to 75% Is Fake

B R I E F I N G S

Mislabeled fish makes it from the ocean to your table more often than not.

Can humanity turn this around? The only honest answer is: Nobody knows. Nonetheless, people can take steps, as individuals and as organizations, which could slow the current damage and in some cases reverse it.

Consider those “dead zones” caused by the runoff of fertilizer into the sea. One major cause is the fact that 70 percent of the nitrogen used in agriculture is not absorbed by crops. So, Johnson notes, finding ways to make agriculture more e�cient — for example, by giving farmers detailed analyses of their fields, so they can apply fertilizer differently to different parts of their terrain — would help both farmers and the global ocean. So would better man-agement of wastes, both animal and human. Sewage treatment plants that remove nitrogen from treated water, for example, would benefit nearby coastlines.

So would a change in diet: Meat-eaters’ excretions have a lot more nitrogen in them than do vegetar-ians’, Johnson notes. One way to help the ocean, then, is to eat less meat.

Johnson, who is not a vegetarian, isn’t holding his breath on that one. But the point underscores a fact about the ocean crisis that is worth remembering as we struggle to find solutions. The damage that hu-manity is wreaking on the global ocean doesn’t result from big policy decisions or leadership directives. It is, rather, the consequence of billions of small, daily, personal choices made by millions of people. One step you can take toward helping the ocean come back, then, is to align your personal choices with that goal.

Consider the problem of overfishing, which increases stress on the species that people harvest for food. Fisheries now are managed according to national jurisdictions. Management by region or species would remove incentives to put national needs ahead of global ones, and thus improve protec-tion of overfished species. It would then be easier to take important steps to conserve marine species. According to the IPSO report, these could include eliminating subsidies for national fishing industries, which encourage overfishing; banning harmful tech-niques like bottom-trawling and long-line fishing; and declaring certain areas off-limits to all fishing.

Meanwhile, on a personal level, you could take steps immedi-ately. Apps like the Monterey Bay Aquarium’s Seafood Watch, for example, can supply real-time information about which species are being sustainably fished (or farmed) and which ones are not. (It will, for ex-

ample, tell you that Chilean sea bass is a good choice because the fish is abundant and is being harvested in a way that protects its long-term population while minimizing harm to other species.)

Such actions can serve as a personal contribution to the ocean’s comeback. They also can act as re-minders that everything in our planetary ecosystem is connected — they can help cure us of the mentality of “out of sight, out of mind,” which created the cur-rent crisis.

That brings us, of course, to the ultimate cause of the problem. Bringing the ocean back from the brink will require that humanity reduce its output of carbon dioxide into the atmosphere. And if, for the moment, there seems to be no will or method to dras-tically lower global emissions, that could change, and change fast. In 1791, when William Wilberforce first introduced his bill to abolish the slave trade in the British Empire, it was easily defeated. Sixteen years later — an eyeblink in the timespan of human his-tory — Parliament voted to abolish the trade. Political will can develop quickly, and the means to act appear once the will is manifest. It may well be that the ocean’s current crisis will help produce that kind of change — that the will to do something about global warming could come in the aftermath of collapsed fisheries or the death of all coral reefs.

It’s still not too late to look out over the ocean waves and see what people have always seen there, for as long as there have been people: hope.

36 B R I E F I N G S T A L E N T + L E A D E R S H I P 37

A Dose of Geritol? T he play of data

and uncertainty about the

ocean crisis doesn’t suit everyone — certainly not anyone with an executive temperament — who wants to identify problems and solve them.

Consider Russ George, a businessman who is convinced that one way to help the ocean and the planet cope with

global carbon dioxide increases is by seeding the ocean with iron. The idea is simple: Algae, the simple plant-like organisms that abound in water, gulp down carbon dioxide as they engage in photosynthesis. But the growth of algae is limited by the availability of the nutrients they need, one of which is iron (which comes to the ocean

from dust storms and the occasional volcanic eruption). In the 1980’s, the oceanographer John Martin suggested that algae failed to grow in some parts of the ocean because those areas lacked iron. Hence the “Geritol hypothesis”: Give the ocean a shot of iron, and algae will bloom and swallow up CO2. (Geritol is a vitamin and iron tonic for

human consumption, sold in drugstores as a cure for “iron-poor tired blood.”) Then, the theory goes, those organisms will die and sink deep into the sea, taking excess carbon with them. “Give me a half a tanker of iron and I will give you another ice age,” Martin boldly announced in 1991.

So goes the theory. But biogeochemistry — the study of chemical

substances moving through both living organisms and through land, sea and air — is not a simple discipline. Some studies have suggested that the Geritol hypothesis might be correct. On the other hand, a careful look at how some algae use iron suggests that it might not. In that work, published last year (2013) in the journal Nature Communications, researchers Ellery D. Ingall, Julia M. Diaz and their colleagues found

that the one-celled algae called diatoms were iron gluttons. Diatoms with access to iron took up more than they needed — like someone in a cafeteria line taking two pieces of cake and eating only one, Ingall said.

This suggests that massive amounts of iron would not generate the expected payoff in algal blooms.

None of this mattered to Russ George, who in 2012 persuaded a local Native American organization, the Haida

Salmon Restoration Corporation, to join him in dumping 100 metric tons of powdery green iron sulfate from a fishing boat some 200 miles west of the islands of Haida Gwaii off of British Columbia. A few weeks later, there was indeed a sudden and massive bloom of algae in the area, covering some 3,800 square miles. George had been advocating this Geritol strategy for years, but with this act he became, as the writer Michael Specter

put it, the world’s first “geo-vigilante.” The Canadian government quickly announced that the dump violated Canadian law, the U.N. Convention on Biological Diversity (CBD) and the London Convention, which governs dumping at sea. Plans for a second fertilization scheduled for June 2013 were canceled, and the Haida Salmon Restoration Corporation announced that George had been “terminated.”

38 39

ComEback CITY

S T O R Y B Y D O R O N L E V I N

“ A C I T Y L Y I N G I N W A I T ” P O R T F O L I O B Y M A T T H E W G U S H

THE GRITTINESS

REMAINS TRUE,

THE INGREDIENTS

ARE IN PLACE

AND THE ARROWS

SEEM POINTED

IN THE RIGHT

DIRECTION. MOTOR

CITY HAS A NEW

PAINT JOB, TIRES

AND RIMS, AND THE

ENGINE OF RECOVERY

IS REVVING UP.

38

etroit’s factories spit out millions of cars and trucks. They manufac-tured the tanks, artillery

and bombers that secured an Allied victory in World

War II. Those feats enshrined Motown as one of the richest and proudest cities on Earth.

Motown’s tumble from glory took a few decades and was just as memorable. Deindustrialization, depopulation, blight, crime and a ghastly fraying of the social fabric fueled the unraveling. The world watched with a mixture of incom-prehension, sympathy and disgust.

Now, engulfed in the granddaddy of all municipal bankruptcies, Detroit is pivoting from bust to boom once more. A groundswell of economic activity is spreading from the city’s center to the neighbor-hoods, fueled by an influx of young, educated, tech-savvy workers. Once-worthless buildings are being snapped up and renovated. Developers, attracted by land and structures recently thought to be worthless, are announcing building projects and investments weekly.


As old factories come to life while other buildings lie dormant, downtown Detroit offers a dynamic juxtaposition of recovery and decay.

“We’ve seen attempts at renewal before, supported by public money. What’s different this time is that pri-vate capital is rushing into the city. They’re coming on their own dime,” said Doug Rothwell, chief executive o�cer of Business Leaders for Michigan, a CEO forum representing the state’s biggest companies. “We’ve never seen this much momentum in our lifetimes. Now, the change is systemic.”

In March 2013, when negotiations broke down between Mayor Dave Bing, the City Council and public employee unions to cut costs and avoid insolvency, Michigan Gov. Rick Snyder exercised his authority to override elected o�cials and install an emergency manager. The criminal convictions of former Mayor Kwame Kilpatrick and other public o�cials for of-fenses tied to municipal corruption lent weight to the rationale for a state takeover.

Gov. Snyder appointed Kevyn Orr, a Washington D.C.-based bankruptcy attorney, as the man in charge. Four months later, Orr petitioned for Chapter 9 under the federal bankruptcy code while directing an overhaul of the city’s dysfunctional and cash-starved operations. A mayor newly elected in November, Mike Duggan, and a new City Council are poised to resume

governance once agreement is reached on resolution of Detroit’s $18 billion of debt. Orr said an agreement with creditors and pension funds is possible before his 18-month term expires next September.

As breathtaking as the city’s deterioration has been, likewise has been the determination and grit of those in the vanguard of the city’s rebound. Nonprofits and foundations for years have been investing in projects to stimulate renewal. Lately, reinforcements are joining them from the private sector, betting their capital that the city is a deeply undervalued asset, a market that has bottomed, a suddenly ripe opportunity.

