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HBX Business Blog

A Teachable Moment

Posted by Kevin Sharer, HBS Professor & Former AMGEN CEO on November 1, 2016 at 10:52 AM

 Chairman-CEO-John-Stumpf-testifying-before-Congress.png John Stumpf, chief executive officer of Wells Fargo & Co., swears in to a House Financial Services Committee hearing in Washington, D.C., U.S., on Thursday, Sept. 29, 2016. Photographer: Andrew Harrer/Bloomberg

This post is from The Harbus, the news organization of Harvard Business School. Click here to see the original article and here to learn more about Professor Sharer.

Every once in a while something happens in the business world that compels us to stop, take notice, reflect, and learn. Enron’s collapse, the financial crisis, the VW diesel emission scandal, and BP’s Macondo oil well explosion come to mind. The Wells Fargo reputation implosion unfolding now is another example, and it is full of lessons for future and current leaders. Like most truly troubling events, it is a multi-element situation that does not easily yield to a single point failure analysis. Of course CEO and board choices and behaviors are at the heart of the problem, but there are many other elements. Let’s use our HBS analysis and critical thinking skills to dissect the case and see what lessons we can take away.

First, some case facts are in order. Wells was the highest market capitalization and most successful bank in the United States. Wells weathered the 2008 crisis better than virtually all other big banks, and prided itself on being a big bank with small town focus and ethos across its many thousands of branches. The CEO is an experienced, respected, capable, and good person who has been in the job for almost a decade, and by all prior measures has done a superb job. The board has the requisite complement of CEOs, ex-government financial executives, diverse leaders, and a lead director who was the successful CEO of a large, complex public company. The company had solid financial performance and a key goal was to cross-sell the bank’s multiple products to its customer base. Cross-selling metrics were a key performance measure for branch managers and employees and central to their compensation.

Several years ago, it became known that some employees opened, without customer knowledge, fraudulent credit card accounts and in so doing received cross-selling credit. The bank discovered this fraud and over the course of several years fired nearly 5,300 employees or about two percent of the total workforce. The fraudulent activity generated millions in fees, but these were in the main small fees which were inconsequential compared to the banks $20 billion plus annual net income. No senior executive was disciplined nor was any compensation for senior executives affected. The retail branch senior executive was to retire with a full and generous retirement package that has been valued at nearly $100 million in stock and expected pension payments.

Then, things changed! The LA Times published a story, the press picked it up widely, top regulators descended and fined the bank $185 million, and the CEO was called to testify at the Senate banking committee. The CEO at first said the problem was the 5,300 bad apples and not the bank, its compensation system, or the executives in charge. At the Senate hearing, he apologized but basically stuck to his story. He was, in the words of the FT, “savaged” and left with his job in jeopardy. In haste the board then decided to claw back $41 million of his previously granted stock and $19 million from the retiring executive’s package. Some see the board’s action as too little too late and the drama continues as the CEO returns to testify in the House. Stay tuned.

How did this stunning, rapid, and steep descent happen? The first and central problem is that the CEO did not properly assess, understand, accept, and act on the root causes. Why did the bank’s internal compliance system and processes not identify, understand, and present for management review such a pervasive problem?

He should have realized the compensation system and managers were as much at fault as the individuals. Next, he held no senior person accountable including himself. He failed to understand the context in which this would be publically viewed given the deep animosity towards banks that still lingers. He did not take personal accountability and tell the board to take compensation action that had teeth. In short, he did not own the problem and did not understand how it would be viewed. Moreover, he did not take initiative to demonstrate his understanding by experiencing personally real consequences. Simply saying "I am sorry" with no consequences is infuriating to others and smacks of insincerity to any observer.

The board also failed. They also did not properly analyze the situation, push back on the CEO, and take action. The lead director and head of the compensation committee were especially delinquent. Finally, it is likely that CEO and board advisors were involved in counseling this course of action out of perhaps fears about shareholder lawsuits or catalyzing other litigation. If so, they were very short-sighted and focused on avoiding what might have been a minor economic event. This sort of possible counsel instead led to a multi-billion dollar market capitalization loss, a permanent dent in the bank’s reputation, and the possible derailment of a CEO and board. This was a totally avoidable event.

The lessons for aspiring leaders? Look hard to understand root causes. Be sure your systems and processes are alert to and able to surface and interpret patterns of data or behaviors that may signal significant problems early. Be alert to and own your part in the problem. Make sure you hold yourself and others to account in ways that are proportional to the mistake. Understand the context in terms of relevant audiences, their perspectives, and their ability to react. In the course of a career, you will likely have a chance to see if you learned these lessons. Pass the test.

