Interview: Jimmy Carter on the CEO as Statesman

This is the fourth in HBR’s series of interviews with some of the world’s recognized leaders—individuals who have led not a company but a country. Each leader illuminates something different about the subject of leadership: the quality of thinking, the sense of responsibility, the style of management. The qualities of the individuals vary, in part as a reflection of the times in which they served, in part as an illustration of the values and approaches each brought to the task of managing some of the world’s largest and most complex organizations. In 1976, Jimmy Carter—farmer, businessman, former naval officer, Georgia state senator and governor, author, and church leader—was elected president of the United States. With the memory of Watergate still fresh in the public’s mind, President Carter appealed to voters by calling for honesty and integrity in government—the need for basic values guiding the country’s leaders. While in office, President Carter successfully championed a long and comprehensive legislative agenda, including passage of a national energy policy, deregulation of transportation industries and banking, and civil service reform. President Carter also negotiated a historic peace agreement between Israel and Egypt, established diplomatic relations with China, concluded the SALT II treaty, and gained ratification of the Panama Canal treaty. During his administration, the country was tested by an inflation-fanning oil embargo and the taking of American hostages in Iran. Both events gave rise to a feeling of American vulnerability to outside forces. Since leaving office, President Carter has continued to write books, lecture, teach, and contribute his services to community work. HBR: What makes a person a leader? Jimmy Carter: The ability to accommodate the pressures of a competitive world is one of the prerequisites to success. During the difficult years of working one’s way to the top, leadership qualities are tested. There may be tens of thousands of people who have the ambition to be president of the United States, or president of IBM, or of General Motors. But you don’t inherit the presidency of a democratic nation or any of these other positions of leadership. Only a few individuals have the capacity to meet the competitive test. What qualities determine success? The ability to work with other people, the capacity to expand one’s mind and one’s heart as years go by, and to see the broader dimensions of the future. Most important, it’s necessary not to fear the prospect of failure but to be determined not to fail. If a leader is not willing to attempt things that might not succeed, then he has little faith in himself or the goal he seeks to achieve. How do values shape leadership? High moral and ethical standards are essential, and they don’t change from one job to another, or from one level of authority to another. Honesty, truthfulness, integrity, unselfishness—these are always there. And whenever a leader violates these basic principles, through arrogance or through ignorance, there’s a derogation of duty. Leaders also have a duty to understand the needs of people who depend on them. I’ve never been a victim of racial discrimination. I’ve never been deprived of basic human rights. I’ve never suffered from hunger or lack of shelter. As a businessman, a church leader, and a political leader, I became intensely aware of the needs of others in the deep South during segregation, although I wasn’t always as courageous as I should have been in trying to alleviate these problems. But understanding the needs and suffering of others is a vital element for successful leadership. Finally, there’s a legal framework within which a leader must operate. The president of the country or of a company should display an exemplary commitment to the law. Any leader who deviates from compliance with the law, or compliance with the principles of a corporation, sends devastating waves of damage throughout the organization itself. Such conduct lowers the standards of performance of everyone who is aware of the violation. Is there anyone who you feel embodies these qualities of leadership? Harry Truman. He’s kind of a hero for me in this century. I tried to measure up to his standards. I don’t think Harry Truman ever told the American people a lie. I don’t think Harry Truman ever violated the law. He had a respect for history and a respect for the office of president. As a consequence, I am certain that Harry Truman would never have done anything to bring discredit to his office. As president, what were your experiences in dealing with business leaders? Both disappointments and successes. We had some disappointments at first. For instance, even before I became president I could see that the U.S. automobile industry was making two very serious mistakes. One was the lack of fuel efficiency, and the other was environmental pollution. So I called in to my cabinet room the chief executive officers—the chairmen of the board and the presidents of every automobile manufacturer in the nation—along with the autoworkers’ union representatives. I told them we were going to pass some very strict air pollution and energy conservation laws. My hope was that they would take the initiative right then and commit themselves to producing energy-efficient automobiles that would comply with these strict standards. Their unanimous response was that it simply was not possible. I told them that automakers in Sweden and in Japan were doing it, so it was possible. But they insisted that they just couldn’t make a profit on it because their profit came from the larger automobiles. So they refused to modify their designs. Eventually we passed a law that required them, incrementally and annually, to improve their automobiles’ efficiency and to comply with environmental standards. In the meantime, American manufacturers lost a lot of the domestic market. That was a case of the automobile industry being unwilling to look to the future. They could not see the long-run advantage, even though it might prove to be costly in the close-in years. In general, however, I think the business community was quite helpful and enlightened when I was in office. There was a tremendous improvement in the efficient use of