The Leadership Moment

Michael Useem presents nine true stories of individuals facing high-stakes turning points, arguing that studying what others did when their leadership was on the line is among the most effective ways to prepare for one's own decisive moments. He defines leadership as the act of making a difference: changing a failed strategy, making active choices, and mobilizing others to achieve results.

The first account concerns P. Roy Vagelos, senior vice president of research at the pharmaceutical company Merck. In 1978, Merck scientist William C. Campbell discovered that the animal antiparasitic drug ivermectin might combat river blindness, a parasitic disease afflicting 20 million people. Vagelos approved further research despite the near-certainty that the drug would never generate profit. After clinical trials confirmed its effectiveness, Vagelos, now CEO, sought partners to distribute the drug, branded Mectizan, but every government and agency refused. He decided to give Mectizan away to all who needed it, forever, announcing the decision in October 1987 without first informing his board. By 1996, 19 million people had been treated. Useem uses the story to explore the tension between shareholder value and social responsibility.

The second chapter examines the Mann Gulch fire of August 5, 1949. Crew chief R. Wagner Dodge led 15 smoke jumpers, firefighters who parachute into remote wildfires, into a Montana gulch to fight what appeared to be a routine blaze. The ad hoc crew had never worked together. When the fire proved far more dangerous than expected, racing through shoulder-high grass faster than anyone could run, Dodge lit a match and set fire to the grass ahead of him. He lay in the smoldering center of this "escape fire" as the main fire swept past, then waved his men in, but none followed; two survived by finding a rockslide, and 13 died. Useem attributes the crew's refusal to Dodge's eroded credibility and his failure to share his reasoning when communication was still possible.

Eugene Kranz, NASA's flight director for Apollo 13, provides the third account. On April 13, 1970, an oxygen tank exploded aboard the spacecraft, crippling its electrical and life-support systems. Kranz called for calm and insisted his engineers focus on what still worked. As the command module lost power, the astronauts transferred into the lunar module Aquarius, designed for two people for two days but now needed for three for four. Kranz reconstituted his White Team as the "Tiger Team," charged exclusively with developing protocols for the rest of the mission. When three superiors pressed conflicting priorities, he set the sequence himself. The astronauts splashed down safely. Useem attributes the rescue to Kranz's personal determination and organizational leadership built through simulated crises.

The fourth chapter follows Arlene Blum's 1978 expedition to Annapurna, a 26,545-foot Himalayan peak where one in 10 previous climbers had perished. Blum, who had faced systematic exclusion from mountaineering because of her gender, recruited nine experienced women and raised $80,000 selling T-shirts bearing the slogan "A Woman's Place Is on Top." When she announced a climbing plan without consultation, team members protested. On October 15, expedition members Irene Miller, Vera Komarkova, and two Sherpas reached the summit. Two days later, fellow expedition members Alison Chadwick and Vera Watson attempted a second ascent despite thin support and Blum's warnings, and both fell to their deaths. Useem draws the lesson that transcendent meaning, while motivating, can push participants toward unwarranted risks.

Joshua Lawrence Chamberlain, a Bowdoin College religion professor who joined the Union Army, provides the fifth account. Days into commanding the 20th Maine Regiment, Chamberlain received 120 mutineers from the decommissioned 2nd Maine. Rather than coercing them, he fed the men and appealed to shared heritage and mutual dependence. Forty days later at Gettysburg, the regiment anchored the extreme left of the Union line on Little Round Top. Colonel Strong Vincent, the brigade commander, had occupied the undefended hilltop on his own initiative, ordering Chamberlain to hold "at all costs." After repulsing five Confederate assaults that exhausted their ammunition, Chamberlain ordered a bayonet charge that routed the attackers. The former mutineers fought as some of the regiment's best soldiers. Useem emphasizes that Chamberlain's early investment in persuasion proved decisive at the critical moment.

The sixth chapter examines Clifton R. Wharton Jr.'s restructuring of TIAA-CREF, the nationwide pension system for college professors. By 1986, the fund held $52 billion in assets but offered virtually no investment choices and provided lax customer service. Wharton, an economist who had led Michigan State University and the State University of New York system, became TIAA-CREF's first outside CEO. He spent three months listening, then reorganized the enterprise into accountability centers with performance-based compensation and created a diverse menu of investment options. Despite initial losses to competitors, fewer than one percent of customers left. By 1993, assets had more than doubled to $114 billion and account holders had grown from 890,000 to 1.5 million.

John Gutfreund's failure at Salomon Inc. provides the book's cautionary tale. In late April 1991, Gutfreund, the firm's chairman, learned that bond trader Paul Mozer had submitted an unauthorized bid at a U.S. Treasury auction. Gutfreund and his top managers agreed the violation should be reported but took no action for three months. When Salomon admitted that management had known, the Treasury suspended the firm from bidding, and its stock price plunged. Warren Buffett, Salomon's largest stockholder, stepped in as interim chairman, selected Deryck Maughan, head of the investment banking division, as chief operating officer, and cooperated fully with regulators. Salomon paid $290 million in fines for violations that had generated just $3.3 to $4.6 million in profits. Useem draws the lesson that inaction at the top can be as destructive as wrong action.

Nancy Barry's chapter traces how a senior World Bank executive left to lead Women's World Banking (WWB), a small organization that dispensed microloans, typically around $500, to poor women in 35 countries, with default rates under three percent. Barry had grown convinced that microfinance was more effective than the World Bank's large-scale lending programs. She expanded WWB's capital assets from $6 million to $30 million, grew worldwide staff from 100 to 1,000, and helped build a global microcredit movement culminating in a 1997 summit that launched a campaign to reach 100 million of the world's poorest families.

The final account follows Alfredo Cristiani, a Georgetown-educated coffee grower who became president of El Salvador in 1989. Five months into his presidency, the Farabundo Martí National Liberation Front (FMLN), a leftist guerrilla coalition, launched a major offensive in San Salvador. The civil war had already killed 70,000 people in a population of six million. During the offensive, an army unit murdered six priests, a groundskeeper, and her daughter at the University of Central America, provoking international outrage. Cristiani authorized military counterattacks but simultaneously pressed for negotiation, incorporating the officer corps into the peace process and arranging seminars with negotiation expert Roger Fisher for both sides. The final accord, signed January 16, 1992, abolished paramilitary forces, reduced the army, and legalized the FMLN as a political party.

Useem concludes that vision and action together form the essential lesson across all nine accounts. He distills one principle from each chapter: know yourself, explain yourself, expect much, gain commitment, build now, prepare yourself, move fast, find yourself, and remain steadfast. He observes that giving away power judiciously makes a leader more powerful and that creating leaders among one's followers makes one more effective. Leadership, he argues, is best learned through vivid, high-stakes narratives shared to create a common framework for action.