CEO Master Class

The elegant wood-paneled conference room, once known as the Members Dining Room, in the historic New York Stock Exchange building has been transformed into a multitiered classroom, and every seat is filled with enthusiastic students. In this case, the students are well past postgraduate level. In fact, almost all are current or former chief executives at high-powered companies and their collective wisdom and experience — not to mention net worth — would be the envy of any eager M.B.A. candidate. Amid business legends such as John Bogle, William Donaldson, Reuben Mark and John Whitehead, all eyes are focused on their professor, Dr. Jeffrey A. Sonnenfeld, the much-admired leadership guru who orchestrates the proceedings with the air of a veteran talk-show host.

Sonnenfeld, the senior associate dean for executive programs and a professor of management practice at the Yale School of Management, is actually moderating his 62nd CEO Summit. As president and CEO of the Yale Chief Executive Leadership Institute, he is continuing to build upon the concept of CEO brain-picking that he pioneered more than two decades earlier while a young faculty member at the Harvard Business School. The conference in New York City in June was one of four held each year by Sonnenfeld’s Leadership Institute — two in the United States, one in China and the other in India. A fertile source of income for business schools, consulting firms and media outlets, leadership summits are plentiful, but few have the drawing power of Sonnenfeld’s. He is the embodiment of the successful academic entrepreneur, a rare breed who is able to bridge the gap between scholarship and real-world practice and create a gathering for sought-after C-level executives who jealously guard their calendars.

Jeffrey L. Bewkes, chairman and CEO of Time Warner, for example, is loath to attend most such confabs, but he has appeared at several of Sonnenfeld’s gatherings. Given the disclosure constraints on CEOs of public companies, it is often problematic for them to talk about financial or competitive issues. Bewkes said that the conversations at most of these events therefore tend to be circumscribed or mundane — CEOs listening to themselves talk. “Somehow Jeff overcomes that,” Bewkes said. “He gets people together and stimulates conversations that are not pointless. Business people feel that they are going into a venue which Jeff will make productive and not distorted, which makes it appealing to show up. He has a facility for uncovering the patterns or similarities that reveal themselves across what seem to be unrelated situations and industries.”

At Yale, Sonnenfeld has solidified his standing as a leadership authority with similar skills in the classroom and an impressive body of scholarship and research. His 1988 best-seller, “The Hero’s Farewell: What Happens When CEOs Retire,” established his credentials in the study of leadership succession, and he has been a prolific contributor to The Harvard Business Review and other scholarly journals throughout his career. His 2007 Review article called, “Firing Back: How Leaders Rebound After Career Disasters,” became another well-received book on a subject he knows well. He is a sought-after commentator for his insights into leadership and decision making.

According to Sharon M. Oster, dean of the Yale School of Management, Sonnenfeld’s generosity in sharing both his knowledge and his well-stocked Rolodex with his younger colleagues on the faculty is widely admired. But for Yale, a small, research-oriented graduate business program (there are just 70 faculty and 450 students), Sonnenfeld’s greatest contribution has been in bringing the world of practice into the institution’s orbit. His CEO summits are lucrative, with up to $12 million a year going to the school.

Tireless and passionate, Sonnenfeld fires up the proceedings with his sharp, insightful probing and his detailed grasp of current business headlines. In his June gathering, he grilled Kenneth R. Feinberg about his role as compensation czar during the Wall Street meltdown, just days before Feinberg was named by President Obama to a similar role for victims of the BP oil spill disaster. Sonnenfeld bounced questions off Raymond V. Gilmartin, former CEO of Merck, Austan Goolsbee, one of Obama’s chief economic advisors, Alan Mullaly, CEO of Ford, and Klaus Kleinfeld, CEO of Alcoa. In past summits, he has initiated lively discussions with notable chief executives, such as Michael S. Dell, chairman and CEO of Dell, and James L. Dimon, chairman and CEO of JPMorgan Chase.

Two large video screens display clips of participants being interviewed by CNBC, Bloomberg or Jon Stewart on “The Daily Show.” Humor and irreverence are a big part of Sonnenfeld’s repertoire and sacred cows are tethered at the door. Sonnenfeld seems to know each of the 130 CEOs personally, and many are regulars at Sonnenfeld’s gatherings. High-powered business journalists, such as Geoff Colvin of Fortune, Dennis Kneale of CNBC and Andrew Ross Sorkin of The New York Times, show up but agree to the off-the-record requirements.

Sonnenfeld’s CEO Summits predate just about all the Business Roundtable, Conference Board, magazine-sponsored and even the World Economic Forum leadership events. Most of those gatherings have a certain level of intellectual creativity but also a huge amount of self-promotion, canned speeches and generic platitudes. Much of what gets shared is scripted by public relations firms months in advance.

