Read an Excerpt
1
Humility
You're Not the Smartest Person in the Room
At a Bower Forum meeting held in Frankfurt, Germany, the CEO of an Asian tech giant explained how he had an extremely complicated relationship with his board. The chairman had been the previous CEO for twenty years and had helped build the company into a powerhouse. The trouble was that the chairman was still heavily involved in running the company, making it very difficult for the CEO to do his job. The CEO knew he needed to make major changes in the company, but he was struggling to get any agreement from the chairman, who ruled with an iron fist. While the CEO felt shackled, he also was conflicted because the chairman was his mentor and he wanted to stay loyal and figure out a way to work collaboratively with him.
One of the other CEOs in the room said, "You can't do this on your own. First off, to work more collaboratively with your chairman you have to understand him better and figure out who are his influencers on the board and who are his friends. You need to talk to these people and get useful input on what the chairman is thinking and then figure out how to influence him." The first CEO explained to the group that an Indonesian investment fund, which controlled some 30 percent of the company, had a strong relationship with the chairman and influenced his views. The CEO, however, didn't have any sort of relationship with them. The other CEOs at the forum told him he needed to fly to Indonesia and start reporting quarterly results in person to the fund managers. That way he could get to know them and ask for their help in persuading the chairman to work with him to make the changes he needed.
Then another CEO chimed in: "Once you understand what your chairman is thinking, you should have a frank conversation with him where you lay out the facts and arguments for your strategic plan. But don't hit him all at once. Have a series of discussions laying out your agenda in bite-sized chunks and tell him, 'Here's what I'm thinking about at this point in time.' Then tell him you'd like to come back in another week and talk more, and then keep doing that until he's won over."
Over the next several months, the CEO reached within himself, realizing that he indeed couldn't go it alone. He sought out investors, friends of the chairman, and others, asking their advice on what the chairman was thinking and the best ways to approach him. Eventually the two rivals began to see eye-to-eye on the company's strategy and worked together to move the business forward.
The CEO of this Asian tech giant is a great example of a leader who benefited from the first element of the Bower Forum process. He took an unbiased look at himself and realized that he was stalled at his job and didn't have all the answers. He realized he needed to become a better listener and reach out to those who could help him perform better. He then built an outside network of advisers to help him figure out how to work with his chairman to form a mandate for change. He had been trying to go it alone, but after feedback from other CEOs he came to realize that he is not expected to go it alone. He wasn't always the smartest one in the room.
As this CEO proved, personal change is possible. After much self-assessment, he became more open and humble, seeking input from his management team, outsiders, and the board, who had a broader sense of the business context or knew the thinking of the company's chairman. He learned how to embark on a never-ending learning journey, one where he had the courage to reach out and listen to the advice of others.
One of the key reasons CEOs come to the forum is to address their isolation and their loneliness. No one likes to feel lonely, but when you get the top job, that's just what happens. Sometimes no one talks to you because you act like you're the smartest one in the room, and no one wants to say the wrong thing or bring bad news to the boss. As a New Yorker cartoon that showed a CEO addressing his team put it, "I am more than willing to acknowledge my mistakes if someone is stupid enough to point them out to me."
When they are feeling uncertain and lack confidence, many CEOs tend to go "one up"-convincing themselves that they are more important in order to feel safer in their role. (Later in the book we will explore how the best leaders go "one down" and behave in ways that supercharge teamwork.) Going one up is a move into grandiosity that leads them to think that they are better and smarter than everyone else. The leaders who fall into this trap aren't usually conceited people, but they might believe the job requires that they make decisions on their own-something that in reality isn't required. As former Warren Buffett sidekick and legendary investor Charlie Munger once put it, "Smart, hard-working people aren't exempted from professional disasters from overconfidence. Often, they just go aground in the more difficult voyages they choose, relying on their self-appraisals that they have superior talents and methods."
Sometimes going one up is a personal attribute of the CEO-they intrinsically operate that way to overcome their own insecurities. Other times, it is the team that expects the CEO to be decisive and have all the answers. This can create disempowerment or even fear in the organization. Teams will defer to the CEO and wait for them to come up with the answer. When tough problems arose at meetings, one CEO of a media company would become very verbose, take over, and solve the problem on the table. This kind of behavior can be very intimidating. What makes this pattern difficult to catch is that it was often rewarded in the past, and it feels good-the CEO gets a rush of energy.
Acting like you're above it all can have dire consequences, as history shows. Napoleon Bonaparte was a brilliant military strategist and conqueror, but he also believed that he was smarter than everyone else and was often unwilling to listen to the advice of his advisers. Ignoring the warnings of his generals, he decided in 1812 that his path to victory in Europe included an invasion of Russia. A fierce winter and tough resistance shattered his forces. Napoleon's army entered Russia with more than 612,000 men, and only 112,000 remained after the campaign. His reputation of invincibility was shattered.
Believing that your colleagues expect you to have all the answers is a trap-one that can have dire consequences in the business world. In the 1970s, former GM executive John DeLorean founded the DeLorean Motor Company, which made a futuristic stainless-steel-bodied sports car with gull-wing doors. He was known for his charisma and innovative ideas but also had a reputation for being arrogant and unwilling to listen to others. While others cautioned him to move slowly-starting a car company is a highly complex endeavor-he ultimately overextended the company's finances, and the production of the DeLorean sports car became a financial disaster that led to the company's bankruptcy.
