Harry Kraemer is an executive partner with Madison Dearborn Partners, a private equity firm based in Chicago, and a Clinical Professor of Leadership at Northwestern University’s Kellogg School of Management. He previously served as chairman and CEO of Baxter International, a $12 billion global healthcare company. He is also the author of three bestselling leadership books and a sought-after speaker.
Harry joined host Robert Glazer on the Elevate Podcast to discuss his leadership career, why self-awareness is essential to leadership, tips for success as a CEO, and more.
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Harry Kraemer On Essential Traits Of CEOs, Self-Aware Leadership And More
Introduction And Guest Overview
Our quote for this episode is from Anthony de Mello, “Wisdom tends to grow in proportion to one’s awareness of one’s ignorance.” My guest in this episode, Harry Kraemer, is a self-aware leader. He is the Executive Partner with Madison Dearborn Partners, a private equity firm based in Chicago, and a clinical professor of leadership at Northwestern University’s Kellogg School of Management. He previously served as Chairman and CEO of Baxter International, a $12 billion global healthcare company. He is also the author of three bestselling leadership books and a sought-after speaker. Harry, welcome to the show.
It’s great to be with you, Robert.
I always like to start at the beginning. I’d love to hear a little bit about your upbringing. What were you interested in, what did you study, and did leadership present itself negatively or positively in your life early on?
I grew up in New York, Pennsylvania. My dad was a salesman so we moved around all over the place. Leadership showed up pretty quickly because I was the oldest. I have four younger brothers and sisters and trying to lead them was one of the things that I got responsible for very early on. My dad traveled a lot and my mother is pretty busy. I got the leadership down at least some of the sense of it fairly early.
We ended up moving to Minneapolis, Minnesota when I graduated from high school. I went to a small college in Wisconsin, Lawrence University where I studied Mathematics. That becomes important later. I met my wife at Lawrence University and then came down to Chicago and went to Northwestern University, the Kellogg Business School. Forty-five years later, I ended up at the same place as a professor here.
You graduated from Kellogg, you’re focused on accounting, and you get your MBA. Take us up to getting to Baxter. What was the progression there?
I guess a couple of things. One, starting off in Math, my professor said, “You’re good at this but you’re such an extroverted guy. There are probably only going to be 3 or 4 people in the world who are going to be able to talk to you if you get a PhD in Math in doing research. We think you ought to think about Economics.” Economics then led to business. In your comment about leadership, I liked the idea of being able to lead people. You have certain values and impacts you could have on other people.
When I was thinking about what industry to go into because I wasn’t too sure, I ended up going to a reception that somebody from Baxter gave at Kellogg and their whole comment was, “I’d gotten one for Pepsi,” and I was asking, “What’s the goal here?” “We were trying to increase market share.” I was like, “My mother told me not to drink Pepsi,” and then I went to the healthcare one and I said, “What are you doing?” He says, “Our whole goal is aren’t we blessed to be able to do well by good in making a difference?” I thought, “Sign me up. Let’s try this for two years.” I went to Baxter for two years. I forgot to leave and was there for 25 years.
What role did you start in?
I started off as a junior financial analyst.
It’s not a mail room but pretty down there.
I knew all the guys in the mail room. We had drinks and had beers together. I knew all those guys. I ended up starting in finance. I had an opportunity to get into operations and back to finance. I had a chance to run the small businesses. I got involved in international. I came back. At one point, I became the CFO and I teased people when I was a CFO. My business card never said, Chief Financial Officer. It said CFO, Cash Flow Officer because hopefully, you know in your business, it’s all about cashflow. That’s what matters in a business perspective.
I’ve seen a lot of businesses with brilliant P&Ls go bankrupt because they don’t know the difference between the P&L and the cashflow.
They grow so fast. People like to grow. They grow so fast and they go bankrupt. That is the problem if you don’t understand cashflow.
What was the culture like at Baxter up until you became CEO? Was there something you had to change or was that something that already existed that you were drawn to as someone who’s very focused on culture and values?
I would say a lot of the basics were there, but rather than let’s assume the basics are there or that it’s somehow assumed, let’s jack this thing up and make sure that it’s very clear. I move from this whole idea that we’re just going to assume people will live the values to set clear expectations, communicate them, hold them accountable, and there are consequences.
I love the simplicity because I was always trying to think through, and my whole leadership model as you know has nothing to do with titles and org charts. It’s all about, “I don’t care where you are in the organization. You may be three levels above me, but if I can figure out a way to relate to you, I can influence you. If I can influence you, I can lead you.”
I tried to set them up with a couple of good folks at the company on how to set this up so the accounts receivable clerk in Tokyo or the sales rep in Sao Paulo could understand it. We said, “It’s all going to resolve around three Rs, Respect, Responsiveness, and Results. That became part of what all 55,000 people focused on. A lot of it was there. I just tried to make it something that every single person could understand and relate to and knew that was the expectation.
We’re coming out of an era of command and control leadership that had consequences and standards, but it also had some not real investment in the people as human beings. You seem one of those leaders who believes in leading the people. As with every correction, you tend to have an over-correction.
We’ve seen this in a lot of parenting philosophies. Now a lot of leaders are struggling with, “We’re all about people. We’re people first,” but it’s interesting again that you said accountability and consequences because this to me is what’s missing in a lot of organizations and leadership. We’ll get into some of this campus stuff eventually now, but can you talk a little bit about that? I feel like we’ve overcorrected for some of the people stuff, but this seems to be a real problem now.
I always tell you when I agree or disagree with you. On this one, you’re right. In my mind and it’s one of my four principles, it’s all about balance. Are we going to treat people respectfully and the golden rule? Are we going to hold people accountable? Have a tough standard and if I expect you to do it and we agree you’re going to do it and you don’t do it, you’re not going to be there. Which is it going to be? Yes.
Accountability without respect leads nowhere. It’s all about balancing tough standards and treating people with respect.
