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Leadership at the top, whether it's a foundation, a school system, a hospital,
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a company or a country, has greatest impact when things are coming apart, when uncertainty is high, when uh it's
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hard to un to kind of recognize where we ought to be going. To put that in a more
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positive framing, leadership has become that much more critical in my view the last year or two uh in in many settings
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because the uncertainty uh world trade and everything else uh is higher and it puts a bigger premium on
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people to get the uh to get the job done. >> Welcome to the ripple effect, the
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podcast that takes you on a journey through the minds of Wargan faculty. I'm
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your host Dan Looney and in each episode we'll be diving deep into the inspiration behind the groundbreaking
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research that Wharton professors have conducted and exploring how their findings resonate with the world today.
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Leadership, whether it be in a corporate setting or one around a government, could always run into challenges. And in
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these current times, it seems like those challenges are as great as ever. We have
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conflict going on in part of the world. We have an economy that's been going up
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and down in recent years. And we have a level of innovation involving AI that's
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looking to change how we work in many ways. But how do leaders handle scenarios like these when so much is
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going on at the same time? Pleasure to ask that question and many others of Mike Eim, professor ameritus of
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management here at the Wharton School. Mike, always a pleasure to talk. How are you, sir?
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>> Uh Dan, I'm doing great and always a pleasure to be with you. So, let me
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start right there because I think that's the primary question and you have so
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much going on right now. In talking with leaders as you have over your career, how do they deal with so many things
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going on at the same time? Uh well Dan, it's great to be on the program with you and you asked in my
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humble view uh the totally right question which is in this era to what extent has leadership become that much
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more important and vital and to cite a well-known academic uh study which really sums up the point. Leadership at
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the top whether it's a foundation, a school system, a hospital, a company or
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a country has greatest impact when things are coming apart when uncertainty is high when uh it's hard to un to kind
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of recognize where we ought to be going. To put that in a more positive framing,
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leadership has become that much more critical in my view the last year or two uh in in many settings because the
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uncertainty uh world trade and everything else uh is higher and it puts a bigger premium on
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people to get the uh to get the job done. That said, to paraphrase a very famous executive coach, uh, Marshall
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Goldsmith, who wrote a book with the great title, what got you here won't get
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you there. Uh, not only do we need a lot more leadership at the moment when uncertainty is high, uh, it's going to
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be different from what we needed in the past. Not completely. Lots of fundamentals are the same, but what got
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you here won't get you there. So, you've really got to think about the leadership
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you're going to need the next five years. H how then do we get to that point? How I mean part of that I've
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always thought leadership is part experience, you know, as you're coming up through the corporate ladder, you're
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learning about this, but if we need it in in the in the more immediate period, how do we
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>> how do we reach that plateau? >> Yeah. Uh let's take it in two parts. Uh,
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number one, just to remind us how important it is to get it right, to modernize our our thinking, to get us up
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to date on what is going to be vital in ways that work now that wouldn't have
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worked 5 years ago. uh in uh a survey a couple years ago asked people for what it's worth and
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take it with a grain of salt but it's an important finding that people at the top
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of the business hierarchy top of the pyramid senior managers in uh US companies estimate that about a fifth of
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what they know is no longer useful and about a fifth of what they should know they've really got to acquire. Well, if
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you multiply 20% by five years in a in a fiveyear period, it's going to be almost
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completely different. That's a little bit of an overstatement, but it will be
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different this year compared to 5 years ago at the start of CO. Certainly by the
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year 2030, it's going to be different. And then Dan, back to your main question. How exactly do we acquire the
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leadership skills we don't have right now? There is a theory that somebody is
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a naturalb born leader. you either have it or you don't. We don't accept that.
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And the premise that many leadership skills can be acquired are acquired. Uh and and then the obvious question is
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well, how exactly do you do that? And the uh just to pick one of three directional um directional steps you can
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take to strengthen your leadership. um kind of number one at least on my list, but there are two others we should talk
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about is looking around and just literally being a student of leadership. Life is a classroom.
