Are U.S. Companies Still Good Role Models for Chinese Companies?

????Q: You wrote an article for FORTUNE in 2003 entitled "The Ten Greatest CEOs of All Time." Given all that we've been through in recent years, do you think American companies are still good role models for Chinese companies?

????A: I don't believe that U.S. business is the model. There are many mediocre or average American companies. It's a very arrogant view to simply say that American business, or American companies in particular, have a monopoly on wisdom. I don't believe that.

????The really critical question, however, is not American business versus Chinese business or European business versus Latin American business. The real question is great versus good.

????If you look at our work, you'll see that all of our great companies have the contrast companies. We have lots of American companies that you don't want to be like. These are the comparison companies. So if you think about it as a question of great American companies in contrast to not great American companies, the words "American companies" drop out of the equation. What's then left is great in contrast to not great.

????So that's my framework: look for great companies, what great companies can teach, not just from one country.

????You asked about the article "The Ten Greatest CEOs of All Time." It's fascinating to look back at them. Each of them had certain key elements, but they were all great models and remain great role models today. For example, Charles Coffin was the real architect of GE, probably the most consistently successful company in the 20th century. He was the company builder who followed GE's founder, Thomas Edison, who was a brilliant inventor but had a management style like a genius with 1,000 helpers. Then there was Sam Walton, for his amazing ability to do succession; Darwin Smith of Kimberly Clark and his courage to sell the paper mills; Bill Allen of Boeing, who led the world into the jet age; David Packard, who invented so many things we now associate with a modern technology company, pioneering the architecture of a Silicon Valley company, and so on.

????My challenge to the up and coming generation of Chinese CEOs is: which of you are going to be David Packard, Charles Coffin, Bill Allen -- the ones that will be mentioned when someone writes about the great CEOs, those who did something visionary, and it worked. It wasn't just dreaming; it worked. Those who did something that fundamentally altered the course of the world, as every one of these CEOs did.

????The ones that just made a bunch of money and retired were not on our list. Back to your question: is that still a good role model? Those people are still good role models. And of course, we'll see a similar group come from China, and Russia, and Latin America, and Europe.

Educating Business Leaders

????Q: You're an educator at heart. How do you see the evolution of business schools as well as other forms of executive education, against the backdrop of the phenomenal change in the world around us?

????A: You know, the best leaders we studied are always students at heart, and I think they always viewed themselves as beginners in their field. They were constantly asking questions. It doesn't really matter where the learning comes from, whether it's from business schools or executive education. Ultimately the key thing is the ability to learn from empirical experience. You may learn from the empirical experience of others, which is why the case study approach is still a very powerful teaching method in business schools.

????I think the critical thing is the attitude that you're going to learn as much between the age of 70 and 85 as you did between birth and age 15. If you have that philosophy, then in every 15-year slice you're going to grow and learn as much as you did in the first 15 years of your life. It doesn't matter where the learning comes from, but it's not as if you get your degree and then you're finished.

????I've been really blessed by having great, great mentors. Part of it was me seeking them out. I sought to learn from Peter Drucker. What struck me was that he was 86 years old when I first met him, and he starts off the day by asking me questions. I was 37 and it took me a long time to finally get a chance to ask him questions, because he was so interested in learning from me. He would telephone former students, following a random list of them who had been out of school and in the workplace for ten years, and just say something like "Hi. This is Peter. What's up in your world?"

????Some of the remarkable business leaders I've met are just really curious people. They want to understand stuff. They want to vacuum your brain, always trying to put things together. And they realize that no matter how much they know, they know a lot less than they could know. Maybe this is a part of the humility of a Level 5 leader. If you really think you know a lot, that's very different from realizing you only know a little bit. To realize your ignorance is a form of humility.

????Q: If you were advising a Chinese company with global expansion plans, would you recommend they hire MBAs and EMBAs from international business schools, or US business schools, or do you think it really makes a difference?

????A: I don't think it makes a difference. What really matters is getting great people and putting them in positions of responsibility. They may come from many different places.

????If we look at Proctor & Gamble, which was founded in 1837 and has thrived ever since despite enormous historic changes and cycles, and examine why they have had the ability to sustain their success since long before there were business schools, a key part of the answer is that they were always bringing talented people into their system, and developing them inside their value system, their way of doing things, inside their different brands. They constantly empirically validated which ones were really proving themselves as someone who can deliver great results consistent with their values.

????And they've been doing that since 1837, first as a small business. Now they recruit from business schools and other types of schools all over the world; but the theme is the same: bring people in at a relatively young age, grow them within their system, keep the very best ones based on them proving their capabilities empirically. And that is still the hallmark of sustained great companies.

????So if I was a Chinese company leader right now, the question I would be asking is, how do we bring in young people so we can test them, so that as we move into overseas markets, we can look inside and find people who have proven themselves, so that we can then put them into a larger seat.

????If you don't look at it that way, then at some point your growth is going to expand beyond your ability to have the right people to execute on that growth.