Jeffrey L. Bleustein looks more like a rugged biker in search of the open road than a businessman. Today, he’s dressed in a Harley-Davidson shirt, black denim Harley slacks and a pair of Harley riding boots.

“I don’t dress in Harley clothing everyday. There are work days when I do [wear] a suit and tie, but that’s when I’m going downtown to meet the founding fathers of the community,” says the avid motorcyclist with a big chuckle.

During the warmer months, he might roar into work on his Electra Glide Classic once or twice a week. “It’s a fun thing to do and a good way to clear your head, both on the way into work and on the way home.”

For someone who started out as a straight-laced English major in a pre-med curriculum and whose first career was as a prim professor of engineering at Yale University, Bleustein today is caught up in a lifestyle with a rather wild reputation: Think Hell’s Angels. “It certainly doesn’t hurt if there’s a little bit of naughty in the image,” he chortles.

Leader of the Pack

As chairman and CEO of Harley-Davidson, Inc., Bleustein holds the legacy to a unique American success story: Harley has made a stunning come-back from its 1970s-1980s downward spiral, beating back challenges to its survival from quality problems, bankruptcy threats and Japanese competitors. Today, the company reigns as champion of the heavyweight motorcycle market in the United States, with a 46 percent share.

With such an inspiring history, it’s not surprising that the company would be in a festive mood on the 100th anniversary of its founding.

Bleustein and Harley threw the party of the century: In August 2003, some 200,000 bikers converged on Milwaukee’s lakefront park for a frolicking four-day festival full of motorcycles, music and controlled mayhem.

Not even global brands like Coke or Chanel could hope for such an astonishing, yearlong, worldwide — the anniversary was observed in Japan, Europe, Australia, Canada and the United States — branding phenomena like the 100th birthday of Harley-Davidson.

“We are trying to fulfill people’s dreams through the experience of motorcycling,” said Bleustein. “A lot of people aspire to have more excitement in their lives. Harley-Davidson is an aspirational brand and we want to inspire those dreams.”

The Long Road to Success

Such revelry wasn’t in the picture when the affable leader, who holds a doctorate in engineering mechanics from Columbia University, joined the company 29 years ago as vice president of engineering.

During those darkest of days, more than half of the bikes on the production line failed inspections and were sent to holding areas called “hospitals.”

Bleustein experienced the quality problems firsthand the morning after he rode a brand new Sportster model home from work. Overnight, a puddle of engine oil had accumulated on his garage floor.

Bleustein’s engineering leadership led to the redesign of the power plant on the Harley Sportster, making the oil leaks history and giving birth to the critically acclaimed Evolution engine.

On his watch, Harley-Davidson developed innovations such as the belt drive, vibration-isolated powertrains, anti-dive suspension and a total redesign of the V-Twin engine. He modernized engineering practices and improved the company’s testing and product-development facilities. The results of his work contributed significantly to Harley’s survival and subsequent prosperity.

In the midst of the revival, Bleustein and a dozen other Harley executives organized an $82 million leveraged buyout in 1980 to purchase the company back from American Machine and Foundry Co. AMF had owned Harley since 1969 but, according to Bleustein, the parent company had squandered Harley’s reputation and was lucky to find any buyers.

The buyout was no panacea, however. Market share was declining and, like many U.S. manufacturers, Harley-Davidson was challenged by European and Asian firms with superior manufacturing techniques.

“Back then, naysayers said we couldn’t compete in the global economy,” Bleustein recalled. “There were temptations at the time for us to say, ‘Let’s throw in the towel.’ But the cynics were wrong: Harley-Davidson isn’t just surviving; it’s flourishing.”

Master Painter

If leadership is an art, Bleustein is a master painter. Few top executives have the innate teaching, consensus-building and, when needed, “the-buck-stops-here” skills. When asked to describe his leadership style, he laughed, “I’m not sure what the choices are! I’m a little schizophrenic.”

Although, as CEO, he holds ultimate responsibility for decisions, Bleustein believes it’s important to build consensus when dealing with strategy, product plans, major people initiatives and changes in compensation or the incentive system. Consensus is especially critical, he noted, “when you know the implementation [of projects] will be difficult or when it’s an emotional issue.”

He describes himself as intellectually curious and prides himself on finding role models in expected and unexpected places. “Throughout my career, I have always tried to be in a learning mode,” Bleustein explained. “I’ve learned from everyone: name-brand CEOs and the folks on the production line.”

One name-brand executive he holds in high regard is his predecessor, Vaughn Beals, who served as chairman and CEO of Harley-Davidson from 1981 to 1996. Beals taught Bleustein to focus on the good things people do and to turn the “occasional screw-ups” into developmental opportunities.

“I’m forever indebted to him,” Bleustein said. “From him, I learned how to give people a chance to succeed and understand that they need to make mistakes as part of their learning process.”

Shared Power

Some leaders grab for centralized power and control; others like Bleustein distribute it. Harley uses a unique team organizational structure that speeds decision-making at the senior level and gives top managers the opportunity for input.

Here’s how it works: A total of 30 vice presidents are grouped into three broad functional teams, or “circles,” of 10 executives each. These executive circles make the routine business decisions for their respective functional area.