Topics: The Harbus

Speaking Up: The Process and Art of Dissent

Posted by Kevin Sharer, HBS Professor & Former AMGEN CEO on July 14, 2016 at 3:01 PM


This post is from The Harbus, the news organization of Harvard Business School. Click here to see the original article and here to learn more about Professor Sharer.

Our HBS General Management class had just completed a series of cases about decision-making processes. In these cases, time and time again the leader or team had made poor decisions with often devastating results. The class had successfully identified several root causes in each case, but a common thread in the cases was that regardless of the process, it had failed to yield a good decision because the collective wisdom of the group had not been effectively revealed and used.

A student approached me after class. “Here’s the problem,” she said. “We may all hope to be General Managers some day, but very soon we will be in less senior roles. We won’t be the leader, deciding on the process or engaging the team through the process. So, how can we speak up effectively and safely, when we have a difficult message that the leaders have not thought about or, worse, do not want to hear?”

This is a common challenge and is not confined to early-career professionals. Mastering the process and art of dissent is a vital skill for anyone working in a group setting. Effectiveness is often determined by when and how you make your views known. Too often individuals blurt out an ill-formed comment that lacks in logic, facts, or clarity and that is powered by an excess of emotion and alarm. The message is lost in the noise.

Admittedly, this is an extreme example, but in the heat of the moment things can go awry. As with most professional challenges, thinking about the problem in a structured way can help.

Let’s break the challenge into its constituent parts. Each element can be considered, understood, and appropriately mastered for the situation at hand. It’s probably not so useful in a do-or-die emergency situation, but hopefully you will not see that circumstance. In those cases, intuition and gut-based judgment will take over. For the more normal, non-emergency circumstance, five elements are in the mix:

  1. What is the context and decision process?
  2. What is the right time to comment/advocate?
  3. Who are likely allies or opponents and what are their views and power base?
  4. What phrasing or message will be most impactful, considering both words and emotional content?
  5. What follow-up strategy is needed?


Understanding context and the decision process in use should not be too difficult but is often overlooked. In a sense these are the “rules” for how things will go. How close to making the call is the group? What is the history and culture of the process? How important is the outcome and to whom? What is the actual decision process being used and how open is the group to dissent historically? How does the group, and particularly the boss, like to consume information?


Someone said timing is everything in life and, when trying to change the course of a decision, this is certainly true. There are times when an intervention is too early and times when it is too late. Knowing the context and process helps, but there is also art here. Discussion processes can be organic with discussion ebbing and flowing. There are no hard-and-fast rules. When should you take your shot? Too early, your message evaporates in the noise or, worse, you seem brash. Too late or too cautious, the moment passes with no impact. Listen closely! Your experience, the advice of others, and good instincts will all inform your timing.


Creating allies ahead of time and knowing who in the room they might be helps. Equally important is understanding who is in opposition, as well as their logic and history. Without a working understanding of the opponent’s view you will likely not be effective in the moment in answering questions and building your case. If you are in a meeting and do not have a clue on this subject, you are lost. Surprising your boss might happen, but is not recommended. Convincing influencers ahead of time and getting advice is never a bad idea. You might find your boss or other more powerful allies can be more effective advocates for the idea than you. You can support his or her position with analysis and important facts.

The Message

How to get the message across is worth real reflection and preparation. What not to do? Use too much emotional heat, be disrespectful or patronizing to others in any way, give a long-winded spiel, or try to talk over others as we see in TV “debates." It is never a good idea and can be fatal to do anything remotely unethical (i.e. pack facts, misstate, exaggerate).

Make your message logical, fact-based, succinct, genuinely respectful of uncertainties and others’ opinions, and be able to answer the obvious questions or objections. Facts and analytics are important if they bear on your logic and are available. State your views with confidence and clarity in an even tone and do not get rattled or flustered. Again, experience will help and observe and learn from others who seem particularly effective.


Follow-up also counts. At an extreme, if you feel conviction that the group is making a decision that will have truly dire consequences, you may decide that you must share your views outside the work group. In the absolute extreme, you may need to go to the CEO or even the board. This would be a momentous decision that is rare in practice, but know it could be the right decision. Normally, your follow-up is much less dramatic but should be considered. Depending on your conviction, you might want another shot. Again, get your boss’ advice but be prepared to respectfully and thoughtfully appeal. All the elements discussed above are still in play and need to be considered. Persistence can pay off as long as you develop allies, the logic and facts supporting the position are clear and persuasive, your credibility is solid, and you find a time, place, and way for the decision makers to hear. Developing the skill of honest and effective advocacy is a journey but starts with understanding and mastering the basics.

