Making It in the Business of America
VTR Date: March 4, 1989
Guest: Korn, Lester
READ FULL TRANSCRIPT
THE OPEN MIND
Host: Richard D. Heffner
Guest: Ambassador Lester Korn
Title: “Making it in the Business of America”
I’m Richard Heffner, your host on THE OPEN MIND…and my guest today is Lester Korn, former United States Ambassador and representative to the Economic and Social Council of the United Nations, and this nation’s chief headhunter, the co-founder and Chairman of Korn-Ferry International, the worlds largest executive recruitment firm.
Now, unfortunately, over the years I haven’t gotten Ambassador Korn to hunt my head, to recruit me for one of those high-paying jobs, or a valued place on a prestigious corporate Board of Directors, or anything of the kind. But I guess even he can’t make a silk purse out of a sow’s ear…and we have had fascinating discussions right here on THE OPEN MIND about corporate governance, about the role of the corporation in American life, about mergers and greenmail and golden parachutes, about decision-making generally in America’s executive suite.
And now Ambassador Korn has written a sprightly new book, “The Success Profile”, which publisher Simon and Schuster subtitles: “A Leading Headhunter Tells You how to Get to the Top”. Of course, that’s mixing metaphors for someone like me who’s over the hill. But, leaving aside such personal sadness, let me try to get Ambassador Korn to tell you a thing or two about “making it” in American business which, seemingly, is still what Calvin Coolidge said it is: The Business of America”. Mr. Korn, Ambassador Korn, welcome.
Korn: Thank you, Dick, it’s always a pleasure to be here with you.
Heffner: How does one make it? What is the success profile?
Korn: Well, I have to comment about your opening, you’re…you’re my view of the success profile, and you’ve had great success and you have worked at it and you have had enormous energy and you have done it with great skill. You’ve achieved huge recognitions…
Heffner: I’d better stop you.
Korn: …so I must stop…
Korn: …I must deal with your opening remarks about…
Heffner: Yes, but…
Korn: …that, but not now.
Heffner: …it says here that you deal with America’s highest paid executives in their jobs, so what is the successful…to becoming…the success formula, to becoming one of those people?
Korn: The formula for success, Dick, in corporate America is setting objectives, meeting those objectives, and evaluating yourself as you march up the ladder of corporate America. It’s true whether it’s a man or a woman. There are certain traits of success, there are certain characteristics that the top people in corporate America have and they work very hard. They work on the average fifty-four hours a week. They love their job, they know exactly what they want to achieve with their career, and they have managed to promote themselves upwardly, mobilely in only two companies. They haven’t moved around, they have…the most successful people in corporate America have only had two jobs. If they’re a man, they’re married, they are still White American, White Anglo-Saxon Protestant, by and large, but that’s changing slightly. If they’re women, they are amazingly not married, they have sacrificed tremendously to achieve success in corporate America, and they measure success by achieving goals. Not by money, and they measure it by the satisfaction that they get out of it. And the trait that they report as the single ingredient for their own success is integrity.
Heffner: That’s interesting because certainly there is an assumption these days, given our previous discussions about golden parachutes and about all of the other troubles, if those indeed are troubles, signs of trouble, about greed in corporate America, and you talk about “integrity” as being the key to success.
Korn: Oh, and you k now, it’s a very interesting point that you raise because it’s not only I that talk about integrity, because I have felt that the best careers, the only really successful careers are based on integrity. But we surveyed fifteen hundred of the top American corporate executives for this, and they reported, by a huge factor that the single largest factor in their own success was integrity…second…which seventy-five percent of them reported as the number one factor; the number two factor being producing results, and the number three factor being concern for people, but those in the fifty percentile numbers compared to the seventy-five percentile. And I am convinced that that’s absolutely true. I have been at this as long as you have been at your distinguished career, and I must tell you that I don’t know very many successful people in the business world who don’t have that core integrity, that core desire to do the right thing and will act with ethics and, in recent years, communicate it. And I think what you see in the newspapers occasionally or in the media is the odd-man out and it just upsets the business community to no end.
Heffner: Why has the business community then done such an absolutely lousy job in communicating to the rest of us that phenomenon that you refer to now, that it is concerned with integrity?