The “Create Demand Circle” broadly includes sales and marketing for motorcycles, parts and accessories. The “Produce Products Circle” includes the engineering, manufacturing, materials, cost management and quality functions. The “Provide Support Circle” includes finance, human resources, legal, information systems, communications and strategic planning.

All three circles overlap to create the Leadership and Strategy Council (LSC), comprising about 10 functional vice presidents from the three circles. Council members are either appointed by Bleustein or elected to the LSC by their respective circle peer group.

“The 30 vice presidents and three circles make most of the day-to-day decisions and are responsible for strategy in their individual areas,” explained Bleustein. “The LSC makes broad long-term decisions affecting such areas as asset allocation, budgets, human resources and the strategic plan.

“I don’t know of any other company with this kind of organizational structure,” he mused.

This distinctive configuration has contributed to Harley’s success by giving a voice to the many rather than the few. The approach yields faster decisions because it eliminated an entire layer of management hierarchy: executive vice presidents (ironically, a position Bleustein himself held between 1990 and 1993).

“The structure is very useful in developing people because executives get to be involved in decisions that affect other areas. It gives everyone the opportunity to see a broader picture and to have a stake in it,” Bleustein pointed out.

The “Aha” Factor

If anything keeps Bleustein up at night, it’s thinking about how to make sure the company isn’t blindsided.

“I focus on the things that are beyond the view of our radar but that could have a very large impact on our life down the road,” he observed.

“I’m looking for ‘aha’ information. I don’t want to be the next IBM that didn’t pay attention to the personal computer market or Motorola that didn’t recognize the change from analog to digital. I don’t want to be forced into a comeback mode. I want to anticipate technologies and social trends before they drastically affect our business.

“I want to read the tea leaves before the tea is ready,” he laughed.

He’s intrigued about what drives young people’s behavior: Are they looking for adventure or individual expression? What’s emerging from the auto industry or the boating industry? What new technologies are being deployed? He scours all of the major business and news magazines for ideas and even will pick up a women’s publication when he visits the dentist’s office.

A recent ‘aha’ experience came when he read a news story about a number of Harley-Davidson riders who took their bikes with them on a cruise ship. When the ship docked, the bikers hopped onto their bikes and rode off and toured the island.

“That was pretty neat,” he said, noting that examples like the cruise ship are interesting ways to build the experience around the motorcycle and grow the company.

Demographic Challenges

Some industry analysts argue that Harley-Davidson faces a rocky future because its baby-boomer customer base is getting old.

The median age of a Harley buyer is 46, compared to the motorcycle industry average age of 38. Moreover, younger riders prefer bikes that are less expensive than the typical Harley.

But Bleustein isn’t worried about the staying power of the motorcycle culture immortalized in such movies as The Wild One in 1953 and Easy Rider in 1969. Over the next two decades, he says, the number of 35- to 54-year-olds will remain fairly stable in the United States.

“There are plenty of young people coming along in Generation X and Generation Y behind the Baby Boomers,” said the optimist.

To cover its bases, though, Harley-Davidson purchased Buell Motorcycle Co. in 1998 to reach younger buyers more interested in race-track-inspired machines than highway touring cruisers. The Harley subsidiary has three models: Firebolt, Lightning and Blast, with suggested retail prices of $4,595 to $9,195. Big Harleys range in price from $6,495 to more than $20,000.

“The key to our future business is to make sure those who are in their prime riding years will find riding relevant and for riding to be one of the things that they want to do,” said the executive.

For future growth, Harley-Davidson is pinning its hopes on new product development, an upsurge in women riders and the branding effect of massive self-promotion events.

“We have riding classes sponsored by dealerships, clubs, rallies, rides, events, apparel and accessories that build the experiences around our motorcycle. That’s how we intend to grow the company,” Bleustein suggested.

Bleustein accounts for some of the strong demand himself. He owns three Harleys: an Anniversary Edition Ultra Classic Electra Glide, a special edition of the company’s first water-cooled V-Rod, and a 1981 Limited Edition Harley FLT. The FLT, one of 13 built that year for the group of 13 who bought Harley-Davidson from AMF, is destined for the Harley-Davidson museum.

The NAM Connection

As a keynote speaker at National Manufacturing Week in Chicago last February, Bleustein shared the 100-year history of Harley’s good times and bad times.

“There is a fascination with the Harley-Davidson story because we went through some very difficult periods and are now flourishing,” he noted.

But he frets that the Chicago audience wanted a magic bullet answer. “There was no magic bullet for us. Our story is pretty basic: Focus on quality; focus on your product; harness the power of your people; and keep your customers informed about what you are doing along the way so they can relate.”

Finding the right prescription is one of the reasons that he thinks the NAM is such a vital organization. “It’s a place where people wrestling with similar issues can learn by coming together and finding points of agreement.”

Also, he values the NAM because it does a great job of organizing, lobbying and communicating issues to different constituencies.

“I think the NAM provides a great mechanism for coming together and speaking with one voice on those issues where we have common goals.”

Brian Moskal is a business and financial writer based in Chicago.