Topics: The Harbus

HBO’s Silicon Valley: Lessons from the Writer’s Room on Leading Successful, Engaged Business Teams

Posted by Jennifer Hurford on May 19, 2016 at 12:43 PM


This post is from The Harbus, the news organization of Harvard Business School. Click here to see the original article.

What could HBO’s Silicon Valley possibly teach you about running a venture? More than you might think.

During a recent talk at the Harvard i-lab, Dan Lyons, author of the recent book Disrupted and a staff writer for the show, shared some behind-the-scenes insights on the process involved in setting a vision for the show, which includes continually coming up with new jokes and generating plot ideas through the — at times tense, at times hilarious, at times boring — brainstorming sessions.

I found a lot of similarities between my own experiences working at innovation and design firm IDEO, and Lyons's description of writing for Silicon Valley. In particular, IDEO’s approach to design thinking and the lean startup mentality are similar to some of the processes — spoken and unspoken — described by Lyons.

Find a “tastemaster” to keep you on track.

Brainstorming can be tough, especially when you are sitting in a room for days with writers trained as standup comedians improvising and building on each others’ ideas. As Lyons described it, it was not only highly stimulating, but often felt like “riding around the world in first class but never getting anywhere.”

As a recent Harvard Business Review article highlights, high levels of collaboration require high levels of empathy, which, as Lyons can attest, can be exhausting. A collaborative work environment requires people to think with each other and see things from the other person’s perspective instead of tearing each others ideas down.

In order to find the gems, the most hilarious jokes, everyone in the writers’ room needed to let the conversation just roam, which often led off to obscure tangents. As Lyons explained, these meanderings needed to be encouraged and not stopped because you never knew what jokes might be uncovered.

But Lyons said key to this co-creating process was having someone who could sift through all the nonsense and decide what to keep and what to forget. What is needed in any brainstorming environment is a “tastemaster” at the top, curating the content.

In a business setting, Lyons’ tastemaster is the combination of the creative tastemaker and the action-oriented taskmaster. Successful teams need both to cultivate ideas from the bottom up, enabling a divergence of perspectives and yet a convergence of ideas which, in the case of a television show, results in a tastefully mixed palette of jokes and characters. For a company, it allows for individuals to feel as if they are part of the process of collectively moving the business in the right direction.

But tastemaster can be a tricky job: How do you tactfully inspire and empower ideas of others without killing people’s inspiration and their desire to contribute, especially when the output of brainstorming often doesn’t make the final cut, in showbiz parlance? Steve Jobs was a particularly adept tastemaster; although he shot down more ideas than he accepted, his process and high expectations inspired his employees to work harder to create products that were innovative, unique, and awe-inspiring.

How did Jobs do that? He got them to believe what he believed.

“We follow those who lead not because we have to, but because we want to. People don’t do what you do, they buy why you do it and what you do serves as the proof of what you believe,” according to management theorist Simon Sinek.

Bottom line: Allow people to share their ideas, but also make sure you have someone who has been accepted as the person who can differentiate the good from the bad without bruising too many egos.

Hire people that make the room “work." Hire for more than function.

At Silicon Valley, the team of writers each had a specific functional role as well as other “unspoken” roles. While it should be obvious that they are all creative and fantastic writers, what was more important to the success of the show was that they could each find ways to add value to the team in intangible ways.

In the Silicon Valley writers’ room, Lyons described various roles people would play. One writer always made fun of himself and others when a joke fell flat, but, most of the time, he was harder on himself. Another writer, for some unknown reason, thought it would be a good idea to live on Soylent for 40 days to simply see what would happen.  His experience led to the creation of lots of content for jokes. There were so many different roles, including one guy whose skill Lyons described as just “making the room work.”

The lesson in these anecdotes is that the function you hire a person for might not always be the place where they add the most value.

Regarding the importance of hiring the right people, Simon Sinek says,

“The goal is not just to hire people that need a job, it’s to hire people who believe what you believe. If you hire people because they can do a job they will work for your money. If you hire people who believe what you believe they will work with their blood, sweat and tears.”

Create a culture of open communication, make fun of yourself, and don’t take it personally.