With this in mind, leaders attending the Bower Forum try to honestly define their attributes-do they always think they have the answer, do they interrupt their colleagues before they have the opportunity to finish their thought, are they the type of person who already knows the answer before they walk into the room? We then suggest that they work on skills that will help them unlearn this unproductive behavior. We suggest they ask themselves what is the worst that would happen if they stopped acting like they're the smartest one in the room and opened themselves up to the opinions and thoughts of others. If they really listened? Even if what they hear contradicts the way they see the world, what do you have to lose? In today's fast-changing landscape, it's less about what an individual knows and more about knowing what they need to know and where to get it. This means developing the skills to really hear what others have to say instead of looking for validation of what you already think.
The best leaders realize they don't have all the answers and regularly question and listen to those around them. Listening sounds easy, yet it is one of the most challenging skills for senior leaders who have been rewarded through their career for their decisiveness, their ability to be in control, and their confidence. Most who make it to the CEO level are, of course, super smart, but their true value comes from their unique bird's-eye view, their ability to connect the dots and bring multiple perspectives together. And to do that well, they have to apply their experience and wisdom in a different way. Instead of going one up, they think carefully about what they hear, they reflect, and they actively understand root causes and implications. They create circles of advisers who can help guide them, give them opposing views, and encourage them to adopt new perspectives. They make it a habit to go beyond their comfort zone, to engage in fearless learning, ready to question deeply anchored assumptions and beliefs. In short, they know that they're not the smartest person in the room.
That raises the question: Who do you need to listen to? It depends on which problems you're trying to solve. Generally speaking, if it's an operation or process you're trying to improve, you listen to what your direct reports and sometimes those managers two or three levels below you have to say. For strategic direction or big personnel decisions, generally speaking, it's the board and your most trusted investors, but if the change is big enough, customer and clients should be included. For products and services, it's the customer, of course. For societal issues and the company's purpose, it never hurts to get input from your employees and the communities where you operate. In all cases you need to listen for different perspectives, while trying to understand the underlying motivations both by what the speaker says and also through nuances such as their tone and body language.
Most important, by opening themselves up to new ideas, leaders can build a mandate-which means persuading the board, investors, and other constituents to grant you the authority to carry out your strategy. As a CEO, nobody tells you exactly what you should do, so it's your job to figure out your mandate. In this age of stakeholder capitalism, you have to establish a mandate with your customers, with your employees, with your investors, with society at large, and with your family. You need to be open enough to listen to what they have to say without any biases or preconceived notions. It's helpful to have what we call an inside-out mindset. You need to find the right balance between understanding the company as an insider and reflecting on it as an outsider-as if you're an outsider coming in to understand your company's culture, context, and legacy.
The best leaders take the time early in their tenure to ask "What is my mandate?" and get input from a broad set of stakeholders-even if they're an insider who's been with the company for years and think they know what needs to be done. It's also very important to understand that mandates evolve over time. Early in a CEO tenure there might be one or two critical things that need immediate attention, which if you ignore could result in a crisis. Later on, once you've settled in your role, you have an opportunity to establish an even bolder, broader mandate to drive change, whether it be your own company or the broader system.
Reflecting on that mandate and then thinking about the unique challenges that come in the way of accomplishing it can be quite helpful for CEOs. Through listening and a willingness to change their minds, they win permission from their various constituents to act. Without a mandate, many well-meaning leaders attempt to forge ahead yet fail, dragged down by the weight of a reluctant organization or the intransigence of board members and investors who aren't aligned with their vision.
We are, of course, not suggesting that you hand over your power to those working for you. Quite the contrary. Excellent leaders run a participatory process where they listen to different points of view, but the final decision still rests with the CEO. "Your point of view could change says Mark Fields, the former CEO of Ford Motor and a Bower coach, "but it can't be, 'Hey, let's just figure this out together, and everybody's going to have a vote.'" This is one of the polarities that leaders need to master. They have to be humble but at the same time have the wits and strength to make a tough decision-especially when there's little consensus on the team.
Many CEOs have struggled with how to get their management teams aligned and marching in the same direction. It's a tight balancing act. As the CEO, you've got to listen to others and perhaps at times change your mind, but at the end of the day you have to call the shots. And as we'll explore in part 2 of this book, you must pull this off in such a way that your team gets behind the plan because you've appealed to both their heads and their hearts. Appealing to the head is laying out the reality-here's what we think are the opportunities. The heart is linking the plan to the mission of the company. Is this something we're passionate about? What do we want our legacy to be? Do we want it to be one of failure, or do we want it to be one of success?
Getting a team pulling in the same direction is hard to do because, as we'll see in chapter 10, "Everyone Keeps Things from the Boss," even direct reports don't want to tell the CEO what's going on in the company. No one wants to bring bad news. No one wants to irritate the CEO, because they fear it will throw their career back if they're the one who's always saying, "This isn't right," or, "I don't agree with what you're doing."
So the job of the CEO is to learn how to engage in what we call positive leadership, which means listening and trying to elicit ideas from others without reacting negatively to what they're telling you. Says Fields, "I've seen great examples of how a leader reacted in a positive way when bad news came up. They thanked the person for sharing and in the process created a safe place for others to bring up criticism. I've also seen absolutely godawful examples where a person gives bad news, and the leader just eviscerates them. That teaches everybody else in that room to keep their mouth shut."
