leadership: what is it? - sage pub · pdf file1...

11John P. Kotter is the retired Konosuke Matsushita Professor of Leadership at Harvard Business School.

Leadership: What Is It?Leadership: What Is It?

Leadership is, most fundamentally, about changes. What leaders do is create thesystems and organizations that managers need, and, eventually, elevate them upto a whole new level or . . . change in some basic ways to take advantage of newopportunities.

—John P. Kotter1

Gary Yukl (2006) defines leadership as “the process of influencing others to understandand agree about what needs to be done and how to do it, and the process of facilitat-ing individual and collective efforts to accomplish shared objectives” (p. 8). Peter

Northouse (2010) defines leadership as “a process whereby an individual influences a groupof individuals to achieve a common goal” (p. 3). These definitions suggest several compo-nents central to the phenomenon of leadership. Some of them are as follows: (a) Leadershipis a process, (b) leadership involves influencing others, (c) leadership happens within thecontext of a group, (d) leadership involves goal attainment, and (e) these goals are sharedby leaders and their followers. The very act of defining leadership as a process suggests thatleadership is not a characteristic or trait with which only a few certain people are endowedat birth. Defining leadership as a process means that leadership is a transactional event thathappens between leaders and their followers.

Viewing leadership as a process means that leaders affect and are affected by their follow-ers either positively or negatively. It stresses that leadership is a two-way, interactive eventbetween leaders and followers rather than a linear, one-way event in which the leader affectsthe followers but not vice versa. Defining leadership as a process makes it available to every-one—not just a select few who are born with it.More important, it means that leadership isnot restricted to just the one person in a group who has formal position power (i.e., the for-mally appointed leader).

C H A P T E R

5C H A P T E R

1

Leadership is about influence—the ability to influence your subordinates, your peers,and your bosses in a work or organizational context. Without influence, it is impossibleto be a leader. Of course, having influence means that there is a greater need on the partof leaders to exercise their influence ethically.

Leadership operates in groups. This means that leadership is about influencing agroup of people who are engaged in a common goal or purpose. This can be a small cen-ter for management development in a business school with a staff of 4, a naval ship witha ship’s company of 300 (a destroyer) or 6,000 (an aircraft carrier), or a multinationalenterprise such as Starbucks with more than 10,500 stores worldwide and in excess of100,000 partners (employees). This definition of leadership precludes the inclusion ofleadership training programs that teach people to lead themselves.

Leadership includes the achievement of goals. Therefore, leadership is about directing agroup of people toward the accomplishment of a task or the reaching of an endpoint throughvarious ethically based means. Leaders direct their energies and the energies of their follow-ers to the achievement of something together—for example, hockey coaches working withtheir players to win a championship, to win their conference, to have a winning (better than0.500) season, or to have a better won–lost percentage than last season. Thus, leadershipoccurs in, as well as affects, contexts where people are moving in the direction of a goal.

Leaders and followers share objectives. Leadership means that leaders work with theirfollowers to achieve objectives that they all share. Establishing shared objectives that leadersand followers can coalesce around is difficult but worth the effort. Leaders who are willingto expend time and effort in determining appropriate goals will find these goals achievedmore effectively and easily if followers and leaders work together. Leader-imposed goals aregenerally harder and less effectively achieved than goals developed together.

In this casebook, those who exercise leadership will be referred to as leaders, while thosetoward whom leadership is exercised will be referred to as followers. Both are required forthere to be a leadership process.Within this process, both leaders and followers have an eth-ical responsibility to attend to the needs and concerns of each other; however, because thiscasebook is about leadership, we will focus more on the ethical responsibility of leaderstoward their followers. Finally, it needs to be said that leaders are not better than followers,nor are they above followers.On the contrary, leaders and followers are intertwined in a waythat requires them to be understood in their relationship with each other and as a collectivebody of two or more people (Burns, 1978; Dubrin, 2007; Hollander, 1992).

In the previous paragraphs, leadership has been defined and the definitional aspectsof leadership have been discussed. In the next few paragraphs, several other issues relatedto the nature of leadership will be discussed: how trait leadership is different from lead-ership as a process, how emergent and appointed leadership are different, and how coer-cion, power, and management are different from leadership.

Trait Versus Process

Statements such as “She is a born leader” and “He was born to lead” imply a perspectivetoward leadership that is trait based. Yukl (2006) states that the trait approach “emphasizesleaders’ attributes such as personality, motives, values, and skills. Underlying this approachwas the assumption that some people are natural leaders, endowed with certain traits notpossessed by other people” (p. 13). This is very different from describing leadership as aprocess. In essence, the trait viewpoint suggests that leadership is inherent in a few select

2 CASES IN LEADERSHIP

Chapter 1: Leadership—What Is It? 3

people and that leadership is restricted to only those few who have special talents withwhich they are born (Yukl, 2006). Some examples of traits are the ability to speak well, anextroverted personality, or unique physical characteristics such as height (Bryman, 1992).Viewing leadership as a process implies that leadership is a phenomenon that is contextualand suggests that everyone is capable of exercising leadership. This suggests that leadershipcan be learned and that leadership is observable through what leaders do or how theybehave (Daft, 2005; Jago, 1982; Northouse, 2010).

Assigned Versus Emergent

Assigned leadership is the appointment of people to formal positions of authority withinan organization. Emergent leadership is the exercise of leadership by one group memberbecause of the manner in which other group members react to him or her. Examples ofassigned leadership are general managers of sports teams, vice presidents of universities,plant managers, the CEOs of hospitals, and the executive directors of nonprofit organiza-tions. In some settings, it is possible that the person assigned to a formal leadership posi-tion may not be the person to whom others in the group look for leadership.

Emergent leadership is exhibited when others perceive a person to be the most influ-ential member of their group or organization, regardless of the person’s assigned formalposition. Emergent leadership is exercised when other people in the organization support,accept, and encourage that person’s behavior. This way of leading does not occur when aperson is appointed to a formal position but emerges over time through positive com-munication behaviors. Fisher (1974) suggested that some communication behaviors thatexplain emergent leadership are verbal involvement, keeping well informed, asking othergroup members for their opinions, being firm but not rigid, and the initiation of new andcompelling ideas (Fisher, 1974; Northouse, 2010).

The material in this casebook is designed to apply equally to emergent and assignedleadership. This is appropriate since whether a person emerged as a leader or was assignedto be a leader, that person is exercising leadership. Consequently, this casebook uses casesthat focus on the leader’s “ability to inspire confidence and support among the peoplewho are needed to achieve organizational goals” (Dubrin, 2007, p. 2).

Leadership and Power

Power is related to but different from leadership. It is related to leadership because it is anintegral part of the ability to influence others. Power is defined as the potential or capac-ity to influence others to bring about desired outcomes. We have influence when we canaffect others’ beliefs, attitudes, and behavior. While there are different kinds of power, inorganizations, we consider two kinds of power—position power and personal power.Position power is that power that comes from holding a particular office, position, or rankin an organization (Daft, 2005). A university president has more power than a dean of abusiness school, but they both have formal power.

Personal power is the capacity to influence that comes from being viewed as knowl-edgeable and likable by followers. It is power that derives from the interpersonal rela-tionships that leaders develop with followers (Yukl, 2006). We would argue that whenleaders have both position and personal power, they should use personal power a vastmajority of the time.Overuse of position powermay erode the ability of a leader to influence

people. Of course, it is important to know when it is most appropriate to use positionpower and to be able and willing to use it (Daft, 2005).

Power can be two-faced. One face is the use of power within an organization toachieve one’s personal goals to the detriment of others in the organization. The other faceis that power that works to achieve the collective goals of all members of the organization,sometimes even at the expense of the leader’s personal goals.

Leadership and Coercion

Related to power is a specific kind of power called coercion.Coercive leaders use force to causechange. These leaders influence others through the use of penalties, rewards, threats, punish-ment, and negative reward schedules (Daft, 2005). Coercion is different from leadership, andit is important to distinguish between the two. In this casebook, it is important for you to dis-tinguish between those who are being coercive versus those who are influencing a group ofpeople toward a common goal. Using coercion is counter to influencing others to achieve ashared goal and may have unintended, negative consequences (Dubrin, 2007; Yukl, 2006).

Leadership and Management

Leadership is similar to, and different from, management. They both involve influencingpeople. They both require working with people. Both are concerned with the achievementof common goals.However, leadership andmanagement are different onmore dimensionsthan they are similar.

Zaleznik (1977) believes that managers and leaders are very distinct, and being oneprecludes being the other. He argues that managers are reactive, and while they are will-ing to work with people to solve problems, they do so with minimal emotional involve-ment. On the other hand, leaders are emotionally involved and seek to shape ideas insteadof reacting to others’ ideas.Managers limit choice, while leaders work to expand the num-ber of alternatives to problems that have plagued an organization for a long period oftime. Leaders change people’s attitudes, while managers only change their behavior.

Mintzberg (1998) contends that managers lead by using a cerebral face. This facestresses calculation, views an organization as components of a portfolio, and operateswith words and numbers of rationality. He suggests that leaders lead by using an insight-ful face. This face stresses commitment, views organizations with an integrative perspec-tive, and is rooted in the images and feel of integrity. He argues that managers need to betwo faced. They need to simultaneously be managers and leaders.

Kotter (1998) argues that organizations are overmanaged and underled. However,strong leadership with weak management is no better and may be worse. He suggests thatorganizations need strong leadership and strong management. Managers are needed tohandle complexity by instituting planning and budgeting, organizing and staffing, andcontrolling and problem solving. Leaders are needed to handle change through setting adirection, aligning people, and motivating and inspiring people. He argues that organiza-tions need people who can do both—they need leader-managers.

Rowe (2001) contends that leaders and managers are different and suggests that oneaspect of the difference may be philosophical. Managers believe that the decisions they makeare determined for them by the organizations they work for and that the organizations theywork for conduct themselves in a manner that is determined by the industry or environmentinwhich they operate. In otherwords,managers are deterministic in their belief system.Leaders

4 CASES IN LEADERSHIP

Chapter 1: Leadership—What Is It? 5

believe that the choices they make will affect their organizations and that their organizationswill affect or shape the industries or environments in which they operate. In other words, thebelief systems of leaders are more aligned with a philosophical perspective of free will.

Organizations with strong management but weak or no leadership will stifle creativ-ity and innovation and be very bureaucratic. Conversely, an organization with strong lead-ership and weak or nonexistent management can become involved in change for the sakeof change—change that is misdirected or meaningless and has a negative effect on theorganization. Bennis and Nanus (1985) expressed the differences between managers andleaders very clearly in their often quoted phrase: “Managers are people who do things rightand leaders are people who do the right thing” (p. 221). Implicit in this statement is thatorganizations need people who do the right thing and who do the “right things right.”

yy ReferencesAshby, M. D., & Miles, S. A. (2002). Leaders talk leadership: Top executives speak their minds. Oxford: Oxford

University Press. Bennis, W. G., & Nanus, B. (1985). Leaders: The strategies for taking charge. New York: Harper & Row.Bryman, A. (1992). Charisma and leadership in organizations. London: Sage.Burns, J. M. (1978). Leadership. New York: Harper & Row.Daft, R. L. (2005). The leadership experience (3rd ed.). Mason, OH: Thomson, South-Western.Dubrin, A. (2007). Leadership: Research findings, practice, and skills. New York: Houghton Mifflin.Fisher, B. A. (1974). Small group decision-making: Communication and the group process. New York:

McGraw-Hill.Hollander, E. P. (1992). Leadership, followership, self, and others. Leadership Quarterly, 3(1), 43–54. Jago, A. G. (1982). Leadership: Perspectives in theory and research. Management Science, 28(3), 315–336.Kotter, J. P. (1998). What leaders really do. In Harvard Business Review on leadership (pp. 37–60). Boston:

Harvard Business School Press.Mintzberg, H. (1998). Retrospective commentary on the manager’s job: Folklore and fact. In Harvard

Business Review on leadership (pp. 29–32). Boston: Harvard Business School Press.Northouse, P. G. (2010). Leadership: Theory and practice (5th ed.). Thousand Oaks, CA: Sage.Rowe, W. G. (2001). Creating wealth in organizations: The role of strategic leadership. Academy of

Management Executive, 15(1), 81–94.Yukl, G. (2006). Leadership in organizations (6th ed.). Upper Saddle River, NJ: Pearson-Prentice Hall.Zaleznik, A. (1977). Managers and leaders: Are they different? Harvard Business Review, 55, 67–78.

yy The Cases

Food Terminal (A)

In this case, a recently appointed store manager at a wholesale food company must makesome decisions regarding management and leadership. The store is losing $10,000 perweek, sales are spiraling downward, the key people in the company do not want him there,and employee morale is terrible.

Dickinson College: Inspiration for a LeadershipStory (In the Vision of a Founding Father)

In January 1999, William Durden became the 27th president of his alma mater, DickinsonCollege. He quickly realized that for much of the 20th century, Dickinson had lacked a

The Food Terminal (A)

Prepared by Leo J. Klus, under the supervision of John F. Graham

6 CHAPTER 1: LEADERSHIP—WHAT IS IT?

Copyright © 1992, Ivey Management Services Version: (A) 2001-08-10

In July 1991, three months after graduating fromthe Western Business School, 23-year-old MikeBellafacia knew that he was in for a rough ride.

When I arrived at the store, the staffmorale was terrible. The previous man-ager had made a mess of things, therecession was hitting home, sales werespiralling downward quickly, and mystore was losing $10,000 per week. Tomake matters worse, most of the keypeople in the company felt that I didn’tdeserve the store manager’s position.

