THE RAIN beat down steadily. Occasionally the wind threw great splashes against the executive office windows. The sound brought a smile to Michael Hobbs’s face. It made him reflect on the beating he was taking as president and CEO of a midsize, once-successful, home products company.

Michael had taken over leadership a little over a year ago, and he had instinctively done his usual thing—seize the checkbook and centralize all decision making. He had developed quite a reputation since his MBA program as a dynamic, high-energy manager. His belief was that lack of leadership at the top was usually the cause of a company’s problems. As a hands-on manager, it didn’t take him long to address that void. He was decisive and in charge, ...

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