You Won’t Be a Successful Business Leader Unless You Understand Government
Skip to content
Jan 27, 2015

You Won’t Be a Successful Business Leader Unless You Understand Government

By Dean Sally Blount

Image: Dean Sally Blount with Jim McNerney, Chairman and CEO of Boeing.

Many people ask me: What’s the biggest change required in preparing business leaders for this century? While some may argue it’s understanding big data, social media, millennials, diversity, or how to grow businesses in the BRIC and beyond, in my mind, the more fundamental shift is the importance of partnering with government, both domestically and abroad, no matter what industry you’re in.

Jim McNerney, Chairman and CEO of Boeing, made this point quite succinctly when he spoke at Kellogg as part of our Brave Leaders Series. “In the 70s and 80s, businesses practically ignored government. But not anymore. You simply can’t succeed today without dealing with government.”

And you “don’t have to work in a company that sells to government customers” to be affected. “Whether it’s expanding regulatory costs, trade and tax policies, commercial diplomacy, or any number of other intersections, government decisions can have a major impact on your business. So you can choose: be at the table … or on the menu. It’s important enough that I’m telling our emerging leaders that they should be looking for a Washington or global–capital market experience before they hit mid-career.”

While other recent business trends are meaningful, they are largely extensions of concepts we’ve been studying in business and business schools since the 1980s and 90s—big data is statistics on steroids; social media has its roots in the study of communications, social networks, and crowd behavior; millennials represent a new customer segment; and we began studying cross-cultural differences in consumer preferences and business practices years ago.

But government policy making and regulatory issues at the local, state, and federal levels—that’s something business schools largely left to others. A small group of business schools, like Yale, tried to address it in the 1980s, but found that they had to convert to more traditional curricula in the 1990s in the face of meager demand.

So what does this new era of public–private interdependence mean for business? It means learning to understand and respect the different priorities and structures that guide government hierarchies and policy making; the different motivations, incentives, and power bases that characterize political actors, their administrators and staff; the different ways of communicating and making decisions—ways that frequently operate on a very different time scale. Finally it means understanding different views of a “successful outcome” (e.g., profits for businesses versus a rising tide that lifts many boats for government).

As McNerney emphasized, managing through these issues requires moving beyond the traditional business functions and operating norms. “You must be able to manage through the grey. You have to deal with folks who have very different objectives. And it’s tough because you can’t control all the discussions or the outcomes.” And this growing recognition isn't just happening at Boeing. Others have mentioned it in recent talks at Kellogg. When Jeff Immelt of GE visits a foreign market, he meets with the government first. Muhtar Kent, CEO of Coca Cola, talks about leading within the golden triangle—combining business, government, and civil society. 

So this century has indeed created a brave new world for business leaders, one that requires constantly crossing new borders of many types. But most notably, success in the 21st century global marketplace demands understanding the interdependencies that bind the public and private sectors and cultivating leaders who can manage and partner across these sectors.

Sally Blount is the Dean of the Kellogg School of Management.

Trending

Editor’s Picks

A mentor puts capes on proteges.
Careers

Podcast: How to Be a Great Mentor

Plus, some valuable career advice that applies to just about everyone.

Kids decide whether to buy water or soda.
Marketing

A New Way to Persuade Kids to Drink More Water and Less Soda

Getting children to make healthy choices is tricky—and the wrong message can backfire.

Computational Social Scientists discuss solutions.
Innovation

How Can Social Science Become More Solutions-Oriented?

A conversation between researchers at Kellogg and Microsoft explores how behavioral science can best be applied.

An entrepreneur enters an established company.
Innovation

Buying a Company for Its Talent? Beware of Hidden Legal Risks.

Acquiring another firm’s trade secrets—even unintentionally—could prove costly.

Careers

Take 5: Tips for Widening—and Improving—Your Candidate Pool

Common biases can cause companies to overlook a wealth of top talent.

Drug innovation at a pharmaceutical company
Innovation

Everyone Wants Pharmaceutical Breakthroughs. What Drives Drug Companies to Pursue Them?

A new study suggests that firms are at their most innovative after a financial windfall.

Careers

4 Key Steps to Preparing for a Business Presentation

Don’t let a lack of prep work sabotage your great ideas.

Healthcare workers meet in a hospital corridor.
Healthcare

Video: How Open Lines of Communication Can Improve Healthcare Outcomes

Training physicians to be better communicators builds trust with patients and their loved ones.

A man tries to improve OR scheduling.
Operations

Here’s a Better Way to Schedule Surgeries

A new tool could drive savings of 20 percent while still keeping surgeons happy.

Voters who do not trust each other.
Politics & Elections

Why Economic Crises Trigger Political Turnover in Some Countries but Not Others

The fallout can hinge on how much a country’s people trust each other.

A clerk scans brand trademarks.
Marketing

Building Strong Brands: The Inside Scoop on Branding in the Real World

Tim Calkins’s blog draws lessons from brand missteps and triumphs.

two coffee growers harvest beans
Economics

How the Coffee Industry Is Building a Sustainable Supply Chain in an Unstable Region

Three experts discuss the challenges and rewards of sourcing coffee from the Democratic Republic of Congo.