George Washington and the Art of Business: A book review by Bob Morris

George Washington and the Art of Business: The Leadership Principles of America’s First Commander-in-Chief
Mark McNeilly
Oxford University Press (2008)

The “father of his country” in so many important ways

In recent years, a great deal of attention has been devoted to one or more of the founding fathers, especially Washington, Jefferson, and Adams. What we have in this volume is McNeilly’s analysis of what business lessons can be learned from George Washington’s leadership as commander-in-chief of the Colonial forces during the War for Independence and then as the new nation’s first president.

In the Introduction, he responds to the question “Why George Washington?” Then, in the first two chapters, he examines “the foundation of Washington’s leadership principles” and how the American Revolution was organized in the first two chapters. During the balance of the book, McNeilly identifies and discusses the aforementioned leadership principles and devotes a separate chapter to each.

McNeilly brilliantly juxtaposes his presentation of historical material with the business lessons he believes can be learned from it. I also appreciate the fact that he cites specific companies when doing so. For example, in Chapter 2, he reviews various competitive disadvantages Washington encountered at the outset of the war. “Could I have foreseen what I have experienced and am likely to experience, no consideration upon earth should have induced me to accept this command.” Yet, despite all the unexpected problems such as the continuous expiration of enlistments that depleted his forces, the 43 year-old general did not quit. “Washington made his share of mistakes: choosing to defend New York when it was in reality indefensible, not protecting his flank on Long Island Heights, and losing Fort Washington and its garrison. Yet after setback he returned to fight again.”

McNeilly then focuses his attention on a relevant example in the modern business world, the situation faced by Jong Yong Yun when he became CEO of Samsung Electronics. Like Washington, he used the severe crisis that then existed to make major changes. The integrity and courage of a leader are essential to the success of any such initiatives. In Washington’s case, he put his organizational skills to work. “At the same time he was fighting the British and their Hessian allies, Washington was implementing measures to improve the fighting ability and logistical system to ensure the army’s survival.”

To me, some of the most interesting and most valuable material is provided in Chapter 8 as McNeilly examines the situation after the victory at Yorktown in 1781. Washington was frustrated to see his officers and men so poorly treated by Congress after they had made so many sacrifices under especially difficult conditions. At one point, a core group of officers decided that taking direct action was necessary and began to plan what amounted to a military coup. Their efforts to enlist support became known as the “Newburgh Conspiracy” because their base camp was in Newburgh, New York, where they met on March 15, 1783.

Washington thoroughly disapproved of the officers’ efforts and met with them, calling their behavior “unmilitary” and “subversive of all order and discipline.” Those gathered were not convinced. “Seeing this, Washington pulled from his pocket a letter from Congressman Joseph Jones. After a fumbling attempt to read it, Washington took out a pair of reading glasses, stating, ‘Gentlemen, you will permit me to put on my spectacles, for I have not only grown gray but almost blind in the service of my country.’ This act and its accompanying words from the heart did what his prepared speech had not done. Washington’s emotional appeal reminded his officers of his own sacrifices and won them back to his side and that of the republic.” As McNeilly makes crystal clear, Washington’s words and gesture could not possibly have been effective had he not possessed — and was perceived to possess — impeccable integrity.

As McNeilly suggests, the same can be said of business executives such as James Burke, CEO of Johnson & Johnson, who immediately demonstrated the right motives and ethical action in 1982 after seven people in the Chicago area died of cyanide poisoning that had been traced to Extra Strength Tylenol capsules. Led by Burke, Johnson & Johnson worked closely with the media to get out as many facts as possible, instituted a nationwide recall of 31 million bottles of Tylenol (then worth an estimated $100-million), and cooperated fully with all law enforcement agencies to solve the mystery. All of this was wholly consistent with the Johnson & Johnson Credo that affirms the company’s first responsibility is to “doctors, nurses and patients, to mothers and fathers, and all others who use our products and services.”

