Leading in Unnerving Times

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Warren Bennis: I don’t recall a time like today. A time when it’s clear that we don’t have the answers, when younger people may know more than their seniors and the importance of experience is declining, when the foundations of success have morphed from natural resources to human capital, when the economy is changing at warp speed and the life of the proverbial deal-making, world-shaking, tyrannical mogul just doesn’t cut it, when employees really are a company’s most valuable asset. You can see it all reflected in CEO turnover. Forget that within the last year, the CEOs of Procter & Gamble, Xerox, Kodak and Coke have had to resign. That’s small beer when you consider that CEOs appointed after 1985 are three times more likely to be fired than CEOs who were appointed before 1985 and that 34% of Fortune 100 companies have replaced their CEOs since 1995. It has been said of a recently fired CEO, “He didn’t get small; the world got bigger.”

Most managers find it unnerving to be thrown into situations they can’t anticipate. Accustomed to being on top of everything, they are now experiencing doubt. And they should be. As organizational-behavior professor Karl Weick has suggested, our contemporary age should consider the “legitimization of doubt.” The really great people know they need new tools and new ways of thinking about leadership. They make it a point of learning how to learn. All of you are leadership educators and have witnessed and participated in the current burst of interest in leadership education. What’s your take on it?

Kevin Cashman: We’re leaving a period of history and trying to live in it at the same time; people are interested in leadership education because it’s necessary for the transition.

David Peterson: But companies are focusing on doing the old leadership programs better; what they need is a new approach.

Paul Hogan: Our businesses are changing in response to competition, the Internet and deregulation. When a management team can’t see the problems coming, companies often have to get a team that can. However, the new people may have no experience as managers — hence the interest in leadership education. Also, employees often know more than managers, so managers have to ask for ideas on running the business and then learn how to bring diverse opinions into a cohesive strategy.

Candy Albertsson: The new focus on training and development is a result of the succession vacuum starting to appear at the board level. Boards are looking at succession and saying, “Wait a minute; we don’t have anybody. We have to look outside [the organization].” For the cradle-to-grave companies in Europe, that’s a shock. The question becomes: What processes will provide a strong pool of candidates for the future? Some European cultures embrace leadership-development processes, but others are 10 years behind — even resistant to 360-degree feedback instruments that assess people’s competencies.

David Peterson: Development programs are growing partly because leaders’ self-confidence is shaken. Leaders thought they understood how to manage succession development, but how do you motivate a 28-year-old dot-com executive who is worth $14 million? The company has to understand thoroughly what motivates individuals and then make multiple offerings: training, sabbaticals, pets at work, children at work.

Warren Bennis: Have any of you heard clients admit to shakiness?

Alan Stopko: You sense it in companies’ planning sessions, when people look for affirmation from outside experts. You also see it in coaching relationships with senior executives.

David Peterson: People are actually asking for coaches now. Leaders don’t say they’re feeling vulnerable; they say, “I’m the best person to handle this job. I just need help on this one piece.”

Warren Bennis: A fascinating change. We are living in developmental times. People are more willing to admit they need to learn some things.

Rich Rosier: There’s a media perception that one individual can lead an organization to greatness. So maybe companies think that if they train 20 leaders to be like Cisco’s John Chambers, say, they could clinch the future.

Kevin Cashman: Steve Jobs, at Apple, says, “I used to think one great engineer was as valuable as two good engineers. Now I think one great engineer is as good as 50 good engineers.” If you work at it, you can replicate one great engineer — or one true leader.

Warren Bennis: Which of you thinks the interest in leadership education comes from people wanting to be John Chambers, GE’s Jack Welch or Intel’s Andy Grove?

Kevin Cashman: The role models raise the bar. If a company wants 20 great leaders, it will be interested in leadership education.

Warren Bennis: I want to argue against today’s emphasis on the great man. (Usually it’s a man.) Chambers himself talks about teams, not about great leaders. I don’t agree that one great engineer is better than 50 good engineers. We may be placing too much emphasis on the individual — what I call “overpeoplefication.” What I would like to see on the covers of business magazines is fewer great men and more teams. A grown-up leader emphasizes teams.

Candy Albertsson: Leadership development is increasingly valued as an attraction-and-retention tool. Prospective employees want to know, Will I strengthen my résumé if I go to this company? It’s tough to compete for a new job when one has been at a standstill developmentally.