The human commitment to Detroit cuts across de-mographic, geographic and ethnic lines. Austin Black II, 32, was born in the city, raised in nearby suburbs and educated at Cornell University. He decided to return to his birthplace “because I saw this as a place where I could make a difference. Young people heard all the stories about Detroit. We were brought up in the suburbs; we’ve traveled extensively and have a strong desire to live differently than in the manner we were brought up.”

After an internship in commercial real estate, Black started out on his own as a residential broker.

Today, six agents work at his firm, City Living Detroit.“In my business, the residential real estate sector,

we are getting a whole new message about Detroit from people buying homes, and it’s a positive one,” Black said. Blight remains pervasive, to be sure, with perhaps as many as 80,000 structures that must be torn down and countless empty lots that must be cleared of debris. Yet, once-grand neighborhoods, where homes sell for a fraction of what they once fetched, are getting fresh consideration from buyers, including families with young children.

The downtown’s roughly nine square miles – of the city’s 138 square miles – had been for years a warren of buildings, many empty, and its littered streets mostly deserted. O�ces, apartments and hotel rooms gathered dust. Today, practically all housing that can be refur-bished has been leased. Apartments and condos new to

the market are leased as soon as they’re painted.The New Cadillac Square Apartments, built as a

hotel in 1927 and converted to apartments in 1966, was 80 percent occupied two years ago. Now it’s virtually full, said Chris Schim, the rental agent. Rent for a one-bedroom has risen to $850 a month from $625 in that period. Most of the influx has been young professionals and students, many former suburbanites hungry for an urban setting.

“They don’t want to drive, they don’t like cars, they don’t want to commute,” said Schim. “They want to walk to work. They like riding bikes and going places after work on foot.”

The Motor City has been, as its name suggests, a place where life and livelihoods revolve around the car. But starting in the 1980s, the Detroit-based auto industry’s contraction clobbered southeast Michigan,

“I saw this as a place where I could make a difference. Young people heard all the stories about Detroit. We were brought up in the suburbs; we’ve traveled extensively and have a strong desire to live differently.”

Austin Black II (left) Detroit real estate agent


The view from Realtor Austin Black II’s midtown office spans the entire city- a panorama that reveals the amount of work to be done

idling tens of thousands of adults, limiting employment opportunities and increasing the poverty rolls. As tax revenue and services shriveled, city residents by the hundreds of thousands moved to the suburbs or left Michigan altogether. From a peak of over 1.8 million in the early 1950s, population fell to the current 680,000 — a third of the total in the last decade.

Looking for better prospects, young Michiganders in their 20s moved to New York, Chicago and Los Angeles to pursue jobs after college – often never to return. Snyder and governors before him fretted publicly about the devastating impact on the state from brain drain and the loss of human capital.

While it won’t be clear until the next census whether the flight of longtime city residents has slowed, stopped

or reversed, signs clearly indicate that a new variety of newcomer is arriving. A typical example is Alex Kaufman, 22, a graphic designer from Los Altos, Calif. After graduation from the University of Michigan, she moved downtown to take a job in her profession. Her parents initially were troubled.

“What they knew about Detroit, they read or they saw on TV,” she said. “They called me every night to make sure I was O.K.”

Kaufman, who lives alone in a $1,155-a-month apartment, said she doesn’t regret switching from her original post-college plan to move to New York. She expects to earn $44,000 this year, which she says “is more than enough,” given what she sees as “a lower cost of living.”

“I came to Detroit not expecting to make a com-mitment,” she said. “What’s most important about the

place are the people who are here. No one came to make money big and fast; they came because they’re invested, committed. There’s a real allure to being part of the mission, a real solidarity. Detroit is bigger than the sum of its parts.”

Kwaku Osei, 24, graduated from Virginia Common-wealth University in 2011 with a degree in marketing and accepted a job from Deloitte Consulting. He found consulting to be “good experience but unfulfilling.” A native of Alexandria, Va., he left Deloitte to join Venture for America, a program patterned on Teach for America, that matches budding entrepreneurs with private companies.

Osei is employed by Rock Ventures, the umbrella organization for companies started by Dan Gilbert, who is best known for starting Quicken Loans and for buying the Cleveland Cavaliers National Basketball

Association team and other sports teams. Osei earns $36,000 to $38,000, “plus stock options.” One of his jobs is assisting the chairperson of an anti-blight coali-tion. He’s also helping to build a system called “the brain” that will track the variety of Gilbert’s activities and initiatives “to make sure that we’re not duplicating efforts among our 21,000 team members.”

“I’m playing a small part in what is the biggest op-portunity in the United States right now,” he said. “I hope to ramp up and play a bigger role soon.”

John Rakolta Jr., chief executive o¥cer of Wal-bridge, an international construction firm based in Detroit, said, “The neighborhoods, which make up the vast majority of the city, are lagging behind” the downtown’s resurgence. “I think the neighborhoods are now turning the corner by electing a mayor who is going to put a big emphasis on services.

“We have great neighbors, they love what we’re doing. Just because residents leave, doesn’t mean the place has to look ugly.”

Mike Score (below) of Hantz Farms


A community garden grows next to a crumbling midtown residence;Mike Score clears brush on a ruined residential plot. Tractors will finish demolition.

“The neighborhoods deserve much better police and fire protection than they’ve been getting, better schools and lighting,” he said. “For decades the city was run for the sake of employing as many people as possible, not delivering the best possible services.”

Federal and state subsidies to improve services and stimulate economic activity have been massive and continuous, though untold millions of dollars remain unspent and often are returned to government due to disorganization, miscommunication and poor management.

Public money was spent in 2000 on the construction of Comerica Park baseball stadium, in 2002 for the Ford Field football stadium and in 2003 for the Compuware Building oce structure in a renovated Campus Martius public square. The pace of development took a quantum leap in August 2010 when Gilbert moved his Quicken Loans mortgage and associated businesses into the Compuware Building, vowing to play a central role in the city’s rebound. Today Quicken and its associated compa-nies employ 12,500 people in buildings downtown.

“I’ve spent the first 50 years of my life building Quicken and my other businesses – and I intend to spend the next 50 fixing Detroit,” Gilbert has said on several occasions.

Recognizing that a youthful cohort working at Quicken Loans and associated companies prefer a lifestyle that eschews commuting and parking, Gilbert and other business leaders and foundations have cham-pioned the construction of a 3-mile light-rail system that will connect the midtown and university districts to downtown. The M1 project, as it’s called, has been financed by corporations, foundations and governments. It is scheduled to break ground within months.

Gilbert also has underwritten scores of start-up companies, sponsored classes to train budding entrepre-neurs, sprinkled donations on civic organizations and hired a private security force that conspicuously patrols downtown’s business district on bicycle to enhance public safety.

Gilbert, who grew up in suburbs surrounding Detroit and still lives in one, has been the most active buyer of downtown real estate, acquiring 40 buildings – in-cluding the Greektown Casino – and spending $1.3 bil-lion on their purchase and refurbishment.

In mid-October, a Chinese company outbid him for the partially occupied 38-story David Stott Building, an Art Deco masterpiece, and the empty Albert Kahn-designed Detroit Free Press Building. Shanghai-based Dongdu International Group paid $9.4 million for the skyscraper and $4.2 million for the 13-story former newspaper headquarters.


Matt Cullen, chief operating officer

of Quicken Loans, is spearheading an effort

to revitalize Detroit.

According to a manager for the group that sold the buildings to Dongdu, the Chinese company — which owns other North American properties — was “as-tounded” at being able to buy a U.S. skyscraper for less than $10 million.

“All of us are very excited and optimistic at the convergence of all this commercial activity and the bankruptcy, which may sound odd. But bankruptcy gives the city a chance to restructure, a clean slate and a clean balance sheet,” said Matt Cullen, chief execu-tive o�cer of Rock Ventures LLC, which coordinates the activities of Quicken Loans with Gilbert’s portfolio of companies.

Orr, the city’s emergency manager, said, “Bank-ruptcy will relieve us of grievous debt service. It will establish us as a creditworthy municipality. That’s what any lender or underwriter wants to see.”

If creditors and the court accept Orr’s “plan of adjustment,” Detroit could find itself in arguably better financial shape than many U.S. cities, counties and states that are likewise facing enormous debts, unfunded pension liabilities and insu�cient cash to support police, fire, schools and other services.

The sheer number of lots that have reverted to city ownership due to taxpayers vacating their proper-ties — perhaps as many as 40,000 — has led one Detroit partisan to propose a remedy for widespread abandonment of residential neighborhoods: urban agriculture. John Hantz, owner of a Southfield, Mich.-based financial services company with 600 employees and 35,000 clients, started Hantz Farms in 2008.

