00:00:00
Leadership at the top, whether it's a
00:00:02
foundation, a school system, a hospital,
00:00:04
a company or a country, has greatest
00:00:08
impact when things are coming apart,
00:00:11
when uncertainty is high, when uh it's
00:00:14
hard to un to kind of recognize where we
00:00:16
ought to be going. To put that in a more
00:00:18
positive framing, leadership has become
00:00:21
that much more critical in my view the
00:00:23
last year or two uh in in many settings
00:00:27
because the uncertainty
00:00:29
uh world trade and everything else uh is
00:00:32
higher and it puts a bigger premium on
00:00:36
people to get the uh to get the job
00:00:38
done.
00:00:39
>> Welcome to the ripple effect, the
00:00:41
podcast that takes you on a journey
00:00:43
through the minds of Wargan faculty. I'm
00:00:45
your host Dan Looney and in each episode
00:00:47
we'll be diving deep into the
00:00:49
inspiration behind the groundbreaking
00:00:51
research that Wharton professors have
00:00:53
conducted and exploring how their
00:00:55
findings resonate with the world today.
00:00:59
Leadership, whether it be in a corporate
00:01:02
setting or one around a government,
00:01:05
could always run into challenges. And in
00:01:08
these current times, it seems like those
00:01:10
challenges are as great as ever. We have
00:01:12
conflict going on in part of the world.
00:01:14
We have an economy that's been going up
00:01:16
and down in recent years. And we have a
00:01:18
level of innovation involving AI that's
00:01:21
looking to change how we work in many
00:01:23
ways. But how do leaders handle
00:01:25
scenarios like these when so much is
00:01:28
going on at the same time? Pleasure to
00:01:31
ask that question and many others of
00:01:32
Mike Eim, professor ameritus of
00:01:35
management here at the Wharton School.
00:01:36
Mike, always a pleasure to talk. How are
00:01:38
you, sir?
00:01:39
>> Uh Dan, I'm doing great and always a
00:01:41
pleasure to be with you. So, let me
00:01:44
start right there because I think that's
00:01:45
the primary question and you have so
00:01:47
much going on right now. In talking with
00:01:50
leaders as you have over your career,
00:01:53
how do they deal with so many things
00:01:55
going on at the same time?
00:01:58
Uh well Dan, it's great to be on the
00:02:00
program with you and you asked in my
00:02:03
humble view uh the totally right
00:02:05
question which is in this era to what
00:02:09
extent has leadership become that much
00:02:12
more important and vital and to cite a
00:02:16
well-known academic uh study which
00:02:19
really sums up the point. Leadership at
00:02:21
the top whether it's a foundation, a
00:02:24
school system, a hospital, a company or
00:02:27
a country has greatest impact when
00:02:30
things are coming apart when uncertainty
00:02:33
is high when uh it's hard to un to kind
00:02:36
of recognize where we ought to be going.
00:02:38
To put that in a more positive framing,
00:02:41
leadership has become that much more
00:02:42
critical in my view the last year or two
00:02:46
uh in in many settings because the
00:02:49
uncertainty
00:02:50
uh world trade and everything else uh is
00:02:54
higher and it puts a bigger premium on
00:02:57
people to get the uh to get the job
00:02:59
done. That said, to paraphrase a very
00:03:03
famous executive coach, uh, Marshall
00:03:06
Goldsmith, who wrote a book with the
00:03:08
great title, what got you here won't get
00:03:10
you there. Uh, not only do we need a lot
00:03:14
more leadership at the moment when
00:03:15
uncertainty is high, uh, it's going to
00:03:18
be different from what we needed in the
00:03:20
past. Not completely. Lots of
00:03:21
fundamentals are the same, but what got
00:03:24
you here won't get you there. So, you've
00:03:26
really got to think about the leadership
00:03:27
you're going to need the next five
00:03:28
years. H how then do we get to that
00:03:31
point? How I mean part of that I've
00:03:33
always thought leadership is part
00:03:35
experience, you know, as you're coming
00:03:37
up through the corporate ladder, you're
00:03:39
learning about this, but if we need it
00:03:41
in in the in the more immediate period,
00:03:44
how do we
00:03:45
>> how do we reach that plateau?
