You need to accumulate enough wealth to provide a good life for your family, educate your children, support worthwhile causes, amply provide for your retirement years, and leave something for your heirs. But that’s not the litmus test for success.
The real test is how well you are respected by your family, colleagues, employees, and friends. That respect is earned by your actions over long periods of time — not your balance sheet.
I had built up a group of businesses for a public company, and then the parent made a major strategic shift. In 1981, I elected to purse a management buyout of the businesses I knew well, at a time when private equity was scarce and interest rates reached 22½%.
Although the risks were high, the timing far from ideal, and my own funds limited and reserved for my children’s college education, it was my chance to run my own show as a CEO and share ownership with my key employees.
The outcome far exceeded even my own expectations — both financially and from the standpoint of personal satisfaction. The lesson to me is clear: One needs to know when to accept sizable risks in order to capitalize on the opportunity. I decided to put all my eggs in one basket, and nurture and watch that basket each and every day.
Every successful leader must articulate a clear vision in a way that everyone in the corporation understands. But that’s just the start.
Integrity and candor in dealing with your management team, employees, and investors, together with treating customers and your community fairly and with that same degree of integrity, is to me the real key to leadership. There is little need to take credit for success. It will flow naturally if it’s really earned.
That was a key take-away message from my years at the Harvard Business School. Unfortunately, I feel its importance has been diluted in recent years, as too much emphasis is placed on “creating shareholder value” as the principal measure of a successful leader.
Develop your passion for your retirement challenge while in the midst of your business career. In 2001, I joined the initial group of Harvard Business School classmates who formed The Partners of ’63. Our focus has been to assist young nonprofits that have targeted poor kids caught up in our dysfunctional public K-12 education system. In particular, serving on the Board of TNTP (The New Teacher Project) and actively working with its young leadership team over the last nine years has been very rewarding.