Hantz Farms faced opposition from community groups, including some that grow crops, on the ground that Hantz wants his enterprise to be run

for a profit. A few city o�cials disparaged the urban farming concept as insulting, an atavistic throwback to the plantations of the rural South.

After city o�cials stalled his entreaties to buy 1,700 mostly overgrown lots near his home on the East Side of the city, a pact finally was signed in late October by the emergency manager and, later, the governor. Under the agreement, Hantz will pay $550,000 for the land; he’ll be permitted to cultivate up to 15,000 hardwood trees and be obligated to tear down up to 100 abandoned homes in a two-year period. His land will return to the tax rolls, generating about $2.5 million in revenue for the city.

“We are buying a liability to the city, not an asset,” said Mike Score, who runs Hantz Farms, which de-cided to clean up the lots, even though the sale hasn’t been completed. “We have great neighbors, they love what we’re doing. Just because residents leave,

doesn’t mean the place has to look ugly.”Clearing and mowing lots and returning them to

the tax rolls, Hantz theorizes, will boost property values, making homes in the neighborhood more desirable and giving owners an incentive to stay and, perhaps, to invest in their property. Score scoffs at ac-cusations from opponents that Hantz is a speculator.

“John lives in Detroit because he likes it here,” said Score. “His decision to live here has shaped his decision to put resources into the community for himself and on behalf of his neighbors. We’ll recover costs over time.”

The racial polarization that fueled a wariness of white public o�cials is subsiding. Duggan, 55, the newly elected mayor, is a white lawyer and politician who moved to the city in 2012 so he could qualify to run. A former prosecutor, he switched careers in 2004 to accept the job of chief executive o�cer of the


Rather than completely gut the basement of the Federal Reserve Building, the renovators decided to utilize the original bank vaults as contemporary meeting spaces.

A frozen downtown Detroit is slowly emerging.

Kwaku Osei, a young professional residing in Detroit, is working with the revitalization efforts of Quicken Loans

to transform the city.

50

Detroit Medical Center and led its financial turnaround. Despite an electorate that is 83 percent black, Duggan overcame legal challenges to his candidacy, made it onto the ballot with write-in votes and defeated a well-liked black sheriff by a healthy margin in the runoff.

Duggan’s role under the emergency manager — they were law school classmates at the University of Michigan — will be part improvisation, part balancing act. Duggan op-posed the state’s emergency manager law during his elec-tion campaign. O cially, he has no authority until Orr’s tenure expires next September. But Orr has said his chem-istry with Duggan is “good,” so an ad hoc partnership to

run the city together could happen.

Orr, who grew up in Miami and remembers watching the 1980 riot in Liberty City from his o ce on West Flagler Street, said “I’ve seen

a comeback in Miami, and that same change and same opportunity can happen here.”

But risks remain. Orr said his financial plan is based on $1 billion of revenue annually, assuming the city’s population stops its decline. “Only about half the people in the city are paying taxes,” he said. “We can’t raise taxes, because we’re at the limit of our taxing authority.”

Recovering from economic failure could give Detroit the chance to create a healthier, more youthful social framework, with less racial tension and acrimony. New residents and investors, especially among the young, won’t have to carry the baggage of history.

“With its first white mayor since the early 1970s and a diverse City Council, we could be a story of cultural diversity as well as comeback,” Orr said. “Outmoded concepts of race and their limitations will be thrown out the window.”

Score, the manager of Hantz Farms, agrees that Detroit’s economic prospects are looking up. He bristles, however, at the label of “comeback city,” insisting that Detroit has always been great, its di culties exaggerated by the mass media.

During five years of acquiring and cleaning up East Side lots, “I’ve never been threatened once,” he said. “The neighbors bring water. They smile, they give us a lot of a rmation. It’s insulting to think we need anyone to root for us; we are who we always were.”

The grittiness remains true, the ingredients are in place and the arrows seem pointed in the right direction. Motor City has a new paint job, tires and rims, and the engine of recovery is revving up.

U-turn for MotownInvestors are fixing up historic buildings near the renovated Capitol Park, top. The 1915 David Whitney Building, center, will become a boutique hotel. The East side’s popular Dequindre Cut will be connected to other greenways.

In Detroit’s case, the transi-

tion may take place overnight

because of individuals like Tom

Kartsotis, founder in 1984 of

Fossil Inc., a trendy watch and

accessory company in Rich-

ardson, Texas. Fossil is now a

publicly traded company with a

$6.7- billion market capitaliza-

tion, run by his brother, Kosta.

Tom Kartsotis, who left Fossil

in 2000, was searching for the

platform from which to launch

his next big fashion merchan-

dise hit. He selected Detroit in

2012 and purchased the name

Shinola, once famous as a shoe

polish brand, and in popular

argot as “you don’t know

(expletive) from Shinola.”

The company’s products

consist of locally assembled

watches and bicycles, as well as

leather goods, including jour-

nals. The style is retro, perhaps

an homage to a Packard or a

Studebaker.

Shinola leased a 30,000-

square-foot space at the Col-

lege for Creative Studies in the

Art Deco Argonaut Building

that once had housed a Gen-

eral Motors design studio. A

study to find what value, if

any, customers might attach to

merchandise made in the city

showed the name Detroit con-

ferred premium status.

The watches sell for as little

as $500 and up to $3,000 at

swank stores like Barneys, Saks,

Neiman Marcus, Bloomingdale’s

and Nordstrom. Shinola also

operates a shop in New York’s

TriBeCa neighborhood and

one on a quiet street between

Detroit’s downtown and the

midtown university district.

The early buzz for Shinola

and its products has been quite

positive, resulting in demand

that its 100 workers have been

struggling to meet.

The company’s promotional

material alludes to Detroit’s

onetime pre-eminence in manu-

facturing, its fall from grace and

the energy of its revival. It’s

almost as if by the purchase of

a watch or bicycle, the buyer

is being recruited as an active

participant in the city’s budding

turnaround.

T H E R E T U R N O F

SHINOL A

B R I E F I N G S50

52

TOM LEIGHTON, AKAMAI AND A RETURN FROM

THE EDGEFew start-ups, already under intense

pressure to survive, are faced with the tragic loss of one of their co-

founders just a few short years into their existence. When Daniel Lewin,

the 31-year-old American-Israeli math prodigy, was killed on board American

Airlines Flight 11 on Sept. 11, 2001, his company, Akamai Technologies,

a Cambridge, Mass.-based start-up, was already reeling after the bursting

dot-com bubble pulled the rug out from under its heady beginnings. Of

all the people left behind, F. Thomson (Tom) Leighton, Akamai’s cofounder

and the M.I.T. mathematics genius who had mentored Lewin, was perhaps the most devastated. Nothing could have

prepared him for the events of 9/11.

53

BY

G

LE

NN

R

IF

KI

N

In classic Alphonse and Gaston fashion, Lewin asked Leighton if he wanted to be CEO, a position Leighton quickly declined, and Leighton, in turn, asked Lewin the same question. Lewin also refused. Both decided that the fledgling company required a certified tech industry business leader to run things. They reached out to former I.B.M. executive George Conrades and former Time Inc. executive Paul Sagan, who both signed up with a mix of enthusiasm and skepticism. This was the height of the dot-com mania, when any cockamamie Web-based idea was reaping vast sums of venture money. Akamai, which had a breakthrough technology concept that actually worked along with a small cadre of brilliant M.I.T. computer scientists on board to develop the concept, looked to Conrades and Sagan as a bet worth making. Conrades became the founding CEO and Sagan, the president. Leighton was content to remain as cofounderer and chief scientist, and when Conrades stepped down in 2005, Akamai turned to Sagan to succeed him.

Flash forward to December 2012. Sagan, who ran the show for eight years, was stepping down, and a search was on for his replacement. After 14 years as Akamai’s chief scientist, Leighton decided, with some urging from Conrades and Sagan, that it was his turn to take the reins of the company.

The son of a nuclear engineer who designed nu-clear warships, Leighton displayed remarkable math skills early in his childhood in Arlington, Va. He was a finalist in the Westinghouse Science Talent Search and ended up with a scholarship to Princeton, where he studied computer science and math and became fixated on the field of theoretical computer science, which married those disciplines. Inevitably, Leighton was drawn to M.I.T., where he did his postgraduate work and stayed on to teach. Ensconced in this fortress of virtuosity, Leighton emerged as a genius in the esoteric field of algorithms and became a lure for the best and the brightest young minds. He was content in academia and hadn’t considered leaping into the start-up fray until he met Lewin.