At Silicon Valley brainstorming sessions, everyone arrived as Lyons characterized it, “with prototypes in hand.” But in the end, you couldn’t be beholden to anything, no matter how clever you thought your idea was. “Strong ideas, weakly held is the name of the game,” Lyons explained.

The way the writers’ room works best is for people to share their ideas and let others build on them using the old improv trick of “yes, and” to further a joke instead of a “no, but.”

The culture that was created also led to a lot of making fun of everyone so that no one personally feels singled out as the one with the idea that got no traction in the team meeting. For the Silicon Valley staff, quantity led to quality. Making fun of everyone creates a culture of psychological safety and allows people to relax and be themselves.

If everyone knows their idea has an equally good chance of being both mocked and accepted, they stop trying to perform and rather let their true capabilities shine, which adds real value to group discussions. Too often in corporate meetings we come in concerned about what we are about to present, worried more about how we will be perceived rather than the actual content we intended to deliver.

Collaboration is at the core of how HBO’s Silicon Valley is created. Startup founders should take a page from this script by welcoming critiques, and learning from them, instead of feeling like failures.

Be intellectually honest with the pros and cons of your business model. Turn the “tastemaster” role on its head and allow your employees to break down your own ideas and innovate with you by establishing an open environment for communication.

And remember to be able to laugh at all your bad ideas.

Topics: The Harbus

In conversation with Jody Miller: Alternate paths to the top (and why “leaning-in” might not be enough)

Posted by Tami Kakaraparthi, HBS Class of 2017 on April 26, 2016 at 10:25 AM


This post is from The Harbus, the news organization of Harvard Business School. Click here to see the original article.

Jody Greenstone Miller is a thought leader on the future of work and the Co-Founder and CEO of Business Talent Group (BTG), the leading global marketplace for top independent consultants and executives interested in project-based work.

BTG was recently named to Inc. Magazine’s prestigious list of the 5,000 fastest-growing companies in America and to the Forbes list of America’s 100 “Most Promising Companies.” Fortune Magazine named Jody one of its ten “Most Promising Women Entrepreneurs” in September 2015. She was also named by EY as one of twelve “Entrepreneurial Winning Women” in North America.

In this interview, Jody discusses her thoughts on alternative paths to reach leadership roles in organizations and how traditional work models are propagating the gender gap in leadership.

Tami Kakaraparthi (HBS ’17): I want focus on a few primary areas today. First, the future of work and how you imagine that; second, the women’s leadership gap; and third, any ties you see between the two. Before we dive right into those topics, I wanted to get an understanding of why these areas became your focus. What brought you there?

Jody Miller: Early on in my career, I ran a company and loved it. Then I had my daughter, and I didn't know how to run a company the way I was required to do it and have the kind of relationship I wanted with my daughter. That's what drove me to look at this and think, is it possible to do it differently? It was really the drive to create an option that I just didn't feel existed in the world.

When I look at why we have such limited progress, I think it has to do with the fact that most women are not willing to make the kind of sacrifices that are needed today if you want to rise to the top of your organization.

The company I created, Business Talent Group (BTG), tries to create alternate career options for people that are different than what is currently available in the world. Our mission is to create a global platform for high independent talent to do project-based work.

TK: Could you tell speak more about what these alternate options look like?

JM: When you think about work, you have to separate flexibility from availability from absolute workload. Those are three totally different concepts, and all of them, in my opinion, have to be available.

For example, inside BTG we allow anybody, but most significantly our leadership, to work less than forty hours a week if that’s what they want and not penalize them. We are structuring the job so it can be done within the shorter hours, which means thinking about and dividing up the role differently. Or one might take an intensive project, work sixty or eighty hours a week and then take four months off once the project is finished. The problem is that currently, we don’t have models that allow people with different work requirements to rise inside of organizations.

TK: Given the labor supply in the current market, what would be the incentive of the company to completely restructure job roles and shift their mindset?

JM: There are several reasons companies should try this. Firstly, the way we manage today is lazy. This new model requires a much greater skill of a manager because everything has to be thought out in advance.

The archetype of a company in the twentieth century was a pyramid structure where everybody stays for many years and goes up. In the twenty-first century it’s going to look like a puzzle. People are going to be coming and going, there are going to be different shapes, and management will be about aggregating talent from a lot of different sources.

Once you go through this, it is much better for the company because there is more precision in assigning the right people to the right projects and hence more discipline about work and productivity metrics.