As the recently appointed store manager ofthe newest Foodco location in St. Catharines,Ontario, Mike knew that he had to turn the storearound by improving its financial performanceand the employee morale. He also knew that

something had to be done immediately becausethe losses at this store were seriously affectingthe entire company.

yy Foodco LtdFoodco Ltd. (FC), with its head office located inSt. Catharines, Ontario, was a large player in theNiagara Peninsula grocery retailing industry. FC,a retailer in this market since 1962, was currentlymade up of seven stores: three St. Catharineslocations, one Welland location, one PortColborne location, and two Lincoln locations.Most of the ownership and key managementpositions were held by Frank Bellafacia, TonyBellafacia, and Rocco Bellafacia, as shown inExhibit 1. Selected financial ratios for FC areshown in Exhibit 2.

strong sense of organizational purpose. By autumn, Durden had turned to the life andwritings of Dr. Benjamin Rush, who had secured the college charter in 1783, as the inspi-ration for the story. After introducing Durden and the challenges confronting Dickinson,the case describes the early history of the college and the ideas and accomplishments ofRush. It then provides students with a brief overview of the strategic challenges that hadsurfaced for Dickinson by the mid-1990s. The conclusion indicates that Durden still hadto resolve many issues associated with the identity story.

yy The Reading

Great Leadership Is Good Leadership

Look into the soul of any great leader and you will find a good leader. But if only that werethe case! Some leaders, those who crave and bathe in the spotlight, are in fact not so great.Others, who are highly effective (and modest) and possess the five key characteristics thisauthor describes, are good leaders first and foremost—which is what, in the end, makesthem great!

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FC had created a powerful presencein this industry by developing and refin-ing a strategy that worked. Their productoffering was that of any typical supermar-ket: groceries, meats, bakery and dairyitems, packaged foods, and nonfooditems. Each store carried eight to tenthousand different items. FC planned towiden the selection available by addingmore lines and to follow a general trendin consumer preferences toward anincreased percentage of nonfood items inthe product mix. Central to FC’s strategywas a well-managed marketing effort.Weekly flyers were distributed that high-lighted five or six items. FC priced these

items below cost to draw customers. Therest of the flyer’s products were represen-tative of all the product groups. FC’s abil-ity to differentiate itself from the othercompetitors centred on its corporatevision: low food prices and fast, friendlyservice. Central to the FC competitivestrategy was the mandate to be the low-price leader among conventional super-markets, during good and bad economictimes. Mike Bellafacia stated: “This is a nofrills and low price store for a no frills andlow price clientele. Most markets areshifting in this direction.” FC had devel-oped aggressive expansion plans with sixstores being considered for development.

1986 1987 1988 1989 1990

PROFITABILITY

Cost of goods sold

Operating expenses

Net income before tax

81.2%

19.4%

−1.1%

80.2%

18.7%

0.5%

79.7%

19.1%

0.3%

78.7%

19.6%

0.7%

78.3%

19.8%

0.7%

RETURN

After-tax return on equity 0.0% 715.0% n/a 725.0% 94.2%

STABILITY

Interest coverage* 1.28x 1.36x 1.05x 1.19x 2.37x

LIQUIDITY

Net working capital ($000)* (1,447) (2,051) (13) (316) (243)

GROWTH

Sales

Assets*

Equity*

26.0%

16.7%

−0.3%

10.7%

3.8%

1.2%

14.1%

11.2%

4.9%

15.5%

9.6%

19.5%

Exhibit 2 Selected Financial Ratios

*Denotes a ratio calculated from the statements of Bellafacia’s Consolidated Holdings Inc.


The Food Terminal (A) 9

Exhibit 3 Front Page of the Weekly Flyer

yy The Retail Grocery Industry

The job of managing the store and the staffbecame crucial to the overall success of FCgiven the demanding challenges in theindustry. The industry was shifting from asimple mass market to a spectrum of dis-tinct, serviceable segments. A recent statis-tic stated that 30 per cent of consumersswitch stores every year. Moreover, a newFood Marketing Institute study found thatconsumers buy on the basis of the follow-ing criteria (ranked in decreasing prior-ity): service, quality products, variety, andlow prices. Thus, there was now moreopportunity for competitive differentia-tion based on service and on quality thanon price alone.

There were tremendous opportuni-ties for niche players to enter the market,and such entrants had been observed.Health and organic food stores, fruit mar-kets, and independent single-commoditystores (i.e., pet food stores) emerged andwere servicing their target segmentsmore effectively than the supermarketswere willing or able to do. Consumerdemands varied from region to region,and many small independent retail gro-cers emerged to meet these demands bothin the Niagara Peninsula and across all ofOntario. These independents managednot only to survive, but to take sizableportions of market share from the majorchains. This shift toward niche marketingand catering to the local market outlinedthe need to employ store managers whounderstood how to please and retain thelocal customer.

yy The Role of the Store Manager

The success of FC depended upon eachof the seven store managers operating

his/her store consistently with the corpo-rate strategy. Traditionally, the road tostore manager (SM) began within one ofthe stores at a lower management posi-tion. The family culture within eachFood Terminal location was very impor-tant to FC management. Thus, storemanagers were selected from within thecompany to ensure a leader who under-stood the FC vision and values. Fivemanagers reported directly to the SM, asshown in Exhibit 4, and their develop-ment was an important job for the SM.The SM position became increasinglymore important at FC. Many of the cur-rent SM functions that used to be han-dled by the head office were delegateddownward to the store level to allow headoffice to focus on overall company strat-egy. The stores were now more attuned tothe local market they serve. An SM wasresponsible for the following:

1. Ensuring that merchandising skillswere strong among all departmentmanagers;

2. Monitoring local market information;

3. Focusing staff on organizationalgoals (such as sales, gross margin,and profit goals);

4. Organizing weekly staff meetings;

5. Developing all employees andencouraging staff training;

6. Generating and producing sales,gross margin, and profit objectives;

7. Meeting cost objectives (motivatingthe staff to be cost conscious);

8. Analyzing the performance of eachinter-store department; and

9. Attending FC “Top ManagementMeetings” (TMMs).



yy Mike Bellafacia’sBackground

Mike Bellafacia graduated from The Universityof Western Ontario with an Honors Business

Administration degree (HBA). During hissummers at university, he was assigned spe-cial projects from his father that focused on avariety of company problems. Mike would

Store ManagerMike Bellafacia

ProduceManager

GroceryManager

MeatManager

HeadCashier

DeliManager

Dairy/Frozen

Manager

SeniorClerk

SeniorClerk

P/T Staff Receiver Cutters P/T Staff

Asst.Head

Cashier

S.I.C.O*

Cash OfficeClerk

PriceChange

Clerk

HeadWrapper

SeniorClerks

P/T Staff

P/T Staff

Exhibit 4 Scott & Vine Organizational Chart

*Store Information and Communications Officer. Responsible for maintaining the lines of communication between the storeand head office.

combine the analytical skills developed in thebusiness school with his knowledge of thefamily business to address these issues. In hislast year in the HBA program, Mike and ateam of student consultants spent the yearfocusing on the long-term strategy and com-petitive advantage of FC. They examinedevery aspect of the company and developedmany strategic recommendations for the topmanagement at FC.

Upon graduation, Mike decided to workfor FC. He planned to start off working insome of the various departments (i.e., the pro-duce department) and at different storeswithin FC to work his way up in order to getthe experience he needed to manage a store.This would have allowed him the opportunityto work under some of the most knowledge-able managers in the company. He didn’texpect to be store manager so soon.

yy The Scott & Vine Location:The First Month

Mike’s career at FC was supposed to begin inone of the departments in the company. BothMike and FC management felt strongly aboutthat. However, while Mike was on vacation inMay, FC management made a chancy deci-sion. As of June 1, 1991, Mike Bellafacia wouldtake over the SM position at the Scott &Vine location from the existing SM. Thestore’s performance was deteriorating, andMike was expected to change things. Mikereflected on the first week at the three-monthold location:

When I first started I was extremely ner-vous. The district supervisor broughtme to the store to have a meeting withthe department managers, and I couldsee the look of disappointment in theireyes. Most of these managers had beenforced to move to this new store fromother locations. The staff morale wasdefinitely low to begin with. Combinedwith the fact that I am the boss’s son,

they probably assumed that I was sentto check on them.

After getting settled in, Mike began to real-ize that something was terribly wrong at theScott & Vine food terminal. The store was notproducing a bottom line, and many of the 95employees were not performing well. Mikecommented:

This building used to be a Food Citythat was on the verge of closing down.We acquired it and picked up wherethey left off. The task I had was to getabove average performance from anaverage staff. They were just not dri-ven to succeed, were poorly trained,and many of them, especially themanagers, didn’t want to be there.

The previous manager had performedpoorly by FC standards. Although he had beenan SM at other grocery stores, he was unable tocreate a productive atmosphere at this one.When this location opened, the sales level was$160,000 per week, but by Mike’s first month ithad dropped by 17 per cent. FC managementexpected this location to be operating at over$200,000 per week. The other St. Catharinesstores were operating at over $350,000 perweek. They had a long way to go.

What took place at the Scott & Vinelocation was a symptom of a more seriousproblem: the performance of FC as a whole.Mike explained the situation:

Some of what was happening here canbe attributed to FC. They became fatcats and, in the process, they losttouch with the customers. Pricing hadgone way out of line, cross-bordershopping was cutting into our bottomline, and our marketing efforts werepoor. The weekly ads that are devel-oped by head office for all the storeswere not drawing in customers likethey used to. As a result, we had noword-of-mouth advertising which is



so essential to a retail outlet. Whenour sales across the board went down,we had only ourselves to blame.

yy Sorting Throughthe Disorder

The job of managing the Food Terminal wasoverwhelming, and the problems were endless.Some of the more prevalent problems arelisted below:

1. Product rotation (a job monitored bydepartment managers and very impor-tant for customer satisfaction) washandled improperly.

2. It was not uncommon to find emptycounters and shelves.

3. The staff paid very little attention tocleanliness. (Customers complainedabout this.)

4. Customers were not treated withrespect by those employees who hadfrequent contact with them.

5. Department managers were doing apoor job of managing and motivatingthe employees in their departments.

6. Department sales and gross profitresults were poor. (See Exhibit 5 for abreakdown of departmental sales andgross profit figures.)

Departmental Performance

DEPARTMENT SALES ($) GROSS PROFIT ($) % OF SALES

Produce 22,677 4,602 20.3

Grocery 77,363 12,467 16.1

Meat 32,963 7,629 23.1

Non-Food 4,784 1,228 25.7

IS-Bakery 2,337 934 40.0

TOTAL 140,124 28,860 19.2

Exhibit 5 Selected Financial Indicators, Scott & Vine Location, for the Week Ending June 9, 1991

Overall Store Performance (One Week)

WEEKLY INDICATORS BUDGET ($) ACTUAL ($)

SALES 155,000 140,124

GROSS PROFIT 33,683 26,860

EXPENSES:

Wages 16,483 19,600

Supplies 1,895 1,410

Other Expenses 17,091 16,257

TOTAL EXPENSES 35,469 37,267

NET INCOME (1,786) (10,407)

# OF CUSTOMERS 7,723/WEEK

Difficulties arose within the staff thatmade the SM job even more strenuous. Mikedescribed the situation:

There were a lot of people problemsthat I had to face. The weekly staffmeetings we had together were ajoke. Instead of a time to interact andsolve problems together, it was just awaste of time. As well, the entire staffwas demoralized due to the continualfailure to meet monthly performancegoals since the store opened. We hadthe worst performance in the FCorganization. The controller of thecompany told me that the Scott &Vine location was hurting the entirecompany. I felt as though head officewas blaming me for the store’s poorperformance, and I knew that I hadto set some goals that we could allrally behind.

For the first month I was very auto-cratic. I had to be! I replaced all thecashiers that month, because of thenumerous customer complaints abouttheir attitude, but that was just thebeginning of my problems. The part-time staff were continually standingaround doing nothing. The receiverwas not handling the deliveries verywell. I found it tough to get along withthe department managers. My worstemployee problems came from theproduce andmeat managers. They justwere not doing their jobs well. I triedgoing over the product orders withthem, developing schedules, andassisting with their product displayplans. I even brought in some of FC’sdepartment experts to go over thingswith them. They would not listen toany of my suggestions. Even though Ihad some problems with my grocerymanager, I began to see that he hadreal potential for managing. Therewas some resentment toward me for

being a family member and gettingthe SM position so young, and as aresult, people would not open up tome. I also knew that some of the otherSMs at other locations didn’t want meto succeed, and I found myself conve-niently left out of important SMmeetings. To make matters worse,after two months here, the generalmanager of FC made it known that Ishould be pulled out of this job.

yy Facing the FutureIt was a tough season to compete in the retailgrocery business. Mike Bellafacia found thisout after only two months at the FoodTerminal and the situation was now grave.The Scott & Vine location was losing over$10,000 per week and the sales level was stag-nant. The staff morale had changed very little.Customers were not responding to advertise-ment efforts, and things looked as if they weregoing to worsen. Mike reflected on what hadhappened during these last two months andwhere things were going. He wondered if hewas responsible for the mess the store wasin—had he mismanaged his managers,thereby making the situation worse? Had FCmade a big mistake putting him in the posi-tion of SM? Thinking back on his education,Mike commented:

The business school helped me under-stand the decision-making process.I’m not afraid to make decisions, doanalysis and pin-point problem areas.But it didn’t teach me how to get thejob done, the execution of a decision.More importantly, I was not preparedto deal with people who didn’t havethe training I did, or the desire to suc-ceed as I did.

Although he was unsure about theseissues, he focused on what he should do to get


Dickinson College 15

the Scott & Vine food terminal operating prof-itably, with good management and with agrowing customer base. As he looked over thefinancial data, he wondered if he should lay offsome employees to bring the wages expensedown. Mike reflected on this: “We didn’t havethe sales to support the exorbitant numberof employees we had at the store.” He was

concerned about how he would handle theselayoffs. He also thought about the seriousmorale problem. Many of the employees werelazy and demotivated, and customers com-plained regularly about cleanliness and service.He wondered if there was a way to use theweekly meetings to his advantage. Thingsseemed just as complicated as they did in June.

