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Conversations in Management

Paul G. Hoffman

The essence of genuine leadership is to share power with people rather than display power over people.

Who is Paul Hoffman? In a 1943 article, Time Magazine answered the question this way: “Paul Gray Hoffman is a mild-mannered, mildly good-looking, nonsmoking, teetotaling gentleman of medium size, whose most distinctive feature is a pair of startling blue eyes.” Not a particularly flattering description of one of America’s greatest administrators. At the time he was chair of Roosevelt’s Committee for Economic Development. The committee had been tasked with providing a blueprint for American industrial expansion after the War. The goal was to ensure full employment for demobilizing GI’s when hostilities ended. Hoffman was a good choice. He was both an entrepreneur and a seasoned executive. He began his career in 1911 selling cars in what would become the nation’s largest market—Los Angeles. By 1919 he owned Studebaker’s LA operation and when he was tapped to take over national sales for the company in 1925, his dealership was doing $7 million in annual sales. Ten years after arriving at Studebaker, he became its President and within a span of only three years returned the company from near bankruptcy to robust profitability. But his greatest challenges were yet ahead. In 1947, President Truman drafted a reluctant Hoffman to be the Marshall Plan’s Administrator. It was a daunting task. Not only had Europe been devastated by war, but recovery would require cooperation among nations with long histories of mutual suspicion and animosity. Compounding the problem was America’s war weariness and public doubts about the wisdom of making multi-billion dollar investments abroad. Truman, however, had chosen his administrator wisely. With four years and $17 billion to get the job done, Hoffman wasted no time in getting to work.

The complexities of administering the Marshall Plan were enormous, but years later Hoffman identified four strategies that helped him succeed. The first strategy was to assign responsibility. He penned the oft quoted line, “Only the Europeans can save Europe.” It wasn’t an empty slogan. He put each nation on notice that the task was their’s to accomplish and that they had only four years to do it. Secondly he insisted on team work and cooperation. The United States extracted two promises from the Europeans as a prerequisite for participation in the Marshall Plan. They promised maximum self-help on the part of every country and maximum mutual aid. The third strategy was to actually hold people accountable. When the Europeans delivered on the promise of maximum self-help but ignored the promise of mutual aid by maintaining prohibitive tariffs, exchange controls and import quotas he called them to task. Hoffman told them, “very pleasantly but firmly,” that the barriers would have to come down or the program would end. The countries complied. They did this in part due to his fourth strategy—make your expectations and requirements known. Hoffman may have been mild-mannered, but he was no pushover. He knew that without explicit targets the Europeans were unlikely to put nationalism aside in favor of helping their neighbors. He therefore set meaningful goals and linked them to firm deadlines.

We all know that Hoffman’s efforts paid off. The Marshall Plan was a stunning success. Europe achieved its goals ahead of schedule and below cost. Hoffman’s strategies can pay off for us as well. Responsibility, cooperation, accountability and clarity are sound means of running any project, team or office. Time said Hoffman was, “no world-shaking figure but a man who has done what he intended to do, and done it well.” Not a bad endorsement. With a little determination folks may say it about us too!

—Ebert