You can still love the person but you can’t let them have red light on the global sales for six quarters in a row to the point where it’s hurting the whole organization.
I get so focused on this idea that it’s all about setting clear expectations. If you’re on the team with me, I’m not going to be a dictator. I may say, “I’d like you to do $50 million this year, Robert,” and say, “Wait a minute,” giving the following reason. When we walk in and decide the number is 45, I’m going to hold you accountable because we set a clear expectation. A CEO asked me, “How do you know if you’re good at this?” I thought this was so clear. How do I know if I’m good at it?
Setting Clear Expectations As A Leader
If I’m good at setting clear expectations, I will never surprise you because it turns out if you have to leave the company and I have to sit down with you, if you’re surprised, guess what? I didn’t set a very clear expectation. It’ll be set and when I say set a clear expectation, communicate it. My longer version is to communicate over and over again because they’ve done the studies. The average human being needs to hear something three times.
I thought it was seven.
Although my wife was until she told me something ten times, I haven’t heard it. That’s my little personal dilemma.
We’ll go with seven. That’s the average. You and I know Alan Mulally. A lot of these simple dashboards and accounts, if people who are not comfortable holding people accountable can hold them accountable with expectations, data, check-ins, red light and green light, and all these things. Alan has this great story where he comes into Ford and they’re losing $14 billion a year. They’re on track to lose the most money ever by a corporation. He starts going into the meetings and all the numbers are green on every dashboard and everyone’s thing. He is like, “Unless we’re trying to lose the most money of any company in history, I don’t understand how all of our dashboards are green.”
Alan is the best.
If you have this set up right and you’re a leader and you’re going into a weekly meeting and your quarterly meeting. Let’s say there’s Jamie and Jamie is like, “Red light. We’re not there.” As you said, if it’s a surprise, then Jamie has a self-awareness problem. Why is accountability kind? Some people need to understand that it’s so missing. The problem is it’s been missing from parenting for about twenty years. Now, that’s showing up in the workplace.
I’ll give you a little formula. Push back on me. Tell me if this works for you. Why is this so hard for people? Why is feedback so hard? Here’s my cent of this. I’ve concluded that most human beings would like to be liked. They may not want to admit it, but they would. Here’s the problem.
Parents want to be liked these days.
Focus On Being Respected, Not Liked
If you focus on being liked, I’m convinced that you’re not going to be respected. You said the parenting thing. I have five children. One of my daughters would say, “Harry, I’d like to go to this movie.” “You know honey, it’s an R-rated movie. You can’t do it. It can’t happen.” “But all my friends are.” “That’s interesting. You’re not going.” “Harry, I thought you were my friend.” “I’m not your friend. I’m your parent.”
Here’s why I’m a ridiculous optimist. The old Math major, I love equations. If I focus on being liked, the chance of being respected is very low, but here’s why I’m an optimist. If I focus on being respected, I explain to her that I love her. I care about her. “I’ll take you to another movie. I’ll take all your friends out for pizza. I truly want to develop you into a good value-based person.” If I do it in a reasonable way, I could be liked. I don’t walk away from being liked, but that’s the dependent variable if you’re into Math. It’s not the independent variable. That’s the conclusion. So many folks, parents and you name it, are so focused on, “I want people to like me.” Forget it. It’s all over when you’re focused on being liked.
I’ve had people say they’re best friends with their kids. I was like, “That is a conflict of interest.” Maybe when your kid is 25 or 30 and your work is done, you can be best friends, but I don’t see how you can be a parent and be best friends with your kid. That seems like an ultimate conflict of interest.
Having raised five children who are now all adults. My youngest is about ready to graduate from Notre Dame. This friendship thing starts when they’re about 25.
That only works when you relinquish your job. You move from manager to coach to mentor. This wasn’t the hard thing about hard things. If you’re still in the manager role at that age, then you still can’t be friends.
Having had five of these, the way I describe it is from one of my children. From 0 to 18, buddy, I’m in control. From 18 to 21, I think I’m in control, but do I know what Robert is doing at college? I may think so. After 21, I’m going to give you advice. I’m going to give you an opinion, but you’re an adult and hopefully, by then I’ve given you the values and perspectives that’ll help you be the person want you to be.
Focus on being respected, not liked. True leadership comes from making tough, value-driven decisions.
You institute the values. You institute the standards, but this college used to be this firewall and now, you have these parent groups where they’re worried about their kids’ laundry. You’re creating a dependent human being. The book I’m working on looks at leadership through the lens of parenting and says if you did all of this stuff as a parent that you did at work, you would be in the HR office on a performance improvement plan. Your employees would be like, “This person is a micromanager. They’re taking all this stuff away from me.”
Importance Of Values And Accountability
How are today’s leaders not seeing that this behavior is so detrimental in the workplace, but it’s not at home? Values standards are only good as your most difficult application of them. Is there a specific story of Baxter where you felt like you had to make values versus financial decisions or where it was complicated? There’s a famous story of J&J going back to their founding credo in the Tylenol story. I’d love to hear 1 or 2 of these where the rubber hits the road.
Values are easy to uphold until they’re tested. The real challenge is standing by them during a crisis.
I’ll do that for you. I got a good one but you mentioned something upfront that maybe it’s good to clarify. Everybody talks about values and having talked about this now for so many years. What I’m realizing is people get very confused about what values are. They truly do. I notice there seems to be a big confusion on the difference between values and preferences.
You and I can be on a team and I may say, “Robert, here’s the deal. We’re not going to use four-letter words and we’re not going to yell at one another.” If you do, I’m not going to fire you, but I’m not going to be happy. It’s a preference I have but the two things related to values that I’ve convinced myself. Maybe there’s more, but I’ve got two.
Number one, if it is a value, you’ll never compromise it and you’ll never negotiate because if you’re willing to compromise and negotiate, it sounds like a preference to me. That’s the way I go into this, which is maybe different than some people feel. When do you have the most issues with your values? I was doing this in a class yesterday. Usually, when you have the most trouble I find is when there’s a crisis. Most people, when there’s a crisis now, “What are we going to do?”