Dickinson College

Inspiration for a Leadership Story (in the Vision of a Founding Father)

By Michael J. Fratantuono

On a mid-October morning in 1999, William G.(Bill) Durden got up from his desk and lookedout his window onto the main green of thecampus. Many thoughts filled his mind. Theprior January, the board of trustees had namedhim the 27th president of his alma mater,Dickinson College. In a few weeks, on October30, during the autumn board meeting, hewould be officially instated and deliver hisinaugural address.

In both personal and professional terms,the appointment represented a dramatic turn ofevents. When contacted by the Dickinson searchcommittee in late autumn of 1998, Durden wasnot initially interested in the position. Yes, hehad graduated from Dickinson in 1971, was cer-tainly grateful for the education he had receivedand was mindful of the opportunities that had

flowed from that experience.2 However, he wasserving as the president of a division of theSylvan Learning Systems, Inc. and the vice-president of academic affairs for the CaliberLearning Network, positions that he foundchallenging and rewarding. Furthermore, as analumnus, he had become increasingly angry andfrustrated that over the past few decades, theschool had not realized its potential; sometimeshe had even been embarrassed that the nameDickinson did not command more respect inacademic and professional circles. He onlyagreed to take the job after talks with trustees,alumni, faculty and students convinced himthere was a genuine, broad-based desire for fun-damental change at the college.3

Once he decided to accept and was namedby the board, Durden began the process of

Copyright 2008, Ivey Management Services Version: (A) 2008-04-16

2For example, Durden won a Fulbright Scholarship, studied in Switzerland and Germany, and earned a Ph.D. in Germanlanguage and literature from Johns Hopkins University. He had stayed on at Johns Hopkins, taught in the German departmentfor 16 years, and had become the executive director of the well known Center for Talented Youth (CTY). He had acted as aconsultant and advisor to numerous government agencies, non-profit organizations, and foundations in the field of education.“President William G. Durden, Biography,” Dickinson College web site, http://www.dickinson.edu/about/president/bio.html,accessed July 28, 2007.

3Bill Durden, “Comments as Guest Lecturer for the Dickinson College course, Financial Transformation of Dickinson College,February 6, 2007,” Dickinson College, Carlisle, PA.


transition. In the spring, he had visited the col-lege several times. On July 1, at the start of theacademic year, he had moved into the presi-dent’s office in West College, Dickinson’s mosthistorically significant building. In the final daysof August, as the semester started, he had min-gled with students and their families, and pre-pared his convocation speech. Over the pastnine months, Durden had uncovered what heregarded as two shortcomings at the college.The first quickly surfaced. For its entire 216-yearhistory, the college had never had a fullyarticulated strategy. That realization hadinformed Durden’s first major goal: the collegewould have a strategic plan by the spring of2000. Towards that end, in the spring of 1999 hehad asked the dean and other administrators toinvite respected members of the college to serveon a special committee. During the summer, heand the group read more than 1,200 pages ofwhite papers, reports, self-studies, and otherdocuments that had been written in recent yearsabout Dickinson. Informed by that backgroundmaterial, with the start of the semester, the com-mittee began to meet each week to start theprocess of writing a first draft of a high-levelstrategic plan, one that would identify a visionand mission, defining attributes, and prioritiesfor the college. Their objective was to completea first draft by late autumn, so that the docu-ment could be vetted by faculty, students,administrators and trustees; redrafted over thewinter; re-circulated; and then released in finalform to the community by the end of the acad-emic year. Later that day, he would be attendinganother such meeting, participating not as aconvener or facilitator, but as a contributor tothe conversation. While the work was toughgoing, the attitude among committee memberswas upbeat and they had started to make somegood progress.

The second shortcoming, more subtle anddeeply embedded, involved the culture of the

college. For much of the 20th century, theDickinson community had lacked the sense oforganizational pride and purpose one typicallyencountered at a college with a national reputa-tion for excellence. Previous leaders had beencomfortable with the status quo and had notconveyed a sense of urgency with respect to theinternal and external challenges that confrontedthe school. Dickinson had remained relativelyanonymous in the field of higher education,had failed to establish a strong and clearidentity—the type of identity that could helpdistinguish the college from rivals and con-tribute to the experience of students, the senseof purpose of the faculty, and the affinity ofalumni. That insight had come to Durden sometwo months earlier. During orientation week,he had gone on a day-hike with a group of stu-dents, and engaged in a lengthy conversationwith a rising senior who had earned goodgrades and been deeply involved in campus lifebefore spending time abroad during her junioryear. The same evening, she sent him an e-mailand confessed that despite all that she hadaccomplished and experienced, she still did nothave a clear sense of what it meant to be aDickinsonian. That troubled Durden: if such anaccomplished student could not explain what aDickinson education stood for, then who could?4

The disturbing, albeit important, exchangewith the young lady gave Durden a new pur-pose. That is, while Durden had—in additionto reading college documents for the specialcommittee—also spent time throughout thesummer studying the history of the college,the exchange had prompted him to revisit thecircumstances associated with the collegebeing granted a charter from the Assembly ofPennsylvania in 1783. Durden had becomeparticularly intrigued by the life and writingsof Dr. Benjamin Rush, the man responsiblefor founding the college. During a period ofAmerican history characterized by dramatic

4Bill Durden, “Leadership, Language Study, and Global Sensibility,” keynote address delivered at the East Asia Regional Councilof Overseas Schools (EARCOS), Ho Chi Minh City, Vietnam, November 2, 2004, http://www.dickinson.edu/about/president/earcos.html.


change in political, social, and economic affairs,Rush had articulated a clear and compellingvision for Dickinson. Unfortunately, in rathershort order, those managing college affairs choseto disregard Rush and dismiss some of the cen-tral elements of his plan. Soon thereafter, Rushand his vision faded as guiding lights: by the1900s, new generations of Dickinson faculty andstudents—including Durden when he was anundergraduate—never heard much at all fromold hands about the man, his efforts, or his ideas.

Through his various life experiences, Durdenhad developed a somewhat non-traditional viewabout leadership. First, while he was a voraciousreader, he did not spend much time with popu-lar books about business management. Instead,he far preferred to read works of literature andvisit museums for insights about human natureand group dynamics. Second, he had come toappreciate the power of a leadership story formotivating and channeling the energies of mem-bers of an organization. In his various posts, healways asked himself and those around him,“What is our story?” and given the story, “Howare we doing?”5 Durden now wondered, couldRush’s vision and the history surrounding thecollege’s origin be translated into a leadershipstory that informed the strategic plan and helpedestablish a strong sense of identity among mem-bers of the Dickinson community?

yy Turbulent Events; ClearVision (1681–1783)

Early History of Pennsylvania and of Carlisle6

William Penn was born in London in 1644 to afamily of wealth and status—his father was

Admiral Sir William Penn. He gradually gravi-tated to the beliefs of the Society of Friends, orQuakers, then a persecuted sect. Despite hisconversion, he retained the trust of the Dukeof York (later King James II) and thus goodsocial standing at the King’s Court. Given hisbeliefs, Penn petitioned the Crown for land inthe Americas that might serve as a haven forthose of all religious persuasions. Ultimately—and at least in part due to an outstanding debtof £16,000 owed to the estate of the admiral,who had passed away in 1670—King Charles IIsigned the Charter of Pennsylvania, named inhonor of the elder Penn, in March of 1681.Later that year, Penn visited the colony andsummoned a general assembly. Under the char-ter, while officials bearing the title lieutenant-governor would represent the interests of thePenn family, the assembly would concentrateon matters of concern to residents.

During the 1700s, immigrants to thecolony tended to cluster according to their her-itage. English Quakers and Anglicans gatheredin the southeast, in and around Philadelphia,which became a vibrant center for commercial,political, and intellectual life. Germans, manyamong them followers of the Lutheran faith,tended to move to the central part of thecolony and take up farming. Scottish and Irishsettled further west and were primarily fron-tiersmen and practitioners of Presbyterianism.

To help shape development, in 1750 theAssembly established Cumberland County,which included all of Pennsylvania west of theSusquehanna River. In 1751, Carlisle, a com-munity of between 500 and 1,000 people, whowere mostly of Scottish-Irish descent, was des-ignated as the county seat.7

In the 1750s, hostilities broke out betweensettlers and Indian tribes, and then between

5Bill Durden, comments as guest lecturer, February 6, 2007.

6Most of this section is based on information found at the web site of the Pennsylvania Historical and Museum Commission:http://www.phmc.state.pa.us/bah/pahist/quaker.asp, accessed July 2, 2007.

7Charles Coleman Sellers provides a nice sketch of the history of Carlisle and the town’s most prominent citizens in DickinsonCollege: A History, Wesleyan University Press, Middletown, CT, 1973, chapter 2. A digital version of the book is available athttp://chronicles.dickinson.edu/histories/sellers/toc_frame.html.

the British and the French over lands in theAllegheny Mountains and the Ohio RiverValley. Carlisle served as an outpost for royaland provincial militias heading west, a place“where the wagon roads ended and the packhorse trails began.”8 By 1756, when the Frenchand Indian War was officially declared,defenses in Carlisle had been fortified. By 1758,Carlisle was a boom town, with some speculat-ing it might grow into a metropolis.9

In the 1750s and 1760s, Carlisle was alsowitness to a power struggle between two fac-tions of Presbyterians, one that was being wagedon a larger scale in congregations, grammarschools, and colleges throughout the colonies.Generally speaking, the Old Side (conserva-tives) displayed the two defining characteristicsof the religion: they organized themselves into atraditional governance structure, under whichcongregations belonged to presbyteries, andpresbyteries to synods; and they accepted tradi-tional Calvinist theology, which asserted thatGod had to intervene in order for an individualto achieve salvation—essentially, a form of pre-destination that dismissed the relevance ofhuman volition and self-reliance in shapingone’s spiritual destiny. The New Side (progres-sives) had no quarrel with governance structure,but influenced by the Enlightenment, they saw agreater role for the individual: a person could eval-uate scripture, attempt moral self-improvement,and in a moment of transformation be touchedby God’s grace and experience a personal“revival.”10 In Carlisle, while members of theOld Side maintained a dominant position in thelocal congregation, advocates of New Side prin-ciples established a foothold.

By the late 1760s, a Carlisle minister hadbegun to offer lessons to the boys living inthe town. In 1772, construction of a church,under the leadership of an Old Side clergy-man was completed, and it afforded space forregular school lessons. In keeping with thepractices found in grammar schools of theday, boys 10 years of age and older studiedmoral philosophy (“the application of sounddoctrine to right living”), Latin, Greek, andother topics. Schools such as this were only astep below and in some cases were an adjunctto the handful of colleges that had beenestablished in the colonies.11 In 1773, theAssembly granted a deed to a plot of land fora grammar school in Carlisle. Nine ofCarlisle’s most prominent residents, menwho had achieved their status through theirmilitary, church, or commercial activities,were named to the school board.12 While theschool was immediately successful, the out-break of the American Revolutionary Wardistracted all parties from the task of con-structing a schoolhouse. Lessons continuedto be held in the Presbyterian Church.

In 1781, the trustees were finally able toinitiate construction of a new building. Theyalso were intent on requesting a formal charterfrom the assembly, a document that would givethe school status as a permanent corporation.In 1782, Colonel John Montgomery, one of thetrustees, shared news of those developmentswith Dr. Benjamin Rush. Rush, who believedthat an educated citizenry was the key topreserving liberties that had been earnedduring the American War for Independence,became intrigued—and a bit obsessed—by


8Ibid, p. 22.

9Ibid, p. 22 and p. 31.

10D. G. Hart and John R. Muether, “Turning Points in American Presbyterian History Part 3: Old Side versus New Side, 1741-1758,” New Horizons, web site of the Orthodox Presbyterian Church, http://www.opc.org/nh.html?article_id=46 and TheAmerican Presbyterian Church, History of American Presbyterianism, http://www.americanpresbyterianchurch.org/htm.

11Charles Coleman Sellers, Dickinson College: A History, Wesleyan University Press, Middletown, CT, 1973, p. 3.

12James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years 1783-1933, Mount Pleasant Press,Carlisle, PA, 1933, Chapter 1. The book is also available in digital form at http://chronicles.dickinson.edu/histories/morgan/chapter_1.html.


the prospect of establishing a college inCarlisle.13 Within a year Rush, in consultationwith Montgomery and in conjunction with hiscompatriot and friend John Dickinson, wouldsee his vision become a reality.

John Dickinson and Benjamin Rush: FoundingFathers of a New Country14

John Dickinson was born in 1732 and wasraised as a Quaker, on his family’s Marylandwheat and tobacco plantation. He received hishigher education in London. Upon his return tothe colonies, he settled in Philadelphia, beganthe practice of law, and was elected to thePennsylvania Assembly. Dickinson becamemore deeply involved in public affairs whenparliament levied the Stamp Act of 1765. Underthe pen name A Farmer, he wrote 12 powerfulessays that were published in newspapersthroughout the colonies. Therein, he criticizedthe act on the grounds that it contradicted tra-ditional English liberties, citing legal authoritiesand the works of antiquity to buttress his argu-ments. He was elected to the First ContinentalCongress of 1774 and made a significant contri-bution by drafting declarations in the name ofthat body. He was also elected to the SecondContinental Congress.

On June 7, 1776, Richard Henry Lee ofVirginia introduced a resolution in theSecond Congress declaring the union withGreat Britain dissolved, proposing the forma-tion of foreign alliances, and suggesting thedrafting of a plan of confederation to be sub-mitted to the respective states. Dickinsonstood in opposition, believing the coloniesshould first form a confederation beforedeclaring independence from Great Britain.

One month later, on July 4, 1776, Dickinsonheld to his principles and in an act of moralcourage, did not sign the Declaration ofIndependence. Given Dickinson’s oppositionto the declaration, he was assigned to a com-mittee to draw up Articles of Confederation.The Congress was unable to reach agreementon the articles until November 17, 1777, atwhich time the articles were forwarded to eachof the thirteen states. The articles were finallyapproved by a sufficient number to becomeoperative on July 9, 1778.

