Five steps to reclaiming America's economic leadership.

• Author: Loucks, Vernon R., Jr.

Five steps to reclaiming America's economic leadership

True leaders can help U.S. companies contend again for the top spot in world economics. A CEO outlines his schema for reviving the once undisputed competitive edge of American business. There's no shortage of evidence that the United States has surrendered much of its leadership in world commerce. The country is a net importer of high-technology products, as opposed to a $27 billion net exporter as recently as 1981. Foreign funds financed 22 percent of the gross investments (in tools, housing, commercial construction, and so forth) in this country in 1987. And, while the amount of money that Americans had invested in savings bonds roughly doubled from 1960 through 1986, to a level of $93 billion, our national level of consumer credit debt increased 11 times, to a level of $723 billion.

Are we headed in the right direction? Or do you agree with Paul Kennedy, the author of The Rise and Fall of the Great Powers, who believes "the American sense of economic security has given way to a feeling of having lost (our) bearings ... not knowing where to compete or how to compete"?

Indeed, with the figures before us, the situation appears bad enough to warrant real concern. We've gotten flabby as competitors. Too much of our political debate is mandated by the pollsters. And too many of our hopes and plans and appetites are far too short-term. But I am not ready to say that the cycle of American economic and diplomatic decline that Kennedy describes is inevitable. With leadership, the cycle can be redirected, I believe, and the future can be affected by us rather than foisted upon us.

To manage or to lead?

It has been said that management does things right, while leadership does the right things. But the distinction between management and leadership is more fundamental. The two are not mutually exclusive. In fact, they're complementary. But they're definitely distinct, one from the other.

Borrowing in part from John Kotter at Harvard, I suggest that management has to do with all the disciplines of planning, budgeting, organizing, staffing, controlling, and problem-solving. I don't diminish it by any means. It's highly significant work and, if it's done well, it produces consistent and generally predictable results.

Leadership, on the other hand, concerns itself with creating a clear sense of direction, with communicating that vision, and with energizing and inspiring. It challenges people to...