G2 On John Baldoni is a Leadership


Leading the Steinbrenner way?


George Steinbrenner violated just about every rule of the leadership handbook, yet he brought tremendous success to the New York Yankees, both on and off the field. What does this say about the conventional wisdom on leadership?


leadership consultant, coach and contributor to the Harvard Business Review online. “The only discipline that


lasts is self-discipline.” That’s from Bum Phillips, the buzz-cut, cowboy-boot-wearing head coach of the now- defunct Houston Oilers. His quote resonates with what it takes to lead: Be disciplined in thought, word and deed. It’s a fine definition of leadership, but not one


that I would apply to Steinbrenner. Certainly he was a winner; he loved the Yankees; he loved his players. But his management style — no matter how many titles his teams won — left much to be desired.


Steinbrenner was tempestuous: He lost his temper and vented about players and managers with whom he had a beef. Steinbrenner was inconsistent: He hired and fired Billy Martin (a volatile manager with little self-discipline himself) five times. Steinbrenner was also a self-promoter. Yes, he wanted the Yankees to win, but as documentarian Ken Burns noted, winning a game or even a title was never enough. Steinbrenner was possessed by the need to win, but sadly it often seemed so joyless. One leader Steinbrenner conjures is another


George — Patton, fearless and courageous, yet vain and self-destructive. Patton was a brilliant strategist but a shrewd one. Patton sought to outflank his enemies when possible, and in the process to save lives on both sides. After all, it was he who said, “Sweat saves blood, blood saves lives, and brains saves both.” Yet Patton ended up on the sidelines for D-Day


after slapping a soldier suffering from combat fatigue. After the European war was over, Patton was denied a command in the Pacific theater and so was effectively retired on the job. Not Steinbrenner. He left on his own terms by ceding control of the Yankees to his sons. But like Patton, Steinbrenner was a well-intentioned leader who ended up suffering from flaws that a more self-disciplined leader might have controlled.


ADAM NADEL/ASSOCIATED PRESS


George Steinbrenner, left, with Joe Torre, who had the longest tenure for a Yankees manager under Steinbrenner — from 1996 to 2007.


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A Reagan-era ambassador and arms-control director, Ken Adelman is co-founder and vice president of Movers and Shakespeares, which offers executive training and


leadership development. Passion trumps rules.


Consultants as well as professors of leadership present excellent rules of leadership. Though the rules haven’t changed much since Shakespeare’s time, they still work well for most wannabe leaders. Yet, as the unstoppable Portia says in “The


Merchant of Venice,” “The brain may devise laws for the blood” — as do all PowerPoint presenters of leadership development — “but a hot temper leaps o’er a cold decree.” George Steinbrenner had a passion to win. His


“hot temper” leapt over any “cold degree” of leadership do’s and don’ts. So unstoppable was his passion that it overwhelmed the management confusion in the Yankee organization created by his frequent top-level changes and untactful communications. That passion led him to throw money galore at


what he wanted: the pennant and World Series year after year, decade after decade. Again, like Portia. When told that it may take


the exorbitant sum of 3,000 ducats to save Antonio, her betrothed’s best friend, Portia doesn’t bat even one of her glamorous eyelids. Instead — as Steinbrenner did when he spotted raw baseball talent he wanted for himself — Portia exclaims: “What! No more? Pay six thousand. Or double six thousand. And then treble that!”


By chance, or good luck, someone can now see this display of raw determination in Central Park’s staging of “The Merchant of Venice” — featuring Lily Rabe as Portia and Al Pacino as Shylock — mere miles from the stadium where Steinbrenner’s beloved Yankees won year after year, under his passionate leadership.


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, JULY 18, 2010 Warren Bennis is a


professor at the University of Southern California, where he was the founding chairman of the Leadership Institute.


Steinbrenner’s “success” highlights two seminal things about that mythical “handbook” of leadership rules: 1. The famous and most quotable British


physician, Sir William Osler, once said that medicine could be a science if every patient were identical. The same can be said about leadership. That’s why outliers such as Steinbrenner (or a Henry Ford or a Gen. George Patton) can turn up as successes. Steinbrenner’s success can be summed up in one word: dollars. Hiring and firing managers at will can be done only with Steinbrenner’s personal wealth, plus Yankees fans willing to pay any price to see the Bronx Bombers win or lose. Steinbrenner’s leadership was costly. Someone — anyone! — with his Croesus-like fortune plus just one piece of conventional leadership wisdom would have won more series with less dough. 2. One example of “leadership rules” that could simply be called “grown-up” manners is that exemplary leaders never publicly criticize their direct reports.


