The Global Fund is an international financing institution dedicated to attracting and devoting resources to prevent and treat HIV and AIDS, TB and malaria. Since its creation in 2002, the Global Fund has supported more than 1,000 programs in 151 countries, providing AIDS treatment for 4.2 million people, anti-tuberculosis treatment for 9.7 million and insecticide-treated nets for the prevention of malaria to 310 million. It has helped save 8.7 million lives, more than 100,000 per month.  

The Global Fund came under intense criticism in 2010-2011 when an internal audit revealed misuse of funds in certain countries which received grants. In response, it set up a high level independent review panel on fiduciary controls and oversight mechanisms.  One of its members was Gabriel Jaramillo, whose 35 years of banking experience had included service as CEO of Sovereign Bank. He had also worked with the UN Secretary General’s Special Envoy for Malaria.  

The panel’s report in 2011 recommended wholesale restructuring of the Global Fund, and it asked Jaramillo to lead the transformation. The fund appointed him as general manager in January 2012, with a one-year mandate to lead the transformation. “My priorities at the Global Fund are to achieve maximum efficiency, accountability and concrete results that save lives,” he said at the time of his appointment. “In essence, we will start with a reorganization that emphasizes simplicity, discipline and rigor.” 

Wharton management professor Michael Useem interviewed Jaramillo not long before his year as general manager ended. Here is his account of how he spearheaded a wholesale change in one of the world’s largest public health organizations.  

Meanwhile, Useem and the Center for Leadership and Change Management are working on a case, to be completed by the end of March, about the Fund’s transformation. Anyone who would like a copy of the case emailed to them as soon as it becomes available should send a message to useem@wharton.upenn.edu with “The Global Fund Case” in the subject line. 

An edited version of Jaramillo’s remarks follows:

In many ways, I have this feeling that I’ve been training for this one year all my life. It’s a very special situation. It’s a different kind of organization. Just the fact that its mission is to save lives — millions of lives — makes it a very different sort of entity. You can’t lose focus of that. It frames a lot of what you do when that is the fundamental purpose of an organization. You take things more seriously, and you can’t fail.

I’ve been part of about eight major restructurings and transformations over the past 20 years. I have learned a few things, and I instinctively used all of them here. One is to move very fast, faster than people may think [is] good. But you might as well get the job done. If it’s well explained, if you’re pretty sure that it’s the right way to go, go very fast.

Banespa is the second largest bank in Brazil. At one time, it was the largest. I took over that institution after a failure and turned it around. Once you initiate a transformation, there’s no going back. All the solutions are forward. None are in the past. None are behind you. You have little opportunity to redo.

Communication Is Key 

I decided that with a one-year mandate, normal behavior would be to just listen. We’ll weather this. Let’s just wait it out, wait a year and things will be back to where we want them to be. I had to show that we were serious from day one. I decided to go public with my goals. I had to make it very simple because I had to communicate to many [constituencies]. I actually sent more than 3,000 individual letters to stakeholders indicating the three goals that I was about to deliver and my commitment to deliver them in a year.

That raised the stakes for everybody. There was some confusion in the beginning. Some people tried to negotiate one or two of the three goals. I did not negotiate. I very bluntly, very clearly, said it’s about creating the foundation for the future with rigor and discipline and good management. It’s about investing strategically, attaining high returns, saving more lives for the same amount of money. And third, getting the money that is required to really get the job done, get the decisions out of the way.

Once I had gone public with the goals, we were all in a way committed to having to do something about them. I showed that I was serious. By the seventh working day, three of the top executives of the institution had departed. It indicated to everybody that this was serious.

The second thing I did was to have a conversation with each one of the remaining executives, one by one. I was very clear how this process would go from beginning to end, the obstacles that could hit us along the way, how we should behave as a group and individually to be able to face those obstacles and move forward and get to the final goal. I made it very clear that this was not negotiable, that you were either in or out.

After having had those individual conversations, I had the same conversation with many board members, one on one. I called them on the phone. I said I have sent you a letter. These are my three goals. This is what I’m going to deliver. Then I got the management team together and we discussed and debated the how, not the what. [We discussed] what would come first, the velocity, the intensity, the behavior that we would have to show as a group and individually. The team came together. There was passive resistance. People engaged at different moments. But there was a behavior that was expected of everybody towards the transformation.