Korn: Well, to begin with they have done a terrible job of communicating it, and as a matter of fact, they don’t do a particularly great job of communicating, as a skill, and we have talked about this over the years, but the…as we look for the CEOs of today, the Chief Executive Officers of today, the key players today, the ones who will lead the next generation of management, clearly communications, which is now world-wide and communicating to shareholders has moved up in priorities. You know, Dick, it’s an interesting thing. We hear so much about the year 2000 and we’re going to have practically a 75% turn-over at the top between now and the year 2000, so that by the year 2000 virtually every Chief Executive Officer in America will have either retired or designated his successor. We don’t hear much about what is going to have to take place. We hear a lot about leadership, have to improve our leadership, we have to improve our productivity, we have to be more competitive in America. One of the reasons I wrote the book and, as you may know, I have donated the royalties to the UCLA School of Management because I wanted to get across some messages about what management is about, how you can improve productivity among the managers, particularly in the people who are moving up the ladder that are going to be responsible for America’s destiny over the next twenty or thirty years.
Heffner: Which leads me to ask you, Mr. Ambassador, you’ve profiled success and you’ve written about the nature of and the ideology of, if that’s the right word, the people who are at the top now. But if you do go down a bit, and take those who, as you say, will in…over the course of the remainder of this century, move to the top, do thy have the same concerns about integrity?
Korn: Oh, yes. As a matter of fact we are finishing a study with Columbia testing that very hypothesis, and that study will be out in a few moths, and I must tell you that, again, that integrity comes out as the number one factor in success. And it’s fascinating, Dick, because in fact you can’t make money in corporate America, you can’t put profits on the bottom line unless you have a product that works, unless you sell it with honesty and with the ethics that are necessary to convince people that they ought to buy it, and that there are going to be other changes. The executive of today and the success pattern of today, and in the book, I think I have about twenty-five examples of very, very successful people, Peter Ueberroth, people you know well, Marshall Manley of The Home Group, Fred Maleck of Marriott and so forth. Now all of these people have demonstrated the same basic skills, and they will still be necessary, by the year 2000. They knew that they needed to get to general management in order to reach to top. Don Beall in “The Book of Rockwell” talks about how he left Ford because he didn’t have an opportunity at that point in time for general management, so…and he was a Controller, one of the bright stars of Ford a few years ago, moved over to Rockwell and has had a brilliant career there. They take risks, they have great courage, they have, as I’ve said huge amount of integrity. They would no more do something that was incorrect in their minds than either you or I would.
Heffner: But you know, they also have, by and large, in terms of the statistics in the success profile, they have wives who are at home taking care of their children.
Korn: Yes, by and large.
Heffner: What does that tell us? You write about women CEOs, you write about women in the executive suite, but what chance is there when one of the characteristics of the male CEO, and he predominates, is that he has a wife at home, taking care of the children?
Korn: It’s changing. If you look today in middle management, if you look below the top five jobs of corporate America, you see a pool of talent that’s fifty-fifty, fifty percent men and fifty percent women.
Korn: Seriously. Five, ten years ago we would interview one out of every twenty people would be a woman. Today one out of every four or five are being interviewed and they are moving up the ladder.
Heffner: But what about moving up to the top?
Korn: Ah, that’s a slightly different point. The top three hundred women other than the household names that we all know, like Mrs. Graham and so forth at the Post, it’s still a tough road. The top five jobs…women have reached the middle management ranks, and they have done it in the last five years or so, Dick. They’re next task is to get the top five jobs, and there you still don’t see a great deal of women in the top five jobs of the major corporations. Once they break that barrier, then they are logical contenders for the presidency of corporations, and you do see more. There are perhaps twenty women running major corporations today. A couple of years ago it would have been three or four. So that you see more, but they are clearly the exception, they have sacrificed, they have had to do things and in their personal lives that the men have not had to do.
Heffner: Meaning what?
Korn: They have to stay single. They have had to pass by the opportunity to have families, they have had to…interesting thing is when you talk to these women they say that the single greatest problem that they have is that they are a woman. It’s not that they don’t have the ability, it’s not that they don’t have the education, it’s not that they don’t have the idea of success, and it’s not that they think that they can’t do the job. It’s just the very fact that they’re a woman and that is something that they cannot overcome. Interestingly enough in the last couple of years, corporate America has had to learn to adjust to the two career family, and while it’s rare still, if I can think of a couple of examples, where both people run companies, that’s rare. It’s not quite so rare to find a successful career for the man and a successful career for the woman and…in one family…and corporate America and more and more so multi-nationally have adjusted to it. They simply have adjusted the relocation factor. They don’t relocate people as rapidly or as much as they used to because there are two careers involved. It’s changed the mobility pattern a little bit, and it has forced people to put priorities on what they’re doing that they didn’t used to do.
Heffner: When my wife, some years ago, wrote her book, oh gosh, it’s more than a decade ago, on “Motherhood: The Emotional Crisis of Mothering After Freud and Feminism”, she was kind of premature in her assumptions about a shift back toward an interest in the home, a shift back to older values. What do you see in corporate America now? You talk about a larger and larger number of women in high corporate America jobs. Does that mean that for this group of women there has been no movement back to a kind of older American values in reference to the family?