It is unusual for a founder to wait 14 years to become CEO of his company, but Leighton, char-acteristically, made his decision based on a logical assessment of the situation and of his own skill set, which he believed was now complete enough to allow him to take charge. It was no slam-dunk. The Akamai board of directors conducted an eight-month external search for Sagan’s successor and had to be convinced that Leighton was the right choice. Yes, he knew the company better than anyone, but he had never managed a business. With Conrades and


eighton, now the chief executive of Akamai, traveled an

unexpectedly circuitous route to the CEO suite. It took him 14 years to get there, only at the last mo-ment realizing that he was ready for the job. As an M.I.T. math professor known for his breakthrough work on algorithms, Leighton attracted Danny Lewin, a brilliant former member of Israel’s most elite special forces unit, to Cambridge where the pair formed a symbiotic relationship that led to Akamai’s founding in 1998. Together, Lewin and Leighton envisioned a method using algorithms to speed up the Internet at a time when the disheart-eningly slow Web was known as the World Wide Wait. They were responding to a challenge from the Web’s inventor, Tim Berners-Lee, an M.I.T. colleague, who foresaw the potential congestion on the Internet. Lewin persuaded Leighton to join him in transforming theory into start-up, and the company was born.

T h e U l t i m a t e C o m e b a c k

“It is unusual for a founder to wait 14 years to become CEO of his company, but Leighton, characteristically, made his decision based on a logical assessment of the situation and of his own skill set, which he believed was now complete enough to allow him to take charge.”

Tom Leighton

Sagan, both board members, singing his praises, and Leighton’s own impressive self-evaluation in front of the board, the decision was made. On Jan. 1, 2013, Leighton became the company’s third CEO.

The analysts who track Akamai were not con-cerned about his lack of CEO experience. “He’s had a C-level position at the company for pretty much that entire period, and in addition to that he’s sat on the company’s board,” Scott Kessler, an analyst with S&P Capital IQ, told Bloomberg News at the an-nouncement. “The understanding of the company is unequaled by any individual.”

Akamai’s history has been tempestuous. The company burst on the tech scene like a moon rocket, soared instantly to dizzying heights and just as quickly plunged back to earth. Along the way, it endured a tragedy on 9/11 that shook the foundations of the nascent company. Though it was hardly a “dot-com” venture, it came to symbolize for many the frenetic nature of that short and volatile era. Many industry pundits and naysayers wrote the company off, and even internally, there was a quarter-by-quarter survival watch. “How much cash,” employees wondered, “is left until the end arrives?”

Leighton endured the trauma and never consid-ered returning full-time to his M.I.T. ivory tower. In so doing, he became a crucial player in a comeback story that bears retelling. Along with Conrades and Sagan, Leighton looked down into the abyss and never flinched. To some, his elevation to CEO seemed a bit odd. But from the inside looking out, it was inevitable.

Taking the HillBefore Danny Lewin

was to board American Airlines Flight 11 to Los

Angeles on Sept. 11, he and Leighton stayed up most of the previous night planning Akamai’s

next layo�. This was the painful, unexpected

dark side of life at a start-up. Akamai was

plummeting. When the charismatic Lewin was killed on 9/11 along with nearly 3,000 other innocent civilians, the stunned employees at Akamai had no time to grieve. Government Web sites, suddenly flooded by millions of hits, turned to Akamai to help stay online through the crisis and beyond. With tears flowing down their faces, the team rallied.

“Everyone knew it was what Danny would have wanted,” Leighton said. “It was a culture of ‘Take the hill, get the job done, make it work, do the impos-sible, never give up.’ It was Danny’s spirit. Yeah, we were devastated, no question about that. But we were fighting for our lives as a company at that time, and on top of that, the government needed us. We had to keep them online because it was chaos.”

What happened to Akamai was complex on the one hand, but a simple case of guilt by association on the other. In the midst of the dot-com run-up, Akamai emerged as one of the brassiest new players. Akamai wasn’t a Web site selling pet supplies or toys. It was addressing a serious need — using complex algorithms to dynamically map Web tra¡c to avoid congestion on the Internet — and had the impri-matur of M.I.T. When Akamai filed for an IPO just over a year after its founding, investors were wowed by the young company’s bold initiative and imposing management team, as well as the unparalleled en-

thusiasm that Lewin brought to every sales call and customer encounter (see book review, page 70).

For Sagan, meeting Lewin and Leighton in their M.I.T. lab had been life-changing. The original “big idea” was built upon changing the Internet, making it work better and faster through the radical application of mathematics. Using its algorithms, Akamai would allow Internet service providers to host content on thousands of servers around the world and thus be able to handle the flood of tra¡c and provide fast, impres-sive content distribution and even data-intensive mate-rial like video and graphics, without crashing the sites.

“The big idea is what affected George and me,” Sagan said, “along with the incredibly smart people and the opportunity to work with them.”

With early customers like CNN, Apple, Disney and Microsoft, Akamai made a stunning debut. When it went public in October 1999, shares skyrocketed to $145 on the opening day, and both Lewin and Leighton were suddenly worth nearly $2 billion on paper. By the end of the year, the stock was trading above $340 a share, and euphoria enveloped the young company. But when the bubble burst on the dot-com era, harsh reality set in quickly. As the dot-com start-ups began to fall like dominoes, Akamai suffered as well. During the crash, panicked investors saw no distinction between a start-up with a viable raison d’être and the pretenders built with smoke and mirrors. Akamai’s shares tumbled so far—to less than a dollar a share — that it was nearly delisted from the Nasdaq.

Losing Lewin was an emotional body blow. “Danny was irreplaceable,” Leighton said. But the darkest fiscal days for Akamai were still ahead. “We had nowhere near reached the bottom financially by 9/11,” Leighton said. “We reached bottom emotionally when Danny was killed, but financially things were going to get a lot worse before they got better.”

Akamai’s market capitalization sunk from $35 billion at the height of the run-up to $50 million by early 2002. The company had $300 million in debt, which was at junk status. “From the outside world, we looked pretty dead,” Leighton said.

The employee count, which had grown to 1,300, had to be slashed to around 500. Given the tight-knit nature of a start-up with its intense, take-no-pris-oners culture, laying off so many was nightmarish. In



situations like this, most founders simply cut their losses and head for the exit. But Conrades, Sagan and Leighton, driven by Lewin’s gritty spirit, refused to concede defeat.

“We never felt like we were going to turn out the lights and lock the door,” Leighton said. “We weren’t in La-La Land. We knew how many quarters of cash we had left, and we knew the challenges we were facing. But we also knew we had a plan. And we believed in the plan, and we were going to execute that plan.”

The ComebackA week after 9/11, the company paused for a formal memorial service for Lewin at M.I.T.’s Kresge Audito-rium. Speakers tearfully recalled the remarkable life force that was Lewin. Rumors were already spreading that Lewin had tried to stop the terrorists on Flight 11 but was stabbed to death before the plane hit the World Trade Center. If anything, the event reinforced the company’s determination to push on, as Lewin would have wanted, and find a path to success.

At the genesis of the comeback was a wellspring of talent at the top. No one could replace Lewin, but Leighton was more than his equal in understanding and propagating the underlying technology of the company’s offerings. Having had two cofounderers was a saving grace. Lewin had focused on customers and outward-facing issues, while Leighton had handled internal assignments. But because they had worked so closely together, with a shared skill set, Akamai’s complex technological underpinning was not compromised. Leighton, who had continued to teach in the algorithm unit at M.I.T.’s Computer Sci-ence and Artificial Intelligence Lab, gave up his aca-demic role for several years and pulled his Akamai team together to fill in the gaps.

Added to the seemingly short list of positives was the presence of Conrades and Sagan, seasoned busi-ness leaders who had made deep commitments to Akamai and were determined to spearhead a come-back. Conrades quickly outlined his plan and set it in motion (see sidebar page 58).

Conrades also made a public effort to display his confidence. With the shares at a dollar, he invested $1 million in Akamai stock. The employees saw it. Prospective customers saw it, as did investors. At the same time, “we suffered together,” Conrades said. The top three executives set their cash compensation

Danny Lewin

at $25,000 each without a bonus. “Everybody knew this, and it was an important way to communicate our commitment,” he said. “It was a Dannyism that he got from the military: You have to suffer together.”

Leighton demonstrated his own commitment by sponsoring parties at the company’s o�ces, which he paid for out of his own pocket, to celebrate important milestones.

But all the internal morale-building would have been for naught without a restructuring of the busi-ness and a slow but steady influx of new customers. Ironically, it was Akamai’s performance on 9/11 and in the immediate aftermath that became the focus of its short-term sales pitch. During the worst chaos on that terrible day, Akamai’s networks had worked! Word spread quickly that Akamai was the place to go to make sure your Web site didn’t crash. On 9/11, CNN’s site was flooded with tra�c. But its Akamai-based network was able to handle the crush without a glitch. According to a 2005 article in Business 2.0, the homeland security business that sprang up after 9/11 “helped resurrect the company.” The FBI, for example, had been outraged when part of its Web site went down during the attacks. So the bureau reached out to Akamai and by March, the FBI had become one of Akamai’s first major government customers. In short order, the new Department of Homeland Security, four branches of the military and the Internal Revenue Service signed on as well.