At the conclusion of the Congress,Dickinson took a position as a colonel in theContinental Army. However, he eventuallyresigned his commission, due to what he inter-preted as a series of insults stemming from thepublic stance he had taken. While there is amixed record, some accounts suggest he subse-quently served as a private soldier at the Battleof Brandywine. Following that service, heremained centrally involved in political affairs.In 1782, Dickinson was elected president of theSupreme Executive Council of Pennsylvania, apost equivalent to a modern day governor. In1786 he participated in and was elected presi-dent of a convention at Annapolis to revise theArticles of Confederation. The brief sessionwas soon adjourned, in favor of a constitu-tional convention held in Philadelphia fromMay to September, 1787. In the latter gathering,Dickinson drafted passages that dealt with theelection of and powers for the President of theUnited States. The constitution was completedin 1787. To promote ratification, Dickinsonwrote nine widely read essays under the penname Fabius. The constitution was adopted in1788 and took effect in 1789, thereby replacingthe Articles of Confederation. While amendedover time, it is the oldest, operative, written

13Charles Coleman Sellers, Dickinson College: A History, Wesleyan University Press, Middletown, CT, 1973, chapter 3 providesa history of the grammar school.

14This section is based on a range of sources, including the respective entries for Benjamin Rush and John Dickinson found in theChronicles of Dickinson College, Encyclopedia Dickinsonia, http://chronicles.dickinson.edu/encyclo/r/ed_rushB.html andhttp://chronicles.dickinson.edu/encyclo/d/ed_dickinsonJ.html, as well as a variety of other web sites dealing with John Dickinson,Richard Henry Lee and the Second Continental Congress.

constitution in the world. Given his patrioticefforts, Dickinson earned a spot in U.S. historyas the “Penman of the Revolution.”

Benjamin Rush was born in 1745 on a farmnear Philadelphia. He was raised in the Calvinisttradition. He earned his bachelor’s degree in1760 from the University of New Jersey (subse-quently renamed Princeton), returned toPhiladelphia and studied medicine from 1761until 1766, and then moved abroad and earned adegree in medicine from the University ofEdinburgh (Scotland) in June 1768. He returnedonce again to Philadelphia in 1769 and started aprivate practice while also serving as the profes-sor of chemistry at the College of Philadelphia.He wrote essays on a range of subjects. His com-mentary about the emerging crisis between thecolonies and Britain brought him into associa-tion with men such as John Adams and ThomasJefferson. When the American RevolutionaryWar broke out in 1775, Rush joined theContinental Army as a surgeon and physician. InJune 1776, he was appointed to the SecondContinental Congress. Unlike Dickinson, whenthe time came, he chose to sign the declaration.

In April 1777, Rush was appointed surgeon-general of the Continental Army. However, hesoon became embroiled in a dispute withDr. William Shippen, Jr., director of hospitals forthe Continental Army, about medical conditionsfor the troops. He wrote letters about his con-cerns to key persons, including Commander inChief George Washington.15 When he receivedno answers, Rush wrote a letter to Patrick Henry:therein, he repeated his concerns and expresseddoubts about Washington’s leadership.16 AfterHenry disclosed the contents of the letter toWashington, Rush was asked to appear before acongressional committee. The committee sidedwith Shippen, prompting Rush to resign his

commission. Nonetheless, Rush would not letthe matter drop. He continued to write letters toWashington and other leaders, claiming thatShippen was guilty not only of mismanagement,but also of selling supplies intended for patientsfor his own profit. In one such letter to NathanielGreene, he unleashed his scathing wit.

I find from examining Dr. Shippen’sreturn of the numbers who die in thehospitals that I was mistaken in theaccounts I gave of that matter in my let-ters to you. . . . All I can say in apologyfor this mistake is that I was deceived bycounting the number of coffins thatwere daily put under ground. Fromtheir weight and smell I am persuadedthey contained hospital patients inthem, and if they were not dead I hopesome steps will be taken for the futureto prevent and punish the crime ofburying Continental soldiers alive.17

In January of 1780, Shippen was arrested. Inwhat was regarded as an “irregular trial,” whichincluded Shippen wining and dining membersof the hearing board, he was acquitted by onevote.18 Rush eventually repaired his private rela-tionship with Washington, but given thatWashington had already started his rise to god-like status at the time of Rush’s letter to PatrickHenry, the incident undermined Rush’s publicreputation for a number of years to come.

Rush returned to his practice in Philadelphiain 1778. In 1780, he began to lecture at the newUniversity of the State of Pennsylvania. In 1783,Rush joined the staff of the PennsylvaniaHospital. He was relentless in his efforts to helpbattle the yellow fever epidemics which repeat-edly surfaced in Philadelphia between 1793 and


15Letters of Benjamin Rush, Princeton University Press, Princeton, NJ, 1951, Volume 1, p. 180–182.

16Ibid, p. 182–183.

17Ibid, p. 195.

18“William Shippen, Jr.,” University of Pennsylvania Archives, http://www.archives.upenn.edu/histy/features/1700s/people/shippen_wm_jr.html, accessed September 23, 2007.


1800; however, he was excoriated by some con-temporaries for his aggressive advocacy and useof purging (bleeding) as proper treatment for thedisease. Ultimately, he gained the reputation as apioneer, credited with writing the first textbookpublished in the United States in the field ofchemistry and the first major treatise on psychi-atry. At the time of his death in 1813, he wasregarded as the preeminent physician in theUnited States.

In 1787, Rush briefly reentered politics: heactively advocated ratification of the constitu-tion and was appointed to the ratifying con-vention for the state. Of greater significance,Rush was an ardent social activist—he helpedfound the Pennsylvania Society for Promotingthe Abolition of Slavery—and a prolific writer,advocating prison reform, abolition of capitalpunishment, temperance, better treatment ofmental illness, universal health care, and arobust system of education. In 1797, he wasappointed by President John Adams to be trea-surer of the United States Mint, a post he occu-pied until he passed away.

Rush’s Values and World View

Rush was a complex character. He accumu-lated an enormous breadth of formal knowl-edge, was a keen observer of everyday events,and was able to engage in either detailed analy-sis or sweeping generalization. He was a manof principle who would not back down in theface of pressure. At times, he was charming andpersuasive, at others, nasty and domineering.While he could be a loyal, devoted, and caringfriend, he sometimes abruptly turned on thosewho did not share his sentiments or opinions,and only later sought reconciliation.

All of Rush’s efforts to institute socialreforms and promote the cause of education inthe new country were informed by his assertion

that the struggle for independence was a neverending process, illustrated for example by apublic statement he made in 1787.

There is nothing more common thanto confound the terms of AmericanRevolution with those of the lateAmerican war. The American war isover; but this is far from being thecase with the American Revolution.On the contrary, nothing but the firstact of the great drama is closed.19

Rush was the type of man who, as the yearspassed by, could be found arguing positions hehad previously rejected—at times he evenappeared to be self-contradictory.20 Despite thattendency, at the most fundamental level he wasconcerned with two sets of relations: the config-uration of social institutions such as family,church, school, and state; and the role of the indi-vidual within the context of those institutions.

Rush was informed by and contributed tothree major intellectual movements of his time.First was the Scottish Enlightenment.21 TheUniversity of Edinburgh, where Rush receivedhis medical training, was an important centerof the movement. Like their French counter-parts, Scotsmen wrote about the power of thehuman mind to uncover the logic of naturallaws, and celebrated the scientific achievementsof the 17th century. However, they had an addi-tional point of emphasis: they were concernedthat Scotland, which in 1707 had been unifiedwith an economically superior England, riskedbecoming a poverty-stricken backwater. Thus,men such as David Hume and Adam Smithinvestigated moral philosophy, history, andpolitical economy in order to better understandthe process of economic growth and develop-ment, in hope of applying insights and keepingScotland economically vibrant.

19Letters of Benjamin Rush, Princeton University Press, Princeton, NJ, 1951, Volume 1, p. lxviii.20Ibid, introduction.21Department of Economics, New School for Social Research, “Scottish Enlightenment,” The History of Economic Thoughthttp://cepa.newschool.edu/het/schools/scottish.htm.


Second, Rush was raised as a Calvinist. Hegradually became sympathetic to the teachings ofthe New Side Presbyterians. The College of NewJersey was decidedly Presbyterian in its affiliation.While at Edinburgh, Rush, acting at the behestof some of the College of New Jersey Trustees,wrote to and visited with the progressive Scottishclergyman John Witherspoon, and convincedWitherspoon and his wife that Witherspoonshould accept the presidency of the college. Thatwas a maneuver important in the ongoing strug-gle being waged at the school between Old Sideand New Side factions. Nonetheless, in later years,Rush became frustrated with Presbyterian eldersand began to attend services of various Christianfaiths. Even later in life, he withdrew to his ownprivate reflections on religious matters.

Third, in terms of political philosophy,Rush’s position also changed. In the years pre-ceding the American Revolution, he was radicalin his beliefs, calling for an overthrow of existingauthority. As the prospect of independencebecame more certain, Rush became more con-servative. For example, in the early 1780s, heasserted that democracy “meant rule by an elitedrawn from the whole,” with the elite reflectingthe influence of God’s grace.22 A few years later,in the debate regarding the need for a bill ofrights in the U.S. Constitution, Rush was sympa-thetic to the conservative views associated withthe Federalist Party of John Adams, and stood inopposition to the Democrat-Republicans andThomas Jefferson, who favored a more egalitar-ian concept of democracy.

There can be only two securities forliberty in any government . . . repre-sentation and checks. By the first therights of the people, and by the sec-ond the rights of representation, areeffectively secured. Every part of a free

constitution hangs upon these twopoints; and these form the two capitalfeatures of the proposed Constitutionof the United States. Without them, avolume of rights would avail nothing;and with them, a declaration of rightsis absurd and unnecessary.23

In the presidential election of 1796, however,he favored Jefferson, who was defeated by Adams.In the early 1800s, he maintained a steady corre-spondence with Jefferson, who by that time hadbeen elected president, as well as with Adams.

In 1797, when Rush was seeking the posi-tion at the U.S. Mint, Judge Richard Peters, along-time Philadelphia Federalist, was asked bySecretary of State Pickering to provide a writtenevaluation of Rush. Peters suggested that Rushhad made a series of bad political choices overtime—he had after all, gravitated to the Democrat-Republicans—and had suffered from the Shippenaffair. But he went on to say the following.

I lament his Want of Stability, for hecertainly has great Merit, unshakenIntegrity & eminent Talents. . . . I admirehis Abilities, lament his Foibles, & withthem all sincerely love him, therefore Icannot but wish him gratified.24

yy Securing a College Charter25

Rush imagined that the college in Carlisle wouldbe part of a larger system that also included ahandful of colleges located throughout the stateand a university in Philadelphia. At the out-set, it would be located at the site of the gram-mar school. He initially asserted that it shouldbe affiliated with one religion—in this case thePresbyterian Church—and that a symbiotic rela-tionship existed between religion and learning.

22Charles Coleman Sellers, Dickinson College: A History, Wesleyan University Press, Middletown, CT, 1973, p. 53.23Letters of Benjamin Rush, Princeton University Press, Princeton, NJ, 1951, Volume 1, p. 453.

24Ibid, p. 1210.

25The following paragraph is based on James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years1783–1933, Mount Pleasant Press, Carlisle, PA, 1933, chapter 2.


Religion is best supported under thepatronage of particular societies.Instead of encouraging bigotry, I believeit prevents it by removing young menfrom those opportunities of contro-versy which a variety of sects mixedtogether are apt to create and which arethe certain fuel of bigotry. Religion isnecessary to correct the effects of learn-ing. Without religion I believe learningdoes real mischief to the morals andprinciples of mankind; a mode of wor-ship is necessary to support religion;and education is the surest way of pro-ducing a preference and constantattachment to a mode of worship.26

Rush soon realized that in order to achievehis objective of founding a college, he wouldhave to win the support of three groups of con-stituents. First were the leaders of Carlisle, foralthough Montgomery endorsed the idea, otherswho were on the board of the grammar schoolwere resistant. Second was the DonegalPresbytery, composed of elders from congrega-tions located in communities throughout theregion. Third was the Assembly of Pennsylvania.The need to win over the last group led him toretreat from the notion of an exclusive affilia-tion with the Presbyterian Church, and to con-sider a non-sectarian school, one that could beendorsed by clergymen of other Christian faithsincluding the Lutherans, and could eventuallywin financial support from the assembly.

Thus, during the first eight months of 1783,Rush adapted four sets of tactics. First, he con-tacted influential and wealthy friends fromPhiladelphia to elicit political support andfinancial commitments for the college. Amongthose he visited was John Dickinson, who was bythat time the president of the Supreme ExecutiveCouncil of Pennsylvania. Dickinson rejectedRush’s first proposal to name the school John

and Mary’s College after Dickinson and his wife,on grounds that it sounded too much like theCollege of William and Mary, which had beennamed for British royalty; however, he graduallywarmed to the idea of a college that would bearhis family name.27 Second, Rush wrote letters tothose he knew objected to the plan, and madehis case for a school: it would obviate the needfor young men from the Carlisle region to travelto Philadelphia or New Jersey for an education;and it would contribute to the emergence of anew commercial center in Carlisle, thereby rais-ing land prices and creating better economicbalance with Philadelphia, which dominated theeastern part of the state.28 Third, in light of theheavy Scottish-Irish presence in the region, Rushargued that the college would provide a soundeducational foundation to young men whoaspired to be ministers in the PresbyterianChurch. Fourth, he told those he contactedabout the pledges of money and support he hadalready earned from others, and held out thepromise of positions on the board of trustees ofthe college to people representing different pro-fessions, religions, and parts of Pennsylvania. AsRush acknowledged, the going was not easy.

