January 12, 2007

Wise words from the Lehman CEO

Knowledge@Wharton has an interview with Richard Fuld, CEO of Lehman Bros on how he transformed a sagging firm.
First, leaders must understand their business. "Know how the pieces fit," he said. "Read. Network. Connect the dots. Anticipate. Try to limit the surprises; surprises kill you." Leaders who have done their homework make it safe for others to follow, he added. "Leaders earn the right to lead."

...Fuld noted he has been with many of the same top managers for 22 years and expects them to push back when they disagree with him. When he has to make a tough call he asks them: "Does anyone feel this decision would be disastrous to the firm?"

Unlike Bobbie Lehman, Fuld never lets managers who disagree square off directly. The most dissension he will tolerate is an agreement to disagree. "What I need is peace in the family," he said.

Finally, he noted, it is important to lead by example and to know when to give managers lower down in the chain the authority to make their own decisions. "Real power is the ability to empower others," he said. "A good leader brings out the best in others. The real reward is in seeing others' achievements."

Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.