00:03:48
>> Yeah. Uh let's take it in two parts. Uh,
00:03:52
number one, just to remind us how
00:03:54
important it is to get it right, to
00:03:56
modernize our our thinking, to get us up
00:03:59
to date on what is going to be vital in
00:04:02
ways that work now that wouldn't have
00:04:03
worked 5 years ago.
00:04:05
uh in uh a survey a couple years ago
00:04:08
asked people for what it's worth and
00:04:10
take it with a grain of salt but it's an
00:04:12
important finding that people at the top
00:04:16
of the business hierarchy top of the
00:04:18
pyramid senior managers in uh US
00:04:21
companies estimate that about a fifth of
00:04:25
what they know is no longer useful and
00:04:28
about a fifth of what they should know
00:04:31
they've really got to acquire. Well, if
00:04:33
you multiply 20% by five years in a in a
00:04:36
fiveyear period, it's going to be almost
00:04:39
completely different. That's a little
00:04:41
bit of an overstatement, but it will be
00:04:42
different this year compared to 5 years
00:04:45
ago at the start of CO. Certainly by the
00:04:47
year 2030, it's going to be different.
00:04:50
And then Dan, back to your main
00:04:52
question. How exactly do we acquire the
00:04:54
leadership skills we don't have right
00:04:57
now? There is a theory that somebody is
00:04:59
a naturalb born leader. you either have
00:05:01
it or you don't. We don't accept that.
00:05:05
And the premise that many leadership
00:05:07
skills can be acquired are acquired. Uh
00:05:11
and and then the obvious question is
00:05:13
well, how exactly do you do that? And
00:05:16
the uh just to pick one of three
00:05:20
directional um directional steps you can
00:05:22
take to strengthen your leadership.
00:05:25
um
00:05:27
kind of number one at least on my list,
00:05:28
but there are two others we should talk
00:05:30
about is looking around and just
00:05:35
literally being a student of leadership.
00:05:37
Life is a classroom.
00:05:39
>> Yeah.
00:05:39
>> Shakespeare all the world's a stage or
00:05:42
more specifically all the world's a
00:05:44
classroom. So by looking at other people
00:05:47
in jobs like your own, looking at your
00:05:49
own senior people, uh by being a great
00:05:52
observer of the human nature around you,
00:05:54
few better classrooms there are. Okay.
00:05:57
So then let me throw in the component of
00:06:00
innovation and and right now we could
00:06:02
use the example of AI but certainly
00:06:04
there have been examples of innov
00:06:06
innovation throughout time that have
00:06:09
forced leaders to
00:06:12
you know open the door more and listen
00:06:14
more and understand what the changes
00:06:16
were happening and what was going to
00:06:18
occur. How then do leaders adjust to a
00:06:23
sharp level of innovation when it comes
00:06:25
to the forefront?
00:06:27
>> You know, I think uh top of my list on
00:06:30
that one is getting out of your office.
00:06:33
It seems like an obvious point, but it
00:06:36
can be uh a very significant step if you
00:06:40
really get out of your office. Case in
00:06:41
point, we tracked a banking executive
00:06:44
who understood that banking was
00:06:47
changing, fintech was coming. Uh his
00:06:50
bank is one of the oldest banks in the
00:06:52
country. And to the point of getting out
00:06:55
of your office, he decided to take a
00:06:58
several month sbatical, a learning tour.
00:07:01
He talked to the board, got permission
00:07:04
from his board of directors, left the
00:07:06
company in the hands of the chief
00:07:07
operating officer, and he literally went
00:07:11
around the country, visited almost 50
00:07:13
other companies including Apple and
00:07:15
Walmart. and his the premise behind his
00:07:18
quote learning tour was that there are a
00:07:21
lot of ideas out there and the best way
00:07:23
to really appreciate him is to talk for
00:07:26
example to as he did the recently
00:07:29
retired CEO of Walmart. So anyway, big
00:07:33
point is get out of your office, get out
00:07:36
of the business. Uh look around, serve
00:07:40
on other boards of directors if you can
00:07:42
find your way onto a seat on another
00:07:44
board. uh show up at professional
00:07:46
associations.
