You can go to school and learn leadership strategies and skills. But if you hope to someday run a successful company, it may be a waste of time and money, says scientist and Pulitzer Prize-winning author Jared Diamond.
As he argues in his latest book, Profit, Prophet, Coach, King: (When) Do Leaders Matter?, released earlier this month, great leaders are neither born nor made. Sure, they’re confident and optimistic and take risks, but they’re almost always in the right place at the right time.
When it comes to determining business success, Diamond argues that circumstances often beyond the CEO’s control, such as timing and location, market competition and regulatory forces, tend to make a big difference between business success and failure.
“The United States is generally a good place to start a business,” said Diamond, professor emeritus of geography at the University of California, Los Angeles, for a variety of reasons, including economic strength, access to capital, and relatively stable systems such as corporate law and safeguards. And in 1930, for example, during the Great Depression that followed the 1929 stock market crash, the United States lacked these qualities, which he says was “not a good year to start a business in the United States.” It may sound somewhat obvious, but the point is that strong leadership only succeeds under conditions that allow it, so it is essential for future leaders and the people and organizations that anoint them to recognize when those conditions are optimal and so leadership skills can actually make a meaningful difference.
“There are many situations in which it is not possible[to be an effective leader]. There are other situations in which it is possible if you have the qualities that business schools claim to teach,” Diamond says. In his previous books, he detailed the impact of geographic location on geopolitical and economic advantage. Notable examples he considers in his latest book include Jeff Bezos, Steve Jobs, Genghis Khan, and Jesus Christ.
Here, Diamond discusses other conditions that increase your chances of success in business and beyond, including higher CEO pay, the most common qualities shared by history’s greatest leaders, and why you need them to motivate people to join your cause.
CNBC Make It: What other conditions enable leadership success across time and space?
Jared Diamond: If you’re the founder of a business, you have more power than if you’ve been the CEO for 37 consecutive terms. For better or worse, the founders often set the operating rules. Another difference is how much authority and discretion you have. In the business world, this is especially important. If you are the CEO of a utility company that is heavily regulated by the government, your freedom (to adopt creative strategies) is limited.
CNBC Make It: And from a founder-successor perspective, do you think founders are generally more effective leaders than their successors, or is it just that it’s harder to change direction further down the succession line?
Jared Diamond: The latter. Founders are in a better position to succeed or fail, to found a good or bad organization. Once a system is established, it is difficult to change it. The institutions that are established, whether good or bad, are likely to continue to exist.
Particularly when your company is in trouble, people who work together can make a difference. (In the late 1970s) Chrysler was in serious trouble, and at that time Chrysler’s CEO (Lee Iacocca), who had been fired (by Ford Motor Co.), managed to save Chrysler. But on average, founders are more likely to make a difference, for better or worse.
CNBC Make It: Corporate boards are increasingly looking for talented leaders who can establish themselves at any stage of a business’s trajectory. As a result, CEO pay has increased, reaching approximately 325 times the average take-home pay of employees in 2025. Are these higher salaries generally worth it, or are they only useful if other conditions such as those described in your book are met?
Jared Diamond: CEOs can be worth a huge salary. Let’s say the CEO of a company you don’t know much about comes to you and says, “Last year, my company made $10 billion in profits under me. So all you can do is pay me a lousy $1 billion.” Well, some CEOs are worth $1 billion and some CEOs are replaceable. There are 37 people who could have done it (with the same conditions and similar skillsets). So when a CEO says, “Pay me a billion dollars,” you don’t automatically agree. Sometimes it’s worth it, sometimes it’s not.
Different skills are required in different settings within a facility, and in some cases these skills are not important and may pay only a modest salary. And sometimes those skills have to be (gained from) the most expensive person around.
CNBC Make It: Is having the foresight to recognize the optimal conditions needed to make a real difference a key skill for successful leaders?
Jared Diamond: That’s right. Being aware of time and place is essential. Other things are important, but if you don’t have the right time and place, you’ll get lost.
For example, Joseph Smith, the religious leader who founded Mormonism, was charismatic. However, Joseph Smith was a charismatic figure in the 19th century, when the United States was growing into an economic and military power. You have to be in the right place, but you also have to have the right qualities.
CNBC Make It: What qualities do you need even under relatively optimal conditions? Do the successful leaders you’ve studied all share certain skills or traits that really set them apart?
Jared Diamond: To succeed in business, you need to be confident, optimistic, and take risks. If you want to do something that has never been done before, you have to take risks and be prepared to fail. For example, Elon Musk… came very close to going bankrupt. Steve Jobs was fired.
To be a risk taker, you may be risk-averse or you may fail. It can be said that people who take risks make a difference, for better or for worse.
CNBC Make It: Confident leaders also find it easier to get people to understand their point of view. In your book, you write about the importance of being able to persuade others to do things they otherwise wouldn’t do. What are some notable examples of such motivational skills?
Jared Diamond: Jeff Bezos is famous for insisting on getting people to do (a job) and if they say, “No, that’s not possible.” (He says): “Just do it.” Elon Musk walked the floor (at the Tesla factory) and told people, “Do it faster.” Both pushed people away. Steve Jobs inspired people to do more than they thought they could, and as a result, people often ended up doing more than they thought they could.
CNBC Make It: It’s true that some prominent technology leaders have a reputation for setting very high standards and harsh criticism when they aren’t met. At least one person, Bill Gates, has expressed regret over his approach. There are obviously many ways to motivate people, but do you really believe this is the most successful way?
Jared Diamond: Is it possible to be a good person and be successful in the business world? Probably, in a small company, yes. My guess is that you’re in a large company. There’s a saying: “Good people finish last.” If you have a large group, it may be difficult or impossible to be the good guy and get 87,000 people to bid successfully.
CNBC Make It: Past successes should also play a role in motivating people to take on difficult or risky challenges, right?
Jared Diamond: That’s true in the business world (and elsewhere). Elon Musk has done some very bold things that others wouldn’t do, and he has a good track record. If you could say to your followers, “I said this was possible, but everyone said it wasn’t possible,” but I was right…so listen. ”
This interview has been edited and condensed for clarity.