Number two, I think the talent shortages that are coming are real. Companies are going to have to change the way they think about work in order to attract enough of the people that they need at the higher levels. I think three populations that really are in the bulls-eye: women who are getting more education than men, millennials who expect more fulfillment from their careers, and baby boomers who will only come back in on different terms.

TK: You have once said, “Women don’t like to lean in because they don’t like what they’re being asked to lean into.” How do you think the traditional work structure is holding women back?

JM: I don’t think women who are professionally successful have a problem with leaning in. We all know how to lean in. The reason you don’t have more women in the top is that there’s only one model of success, which requires an enormous sacrifice to everything else in your life.

There are many men who decide not to do this either, so it’s not just women. The men who decide not to do this don’t talk about it because there are enough men who decide to do it that they’re the ones taking all the slots.

In my view, there is nothing wrong with talking about bias, but that alone is not enough. To really solve the problem, there have to be different paths to the top. It is a fundamental disconnect between the ability to imagine someone at the very pinnacle of an organization, but reaching that pinnacle through a different path.

TK: Do you think asking women to correct for biases could have negative consequences?

JM: I think if women are constantly being put under a microscope and being told, “people don’t like your voice, people don’t like you,” it could have negative consequences. Constantly telling women about all the things holding them back, that they can’t control, doesn’t feel positive to me. What is your choice?

The attention on this problem is good. But the fact that the conversation has been almost entirely focused on either women needing to be more aggressive or the unconscious biases that exist in society have limited the progress we have made. Even if both of these issues are solved, I still don’t think you would close the gap enough.

We would be better off spending time on truly making the institutional changes at work. It’s like politics. Political coverage is almost entirely about the horse race and very little about what’s really going on to solve our problems because it’s a lot easier and sexier to talk about the horse race.

If we don’t tackle the third leg of the problem, which is truly making alternative paths to the top, we will not see fundamental changes occur.

The saving grace is that demographic changes force companies to make these shifts. Demographic changes give leverage to the people who want to do it differently. While we are not there yet, it will happen, just that it will take longer to happen that it should.

TK: Would you have any suggestions on what we, as business school graduates, should focus on in our careers over the next five or ten years, to make sure that we position ourselves well?

JM: First, coming from a business school gives you a huge advantage because Harvard is among the best markers of credibility. Beyond that, I think it’s important to get experience for the first few years in a really high-quality professional environment. It will train you to be a professional and help you forever.

After that, keeping your eye on the new trends and getting exposure is probably the best single thing you can do. It’s important not to get complacent in the fact that you’ve got a secure job. Make sure you’re in the flow of the next generation of innovation; otherwise you’re going to become a highly paid expert on something that doesn’t matter anymore.

Jody’s thoughts are a refreshing take on problems that are especially relevant as we make important career choices. The first step to changing the fundamental structure of current work models is to challenge them, and we at HBS are very well poised to start instituting these changes and helping shape the way professional roles and the workplace overall will look in the future.

Topics: The Harbus

The Mindful Athlete: An Interview with George Mumford

Posted by Karan Kumar, HBS Class of 2016 on March 17, 2016 at 11:13 AM


This post is from The Harbus, the news organization of Harvard Business School. Click here to see the original article.

Michael Jordan credits George Mumford with transforming his on-court leadership of the Bulls, helping Jordan lead the team to six NBA championships. Mumford also helped Kobe Bryant, Shaquille O’Neal, Lamar Odom, and countless other NBA players turn around their games. His successful techniques are available for everyone to learn in his book, The Mindful Athlete: The Secret to Pure Performance. His proven, gentle, but groundbreaking mindfulness techniques can transform the performance of anyone with a goal, be they an Olympian, business executive, or artist. 

Karan Kumar: How does one attain performance under pressure? What do you tell the athletes you work with?

George Mumford: Just like any other machine, our mind and body works according to certain laws. With the necessary awareness of how these laws operate, one can gain control over one’s inner faculties and open doors to living a joyful life. Being successful in anything requires having the necessary right inner climate and mindfulness techniques help create that.

KK: Your book, The Mindful Athlete, talks about five superpowers to find joy and success in sports and life in general. Can you tell us a bit more about these?

GM: These five principles – Mindfulness, Concentration, Insight, Right Effort, and Trust – are my spin on Buddha’s Eightfold Path. These principles are like spokes in a wheel: take one away, and the wheel doesn’t turn. Each of these can be imbibed in one’s life using ancient techniques and thus open a path of living a deep life. But on an every day basis, just watching one’s thoughts and actions without judgment can be a powerful way to begin the journey of self-transformation.