The promise of uninterrupted Web service also drew in new business from companies like ETrade, FedEx, L.L. Bean and MTV.

Behind the scenes, Conrades and Sagan drew up a new organization chart and divided the key responsibilities. The important thing was to put the right people in the right boxes. “We made choices,” Conrades said. “Who was on the team we would go with? We’d hold them accountable in transparent ways with frequent reviews. We had quarterly meet-ings, and we’d put them all in a room and reviewed the commitments they had made and whether that commitment had been met. ‘We’re going to acquire so many accounts, ship so many servers, get so many new networks.’ We worked this as a team.”

Leighton’s team had to bulletproof the company’s offerings and make sure new releases were timely and reliable. On this precarious perch, glitches could be fatal. Inevitably, they came anyway. After one software rollout onto a live network, a malfunction hit some of the company’s big customers such as General Motors.

“G.M. had a practice of calling in vendors who failed them,” Conrades recalled. “Tom and I had to

go to Detroit to talk to them and tell them exactly what had happened.” When they were called into the conference room with G.M.’s CIO Ralph Szygenda, Conrades began by thanking him for the opportu-nity to explain what happened. Szygenda, a bit of a taskmaster, laughed. “You know, George, all the years we’ve been doing this, nobody has ever thanked us for this opportunity.”

Conrades replied, “We know what went wrong, and we want to explain this to you and how we do it.” He then introduced Leighton, who deftly explained how a human error had affected the rollout and that it would not happen again. Szygenda was more than mollified—he was so impressed that he asked the pair to wait and sit in on another meeting to explain how Akamai could update software in a running system. Conrades invited him to Cambridge for a further meeting, and G.M. upped its commitment to Akamai. It remains a loyal customer to this day.

A New CEOWith a slow but steady pace of progress, Akamai emerged from its crisis as the major player in a small but crucial market sector. Its customer list is now populated by hundreds of multinational enterprises such as Merck & Co., Airbus, the British Broadcasting Corporation, BMW, Best Buy, Nintendo, National Public Radio, Charles Schwab, Dow Chemical, Fox Broadcasting, Hitachi, I.B.M. and Verizon Wireless.

At any given time, 15 to 30 percent or more of Internet tra�c flows through Akamai servers around the world. When he reached his self-determined targets of growth and profitability in 2005, Conrades, in his late 60s, stepped down. Sagan reluctantly, and


didn’t present a problem. “I was playing a leadership role throughout my 14 years here,” he said. “Plus George and Paul have always been fantastic mentors, so I got good advice from them. And I did go out and get some books on management.”

Leighton’s rise comes at a time of relative stability for Akamai, but he is acutely aware that economic volatility and the ever-present twists and turns of the technology sector make complacence impossible. There is no “hockey stick” of growth around the corner, and he must fend off ceaseless rumors of mergers and takeovers while keeping the product pipeline full.

For smart executives, a comeback never ends. Leighton accepted the baton from Sagan and made no fundamental changes in the company’s strategic planning. Leighton recognizes the importance of cul-ture, and at Akamai the culture was forged through cataclysmic events with which few companies must

contend. “Part of our culture is that we’re always looking up at the next hill,” he said. “Coming from M.I.T., there’s a sense that you can solve any problem if you work hard enough and smart enough, and as a team. It’s intense.”

A year into his tenure, Leighton is confident that he made the right decision. Eventually, he said, he realized “that this would be the best outcome for the company. Because I really care most about the company. You put more than 14 years of your life into something and you really believe it has the potential to change, maybe not the world, but at least the Internet for the positive. You want to do what is best for the company. And if I look back now, I’ve been training for this job for 14 years.”

with strong persuasion by Leighton and Conrades, took over. Former head of Time Inc.’s New Media division, Sagan steered Akamai to unprecedented growth, with sales jumping from $250 million to $1.5 billion and headcount up to 3,500 employees.

Sagan never intended to stay so long at Akamai’s helm, and when he announced his decision to step down in early 2012, Leighton had no designs on the CEO suite. “I was very happy during those 14 years working for those guys,” Leighton said. “I learned a ton from both George and Paul and worked very closely with them all through those years.”

As a national search for his successor was proving di�cult, Sagan sat down with Leighton for a conver-sation. “Tom said, ‘Well, aren’t there more candidates out there?’” Sagan recounted. “I said, ‘There’s one obvious candidate and he’s right here. And that’s you... but you have to want it.’ He did the Tom thing. He thought about it and came back and said, ‘O.K., tell me everything I don’t really understand. What else is there?’”

Leighton’s reluctance had nothing to do with a lack of self-confidence. He had displayed business skills throughout his tenure as chief scientist, negotiating many of the company’s first network and colocation deals with customers. He was a shrewd negotiator and born leader, Sagan said. “People loved to follow him.”

More likely, his comfort in his long-held position coupled with the company’s culture kept him from throwing his hat into the ring. Self-reverence is anathema at Akamai. It is never about “I.”

“People who talked about themselves or thought about themselves in that way at almost any level here are rejected by the culture,” Sagan said. “You have to be all about the team.”

For Leighton, the leadership aspect of the job

Shaping a

Despite the crushing loss of Akamai co-founder Daniel Lewin and the company’s struggle to survive in the aftermath of the dot-com bubble, industry veteran and Akamai CEO, George Conrades committed to stay. “We shall return,” he told employees. He and Akamai President Paul Sagan had a plan.

The focus would be on three key agenda items: productive revenue, reduction in spending, and keeping up morale.

By 2005, Akamai had revenues of $200 million, achieved sustained profitability and had a positive cash flow. Conrades stepped down and Sagan reluctantly took the helm, a post he held for the next eight years. Sagan then handed the keys to Leighton. Both Conrades and Sagan remain on the board.

Does the technology

work?

Do you still believe

in the big idea?

The people. Look to your left, look to your right. “Do you love these people? Do you want to work with them?”

Is it the right business model? If we grow revenues and keep costs down, we will be profitable. People need to understand this.


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T H E A M A Z O N is calling for help. Deforestation is back on the rise,

and to protect the rain forest , says S E B A S T I Ã O S A L G A D O ,

consumers must demand certificates identifying Brazilian products

grown on denuded rain forest land — so they can refuse to buy them.

It’s the kind of plan you’d expect from a Ph.D.-level economist like Salgado.

S T O R Y B Y C H R I S T O P H E R O ’ D E A

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But Salgado is also the world’s foremost photographer of indigenous

people struggling against environmental catastrophe and industrial

civilization, and he’s made it impossible to ignore his campaign to

protect the Amazon — by giving the rain forest a face. ✸ In capti-

vating black-and-white images, Salgado’s latest campaign por-

trays the lives of the nomadic Awa of Brazil’s eastern rain forest .

The tribe of indigenous hunter-gatherers with fewer than 400

remaining members today find themselves on the front line of a

struggle with industrial agriculture interests that are aggressively

logging, slashing and burning their way into Brazil ’s rain forest .

algado spoke with Briefings on Talent & Leadership from Amazonas Images, the Paris-based agency he founded in 1994, a

day before heading to Central America in November for a two-month project. “It’s very important that people know the dangers that all these Indian cultures face,” he says. “We must, I believe every one of us, fight for this forest, and fight for the Indian culture that holds this forest.”

Brazil’s annual deforestation report for 2013 brought renewed urgency to the struggle. After nearly a decade of steady de-clines in the rate of rain forest loss, deforesta-tion rose nearly 30 percent in the year ended in July 2013. Salgado has no illusions: saving the rain forest will be a battle. Despite being

ordered in early 2013 by Brazil’s highest court to enforce laws against rain forest logging, the Ministry of Justice has not removed the loggers who have razed the rain forest where the Awa live.

Salgado brings technical credibility to the task. He trained as an economist in Brazil and Paris, worked at the International Coffee Or-ganization in London, and then tried his luck as a freelance photographer in his mid-30s. He and his wife established a foundation on the site of his family’s farm in central Brazil, the Instituto Terra, to study and promote sus-tainable farming; since 1998, they’ve planted more than 2 million trees. Salgado also understands the threat posed by the effort of Brazil’s agribusiness industry to amend

the country’s constitution in order to wrest control of the rain forest from the executive branch and hand it to a friendly group in the Brazilian Congress. He proposes a solution on their terms; “economic pressure” he says. “We must do serious pressure on [agribusiness].”

