Were all these companies—and their top managers—unfortunate victims of a business environment where the rules of competition are changing dramatically? Noel M. Tichy, an organizational psychologist and management consultant, has a different explanation. In THE LEADERSHIP ENGINE: How Winning Companies Build Leaders at Every Level (HarperBusiness; November 12, 1997; $26.00) Tichy, with Eli Cohen, examines the performances of winning companies who faced the same challenges, but prospered rather than floundered. These companies have leaders who develop leaders. They build institutions that create companies and prepare all individuals—from executives in corner offices to the production staff on the plant floor to sales and customer service representatives—to make smart decisions and implement them efficiently. From such well-known businessmen as Larry Bossidy of AlliedSignal, Roger Enrico of PepsiCo, Lewis Platt of Hewlett-Packard, Jack Welch of GE, Bill Pollard of ServiceMaster, Andy Grove of Intel, and Eckhard Pfeiffer of Compaq to people like Eleanor Josaitis of Focus: HOPE, a 30-year old non-profit in Detroit, the leaders profiled in THE LEADERSHIP ENGINE have demonstrated the ability to instill their ideas and their values in their organizations’ political, technical, and cultural systems. By grasping every opportunity to teach the upcoming leaders and by telling stories about their past experiences to illuminate future pathways and possibilities, these leaders create the momentum that guarantees continued success.

For decades, General Electric’s "scientific management" system was considered one of the company’s greatest strengths. As head of the Plastics Division, however, Jack Welch spent many years outwitting the system’s "enforcers" at corporate headquarters. When he made it to the CEO position, Welch quickly did away with GE’s nit-picking system of formal reviews and

approvals and eliminated the complex strategic planning apparatus. In its place, he introduced "integrated diversity," a new political system that gives GE’s managers the freedom, and the responsibility, to respond quickly to change in their various industries.

A clear-sighted look at marketplace realities has been the impetus for revolutionary changes at many of the organizations Tichy cites. At Intel, Andy Grove abandoned semiconductors, the foundation of Intel’s phenomenal growth, and instead focused on designing the best microprocessors in the world; at Compaq Computer, CEO Eckhard Pfeiffer shifted the focus from over-engineered machines to the first sophisticated segmentation of the PC market; in 1995, Bill Gates initiated a turnaround at Microsoft when he dropped his prior beliefs and dozens of projects and embraced the Internet; and outside of the business arena, leading members of the special operations forces of the U.S. Military have successfully left behind the "Rambo" mentality of old missions and adapted to their roles in an increasingly complex world. In each case, these leaders display what Tichy calls "edge"—the ability to make tough decisions and the willingness to sacrifice the security of the present for the sake of a better future. They not only come up with the "quantum ideas," they develop the strategies and tools for implementing them, establishing a framework for action at all levels.

Innovative ideas pinpoint a company’s goal; values provide the grounding for smart decisions. As Tichy’s anecdotes show, winning leaders embody the company’s values in their own behavior and nurture them in their employees. At ServiceMaster, a top facilities management company, Chairman Bill Pollard’s dedication to providing stable, secure, and honorable employment for low-tech workers has resulted in a workforce whose commitment to excellence has helped ensure the company’s healthy bottom line. Just as Pollard transformed the negative image often associated with service work, he and other leaders are masters at turning negative energy into positive energy and encouraging people to stretch their goals. Tichy’s profile of Eleanor Josaitis at Focus: HOPE shines a spotlight on a leader who has truly worked wonders. Through a Fast Track Remedial program, the Machinist Training Institute, and the Center for Advanced Technologies, Josaitis has taught thousands of inner-city men and women that directing their energy to acquiring the skills for work, and maintaining that energy in the workplace, is the key to escaping despair and controlling their futures.

Like the leaders he describes, Noel Tichy is a world-class teacher. In a "storyline" that clearly articulates his point of view, THE LEADERSHIP ENGINE presents managers with a compelling case for making shifts in their leadership styles.