energy while I was there. The laws that we finally passed after four full years of tedious negotiation are still on the books. And now we can sustain any given gross national product using about 30 % less energy than we did, say, ten years ago. Another commitment my administration made, with which most business leaders helped me, was deregulating the private enterprise system. We deregulated oil and gas, airlines, railroads, trucks, the financial institutions, and communications, including radio and television. And we couldn’t have done that without the support and leadership of enlightened members of the business community. They agreed to put their faith in a more competitive free enterprise system. In general, even including the airlines, U.S. industry and consumers have gained substantial benefits from deregulation. How does becoming president change the way you think and what you think about in making decisions? Becoming president generates and demands a much greater awareness of what one’s predecessors have done. A leader must understand history, either within the corporation or within the nation. Quite often an awareness of what has gone before gives good guidance about how to handle current challenges or opportunities and helps avoid repeating mistakes. Leadership also requires a broad concept of your responsibility to others and your future effect on them. As you rise in corporate or political positions, you have an increasingly broad impact on other people’s lives. How would you describe your management style? I have always tried to limit the number of specific duties that I had to manage. Where I could, I would delegate authority to others whom I trusted. I’ve done everything I could to master those duties that I considered uniquely mine, that no one else could perform. To do that, I would commit the time and concentrated effort necessary to go into considerable detail. Management, in my view, requires mastery of relevant details about one’s own unique duties. As president, you were constantly engaged in negotiation and mediation—with business leaders, with the Congress, in the Middle East. You’ve even written a book on mediation, Negotiation: The Alternative to Hostility. Why is negotiation so important? Every leader has to understand at least the rudiments of negotiation—because a chief executive officer in the White House, in the boardroom, or in the corporate executive offices is faced every day with potential conflict, with immediate subordinates, with the workers in the plant, with the sales force, or perhaps with competitors. All negotiations, whether in government or business, require certain things. One is a proper respect for the people across from you whose opinions differ from yours. You can’t be arrogant. You’ve got to give the people with whom you’re contending your understanding—not your agreement but your understanding. It requires some humility to recognize that you’re not inherently better than they are. A successful negotiation has to be voluntary and unanimous. Then you have an agreement. You also need to understand when an intermediary, an arbitrator or mediator, would help and when a direct approach is best. This has an important application in business. Altercations between two big corporations can often be resolved most easily through direct talks between the chief executive officers. They need to be secluded but backed up and advised by their attorneys. Instead of going to court in an extremely expensive eight- or ten-year lawsuit, where no one wins, a direct encounter like this is often the best approach. During your administration, the United States confronted a series of economic, environmental, and military limits. How do you think a leader should contend with limits and the recognition of limits? The recognition of limits shouldn’t lead to a feeling of weakness. A shortage of raw materials, of arable land, or of pure air, are all real conditions that must be accepted and then corrected or accommodated. The acknowledgment that we can’t do anything we want to the environment is not an acknowledgment of weakness. Dealing with limitations wisely and successfully is a sign of greatness. Business should readily understand this concept. Limits are taken for granted in the competitive arena. Alternative products are on the market. Competitors are striving to be better, more desirable, or more efficient than you are. You also are limited by your customers’ desires and tastes. You can’t charge any price you want for most products. In business, limits are acknowledged and expected. So there’s no feeling of inferiority. The same principle should apply to political leadership. Yet that message of limits and restraints is tough to convey, particularly in politics. That’s exactly right. And I was not always successful in getting it across. It’s always much more popular for someone to say, it’s okay to do whatever you want, we’re never going to run out of oil, forests, or other raw materials; to tell the American people the United States is so powerful, we can always live a happy life, regardless of what happens to the rest of the world; to say it doesn’t matter how large our federal deficits are—our country is so strong, we can survive it. It doesn’t matter what happens to the nation’s agricultural community—we have enough land to survive. It doesn’t matter about human rights violations around the world, because our people are secure in their basic rights. This way of thinking is very attractive to the American people. These are messages they like to hear. We don’t have to worry about others, we’ve got it made, and because of our great blessings, which are obvious, we must be God’s chosen people. And if someone is poor, or destitute, or deprived, it must be because God looks on them with disfavor. To me, that is an incorrect approach to the world’s problems. But it is a politically attractive approach. Part of leadership is telling people news they may not want to hear. Is another part willingness to hear bad news from advisers? It’s a serious mistake for any leader to be surrounded by sycophants. It’s just as erroneous to listen only to advisers who have a homogeneous approach to the important issues of the day. The stronger and more self-assured a leader is the more likely he or she is