Change Causes Fear

Change implies risk and uncertainty, and there’s always fear. We all react to fear in different ways. We can react by being aggressive and going forward and confronting it – whatever the threat. Or we can hide. In between those two, we had all kinds of behaviors, as we do in every change situation. It’s just human nature. What you have to do is make sure that you find those two or three minutes to review with individuals who have anything to do with that specific situation. What did we do wrong? How could we do this better? Let’s move forward. Let’s not make the same mistake again. Let’s do it in a different way. Every time, at the turn of every corner, just review how you’re doing. Be honest about it. Be very humble about it. You’re bound to make huge mistakes along the way. It doesn’t matter. What really matters is that you identify, you learn, you move forward.

Be close to the situation. Make sure that you enchant people, that you seduce people with a dream, that there are green pastures out there, that there’s a reason why you and the organization are in it because you believe in what the organization is out to achieve. In this case, it’s so fantastic because this is an organization with passionate people, people who have decided that they want to save lives. It’s about the nitty-gritty, a lot of detail, management detail, but stopping, having a walk into the future, seeing the green pastures and coming back to the sweaty reality of managing detail.

Having led transformations in banks in Mexico, Colombia, the U.S. and Brazil gave me a multicultural view of transformations, and the Global Fund is about multi-culture. It is truly global. That’s one aspect that clearly prepared me. The other one is the sheer complexity of transformations. I probably have more experience than most people because I’ve been exposed so much to them. I’ve worked on eight transformations, not just worked but actually led aid transformations of huge institutions – troubled institutions — in different places. And [I know] how you can turn them around and come out and have a great future. It’s all about people, and it’s all about managing people. This is what transformations are about. I transform very little. It’s basically the people who work with the organization who do the transformation.

Finance Is Complex

I think anything that is financial is more complex because it hits all sides of the economy and it hits every activity. So the financial sector is probably the most complex of all. We are learning that in this financial crisis.

The Global Fund is a financial institution and has all the complexity of a financial institution. It just didn’t realize it was a financial institution. I recall when I joined, there were all kinds of social media asking: What’s a banker doing in the Fund? And my answer was: We’re the bankers of the world. We are a financial institution. We have to be extremely strong in the management of our finances. What crippled the Fund was poor financial management.

Another aspect new to me — and I was not prepared for this because you’re always learning — was the combination of the public multilateral sector, civil society and the private sector. I had this idea that everything should be private sector and that the private sector is good and the rest is not. I’ve come out with a conviction that that is not the case. I don’t think the Fund should be private sector. The Fund should be a well-balanced combination of civil society, the public multilateral sector and the private sector. That is the best combination for these kinds of institutions. If you look at the composition of our management team, it will reflect that. We were clearly short on private sector. So I emphasized the need to bring in private sector components. But we have to make sure that we do not overpower the civil society component and the multilateral public sector aspect.

Private Sector Values

I think the most important value of the private sector is that the organization is more important than the individual. In the public sector, the individual believes he is going to spend all his life at that institution. The mindset is: How can I spend my lifetime at this institution? How do I get to 65 in this institution? In the private sector, the mindset is: How can I continuously improve so that I can be in this institution for as long as I want to, for as long as I’m interested in being here? How do I constantly gain the right to be here? And those are two very different mindsets.

I’m not too sure if you can say that there are private sector values or public sector values. There probably are, and I’m not too good at differentiating one or the other. But I can tell you that there’s a different mindset. And therefore efficiency means survival in the private sector. Efficiency has little meaning in the public sector. You have to make efficiency real. You have to make a purpose out of efficiency. In our case, it was pretty easy because by gaining efficiency we could save more lives. We just had to translate that into something meaningful. When we did, the conversion rate was very high.

The Starting Point

What do you do first when you have such a challenge in front of you? It is to plan very clearly, to know what you want to do. In my case, before I walked into the building, I had an idea of what I was going to do the first day, the second day, the third day, for the first 20 days. I also had an idea of what I would do the first 12 weeks, and by the end of each one of those weeks, what I should have accomplished. That gives you a lot of clarity. Things don’t turn out the way you expect. You have to have the stomach to know that things will be worse, and therefore your plan might not work smoothly.

The other thing is knowing that it’s people who do things. So it’s a people management exercise. You can transform anything. I could go to a chemical company which I know nothing about. I have to know about people managing. They have to know about chemicals. I don’t. I will learn along the way. Sometimes not knowing can be helpful.