[One group of opponents] accuse us of an attempt to divide thePresbyterians . . . [To some groups] theysay our college is to be a nursery . . . ofthe Old Lights [Old Side]—with the OldLights they accuse us of a design tospread the enthusiasm of the New Lights[New Side] through the state. . . . Insome of their letters and conversations Iam considered as a fool and a madman.In others I am considered as a sly, perse-vering, and dangerous kind of fellow.Almost every epithet of ridicule andresentment in our language has beenexhausted upon me in public newspa-pers and in private cabals since the


27Charles Coleman Sellers, Dickinson College: A History, Wesleyan University Press, Middletown, CT, 1973, p. 55.


humble part I have acted in endeavoringto found a college at Carlisle.29

Nonetheless, his methods worked. He suc-cessfully neutralized critics in Carlisle. In springof 1783, the Donegal Presbytery endorsed theidea of a college. And, on September 9, 1783, by amargin of only four votes, the General Assemblyof Pennsylvania approved the Dickinson Collegecharter, entitled “An act for the establishment ofa college at the borough of Carlisle, in the countyof Cumberland, in the state of Pennsylvania.”30

The date of the charter fell only six days afterthe September 3, 1783, signing of the Treaty ofParis, an event that formally ended the AmericanRevolutionary War and included recognitionby the United Kingdom and by France of thethirteen colonies as independent states.

Rush’s Vision for the New College

Rush’s philosophical leanings informed hisvision of a Dickinson education. At the thirdCarlisle meeting of August 1785, Rush sharedhis “Plan of Education for Dickinson College.”The original document, which survived, isfilled with notations, suggesting Rush’s planwas modified during conversations with otherboard members. The initial curriculum actu-ally approved by the board included instruc-tion in six major areas of study: (1) philosophyof the mind, moral philosophy and belles lettres(the translation from French is “fine letters” or“fine literature”), economics, and sociology;(2) Greek and Latin; (3) history and chronol-ogy; (4) mathematics; (5) English; and (6) nat-ural philosophy (science).

As far as Rush was concerned, the curricu-lum was not ideal. For example, in his plan,

Rush had placed chemistry in the same clusterof courses as mathematics and natural philos-ophy; but it was lined through. Given thatRush was one of the leading experts in the fieldin the United States, and that he believed thatchemistry was fundamental to other sciencesand could be applied to fields of practicalimportance in the new nation, such as agricul-ture and manufacturing, the omission ofchemistry as a stand-alone topic in the initialDickinson curriculum had to be a source offrustration to him: indeed, the first professorin that field did not arrive at Dickinson until1810.31 Furthermore, while Rush believed thathistory and government were critical courses,he downplayed the significance of moral phi-losophy. Finally, despite his low opinionregarding the study of Greek and Latin, he hadmade a strong concession: in light of the cen-tral place those languages held in the educa-tion of the times, they should be included inDickinson’s program. But he did expect thatmodern languages such as French and Germanshould also be taught.32 However, as was thecase with chemistry, the first faculty memberwho was expert in Spanish, Italian and Frenchdid not arrive on the scene until 25 years hadpassed. It took even longer for a professor ofGerman to come to Dickinson.

Rush’s disappointment with the shape ofthe initial Dickinson curriculum did not stophim from speaking out and staying involved ineducational reforms. In 1786, Rush wrote thefirst version of an essay entitled, “Upon the spiritof education proper for the College in aRepublican State,” in which he more clearly andfully articulated his view of the purpose, princi-ples, and content of the education that should beprovided at Dickinson College (see Exhibit 1).


29Ibid, p. 299–300.

30A digital copy of the original charter is available at the Chronicles of Dickinson College, http://chronicles.dickinson.edu/archives/charter_orig/. A digital copy of the original plus subsequent amendments through 1966 is available athttp://chronicles.dickinson.edu/archives/charter_1966/charter.html#amendments.

31Charles Coleman Sellers, Dickinson College: A History, Wesleyan University Press, Middletown, CT, 1973, Appendix A, p. 507–508.

32Ibid, p. 81–82.


Exhibit 1

Selected Passages From Benjamin Rush, “Of the Mode of Education Proper in a Republic”

The business of education has acquired a new complexion by the independence of our country. . . .

An education in our own, is to be preferred to an education in a foreign country. The princi-ple of patriotism stands in need of the reinforcement of prejudice . . . formed in the first oneand twenty years of our lives.

Our schools of learning, by producing one general, and uniform system of education, will ren-der the mass of the people more homogenous, and thereby fit them more easily for uniformand peaceable government.

The only foundation for a useful education in a republic is to be laid in Religion. Without thisthere can be no virtue, and without virtue there can be no liberty, and liberty is the objectand life of all republican governments. . . .

Next to the duty which young men owe to their Creator, I wish to see a regard to their coun-try, inculcated upon them. [Our student] . . . must love private life, but he must decline no sta-tion . . . when called to it by the suffrages of his fellow citizens. . . . He must avoid neutralityin all questions that divide the state, but he must shun the rage, and acrimony of party spirit.

[To improve students’ ability to absorb their lessons] it will be necessary to subject their bod-ies to physical discipline. . . . [T]hey should live upon a temperate diet . . . should avoid tastingSpirituous liquors. They should also be accustomed occasionally to work with theirhands. . . . [They should receive guidance on] those great principles in human conduct—sensibility, habit, imitations and association.

[Students should not be crowded] together under one roof for the purpose of education. Thepractice is . . . unfavorable to the improvements of the mind in useful learning. . . . [If we requirethem to separately live in private households] we improve their manners, by subjecting them tothose restraints which the difference of age and sex, naturally produce in private families.

A knowledge of [the American language is essential] . . . to young men intended for the professionsof law, physic, or divinity . . . [and] in a state which boasts of the first commercial city in America.

The French and German languages should . . . be . . . taught in all our Colleges. They aboundwith useful books upon all subjects.

Eloquence . . . is the first accomplishment in a republic . . . We do not extol it too highly whenwe attribute as much to the power of eloquence as to the sword, in bringing about theAmerican Revolution.

History and Chronology [are important because the] . . . science of government, whether . . .related to constitutions or laws, can only be advanced by a careful selection of facts, [espe-cially those related to the] . . . history of the ancient republics, and the progress of liberty andtyranny in the different states of Europe.

(Continued)


(Continued)

Commerce . . . [is] . . . the best security against the influence of hereditary monopolies of land,and, therefore, the surest protection against aristocracy. I consider its effects as next to those of religion in humanizing mankind, and lastly, I view it as the means of uniting the differentnations of the world together by the ties of mutual wants and obligations.

Chemistry by unfolding to us the effects of heat and mixture, enlarges our acquaintance withthe wonders of nature and the mysteries of art . . . [and is particularly important] [i]n a youngcountry, where improvements in agriculture and manufactures are so much to be desired.

[T]he general principles of legislation, whether they relate to revenue, or to the preservationof liberty or property . . . [should be examined, and towards this end, a student should] bedirected frequently to attend the courts of justice . . . [and for this reason] colleges [shouldbe] established only in county towns.

[T]he prerogatives of the national government . . . [should be studied, including] those lawsand forms, which unite the sovereigns of the earth, or separate them from each other.

[W]omen in a republic . . . should be taught the principles of liberty and government; and theobligations of patriotism should be inculcated upon them.

SOURCE: Selected by the case author from Benjamin Rush, “Of the Mode of Education Proper in a Republic,” Essays, Literary,Moral & Philosophical, printed by Thomas and Samuel F. Bradford, Philadelphia 1798: (available in digital form athttp://deila.dickinson.edu/theirownwords/title/0021.htm; accessed July 23, 2007).

He asserted that a liberal education should beinformed by the core values associated with reli-gious doctrine—especially that of the NewTestament—in order to cultivate virtue; in turn,virtue was essential to liberty, and liberty to arepublican form of government. An educationshould promote a sense of homogeneity, civicduty, and patriotism among young men andwomen who had a critical role to play in shapingthe new nation. With respect to the residentialexperience, students should live with host fami-lies rather than in dormitories, in order to learncivility and to develop an appreciation of familyvalues. In terms of life style, students shouldhave a balanced diet, avoid consuming liquor,and be exposed to rigorous physical activity andmanual labor, all for the purpose of learningdiscipline and achieving balance in the conductof life and affairs. A college should be located in

a county seat, so that students could leave theclassroom, visit the courthouse and witness gov-ernment in action. The curriculum should notbe preoccupied with the classics, but insteadshould include subjects—from history, to con-temporary foreign languages such as French andGerman, to mathematics and chemistry—thatwere useful, that would help strengthen theintellectual, economic, political, and technicalfoundations of the new republic.

In “Thoughts on Female Education” writ-ten in 1787, he argued that in America, whichhad fewer class distinctions and a lower preva-lence of servants than did England, a womanneeded an education so she could be a partnerto her husband in managing household prop-erty and affairs.33 In “Observations on the Studyof Greek and Latin,” written in 1791, Rushposited that because useful knowledge was

33Benjamin Rush, “Thoughts Upon Female Education, Accommodated to the Present State of Society, Manners, and Government inthe United States of America—July 28, 1787,” Essays Literary, Moral, and Philosophical, Thomas & Samuel F. Bradford, Philadelphia,1798, available in digital form at http://deila.dickinson.edu/cdm4/document.php?CISOROOT=/ownwords&CISOPTR=19843.


disseminated in contemporary languages, timespent studying Greek and Latin crowded outtopics more relevant to a republic.34 He alsopointed to the instrumental and intrinsic natureof a liberal education.

The great design of a liberal education isto prepare youth for usefulness here, and hap-piness hereafter.35

Citing rationales similar to those he cited whenfounding Dickinson, Rush continued to endorseother educational initiatives. For example—and perhaps a reflection of his disappointmentabout the absence of German language atDickinson36—he helped found in 1787, inLancaster, Pennsylvania—located only 55 milesfrom Carlisle—the German College, which wassubsequently named Franklin College and evenlater Franklin and Marshall College. Sinceinstruction would be in English, he believed theschool would help German-speaking citizens inthat part of the state be more quickly assimi-lated and eliminate barriers between them andEnglish speaking inhabitants. Meanwhile, he feltthat capability in German could be preserved,and employed to understand books and articlesfrom the sciences and other fields written inthat language. He also believed the schoolwould help unite the Calvinists and Lutheransamong the German population.37

As another illustration of his thinking, in1788, Rush publicly advocated a federal uni-versity to help prepare youth for civil and pro-fessional life, one which students would attendafter completing a college education in theirrespective home states.38 A promising handful

should be deployed to Europe, and othersselected to travel the United States, to collectinsights on the latest innovations in agricul-ture, manufacturing, commerce, the art ofwar, and practical government, in order toreport these to their faculty. The purpose ofthe curriculum for the University was muchlike that he had proposed for DickinsonCollege: it should be forward looking andpractical in its orientation.

While the business of doing educationin Europe consists in lectures upon theruins of Palmyra and the antiquities ofHerculaneum, or in disputes aboutHebrew points, Greek particles, or theaccent and quantity of the Roman lan-guage, the youth of America will beemployed in acquiring those branchesof knowledge which increase the con-veniences of life, lessen human misery,improve our country, promote popula-tion, exalt the human understanding,and establish domestic social, andpolitical happiness.39

Rush and Nisbet40

On the important question of who should serveas the first headmaster, Rush strongly endorseda well renowned scholar Dr. Charles Nisbet ofMontrose, Scotland, who had completed hisstudies at Edinburgh in 1754—twelve years priorto the time when Rush started his studies—andwas also deeply influenced by the Scottish

34Benjamin Rush, “Observations on the Study of Latin and Greek Languages, As a Branch of Liberal Education, With Hints ofa Plan of Liberal Instruction, Without Them, Accommodated to the Present State of Society, Manners, and Government in theUnited States—August 24, 1791,” Essays Literary, Moral, and Philosophical, Thomas & Samuel F. Bradford, Philadelphia, 1798,p. 21, available in digital form at http://deila.dickinson.edu/cdm4/document.php?CISOROOT=/ownwords&CISOPTR=19843.

35Ibid, p. 27.

36This possibility was suggested by Bill Durden, interview with the case author, October 23, 2007.


38Ibid, p. 491–495.

39Ibid, p. 494.

40This section is primarily based on James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years1783–1933, Mount Pleasant Press, Carlisle, PA, 1933, chapter 4.

Enlightenment. Rush had first heard of Nisbetwhen John Witherspoon, who had initiallydeclined the invitation to become president ofthe College of New Jersey, had suggested Nisbetas a worthy candidate. At their April 1784 meet-ing, the board unanimously elected Nisbet thefirst principal of the college. Following thatmeeting, John Dickinson, as chairman of theboard of trustees, wrote to Nisbet, informing himabout the position. Nisbet was not initially eagerfor the job. Thus, from December 1783 to June1784, Rush took it upon himself to write lettersto Nisbet, describing in enthusiastic if not hyper-bolic terms the prospects for the college.

The trustees of Dickinson College areto meet at Carlisle on the 6th of nextApril to choose a principal for theCollege. I have taken great pains todirect their attention and votes to you.From the situation and other advan-tages of that College, it must soon bethe first in America. It is the key to ourwestern world.41

[T]he public is more filled than ever withexpectations from your character. Theydestine our College to be the FIRST IN

AMERICA under your direction and gov-ernment. [Rush provided the emphasisin his original letter].42

Our prospects . . . brighten daily. . . .Indeed, Sir, every finger of the hand ofHeaven has been visible in ourbehalf. . . . Dickinson College, with Dr. Nisbet at its head, bids fair for beingthe first literary institution in America.43

Rush’s repetition of the phrase “first inAmerica” in his series of letters was provocative,

for it had two possible meanings: Dickinsonwould become the foremost college in the newcountry, in terms of quality; and, in light of thedate September 9, 1783, coming as it did onlysix days after the signing of the Treaty of Paris,Dickinson had been the first college to receive acharter in the newly recognized country.

