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Business On Leadership
Israel, Turkey and the U.S.
Israel’s deadly raid on a boat filled with Turkish activists confronts President Obama with a classic challenge for all sorts of leaders: How do you behave when a close friend and ally misbehaves?
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Marshall Goldsmith is an executive educator, speaker, coach and best-selling author. I believe that the question should be reframed to ask,
“How do you behave when close friends disagree?” Neither Israel nor Turkey sees itself as “misbehaving.” Each is behaving in a way that it feels is consistent with its own values.
Mickey Edwards, a former Republican congressman from Oklahoma, is vice president of the Aspen Institute. The question presupposes
Israeli misbehavior. The leadership challenge, for the president and Congress, is to first gather as much information as possible to ensure knowing where blame lies, despite considerable pressure to act precipitously. The blockade was not an Israeli blockade but a blockade established jointly by Israel and Egypt; the Israelis had offered to accept the material, ensure that it did not contain weapons to be used against Israeli citizens, and facilitate its passage into Gaza, just as it has facilitated the movement of a great deal of humanitarian aid into Gaza despite continuing missile attacks on the Israeli population. It now appears that when Israeli forces boarded the incoming ships (all nations, including the United States, enforce blockades in this manner), the Israelis were attacked and responded to those attacks. This broader overview is important because leaders are always subject to intense pressure to act quickly before all the facts are known; true leadership refuses to be stampeded into action before facts are known.
Kathryn Kolbert, a public-interest lawyer and journalist, is director of the Athena Center for Leadership Studies at Barnard College.
Mark Twain wrote in his autobiography,
“Whenever I have diverged from custom and principle and uttered a truth, the rule has been
BULENTKILIC/AGENCE FRANCE-PRESSE VIA GETTY IMAGES
Thousands of people, some carrying Palestinian flags, gathered in Istanbul last week to protest the Israeli raid on an aid flotilla headed for the Gaza Strip. Nine activists died in the raid.
on
washingtonpost.com This week’s business chats
washingtonpost.com/ discussions
WEDNESDAY Derrick Dortch, federal jobs, 11 a.m.
THURSDAY Color of Money columnist Michelle Singletary, noon.
FRIDAY Cars columnist Warren Brown, 11 a.m. Elizabeth Razzi, real estate, 1 p.m.
that the hearer hadn’t strength of mind enough to believe it.” I fear that may be the reaction should the United States and other allies criticize Israel for its deadly raid. Yet the United States and courageous leaders of all stripes must stay true to their values and let their friends know when they do not condone outrageous behavior. Saying nothing in the face of despicable
conduct is a tacit acceptance of a friend’s behavior and speaks volumes about your own cowardice. A spineless leader is not really a leader at all.
John Baldoni is a
leadership consultant, coach and contributor to the Harvard Business Review online.
When friends make
trouble, a leader’s first responsibility is not to a friend, but to the organization he leads. This point is even more operative in the case of allies, be it a country or a company. “Nations do not mistrust each other because they are armed,” said Ronald Reagan. “They are armed because they mistrust each other.” Allies come together for mutual interest; they are not friends per se; they do things for one another not because they like or even respect the other but because it is in their best interest. Countries get together for trade or protection; companies come together to share technology or even customer knowledge. Allies trust each other so far as mutual interest makes it viable.
Slade Gorton, a Republican who served in the U.S. Senate and as Washington state attorney general, was a member of the 9/11 Commission.
What misbehavior? A group of anti-Israel
activists transporting cargo ignores a blockade, refuses orders to turn back and resists a boarding.
Excerpts from On Leadership, a Web feature exploring vision and motivation by Steven Pearlstein and Raju Narisetti. To see videos and read the entire panel’s comments, go to
www.washingtonpost.com/leadership.
SUNDAY, JUNE 6, 2010 Israel is faced with a threat to its very
existence and has every right to resist such a threat by force. The blockade runners got just the response they were seeking. The Obama administration’s proper reaction should be to say just that, which might well end such attempts. Its probable response — of tut-tutting both sides — will only encourage such adventures and thus contribute to more violence.
Ken Adelman is
co-founder and vice president of Movers and Shakespeares, which offers executive training and leadership development.
Declare “Time out!” and practice Selah, the ancient Hebrew word for “pause and reflect.” Judging Israel — surrounded by enemies who seek its extinction — is rather presumptuous from 5,700 miles away, from a country surrounded by friendly neighbors. Nonetheless, as Israel’s best if not only real friend, we should “pause and reflect” together. That would reveal Israel to be adept at the
tactical and (most of the time) operational levels. It’s at the strategic level that it fails — miserably, and to all our misery. Most critical to Israel are the United States
and Turkey. Yet one tactical move after another — whether on housing announcements, or settlement agreements, or ship boardings — have bitterly alienated both the United States and Turkey. Israeli leaders make it hard to be Israel’s friend nowadays. That’s not a great strategic approach, but it’s
one that’s common on the world stage. Shakespeare’s Bolingbroke is a tactical genius— which enables him to seize power from the hapless Richard II — but a strategic nincompoop.
Once Bolingbroke becomes King Henry IV, his
tactical adjustments lead to one rebellion after another. He never pauses to reflect on the need for him to think bigger and act bigger, in order to preclude his need for constant tactical maneuverings. So I’d advise the Israeli cabinet to read the
Psalms, appreciating its advocacy of Selah, and then to “brush up your Shakespeare.”
Zipcar files for public offering, but watch for bumps in road
by Matthew DeBord Is car sharing about to have its
market moment? So it would seem, as Cambridge, Mass.-based Zipcar, the country’s best-known car-sharing service (and the world’s largest) recently filed for an initial public offering with the Securities and Exchange Com- mission. The company’s modest goal is to take what was once a stalwart of crunchy, Northeast- ern hippie culture (it got its start with a single VW bug, according to Bloomberg), raise $75 million and position itself among the dominant players in an industry that could be worth billions. Or an industry that could never find its momentum.