Korn: I don’t really like the phrase that I’m about to use, but I can’t think of a better one. You talk to these people and I’m sure when we see Elaine she would agree, it’s a question of the quality of time and how you set your priorities. It’s much easier for a man to be a parent than a corporate woman to be a parent because you do have to work 54 hours a week. You do have to socialize, you do have to get out into the community, you do have to do the networking, you do have to do the traveling. So the changes in the way we deal with our families, I think, are quite dramatic, and I think one of the reasons you find that in these duel careers there’s one or two children instead of three or four is because the wives have come back to the work force immediately. They haven’t dropped out of the work force, they have simply left for three months or in some similar examples in the book, have left for three weeks, four weeks, and yet they all feel, and it’s been my observation, that they have done it successfully. That they have, in fact, accomplished the ability to have a family, raise that family happily and productively, and America’s better off for having the women in the work force. We have increased our capabilities, I’m absolutely convinced of this, we have increased our capabilities in middle management dramatically in the United States over the last five years, and I believe that the major impetus to that has been the competition coming from the women who have entered the work force and are in middle management, competing for those fifteen or twenty top jobs right below the top.
Heffner: Since Korn-Ferry is international, how does this compare, this phenomenon in America, how does it compare with corporate practices abroad? Women entering the CEO category?
Korn: It’s virtually non-existent.
Korn: Overseas. And I’m going to get some letters from London and I’m going to get a couple of letters from Paris from Jacqueline Deteau who runs the French newspaper over there, but the fact of the matter is that it’s virtually non-existent. Women have done much better in the political and in the social and the sciences arenas around the world, perhaps even better than in the United States, but not in the business world.
Heffner: Now, this may be an unfair question, but do you think that will be advantageous for us in the next century in terms of the competition we must face with business overseas? The fact that we are tapping the other half of our human resources?
Korn: I think it will be extremely advantageous, providing we also add one more factor that I foresee over the next ten years. And that is competition for American companies is going to be even more brutal that the last ten years. And I’m convinced of this. I made thirteen state visits overseas in the last year and a half as an Ambassador for President Reagan. I am absolutely convinced that unless we re-think our marketing and re-think what our markets are, where our markets should be, American corporations will not have the opportunities that we’d all like to see them. We have got to re-think where the major corporations are going, make them more competitive, then the women, indeed, will have those opportunities, and I think that women will help American corporations make themselves more competitive.
Heffner: In your estimation, are we doing, here at the end of this century, what you think we need to do to be competitive?
Korn: In most ways, yes. I think the one thing that we have ignored are the…one of the major thing s we’ve ignored… are the emerging Third World countries, and the marketing opportunities there.
Heffner: What do you mean, ignored?
Korn: We simply are not marketing our products. I’ll give you a perfect example. The other day someone was telling me that Japan sells, dominates the market for automobiles in India. And you might say, “Well, now, why is that significant?” Well, it’s significant if you put it in perspective. In India they are presently buying per annum more automobiles than all of France, and the United States doesn’t ignore the French market. It doesn’t have much of it any more, but carry that away from the automobile industry, and say, “Okay, if they can support an automobile industry the size of France’s, what about the consumer product? What about the food stuffs? What about the chemicals?”, and on and on and on and on. So, I foresee over the next ten years a very, very sharpening, particularly as the European community does or does not become protectionistic in total, but clearly more competitive.
Heffner: Mr. Ambassador, I need to ask then whether that awareness is part of your success profile. I mean you talk about the need to find the right job, to see yourself, knowing when to change jobs, learning what you’re worth and how to negotiate for it, and understanding what you nicely call “the six figure profile”. What about this larger, more cosmic concern…
Heffner: …that you’ve just shared with us?
Korn: You will see, as we have chatted before, Dick, that the most successful people also know that creativity and marketing; marketing is the fastest route into senior or upper management, and general management is the fastest route to the very top. And the people who are under forty are extraordinarily aware of the need for marketing. In fact, they’re extraordinarily aware of the need to have a vision, and it’s covered in the book. They have to know that it is…as one of the people in the book said, “There’s no sense in doing every day…you can be the hardest working person in the world, and you could sit at your desk and do the same thing every day, and work around the clock, and it won’t do you any good”. You have to simply determine that the objectives of the corporation are known to you and you are proceeding in matching them. You know the career belongs to the person, the job belongs to the company, and so often, over the years I’ve seen people not understand that those two things are…should be together and then they’re going to have success. If they’ve got this job and their career’s going off in this pattern, and they don’t understand that they have to figure out what the job is about, they’re simply not going to be successful, and it’s very clear. I think that the people that I selected to profile are, in fact, prototypical of the types of executives that we’re going to have in the next decade.
