Harvard Business School Working Knowledg e Archive

Leadership in th E-Age: A Talk by Robert Reich

4/25/2000
What does it take to be a leader in the E-Age? Guts, perseverance and an understanding of public ethics in a world of instant communication, according to Robert Reich, former U.S. Secretary of Labor, who spoke candidly to an audience of HBS MBA students in late March. Reich, who addressed the group as part of the student-run Leadership & Ethics Forum, shared some of the more troublesome ethical dilemmas he had encountered. As Reich reminded the students, "You are going to be exercising leadership in a world in which information is much richer and much quicker than ever before. This changes the implicit rules of the game in terms of public ethics."

Robert Reich
Robert Reich

With one hour till air-time, Robert Reich was in a bind.

As the new U.S. Secretary of Labor, Reich was facing the first crisis of his administration. He had just learned that one of his labor inspectors had discovered that a child named Tommy McCoy, in Savannah, GA, was working illegally as a bat-boy for a local baseball team.

The team, the Savannah Cardinals, was a farm team for the major-league Atlanta Braves. And while Tommy's parents and all of Savannah not to mention Tommy himself thought it was a great honor for him to hand bats to the players at games, the team and Tommy were actually breaking the law. The labor law was quite clear: No person under the age of 15 was permitted to work.

When Reich, now a professor at the Heller Graduate School at Brandeis University, related the incident to a gathering of HBS MBA students, as part of the School's student-run Leadership & Ethics Forum, he described the pressure he felt during this first test of his leadership in what was, on its surface, a ridiculous situation.

As his Labor Department advisors, lawyers and staff frantically informed him, ABC News anchorman Peter Jennings was poised to announce on national television that the Department's first act under new Secretary Reich, in the then-fledgling Clinton Administration, was to crack down on an unsuspecting bat-boy.

"One by one we went around the table about what I should do," Reich recalled of that meeting. "'Mr. Secretary,' everyone said, 'this may look stupid, but this is a violation of Child Labor Law. If you do not enforce the law, you and we will have a credibility issue. There are thousands of inspectors who are waiting to see if you will buckle under to the press.'

"'This is a precedent,'" went the chorus. "'If you allow this, tomorrow we will see 14-year-old peanut vendors and 13-year-old parking-lot attendants; there is no shutting that door. Mr. Secretary, be tough, be clear, child labor, demoralizing your troops, sending a signal about the press, buckling under, a slippery slope.'

"Every one of my advisors, staff, and lawyers said, 'Mr. Secretary, you must enforce the law!'"

With ten minutes to go, Reich continued in retrospect, the answer came to him "like a bolt of light."

"I realized I could make this decision, not other people," Reich told the HBS students. "I didn't have to take their advice. The consequences would be on my head. So I looked at everyone, and said, 'This is stupid. This is dumb. The public will think we are a bunch of complete raving fools if we go after this boy. Congress did not say bat-boys could not be employed. We can make an exception. And that's it."

Peter Jennings did briefly announce the story on the air, Reich said, but thanks to quick telephone work to ABC by Reich's staffers the anchorman also added a happy coda: Little Tommy McCoy could keep his job.

Precious assets
"Did I do the right thing?" Reich asked the HBS group. "We had only a certain amount of public capital: Public trust."

Everyone in the Labor Department, he noted, had to be made aware that their job was tackle serious issues, not waste valuable public assets of trust and credibility. And to do that, Reich said, they needed to convince the public through exposing sweatshops and "terrible conditions that are indecent in civil society" that they were working for the public's benefit.

"The more we did that and focused our limited resources where people were outraged, the more our credibility increased," said Reich.

Reich said he learned another important leadership lesson in the process of hunting down dangerous violations of labor law when his department uncovered one particular sweatshop in New York. According to Reich, people were packed together, working for about $1 an hour.

"We found that garments were being manufactured with the label 'Kathie Lee Gifford' after the television star," he said, adding that he learned Gifford had licensed her name to subcontractors working under Wal-Mart.

He phoned her. As he related to the HBS audience, "This is a leadership issue. She was not legally liable [for the sweatshop conditions] just because her name was stitched." Reich's tack was to ask her to join him and speak out in public about the responsibility of major retailers and manufacturers to police themselves and their subcontractors.

"'You, Kathie Lee,' I said, 'can have a much better impact than I.' To her credit, she did exercise her leadership and her political capital to put some pressure on Wal-Mart and its subcontractors to better police themselves."

The law of public opinion
Reich told the HBS audience that such experiences had taught him there is a difference between what is technically lawful and legal, and the larger public and ethical understanding of a certain event or relationship or process. It would have been ridiculous, he said, to use public resources to go after a child. As for Gifford, he told the group, she had had no legal liability to get involved in the sweatshop scandal; yet in terms of acting upon moral responsibility, he said, she emerged a star.

"You are going to be exercising leadership in a world in which information is much richer and much quicker than ever before," Reich told the students. "People will know and can know much easier and faster what you are doing, and how you are doing it.

"This changes the implicit rules of the game in terms of public ethics.

"Their judgments about the propriety of what you are doing will occur whether you want them to or not," Reich said. "It's an open public book.

"Inside your thinking about leadership has to be a consideration not so much about how it will look on the front page of The New York Times but more about how you would feel if your activities were known by everyone with a potential to know."

"This doesn't mean it should change your decision," he observed. "It is related to ethics public ethics not to a formal moral philosophy.

"People may not have a direct financial interest in what you do," said Reich. "But they can affect what you are doing for good or for bad, because they have a sense of what is right and appropriate, and wrong and inappropriate."