The way I set this up a long time ago, part of that is the annual retreats. It turns out that having done that, what I decided is there’s a bunch of things that I know you are aware of and I’m sure your speakers are aware of that we all spend more time on than we wish we did. Worry, fear, anxiety, pressure, and stress. I then say to myself, “What do you know about those things?” They’re a problem. They’re not healthy, a waste of time, and all the things that you know.
Let’s think about this. How do I minimize that? What I realized is the way I’m going to minimize that and I’m going to decide that no matter what happens, and I mean no matter what happens. Let’s include every crisis you can think of. It doesn’t matter what happens because when it happens, we’ll do two things. Number one, we’ll try to do the right thing, which becomes a little easier based on your values. Number two, what we can do.
I always get interviewed all the time about crises and I always say, “They’re not that difficult to deal with as long as you know when it happens, you already know what you’ll do.” You’ll try to do the right thing based on your values and a lot of input from some values-driven people. Also, you’ll do the best you can do. I give you that as background because now any example I use, that’s exactly the way we’ll deal with it.
Navigating Crises With Strong Values
Can I ask a clarifying question before that? The other thing that would seem to be part of it that’s embedded in that is it’s a value if you’re willing to apply it when you don’t agree with the outcome that it will produce. That seems to be the biggest problem in society now. I value the Constitution or whatever until my guy shreds it and then I don’t care. This seems to be the real crisis in leadership. Free speech is the perfect one. We hear the left yell about free speech, the right and they mean when it’s things that I want said.
To come back to your comment, one of the issues that we had when I was the CEO, one of the products that Baxter was one of the founders of many years ago was dialyzer which if you have kidney failure and your kidneys aren’t working, if you don’t get dialyzed, you die. It was in 2001 that several patients who were dialyzed by Baxter died in Spain. Immediately, the question was, “What happened?”
If you’re a healthcare company where you’re trying to keep people alive and that happens, it’s not a good thing, to say the least. Several of the doctors that were involved said, “We don’t know if it was your dialyzers. It could have been the water because you need a lot of sterile water,” and so on and so forth. Our perspective was, “Several people died. What’s the right thing to do?”
The right thing to do is immediately recall it and shut it down. To your point, if you shut down a product like that, you’re going to write off a couple of hundred million dollars, As soon as you start to say, “Wait a minute,” it doesn’t matter how much it costs. If it’s the right thing to do, there is no alternative. As you correctly said, it’s when there’s something that you wish didn’t happen that’s going to impact your decision. That’s interesting, but as I said already, you’re not going to compromise and you’re not going to negotiate.
We ended up writing off $185 million, and the stock fell but here’s that optimism again. Interestingly enough, I must have gotten 500 emails from my team members as stock fell saying, “This is exactly why I work for this company because the only thing I know for sure is that when the proverbial stuff hits the fan, the company will do the right thing.” If you’re wondering why I’m an optimist, after about six months, we had customers who never hit a Baxter dialyzer who said, “We’re shifting our purchases to Baxter because the only thing we’re pretty confident of is that when something bad happens, you guys will do the right thing.”
Was it a Baxter issue or was it not in the end when you did the debrief?
To be very clear, it turned out that it had something to do with the dialyzer but you tell me if this is helpful to you. Do you know how you can learn from everything? You’re probably too young to remember this, but in 2001, it was that year, you may have remembered or you may have read, that Ford Explorers were flipping over.
I know deeply about it because I know about the brief at Ford. They decided to remarket the car to moms rather than fix the structural deficit in the car.
I’m focusing on that. There was an enormous argument within The Wall Street Journal of whether was it Ford’s fault or was it Firestone’s fault. They kept going back and forth. Whose fault was it? We literally in my staff meetings would sit down and say, “You can learn something from everything. What would we do if that had happened to us?” We agreed that if it happened to us, we wouldn’t be talking about whose fault it was. We’d say, “We’re involved in this, we’re going to take responsibility.”
To answer your question, it turned out that in the dialyzers, we ended up having to use a certain glue substance and it looks like that was the issue. One of my team members said, “Maybe we ought to blame it on them.” Three people said, “We talked about this three weeks ago. We’re taking responsibility. Let them know about it so they’re aware of it, but we are taking responsibility.” That’s the right thing to do.
It’s simple in theory, but harder in practice. The Ford thing is fascinating. Do you want to talk about not the right thing to do? All of these memos came out. Ford realized they had a rollover problem with this Explorer. Structurally, it didn’t handle well. There’s always a quiz I ask. What’s the number one thing that determines the accident rate of an automobile? They start going into safety stuff and whatever. The answer is the demographic of the driver.
In the real world, if sixteen-year-olds drive it, they’ll be in far more deaths in that car than in another car. All the smoking gun memos said, “This car rolls and we have a problem.” The new Bronco is all popular with teenagers years later. Boeing will go down as one of the worst case studies ever of wrong decisions.
“It’d be expensive to fix this. What we should do is we should market it to moms. Without changing the platform, market it to moms who won’t drive it as aggressively.” That worked until the bad tires. They never fixed the defect. I’ve read all the memos. The soccer moms were driving it much less aggressively but when the tire popped, you had the same problem.
I wasn’t even aware of it. It’s interesting and fascinating.
There’ll be case study after case study of whatever Boeing tried to save for $50 million on the certification of that plane to now have cost them billions.
Billions and probably half their market capital.
You’ve led at the highest level and you’ve been in private equity for a while now and one of the top private equity firms in the company. That involves evaluating a lot of leaders and deciding who you want to place your faith in. What qualities do you look for in leaders that are worth investing in and how do you dig into that?
That’s pretty much my model chief in my leadership classes. I’ll give you a series of them. The three characteristics I always look for and anything you want to go in-depth, you let me know. The three characteristics I focus on are 1) The ability of people to keep things simple, cut through the morass, and figure out what the real issue or opportunity is.
