What leadership challenge has sustained or even expanded in the last decade?
How can leaders handle pressure coming from all sides?
What can boards do to optimize values and velocity?
What are 3 questions you’d ask a new CEO?
These questions and more were covered in the lively exchange. A shout out goes to Mark Weinberger who also jumped in—he is the former global chairman and CEO of EY and board member at Metlife, Johnson & Johnson, Saudi Aramco, and JP Morgan Chase.
On leading in a rapidly changing world
Change is a constant. What remains true a decade ago and now is that the world is being profoundly reshaped by unfamiliar and unprecedented forces. Leadership is not just about how we meaningfully respond to headlines. It’s being able to see and respond to the trendlines. And: a trendline leaders cannot overlook is our increasing interdependence.
“Socialism in the epicenter of capitalism, New York City. Or: the largest layoffs ever, even though we’re in a record high stock market. That’s quite a headline. Or the trillion-dollar pay package—and the new Pope weighing in on that. These are the headlines that we can respond to. But leadership is more fundamentally about how we respond to trend lines and passing judgment on the future and charting a purposeful path in that direction. And I think that we are at a moment right now of discontinuous and profound disruption. In the most significant trend line in our lives, the world has gone from connected, to interconnected, to fused. The world is so interdependent that we increasingly and inescapably rise or fall together.”
Interdependence is not a choice. It’s a condition.
The only choice before us, as leaders, is do we want to forge healthy interdependencies with our suppliers, our colleagues, our customers, our communities, so that we rise together and not fall?
“I need to add that we are now interdependent with machines. And one more facet of our interdependence is, and this needs to be said, we are naturally, as people, we get divided. But capitalism is now actively dividing us. There are people making money, literally using algorithms, to put and pit people against each other. This type of interdependence demands a certain kind of leadership…Boards are uniquely positioned and responsible as the occupiers of the most formal authority in any institution for getting leadership right.”
The single greatest leadership challenge of the 21st century
The only way to navigate a rapid-fire, interconnected and interdependent world is to lead not just with formal authority, but with moral authority. Moral authority is a function of who you are, and your virtues, and how you live your values, how you relate to others, how you make decisions pragmatically or with principle, how you have conversations. Moral leadership is fundamentally about working better, together.
“You cannot run and lead an institution—and we are in an institutionalized world—without positions of formal authority. I can’t imagine a country without a president, a high school without a principal, a football team without a head coach, and a company without a CEO. But we are so being disrupted with voices and power that is coming bottom up, and from the outside in, and from the sides, that authority itself has been disrupted. So formal authority, top-down power over people has been disrupted. But without formal authority, we get chaos and no possibility of governance.”
“What makes any institution really work is when individuals with moral authority occupy these positions of formal authority, and in this transparent world, we are seeing how distinct they are. The challenge that boards have to meet is this: How do you nurture a culture of moral leaders who lead with moral authority and ensure that they occupy positions of formal authority? There is an old African proverb, “If you want to go fast, go alone. If you want to go far, go together.” We now need to go far and fast, and the only way to do that is together.”
Measure moral leadership
It’s possible and advisable to add the right metrics to your leadership assessments.
“I’ve asked rooms of CEOs the following question, “You have sophisticated performance management systems. Can you identify your top 24 leaders in your respective organizations?” And, invariably, hands go up. Second question, “With the same alacrity and confidence, can you identify your top 25 ethical leaders who shape the culture and strengthen the character of the firm?” Hands typically don’t go up. “Do you think this interdependent world suggests that we should get an answer to that question?” Hands go back up. So, first, it’s acknowledging that boards have noses in, but fingers off. The most potent way a board can influence the future is by asking certain questions, and then also modeling the most important practice of moral leadership.”
The power of the pause
The pause is one of the most simple yet powerful practices in the HOW community. The faster the world gets and the more that comes at us from all directions, the more important it is to pause.
“When a machine pauses, it stops. But when we pause, we begin. We can reflect on where the world is going and are we prepared to thrive in that world? We can reconnect with our purpose, and our character, and our values. We can rethink some of our inputs, and are they getting us the outputs we seek. We can even rethink our metrics. I believe that what you measure is what you get, but we tend to measure only the how much, how much revenue, how much market share. Are we rethinking our metrics and measuring how resilient, how resourceful, how loyal, how trusting? And, finally, you can reimagine, for example, have we identified what makes us uniquely human? A board should really implement the practice of the pause, because only when we pause can we chart the purposeful path ahead.”
Three questions you would ask an incoming CEO
Questions that are designed to inspire trust in somebody’s character can be incredibly revealing.
“Maybe the first question I would ask is, do you see humility as a superpower? Do you think your job is to try to be certain in an uncertain world or to do the hard work of forging clarity in an uncertain world? And how do you use humility with the board, the executive team, and everybody else to pursue clarity over certainty? That would be one.”
“Second question, do you inspect for trust, or do you engender trust by giving it away? Aristotle taught us that trust is the only legal performance-enhancing drug. That when you extend trust to somebody, oxytocin is literally released in their brain and they reciprocate the trust. So if you want to go far and together, you’ve got to build trust. I would want to ask this individual, how do you put more trust in the boardroom, and the C-suite, with your colleagues and your customers?”
“And, finally, I would want to remind this person that smooth seas have never made a great leader. These are very stormy seas. You’re going to captain a ship in stormy seas that will remain stormy. We’re going to go up and down, because linearity is over. I would want to ask this person, are you prepared to lead in an up-and-down world? And how do you inspire people to see meaning in the struggle to get strong when we’re in the valley? Because that’s when people typically quit and that’s also when the best companies just get going.”
Equipped for the future and the speed business
It’s not values vs. velocity. If we scale values, then we will get velocity. Velocity is direction plus speed. If we don’t know where we’re going, we don’t want to go fast.
“The most important thing that a CEO and a board need to do together is to not just have values, but to scale them by translating their values into observable, measurable behavior. Celebrating the behaviors you want to scale, disciplining the ones that don’t belong, because great countries, and communities, and countries run on norms. It’s not about the few specifying to the many a morality (what you can and can’t do) it’s about what you should and should not do. And values are the only thing ever invented that do double duty: They socialize against what we should not do, and they animate and guide what we should do.”
Listen to the complete and compelling conversation at WSJ.