The Amazon rain forest is Earth’s genetic laboratory, and more than 60 percent of it lies within Brazil. In what the World Wildlife Fund calls the “decade of discovery” between 2000 and 2009, scientists identified more than 1,200 previously unknown species in the Amazon, and the WWF’s latest report last October reported the discovery since then of more than 440 additional new species believed to exist only in the Amazon.

The decade of discovery was a golden age

for rain forest protection. Between 2003 and 2011, Brazil cut its deforestation rate in half. Salgado says Brazil’s o�cial policy against logging is appropriate, but a controversial new law passed in 2012, the Forest Code, sparked a resurgence in logging, despite President Dilma Rousseff’s veto of nine sections of the law that heavily favored loggers. Today the Awa confront loggers illegally clearing rain forest land to make way for soybean produc-tion and cattle grazing – and Salgado portrays the divide between intact rain forest and land stripped of its pristine vegetation.

“The major problem is agricultural devel-opment,” says Salgado. Large farmers, he says, “are fighting against the Indian lands, against the Amazon forest. This is the biggest fight of

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the Awa Indians today, the loggers that go in the front line that take out the wood, and the farms that come back inside the Indian land.” Tactically, Brazil’s large ag companies “were very smart,” he says. “Agrobusiness [compa-nies] in Brazil, they produce 4-5 percent of the national income, but through advertising and political pressure they have given the impres-sion that they are responsible for half the national income in Brazil. They organized big political backing. There are a lot of senators,

a lot of elected deputies in Brazil that defend their interests.”

Congressional supporters are known as the bancada ruralista, the rural workbench, which was instrumental in passing the Forest Code. The code weakened enforcement by shifting responsibility for many aspects of rain forest protection to state and local government agencies that lack the resources to counteract illegal logging and development. “Brazil is a federation like the United States. There is huge pressure on local authorities, and the pressure is very strong. It’s this kind of thing

we must be very aware about,” says Salgado.Clearing rain forest isn’t the only way to

farm in the Amazon. A research team led by archaeologist and paleoethnobotanist Jose Iriarte of the University of Exeter believes indigenous people also used sustainable methods to farm savannas at the edge of the rain forest as long as 800 years ago, constructing small mounds that provided drainage, soil aeration and moisture reten-tion. The practice, called raised-field farming, suited the Amazon’s cycle of drought and flooding. Resuming “raised-field agriculture can become an alternative to burning down tropical forest for slash-and-burn agricul-ture,” Iriarte says.

But time is short. Salgado says the best way to protect the Awa and the rain forest is to strike at the financial core of large-scale farming. “These are public lands, and there is a lot being done to destroy these lands in order to produce soyabeans, to produce fish” and other products, he says. “Countries such as the U.S., China, the E.U., that import all these products that come from farms in Brazil must pay attention to where these products are coming from. We must have cer-tificates – if it is Indian land that we destroy, if it is rain forest public land that we destroy to go to those farms, we must stop importing those products.”

It won’t be easy. Agribusiness and the bancada ruralista are pushing back. In early December, more than 500 people, many members of indigenous tribes, marched on the presidential palace in Brasilia to protest the proposed amendment to the constitution that would give Congress sole authority to decide which land to protect as rain forest or indigenous territory. Security forces dis-persed the protestors with pepper spray.

Salgado’s Awa campaign marks his second major collaboration with U.K.-based Survival International, which works to save endangered tribes around the world. With deforestation back on the rise, Salgado modestly urges renewed vigilance. “I’m just a photographer,” he says. “This is a way that we can call attention to these problems.” Those facing the problems, he says, “are the people that are living inside this forest, protecting this forest, the Awa Indians.”

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66 6767T A L E N T + L E A D E R S H I P

IndianFans of American iron have always had Harley-Davidson, which has vastly improved the performance and reliability of its timeless “hogs” in recent years. But now they can also buy a new bike from a even older brand, Indian, which manu-factured motorcycles in Springfield, Mass., from 1901 to 1953. Stel-lican Ltd., a British private equity firm, purchased the brand out of bankruptcy in 2006 and restarted production in Kings Mountain, N.C. In 2011, Indian was acquired by Po-laris Industries, parent company of Victory Motorcycles, which moved production to Spirit Lake, Iowa.

The new Indian lineup consists of three bikes, the Chief Classic, which starts at $18,999; the Chief Vintage, at $20,999; and the $22,999 Chieftain, all of which fea-ture the brand’s classic look, with thick, valanced fenders, oodles of chrome and real leather saddles. The Thunder Stroke 111 engine, Indian’s first all-new power plant in 70 years, is a 49-degree, air-cooled V-twin with six-speed overdrive transmission. Like Rolls-Royce, Indian does not quote horsepower, but road testers have found it more than adequate.

“A television ad developed for the introduction shows a Harley owner lavishly cleaning, buffing and shining his bike; in the ad’s punch line, he slaps a ‘For Sale’ sign on it and walks away,” Jerry Garrett wrote in the New York Times. “After riding the new Indian, I get it.”

The growing popularity of reborn bikes and brands — the term “retro” is disdained — stems from several antecedents, but the most obvious one is that they look and feel fabulous. There is a sensuality in the subtle curves and a visceral appeal to the throbbing two-cylinder engines that make an enthusiast’s heart beat a bit faster. In comparison, today’s modern motorcycles may be masterpieces of mechanical engineering that accelerate like jet fighters, but they are for the most part generically anodyne and generate little emotion.

“Somewhere in the late 70’s motorcycles became much less sculptural, more appliance-like,” says Paul D’Orleans, editor of The Vinta-gent, the world’s No. 1 vintage motorcycle site. Designers of the newer bikes “shape the frame and bodywork in this somewhat ergonomic way, but ultimately it looks more like a blender or a toaster than a motorcycle. There was a genera-tion that walked down a path it thought was progress, and I think we’ve realized it was an il-lusion. That’s not a choice we needed to make.”

At first glance, these reborn bikes might seem to appeal primarily to graybeards in

search of their misspent youth. While there is an element of that, it’s only part of the story. With their timeless lines and machine elements that look, feel and sound like ma-chinery, the new classics fit right into the new authenticity movement, which stokes con-sumers’ hunger for something real, whether in shirts or shotguns. The same impetus that drives Levi’s new Made & Crafted brand draws customers to motorcycles that look like a mo-torcycle ought to look.

D’Orleans says that price defines the demographics of the reborn motorcycle market, with younger riders drawn to the less expensive machines, like the new Triumph Bonneville, Scrambler and Thruxton, or Moto Guzzi’s V7 models, all of which cost about $10,000. The stubble-bearded hipster looking for the perfect café racer to make the Brooklyn scene need look no further. “At some point it becomes an aesthetic option and not a memory. The people I know who are buying Bonnevilles are in their 20’s. They just want a cool bike. Being resonant in history isn’t neces-sarily retro, or worse, nostalgic.”

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Feast your eyes on some glorious machinery. For motorcyclists of a certain age, the gleaming tailpipes, wire spoke wheels and majestic big twin motors of the bikes on this page evoke a golden era. In that bygone time, the surest way for a young Bob Dylan to project the right air of jaded cool was to don a Triumph T-shirt for the cover of “Highway 61 Revisited.” But look closely: these are not your fathers’ Triumphs, Vincents and Indians. These are all new motorcycles, available for purchase today, and selling very well, thank you.

B R I E F I N G S66

LAWRENCE M. FISHER

with bigger displacement motors, higher performance and rock-solid reliability. Triumph failed.

Enter John Stuart Bloor, who had become wealthy in the residential construction business. In 1983, he bought the Triumph name and manufacturing rights from the official receiver. He hired a few veteran Triumph designers, but sent them to Japan to learn modern ways. Triumph introduced six new models in 1990 with nary a retro machine among them. Neverthe-less, demand for a more traditional Triumph never went away, and in 2000 the company reintroduced

the Bonneville. Reviews and sales have been strong, and besides,

Bruce Springsteen owns one. How cool is that?

TriumphFounded in 1902, Triumph Motor-cycles became the iconic British brand, and there was no more iconic model than the 650cc Bonn-eville, produced in great numbers through the 1960’s and 70’s.

Though it was decades ago, the author well remembers taking a friend’s 1965 Bonneville for a ride, reveling in the motor’s ample torque at low revs, and the light weight and low center of gravity that made it feel as nimble as a bicycle. Joy turned to sorrow at a busy stoplight when a sticky car-buretor caused the engine to flood and no amount of frenzied kicking would bring it back to life.

Unfortunately for Triumph, and the British motorcycle industry, a lot of riders had a similar epiphany during the 1970’s, as the Japanese manufacturers began making bikes

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Above, 1960s TriumphBonneville ad. Below, the 2014 Bonneville model line retains signature styling details from past iterations.

with bigger displacement motors,

brand, and there was no more iconic model than the 650cc Bonn-eville, produced in great numbers through the 1960’s and 70’s.