None of Washington’s principles of leadership was unique to him. As McNeilly explains, however, few others throughout history possessed all of them and to the extent that George Washington did. At an early age, he developed self-discipline, strong character, courage, intellectual curiosity, and a preference for innovative ideas. When war came, Washington formulated a vision of what the new nation could become, once victorious. He also developed a strategy that accommodated the colonies’ vulnerabilities while maximizing their strengths. Throughout the war, he seized appropriate opportunities while resisting others that involved what he perceived to be excessive risk.

Washington was a quick thinker under pressure and built an effective team of subordinate officers within whom he communicated constantly. He supported an intelligence network to obtain the information he needed to make key decisions. Meanwhile, he cultivated relations with key members of Congress. Later, he played a central role during the Constitutional Convention and then agreed to serve as the new nation’s first president. “In that role his wisdom led him to set high standards that future presidents would look to for guidance and by which their terms would be measured.” He retired after two terms “to allow new people to implement new ideas and have their turn at leading the country.”

Congratulations to Mark McNeilly for providing an abundance of information about George Washington as well as a rigorous and eloquent analysis of his singular greatness. The lessons to be learned from who he was and what he accomplished can guide and inform our own efforts to become, in McNeilly’s words, “a better version of ourselves.”

Here’s the most important business question to ask: WITRBD?

The acronym WITRBD refers to a question that should be asked whenever an important business decision must be made:

What is the right business decision?

I was again reminded of that during a recent meeting with a senior-level executive of a major corporation. We had been discussing what he referred to as “downsizing.” In fact, the correct term is “rightsizing” and it can describe either a reduction or increase of the given workforce.

What is the right business decision?

In 1982, then chairman and CEO of Johnson & Johnson, James Burke, ordered a recall of all Tylenol capsules from retail shelves throughout the U.S. when several people in the Chicago area died of cyanide poisoning after ingesting Tylenol capsules with which someone had tampered. Yes, it was a humanitarian gesture but, more to the point, it was a decision based on the company’s core values.

What is the right business decision?

It is ludicrous to intensify efforts to reduce waste only when an organization is encountering serious financial problems. Waste must be avoided or eliminated whatever the economics may be.

What is the right business decision?

Ethics and integrity at Johnson & Johnson

Many people could not believe it when, in 1982, Johnson & Johnson’s then CEO, James Burke, ordered that all of the company’s Tylenol products be immediately removed from all retail stores throughout the United States after a few poisonings occurred in Chicago. Several people had ingested Tylenol capsules and died. Burke’s decision was wholly consistent with J&J’s values. How so?

In his article, “The Age of Consumer Capitalism,” that appeared in the January/February (2009) issue of Harvard Business Review, Roger Martin explains that J&J has “the corporate world’s most eloquent statement of purpose — its ‘credo,’ which hasn’t changed since J&J’s legendary chairman Robert Wood Johnson created it in 1943,” 39 years before a person or persons tampered with Tylenol capsules and inserted poison. Here is the statement in abbreviated form:

“We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services…We are responsible to our employees, the men and women who work with us throughout the world…We are responsible to the communities in which we live and work and to the world community as well…Our final responsibility is to our stockholders…When we operate according to these principles, the stockholders should realize a fair return.”

It is worth noting that Burke ordered the recall voluntarily; the government had not demanded it. At that time, Tylenol sales represented about 20% of the company’s profits. Nonetheless, it was the right thing to do. Whenever Burke was praised, he patiently but firmly explained that his company’s values required the decision and he merely executed it.

According to Martin, “The credo bluntly spells out the pecking order: Customers come first, and shareholders last. However, J&J has confidence that when customer satisfaction is at the top of the list, shareholders will do just fine.”

Martin is the dean of the Rotman School of Management at the University of Toronto. His most recently published books are The Opposable Mind and The Design of Business, both published by Harvard Business Press.