Why Larry Summers Kept His Job
What's the difference between Larry Summers and other notoriously unpopular executives such as Howell Raines, Carly Fiorina, and Phil Purcell, the just-ousted chief of Morgan Stanley?
Simple: All four people were widely disliked for their brusque and abrasive top-down management style. But Raines, Fiorina and Purcell got fired. And as far as we know, Summers never came close to losing his job.
I was thinking about why that was so as I read a piece on Purcell by James J. Cramer in this week's issue of New York magazine. There are some interesting similarities between Purcell and Summers—and between Morgan Stanley and Harvard.
As Cramer writes, "In the end there is a Willy Loman factor on Wall Street that Purcell either forgot or never learned. Although it is not as simple as 'be liked and you will never want,' as Loman says, the corollary is true: You can't be hated by everyone and prosper. By all accounts, Purcell was hated for his intense arrogance by almost everyone who worked for him. His lack of people skills, Wall Street gibberish for 'he thought he was better than everyone else,' ate him."
It would be too strong to say that Larry Summers is hated by "everyone." But he's certainly hated by enough people at Harvard to make his management of the institution profoundly difficult and, perhaps, fatally flawed.
So why, after the faculty vote of no-confidence, did Summers keep his job?
There are many answers, but the primary one has to do with management structure. Purcell was fired by the Morgan Stanley board of directors, which has some independent figures (one of whom, Laura D'Andrea Tyson, is a former colleague of Summers, and would make a great university president herself).
The Harvard Corporation, the seven-person board with the power to fire Summers, has been stocked by Summers. In hip-hop terms, the Corporation is Summers' bitch. (Though I'm told that newcomer Nan Keohane is a strong and independent figure. We'll see.) It has abdicated a meaningful checks-and-balances role.
Moreover, Morgan Stanley had tangible results that showed that Purcell's leadership was not working: departures of top execs, poor earnings, massive payouts to prevent other departures, etc.
At Harvard, "results" are difficult to quantify. Some people have left under Summers, but not enough to prove anything (Harvard's a tough place to walk away from). And Summers has paid out substantial sums to alleviate discontent—$1 million to Skip Gates, $50 million to women—but few people know about the former, and the latter is couched as an investment in the future.
Of course, I'd argue that you can see disastrous results in, say, the conduct of the curricular review. But on this subject and others, one gets the feeling that the Corporation knows only what Summers tells them.
(Cramer on Purcell: "...Purcell never managed down, just up, catering to the board in a way that made many people...think that he would have to commit a homicide to lose the support of these mostly handpicked bakcers. ...They knew only what he told them, and he told them that all was well and the people who were departing were just sore white-shoe losers—and not of the tough-guy, Notre Dame ilk that spawned Purcell.")
One could argue, I suppose, that Harvard is the world's leading university, so the structure of its corporate governance must be doing something right.
But I'm not so sure that we aren't entering into a phase where Harvard is going to be challenged by other universities as never before—an era where the unresponsive, uncommunicative, insular and secretive Harvard Corporation will appear increasingly anachronistic. And, more importantly, less well-equipped to lead Harvard in the 21st century.
It's a great story. Can't wait to see what happens.