2) Common sense. People can effectively communicate throughout an entire organization so people from the top to the people who are starting as interns or your famous mail room know exactly what’s going on and what role they play. 3) I’m a big fan within the organization of what I call the ability to start ASAP rather than waiting for somebody because as you’ve heard me say before, there’s an awful lot of waiting for these people who are famously called “those guys” rather than realizing we are those guys.
I got these three characteristics and I spent a couple of hours on each one of them in my class. Also, there are four principles that you’ve heard me talk about in a very specific order. How self-reflective is the person? How self-aware are they? It’s because you can’t possibly lead other people if you can’t lead yourself. How balanced are they?
Great leaders know themselves before leading others. Self-awareness is the foundation of effective leadership.
We talked a little bit about that. That ability to seek to understand before you’re understood and understand all perspectives. Do they have true self-confidence? We can take that apart. I never say confidence without truth for several reasons. Also, do they have genuine humility? I never say humility without genuine. Do they realize every single person matters? Those are seven.
I could spend an hour on each of them. Jeff Bezos talked about it, and I thought it was an interesting perspective. Some people in the organization may not be the most liked or types of things but making sure to award people that are right more often than not. Where do you think that factors in? If the things that they talk about or warn people about end up happening and they’re seeing around corners, is that part of the equation somewhere?
Having that characteristic is helpful. I wouldn’t put it up there anywhere close to some of the other pieces related to your comments about servant leadership and your ability to develop people. The reason I say that is often, and Jeff does this as well. There’s this almost this view of, “This person is super bright. This person is an amazing individual.”
The problem I have with that is to think about it this way and tell me if this is almost too philosophical. When you and I are in school and we’re single contributors in a school, I want to be the best. I want to beat Robert because I want to be the best. In our first job, when we were in an organization and there were 50 interns at Ford Motor Company, I wanted to be better than them.
The day you become a leader, and I don’t care whether you got four people. Robert, it’s no longer about you. It all comes down to whether are you the kind of person that can motivate and develop people to get a tremendous amount of things done. The way I would describe it to you is I learned so much from the students, particularly when they ask questions. The typical question I get a lot is they’ll say, “If you were the CFO of a $13 billion company when you were 35 and you were the CEO when you were 40, you must have been this incredibly bright guy.”
This is not a humble comment, but I’ve taken enough time for self-reflection. I tell myself, “The reason why I was fortunate and blessed, you want to call what you want, is I had three things going for me. 1) I took the time to get to know everybody. When I say everybody, I wasn’t kidding before. I knew the names of everybody in the mail room. I knew the receptionist. I knew everybody in the cafeteria. I get to know everybody is number one.
2) By getting to know everybody, you figure out who the good people are, and 3) Probably the most important, in every job I was ever in, first-level manager, second director, vice, I tried to create an environment that the very best people wanted to work for me. Guess what, here’s how incredibly simple this is. If you know who the good people are and they want to work for you and produce for you, you do not have to be that bright. You do not have to be the answer man.
It seems out of that list that you said, there’s hierarchy. It seems that if you are not self-aware, then all the other things are difficult. I like to ask people sometimes if there was a blood test in interviewing. Give the candidate any blood test and I would come back and tell you whether they have a quality or they don’t have a quality. I posted this on LinkedIn once and I got a whole bunch of interesting answers. Mine was always self-awareness because I feel like if you don’t have that, I don’t know how you get to any of those other things. How do you discuss humility if you don’t know you’re not humble?
You’re more perceptive than I thought you were because I didn’t know you that well but if I rewrote that fourth book From Values to Action: The Four Principles of Values-Based Leadership, I would have spent half the book talking about the first principle. It’s all self-reflection. It’s all self-awareness. I was doing a CEO forum in New York and one of them said, “I’ve read all the books and I get it but you seem to be so focused on this self-reflection.” Why is that number one?
Here’s a little three-part equation, old Math major here, three-part equation with no numbers. 1) If I’m not self-reflective, is it possible for me to know myself? I don’t think so. 2) If I don’t know myself, is it possible for me to lead myself? I don’t think so. 3) If I can’t lead myself, how the heck can I lead other people? A, then B, B then C, and the transited property be quality, it matters. It’s bigger than life. It’s all self-reflection.
There’s a part four. If I don’t know myself, but other people I lead know myself, then I have massive blind spots. That’s another tangential to that.
That is number four.
It’s for your abridged version. I heard you speak a few years ago at Marshall Goldsmith Group. You said something that I loved. I wrote it, forwarded it, and quoted on it. You talk a lot about how you are often surprised that people are surprised. When you counter a situation where a person lacks self-awareness. You have some great examples, but can you give some stories of this? It resonates and then again, we can talk about some of this college stuff because it relates, but I bet you had some great anecdotes here.
I’m one of these guys. Every time I’m serious, I have to have a sense of humor just to keep things balanced because it’s all balanced. At the Marshall Goldsmith meeting, I get asked all the time. They’ll say, “What are some of the big benefits of self-reflection and being self-aware?” I said, “The biggest one is this. It turns out that anybody can determine whether somebody else is self-reflective by talking to them for about twenty minutes.” The reason for that is that people who are not self-reflective are constantly surprised. You’re surprised they’re surprised because if you’re self-reflective, there are not that many things to be surprised by.
Every single one of your audience at some point in time didn’t get the grade they wanted, the job they wanted, the promotion they wanted, or the date they wanted. Somebody they love and care about dies. It’s very unfortunate but I’m not so sure it should be a surprise. People who are not self-reflective are all over the place. These are some examples. I’m at the airport and now, having taught thousands of folks, I can’t go to an airport without running to at least 5 or 6 former students.