to seek diversity of advice. If you are insecure or don’t have confidence in yourself, then you’re apt to listen to a narrow range of advice. I deliberately chose advisers with disparate points of view. The media criticized this as indicating disharmony in my administration. But especially in matters of foreign policy, I wanted the very conservative, stable, and cautionary reaction of the State Department on the one hand and the more dynamic, innovative advice from the National Security Council staff on the other hand. Sometimes the two points of view conflicted. But in foreign policy and defense, the final decisions were always mine. I wanted a broad assortment of opinions before I made a judgment. That’s also why I brought in to the Oval Office members of the Congress from both houses and both parties, and listened to them: to make sure again that I had diversity. Do we expect too much or the wrong things from our leaders? In general, the American people credit the president with excessive power and authority in the field of economics. The president doesn’t have much to do with the inflation rate, for instance. A little, but not much. He can affect the budget deficit. In economics and finance, the president must share authority with a tremendous free enterprise system and with the Congress and the Federal Reserve Board. But in matters of foreign policy and defense, the president does have tremendous power and unique authority. Occasionally, he can even act unilaterally. Because there is a misapprehension among the American people about this delineation of power, one responsibility of the executive officer is to define his or her authority and influence properly. I was not against using my legal authority to a maximum degree, but I was very careful to make sure that it was legal and proper when I did exercise authority. As stated earlier, I also consulted with others as much as possible. How much consultation went into your decision and policy making? Whenever I made a decision concerning foreign policy or defense, I worked it out in advance, initially with the secretary of state, secretary of defense, the joint chiefs of staff, the National Security Council, and the key members of Congress, both Democrats and Republicans. We would have a consensus before we made a major move on the Panama Canal treaty, for example, or with the negotiations on SALT II. As a result, Congress never reversed or refused a single proposal I made and changed my defense budget proposals minimally. It is extremely important to build into initial discussions the people who will eventually be responsible for the final definition or implementation of a proposal. A large amount of consultation, however, increases the danger of leaks. What was your view of keeping information secret? If you’re a political leader, you have to decide about the level of secretiveness. In general, I think that some secrets contribute toward leaders’ misusing and violating their positions. When secrecy is emphasized, it tends to be used sooner or later to cover up mistakes. And if those mistakes later become public, they will be more embarrassing than if they were acknowledged openly in the first place. My inclination was to have as few secrets as possible. In general, we sought to reveal the facts to the American people. So I had frequent press conferences, and all my cabinet officers had orders to share their knowledge with the press whenever it would not adversely affect our national security. How much of a leader’s time should be spent on pursuing accomplishments and how much on selling accomplishments to constituents? You have a choice at any time to concentrate your efforts on additional accomplishments or to publicize previous achievements. I don’t want to appear too idealistic by saying this, but we deliberately kept a full agenda on the things we wanted to accomplish. Our agenda was always so ambitious that even after I was defeated in November 1980, we still had a highly productive legislative session. We finished energy legislation, we passed the Alaska Lands Bill after 20 years of fruitless effort, we passed legislation creating the Super Fund, and more. I had envisioned publicizing my successes for political purposes in the 1980 election year. But, unfortunately, two things happened: the Iranian revolution precipitated a more than doubling of oil prices in less than 12 months, and the hostages were taken. The political and economic climate precluded my letting the public know what I had accomplished. But there has to be a combination of initiatives and publicity. Only by educating people on what you have already done can you retain adequate political support to pursue present and future goals. What do you consider is the right way for leaders in this country to use their power? Our country is certainly the most powerful nation on earth. Economically, militarily, politically, sometimes even morally and ethically. But that doesn’t mean we can use this tremendous power to subjugate other people or to impose our will on others against their wishes. Or to intrude into the internal affairs of another country, unless our own security is directly threatened. We should use our influence, not to create or sustain conflict and animosity and suffering throughout the world but to alleviate it. And although we have the most powerful military force on earth, we should use that force with great reticence. Whenever possible, we should use diplomacy and negotiation to alleviate friction, to bring disputing parties together, to resolve matters through peaceful means. In the case of the Middle East, my predecessors and I were always eager to support any peace process that was initiated. Anyone in the Middle East who took one small step toward peace knew there was an eager partner in Washington. To me that was a proper use of U.S. power. We didn’t inject troops into the Middle East. We didn’t bomb villages or bomb Beirut. We sought opportunities to bring people together to work out a peaceful agreement, with our government acting as mediator. That to me is a stamp of greatness, not weakness. We don’t have to be a bully in the world just because we are the strongest.

Interview: Jimmy Carter on the CEO as Statesman

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