Mickey Edwards, a former


congressman, is vice president of the Aspen Institute. There is a difference


between “leading,” on the


one hand, which involves vision, persuasion, motivation and other attributes useful in bringing along people who have other options, and, on the other hand, exercising the powers of an all-empowered “boss” who may simply issue commands and, if the commands are not obeyed adequately or quickly enough, fire those whose perceived inadequacy of response is displeasing to him.


Steinbrenner had a powerful commitment to results and to primacy, and that is an important element in the exercise of leadership, but to command is not the same as to lead.


LIVING WELL LATE IN LIFE THE COLOR OF MONEY Use benchmarks to decide when to retire singletary from G1


expenses to maintain the home and pay property taxes, but eliminating the mortgage will provide you with much more financial freedom, Ringer said. Only 48 percent of retirees in a 2009 survey had paid off their mortgage, compared with 76 percent surveyed in 2007, according to a report released this spring by the Society of Actuaries. It used to be that many


financial experts would tell people to keep their mortgage because the cash they would use to pay it down could earn more in the stock market. Try telling that to anybody these days. In a Consumer Reports


survey, 74 percent of retirees who didn’t have any major debt said they were highly satisfied with their retirement. I like Ringer’s 20 percent benchmark. This forces you not only to budget but also to consider what could be cut when financial difficulties arise. If you know your money is going to be tight from Day One of retirement, with little room to eliminate expenses, then perhaps it’s not yet time for you to stop working. Knowing when to take your Social Security benefits is a tough decision, because it involves guessing how long you are going to live. You have three options. You can elect to start collecting early, even though your benefits are reduced a fraction of a percent for each month before your full retirement age. You can wait until your normal retirement age, which can be as late as 67, or keep working until 70 and collect more money every month. Check your annual Social Security statement, which lists your projected benefits at these three stages. To arrive at your Social


Security benefit, your lifetime earnings are adjusted to account for changes in average wages. Social Security then takes the 35 years you earned the most and applies a formula to determine the monthly benefit you’ll get at your full retirement age. The longer you work during your top earning years, which is typically the years just before retirement, the higher your Social Security benefit. “People don’t consider that, because they don’t know the nuances of how Social Security works,” Ringer said. The final two benchmarks can be difficult, because they involve inflation estimates and


If you’re younger than 40, odds are you’re not saving enough


retire from G1 Clearly, all those thoughtful


lectures about the need to pre- pare are falling on deaf ears. So I’ll say it again: The pay- checks stop. Every day, every week and every month of your re- tirement, you’ll use up some of the money you accumulated while you were working. Specifically, imagine that every week you have to pay for food with cash from savings. And it’s the same with your electricity, ca- ble, phone, gas, credit card and other recurring bills. Because your health care is no longer sub- sidized by your employer, you write a big check each month to an insurance company as well. If you earn a few bucks on the side, even the taxes have to come out of your savings; no one else with- holds federal and state tax from every paycheck.


Sure, if you work until you can


collect Social Security, you’ll get some money from the govern- ment, but it’s a fair bet that your No. 1 source for retirement is go- ing to be you. If you are not saving assiduously now, you are going to be much, much poorer in retire- ment. Restaurants, cable TV, BlackBerry service, travel abroad — even things like beer, fast food and haircuts — all will be fond memories of youth. Retirement does not have to be


this way. I glimpsed my own future more than 20 years ago, when my wife and I worked for the federal gov- ernment. In 1987, it introduced the Thrift Savings Plan — basi- cally a 401(k) for government em- ployees. When we left govern- ment service, we withdrew our contributions and invested the money ourselves. My next em- ployer offered no pension, only a 403(b). In other words, although we are both baby boomers — born in 1946 and 1953, respectively — we are living the Gen X or Gen Y re- tirement.


Over the past year, I have learned a few things about how to retire successfully without a pen- sion.