KK: How important is intention to achieve goals?

GM: Intention drives everything. Buddhism strives for having the right intention. If the intention is motivated by selfishness or greed, it will create suffering. If its motivated by generosity, loving, and world at large, it would create joy and happiness. The golden rules of living an effective life are timeless and don’t change.

KK: Most of us would have high stress jobs when we graduate. How can we maintain calm and perspective in a high stress environment?

GM: When we don’t know how things work, we get anxious and stressed. The only way to live a full life is to know how this mind and body work – that would help us live our lives based on reality, and not illusions we keep on cultivating through our mind.

The most powerful way to avoid stress is to remind oneself that mind is an exterior entity, and not the person itself. This powerful difference can help create calm within the system. We get too attached to the mind and the situation and get stressed. A good way to experientially create this difference is through practice of daily meditation. Simple daily practices such as practicing three conscious smiles; reminding one about three things one is grateful for also can dramatically reduce stress levels.

KK: People often wrongly confuse meditation with religious connotation or simply something that is for the “weird." What do you think about this opinion?

GM: Religion and meditation are very separate things. Meditation is a spiritual practice and religion is a set of doctrine of looking at things in a certain way as prescribed in a culture or a religious book. It is the business of “believing." Meditation is a powerful way to connect with your inner self and become open-minded and less judgmental in life.

KK: Can you share some simple mindfulness techniques that we can practice everyday?

GM: Before you begin to exercise or do your physical activity, take five minutes to be still and practice being conscious of the space between stimulus and response. Stop what you are doing and return to your breath. Stay in the calm center. Respond from the center of the hurricane, rather than reacting from the chaos of the story.

Another effective way to be really conscious of yourself is to experience your breath when you wake up. Notice how your body is feeling. Breathe in and out. Be conscious of how the body is making contact with the mattress. Stand up and take a couple of breaths. Let the breath nurse you. Feel the presence of your body and its relationship to the space around you. Say to yourself – I am here now and I am going to do this today. Ask yourself how you feel? Just pay attention.

Topics: The Harbus

Professor Kevin Sharer: Listening is Underrated

Posted by Kevin Sharer, HBS Professor & Former AMGEN CEO on February 25, 2016 at 10:33 AM


This post is from The Harbus, the news organization of Harvard Business School. Click here to see the original article and here to learn more about Professor Sharer.

When we think about “Leadership” we think about action. The word is kinetic. What verbs come to mind? Decide. Choose. Inspire. Speak. Allocate. Risk. Win. Here at HBS, where our mission is to develop leaders, we reward these actions explicitly through the practice of assessing class participation as half of the grade. We expect you to analyze, speak, judge, and share every day.

What about listening? Did anyone come here with the goal of improving their listening skills? Probably not. But in my experience, careers are too often derailed by a candidate’s inability or unwillingness to listen.  As leaders, how can we expect to be effective negotiators, counsellors, team members, collaborators, decision makers if we are not exceptional listeners?

I think about listening as both offense and defense. Offensively, we can listen with purpose and curiosity in order to gain insight and opportunity. Defensively, we  listen with an awareness that truth is often below the surface or even contradictory to the words being said. Through defensive listening we better navigate the often danger-filled jungle of our business and personal ecosystems.

Like leadership, we must work throughout our careers to hone our listening abilities.  We can all get better, but it is especially urgent that those of us who are Type A personalities to resolve to develop this talent. It’s not innately our strong suit. In a more positive sense, being a truly good, complex, and sophisticated listener will help you recognize and understand things lost to others and give you a career advantage.

Let’s consider three different contexts in which listening skills are progressively more challenging: one-to-one, one-to-many, and one-to-ecosystem. 

Listening to one person seems easy. Maybe not. A little listening hygiene is in order. No multitasking! Clear your mind of competing thoughts: that text message, plans for the weekend, the case you haven’t yet read, the unpleasant handoff at daycare this morning—you get the idea. Now you are listening, but please stop plotting your next response, judgement, argument, or objection and just listen for comprehension. This need to prepare the ground by eliminating distraction and deciding only to understand is a massive shift for most of us. Give the person you are listening to your full attention and at first only ask questions to understand rather than argue, or convince. Listening with full attention and for comprehension conveys your respect in a powerful way, and the other person will be encouraged to share more completely in the psychologically safe atmosphere you have created. You are not in class competing for airtime. You are seriously connecting and receiving concrete information, personal experience, and shared intuition.  