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>> Yeah. >> Shakespeare all the world's a stage or more specifically all the world's a
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classroom. So by looking at other people in jobs like your own, looking at your own senior people, uh by being a great
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observer of the human nature around you, few better classrooms there are. Okay. So then let me throw in the component of
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innovation and and right now we could use the example of AI but certainly there have been examples of innov
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innovation throughout time that have forced leaders to you know open the door more and listen
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more and understand what the changes were happening and what was going to occur. How then do leaders adjust to a
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sharp level of innovation when it comes to the forefront? >> You know, I think uh top of my list on
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that one is getting out of your office. It seems like an obvious point, but it can be uh a very significant step if you
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really get out of your office. Case in point, we tracked a banking executive who understood that banking was
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changing, fintech was coming. Uh his bank is one of the oldest banks in the country. And to the point of getting out
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of your office, he decided to take a several month sbatical, a learning tour. He talked to the board, got permission
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from his board of directors, left the company in the hands of the chief operating officer, and he literally went
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around the country, visited almost 50 other companies including Apple and Walmart. and his the premise behind his
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quote learning tour was that there are a lot of ideas out there and the best way
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to really appreciate him is to talk for example to as he did the recently retired CEO of Walmart. So anyway, big
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point is get out of your office, get out of the business. Uh look around, serve on other boards of directors if you can
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find your way onto a seat on another board. uh show up at professional associations.
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Um just become a student of leadership. You've always been a student. Remind
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yourself that it's important more important than ever to be. So how then do leaders deal with global conflict and
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and I asked that because for many businesses it may not have a direct impact. It may be a secondary impact.
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Obviously for governments it's you know in many cases it's right at the forefront of all that they have to deal
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with. Um but in certain instances and using what we saw play out in Israel you know for the last couple of years there
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are many companies in Israel who do a significant number of business amount of business here in the United States. and
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those business leaders had to deal with those companies having to adjust to a significant shift in their day-to-day
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life over in Israel. You know, picking up on that that point, one directionality that we advocate is
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getting out of your backyard as the person did that I just described, but more generally getting out of your home
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country. So uh we have uh conducted research in in recently in Japan in China and India on some of the business
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call them leadership uh agendas that are different from your own. >> Yeah.
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>> And no better way to think about what you need to take than to take a look at
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places where people do it very differently. much of what they do in Japan will not be relevant, but some of
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what they do in Japan will be interesting and worthy of concern. So, if you're an Israeli company, a Dubai
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company, a Japanese company, we strongly advocate looking not only at some of the
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successes in your home turf there, but getting out of your home turf completely and spending time with people who are
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doing it in a very different world. It's going to be different. you got to translate back but that's the agenda.
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>> So to using that as a part of the overall leadership philosophy does it benefit then leaders to tweak
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their style of leadership along the way over the course of you know 20 30 years as they are leading a company when they
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experience these these other kind of leadership styles. Yeah, Dan, let me pick up Annette with
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reference to a program that we have long run here at the Wharton School. It's
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called the CEO Academy. It's a slightly ironic phrase for our program, CEO academy. Don't CEOs kind of know
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everything otherwise they wouldn't be there, >> right? >> But we've concluded uh not the case. uh
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that even people at the very top of the pyramid there are plenty of learning opportunities and uh in addressing that
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we've learned through a lot of experience this CEO academy goes back 20 years now that vital for people in
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business or really in any organizational terrain to think to sit down and think with people this is what the CEO academy
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does who have given analytic thought i.e the academics, researchers, consultants and so on to what's
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happening in the leadership um in the leadership chair, call it that. In addition though, it's also really
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important to take time with people who've been there and done a lot of what you've done, maybe more, and to turn to
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them as a kind of um call them mentors or coaches, >> right? And u those two methods of of
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talking to people who think about it analytically, academically separately those who have done it. Uh if you add to
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that uh we we tend to call it the afteraction review drawing from emergency services
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sitting down episodically and telling yourself you know a lot a lot about leadership but still given the evolution
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we've been talking about not everything. what do you want to do different tomorrow?
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>> Right? >> And that's a way Dan of saying make it explicit. Just decide in addition to a
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pretty good diet uh a food diet, a pretty good exercise diet, make it a diet of afteraction reviews. One of the
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things that has come onto our uh landscape, our view in the last several years is when we see social change going
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on and it's really become something that has filtered into the business landscape
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as well because leaders of companies want to hear from their employees and certainly not every employee is going to
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have the same viewpoint on different topics. So these elements from outside the company end up coming inside the
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walls of the firm and having an impact on what's going on in the relationships
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between employees, managers, leadership, etc. You know, it's a great point because it
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really speaks to one of those elements really important element that define what leadership is now requiring that
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was not so much required say 15 years ago and that is an understanding that the people who work for you could be 300
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people, could be 150,000. Uh they are there not just as a automaton, they're people,
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>> right? And uh in modern times these days they feel it is appropriate for the
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company to help them understand why they're doing what they're doing. What
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purpose does it have? What customers are they serving? What improvement in healthcare delivery are they providing?