Nisbet ultimately succumbed to Rush’s per-suasiveness and accepted the post. His firstmonths in America were filled with highs andlows. He arrived with his family in Philadelphia,on June 9, 1785. They stayed with Rush for threeweeks before departing for Carlisle on June 30.Rush wrote to a friend, “The more I see of him, themore I love and admire him.”44 Nisbet reachedCarlisle on July 4, 1785, took the oath of office thenext day, and got to work. Ten days later, July 15,he wrote his first letter to Rush, and was somewhatcritical of conditions in Carlisle—for example, hepointed to the need for a new building, describingthe grammar school as shabby, dirty, and too smallto accommodate all the students. Soon thereafter,he and his entire family contracted malaria. Hebecame demoralized, and in August informedRush that he had experienced a change of heart,would relinquish the position of principal andreturn to Scotland as soon as feasible.

Perhaps Rush, like an overly protective par-ent, was offended by Nisbet’s early criticism ofthe college. Perhaps he was disappointed withNisbet’s lack of resolve. Perhaps he was beginningto get a different read on the man. For whateverreason, by the time of the August 9, 1785, boardmeeting in Carlisle, Rush had soured on CharlesNisbet. He ignored a note delivered to him onNisbet’s behalf, and did not visit the Nisbet family,who were still convalescing. Nisbet, at first per-plexed, grew angry. In the ensuing years, the rela-tionship between the two men remained strained.


41Letters of Benjamin Rush, Princeton University Press, Princeton, NJ, 1951, Volume 1, p. 316. 42Ibid, p. 334.43James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years 1783–1933, Mount Pleasant Press,Carlisle, PA, 1933, chapter 1, p. 31–32.44James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years 1783-1933, Mount Pleasant Press,Carlisle, PA, 1933, p. 34.


yy Glorious Intentions;Disappointing Outcome(1785–1816)

In summer 1785, the board accepted Nisbet’sresignation and appointed faculty memberRobert Davidson as acting principal for thefirst year of classes. At the outset, the attributesof the school bore little resemblance to a mod-ern liberal arts college. The school was in ses-sion year round, except for one month breaksin October and May, with commencementoccurring on the last Wednesday of September.Fees ranged from $15 to $25 per year. Thecampus consisted of one building, the originalCarlisle Grammar School, which had beenceded to the college in 1783. In 1786, the build-ing was enlarged from its original two-story,two-room dimensions. The original facultyconsisted of only four professors, including thehead of the Grammar School. Enrollment inthe classes of 1787 to 1816 fluctuated betweenzero and 60. Students found it relatively hardto earn an undergraduate degree, as the aver-age number who actually received a diplomaduring that period was often less than 75 percent of each class.45 In terms of scale,Dickinson was typical of the times: for exam-ple, in the 1780s, while Columbia College hadtwo professors and some two dozen students,the College of New Jersey had two professors, aprovost, and roughly 60 students.46

Meanwhile, Nisbet decided he and hisfamily would wait until spring of 1786 to

return to Scotland. Over the winter months,the weather cooled, Nisbet and family recov-ered their health, and he had a change of heart.By February of 1786, he expressed in writinghis desire to be reinstated. While Rush wasopposed, the Carlisle-based members of theboard rallied to the idea, and in May of 1786reelected him as first principal of DickinsonCollege. His performance as principal wasinfluenced by a range of factors, including hisown character traits, the structure in place forgoverning the college, financial pressures, andefforts to construct the first major building onthe college campus.47

Nisbet was a relentless worker and gener-ally regarded as a brilliant scholar, a man whopossessed deep knowledge about an extraor-dinary range of subjects. In addition to serv-ing as principal, Nisbet carried a full-timeteaching load, responsible for lectures in phi-losophy of the mind, moral philosophy andbelles lettres, economics, and sociology. Hislectures—which the students wrote verbatimin their notebooks—were remarkable fortheir breadth and insights. Nisbet wasextremely well-liked and admired by his stu-dents. Although Nisbet tended to place ahigher value on the classics than did Rush,intellectually speaking the two men appearedto be in fundamental agreement about thepurpose of a liberal education.48 Unlike Rush,however, Nisbet remained politically conserv-ative throughout his life. Ultimately, he wasnot able to sympathize with the dominantvalues and institutions of the new country

45Author’s computations, based on information found in “Alumni 1787–1900,” Encyclopedia Dickinsonia, Dickinson Chronicles,http://chronicles.dickinson.edu/encyclo/a/alumni/.

46Charles F. Himes, A Sketch of Dickinson College, Lane S. Hart, Harrisburg, 1879, Chapter 1, page 3. A digital version of this bookis available at the Chronicles of Dickinson College, http://chronicles.dickinson.edu/histories/himes, accessed July 23, 2007.

47This section is based on James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years 1783–1933,Mount Pleasant Press, Carlisle, PA, 1933, chapters 5–10 and on Charles Coleman Sellers, Dickinson College: A History, WesleyanUniversity Press, Middletown, CT, 1973, chapters 5 and 6.48Dickinson College History Professor John Osborne, interview, September 6, 2007, and Dickinson College Archivist JimGerencser, interview, September 7, 2007, each suggested that Rush and Nisbet were actually closer in their way of thinking thanone might expect, given the tension in their personal relationship.


and he regarded himself an outsider in hiscommunity.49

Throughout his administration, Nisbet—who was quite good at being critical of eventsbut quite ineffective at being persuasive50—wasconstrained by his formal relationship with theboard of trustees. Under the original charter,neither the principal nor any faculty membercould serve on the board, and by 1786, theboard had adopted an even more stringentpolicy—the principal and faculty were prohib-ited from attending board meetings.

When the charter for Dickinson was beingdrafted, Rush had endorsed the idea that thepresident of the college should be subservientto the board of trustees. He based his opinionon what he had observed at the College ofPhiladelphia: he believed that a controllingand rigid-minded president had dominatedthe board to the detriment of the school.51

Nevertheless, Rush objected to this new devel-opment at Dickinson on both philosophicaland practical grounds. In a letter written to thetrustees in October of 1786, Rush wonderedwhy his plan, which had been agreed by theboard in August of 1785, had not beenadopted. He was particularly concerned thatthe behavior of the boys was “irregular” andthat the faculty was not imposing discipline.

I beg leave to recommend that thetrustees would exercise a watchful eyeover their own authority, and that theywould divide the government of theCollege among every branch of the fac-ulty agreeably to the spirit and letter ofour charter. Unless this be the case, thedignity and usefulness of our teacherswill be lessened and destroyed, and the

republican constitution of the Collegewill be reduced to the despotism of aprivate school. When our professorscease to be qualified to share in thepower of the College, it will be proper todismiss them, for government andinstruction are inseparably connected.52

However, the situation did not change.Given that making the journey to Carlisle fromany of the cities to the east was a difficult under-taking; that seven of the nine Carlisle men whohad been on the board of the grammar schoolwere also members of the board of the college;and that only nine people were needed for aquorum, the Carlisle contingent of the boardwere in a position to dominate college gover-nance and micromanage daily affairs.

In its early history, the endowment of thecollege never exceeded $20,200, an amountachieved in 1784. Thus, the endowment did notgenerate large annual returns. Further more, thesmall number of students paying tuition causedthe college to experience budget deficits. Giventhose difficulties, the trustees repeatedly appealedto the Assembly for assistance; in turn, theAssembly responded with modest annual grantsthat averaged about $550 per year. However,budget pressures continued, the college took outloans, and overall debts began to rise.

Furthermore, the college had some difficul-ties in raising contributions. Rush assigned someof the blame to Nisbet. He believed that whenNisbet announced his decision to retire that firstyear, and when he continued to publicly complainabout the treatment he had received at the handsof Rush and more generally about the state ofaffairs in America, he did harm to the reputationof the college.53 By 1799, Rush—who had become

49James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years 1783-1933, Mount Pleasant Press,Carlisle, PA, 1933, p. 66.50Charles Coleman Sellers, Dickinson College: A History, Wesleyan University Press, Middletown, CT, 1973, p. 79.51Ibid, p. 139–140.52Letters of Benjamin Rush, Princeton University Press, Princeton, NJ, 1951, Volume 1, p. 397.53Letters of Benjamin Rush, Princeton University Press, Princeton, NJ, 1951, Volume 1, p. 537.


a supporter of Jefferson—was even more dis-tressed that Nisbet was expressing pro-federalistsentiments in his classroom, thus underminingthe college’s ability to raise contributions fromDemocratic-Republicans.54

In 1800, the board voted to reduce Nisbet’ssalary from $1,200 to $800 per year, to reducethose of the other faculty as well, and to bor-row $2,000. In 1801, the board sold stockworth another $2,000. In spring 1802, theboard stopped making full payment of facultysalaries. Those developments impacted themorale of Nisbet and his faculty.

Meanwhile, in 1799 the college purchased aseven acre parcel of land on the then-existingwestern boundary of Carlisle, for $151. The boardbegan to solicit contributions, and on June 20, thecornerstone for a building called New Collegewas set in place. The board hoped constructionwould be finished by winter, but progress wasslow. That fact, along with the college’s mount-ing financial difficulties, fueled speculation thatDickinson would have to close its doors.Finally, in the winter of 1802–1803, New Collegewas receiving final touches: sadly, on February 3,1803, the building burned to the ground.

In the aftermath of the disaster, the trusteesdemonstrated their determination. They appealedto the presbytery for financial assistance. They vis-ited Philadelphia, Baltimore, New York andNorfolk to raise funds, and met with success. InWashington DC, they won a personal contributionof $100 from President Thomas Jefferson, as wellas contributions from other important politicalfigures. Buoyed by the inflow of funds, the boardsolicited help from one of the foremost architectsand engineers of the time, Benjamin Latrobe, whograciously agreed to contribute a design for areplacement building larger than the first. The newbuilding—which became known in later decades,when other buildings were added to the campus, as

West College—would be constructed of limestonewith brown sandstone accents, and would be mul-tipurpose in nature, providing dormitory, dininghall, chapel, and classroom space for the studentsand living quarters for the faculty. Once again,Rush had to accept a compromise, as the plan tohouse students in the building, rather than to havethem board with local families, ran counter to hisphilosophy of education. The cornerstone of thebuilding was laid on August 8, 1803. It was firstused for academic purposes in November of 1805.

Charles Nisbet died from complicationsassociated with pneumonia, on January 18,1804. While they had been at odds for the bet-ter part of 20 years, at the last it appears thatRush and Nisbet managed to find some com-mon ground, judging by a letter Rush wrote toMontgomery when Nisbet died.

He has carried out of our world anuncommon stock of every kind ofknowledge. Few such men have livedand died in any country. I shall long,long remember with pleasure his lastvisit to Philadelphia, at which time hedined with me in the company [of twofriends]. His conversation was unusuallyinstructing and brilliant, and his anec-dotes full of original humor and satire.55

Following Nisbet’s death, the board onceagain turned to Robert Davidson56 to serve asacting principal, a position he held for the nextfive years. While never formally elected as such,he came to be recognized as the second principalof Dickinson College. Financial pressures were areality throughout Davidson’s tenure. AlthoughDavidson was an outstanding churchman, hewas not a successful college president. Of note,John Dickinson, still serving as a trustee of thecollege, died on February 14, 1808.

54Ibid, p. 812.55Ibid, p. 878.56This section is based on James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years 1783–1933,Mount Pleasant Press, Carlisle, PA, 1933, chapter 14.

Davidson was succeeded by JeremiahAtwater,57 a Presbyterian who was serving asthe first president of Middlebury College wheninformed of the post at Dickinson. A devout,conservative Presbyterian, he hoped to create aculture at Dickinson based on religious princi-ples, and in this sense was in step with Rush.However, upon his arrival, he was aghast at thestate of affairs in Carlisle, complaining in cor-respondence to Rush that the boys were proneto “drunkenness, swearing, lewdness, & duel-ing” and the faculty did not take responsibilityfor imposing discipline.58 Atwater quickly tooksteps to introduce the type of discipline typicalof that found in the colleges of New England.

During Atwater’s tenure, financial pres-sures continued to plague the college, espe-cially given efforts to add dining rooms andother features to the interior of the collegebuilding. Given the small scale of the collegeand the relatively low standard of living at thetime, the ongoing construction drainedresources, consumed the entire endowment,and forced the college into debt. In light ofdevelopments, Rush wrote in 1810 about rais-ing tuition, which he understood would limitaccess to a liberal education.

I wish very much the price of tuitionbe raised in our College. Let a learnededucation become a luxury in ourcountry. The great increase of wealthamong all classes of our citizens willenable them to pay for it with moreease than in former years when wealthwas confined chiefly to cities and tothe learned professions. Besides, it willcheck the increasing disproportion of

learning to labor in our country. Thissuggestion is not intended to lessenthe diffusion of knowledge by meansof reading, writing, and arithmetic.Let those be as common and as cheapas air. In a republic no man should bea voter or juror without a knowledgeof them. They should be a kind ofsixth or civil sense. Not so with learn-ing. Should it become universal, itwould be as destructive to civilizationas universal barbarism. [Emphasisprovided by Rush.]59

During the first three years of Atwater’sterm, the number of students at the collegenearly tripled. But the War of 1812 had a neg-ative impact on student attendance and gradu-ation rates. As time passed, Atwater becameincreasingly discouraged by the unyieldingfinancial difficulties, and by internal dissentionamong his faculty. On April 19, 1813, Atwaterlost a sympathizer when Benjamin Rush diedrather suddenly at his home.

In early 1815, the trustees ordered Atwaterand each professor to submit a weekly writtenreport to the secretary of the board that iden-tified all student absences or transgressions. Ina corrosive environment of friction among thefaculty and hostility between the faculty andthe board, that proved to be the last straw.Within the year, Atwater retired from the col-lege, as did the other faculty. The college was inshambles.

In November of 1815, the board elected JohnMcKnight,60 a professor and member of the boardof trustees at Columbia University and influen-tial Presbyterian, to serve as fourth principal of


57This section is based on James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years 1783–1933,Mount Pleasant Press, Carlisle, PA, 1933, chapter 15 and Charles Coleman Sellers, Dickinson College: A History, WesleyanUniversity Press, Middletown, CT, 1973, chapter 7.58James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years 1783–1933, Mount Pleasant Press,Carlisle, PA, 1933, p. 183.59Letters of Benjamin Rush, Princeton University Press, Princeton, NJ, 1951, Volume 1, p. 1053.60This section and the next are based on James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years1783–1933, Mount Pleasant Press, Carlisle, PA, 1933, chapter 16.