Though it was decades ago, the author well remembers

1965 Bonneville for

it feel as nimble as a bicycle. Joy turned to sorrow at a

Above,1960s TriumphBonneville ad. Below, the 2014 Bonneville model line retains signature styling details from past iterations.

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At the upper end of the price stratosphere, bikes like the new Brough Superior SS100, at about $65,000, are bought mostly by well-heeled collectors, who are not likely to use them on their daily commute. “Any time you’re buying a motorcycle that’s over $40,000 or $50,000, you’re not looking at a rider,” says D’Orleans. “They may ride them occasion-ally, but they’re really interested in owning something that’s cool.” Nevertheless, the new Brough Superior company, founded by Austrian businessman Mark Upham, reports taking deposits for fifty SS100’s in a few weeks after its introduction late last year.

Another appeal of the new classics stems from what they don’t have: oil leaks, intermit-tent electrical systems, balky kick starters and weak brakes that just might eventually stop you, sometimes. While some of the handmade efforts from boutique makers preserve the old machines’ caprices — and invent some of their own — production ve-hicles like the Triumph and Moto Guzzi bikes are as easy to ride and own as any modern motorcycle, which in fact is what they are.

Unlike a real vintage bike, these reborn mo-torcycles don’t need to be babied. As Peter Egan put it in Cycle World: “Riding an older British motorcycle can be, at times, like going dancing with your great aunt. You have to take it just a little slow, show some respect and hope to God she remembered her heart pills. The GB500, on the other hand, takes you backward in time, to when your great aunt was young and beautiful and could go all night and drink you under the table.” The GB500 (“GB” as in “Great Britain”) is a now-discontinued Honda that evoked vintage British bikes.

Yamaha and Kawasaki have also made, and continue to make, motorcycles patterned after the British classics, and many of these are fine machines, often better than their forebears in myriad ways. But for riders seeking authenticity, there’s no substitute for going to the original source, and thanks to a British industrialist named John Bloor, they can do just that.

B R I E F I N G S

Moto GuzziPlay word association with “Italian motor-cycle” and the most likely reply is Ducati. Ducati offered the SportClassic line of retro-styled motorcycles from 2006 to 2010, but has since stuck to its stock-in-trade super-bikes, like the marvelously named Monster. Ducati’s exit created a wonderful opening for Moto Guzzi, another venerable Italian brand, which was conceived by two aircraft pilots and their mechanic serving in the Italian Air Corps during World War I. Like many motor-cycle brands with a history, Moto Guzzi has gone through multiple owners and is now a unit of Piaggio, which is best known for the Vespa motor scooter.

Like the new Bonn-eville, Moto Guzzi’s V7, introduced in 2008, pays homage to a well-loved prede-cessor from the 1960’s, but with up-to-date technology. Instantly recognizable, the V7 features Guzzi’s trademark air-cooled 90° V-twin with a longitudinal crankshaft orientation and the en-gine’s transverse cyl-inder heads projecting

prominently on either side of the bike. As on all modern Moto Guzzis, a sturdy shaft drive sends power to the rear wheel, and the right handbrake operates just one of the front disc brakes, while the foot pedal operates the other and the rear.

Moto Guzzi offers several variations on the theme, but the concept reaches its pin-nacle in the V7 Racer, which honors what Guzzisti have long done to customize their 70’s bikes into café racers. The chromed gas tank, complete with period leather hold-down strap, emulates custom hand-hammered aluminum tanks. So many parts are refinished as compared to the other V7 models that the V7 Racer appears more like a hand-built custom than a production bike, yet it still costs just $10,090.

The V7 is less powerful than the new Bonneville, but it’s also lighter, which makes it easier to handle for new riders and smaller people. “Many modern bikes are overweight, mostly due to heavy ABS anti-lock braking systems and large, restrictive silencers,” says Chris Hunter, editor of Bike EXIF, a site devoted to custom and classic motorcycles. “I bought a Guzzi V7 over a Bonneville because the Guzzi is hugely lighter, and the Bonneville felt ponderous to me,” he said. The new classics mark “a return to the simpler pleasures of motorcycling.”

NortonAs the golden era motorcycles aged, parts became hard to find, and many repair shops became small-scale manufacturers, crafting the bits they could no longer buy. Some grew so skilled that they could remanufacture everything needed to make an entire new motorcycle. One such craftsman was Kenny Dreer of Portland, Ore., a restorer of vin-tage bikes, who founded Norton America to bring the classic Commando back to life. Dreer & Company fought for the rights to the Norton trademarks and produced several working pro-totypes, burning through about $11 million before shutting down in 2006.

Stuart Garner, a British fire-works entrepreneur, bought the

remains and moved production to the U.K. Though the made-in-England bikes look just like Dreer’s prototypes, which means they look very good indeed, Norton officials say they share no parts. “About 80 percent of the bike is actually made in England, and that is important to us,” Garner told MotorcycleUSA. “We do buy in things like Ohlins suspension and Brembo brakes, but this is because they are the best available anywhere in the world. If we could make them better here, we would. What you won’t find is us manufacturing lumps of the bike in cheap labor countries. Buy a Commando and you will buy the best of British engineering -- made in England. That’s a promise.”

The Norton Commando 961 is impressively light, at about 400 pounds, and as Garner noted,

uses the best components money can buy. These factors, along with the absence of economies of scale, result in a list price of $20,000, roughly twice the cost of the superficially similar Triumph. But Norton production is in the hundreds of units, while Triumph made over 50,000 bikes last year, and the Commando is a much more handmade affair.

MotorcycleUSA’s tester said the new Commando is like “the best possible day’s riding you ever had on a classic motor-cycle,” without the problems. “Somehow, the Commando manages to simultaneously feel like a traditional classic and a modern bike. Just as important, it also looks the value for the money. Nothing about the bike feels cheap, or built to a price, but rather the Commando looks totally honest.”

2014 Moto Guzzi V7 Racer

2014 Norton Commando961 Café Racer


H E N DA N N Y L E W I N , the 31-year-old cofounder of Akamai Technologies,

settled into seat 9B on American Airlines Flight 11 to Los Angeles, he was trying to find

a way to save his fledgling company. After a record-setting IPO in 1999, Akamai’s for-

tunes began to tumble soon after and the company was hanging on by a thread.

Lewin, the young American-Israeli math whiz with a thousand-watt personality, had thrown his entire being into building Akamai into an engine that would drive the growth and capability of the Internet. Unfortunately, Akamai, a real company with a sound product and business model, was caught in the same irrational bubble as the countless dot-com ventures that had burst on the scene and proved as evanescent as morning mist. When that bubble burst, those startups went down in flames, and it looked like Akamai might as well. On this morning, Sept. 11, 2001, Lewin, despite his company’s foibles, believed his future would be bright.

The world knows what happened next. Flight 11 was the first plane to crash into the World Trade Center in New York City. What few know, however, is that Danny Lewin, a former member of the Israeli military’s most elite special forces unit, tried to fight off the terrorists that morning, and based on evidence from transmissions from the plane, Lewin was the first pas-senger murdered on 9/11. Everyone who knew Lewin was convinced that he leaped out of his seat and used his training to try to take down one of the terrorists.

No Better TimeThe Brief, Remarkable Life of

Danny Lewin, the Genius Who Transformed the Internet

IN R

EV

IEW

In Molly Knight Raskin’s new biography of Lewin, “No Better Time: The Brief, Remarkable Life of Danny Lewin, The Genius Who Transformed the Internet” the incidents of 9/11 form a coda to a life that was indeed remarkable.

Lewin, born in Colorado, was uprooted at age 14 by his parents so the family could make aliyah (to im-migrate) to Israel. After a rough indoctrination to the Israeli lifestyle, Lewin embraced his new country, and though he was not obligated, joined its military. A bear of a man who could bench press 300 pounds when he was 16, Lewin had more than a stunning intellect. He was a physically imposing man who was accepted after a grueling selection process into Sayeret Matkal, the most elite of Israel’s special forces.

“By the 1990s, the selection process for Sayeret Matkal had expanded significantly,” Raskin writes, “but for soldiers who were not Israeli-born, recruit-ment to Sayeret Matkal was almost unheard of. Still, Lewin made the first of many decisions in his short life to defy the odds.”

