Keyword search
Tag search
Career Success
JUL 8, 2014

The Best Leaders Do…Nothing

By Yoshito Hori
Shutterstock photo/XiXinXing

A few years ago, I took part in a conference on leadership at The Aspen Institute. One of the events was a discussion based around the sayings of famous people. I caused a bit of a stir by arguing, along with Confucius, that the best leader is the leader who does nothing.

Of course, Confucius was being deliberately provocative. He did not mean that a good leader should never do anything whatsoever. I think he meant that the best thing for a leader to do is to create a well-structured, well-trained, and fully-functioning organization—and then stand out the way and let other people get on with their jobs.

I agree.

That’s why, when I started out as an entrepreneur in the 1990s, I defined my role as CEO in quite limited terms. My 3 essential functions were:

1. To create a vision, craft a strategy, take decisions, and assume responsibility.

2. To take care of all external stakeholders (customers, shareholders, etc.), by communicating with them, and by listening and responding to their needs.

3. To create a motivating culture and communicate the organization’s mission/values to the employees.

The best way to grow a successful company is to grow the organization, and the best way to grow the organization is to get your employees to grow into leaders themselves—by encouraging them to develop new skills and perform at the very edge of their abilities.

One key task for me as a new CEO was thus to hire talented people, educate them, and encourage them to take all the responsibility they wanted.

When it comes to hiring good people, regrettably I have no “secret.” It’s just trial and error. For the education part, however, we are in a lucky position. I require all our professional employees to take an MBA or some kind of master’s degree. Happily, since we’re running a business school operation that can be taken care of in-house.

To get people to stretch themselves, we encourage them to propose themselves for the position and pay they want. Provided the human resource committee approves, anyone can rise up the organizational ladder fast and earn high compensation. This approach inspires everyone to take on plenty of responsibility.

What, then, is left for me, the CEO, to do?

I think of it like this: The CEO ends up doing (a) the jobs that no one else can do and (b) the jobs that no one else wants to do.

In my VC business, that involves investor relations and managing my colleagues. (Most professional venture capitalists love the thrill of finding great companies, but they’re far less keen on IR and the other back-office work that goes along with it.) At the business school, it’s mostly about being a public figure and making speeches.

Now, though, as my employees have become more numerous, capable, and diverse, the number of jobs that they can’t or don’t want to do has shrunk dramatically. My responsibilities are getting fewer all the time.

With so little left to do, do I still qualify as a leader?

I think so.

First, it’s good for a leader not to be too busy. A leader should have time to think and self-educate in order to grow, just as the employees grow. For example, reducing my everyday work commitments has enabled me to organize influential conferences on Japan’s economic future and to run an NGO focused on reviving Japan’s earthquake-battered northeast. These activities have a halo effect, boosting the company profile and showing that we stand for something greater.

Secondly, while a good leader may be out of the spotlight, he or she is never out of touch. When a real crisis strikes—whether it’s the financial crisis of 2008 or disruption due to new technology—a good leader is always ready to step out of the shadows and assume direct control, communicating the necessary message of change and transforming the business model until the crisis is past.

A good leader, in other words, should be a thought-leader all the time and an action-leader as needed. That’s the kind of leader I aspire to be.

So I would update Confucius like this:

Bad leaders spend the maximum time on the job, micromanaging and pursuing novelty for its own sake until they become a burden on the organization. Good leaders spend the minimum time on the job, but everything they do has a positive effect.

There are certain fields, like IT, where change is so rapid that things are in a state of permanent crisis, making it dangerous for the CEO to lead from one step behind. In corporate education, however, change is relatively slow. That’s why my goal is to do as close to nothing as I can.