Dickinson. In December 1815, a Dickinson stu-dent was killed in a duel. The incident furtherundermined the college’s reputation. In 1816, theboard of trustees closed down the college.

Dickinson remained closed for five years,resumed operations in 1822, and then closedits doors again in 1832.

Despite the enormous strains of the first50 years and the sad circumstances associatedwith the closing of the college, many of theyoung men who attended Dickinson duringthe era 1785 to 1832 went on to highly success-ful careers. Their number included ministers;college professors and presidents; secondaryschool teachers and principals; representativesand senators at the state and national level ofgovernment; a U.S. president and members ofthe executive branches of various administra-tions; military officers; lawyers and judges;physicians; civil servants; and businessmen.61

In order to reopen the college yet again, theboard of trustees realized they had to end theirloose affiliation with the Presbyterian Churchand accept the invitation of the MethodistEpiscopal Church to establish an alliance. In1834, the college was reopened. Over the next130 years, Dickinson experienced eras ofgrowth and decline. The college’s fortunes wereinfluenced by external events, such as wars, eco-nomic fluctuations, and shifts in social norms.They were also influenced by internal factors,including the governance structure, the cultureand the financial health of the college. Finally,they were influenced by the leadership andmanagement abilities of individual presidentsand the relationships each man had been able toforge with various constituents. Throughoutthat period, Dickinson remained a school witha relatively conservative and parochial culture.

In the 1960s, the college began thelengthy process of separation from the

Methodist Church. By the 1970s, the collegewas characterized by a culture based on coop-eration and collegiality. In that environment,the faculty greatly enhanced the curriculum,as reflected in more breadth in the foreignlanguages and opportunities for internationaleducation; innovative teaching methods inthe sciences; interdisciplinary programs ofstudy; and more faculty-student interaction.Dickinson had an enrollment of approxi-mately 1600 students. By the mid-1990s, therelationship between the Methodist Churchand Dickinson was cordial—the church con-tinued to hold approximately $2 million intrust on behalf of the college and conductedits own decennial review of the college’s per-formance. However, the church had no sub-stantive influence on matters related tocollege policy or strategy.

Mounting Frustrations

In the early 1980s, the external environmentconfronting colleges became more challenging:costs of providing an education continued torise; families were becoming less willing andable to pay higher tuition fees; and the publicincreasingly questioned the relevance of a lib-eral arts education. In that competitive environ-ment, Dickinson made two strategic choices.First, given the dominant, egalitarian culture ofthe 1960s and 1970s, the college did not cele-brate the accomplishments of any single depart-ment over others and continued to describeitself as a pure liberal arts college. Second, thecollege opted to award aid to incoming studentson a loan-first rather than grant-first basis, andto award less overall aid than other colleges—to illustrate, through the mid-1990s, Dickinsonhad an average discount rate62 of 24 per cent,compared to a discount rate of 33 per cent of

61A matrix that describes professions pursued by alumni graduating during the administrations of various presidents is pro-vided in James Henry Morgan, Dickinson College: The History of One Hundred and Fifty Years 1783–1933, Mount Pleasant Press,Carlisle, PA, 1933, p. 396–397.

62The discount rate states, in percentage terms, the reduction from the full tuition price paid by the average student. To say thisin another way, a 24 per cent discount rate implied that Dickinson realized $.76 for each $1.00 of the posted tuition price.


63The data included in this paragraph and the next is based on the PowerPoint presentation, “Dickinson College: A Case Study inFinancial Transformation,” created by Annette S. Parker (Class of 1973), vice-president and treasurer of the college, spring 2007.

64Planning and Budget Committee, April 29, 1996, “A White Paper,” Dickinson College internal document, p. 2.

65“Report for the President’s Task Force on the Future of the College,” June 18, 1997, Dickinson College internal document, p. 1–2

most rivals.63 Between 1988 and 1996, applica-tions for first year admissions dropped from4,438 to 2,829, the acceptance rate rose from 40per cent to 84 per cent, enrollment droppedfrom 2,079 to 1,824, and average SAT scores foradmitted students dropped from 1,216 to 1,150.

To combat that trend, in the mid-1990s,the college moved to a grant-first aid approach,and aggressively elevated average aid awards. Atone level, the tactic worked. From 1996 to 1999,applications rose from 2,829 to 3,434; theacceptance rate fell from 84 per cent to 64 percent; and average SAT scores rose from 1,150 to1,193. At another level, it was a serious mistake.By 1999, the discount rate had risen to 52 percent, and the college was experiencing an oper-ational deficit of roughly $5 million with aneven larger deficit forecasted for the followingyear. Those deficits could only be covered in theshort term by drawing down the endowment,and were clearly unsustainable in the long run.

More broadly, there was gnawing concernsamong various members of the college com-munity that successive administrations hadbeen ineffective relative to those at rival schoolsin terms of managing admissions and raisingfunds. For example, while there were certainlymany highly motivated and talented studentsentering the college, Dickinson remained aschool with regional appeal that primarilyreceived applications from students living inthe Mid-Atlantic States. By the early 1990s,some among that group regarded Dickinson asa “safety” school rather than as a first choice.Furthermore, while Dickinson prided itself onadmitting students who were the first in theirfamily to receive a college education, and whileit had good socio-economic diversity, it hadvery low representation from students of coloror from international students. With respect tofinancial profile, although Dickinson’s endow-ment was experiencing relatively high returns,

by the end of 1998, it stood at only $143 mil-lion, an amount that did not measure up wellto the endowments of other colleges.

Those circumstances prompted Dickinson’sCommittee on Planning and Budget to release awhite paper in the spring of 1996 to the entirefaculty. The paper asserted that Dickinson hadto develop a “grounding vision.”

Dickinson must be able to show . . .that a liberal education is simultane-ously the most humanly fulfilling andennobling and the most practical edu-cation. And it must be able to showthat the liberal arts education offeredby this College is superior to oneoffered elsewhere. (Emphasis includedin original.)64

In response, college President A. LeeFritschler formed a task force on the future of thecollege, consisting of a student and six seniorfaculty and administrators, to convene in earlysummer of 1997, for the purpose of identifyingproblems and proposing general solutions. Theirreport was released to the faculty, under the coverletter and signature of President Fritschler, onJune 18. The telling language contained in thepreface echoed the themes of the white paper.

We want Dickinson to be generally rec-ognized as one of the twenty-five mostprestigious liberal arts colleges in theUnited States within the next tenyears. . . . [We envision] Dickinson as aliving and learning community thatembraces change, that regards diversityas an essential feature of an educationalcommunity, and that declares liberaleducation to be the most humanly lib-erating and practical preparation forcitizenship in an interdependent, com-petitive, culturally-complex world.65


The report offered the following diagno-sis: “The College’s greatest external challenge isvisibility, the greatest internal challenge iscommunication.” To address the former, thecollege had to stop describing itself as a “pureliberal arts college” with “balance across alldepartments” and start celebrating core com-petencies, such as “excellence in internationaleducation.” To address the latter—whichinvolved concerns that in light of growing dif-ficulties, the administration was becominginsular and less than transparent—steps had tobe taken to reopen communication channelsamong administration, faculty, students andtrustees.

In late 1997, President Fritschler indicatedto the community he would resign his positionin June of 1999. In January of 1998, a searchcommittee was named to find a new president.

The Challenge of Creating an Identity Story

When Bill Durden agreed to be president ofDickinson College, he was aware that theboard of trustees wanted to improve the repu-tation and the financial foundation of the col-lege, but did not have a detailed blue-print onhow to proceed; instead, they hoped they couldestablish high expectations and grant a newpresident a broad mandate to engineer a trans-formation. He was aware that the program ofstudy was first-rate and the internal gover-nance system was sound.

Durden also knew that there was anintense desire for change and progress amongthe faculty and some members of theadministration: he had come to appreciate thatdesire via conversations during the spring andfrom his extensive review of previously writtenwhite papers and self-studies during thesummer months.

Of all the documents he had read, apassage included in the 1997 Report of the

President’s Task Force—“We want Dickinsonto be generally recognized as one of the 25mostprestigious liberal arts colleges in the UnitedStates within the next ten years”—was mostprovocative. While he would certainly give itmore thought, his initial reaction was that suchan externally focused objective—based onrankings produced by for-profit organizationssuch as U.S. News and World Report—might be a distraction from what he saw as the appropri-ate areas of concentration: the organizationalculture and capabilities and the financialfoundation of the college. Furthermore, hebelieved those rankings were based on a set offlawed metrics that did not properly capturethe relative strengths of various institu-tions, including Dickinson. Finally, he wasalso troubled by what he saw as an emerg-ing tendency in America to regard highereducation as a standardized commodity: hebelieved that the increased attention beingpaid by the public to the rankings were amanifestation of that tendency.

Via his various experiences, Durden hadcome to believe in the power of a leadershipstory. He acknowledged that he had been influ-enced by the work of psychologist and leadershiptheorist Howard Gardner (see Exhibit 2).66

Given his general assessment of the situationat Dickinson and prompted by his conversa-tion with the rising senior who had expressedher concerns about what it meant to be aDickinsonian, Durden had over the past sev-eral weeks started to imagine a story based onRush and the founding of the college that hebelieved would help create a unique Dickinsonidentify. But several issues and questionsremained unresolved. Durden knew that hehad to achieve greater clarity regarding thestory’s purpose and target audience and itsstructure and content. He also had to thinkmore about the tactics and timing he wouldemploy in introducing the story to theDickinson community.

66Bill Durden, interview with case author, August 31, 2007, Dickinson College, Carlisle, PA.


Exhibit 2

Role of a Leader and the Relevance of an Indentity Story

Leaders are “persons who, by word and/or personal example, markedly influence the behav-iors, thoughts, and/or feelings of a significant number of their fellow human beings.”

Leaders influence other people either directly, through the stories they communicate to oth-ers; or indirectly, through the ideas they create. Examples of these two types include WinstonChurchill, a direct leader who sits at one end of a spectrum, and Albert Einstein, an indirectleader who sits at the other. Other leaders would fall somewhere between those two, withmost corporate and political leaders closer to the spot occupied by Churchill, and most artistsand researchers closer to the spot occupied by Einstein.

Direct leaders achieve their effectiveness in one of two ways: they relate stories to others,and they embody those stories, thereby serving as an example which inspires others. The abil-ity to embody stories is much more relevant to direct leaders than indirect leaders.

While it may be hard to draw precise lines between categories, leaders can be ranked asordinary, innovative, or visionary. An

ordinary leader . . . simply relates the traditional story of his or her group as effectively aspossible. . . . The innovative leader takes a story that has been latent in the population, oramong the members of his or her chosen domain, and brings new attention or a freshtwist to that story. . . . [T]he visionary leader . . . [is not] content to relate a current storyor to reactivate a story drawn from a remote or recent past . . . [and therefore] actuallycreates a new story.

The ultimate impact of the leader depends most significantly on the particular storythat he or she relates or embodies, and the receptions to that story on the part of audi-ences. . . . [A]udience members come equipped with many stories that have already been toldand retold. . . . The stories of the leader . . . must compete with many other extant stories; andif the new stories are to succeed, they must transplant, suppress, complement, or in somemeasure outweigh the earlier stories, as well as contemporary counterstories.

[L]eaders present a dynamic perspective to their followers: not just a headline or snapshot,but a drama that unfolds over time, in which they—the leader and followers—are the princi-pal characters or heroes. Together, they have embarked on a journey in pursuit of certaingoals, and along the way and into the future, they can expect to encounter certain obstaclesor resistances that must be overcome. Leaders and audiences traffic in many stories, but themost basic story has to do with issues of identity. And so it is the leader who succeeds in con-veying a new version of a given group’s story who is likely to be effective. Effectiveness hereinvolves fit—the story needs to make sense to audience members at this particular historicalmoment, in terms of where they have been and where they would like to go.

SOURCE: Howard Gardner, in collaboration with Emma Laskin, Leading Minds: An Anatomy of Leadership, Basic Books, aDivision of Harper Collins Publishers, New York, NY, 1995.

Great Leadership Is Good Leadership 37

Look into the soul of any great leaderand you will find a good leader. But, ifonly that were the case. Some leaders,those who crave and bathe in the spot-light, are in fact not so great. Others,who are highly effective (and modest)and possess the five key characteristicsthis author describes, are good leadersfirst and foremost. Which is what, inthe end, makes them great.

The extraordinarily successful book From Goodto Great67 focused attention on the kind of

leadership that was required to achieve enduringhigh performance. While it has been one of thebest-selling management books of all time, ittends to focus on the effectiveness dimension ofleadership to the virtual exclusion of otherimportant dimensions. In my view, you cannothave truly great leadership without consideringthe broader challenges that face organizationalleaders today. Great leadership must be goodleadership too.

The word “good” is an interesting word inthe English language because of the manymeanings that it has. No more so is this true

Great Leadership Is Good Leadership

By Jeffrey Gandz

Copyright © 2007, Ivey Management Services Reprint# 9B07TC07

67Collins, J. C. (2001). Good to great: why some companies make the leap—and others don’t. New York, NY, HarperBusiness.