Somebody walks up to me, I try to keep track. “Charlie, how are you doing?” “Professor Kraemer.” “No, Harry.” “Harry, I’m just surprised.” “Charlie, what are you surprised by?” “I have two young boys now. I have no relationship with my two.” “Do you spend time with your two boys, Charlie?” “I don’t spend any time with them at all,” but he’s surprised. I’m surprised. He’s surprised. A couple of weeks ago, the class was ready to start and a young woman was emotional. I said, “Kathy, are you okay?” “I’m just surprised, Harry.” I said, “What’s the surprise?” “My grandfather died. I’m just surprised. I wanted to spend time with him. I’m listening to all your talk on self-reflection and he suddenly died.”
He’s 100. I know this is the punchline.
The punchline is, “How old was he?” “He’s 103 years old.” I’m thinking to myself, “I’m surprised that you’re surprised.” The guy is 103 years old. What did you think was going to happen?
This is a now or never. Spend some time with them. There was a story. You must have 100 of these, but it was something about a similar thing with a wife or something where their wife’s not happy with them. They’re not home. They’re traveling all the time. They paid no attention to and they were so surprised that their wife wasn’t happy.
If somebody says to me, and you know how I talk about life balance, 168 hours, and so on. If somebody says to me, “Harry, the most important thing to me is my career. It’s much more important than my family and my faith.” Now, that is something you and I would do, but if the person wants to do it, it’s America.
However, they’re clear about that.
Don’t be surprised that you’re divorced. Don’t be surprised that you don’t know your kids’ names. I’m surprised that you’re surprised. I’ll give you another great one that shows you how even bright people are. There was a guy who did well. He’s in his early 40s. He’s done well. What does he do? He builds this incredible house. He could’ve just bought one. “No, I’m going to build it.” “It’s going to take you 2 or 3 years yelling, complaining, or whatever.” He buys this house, six bedrooms, and the whole bet.
I run into him. Finally, it’s done but I see the guy three years later. I said, “How are you doing?” Susie and I are selling the house.” “Why?” “All the kids are going to college. It’s like, “Did you not realize three years ago that three years later, your children are going to college? I’m surprised you’re surprised.” There is an unbelievable number of surprise people walking around. They’re all over the place because they’re not very self-reflective.
How does someone begin to be self-reflective if they’re not? The problem is if they’re tuning in to this and they don’t know that they’re not self-reflective, it’s a little bit of a doom loop.
Here’s some actual good news. In my classes at Kellogg, just pretend you were starting one of my classes, I tell people this the very first day. Remember, these are all hyped-up Kellogg folks, one of the top three business schools, and they want to run something. They run into me and they’re thinking, “This guy ran a $13 billion company.” I say, “The first thing you got to do is you have to be self-reflective.” What does that mean? I realize I better start doing it.
They have to write a one-page self-reflection each week. They’re not graded. They have to turn in every week, talking a little bit about what’s your purpose, what are your values, and what matters. It’s an interesting process. What’s fascinating is in the first couple of weeks, it’s very other-oriented. “I need to talk less quickly. Maybe I need to be less ambitious.”
However, in the ninth or tenth week, “What difference do I want to make in the world? Why am I in business school? Is this all about the money? How do I separate the difference between success and significance?” I’ve already thought that through, and it truly helps and you know what I do fifteen minutes a day.
You do this yourself, right? What are the questions you ask every day?
I’ll give you two things. The questions I ask every day, I get them to do this. I’m sneaky about but they’ll say, “This self-reflection is important. How do you do this?” I said, “I spend fifteen minutes a day doing a personal self-examination. I’m not a morning guy with a lot of talks and a lot of kids teaching. Fifteen minutes is important because if I said I do it for half an hour, I could easily rationalize, “I don’t have half an hour.” It’s hard to rationalize “I don’t have fifteen minutes.”
Mine is about midnight. Mine goes like this. “What did I say I was going to do this day? What did I do? What am I proud of? What am I not proud of? How did I lead people? How did I follow people? If I lived today over again, what would I have done differently? The last one is, if I have tomorrow knowing fully well, sooner or later I won’t, but if I do have tomorrow, based on what I know today, how will I operate differently tomorrow?” Whatever dimension of your life has any significance.
It could be your career, it could be your family, it could be your spirituality, or it could be your health. It puts everything into perspective. Immediately, I got five students jumping up saying, “Do you do this every day?” I say, “I do it every day and I’ve done it every day for 40 years.” If I’m having a party with all of you guys till midnight, most of you will brush your teeth before you go to bed because that’s a hobby you got into.
Also, somebody will almost always say, “Do you have to write it down?” I’ll say, “I don’t think you have to write it down. I write it a little bit down in a couple of sentences in my journal because if I don’t write it down, am I reflecting or am I daydreaming, particularly if I had a couple of glasses of wine? It could get a little squirrelly here as to as to what it is. Almost always, they’ll say, “You’ve done this since you were the CEO or the CFO.” “No, I’ve done this since I was at Kellogg.” I then tell them the story of how I ended up getting trapped into going to a three-day silent retreat that my future father-in-law made me go to.
That’s amazing. At least he wasn’t going to talk to you.
I didn’t even know that. I was dating his daughter up at Lawrence University, and he found out about it because I was a senior and she was a freshman. He called me from St. Paul and said, “I want you to come up here. We need to spend time together.” I flew up there and when I flew up there, I thought maybe we’ll go to a Viking game. He goes, “No, we’re not going to Viking game. We’re going on a retreat together.”
He sandbagged you.
I said, “What’s the retreat?” He goes, “You’ll find out,” and then driving to this place, he said, “I should have told you before, but it’s a silent retreat.” “What does that mean?”
This sounds like a meet-the-parents nightmare.
It was and the reality is I went on it and I realized that this is pretty valuable. They said that at the end of it, you ought to spend fifteen minutes a day. The crazy part that the students truly can’t believe is that not only did I marry his daughter 43 years ago, but every year, the first weekend in December, from the first weekend from Thursday to Sunday, I go on this three-day retreat and I’ve done it every year with my 90-year-old father-in-law for the last 43 years.