We called our first phase “Organizing to Deliver.” We knew we couldn’t take any shortcuts. We were well organized; people understood what they had to do, even if they didn’t want to do it. The second part was about making sure that our investments were truly of quality, that we would be able to refer to the returns in terms of saving lives. That’s what we call investing strategically — creating internally sufficient control mechanisms and quality conversations so as to be able to ask repeatedly, are we saving as many lives as can be saved by making this grant or that grant.

The third is what comes now, which is getting the money – what we call replenishment, which is not a good word. It’s really seducing investors into giving us money because we obtain with that money so much more than anybody else.

So the transformation was about the three goals. The goals came, each one in its phase, and we did sort of say we have finished this phase, we’re starting this phase. Now everybody be attentive; we’re going into this phase. But the job is never done and transformations are forever.

Restive Stakeholders

The stakeholders were a real challenge because the best diagnosis of the situation of our organization is: How settled or unsettled are the stakeholders? The stakeholders here are the donors and, of course, the patients, the people who are suffering from the diseases — and civil society which is close to them and is mobilizing society so that they get treated and they don’t just simply die because they were born in the wrong place at the wrong moment. They’re all stakeholders. And then the implementing countries as they engaged so that combating the diseases was more than just saving lives, that there was a real economic developmental return for having a society where you don’t have more professors and schoolteachers dying than the ones you can train to take over. And that you can reverse those trends or you can empty so many hospital beds that you have extra hospitals in an environment that thought that they had a huge shortage of them.

So where were the stakeholders? The donors were not pleased. They were in disarray. Some had to stop making payments. Others were very close to doing that. They were not seeing results. They were not getting the kind of response they wanted. They didn’t have enough ammunition to go to their legislatures and explain that this was a very good investment, that this was a great investment.

When you look at the implementing countries, all they heard was about audits and being accused of wrongdoing and being put in situations which they considered truly unfair, where they couldn’t really defend themselves. The money didn’t flow at the pace promised. They were just fed up and very disturbed. They were looking for avenues of getting bilateral aid and multilateral aid because they could control that more.

The patients were in the worst of situations. They had high anxiety because they were living with HIV/AIDS and somebody was supplying the medicine. The fear was that they would be cut off. That’s a very unfair situation. They were in that situation because the headlines were talking about the Global Fund disappearing. The disappearance of the Fund would mean their oxygen would be cut off. So their level of anxiety was very high.

The people inside the secretariat — the management — were totally lost. They didn’t know if they had a future. They didn’t have a future. How would they go around doing this? Who was really responsible for what was going on?

Priority List

Everybody was working so hard that nothing was getting done. I couldn’t think of a more difficult situation of walking into a job, with all stakeholders [unhappy]. So we decided to go in order. We said, let’s work on the donors first. Let’s work on the internal management and people first. Next, the organization. Let’s go to the recipients third. That will take care of the patients if we do it well. We did it in that order, and it worked.

The hardest thing is always the long night before people decisions because the situations that you confront are never black and white. You ruminate, you think, you fight with yourself. Then there’s a moment when you say, this is what should be done. Those are always the loneliest moments in any transformation. In this transformation, the most difficult for me was to understand that the stakeholders had come together with a strategy. They had brought me to implement it. But they weren’t quite committed to it. In fact, I sometimes think that they never thought it would be implemented.

The strategy and the business model change that we implemented had a very fundamental aspect to it. We are a demand-based organization, as we should be. We only provide finance if countries demand financing. We don’t go and convince countries to take our money. The countries come and show us the investment opportunities. And we look at that opportunity, and we see if it’s bankable and if it’s a good use of our money. That’s a good model. But that model was misunderstood, and it was taken to an extreme around something called country ownership, where investment proposals were coming from countries without full information, without the latest information, without the possibilities of cross-fertilizing the learning of a fight that was taking place in 140 countries. In our business model today, we continue being a demand-based organization. Countries bring opportunities to us, but as those opportunities and those proposals are being molded, there’s an intense dialogue of all the communities, international and local, that have something to do with the fight against that disease. That’s a much better proposal.

That is the fundamental change. It was very difficult to break from the purely passionate discussions about country ownership. It turns out that we have not broken the principle of country ownership; we’re truly enriching it because the country owns more information and a better plan. That plan is more likely to get investment support from us or somebody else.