As valuable as the words are, they are only part of the communication. An experienced leader at the end of his executive management days said he started listening to body language at least as much or even more than the words. This focus gets more important as you are more senior when others will be trying very hard to meet your expectations. They will be ever so careful in language but their body will reveal truths they might not want to share explicitly. Once you have listened it can be useful to share what you heard in a respectful and thoughtful way, making sure you understand and to demonstrate that you wish to open the channel further. Sincere questions along the lines of “did I miss anything?” or “did I get it right?” are powerful if asked with sincerity and respect.

Listening to the room (one-to-many) is more challenging. There is more noise and many more messages coming at you. The room could be your small team, your colleagues and boss in a meeting, the audience for your presentation, or your C-suite team when you are CEO. The same basic principles apply, but there are more musicians and the music is harder to understand. Watch for patterns. Who speaks, who is paying attention, who is distracted or annoyed, where are the knowing glances among individuals? What does the emotional temperature or energy level feel like? These are all forms of listening. Be sure you know as much as possible about the biases, beliefs, alliances, history, and priorities of those with you. Only by listening to and understanding all these elements can you hope to be a full and effective actor in the dynamic of the group. As you grow in seniority, fight the tendency to dominate.  Respectfully ask people what they think and mean it. Avoid dumb close out comments like “so we all are agreed?” Talk about a stop listening move, but it is a more popular tactic than you might imagine. If someone is clearly not comfortable, seek them out after the meeting. The point is to understand the individuals, the alliances, and the group. Otherwise, you have not fully listened.

Let’s turn to the last and most complicated context, the ecosystem. Now we are in the major leagues. The ecosystem refers to the entire environment which includes your boss, the culture, opinion leaders, customers, competitors, the press, your team, the entire staff if you are CEO, shareholders, regulators, and the list goes on. We are talking about the totality of your environment. The first big idea is to recognize you need to listen and that no news is most definitely not good news. As you progress in your career, you will necessarily listen to a larger and larger portion of the ecosystem until as CEO you will need the widest possible scan. You will rely on others to keep you informed but, unfortunately, no system of reports, processes, or formal routinized steps will ever give you the full and timely picture. You need to know this and be alert and curious by having a sense for danger and knowing that small or isolated signs often foretell much bigger issues. Trust your instincts and follow up with a bias for action rather than complacency.

Knowing that any system is inadequate, you must design and operate the best set of processes you can.  Realize that the results will be summary level and retrospective in nature, so go out and hear for yourself. Test and supplement the output of the formal system. Know the top ten shareholders. Go on rides with your sales reps. Walk the factory floor with the first line supervisors. Know and understand what your critics are thinking. Ask penetrating questions in surveys and personally read the comments. The big idea here is to supplement and test the macro with your own recent, granular, and relevant micro. One last ecosystem listening thought:  make it easy for those that might be reticent to speak to be heard and listen to them! This group certainly includes people who have valuable information for you about you. Useful information can be quite uncomfortable, even humbling, but be confident enough and brave enough to encourage and welcome this gift of feedback and coaching. We also listen best to those we respect and trust, and my best advice is to empower a skilled HR leader for this most important source of unvarnished input.

Someone once said we learn by listening rather than talking, but they did not tell us listening was so demanding and vital. The reward is more than worth the effort. By the way, your life partner, children, and friends will really appreciate and respond to your growing skills as a listener.

Topics: The Harbus

Boeing Chairman Jim McNerney on Leading, Learning, and Growing - as a CEO and an MBA

Posted by Greg Laudick, The Harbus on December 23, 2015 at 9:08 AM


This post is an excerpt from an article originally posted by The Harbus. To see the full interview, click here.

Greg Laudick (HBS MBA 2016) sat down with Boeing Chairman Jim McNerney for an in-depth conversation about building a successful career from MBA grad to CEO. The conversation has been lightly edited for clarity and brevity.

Greg Laudick: What do you wish you knew when you were 30 that you now know today?

Jim McNerney: When I was 30, I thought it was more a matter of design on how you motivate people and how you pay them, but people want more than that. People want career growth. They want to be part of an ethical organization. They want to be part of an organization that’s doing important things. I’ve learned that is as important a part of the Boeing story when I’m talking to people who are going to join or are part of the organization. It’s more holistic.