Folks will say, “Could you do it a different week?” My wife would say, “Harry, I am pregnant now, or whatever. Could you do it in a different week?” That’s when the group goes. My guys, that’s the week we go. She says, “You don’t talk to any of these people.” “No. I don’t talk to them but that’s my group.” Once a year comes down to, “What are your values? What’s your purpose? What matters?”
The easiest way to think about all of our businesses, you have a strategic and operating plan. When I was leaving Kellogg, I thought, “Why wouldn’t you do the same thing for yourself?” Once a year, I asked myself, “What can I do this year in all the dimensions of my life?” I do my little fifteen-minute checkup every day. It’s a very simple process.
I’m curious though. This is always true. I’ve heard conflicting advice on this. You have the discipline to do this. For most people, if it’s all or nothing, it’s easy for them to quit. Do you ever advise people like, “Commit to 5 out of 7 or commit to 4 out of 7 or do you think that this is an all or nothing?
No. The only thing that’s all is to do it. It depends on the person. You may do this once a week. You may do it once a month. You may do this when you’re sitting down.
It’s all better than nothing.
In my mind, it depends on the person. For some people, it’s a good thing to do when they go for a jog in the morning. Some people if they’re meditating and some people when they’re driving. In my mind, taking a short amount of time where you turn off the noise, you get off by yourself, and you ask yourself these things.
There’s one other part to this I didn’t mention. You better find a few people that you can bounce this off of. My wife would say, “Harry, left to your own devices, you could convince yourself of anything. Do you want to know what I think?” The answer to that, in my case, better be yes or I’m in a lot of trouble. You need a reality check because we can all convince ourselves of a lot of things that aren’t true.
It’s super interesting. I love hearing that. Some of this journaling, prompting, or any of this exercise is self-reflection. It gets annoying when you write every night, “I’m going to do this tomorrow.” I would say there are three levels of accountability, self-accountability, peer or I know some people that also just put their stuff out to the world, their goals for the year, but self works pretty well. When you go to your journal and you’re like, “I said I wasn’t going to do that like eight days in a row and I did it,” you’re annoyed at yourself.
Hold yourself accountable. You said it with a little bit of discipline. My four favorite words I tell the students are discipline, focus, consistency, and credibility. In my case, if I’m disciplined, if I’m focused, if I do it consistently, I establish a little credibility with myself. I can have credibility with other people.
I wanted to get your insight. You have been a global leader. You are a leadership professor at a leading school. You invest in leaders. I’ve been writing about this and looking at what’s going on campuses around the country right now because I believe this will be case studies at universities for years to come on the same demographics at a lot of these schools with completely different cultures, responses, and environments. There’s not anything fundamentally different than Columbia and Cornell in terms of the students or otherwise.
Surprise. You also have a lesson, “If you do this, here’s the consequence.” The consequence comes and they’re apoplectic that the consequence exists. I would go back to this is coddling from their teachers and parents in a while where consequences aren’t consequences. What is your thought on campus leadership? When you have norms and values in an organization, how do you try to apply those equally?
Any objective person looking at the last 5 or 10 years, particularly around how we love free speech, would argue that they have not been defending that at all in a lot of these schools. Now, they’re trying to lay into it. When you have those double standards, when you have these difficult situations, when you say, “Here are our rules,” and you don’t enforce them, you have very little credibility.
You summarized it perfectly. At the end of the day, if you’re going to set an expectation and you’re not going to follow the expectation, you lose all credibility. Also, because I’m a parent of a lot of kids, I like the fact that it does go all the way back to that. I have seen parents who will say, “You’re sixteen years old. You need to be home by 10:00.” We used to say, “If you’re ninth grade, it’s 9:00. Tenth grade, it’s 10:00.”
Some parents say, “If you’re a sophomore, you got to be home by 10:00.” They’re not home by 10:00. Of course, I’m going to start coming home at 11:00. I can distinctly remember telling Susie because I am modeling even back then. I’d say, “Susie, you need to be home by 10:00”. “No one’s going to.” “Honey, let me just be very clear. You need to be home by 10:00, and let me explain this to you.” It doesn’t matter what happens. The car could blow up. You could have a flat tire, and your friend’s mother could die.”
This is the Bill Belichick.
“It doesn’t matter because if you’re not home at 10:00, you’re going to nowhere for a month. Tell me now. Let’s think this through. What part of this could be confusing? Set clear expectations and communicate. I’m going to use your seven number now. It’s seven times. I’m holding you accountable and I got to tell you, honey, the consequences, you’re not going to like,” but notice, why am I so fanatic?
Do you state the consequences upfront because isn’t that important to you so you shouldn’t be surprised?
It’s funny. Whether I’m working, whether it’s home, I have a goal. If you worked for me and I’m giving you feedback, I will never surprise you. It’s a little bit like, “I’m going to give feedback to Robert. He wants to know how he’s doing.” If I don’t give you open, honest, continuous, transparent feedback, and then I have to have you leave and you’re surprised, I didn’t do my job. In my mind, it can be college campuses, it can be your children, or whatever. If you’re not going to follow through on what you said, you lose all credibility and then you’re surprised.
At some point, I’m not sure if you took the best leader in America. I don’t know who that is now and parachuted them into Columbia University so that they could solve this because it’s gone so long now that it seems like it has to bottom. The problem is that it’s now almost an everyone loses situation.
You’ve lost all credibility. No one’s going to believe anything you say.
You don’t think twelve different ultimatums at 12:00 ten days in a row. People notice when you let that go.
Robert, I’m just very surprised you’re surprised. I reached a conclusion a long time ago. When you have an issue, how are you going to deal with it? In the crisis management thing, I always say there are three steps. 1) You tell people what you know, you don’t lie, and you don’t make it up. Here’s what we know. 2) Here’s what we don’t know and why, and 3) Here’s what we’re going to do about it.