Each transformation is unique, and they’re all the same. I’ve been lucky because all of them turned out to be right. And so there’s a lot at stake. There’s a lot at stake because when you’re talking not about reorganizing but transforming, it’s because there’s failure looking at you. In the case of the Fund, what was different was that failure meant millions of people dying. That’s what really impacted me the most and gave me so much energy and so much positive energy and such capacity to take bad news, digest it and do what leaders do.

Leadership Qualities

Being a leader in a good situation is easy. A bad moment is when you need a leader. You come in smiling and show people a way, with a failure just behind you. You have to recuperate and move forward.

Be humble. And be direct. Being direct is not offensive; it is not disrespectful. Make sure that what has to be said is said and it’s understood and that there’s a healthy debate about things. But the debate has a time. The debate has a moment. The debate has a beginning and an end. Decisions are made, and everybody has to line up and go after them. I think this is very important because it is people who do the transformation. It is not you. What you do is create those moments of debate, of closure, of clarity and move forward. And the lessons are be humble, be ready to accept mistakes, know that you’re not going to be perfect, know that you can correct and move forward, that the world doesn’t stop in a failure or in a mistake. Be very direct. Communicate clearly what has to be said. Make sure that there’s debate, that different points of view are put on the table. Out of those points of view a decision is made. Once there’s a decision, move in that direction. Have confidence in your experience. If your intuition tells you to go one way, go, go.

Arthur Sulzberger, publisher of The New York Times and chairman of The New York Times Company, talks with Wharton management professors Michael Useem and Adam Grant about journalism, leadership and the challenges that lie ahead in the newly-configured world of publishing.

 An edited transcript of the conversation follows.

Michael Useem: Arthur, welcome to Wharton. I’m going to begin by asking you about your years as publisher of The New York Times and chairman of The New York Times Company. As you look back, what decision, what action, what purchase, what divestiture are you most proud of? 

Arthur Sulzberger: Thank you, Mike. It’s a pleasure to be here. Let me start by saying that the decision I’m most proud of I haven’t made yet. So that’s my hope…. But I think as I look back, what I am proud of is the speed with which we began to address the digital revolution and [how] we have worked very hard to build our digital muscles journalistically and [as] a business…. That was something that we took on very early in this evolution. It wasn’t something we shied away from. We have made mistakes. We’ve had successes. We continue to evolve as we must. But I think what I’m most proud of is that my colleagues and I stood up to that right away and acknowledged it and embraced it. 

Useem:  Arthur, a quick follow up on that. We’re still in the middle of that revolution. 

Sulzberger: We are hopefully in the middle, but my guess is we’re still beginning. 

Useem: It may be closer to the start than the end. As you look ahead, what do you anticipate that revolution’s going to look like for The New York Times five years out? 

Sulzberger: I’ve learned to not do those kinds of projections because I’ve been caught being wrong in the past. In fact, one of the greatest challenges that this has meant for the management structure and decision making is not to say, “That’s where we’re heading.” Because what we’ve discovered over and over is this is a very twisty road. If you think you’re going that direction and the road curves left, you’re going to be in trouble. So it’s flexibility and being comfortable with the ambiguity of that. 

Having now said all of that, what I see as most exciting is the chance for international growth digitally. We recently launched a web site in Chinese. It’s our first foreign language web site. It’s one of a number that you’ll be seeing over the next few years. And what we’re discovering is that people are engaging with us in very exciting ways. I’ll give you just one example. If you look at usage of our web site outside the U.S., the biggest countries are – and this will shock you – England, Canada and Australia. Obvious, right? English. If you look at our usage on the iPhone – and this is before we moved to a Chinese language site – China was the largest user of The New York Times outside the U.S. If that doesn’t tell you that our information, the quality of our news, the quality of what we offer are incredibly valuable world wide, I don’t know what can. 

Adam Grant: When you think about your leadership experience, can you tell us a little bit about the toughest decision that you’ve ever made? And how you walked through it and then maybe anything you would have done differently with hindsight. 

Sulzberger: There are two tough decisions. Part of my job is news and part of my job is business, so I sometimes have to look at it from both ways. From a news perspective, it was our decision to publish the story saying that the Bush administration was illegally wiretapping United States citizens. The Bush administration was vehement in the fact that this was going to have a very hard effect on the country and on the security of our nation to the point that we met at their request with the President and some of his staff at the White House [where] they made their pitch. At the end, we concluded that it was, in fact, right to publish that story. But that was not an easy decision. I think, in fact, it played out that it was the right decision. 