The two-year training period was daunting, but Lewin had the right stuff and was assigned an array of

dangerous missions. He emerged as a leader of his unit. On one visit home in Jerusalem, Lewin met a

young Belgian woman named Anne Pardes and quickly fell in love. They were married when Lewin was 21 years old. With a child on the way and a yearning to continue his education, Lewin requested a leave from the military to attend the Technion in Haifa. While there, he came across the work of a little-known M.I.T. professor and math genius named Tom Leighton. He knew immedi-ately that he had to study with this man. He chose to leave his wife and two young sons in Israel and head to M.I.T

Once at M.I.T. and under Leighton’s wing, Lewin’s intellect and matchless enthusiasm af-fected everyone he met. Though they began as teacher and student, the two men eventually joined forces to start Akamai. The company was based upon an innovative algorithm con-ceived by Lewin and enhanced by Leighton that aimed at dramatically increasing the speed and reliability of the Internet. The goal was to abolish the “World Wide Wait” and allow servers to host corporate Web sites.

By October 1999, though Akamai was less than a year old and had not reached profitability, the company joined the IPO frenzy and hit the jackpot. Opening at $29 per share, the stock soared on its first day of trading and closed at $145 a share. Lewin and Leighton went home that night worth nearly $2 billion each on paper. The stock closed out the year at $327 a share. The fantasy didn’t last long, however. The dot.com bubble began to burst in March 2000 and Akamai shares tanked. In 18 months, the shares had dropped so far that the stock was delisted from NASDAQ. Akamai’s obituaries were being written.

Though Raskin provides an excellent account of the birth and early struggles of Akamai, she is less successful in illuminating Lewin as a fully developed character in his own story. Raskin relies on countless interviews with friends and colleagues but eventually comes up a tad short. We read again and again a rehash of an early quote from M.I.T.

Professor Alfred Bruckstein, who encountered Lewin in 1992, sev-eral years before Lewin enrolled at M.I.T. as a student.

“His brightness was a given, but it was his enthusiasm that I remember the most,” said Bruckstein. “His eyes were scintillating. He was immersed, interested and had this fan-tastic drive.”

Lewin, with an unmatched understanding of algorithms, an eclectic and little-under-stood subset of math, was able to spark a fire inside Leighton that lured the professor out of the ivory tower into the world of tech commerce. Akamai today is a $7-billion company

with 3,500 employees around the world, and Leighton was recently named CEO. Using its unique tech-nology, Akamai regularly controls between 15 and 30 percent of all Internet traffic.

According to Raskin, “Leighton said he thinks often about Lewin, but no longer in the context of Akamai. Over time, he said, the feeling that Danny might charge into the room — smiling and wild-eyed with a big new idea — has faded. When he does think of Lewin, Leighton often recalls the time when they could talk for hours about their shared dream of proving mathematical theorems for a living. It was the moment in time before they took what they both knew, as theoreticians, to be a rare chance.”

www.facebook.com/NoBetterTimeBook

W

27%THE IMPACT

OF SOCIAL MEDIA ON BOARDS AND

DIRECTORS TODAY

DEFINE. DISTILL. DEPLOY:

ADOPTING 21ST-CENTURY

COMPETENCIES FOR HIGH-IMPACT

TALENT

GLOBALIZATION MORPHS Only 27 percent of corporate board directors consider themselves “very knowledgeable” about the company’s social media practices and believe they can easily discuss the topic and ask probing questions.

The world has been in the process of globalizing for years. Now, a new dimension is emerging: How should firms treat diversity and inclusion as they expand their reach? Chief diversity officers and others are in a position to rethink diversity as they take into account the re-shoring of American jobs and building multinational talent pipelines.

While job experi-ence, personality and other factors matter, measurable leadership compe-tencies account for 45 percent of ex-ecutive on-the-job performance.

INSIGHT FROM THE KORN FERRY INSTITUTE

New Reading

a leave from the military to attend the Technion in Haifa. While there, he came across the work of a little-known M.I.T. professor and math genius named Tom Leighton. He knew immedi-ately that he had to study with this man. He chose to leave his wife and two young sons in Israel and

Once at M.I.T. and under Leighton’s wing, Lewin’s intellect and matchless enthusiasm af-and matchless enthusiasm af-and matchless enthusiasm affected everyone he met. Though they began as teacher and student, the two men eventually joined forces to start Akamai. The company was based upon an innovative algorithm con-ceived by Lewin and enhanced by Leighton that aimed at dramatically increasing the speed and reliability of the Internet. The goal was to abolish the “World Wide Wait” and allow servers to host corporate Web sites.

By October 1999, though Akamai was less than

and again a rehash of an early quote from M.I.T. Professor Alfred Bruckstein, who encountered Lewin in 1992, several years before Lewin enrolled at M.I.T. as a student.

“His brightness was a given, but it was his enthusiasm that I remember the most,” said Bruckstein. “His eyes were scintillating. He was immersed, interested and had this fantastic drive.”

Lewin, with an unmatched understanding of algorithms, an eclectic and little-under-stood subset of math, was able to spark a fire inside Leighton that lured the professor out of the ivory tower into the world of tech commerce. Akamai today is a $7-billion company

with 3,500 employees around the world, and Leighton was recently named CEO. Using its unique tech-nology, Akamai regularly controls between 15 and 30 percent of all Internet traffic.

Haifa. While there, he came across

professor and math genius named Tom Leighton. He knew immedi-ately that he had to study with this

Leighton’s wing, Lewin’s intellect

speed and reliability of the Internet. The goal was to abolish the “World Wide Wait” and allow servers to

Professor Alfred Bruckstein, who encountered Lewin in 1992, several years before Lewin enrolled at M.I.T. as a student.

but it was his enthusiasm that I remember the most,” said Bruckstein. “His eyes were scintillating. He was immersed, interested and had this fantastic drive.”

with 3,500 employees around the world, and Leighton was recently named CEO.nology, Akamai regularly controls between 15 and

www.kornferryinstitute.com

72 B R I E F I N G S

EUROPE IS ARGUABLY THE BIGGEST COMEBACK STORY in modern times. In the aftermath of World War II, amid rubble, rationing and lingering enmities, a group of visionary leaders built an organization —

the European Coal and Steel Community. That organization, launched in 1951, evolved into the European Union decades later. The European Coal and Steel Community was the first of many steps leading to Europe’s resurgence as an economic and technological powerhouse, and as a stable political entity.

The Essence of Comebacks

PA

RT

ING

TH

OU

GH

TS

J O E L K U RT ZM A N

What’s so interesting about this story, and reflective of all successful comebacks, is that the resurrection was an improve-ment on what preceded it. Before the European Union, the Continent was divided into nation-states, guarding their sovereignties and vying for political and economic power through constantly changing alliances. After the E.U., Europe is a strong, stable, partially integrated community of states that have voluntarily surrendered some of their sovereignty for the greater good. The present is based on, but transcends, the past.

That’s the part of comebacks we sometimes forget. The job of leaders

and their supporters during a comeback is not to resuscitate an

organization or enterprise on its deathbed, but to construct

something new. Yesterday’s China was “the sick man of Asia”; today’s is powerful

and dynamic.Apple’s renaissance, led by Steve Jobs,

transformed that company radically. Had Jobs simply propped up Apple Computer, rather than reshaping it into Apple Inc., the company might not have endured. Simi-larly, to create the new General Motors, the leaders who orchestrated that company’s resurgence had to bury the old G.M.

Harley-Davidson’s overhaul followed a similar script. It took place in the 1990s when a group of executives, including the scion of one of the founding families, took over the company and recreated it. They did it because they were passionate about the brand and their customers. And while

the company’s motor-cycles may just look as “bad” as they did in the “Easy Rider” days, the way the company makes and finances those “hogs” is alto-gether different.

That’s the paradox of a comeback. The worst outcome would be to duplicate the organization that just went under. And yet, for the turn-around to succeed, the soul of the original must survive. That essence must be transmitted to everyone working at the company, to the markets where the products are sold, and to investors.

When France, Germany, Italy, Spain and the other European countries gave up sovereignty to create the E.U., they did not give up being French, German, Italian or Spanish. Fans of football in Barcelona, Manchester and Madrid did not give up cheering for their teams. And, when Jobs rebuilt the company he helped to found, he made sure the Apple didn’t fall far from its original tree. Radical transformation must be balanced by preserving some of what came before. That is one reason comebacks are so di�cult to achieve.

but transcends, the past. That’s the part of comebacks we

sometimes forget. The job of leaders and their supporters during a

comeback is not to resuscitate an organization or enterprise on

its deathbed, but to construct something new. Yesterday’s

China was “the sick man of

and dynamic.Apple’s renaissance, led by Steve Jobs,

transformed that company radically. Had Jobs simply propped up Apple Computer,

FROM THE

COVER Some marine scientists say

the rate and impact of

ocean change are greater

than anyone had previously

realized. This issue’s cover

suggests that the next big

comeback can begin with us.

Joel Kurtzman is author of the new book Unleashing the Second American Century. kurtzmangroup.com

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