Leadership meltdowns are suddenly everywhere, and I confess I can’t take my eyes off them. Like car crashes and reality TV, they’re not necessarily edifying, but they’re hard to resist. So let’s see if we can find at least a little to learn from this morning’s Leadership Hall of Shame:
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-“Chaos” is the word of the day, used by virtually every media outlet to describe House Republicans’ situation. Representative Kevin McCarthy—whom I unaccountably called “Murphy” yesterday, for which a thousand apologies—dropped out of the race to succeed Speaker John Boehner, in which he was the favorite. “We need a fresh face,” he said, which is Washington code for “I don’t have the votes.” All eyes now turn to Paul Ryan, who could apparently win but resolutely does not want the job. The leadership failure here is not individual but party-wide—this party wants to win the White House next year but is digging itself into a deepening hole. As longtime New York representative Peter King told the New York Times, “We have to end this. We look absolutely crazy.”
–Michael Horn, head of Volkswagen Group of America, testified to a House subcommittee yesterday that he knew nothing about the “defeat device” software that let Volkswagen cars pass emission tests they should have failed. That’s not hard to believe, and he was properly contrite and apologetic. The problem is that, like other VW officials, he seemed most concerned with establishing his own innocence and that of top management. “To my understanding this was not a corporate decision,“ he said. “This was something individuals did.” And he may be right. But the best leaders step up and take responsibility for what went wrong, even if they weren’t involved. That’s in the definition of leadership. The real criticism probably applies to CEO Matthias Müller, since Horn was most likely speaking according to instructions from HQ.
-Brazilian president Dilma Rousseff, already widely unpopular, looks even weaker today than she did on Monday. A court has allowed a lawsuit to proceed seeking to annul her election last year over allegations of illegal campaign funding. In addition, a government agency reported that her administration had falsified the country’s 2014 fiscal accounts, a potentially impeachable offense. It’s still unlikely that she’ll be forced out of office, but her ability to lead is dwindling to near zero. The real issue is corruption, a huge and intractable problem in Brazil, and Dilma’s refusal to take it on. Maybe that’s asking too much; maybe no politician can try to clean up corruption and survive. We’ll never know until someone tries.
-The Sepp Blatter saga has become ridiculous. On Thursday, FIFA’s independent ethics board suspended Blatter, FIFA’s president, for 90 days as Swiss authorities investigate him and others for corruption. Let’s see, that means his suspension would end on Jan. 6, and he has said he will step down in February. So the governing body of the world’s most popular sport, and a huge global business, is leaderless for three months, and then Blatter comes back for a month, and then he leaves again. That can’t be the real plan, but maybe there is no real plan. Good leaders like good governance, and FIFA hasn’t had good governance in decades.
What We're Reading Today
Bill Gross sues the fund he founded
In a suit against Pacific Investment Management Co. (Pimco) and parent company Allianz SE, bond king Gross seeks "hundreds of millions of dollars" over wrongful termination last year. Gross claims a "cabal" of executives forced him out in order to keep his $250 million bonus. Pimco denies any wrongdoing. CNNMoney
DraftKings CEO speaks out
Current Fortune cover guy Jason Robins defended his company's status as purveyor of a game of skill, which allows daily fantasy sports to operate legally as a non-gambling activity. Robins has been on the defensive following news that an employee may have used inside knowledge to win $350,000 on opposing site FanDuel. Although his company has faced much public scrutiny in the scandal's wake, Robins has been out front addressing the problems, banning all employees from playing daily fantasy games and hiring a law firm to conduct an investigation. Fortune
SABMiller bid hinges on Colombia's wealthiest family
The Santo Domingo family, headed by Alejandro Santo Domingo, is the group that Anheuser-Busch InBev CEO Carlos Brito has failed to court while offering over $100 billion to purchase SABMiller and merge the world's No. 1 and No. 2 brewers. Holding out for more isn't an unusual tactic for Domingo, and the family is "calling the shots" on whether a deal gets done. WSJ
Regulators looking at 2nd Volkswagen program
In testimony to the House Energy and Commerce subcommittee, Volkswagen U.S. head Michael Horn said he did not know about the efforts to subvert regulators and reiterated that it may take years to fix all the vehicles. He also informed Congress that Federal and California regulators are looking at another computer program in Volkswagen cars that might have modified emissions performance. NYT
Building a Better Leader
Equality in the C-Suite may take longer than 100 years
Facebook COO Sheryl Sandberg's forecast for gender equality may be too hopeful. Fortune
It's okay to be a little selfish
People procrastinate less if they're working on projects they care about. Quartz
Watch out for more time sheets
Many salaried workers will return to filling out time sheets as new overtime rules kick in. WSJ
Succeeding The Speaker
McCarthy removes his name from consideration
Kevin McCarthy claims he didn't want his bid to disrupt the committee investigating Benghazi, but he was told in a closed-door meeting with Republicans that he would not get the 218 votes needed to gain leadership. His decision has created chaos among GOP representatives. Now there's no one clear leader for Speaker, and John Boehner has said he will remain in the House until his party can name a replacement. Washington Post
Boehner begs Paul Ryan to step up
Shortly after McCarthy's announcement, Boehner called Wisconsin Representative Ryan to ask him to take over as Speaker. Ryan said he would not seek the Speakership, but he continues to remain the only figure that all factions seem to support. His reluctance signals that maybe even he can't resolve the conflicts that forced Boehner out. Talking Points Memo
Republicans to gather
House GOP members will meet today to try to lay out an orderly succession plan. Florida's Daniel Webster and Utah's Jason Chaffetz remain in contention if Ryan stays on the sideline. NYT
Up or Out
Banana Republic has parted with creative director Marissa Webb, though she will remain as a creative advisor. WWD
Fortune Reads and Videos
Starbucks will soon begin accepting ApplePay
But not until next year for most stores. Fortune
Lyft teams with Hertz, Shell
Lyft riders can now earn free gas and lower car rental rates. Fortune
Goldman Sachs will tweet out earnings
The firm could reduce leaks by not releasing financial results through a third party. Fortune
Jawbone has plans to design a health tracker...
...that you swallow. Fortune
Birthday Wishes
British Prime Minister David Cameron turns 49 today. Biography
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