On the business side, I think the hardest challenge I faced was when we discovered that one of our journalists had been writing lies and making up stories. Really, that goes to the core of what we are — the core that is the brand promise of The New York Times. Whether you get it in print or whether you get it digitally or whether you get the mind meld edition of The New York Times, at the end of the day it’s got to be about the quality of our content and the trustworthiness. So when the Jayson Blair event happened in 2002, that really threw so much into question. That was probably the hardest leadership challenge I faced. 

Grant: Those are great examples, and they’re both big values questions. How did you think through what to do in either one of those situations? 

Sulzberger: For the one involving the story, I had some colleagues who were very plugged into it who had their own sources within the security administration, as did I. Having heard out the President and his team and just the follow up we did over the next few days – at the end of the day, we just were not convinced. We had held the story for a year, by the way, before we made the decision to publish it. So it was not as though we just got the story and said “go.” We held it for a year and then learned more and more and more and decided, “No, they’re not telling us the full story.” That’s when we finally made the decision to go. It was constant investigative journalism over and over and over. 

For Jayson Blair, honestly, I wish I had moved faster. That was our mistake. There were some earlier warnings we could have listened to about what he was doing that we didn’t hear quite as well as we should have. I think it was in a way just being willing to move faster and more aggressively. 

Useem: We’re going to take you back even further in your early career. You graduated from Tufts University. You worked for another newspaper, came into The New York Times. You were a front line reporter, assistant editor, editor, now you’re the publisher. As you look back on your experiences and maybe a mentor or two, which experience and which mentor really stands out in shaping the kind of person you are now and the kind of leadership that you exercise? 

Sulzberger: Let’s start with the fact that my best mentor was my father. My father, like me, grew up in the family that has controlling interest of The New York Times Company. His father had been publisher, and he knew a lot about the road that I was going to be traveling. He was always gentle; he was always kind. He pushed me when I needed to be pushed, but he did it in a kind and loving way. I’m grateful for him and all that he gave me. 

Outside of that one, I would point to an organization, not to a person – Outward Bound. Outward Bound has taught me more lessons about myself, about how to think about who I am — and about how to work with teams of people under conditions of pressure and stress in a fruitful way that allows you to really build a team, set a goal and work on achieving that goal — more than anything in my life. That has been perhaps the single best mentoring experience I’ve ever had. 

Useem: You’ve written about being with an Outward Bound group on what’s called the Via Ferrata in the Italian Alps. 

Sulzberger: It’s been a while since I thought about that. But, yes, you’re right. We had a group of guests that we had invited on a four-day Outward Bound trek in the Italian Alps, the Via Ferrata. The first day, we were moving way too slowly. A lot of these were people new to these kinds of experiences – being at altitude, being clipped into a wire and knowing that if, for any reason, you slipped and the wire came out, you were going to fall to your death. Just small things like that. And when the dark fell and we started to run out of water and other things, we broke ourselves into small teams and said, “Look, now this is the time where we break down to groups of five.” I led one of those teams because I’d been involved with Outward Bound many years. We said, “Our goal is to take care of ourselves.” 

One of the great lessons of Outward Bound, and I actually had to use it on this particular trip, is that when the slowest person is keeping you from getting to where you need to go, the worst thing you do is yell at them because that only slows that person down further. What you really do – you reach into their pack and you take something heavy out of their pack and you put it in yours. That’s the way to get that person to move with the group. 

Grant: That’s a really nice metaphor for leadership. And it connects very nicely to one of our other questions: If you look back on what you thought leadership was about early in your career and what your current view of leadership entails now, how has it changed over time? 

Sulzberger: It has changed in a number of ways. I grew up in a work environment where we had daily deadlines, and you filed for that deadline. When that was done, you went home, and you were done for the day. There was a nice systematic way to it. The paper would land on the door, and you’d be off. Now I’m in a world where you must file the story when the story is ready. If it’s ready at 2:47 p.m., you’ve got to get it up on the web. We hold stories back now, and we put them up at different times in the day because we want someone waking up in Paris to have a different experience than the person who woke up in New York, to have some new news. And the same around the world. 