The chance to interact with counterparts from around the global business stage and sound off in an off-the-record, no-holds-barred environment is enticing. But the real attraction for most of these power brokers is Sonnenfeld himself. “Jeff is sui generis,” said Oster. “He is a force of nature,” added Sandy Climan, president of Entertainment Media Ventures. Most important, he is well prepared. Sonnenfeld and his staff relentlessly research all the attendees so the program moves quickly into valuable discussions. “Most of the people in these summits are gods and goddesses back in their own organizations and industries,” Sonnenfeld said. “But when they come together, they don’t know each other quite so well or at all, and they are a little bit unnerved. Having studied them, I can put them together in panels where there are some less than obvious parallels to be gleaned or some profound paradoxes where people have tried to do similar things in very different ways.”

Sonnenfeld’s forte is to move past the theoretical into a real-time analysis of why and how decisions get made, how leaders respond to crises and how wisdom gets translated into action. He gets CEOs to explain failed or successful mergers and the execution of complicated business strategy. This is the realm beyond academic dissertations and PowerPoint platitudes, a place where real learning and sharing happens. Sonnenfeld, with his uncanny ability to draw upon a seemingly bottomless well of facts and patterns, orchestrates the debate.

“He is extraordinary,” said Reuben Mark, former CEO of Colgate-Palmolive and a long-time attendee. “He makes it his business to really get to know people, and just as he has a real relationship with you, he has that same relationship with everyone in the room. He asks tough questions but in a positive way, and he ranges over the whole business environment with an encyclopedic knowledge. You know you are not going to be held up to ridicule. You rarely see someone operate at that level, which is why the summit gets such great attendance.”

“I just like to listen to him,” added Millard S. Drexler, CEO of J.Crew, who has been to several CEO Summits and speaks occasionally at Sonnenfeld’s classes at Yale. “The first time I met Jeff, I found him incredibly charismatic, smart, quick, totally passionate and totally involved in what he is doing.”

A steady climb over a 35-year career has brought Sonnenfeld into the pantheon of leadership legends like Warren Bennis, Tom Peters, Edgar H. Schein, James Kouzes and Barry Posner. For his part, Sonnenfeld works with the feverish zeal of someone who not only is deeply devoted to his craft but also saw his career implode a decade ago in a bizarre drama. 

Up from Harvard

At 56, Sonnenfeld, with his ample girth, loose shirttails and out-of-kilter tie, has the rumpled air of an absentminded professor. His Yale office is a chaotic clutter of books, videotapes, DVDs and papers scattered across every available surface. A cable business channel drones constantly in the background on a flat-screen TV. The disarray, however, does nothing to diminish Sonnenfeld’s focus and an uncanny ability to call up the minutest details of a business saga. He has advised presidents (he used to jog with Bill Clinton at Clinton’s renowned Renaissance weekends) and leaders of a long list of companies. And he is laser-focused on his mission, with a combination of intellect and fervor that few can bring to the study of leadership.

Sonnenfeld treats everyone he meets with a gracious quality that bespeaks an almost childlike craving to be admired and accepted. Any hint that he may have hurt someone’s feelings or been unkind leaves him anguished until he can reach out and make amends. Having married for the first time at age 47 in 2001, Sonnenfeld has filled his office with photos of his young family — two daughters, ages 5 and 8, and his wife, Clarky, a lawyer who is 18 years his junior.

Raised in Abington, a middle-class Philadelphia suburb, Sonnenfeld came from a close-knit family, but both his parents struggled with health issues throughout his childhood. His father, who ran a clothing store in Philadelphia, suffered several heart attacks during Sonnenfeld’s youth. His mother, an athlete and intellectual, had been temporarily paralyzed after a gymnastics accident when she was 26. Although she recovered use of her limbs, she suffered an unusually crippling form of chronic rheumatoid arthritis that defied treatment. Sonnenfeld spent an inordinate amount of time in hospitals visiting his mother who, with her advanced degrees in biochemistry and French politics, was a steady source of intellectual stimulation. Mostly, Sonnenfeld fell under the wing of his brother, Marc, eight years older, who served as a surrogate parent and mentor. “He was always a facilitator, a problem solver, a person to turn to when crisis hit,” Sonnenfeld said.

