Editor’s Note: The Meaning of Excellence

The word excellence comes from the latin term excellere, meaning to stand out or be distinguished. But the idea of excellence goes back to ancient Greek mythology. Arete, the goddess of virtue and excellence, inspired heroes such as Heracles to avoid the quick path to personal glory and gold offered by Kakia, the goddess of vice, and instead use their strength, bravery and wit to overcome the toughest challenges with the goal of making the world a better place. The idea of excellence was about in modern America, we often idolize people who come up with new technologies or business models. These individuals build companies that are propelled by the turbulence around them or are generating the forces that disrupt markets, and sometimes they make lots of money quickly.

But our most respected business experts look at great business leaders much as the ancient Greeks regarded their heroes. Leadership-behavior pioneer Peter Drucker, for example, said management was a noble calling because it was about running institutions, whether for profit or not, that are essential to a free society. Good management, he argued, was not simply about making our economy more productive; it was also about providing moral leadership, about making society more humane.

Toward the end of his life, Drucker despaired of a business culture in which management success was determined by an executives salary, which, in turn, was often based on short-term profits. I expect Drucker would have been disappointed with Boeing for risking its reputation as a great engineering company to go after short-term profits by outsourcing the production, engineering and design of major segments of the 787 Dreamliner. Now, the company is raising dividends and buying back stock to bolster short-term profits and boost executive salaries. It risked its future by threatening to move production of the next-generation 777 to a state with no experience building commercial aircraft.

For Jim Collins, author of Built to Last, the truly great leaders are those who create institutions and imbue them with cultures and values that give the organization a sense of purpose and values that go beyond the ups and downs of the business cycle. Collins argues that the best of those organizations take care of all their stakeholders. They are empathetic toward employees and work well with their communities even as they serve their shareholders effectively.

We salute the executives honored in this years Executive Excellence Awards issue (page 29), who take into account not just the bottom line but also the broader environment in which they operate. While we understand that Boeing faces competitive new challenges, we also hope the companys next CEO will realize that true executive excellence involves understanding that the future of a company is closely tied to the well-being of its employees and of the community in which it operates.