We own the International Herald Tribune, and so we’ve got a world wide view, which means that you’ve lost some of the certainty of life, and you’ve got to embrace that uncertainty. With that comes experimenting and recognizing that if you don’t experiment, you’re just going to fall further and further behind. And experiment means you’re going to fail. One of my colleagues famously said, “If everything we do succeeds, we’re not trying hard enough.” 

Grant: How do you differentiate between productive failures that allow you to learn and failures you can’t tolerate? 

Sulzberger: Failures you can’t tolerate really have to go back to the core promise of The New York Times – quality journalism. We cannot tolerate failures of quality journalism, which doesn’t mean we don’t make mistakes, of course. We’re a human enterprise. That’s why we have a correction box. That’s why we have a public editor. That’s why we have a standards editor. We’re human. But there are certain levels of mistakes you cannot allow, or else it’s going to deflate the brand in a way that’s unacceptable. 

More on the business side. A number of years ago, we made a first attempt to charge on the web. Times Select, it was called. It focused on our editorial content and particularly our Op Ed Page columnists – Tom Friedman and Maureen Dowd, etc. It didn’t work. After a year and a half we said, “Done. Pull the plug on them.” Four years later, when we were coming back and saying, “Should we start charging for The New York Times on the web?” – boy, did the people who didn’t think we should start charging throw that in our face. “Don’t you remember Times Select? Don’t you remember Times Select?” 

Now, we finally made the decision after a lot of study, to charge, and it has been a far greater success than anyone had predicted, including our own internal numbers. You’ve got to keep trying, but sometimes you’re going to fail. 

Useem: I’ve got a question on the flip side of thinking about leadership. You run a multi-billion dollar enterprise. You have a world wide brand. You’re an extremely rapidly changing industry. You have a very strong board of directors. You’re publicly traded. You have to work with those in the equity market. You’ve got a couple thousand people coming to work for you every day. Taking that all into account and looking back on how you thought about leadership some years back, what in your own experience turns out to be not true about how to lead? 

Sulzberger: … Leaders bring groups of people together. There’s got to be a collective buy in. Now, that doesn’t mean everyone has to agree. That’s nonsense. But I really do believe strongly in the power of debate and discussion and team work. And that’s the big lesson for me. 

Useem: You’ve made tough decisions on running WikiLeaks materials. You’ve already referred to a couple of other difficult decisions. Talk about one of those decisions and who you put in the room to make that decision with you. 

Sulzberger: I think the biggest one is the decision to move to a pay model on the web. There was massive internal debate and discussion on this one. There were people who absolutely were committed to the thought that if we did this, we would be just destroying ourselves digitally. We’d be carving ourselves away from the digital ecosystem. There were other people who said firmly that we’ve got to create a model because the move is shifting from advertising to circulation. We’re seeing it in print. We’ve got to see it in digital. And it took us a long time to get to where we had to get to. But without that discussion and without that debate, we would not have come up with the structure we came up with – the porous wall. In other words, it started as 20 free stories a month. If you came in through “search,” you came in. If you came in because you shared a story with somebody, you were able to come in. That model, which I think really did protect us from being thrown out of the Google driven digital ecosystem – or the Facebook driven [one] – still allowed us to begin to build a very powerful pay model. We would not have come to that if we had not engaged in a real dialogue. 

Grant: This is also on a similar theme, but we’re interested in advice for current and future leaders. So – whether it’s leading an effective debate and dialogue or whether it’s other key skills you need to learn as leaders – what are the most important pieces of advice you would share? 

Sulzberger: Listen is one of the big ones. Find colleagues whom you value, and embrace them. One of the things I tell people is if you’re new an area, there’s nothing like grabbing people and taking them out to lunch. You’re going to establish a relationship with people outside the office that is going to pay off very much inside the office. So build a group of people whom you value, you trust, you listen to — which doesn’t mean you don’t have to occasionally say, “Yeah, we’re going to do it this way.” You do. But more often than not, you’ll be getting the kind of value – the quality information — you need to make the right call. 

Useem: Arthur, by way of closing, is there a question we should have asked you about leadership that we didn’t touch on? Anything else that comes to mind? 

Sulzberger: No, I think we’ve covered this very well. Thank you. 

Useem: Thank you for joining Knowledge@Wharton today.