GoodLeadership

Effectiveperform now+ build for the

future

Satisfyingmake others and

you feel good

Purposivestrive for goals

that societydeems fitting

Ethicaldo the rightthings in the

right way

Exhibit 1 Great Leadership


than when it is used in conjunction with thewords “leader” or “leadership.” Good leader-ship can, indeed, refer to effective leadership—getting followers to pursue and attain goals.But it can also refer to the purpose or goals thatleaders pursue and whether those are deemedfitting by the societies within which they oper-ate; it can refer to the ethics of leaders—doingthe right things in the right ways. It can alsorefer to the ways in which leaders make follow-ers feel good and, indeed, the way they feelabout themselves as leaders.

yy Good as Effective

It goes without saying that good business lead-ers must be highly effective in getting people tofollow them in pursuit of selected goals. Highlyeffective leaders:

• Recognize and analyze the drivingforces in the political, economic, soci-etal and technological environments inwhich they operate and understandthe impact of these forces on their cur-rent strategies;

• Develop winning strategies based onsound competitive analysis, under-standing buyer-behaviors, building corecompetencies and selecting the rightdomains in which to compete that willsatisfy the expectations of their share-holders and other stakeholders;

• Execute those strategies brilliantly byinvolving people in their formulationand implementation;

• Evaluate the execution and results sys-tematically, making strategic adjust-ments as indicated;

• Beyond this, they continually build forthe future by increasing the capabili-ties of their organizations, divisions,departments, teams and themselves.

Really effective leaders drive for resultsnow while simultaneously building for thefuture. It is simply not acceptable to view theseas trade-offs, as perhaps used to be done bycoaches of perpetually losing sports teams. Theperformance bar is continually being raisedand to be three, four, six percent or more thanlast year is baked into the expectations that wehave of leaders of organizations today.68

Much has been written about effectiveleadership. Suffice it to say that we expect ourleaders to: work with their followers todevelop a compelling future vision; enlist thesupport of others—inside and outside theirorganizations—in achieving this vision; ener-gize, enable, and encourage high performance;empower people to act within an agreed-uponvision; and to be exemplars of the values ofthe organizations they lead. To do thisrequires both competencies and character.Competencies determine what leaders are ableto do; character determines what they will do,how they will exercise those competenciesunder various circumstances. Good leaders,especially those who endure, are seldom one-dimensional, simple individuals. They areoften complex, contradictory and multi-faceted, especially in how they respond to dif-ferent situations: confident and humble,assertive and patient, analytical and intuitive,deliberate and decisive, principled and prag-matic, among others.

yy Good Purpose

When the character Gordon Gecko uttered hisfamous phrase “Greed is good” in the movieWall Street, he reflected the view that man-agers, by single-mindedly pursuing the inter-ests of shareholders, are fulfilling the truepurpose of the business entity. The late MiltonFriedman, the Nobel prize winner and high-priest of free-market economics, held that this

68Gandz, J. (2005). “The Leadership Role.” Ivey Business Journal 66(1): 5.


approach by business produces the most goodfor the most people since other institutions—government agencies, trade unions, consumerprotection associations, etc.—will curb theexcesses of business and that the maximumaggregate benefits come from the tensionbetween these forces. Leaders of businessesmust then pursue shareholder interests exclu-sively and should be compensated for so doing.They should eschew the role of social arbitersattempting to balance competing interests, arole with which they are neither charged norcompetent to perform. This is not an immoralor amoral argument on the part of Friedman.Indeed, it holds to the precept that the moralaction is the one that brings the most good tothe most people. Attempts to demonizeFriedman for this argument are misguided.

Such a philosophy does not negate theimportance of other stakeholders in the busi-ness enterprise. Indeed, customers, suppliers,employees, governments—national, regionaland local—and the broader societies withinwhich these businesses operate are also veryimportant. Businesses benefit suppliers butalso depend on excellent service and qualityfrom those suppliers; they pay wages toemployees but depend on their engagementand commitment; they provide value to cus-tomers but also benefit from the dependenceof customers on them; they provide employ-ment to members of communities but alsodepend on getting planning permission from alocal government when they want to put up anew building, and they pay taxes to govern-ments but also seek subsidies and other pro-tections. But it subordinates their importanceto the fundamental primacy of shareholders.They are to be considered only to the extentthat they may be instrumental in creating areturn to shareholders.

The alternate perspective is that share-holders are but one group of stakeholders inthe business enterprise and that there areother stakeholders such as customers, suppli-ers, employees, community groups, pensioners,

etc. to whom the business enterprise hasobligations.

These obligations stem from the reciprocalsocial and moral obligations between the par-ties. Businesses owe senior employees job secu-rity and a rising standard of living becauseemployees who have worked for the organiza-tion for many years have been committed andinvolved in the business; they should not pol-lute or degrade their environments becausethey are responsible moral actors in the soci-eties within which they operate; they shouldnot outsource work to countries with poorlabor or environmental standards because todo so is morally wrong for employees in thosecountries since it perpetuates those poor stan-dards while damaging the livelihoods of thoseon the countries from which products wereoutsourced; they should not deplete naturalresources because it will make the societies inwhich they operate unable to sustain economicand social life for generations to come.

Leaders of businesses, as viewed from thisperspective, must seek a fitting balance betweenthe interests of various stakeholders both whenthey coincide and when they differ, constantlyseeking “win-win” or compromise resolutionswhen conflict occurs between stakeholders’interests. If this balance or integration sub-optimizes profit and reduces shareholder value,good business leaders should take the high roadof “balance of interests.” As leaders, businesspeople cannot avoid the requirement to seekthis balance even ‘though—as the protagonistsof shareholder primacy point out—they maybe ill equipped to do so. They can seek advice,sift arguments, reflect and consider differentinterests and endeavor to find creative solu-tions that either satisfy all parties’ demands orcompromise between them, sub-optimizingshareholder value in favor of some broader,societal contribution.

This debate is ongoing. Sometimes it istrivialized by those who seek to make the casethat striving for good purpose is axiomaticwith shareholder value creation, and that in


the long-run business does well by doing good.This negates the reality that by consolidatingplants, profits are increased and communitiesare destroyed; by pursuing minimally legalenvironmental compliance, costs are mini-mized; that by selling legal products that maybe harmful, profits are generated for years oreven decades. Recent hard-edged researchindicates that the financial returns to corpo-rate social responsibility are dubious but,despite this, there are increasing demands onbusiness leaders to expand their horizons toembrace this ethic.

yy Ethical Goodness

The excesses of business and business leadershave been a pervasive if not dominant themein the popular business literature in the lastdecade, leading not only to new legislation butto a widespread revulsion with the ways inwhich some managers have been proven tohave ripped off shareholders, customers,employees, creditors, and other stakeholders.Unlike the broader issue of corporate socialresponsibility, this does not address the funda-mental purpose of business but, rather, theways in which business people act. It recog-nizes that many decisions made by managersand executives benefit some people at theexpense of others. Whenever someone may behurt by an action of management, there is anethical decision involved.

Business ethicists recognize three distinctforms of unethical behavior.69 The first ofthese are actions that are clearly not within thescope of the role. Chief Financial Officersshould not fiddle the books, senior executivesshould not pad their expense accounts or chargepersonal expenses to the corporation, corpo-rate directors should not trade stock basedon inside information; companies should notconspire to rig bids; defense contractors should

not charge unrelated expenses to cost-plusgovernment contracts; and so on. In manycases we have laws and regulations that expresslyprohibit these behaviors and, in most cases,breaking laws or evading regulations is primafacie unethical.

The second type of unethical action is onethat serves the purpose of the role but pushesbeyond the types of behavior that societywould consider morally right. So, we expectmarketers to emphasize the benefits of theirproducts but they should not lie about the per-formance of their products or conceal dangersthat might be associated with their use; humanresource managers should not mislead peopleabout terms and conditions of employment toinduce them to accept a job; salespeople shouldnot spread false rumors about the financialhealth of their competitors in order to detercustomers from doing business with them;financial advisors should not tailor their adviceto meet their rewards to the detriment of theirclients. Clearly, different societies have differenttolerance levels for these behaviors and what isconsidered ethical in one society might be con-sidered beyond the pale in another.

The third type of unethical action is onethat describes something that should be donebut which is not done—an act of omissionrather than commission. These non-actionsthat many people consider unethical include afailure to recognize the talent that exists inminority groups, failure to give people regularperformance reviews and candid feedback thatwould help them improve, failure to point outto people that their choice of products and ser-vices may not be in their best long-term inter-ests, and failure to review a client’s financialportfolio to ensure that it is appropriately bal-anced for their investment objectives. Thistype of unethical action is often fiercelydebated since it clashes with other philoso-phies such as “buyer-beware,” or “you get whatyou negotiate” that appear to put the onus on

69Bird, F. B., and J. Gandz (1991). Good management: Business ethics in action. Scarborough, Ont., Prentice-Hall Canada.


the customer, employee, or other party. Unlikethe more black-and-white non-role acts, thistype of unethical behavior is also more subjectto gradations, with some people expectingminimal compliance and others expectingstandards of excellence.

When businesses meet or exceed theexpectations of the societies within which theyoperate, they will be free to operate. When theycease to meet those expectations they will beregulated, controlled and, perhaps, even be putout of business.

The issue of what “society” condones andwhat is right is not trivial. At the extreme,the anti-Semitic laws of National SocialistGermany were both popular and passed by par-liament as, indeed, were the anti-apartheid lawsof South Africa. Petty bribery—and some thatis not so petty—is commonplace in some soci-eties yet frowned upon in others. Some soci-eties protect intellectual property rightswhereas others either have no protection or, if alaw does exist, may not bother to police it. Theextent to which something is criminal or not,widely or narrowly accepted, or considered acivil tort may vary widely from place to place.

Quite often, people make an assumptionthat “if it’s widely done, it must be okay!” Withthis assumption, there would have been verylittle if any progress made over the years to dealwith the blatant discrimination against racialminorities, gender-based discrimination, orindeed ANY act of discrimination by a power-ful group imposed on a less powerful one.Even if something is widely practiced, peoplemay not think that it is right. For example,while corruption is widespread in business inmany parts of the world, it may be expresslyforbidden by both legal and moral authoritiesbut, because the powerful can escape the sanc-tions associated with the disapproval, they mayperpetuate the practice.

yy Feel-Goodness

It’s a leap from thinking about “good” as effec-tive, purposive and ethical, to thinking aboutthe importance of making people feel good orfeeling good about your leadership. Yet it is acritical leap. The sociologist Amitai Etzioniproposed that people comply with leadershipif they are forced to do so, if they are paid to doso or if they are moved by ideas and ideals sothat they want to do so.70 When people areforced to follow, they feel alienated; when theyare paid to follow, their followership can bebought by others or will cease when the moneystops flowing. When they buy into ideas orideals and when they realize them througheffective leadership, then the positive feelingsgenerate their own energy and momentumand wanting to be led is more likely to result inextraordinary and sustained support for thoseshared goals. The leaders of slave or mercenaryarmies were never as durable as those whosearmies were fired up by ideals and values.

The great leader described by Jim Collinsis one who through “level-5” leadershipembraces fierce determination and humilitythat leads to involvement and commitment byhis or her followers.71 They develop a sense ofself-efficacy, of value, of worth. They want tobe led by such leaders, not because they aresheep but because they understand that theycan achieve their goals through those leaders.And they are prepared to exercise leadershipthemselves within the umbrella of the organi-zational leader who makes them feel goodabout themselves.

None of this is intended to suggest that thegood leader should always adjust to the surfacewants and desires of those who are to be led.Indeed, panderers generally make poor leaderssince they end up promising too much to toomany and cannot deliver the goods.

70Etzioni, A. (1961). A comparative analysis of complex organizations; on power, involvement, and their correlates. New York, FreePress of Glencoe.

71Collins, J. (2001). “Level 5 leadership: The triumph of humility and fierce resolve.” Harvard Business Review 79(1): 66–76.

A cynical perspective on leadership sug-gests that leaders find out which way theparade is heading and scramble to the front ofit, or that leaders take people where they reallywant to go anyway. Some have proposed, judg-mentally or paternalistically, that leaders takepeople not to where they want to go but,rather, to where they really need to be. Perhapsit is more accurate to suggest that great leaderssatisfy people’s deep needs rather than theirsurface wants, even if they may not immedi-ately realize their needs.

The ability of leaders to understand theirpotential followers’ needs has been associatedwith great religious, military, political and,yes, even business leaders. Sometimes this hasresulted in great good and sometimes in greatevil. Sadly, not all effective leaders who tapinto their followers’ needs and motivate themto action do so with good purpose in mind.Genocides, persecutions, and the unrelentingpursuit of corporate greed through fraud,misrepresentation, or even callous indiffer-ence of the impact of their actions on othershave left their scars.

However, the good leader never ignoreshow his or her followers feel about their lead-ership. They know that short-term pain mustbe followed by long-term gain, that effortsmust lead to rewards, that sacrifices will bemade but not forever. And they nurture theirfollowers through these tough times. Theydraw on wellsprings of optimism when thingsare not going well, without losing their gripon reality.

Leadership is also hard work, especiallywhen times are tough, when things are notworking the way they were planned and peo-ple are beginning to question the credibilityof leadership. Often the only thing that lead-ers have to draw on at those times is their own

self-confidence, their sense that they aredoing the right things for their people. Theborderline between self-confidence and arro-gance, between steadfastness and hubris maybe very narrow and the leader treads it all thetime. If they are to cope with the stresses andstrains of leadership, it is essential that theyfeel good about what they are doing to makeit worth the effort.

yy The “Good” Leader

There will always be debates about what con-stitutes good or great leadership in a businesscontext, and each generation will yield itscrop of candidates. Creation of shareholdervalue will always be high among the criteriaconsidered, as indeed it should be. But associetal values embrace broader concerns, aswe judge not only what these leaders appearto have achieved but also how they have doneit, as we assess leaders not just in terms oftheir achievements but on their contributionsto the societies within which they operate, Isuspect that the emphasis will shift towardthe goodness of leadership as described inthis article as a necessary condition for lead-ership greatness.

There is an argument to be made that,given a long enough time frame, “Goodness” asI mean it and “Greatness” as suggested by JimCollins converge into one and the same thing.That may turn out to be the case but there istoo much press given to leaders who have yetto achieve either. Perhaps it is we—the public,who look to our business leaders to drive theprosperity of this and future generations—who need to be more restrained in grantingthis ultimate accolade and granting someonethe title a “good leader.”


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