00:07:48
Um just become a student of leadership.
00:07:51
You've always been a student. Remind
00:07:53
yourself that it's important more
00:07:54
important than ever to be. So how then
00:07:58
do leaders deal with global conflict and
00:08:01
and I asked that because for many
00:08:04
businesses it may not have a direct
00:08:06
impact. It may be a secondary impact.
00:08:08
Obviously for governments it's you know
00:08:11
in many cases it's right at the
00:08:13
forefront of all that they have to deal
00:08:15
with. Um but in certain instances and
00:08:19
using what we saw play out in Israel you
00:08:21
know for the last couple of years there
00:08:24
are many companies in Israel who do a
00:08:27
significant number of business amount of
00:08:29
business here in the United States. and
00:08:30
those business leaders had to deal with
00:08:33
those companies having to adjust to a
00:08:36
significant shift in their day-to-day
00:08:38
life over in Israel.
00:08:41
You know, picking up on that that point,
00:08:43
one directionality that we advocate is
00:08:48
getting out of your backyard as the
00:08:50
person did that I just described, but
00:08:53
more generally getting out of your home
00:08:55
country. So uh we have uh conducted
00:08:59
research in in recently in Japan in
00:09:02
China and India on some of the business
00:09:07
call them leadership uh agendas that are
00:09:11
different from your own.
00:09:12
>> Yeah.
00:09:12
>> And no better way to think about what
00:09:14
you need to take than to take a look at
00:09:17
places where people do it very
00:09:19
differently. much of what they do in
00:09:21
Japan will not be relevant, but some of
00:09:23
what they do in Japan will be
00:09:25
interesting and worthy of concern. So,
00:09:29
if you're an Israeli company, a Dubai
00:09:32
company, a Japanese company, we strongly
00:09:35
advocate looking not only at some of the
00:09:37
successes in your home turf there, but
00:09:40
getting out of your home turf completely
00:09:43
and spending time with people who are
00:09:45
doing it in a very different world. It's
00:09:46
going to be different. you got to
00:09:48
translate back but that's the agenda.
00:09:50
>> So to using that as a part of the
00:09:53
overall leadership philosophy
00:09:56
does it benefit then leaders to tweak
00:09:59
their style of leadership along the way
00:10:02
over the course of you know 20 30 years
00:10:04
as they are leading a company when they
00:10:07
experience these these other kind of
00:10:10
leadership styles.
00:10:12
Yeah, Dan, let me pick up Annette with
00:10:14
reference to a program that we have long
00:10:17
run here at the Wharton School. It's
00:10:18
called the CEO Academy. It's a slightly
00:10:21
ironic phrase for our program, CEO
00:10:25
academy. Don't CEOs kind of know
00:10:27
everything otherwise they wouldn't be
00:10:29
there,
00:10:29
>> right?
00:10:30
>> But we've concluded uh not the case. uh
00:10:34
that even people at the very top of the
00:10:36
pyramid there are plenty of learning
00:10:38
opportunities and uh in addressing that
00:10:42
we've learned through a lot of
00:10:43
experience this CEO academy goes back 20
00:10:46
years now that vital for people in
00:10:50
business or really in any organizational
00:10:53
terrain to think to sit down and think
00:10:56
with people this is what the CEO academy
00:10:58
does who have given analytic thought
00:11:02
i.e the academics, researchers,
00:11:04
consultants and so on to what's
00:11:07
happening in the leadership um in the
00:11:10
leadership chair, call it that. In
00:11:12
addition though, it's also really
00:11:14
important to take time with people
00:11:17
who've been there and done a lot of what
00:11:19
you've done, maybe more, and to turn to
00:11:22
them as a kind of um call them mentors
00:11:25
or coaches,
00:11:26
>> right? And u those two methods of of
00:11:31
talking to people who think about it
00:11:33
analytically, academically separately
00:11:35
those who have done it. Uh if you add to
00:11:39
that
00:11:40
uh we we tend to call it the afteraction
00:11:43
review drawing from emergency services
00:11:46
sitting down episodically and telling
00:11:49
yourself you know a lot a lot about
00:11:51
leadership but still given the evolution
00:11:54
we've been talking about not everything.