Warren Bennis: What should a leadership-development expert advise someone who has been successful in the Old Economy and is trying to be a dot-com? Let’s say Thomas Stemberg of Staples calls on you. Interesting man, right? A progressive thinker and all that. A Boston firm. Let’s say that 10 years ago, you had advised Mr. Stemberg on leadership. What different things would you emphasize today?

Paul Hogan: I’d say, “You don’t have time to plan. Try a bunch of things, and see if they work. If they don’t, stop doing them. If they do, feed them.”

Alan Stopko: I’d say,“If you hire someone to lead, and you believe you have the right person for that job, stay out of the way.”

David Peterson: People need learning capabilities. Teaching people how to learn is missing from most leadership-development curricula. How do you learn to cope with ambiguity, for example? You have to get out there and muck around. Figure out what’s working. We need to teach people curiosity — how to look at things in a new way. We need to teach them to think clearly, to juggle multiple agendas — to be fast but to leave time for reflection.

Alan Stopko: I’d also emphasize agility of learning — the speed and efficiency of learning something new. Competence, experience and learning agility lead to new expertise.

Candy Albertsson: To be successful in developing new capabilities in an organization, the top people have to look inward first. Do they themselves need new skills? Does their behavior exemplify what they want middle managers to learn? Companies that think about how development fits with the strategic agenda recognize that development must start with the CEO and the board.

Alan Stopko: The issues facing leadership development are best seen in the New Economy. How will the leader of the future motivate the youthful, inexperienced manager who already expects wealth through stock options?

Warren Bennis: Good point. I have a story that illustrates that. A certain famous CEO, now retired, a very good leader, had a protégé with a great future at the corporation. This protégé upped and left for a well-known dot-com. When the CEO asked why, the protégé said, “I want to make more money, and I want to make history.” How could the CEO have kept that young man?

Kevin Cashman: He could ask him, “What would you like to do here? What would it take for you to stay?” Then he’d have to decide if it’s worth it.

David Peterson: The main question is: How can he make history? Can the company find a way to make that happen?

Paul Hogan: You could ask the guy who’s leaving if he’d like to build something new. I think of the way Enron reshaped its playing field.

Warren Bennis: What would the something new be? A company about to commit resources might want to know.

Paul Hogan: I’d say to the person, “You tell us. Create our future. Tell us who you want and what funding you need. We’ll build your vision in five years, and you will own everything.” You have to inspire people — the way Amazon.com does.

Warren Bennis: I’d probably say, “Before you decide to leave, let’s bring a coach in and talk it over.”

Candy Albertsson: The best way companies can identify what is required to keep people is to ask them. Today’s 30-year-olds may have different ambitions than senior managers had at 30. Once a valued employee’s wishes are clear, companies must coach that person regularly. Then if it looks like he or she might leave, the company will be better positioned to take action.

Warren Bennis: So you say, “Here are the things we’re going to do to keep you here”?

David Peterson: Well, usually retention plans involve pay and short-term fixes. Long-term fixes require a culture of development.

Warren Bennis: Development for what? When you say “development,” what do you really mean?

Candy Albertsson: Making someone capable of meeting the likely challenges.

David Peterson: Providing more career options, so people have more control over their lives.

Paul Hogan: I read about the difficulty of keeping young people in Wall Street funds. At one large firm, a group of young analysts got together and sent a letter to the president with about 30 items they wanted. They got almost everything in about a week. One of the things they wanted was five minutes a week of one-on-one senior-management time. Retention programs suffer when people think, “If somebody senior doesn’t have enough interest to talk to me a few minutes a week, then I don’t exist as a person.”

Kevin Cashman: Maybe the young man Warren described — the big corporation’s protégé who went to a dot-com — wasn’t asking to develop his capabilities as much as he was asking for more meaning. And for the chance to apply his capabilities to create even more meaning.

Warren Bennis: So we ask the protégé, “What would be most meaningful for you and how can we help you get that?”

Paul Hogan: The problem with most succession planning is that it focuses on the organization’s needs without a commensurate investment in what gives meaning to the succession candidate.

Candy Albertsson: People who are wired entrepreneurially are unlikely to remain inside a large organization anyway.

Warren Bennis: According to Dan Tapscott’s “Growing Up Digital,” someday we’ll all be wired entrepreneurially. How does a business operate when everyone is entrepreneurial? Is it possible to develop such people?

