The whole focus on "leadership" is precisely what's WRONG.
"Leadership" means different things to different people -- especially in different contexts.
In business, "leadership" ends up being self-serving. In other words, as an executive I "lead" others to fulfill my own agenda.
It ends up being about self-interest, and not about serving others.
This may end up being semantics, but important semantics nonetheless. The emphasis really should be on TEAMWORK.
Teamwork implies a sense of collective responsibility. That each person isn't just after their own self-interest (self-interest is a given, but for an organization to work properly it needs more than just the sum of self-interested leaders) -- but that they are contributing to something greater than themselves.
That is the fundamental problem with business education and frankly the whole mentality in the business world that has got to change.
In most professions, self-interest is a given (we all want to put food on the table, and between more money/power and less money/power, we would prefer more money/power). However, there is a fundamental ethos that grounds every profession. In medicine, it's about healing and treating others in need - there's a sense of service. In law, there's this fundamental belief in protecting the integrity of our legal system (and that regardless of their billing rates they are ultimately serving the legal system). In education, there is an ethos of shaping young minds / inspiring young people to achieve their dreams. In the military, it's serving your country and fighting for your fellow soldiers. In many team sports, what binds a team together isn't the individual million dollar contracts, but an atmosphere in the locker room where the players are playing for each other.
In other words, while there is self-interest in just about any profession, there is also a sense of selflessness and service to others that is embedded in the ethos of those professions - fundamental assumptions that are either explicitly or implicitly conveyed.
And this is something that is fundamentally lacking in business education AND in the business world. It's basically a bunch of NIMBYs (not in my backyard) where there is ONLY self-interest and no sense of service or contributing to something that is larger than themselves. When all you have is self-interest (I only care for my own little lot), there is a complete lack of collective responsibility, and that's when things break down and when organizations like AIG create such a mess - because if every single person is only responsible for their own thing, than NO ONE is responsible for the whole thing.
It's promising that more MBA types view the importance of this -- it's part of a larger sea change in this generation of young people perhaps that makes me optimistic.
But schools have to make it far more explicit - that business CAN be more than just self-interest. There can be a sense of service.
And that starts with hammering in the concept of teamwork. The "Wiki" mentality. That no one is larger than the group. That no one's agenda or self-interest is larger than the group/organization they are serving. Start there, and moments of leadership will emerge - different individuals will rise to the occasion at different times. And more importantly, those "moments of leadership" will be grounded in the interests of the group as a whole far more than in furthering an individual's own agenda or self-interest.
In a way, this is where Harvard is absolutely wrong (and their focus on "leadership" will only make the problem of self-interested NIMBY-minded grads), and where other schools like Kellogg, Stanford, Duke and Michigan have it right (and hopefully others will follow suit with a more "team-oriented" ethos).
Business schools need to graduate people who know how to SERVE, not how to lead.
Because whether it's business/financial system, global warming, healthcare policy, education policy, or any of the big issues we face today, it takes more than having individual "leaders". It takes a collective effort.