The one that to this day upsets me is the whole way we dealt with COVID. Our president said a month afterward, that it’s going to all be over by Easter. That’s fascinating. Is a mask good or isn’t it? No. There are certain things we didn’t know, but guess what? Here’s what we know. Some people are dying in China. They’re dying in Italy. That’s all we know for sure. Here’s what we’re going to do about it. We’re going to try to develop a vaccine. Here’s why a mask is or isn’t good. They seem to work well in operating rooms for years.
“When it changes, we’ll update you,” and that also didn’t happen.
You had people walking around who didn’t have a famous idea of what was going on. It was like an absolute zoo.
Do you know what’s crazier to me when you think about this? It’s four years since the beginning of this. We spent trillions of dollars and a million people died. We don’t have any book or study commission with a consensus of what was right, what was wrong, and what we would do differently next time. If it happened tomorrow, I’m not sure we’ve learned anything. A lot of people were right and a lot of people were wrong. They’re just not willing to say that. They’re not going to say, “I was wrong and I learned. Next time, I wouldn’t do this.”
Once again, what are we talking about is the lack of a value-based leader. It’s a lot of what I call that third principle of true self-confidence where you say, “How do you know if you have true self-confidence?” Are you willing to admit you don’t know? Are you willing to admit that you were wrong? Do you have a healthy sense of, “I’m pretty good, but guess what, I’m going to make mistakes.” It’s very interesting. A lawyer the other day was telling me, “Harry, I understand your concept of true self-confidence, but you know what, my problem is I’m a little worried that if Robert is my boss and I tell him I don’t know, how is he going to react?”
I always go back to my model. Leadership, influence, and relate. How many people relate to somebody who never makes a mistake? How many people relate to somebody who knows everything? If I say, “I don’t know but I’ll get you an answer,” you’re going to say to yourself, “I can relate to this guy.” If you can relate to me, I can influence you. I can lead you. It’s the opposite of what most people fear.
One of the objective things looking at it is that very early on, the government told people that masks weren’t needed because they were panicked that there weren’t enough masks for the emergency rooms. I’m not sure if they had said that it would’ve stopped selfish people from running on masks or otherwise but later, no one ever owned up to that or said that, or said, “It was a poor decision to say that, but we said it because we were paranoid about getting these masks to hospitals and first responders. Otherwise, there’s going to be a run on masks and our hospitals are going to shut down. It’s astonishing that there isn’t a book or a commission.
I appreciate your comment. That’s a good example of the lack of leadership. I happen to believe this, and you can challenge this because maybe I’m into too much of it. Most people, there are exceptions, God knows, are pretty reasonable and they’re pretty good people. I like to think of this. If I was the president and I said, “We have this serious issue. The most important thing for all of us. A lot of us are fortunate, we’re not in a hospital right now, but the first step we’re going to do is we’re going to make sure everybody in the hospital gets a mask.”
“Do you know what we’re going to do? I’m churning up every place possible so that I’ve done this study in the next X weeks, we’ll have more.” A lot of people are going to say, “I can understand that. I can relate to that,” but when you lie to people and you don’t give them information, you lose all credibility. I’m sure you’ve gone to the studies. It takes a while to develop trust and it takes about a nanosecond to lose it. Once you lose it, forget it.
In October, the president of Acme University called you and said, “Harry, my campus is in upheaval here. I don’t know what to do. We need some leadership help here.” What would you have said to them as some overarching leadership principles?
The first thing I would say is, “What are your established values of the institution? What is in your bylaws now? What did you say you’re going to do when this occurred?” I’m a chairman of a lot of companies. If you’re the CEO and you tell me that you’re surprised that this happened, I’m old enough, I remember the Vietnam War for God’s sake.
Every past rule happened for a transgression of that rule.
If you’re surprised, you’re not going to be in the job because we’ve set it up. We’ve got all these precedents before, but if somebody is taking over a building or people who aren’t even part of the campus or showing up, we don’t want that to happen. You cut it off on day one. The minute you don’t, welcome to the world of Columbia. The fact that any of those board of trustees are surprised, I am so goddamn surprised they’re surprised. You wouldn’t believe it.
I read an interesting letter from the Holocaust Museum to the Columbia president and the board, and they said, “You’ve been an administrator. The decision to call in the police, which probably wasn’t right, was an administrative decision.” What we haven’t seen is any leadership. What we haven’t seen you say is, “Free speech is okay, but I find the avocation for terrorism with my campus deplorable and morally repugnant.” Those things are not incompatible.
This is leading versus administrating. I thought it was a very well-written letter saying, “There are things we think you should be better or worse but you have an incredible background. You should lead.” Leading means “This is not our values,” but at the same time, maybe, but I can’t stop anyone from saying so.
The problem is that if you’re not self-reflective, you’re not self-aware. You’re constantly surprised. Also, if you don’t have that second principle of a balanced perspective, you get lost. We even learn in high school that there’s an enormous benefit of free speech. It’s one of the founding principles, but there are certain things you don’t do. I remember in high school, they used to say, “Harry, free speech, you can’t yell fire in a theater.” “Wait a minute, I thought you have free speech.” However, there’s a balance here.
There are certain things you don’t do, but if you’re not self-reflective and you’re one extreme or the other, we probably not going to have time to talk about this time, but I’m so unbelievably sensitive. It’s the thing I’m probably most focused on now. It is this whole lack of balance in everything. Think about this. It wasn’t too many years ago, and I’m sure you write about this so you can maybe help me understand this. It was only a few years ago. You have a view and I have a view.
I tell my students, “That’s a sensitive time.” We already talked about anything, respectfully. It could be gun control, abortion, or immigration. Ten years ago, you had a view on gun control. I had a view. I have different views than you, but I understand your different views. I still like you. I still respect you, but now it’s I dislike you. I hate you. I have to stop you.
Our ideas are our identity. The academic environment became this thing where you write a viewpoint that I don’t agree with and instead of publishing a counter viewpoint, which used to be what academia was, I’d lobby to have your thing redacted.