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That's a indirect way of saying that leadership increasingly at the top requires an ability of people
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obviously including you Dan um to to articulate why we're doing this, what the purpose
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of it is. And I think 20 years ago the attitude maybe a little crudely put here is just get the job done. I'm going to
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give you a paycheck. that's really evolved to uh I want to do something that has purpose meaning and serving
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somebody maybe other employees hopefully customers as well. So a lot of this we've talked about from the mindset of
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the seauite of the leaders near the top of the food chain. What about middle management? What about the people that
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are in contact with those employees each and every day? I'm thinking about this
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larger scale, not only just the social change comment comment uh in in terms of how middle managers have had to deal
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with a lot of this change in recent years. >> Well, here's one of the great ironies in
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the terrain we're talking about. If you think about how we tend to use the word
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leadership on the face of it, we start by saying, well, it's the CEO, it's the
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president, it's the senior VPs. But in recent years, and this is one of the great changes that we've experienced
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over the last 20 years, leadership is increasingly coming from all levels, right?
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>> Senior management and middle management. Case in point, when the great Japanese
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automaker Nissan turned around a couple years ago, it was flat broke, almost going out of business, new CEO came in
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and he discovered pretty quickly that in the mid-ranks were some great ideas on how to make Japanese cars, the Nissan in
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particular, more effectively that were not being recognized further up the food chain there. And as a result, he reached
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down and he said, "Okay, I want people in the mid-ranks to help us lead out of
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lead us out of our doldrums." And that did happen. And then that raises a great
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separate point, which is that I think senior management increasingly is called upon to draw ideas up from the mid-ranks
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below them. I tend to call that leading up. Getting people below you to lead up to bring an idea to you before you blow
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it to uh speak truth to power. A lot of ways to put the same thing. That's a
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long-winded way, Dan, of saying that one of the new features of leadership increasingly in addition to what you
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said, which is the articulation of purpose and meaning, is the ability to draw people below you into what you're
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doing and to help them lead you. It's a little bit ironic when I put it that
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way, but it's very important. >> Is it fair to say then that a lot of those components are things that leaders
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at various levels have really either had already in their mix or have built up and added to their mix, especially in
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the last 5 years or so. when you think about where we started at the beginning of the pandemic and obviously all that
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we had to deal with there and on all we've had to deal with in the last couple of years as well.
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Yeah, I think to to make it very tangible in response to your question there, we've tracked a chief executive.
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Now he's moved on, but for a while he was the chief executive of a very large
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firm and he often said publicly, certainly privately. I heard him say this on many occasions that as he
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reached higher and higher levels of the company, finally becoming its chief executive officer, a huge company,
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150,000 employees, he said he noticed two things. Number one, uh the news got better,
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>> which is a way of saying the bad news was not coming up. Yes. And the joke got
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his jokes got funnier which is also a way of saying that there was more difference to him. And thus he adopted
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this is leadership 101 these days in my view. He adopted a whole host of methods
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of reaching down reaching out on the premise that people in the mid-ranks often have great ideas about an
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innovative product. And your job as a senior leader is to help them appreciate that they can lead you. Even though it's
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a bit ironic to say it that way. And by the way, a footnote on that. When it comes to leading up, you want to do it
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without your ending up getting your head handed to you on a platter. >> Yes.
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>> Right. So there's a warning there. >> But uh again, life often does begin at
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the top. We strongly encourage people in senior ranks to spend time in the employee cafeteria sitting down just
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taking a seat. What's going on, guys? >> Mike, always a pleasure to get your
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insight and spend time with you. Thanks again. >> All right, Dan, great to talk with you.
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Best wishes. >> You got it. Mike Yim, who's professor ameritus of management here at the
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Wharton School. Thank you for listening to the Ripple Effect. We hope you found this episode informative and engaging.
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Don't forget to subscribe and leave us a review so that we can continue to bring
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