Heffner: That’s really what I wanted to ask you next. And you’ve answered it. They are prototypical?
Korn: Oh, absolutely.
Heffner: You don’t feel you’ve chosen those whose personal characteristics are so different from the rest of mankind?
Korn: Absolutely not. I would say that every one of the people that are in this book have a vision of the future and they had that vision throughout their careers, and they know where they want to take their companies, and they know what they want to do with their companies. And now because there is, in fact, a pattern of success and there is a clear pattern of success, I wanted those people to speak out and as a favor to me, many of them did.
Heffner: But, of course, you know, one still has to ask the question: It’s said, that great teachers are born, not made. The elements that go into your success profile, teachable? Or inborn? What’s your own sense of that?
Korn: A little bit of both. I would say that the drive and the energy factor that you see as a common characteristic is probably inborn. All of these people love working, they love their jobs. Good days and bad days, but they like getting up in the morning and going to work, and when they’re not busy they’re unhappy. And I think that is something that you don’t teach. I think people should understand it and they should recognize it, and they should motivate themselves towards that factor. The rest of it is learnable. There is nothing like the mentor program and…for Japan, and there is nothing like the meeting of objectives in corporate America, and you have to learn to meet objectives in corporate America, just like you have to listen to what your mentor says in Japan, in order to progress.
Heffner: As the Chairman of this huge executive recruitment company, do you think you can identify the qualities you identify for the reader in the success profile, the qualities that are needed to rise to the top? Can you, testing or interviewing, or whatever, identify whether individuals have those qualities?
Korn: Oh, absolutely, Dick. We have the simplest test possible. If the people we select don’t succeed, they don’t keep their jobs, and we lose clients. And since the people we have selected do succeed, we’ve kept our clients over these years and I’m very happy about that. But the fact of the matter is that it is readily identifiable and readily…it doesn’t exist in everybody. One of the reasons I wrote the book is I wanted people to understand what the heads of major corporations look for when they interview people. And the fact of the matter is that they are looking for people who want to reach the top. That very one fact is a mystery to most of America, that people, some people do want to reach the top, some don’t, and it breaks out about 60/40. About 40% of the population are very happy with what they’re doing. They’d like to make a little more money perhaps, but they’re happy with it. They don’t want to make the sacrifices, they don’t want the life that goes with the pattern of reaching the top in corporate America, and that’s fine if you know it. But if you…out there trying to reach the top, then you have to find out how you’re doing, you have to ask how you’re doing, you have to make sure you understand the corporate objectives, and I, as a recruiter am in the business of locating people who’ve done just that.
Heffner: As a former Ambassador, of course, you’re an astute diplomat, so I don’t know how you’ll take the question, but what do you see, in the future, for American business? For the American economy?
Korn: I see, for the next decade, a period of time where corporate America is going to be re-thinking its objectives in terms of how its profits are made: what markets it has, whether it wants to be a services country, or whether it wants to re-emphasize some of the manufacturing. It will have to concentrate on technology, it will have to bring back the ability to manufacture, and it will have to train its people and educate its management group to changing world economies. Japan is much further along in some ways. I have traveled the entire world for twenty-five years. The American managerial ability is the most admired and the most skilled in the world, and that is true today just as it was five years ago. And I have seen it with my own eyes for the last two years as an Ambassador.
Heffner: Ambassador Korn, what you’re going to have to do is come back many times before the end of the century, but at the end of the century we have to look back and see if what you say we must do, we indeed do.
Korn: I look forward to that, Dick, and I hope that we indeed, as a country, do it.
Heffner: Ambassador Lester Korn, thank you so much for joining me again today.
Korn: Oh, it’s always a pleasure.
Heffner: And thanks, too, to you in the audience. I hope you’ll join us again next time. And if you care to share your thoughts about today’s program, please write to THE OPEN MIND, P.O. Box 7977, FDR Station, New York, NY 10150. For transcripts send $3.00 in check or money order. Meanwhile, as an old friend used to say, “Good night and good luck”.
Continuing production of this series has generously been made possible by grants from: The Rosalind P. Walter Foundation; The M. Weiner Foundation of New Jersey; The Mediators and Richard and Gloria Manney; The Edythe and Dean Dowling Foundation; Lawrence A. Wien; The New York Times Company Foundation; and, from the corporate community, Mutual of America.