The Capacity to Face Reality
Intellectual honesty is strongly interrelated to management style. It is framed by the capacity to face the realities confronting leaders, their willingness to have their thinking challenged by advisors and to seek out and consider opinions, even if they may not agree with them.
The following example demonstrates how Michael Dell (Dell Computer) exemplifies this ability. His “ability to call in experienced corporate talent, coupled with Dell’s own lack of corporate experience, has imbued his company with a unique competence–the ability to fail well. When the company hit its first roadblock (a net income decline in 1993 of more than $100 million),
Dell called Bain for counsel… by then-consultant Kevin Rollins. ‘Michael said, ‘I want you to tell me what’s wrong with my company, and fix it at the same time,’ recounts Rollins. ‘I told him that we generally diagnose the problems first, then afterward figure out a solution and then go and implement it. He said, ‘No, do those concurrently.’ So we did, and that started Dell Time, where a quarter is a year in most people’s lives.’”
Related: The Productive Response to Failure
It should be noted that intellectual honesty also incorporates a healthy dose of curiosity that leads to in-depth questioning and insights. After the Second World War, William Blackie (Caterpillar) didn’t like to “make his decisions in some comfortable office. He went out in the field to see for himself and advised others to do the same… Seeing the changes and their effects creates more conviction than being told about it or reading about it.”
Blackie’s own intellectual honesty created the same expectations he demanded from his employees were contributing factors in the growth of Caterpillar during the post World War II period.
Intellectual honesty applies to all company-related aspects, but equally important it also applies to leaders, as they assess their own abilities, behaviors and decisions.
Related: Mistakes as a Source of Innovation
Kemmons Wilson (Holiday Inn) typifies this. “Knowing his strengths and weaknesses is one of Kemmons’ strongest characteristics. He freely admits that he did not have a good education. But he makes up for it by positioning the right people around him.”
The degree of intellectual honesty will directly affect a leader’s critical thinking and decision-making abilities. Key constituencies may question a leader’s professional credibility if he or she refuses to face the facts surrounding a problem or issue and chooses a course of action that may be considered harmful. The same is true if a leader makes a decision and refuses to be challenged. This creates doubts, fosters distrust and leads to a loss of confidence.
My research disclosed that intellectual honesty appeared to be absent in poorer performing leaders, and those whose companies experienced the most problems. These leaders failed to posses the ability to face reality. They refused to be personally challenged and stopped listening to trusted advisors.
In most cases, these leaders were insolated and displayed an intensity of intellectual arrogance and hubris. Thinking they knew more that their constituencies, they quickly alienated them, and often put their companies in jeopardy.
Al Dunlap (Sunbeam) displayed these tendencies throughout his career. “He [Al Dunlap] is utterly convinced of his own greatness, and wholly uninterested in anything that doesn’t further his own self-aggrandizement. The portrait he paints of himself is that of a man who has never made a mistake and has never had a second thought about anything, and whose life has been little more than a series of ever-greater triumphs. He is always ready to tear down someone, especially when he can make himself look good by comparison.” 
In addition to Dunlap, three notable examples of this include Robert Allen (AT&T), John Akers (IBM) and Roger Smith (General Motors). In each instance, personal pride and ego prevented them from being intellectually honest about the problems facing their companies. They refused to listen to trusted advisors. They created a series of cascading problems that negatively impacted the company’s performance and further exasperated their difficulties.
My research illustrates instance after instance where great leaders faced problems, were intellectually honest with themselves and others, and established a tone that became the hallmarks of their companies.
In 1986, during a second Tylenol crisis, James Burke (Johnson & Johnson) “looked facts in the face. [He] understood the gravity of the situation… partnered with the government and media. When a reporter asked why it happened, Burke responded with crystal clarity and honesty.” 
When Cisco company went into a freefall after the markets collapsed in 2001, John Chamber quickly analyzed the problem without affixing blame, determined its seriousness, took harsh and necessary actions to get through it and then prepared for an economic recovery.
“Sam Palmisano, CEO of IBM… said, “John kept the company focused. He said this is where we are, and he drove the company forward… He never dwelled on it.’”
The great leaders allowed their judgments and decisions to be challenged. They encouraged vigorous debate within their organizations. They were willing to seek out expertise to solve problems, even if it was contrary to their own thinking, feelings and intuition. They were open minded and displayed sound judgment when making decisions and evaluating risk.
Prior to taking decisive action during the Tylenol crisis, James Burke (Johnson & Johnson) heard and considered contrary opinions from his advisors, legal counsel and the government not to the take the actions that ultimately vindicated his company. After carefully considering their advice, he decided to adhere to the company’s credo that “proclaimed that J&J’s “first responsibility” was to its customers and then to employees, management, communities, and stockholders-in that order.”
These leaders encouraged the same behaviors in their managers, which drove similar attitudes, skills and abilities deep into the fabric of the organizational culture. In doing so they empowered their employees and created a collaborative environment. This, in turn, fostered innovation and increased their competitive advantage.
Arthur Blank (Home Depot) observed, “Sometimes in business you have to put management in the back seat and let associates take the wheel. At Home Depot, most of our best ideas came from our sales associates. Some of the ideas were brilliant – some were risky…”
Henry Kaiser (Kaiser) and Stephen Bechtel (Bechtel Corporation) fostered high levels of intellectual honesty and collaboration due the size and scope of the production projects their companies worked on. This included the massive shipbuilding yards Kaiser built during the Second World War and the building of the Hoover Dam, that both men participated in. They would not have been able to succeed and grow without it.
For more information on this topic and to read a free chapter, refer to Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It by Timothy F. Bednarz (Majorium Business Press, Stevens Point, WI 2011).
- Schleier, Curt, William Blackie Put Caterpillar on An Upward (Investor’s Business Daily) February 2, 2002
- Success Secrets of Memphis’ Most Prolific Entrepreneur (Business Perspectives) July 1, 1997
- Nocera, Joseph, Confessions of a Corporate Killer (Fortune Magazine) September 30, 1996
- Kwoh, Leslie, Business Historian Richard Tedlow Discusses Dealing with Denial (The Star-Ledger) January 28, 2010
Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
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