“When transcendent purpose trumps individual self-interest, we see the ultimate test and triumph of leadership,” according to Wharton management professor Michael Useem and Andrea Useem, a director at media analysis firm Infoition. In the following opinion piece, they write that a recent Medal of Honor ceremony at the White House underscored the idea that a particularly rare quality — “true selflessness” — is what sets great leaders apart.

The East Room of the White House became still on May 16, 2012, as President Obama bowed his head for the reading of a Medal of Honor citation. 

“Specialist Four Leslie H. Sabo, Jr., distinguished himself by conspicuous acts of gallantry and intrepidity,” the citation read. “[His] indomitable courage and complete disregard for his own safety saved the lives of many of his platoon members.” 

When enemy troops ambushed Sabo’s platoon as it patrolled near a Cambodian village, the 22-year-old draftee counter-attacked without hesitation, drawing fire away from his fellow soldiers and later using his own body to shield a wounded comrade from a grenade blast. Gravely injured, Sabo still pressed forward, ultimately silencing an enemy position with a grenade that also ended his own life.

More than 40 years after Sabo’s extraordinary actions, the President presented a light-blue neckband with 13 white stars and a gold star with a wreath — the Medal of Honor — to Rose Sabo-Brown, who had been married to her high school sweetheart for fewer than eight months when he died on Mother’s Day in 1970. With Obama at her side, she accepted the nation’s highest military decoration on behalf of her late husband. 

The description of Leslie Sabo’s courage and sacrifice, along with accounts of the nation’s other 3,458 Medal of Honor recipients, comes as close as any narrative to embodying the most defining element of leadership — serving a cause far greater than oneself, even if that service exacts an extraordinary personal price.

At a ceremony the next day to induct Sabo into the Pentagon’s “Hall of Heroes” — a room lined with the names of all Medal of Honor recipients stretching back to the Civil War — Army chief of staff General Ray Odierno explained the meaning and purpose of the decoration. “With this Medal of Honor, a warrior is held up to the American people as an example to all fellow men and women, the embodiment of our highest ideals,” he said. “Specialist Four Leslie Sabo, Jr., epitomizes the very best of what we all strive to be: selfless and intrepid, fearless yet resolute.” He “was a man of action who fought until his last dying breath.”

Transcendent Purpose

Most Medals of Honor have been bestowed for acts of extreme leadership. Very few of us will ever face the choice of whether or not to use our own bodies to shield a comrade from a lethal blast. Yet the narratives, absorbing and inspiring in their own right, offer an indelible lesson on the essence of leadership.  

For most of us, most of the time, private self-interest is well aligned with organizational purpose. At rare but critical moments, however, when common purpose and personal interest diverge, we see leadership put to its supreme test, sometimes requiring a split-second decision. And when transcendent purpose trumps individual self-interest, we see the ultimate test and triumph of leadership.   

That spirit of selflessness is well captured in a Civil War dictum for cavalry commanders — “feed your horses, feed your men, then feed yourself” — and in a more contemporary Marine Corps maxim, “the officer eats last.” In the business world, research by best-selling author Jim Collins shows there is a connection between selflessness and organizational performance. His study of 11 firms that had risen from good marks to great performance revealed that they were all headed by “Level 5” executives — company leaders who were unswervingly ambitious for their organization but not themselves.

True selflessness, however, remains one of the most elusive of qualities. We are all too familiar with the far more common force of private interest. Yet it is precisely selfless leadership that allows communities, companies and countries to survive and prosper. In his first inaugural address, on the eve of the Civil War, President Abraham Lincoln urged that the nation’s “passions” be driven “by the better angels of our nature.” 

At the Hall of Heroes ceremony, Defense Secretary Leon Panetta noted that Leslie Sabo’s life course was like that of so many Americans: a son of immigrants who sought a better life for their children. Sabo himself worked at a steel mill and attended college before accepting and embracing his new role in the Army, a role that called for placing purpose first.  

Sabo “paid the ultimate price” to make “the ultimate difference,” and future generations “will walk the earth because of what Les did that day,” Panetta said. Like those before it, the nation’s newest Medal of Honor recipient provides a compelling reminder of what truly makes a difference in the lives of others. And “when someone puts his life on the line for others,” Panetta added, “that sacrifice must never be lost.” 

Note: Michael Useem attended the White House ceremony on May 16, and both authors attended the Pentagon ceremony on May 17.