It’s this whole idea that people could now be wherever they want to be. Somebody is on the far right. Somebody is on the far left but now if that happens with you and me, it can’t be, “I have a different view. I understand where you’re coming from.” If 100% of my information is different than 100% of your information, how can I possibly understand? That’s why you say, “What do we do about this? I like to solve problems so I create them.”
I tell the students, “Here’s the deal. If you want to watch Fox, super. You better watch CNN. If you’re going to read The New York Times, you better read The Financial Times, the Economist, and The Wall Street Journal.” You’re going to look at this and you’re going to say, “Whoa.” Guess what? That’s why you have a brain so now you figure out what is the balance, what makes sense as opposed to sitting at one extreme or the other. That’s another one of my grandfather’s great lines to me. When I was a kid, he used to say, “Harry, life is much simpler when you only understand your side of the story.”
Those of us who ever manage people, and I’m sure that you have seen this. I did write an article on this about the bias of the first telling of the story, which is a problem where you have an employee come to you and they’re like, “Harry, let me tell you what happened.” You listen to this story and you are like, “I am going to kill the other person.” You go to them all wound up and then they tell you a different story.
The truth is somewhere in between and you are a little impacted by the first one you hear because that’s the one you’re spinning on and stirring off. Every time this happens, I’m not surprised anymore, but for a while, I was surprised being like, “I cannot believe how different these stories are.” This is the problem of the algorithms and everything. It’s feeding.
One thing may be helpful because I’m always trying to help people get better. If I could have a small impact on the next generation of people who are leading, it’s all worthwhile. The dean said to me, “Harry, You’re 69. You’ve been the professor of the year. What’s your plan?” I say, “I’m probably down on my last twenty years.” The reality of it is that you can make a small impact. What I’m trying to get people to do, and here’s my lesson for folks. My view is if every one of your audience could stop saying, “I don’t understand,” and take the time to understand, the world becomes a better place.
I’ll give you one great example that happened and if you’re into history, I’m a big history guy. Correct me if I misinterpret this. Somebody said to me, “There are some things you can’t understand.” I said, “Give me an example.” “Putin, what he’s doing to Ukraine, you can’t understand.” I said, “I can understand. I don’t agree, but I understand.”
They said, “How can you understand? I said, “Here’s the quick list history lesson. I could be wrong. In World War II, 50 million Russians died.” If you’re in the UK in 1945 in Russia, maybe you say, “We’re going to create the USSR. We’re going to have this whole satellite group. We’re never going to let anybody get close enough of Russia again.” What happens in over 70 years, this peels off. Now, it’s mostly Ukraine and the guy who is running Russia now is a former KGB guy.
He picks a newspaper up and says, “What’s happening today?” Ukraine is going to become part of NATO. That’s fascinating because if they become part of NATO, let me look up my notes. That means there are going to be German, French, English, and American troops in the Ukraine. That’s not going to happen. What’s going to happen? We’re going to attack. As I told everybody, they don’t like to hear this. I’m surprised.
You’re surprised that he did that. I’m damn surprised that you’re surprised. Once you understand it, you can say to yourself, “What are we going to do about this,” but if you are walking around surprised, I’m surprised. It doesn’t matter what the issue is, if you take the time, you’ll not be surprised.
I couldn’t agree more. Given all of this and your study of history, what does everyone need to read now because history repeats itself?
I’m a voracious reader of so many things. I’ll give you some examples in a minute, but here’s the mindset. How do you get the history to understand from people who dealt with this or people who they’re understanding the consequences or who dealt with it better than we’re dealing with now? I think about it, and I’m sure you’ve read it. Abraham Lincoln, the book that Doris wrote about Team of Rivals.
I have every student read that book. I try to have them read from good leaders who have a difference. Somebody who can talk about what it means to be a value-based leader. I have folks read Bill George’s book on Authentic Leadership. Let’s not try to be somebody else. Be yourself. It’s funny when somebody takes the time to study it, and I got this book the other day. I don’t know if you’ve seen it. I’ve started reading it but it’s Fareed Zakaria.
My friend told me that I needed to read that.
It’s funny you mentioned it. I’m not advertising. I happened to be on my desk here.
What’s the title?
It’s literally called the Age of Revolutions. Again, he walks through what happens.
I’ve heard him speak. He is very balanced. He’s good at educating.
You said the word. You know me better than I thought. Anybody I respect, that’s the first thing I look at. He’s a very balanced guy. He walks you through the French Revolution of these pieces and guess what? You can predict what could happen if we don’t get our act together. The guy is very balanced. I’ll let you know more after I read the whole thing.
My rule is three. You’re the second person in four days who’s told me to read it.
He’s a very well-written guy.
Harry, last question, and this is multi-variant. It could be single, singular, repeated, personal, or professional. What’s a mistake that you made that you learned the most from?
I’ve made so many mistakes. The business mistake I probably made early on, and thank God, I learned from it. It cost me dearly. Because of my mathematical background early on, I assumed that making acquisitions was all about the numbers. I realized after an acquisition, “Why do 80% of acquisitions fail for my classes?” It’s because it’s all about the people.
Most acquisitions fail because companies forget—it’s all about the people, not just the numbers.
It’s Always About The People
I’m sure you’ve seen this, Robert. You’ll buy a company and immediately you say, “In the next nine months, we’ll let Robert know what his job is going to be,” and we’re surprised he and all the good people after three months have left. I realize it doesn’t matter how good the numbers look if you don’t understand the people and you don’t figure out a way to embrace the people from a servant leadership standpoint, which is exactly what I started doing after the first two times that I blew it. It’s one of the biggest lessons I ever learned. It’s always about the people.
It comes back to surprise and surprise. It shouldn’t be a surprise to people who’ve tuned in to this episode that we’ve come to the end. Harry, thank you for joining the show. It’s met and exceeded all of my expectations. I hope the audience appreciates why I wanted to have you on and have this conversation.
It’s great to be with you, Robert. Good luck, my friend. Stay balanced and don’t be surprised.
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