Working in his father’s store during holiday seasons to help keep the business afloat, Sonnenfeld still found time to become a standout student and play football and lacrosse in high school. Despite his mother’s ailments — she wore leg braces and was in and out of surgery over the years — Sonnenfeld describes his as a happy childhood. “We were all in this sort of collaborative survival endeavor, trying to get through the difficult Christmas selling season in the store, and it was something we would all rejoice in together.” Intent on a career in medicine, Sonnenfeld was pre-med when he went to Harvard in 1972 and majored in psychology and social relations.

In a stroke of fortuitous timing, Sonnenfeld arrived at Harvard during a renaissance in the social and behavioral sciences. He was able to take classes with and get to know the likes of B.F. Skinner, George C. Homans, David Riesman, David C. McClelland and Roger Brown. “These legends of social science were all still active,” Sonnenfeld recalled. “They were in their waning days of public activity, but they were at a generative stage too. So I worked directly and personally with an amazing collection of behavioral science superstars.”

A course called Human Behavior in Organizations, taught by Jay W. Lorsch, was a turning point for Sonnenfeld. The study of organizational behavior struck a chord. “It was so much fun that I could not believe you could get credit for the course,” he said. Through Lorsch, he also met Paul R. Lawrence, the noted organizational behavior pioneer, who later became a mentor at Harvard Business School. As an undergraduate, Sonnenfeld would join Lorsch and Lawrence at Lawrence’s house for dinners replete with long, mesmerizing discussions about the way organizations worked. The heady company and the excitement of this new avenue of thought refocused Sonnenfeld away from medicine toward an entirely new discipline. Working part time in the emergency room at Massachusetts General Hospital turned the theory into reality.

Sonnenfeld became absorbed with the way Mass General worked as a system. Having grown familiar with hospitals in Philadelphia during his childhood, he had developed a cynical outlook. “There was corruption and incompetence,” he recalled about the Philadelphia hospitals. “My mother had improper surgery done on the wrong hand. They’d leave sponges in her or cause nerve adhesions when they’d stitch her up and catch a nerve. And nobody would take responsibility for correcting it.”

Having seen the failures, Sonnenfeld was awed by the efficiency of Mass General. Working as an internal courier, Sonnenfeld did mostly menial work but saw something cathartic. “There was an amazing sense of pride unit by unit,” he recalled. Moving around the hospital delivering supplies, he saw this same sense of duty and mission throughout the building. “It made me realize that maybe there really was something to this leadership stuff.”

Upon graduation, Sonnenfeld had abandoned any medical school ambitions and decided to focus his graduate studies on the social sciences. He was admitted to Stanford and the University of Michigan but decided to remain at Harvard. He began to pursue dual degrees — a doctorate in social science, and at the same time, an M.B.A. from Harvard Business School.

Always interested in real-world behavior since his days in his father’s shop, Sonnenfeld did extended ethnographic research stints at companies like United Parcel Service of America and IBM. In these positions, he assumed actual managerial responsibilities in order to get a personal glimpse of organizational structures and leadership effectiveness. His stellar academic output led directly to a faculty position at the Harvard Business School, and he spent nearly a decade as a rising star at the hyper-competitive institution. Near the end of his stay, he formulated the idea for a CEO gathering in which leaders would come together and share their wisdom. He overcame the skepticism of Harvard Business School Dean John H. McArthur and persuaded him to begin a pilot program. The dean invited Sonnenfeld to hold the initial gathering at his home, and business luminaries such as Bill Mar-riott, chairman of Marriott International, Ken Olsen, co--founder of Digital Equipment Corp., and Nick Nicholas, then chairman of Time Warner, agreed to attend. But when one of the invitees began pontificating and refused to stop talking, a couple of attendees got up to leave. McArthur turned to Sonnenfeld and said, “See, Jeff. It’s not going to work. You can’t invite CEOs. They don’t listen to each other. They only hear themselves.”

Undaunted, Sonnenfeld was determined to find a home for his leadership summit concept. He was already receiving offers from other schools, including one of full tenure and $7 million in seed money to start his CEO Institute at the Goizueta Business School at Emory University in Atlanta.

Despite being entreated to remain at Harvard, Sonnenfeld headed south in 1989 and began what appeared to be an idyllic stay at Emory. He immersed himself immediately in the school’s culture and became a highly visible and popular professor. Although the promised seed money never materialized, Sonnenfeld persevered and raised the money on his own.

According to Benn Konsynski, an Emory professor who had been a colleague of Sonnenfeld at Harvard, it was Sonnenfeld’s enthusiasm that drew Konsynski and others to Emory. His nascent CEO Institute gave Emory national visibility and drew to the campus business leaders who had until then ignored Emory. The millions of dollars in profits from the CEO Summits were a welcome addition to the school and made Sonnenfeld a star in Atlanta’s higher-education community.