Forty years ago it was sort of a transaction between an individual and a company. Today, it’s more of a merger. So, it’s a more holistic discussion and a more holistic set of things that motivate people, and so I pay more attention to those things. Are we an ethical company? Do we care about the environment as well as do great things and important things? Do we care about people where they live and how they live? It’s a different environment today that I probably didn’t appreciate as much at 30. A sign of the times when I was 30 but also a sign of youth.

Greg Laudick: Throughout your career, you've likely seen many people's careers go off track. If you were speaking to a newly graduated Harvard MBA, what would you advise them to look out for and how would you advise that they try to avoid those derailers?

Jim McNerney: Staying in one function or one location, while 30 percent of the time is good because that’s what people want, 70 percent of the time is not good. Diversity of experience is helpful. Insularity is always a problem, whether you’re in a job for too long or you’re in a function for too long. It hurts your ability to interact with the outside world.

I think there are other human traits, like self-righteousness. You can’t always be right and be part of an organization. You have to make other people right as many times as you’re right.

Greg Laudick: How do you look at balancing being in one function and development expertise there versus getting a breadth of experience?

Jim McNerney: It depends on the potential of the person. For a person who can eventually be a significant leader in your organization, the test is not have you mastered something. The test is have you shown the ability to do it. Are you on a trajectory that you will master it quickly but then enable you to move and then move again? And then you want to make sure they have the diversity of experience that will allow them to stitch it all together when they’re in jobs that ask them to integrate all of it. The value of them being to integrate it exceeds the value of mastering any one of them now.

Greg Laudick: In the 787 program, you inherited a lot of challenges and really turned it around. What are maybe some of the big challenges that you've faced in your career. What have you learned and how did you overcome them?

Jim McNerney: In the case of the 787 we overestimated our ability to manage risk on the technical side and on the supply chain side. Fortunately, we built the right airplane. We had the right competitive thought and we had the right product thought, but we let that dominate the discussion, and we had some immature technologies, and we overestimated the capabilities of some of our supply chain. It’s one thing to see something on paper. It’s another thing to understand the risk associated with it, and, therefore, the variability of outcomes. It’s very hard, but we were not as good as we should have been at assessing risk. But we did a great job of assessing opportunity.

I would say many times that is the general management challenge: understanding underlying risk. That gets down to not only understanding the people and the technology but also to asking questions that probe at the distribution of outcomes, not just the mean. That was not done rigorously enough in the case of the 787.

Greg Laudick: I can imagine as CEO, everyone's trying to meet your expectations. How do you, in addition to asking the probing questions, really get to the truth?

Jim McNerney: I think it’s the culture you can set in place as CEO. If you have a culture where everybody knows there’s only one answer when you walk into a room, you’re going to get that answer. I’ve always thought that when you’re creating something new, whether it’s a new product or a new idea, there always needs to be two processes. There needs to be a process where concepts are developed and a second process where concepts are committed to. The commitment is when you’re building plants, you’re assigning engineers, you’re spending the $100 million a month to get it going. That’s commitment. In that world, you don’t want a lot of discussion.

In the development world, you want nothing but discussion. Only one out of 10 ideas are good. You’ve got to be willing to tolerate the messy iterative  discussion where people can put up their hands and feel free to say, “Hey, you guys are crazy.”

It’s when you start with the answer, which is the second process, and then demand it from the people who are in charge of creating it in the right way that you get the wrong answer.

Greg Laudick: What would you say you learned about yourself, your leadership style and your capability to lead through these challenging situations?

Jim McNerney: I think with more experience, you become a little more tolerant in one way and a little less tolerant in another: a little less tolerant in having high expectations of the people that work for you, but a little more tolerant of letting them find their own way to get there. I think good leaders have very high expectations for people but also figure out a way to give them the tools and inspire them to reach for those expectations. You don’t find that in very many people together.

You find inspirational leaders who don’t have the same set of goal orientation, and then you have unreasonable goal setters who just won’t spend any time with you. They’re not willing to walk the talk themselves. So it’s about being more tolerant of the many different ways to roam and investing in people to get there but remaining very high in your expectations of people. A good leader has both of those. It is the hardest thing to find in one person. I think over time I’ve just become more convinced that the blended leadership capability is critical.

Greg Laudick: Do you have any advice for MBAs entering the workforce on finding mentors?

Jim McNerney: Mentors don’t just happen. You create them. I think my message to the readers would be you create mentors with your curiosity, and you don’t create a mentor by just walking up cold and saying, “Will you be my mentor?” You create mentors by being open, curious, asking questions, performing well. Do that and people will want to help you.

Topics: The Harbus