David Peterson: Not if companies keep asking, “How do we do training better?” instead of “How do we help people learn better?”

Warren Bennis: Well, David, how do you help people learn better?

David Peterson: Self-insight is the first thing people need. Second, motivation. Third, capabilities. Fourth, real-world practice. And fifth, accountability. Most development programs fail to link those pieces.

Warren Bennis: So we make organizations into theaters of inquiry and learning? The idea is good but needs fleshing out. Do any of you really know how you learn? It might be good to organize a conference enlisting the deep thinkers from the learning arena: researchers from linguistics, neurosciences and human development. We haven’t listened to them much. Let me ask you: In the last year, what insight did you have that changed the way you looked at things? What were the conditions under which that happened?

David Peterson: People learn in different ways at different times. Let me go back to my model …

Warren Bennis: I don’t want your model; that’s too abstract. How do you yourself learn?

David Peterson: Well, I am going to go back to the model. People are different. For learning to occur, the material has to be relevant.

Warren Bennis: OK. Good. It has to be something that resonates.

David Peterson: I learn when all five ingredients are present. There is a difference between having the insight and seeing the application, between having the skill and using it. There are 22 functions on my company’s new phone system — three of them relevant to me. The training so overwhelmed me I walked out and taught myself how to get voice mail.

Warren Bennis: The need for voice mail was resonant. You were motivated to learn.

Kevin Cashman: That’s content learning — learning that impacts a function. There’s also transformative learning, which affects every part of your life. It comes from an experience —good or bad — that prevents you from looking at anything the same way afterward.

Paul Hogan: In some environments I have felt everyone would learn better if management just eliminated barriers. Learning occurs when you know you won’t get criticized for trying something new. A learning environment is also one where the senior people model the behavior the company says it wants. If the company says it wants a team culture, but the senior people keep operating fiefdoms, that tells young people a lot.

Warren Bennis: How do we embed learning into company culture? Workshops are not enough. We need organizations to become fields of inquiry, where people are continually thinking about learning and helping others learn.

Rich Rosier: It might help to have the CEO walk around and ask people, “What have you learned lately that mattered?”

Warren Bennis: I’m sure that would stump many of them. Personally, I often start learning when I am stumped. I recall lecturing to an M.B.A. class about “meaning” and what is “meaningful,” when one of the students asked, “How do you find meaning at work, in life?” That stumped me. Still does. I told the student I didn’t know. When I think about it now, I realize that I could have said, “No one can create meaning for you; you’re the only one who can do that.” We create our own meaning from our own experiences.

Rich Rosier: The wish to learn is tied to role models. A lot of my leadership capabilities come from people I’ve worked for. It would be interesting to analyze whether the Jack Welches of the world have been successful at growing leaders because of leadership-development programs like GE’s in Crotonville, New York, or because dozens of people inside the organization were inspired to model the behavior of a Welch.

Warren Bennis: Welch does show up at the leadership-development institute every month, but GE’s whole system creates opportunities, so it’s more than just modeling.

Rich Rosier: Still, how much more learning would happen if instead of talking about leadership qualities in a classroom, you put someone who embodied those characteristics right into the work setting? Suppose you told people, “Here’s what this skill looks like. Watch how decisions are made.”

Kevin Cashman: Too many senior managers think they don’t need to develop. Their behavior communicates negativity about development and blocks creation of a learning organization.

Paul Hogan: We need to redefine some control functions as teaching functions. In a global bank, for example, the risk-management function can control some things but not everything. Employees must learn how to think about risk so they can do the right thing on their own.

Warren Bennis: Let me end with this question: How do you elicit what’s relevant to other people when they themselves may not know? Creating that propitious moment for learning is a mystery.

Rich Rosier: A very individual mystery. But we do know that most people want to be successful, so we can tell them exactly what skills are relevant to being successful in the organization. The questions I hear most are: “What does it take to be successful around here?” “Where do I stand?”

Warren Bennis: If you get people to open up with their personal dilemmas, you can spot what would be relevant to them.

Kevin Cashman: It helps to identify the intersection between what the individual cares about and what the organization cares about. At that intersection, the individual finds something relevant to work on, and the organization finds something it can help the individual develop.

Warren Bennis: Very good. It looks like leadership of the future begins with an atmosphere of inquiry and learning. Thank you all. I learned some things.