ISTOCKPHOTO


hoping your investments meet projected returns. Still, it’s worth working out the numbers. Fun stuff, right? Okay, maybe not so much. But fail to come up with a pre-retirement plan, and you’re planning to fail during a time when you have less chance for correction.


singletarym@washpost.com


Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.


Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please note that comments or questions might be used in a future column, with the writer’s name, unless a specific request to do otherwise is indicated.


First, take a moment to think about how much money you will need each year after you stop working. Start by itemizing your usual expenses. Estimate your rent or your mortgage and prop- erty tax. Make reasonable as- sumptions about what you spend on food, utilities, essential travel, clothing, car repairs and so on. I assumed that my single biggest expense would be health insur- ance and budgeted more than $10,000 a year. Whatever figure you come up


with — let’s say, $50,000 — con- sider it a minimum. Divide it by 26 to come up with your biweekly retirement income — about $1,925. Your figure will probably be much less than the usual 80 percent of your current income that most financial advisers say you’ll need. We’re talking about getting by; any extra will only make life better.


So without a pension, how much do you need to get $50,000 (before inflation) each year? Sim- ply put: a bundle. If you plan to retire at 65 and hope to have at least 30 years in retirement, you’ll probably need something like $1.5 million in today’s dollars. Even a little inflation could push that to $3 million if you’re two or three decades from retirement. For the moment, let’s leave in-


If you are not saving assiduously now, you are going to be much, much poorer in retirement.


flation out of the calculation. In other words, if you have


saved just $25,000 — and remem- ber, that describes about half of all workers — you are less than 2 percent of the way toward your goal. Your future definitely doesn’t include cable. Here’s more bad news: Just sav- ing a lot isn’t going to be enough. Let’s say you’re 30 years from re- tiring, you earn $100,000 now and you guess that your income will go up by about 3 percent a year. Even if you earmark 10 per- cent of every paycheck for your retirement and your employer adds another 5 percent, you’ll have set aside only about $713,000 by the time you stop working. That’s half of what you’ll need for that $50,000 annual in- come. To live comfortably in retire- ment, whatever you save has to grow — and its growth has to beat inflation by at least a percent or two. Here’s where time is your ally. Take the example above, where you’re earning $100,000 a year: That first $10,000 you set aside in 2010 will have become more than $30,000 in 2040 if it grows by 4 percent each year. If it grows by 6 percent, you’ll have more than $50,000. And what- ever your employer put in will have tripled or quintupled as


well. The bottom line is that the only


way to ensure that decades from now you will have enough money to live on is to invest wisely. So it’s imperative to educate yourself. You should understand what a bond is, how to select a mutual fund, how inflation af- fects your investments and so on. Even if you turn to a financial planner, you’ll need to evaluate the advice and make your own de- cisions about where to put your money. Bernie Madoff ’s clients wouldn’t have been so easy to scam if they’d understood that it’s simply impossible to get 12 per- cent returns, year after year, in vastly different economic cli- mates. That’s a key point: Economic conditions change, and you will need to take advantage of those changes. If the next 30 years are even remotely like the past 30, in- flation will swing from low to high and back. There will be stock market booms and crashes. As an investor, I’ve endured the crash of 1987, the bursting of the tech bub- ble in 2000 and the terrible bear market of 2008-09. I’ve also seen 13 percent annual inflation, which gave us 16 percent mort- gages but also money markets with yields of 15 to 20 percent. So do a little research about when it’s smart to buy bonds — and whether they should be Trea- suries, corporate bonds or munic- ipals — and when it’s better to in- vest in stocks, bank certificates of deposit or commodities. Learn how to recognize when invest- ments overseas are strong. Over 20 or 30 years, you’ll want to di- versify and rebalance your in- vestments so that the inevitable market tsunamis create relatively small waves in your portfolio. You’re surrounded by this infor- mation. Read books about how the markets work, go to Web sites with primers on stocks and bonds or just watch business channels on TV.


Finally, even when times are tough — especially when times are tough — don’t ignore that quarterly 401(k) statement. That’s when you can see whether all your planning is working — cush- ioning the blow of a bad stock, bond or real estate market — or whether you need to explore dif- ferent investments. Think of all these do’s and


don’ts as a warning from your (not-so-distant) future. You can’t just cross your fingers and hope that things turn out, or that some- one else will take care of it. Start thinking about retirement now. Your life — or at least your future standard of living — depends on it.


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