Although Sonnenfeld’s ebullience and young-man-in-a-hurry persona rubbed some the wrong way at the conservative campus — academia is rife with petty jealousies and territorial spats — he quickly became the face of the school. When the deanship of the business school opened up in 1997, Sonnenfeld made an aggressive push for the position, a move he later regretted. Emory’s president, William M. Chace, was not a fan, judging from a “60 Minutes” segment and other reports, and Sonnenfeld did not get the job. When the deanship at Goizueta’s crosstown rival, the Business School at Georgia Tech, became available, the school approached Sonnenfeld.

But before he could even pack up his office at Emory, Sonnenfeld found himself suddenly immersed in a career-threatening nightmare. Just after the Thanksgiving holiday, Sonnenfeld was called into the campus police department, where he was confronted by officers who informed him that he had been videotaped vandalizing Emory’s brand-new business school building. Stunned, Sonnenfeld protested his innocence, but the police told him he had to sign a letter of resignation and agree to stay off the campus or he would be arrested and prosecuted, according to the “60 Minutes” segment on the case. The police showed him the surveillance videotape, which had caught him the night before Thanksgiving in the hallway of the school. The tape, included in the “60 Minutes” piece, showed Sonnenfeld doing a goofy little dance up and back down the hall and along the way, he touched the walls with his foot three or four times. If even a scuff mark resulted, it would have been a lot. To call it vandalism strained credibility.

For Sonnenfeld to lose his position at Emory based on such trifling evidence was appalling, but Chace was not through. He called his counterpart at Georgia Tech to inform him that Sonnenfeld had vandalized the school and resigned, according to an article in The New York Times. On December 3, Georgia Tech withdrew its offer, according to The Times.

“It was an extraordinary pattern of stupidity that escalated beyond reason,” Konsynski said. “The absurdity of the process and the heinous way things were handled was amazing.”

Advised by friends and colleagues to fight back, Sonnenfeld sued Emory as well as Georgia Tech. Eventually, Emory complied with a binding arbitration agreement, and Sonnenfeld walked away with a significant financial settlement, according to colleagues. He is forbidden from discussing the incident publicly, but it is evident the crisis took an emotional toll. For Emory, the fallout was worse. According to Konsynski, Sonnenfeld’s departure left a deep void in Emory’s ability to connect to the world of business practice that has yet to be filled. “The region and the community have suffered ever since from the absence of that kind of traffic,” he said.

But Atlanta’s loss turned out to be New Haven’s gain. Sonnenfeld’s reputation might have been sullied, but word spread about the fiasco at Emory and he was quickly scooped up by Jeffrey E. Garten, then dean of the Yale School of Management.

“To me, this was incredible good fortune,” Garten said. “At the time, the school was in very serious need of more links to the business community along with professors who were scholars with an acute sense of how the business world operated. Jeff was the embodiment of that.” Undaunted by the Emory debacle, Garten made an offer and Sonnenfeld jumped at it. “He was a match to dry wood,” Garten said. “He immediately established himself as both a scholar and practitioner.”

For Sonnenfeld, Yale has meant more than redemption. “I loved it instantly,” he said. “It’s the best of both worlds, and I can’t imagine another university like it.” Sonnenfeld waxes enthusiastic about Yale’s president, Richard C. Levin, as the catalyst for Yale’s current successes. “He is an incredible, intrinsic model of leadership,” Sonnenfeld said.

Levin has been an enthusiastic supporter of the CEO Leadership Institute, according to Sonnenfeld. “He saw that adult learning was a significant, central, core mission of the school,” Sonnenfeld explained. “He didn’t see executive programs as an intellectual backwater as so many schools do. He wanted this to be a high-end outreach, which was pretty exciting.”

For Sonnenfeld, the sense of stability at Yale is palpable. Being within close proximity to New York and Wall Street puts him in a strategic position to cultivate and grow his leadership efforts. Although his frenetic enthusiasm for his work is greater than ever, he has also embraced the calming effects of family life with the air of a man who came late to such joy. He is so devoted to his daughters that he insists on being home to tuck them into bed, regardless of having to rush through airports to catch timely flights.

Of course, that devotion will not stop him from being on a plane or at the New York Stock Exchange early the next morning. “The real story with Jeff is that he is an academic entrepreneur, and there are not many of them,” Garten said. “In the world of business schools, he has done something very crucial — bridge the world of scholarship and the world of real-world practice.” Very few can do it and he does it exquisitely.

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Glenn Rifkin has written for The New York Times, Fast Company, Strategy + Business, and many other publications.

Authors

  • Glenn Rifkin

    Managing Editor, Korn Ferry Briefings