On its face, the case for car
sharing, particularly in its tradi- tional metropolitan redoubts, is hard to shoot down. Zipcar’s 400,000 members pay $50 for ac- cess to a fleet of 6,500 cars parked in easy-to-access locations. They make online reservations for as little as a few hours and unlock the doors with member cards. Zipcar handles gas and insurance (although how much insurance is something of a serious sticking point). For people who don’t need or want to own a car, Zipcar repre- sents an ideal solution: cheap, re-
liable transportation on demand, with no need to interact with middlemen or wait in lines. Pret- ty much everyone I know who us- es Zipcar — and, like myself, used Flexcar on the West Coast before the two companies merged in 2007 — is more or less delighted with the service. I went a step fur- ther after the Zip-Flex merger and suggested that we could be looking at the early stages of a new type of business model. (For the record, I’m no longer a mem- ber.)
Still, business is business, and although Zipcar has been grow- ing steadily, it has yet to make any money, even though it has doggedly predicted that profit is just around the corner. Filings with the SEC compel fairly ruthless hon- esty, and in Zip- car’s case, the bal- ance sheet is laid bare. Both contin- ued rapid growth and impending profitability are treated with ju- dicious skepticism — for good reason. Although Zipcar is a won- derful idea that has, on a reason- ably ambitious scale, been well executed, it has an even more am- bitious task in front of it. It must transition from recruiting mem- bers who were already ripe for its
The Big Money is a financial news and analysis Web site from the Slate Group.
services to courting people who would otherwise be customers of conventional car-rental agencies and car dealers. It finally has to venture beyond the safety of its acolytes. In this sense, staging an initial public offering in the current business environment, with ap- petites for them at historic lows, is savvy and sort of desperate. Anyone can look at Zipcar, im- pressive though it is, and see the cracks forming in its business model. Apart from the food co-op ethos, the whole point of Zipcar is that it eliminates the costs and hassles of car ownership. There’s no need to engage with Flo from Progressive or deal with the Gei- co gecko. You never have to check the tire pressure or pop the hood. Somebody else washes the cars. Some- body else pays for parking. Somebody else buys the gas. If the IPO comes off as planned, Zipcar will be able to shed debt and provide early investors with a way to
cash out. That would allow it to devote revenue to growth, and, perhaps more important, to fend- ing off challenges to its little- engine-that-could mojo. Hertz and Avis are offering similar ser- vices. So Zipcar will have to de- vote some of its new money to marketing; thus far, it has made
ANDREW HARRER/BLOOMBERG NEWS
For people who don’t need or want to own a car, Zipcar represents an ideal solution: cheap, reliable transportation on demand, with no need to interact with middlemen or wait in lines.
its name by word of mouth (and, truth be told, through a lot of me- dia attention because of its sig- nificant hipster footprint in the nation’s media capitals, where owning a car is often challeng- ing). As it acknowledged in its fill- ing, Zipcar has high fixed costs, most notably the care and feed- ing of its fleet — one that will have to expand. It may be able to gobble up some potential com-
petitors, and it can always look to acquire similar businesses abroad as it did in April with London-based Streetcar. If you’re in the car-sharing game, you
Although Zipcar has been growing steadily, it has yet to make any money.
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need to buy cars. But the real fi- nancial challenges come when you look at fuel and insurance costs. For consumers, another selling point of car sharing is the limited exposure to the volatility of gaso- line prices. Once you don’t need to buy gas to get around, you can develop a cavalier attitude about how much it costs. But if you’re buying many thousands of gal- lons per year, as Zipcar is, even minor increases can have a major impact on the bottom line. This is why airlines get into fuel-hedging strategies. The question is wheth- er Zipcar, with its affront to the traditionally cozy relationship between car companies and oil companies, will have any real lev- erage in this area. It’s a huge deal, as a few cents more per gallon could make a difference in whether Zipcar will have to run aging vehicles longer, skimping on maintenance, thereby intro- ducing the possibility of break- downs and a less-than-ideal aes- thetic experience. Zipcar chief executive Scott
Griffith said sales should hit $120 million this year, according to Bloomberg, but he foresees $1 billion by 2020. That means,
potentially, a fleet of vehicles numbering close to 70,000 and a membership of perhaps 4 mil- lion. Those are back-of-the-enve- lope calculations, but the mil- lions-of-members goal does make one thing perfectly clear: Zipcar will have to expand outside the United States to hit its targets. Let’s say it wants to add, conser- vatively, 1 million members. The entire new-vehicle market in the United States is hovering around 10 million. (That market will re- bound, getting back to something like 12 million to 14 million in the next five years.) These are the people that Zipcar will be aiming for: customers who would other- wise give in to the siren call of car ownership. Maybe the major expansion
isn’t the way for Zipcar to go. It could be better off if it positioned itself as an investment opportu- nity between, say, battery maker A123 (AONE, which staged last year’s most talked-about, and now most troubled, IPO) and General Motors (which will stage 2010 or 2011’s most talked-about IPO). This would entail less of a conventional growth strategy and more of an upsell to a right- size level of membership, made up of affluent urbanites who en- dorse personal mobility but who don’t want to own or lease a car. At the moment, however, Zip- car looks to be betting on its brand equity in an effort to max out its prospects. A successful IPO would position it well for the future. But the management challenge down the road promis- es to be daunting.
Matthew DeBord has written about the auto industry for The Washington Post, the New York Times, the Los Angeles Times and the Huffington Post.
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