00:11:56
what do you want to do different
00:11:58
tomorrow?
00:11:59
>> Right?
00:11:59
>> And that's a way Dan of saying make it
00:12:01
explicit. Just decide in addition to a
00:12:04
pretty good diet uh a food diet, a
00:12:06
pretty good exercise diet, make it a
00:12:09
diet of afteraction reviews. One of the
00:12:12
things that has come onto our uh
00:12:14
landscape, our view in the last several
00:12:17
years is when we see social change going
00:12:20
on and it's really become something that
00:12:23
has filtered into the business landscape
00:12:25
as well because leaders of companies
00:12:28
want to hear from their employees and
00:12:31
certainly not every employee is going to
00:12:33
have the same viewpoint on different
00:12:35
topics. So these elements from outside
00:12:38
the company end up coming inside the
00:12:41
walls of the firm and having an impact
00:12:43
on what's going on in the relationships
00:12:45
between employees, managers, leadership,
00:12:48
etc.
00:12:49
You know, it's a great point because it
00:12:51
really speaks to one of those elements
00:12:53
really important element that define
00:12:56
what leadership is now requiring that
00:12:59
was not so much required say 15 years
00:13:02
ago and that is an understanding that
00:13:05
the people who work for you could be 300
00:13:08
people, could be 150,000.
00:13:11
Uh they are there not just as a
00:13:15
automaton, they're people,
00:13:17
>> right? And uh in modern times these days
00:13:21
they feel it is appropriate for the
00:13:24
company to help them understand why
00:13:27
they're doing what they're doing. What
00:13:28
purpose does it have? What customers are
00:13:30
they serving? What improvement in
00:13:32
healthcare delivery are they providing?
00:13:35
That's a indirect way of saying that
00:13:38
leadership increasingly at the top
00:13:40
requires an ability of people
00:13:43
obviously including you Dan um to to
00:13:47
articulate
00:13:49
why we're doing this, what the purpose
00:13:50
of it is. And I think 20 years ago the
00:13:55
attitude maybe a little crudely put here
00:13:57
is just get the job done. I'm going to
00:13:59
give you a paycheck. that's really
00:14:01
evolved to uh I want to do something
00:14:03
that has purpose meaning and serving
00:14:05
somebody maybe other employees hopefully
00:14:08
customers as well. So a lot of this
00:14:10
we've talked about from the mindset of
00:14:14
the seauite of the leaders near the top
00:14:16
of the food chain. What about middle
00:14:18
management? What about the people that
00:14:20
are in contact with those employees each
00:14:22
and every day? I'm thinking about this
00:14:24
larger scale, not only just the social
00:14:25
change comment comment uh in in terms of
00:14:29
how middle managers have had to deal
00:14:31
with a lot of this change in recent
00:14:33
years.
00:14:34
>> Well, here's one of the great ironies in
00:14:36
the terrain we're talking about. If you
00:14:38
think about how we tend to use the word
00:14:39
leadership on the face of it, we start
00:14:42
by saying, well, it's the CEO, it's the
00:14:44
president, it's the senior VPs. But in
00:14:47
recent years, and this is one of the
00:14:49
great changes that we've experienced
00:14:51
over the last 20 years, leadership is
00:14:53
increasingly coming from all levels,
00:14:56
right?
00:14:57
>> Senior management and middle management.
00:14:59
Case in point, when the great Japanese
00:15:02
automaker Nissan turned around a couple
00:15:04
years ago, it was flat broke, almost
00:15:07
going out of business, new CEO came in
00:15:11
and he discovered pretty quickly that in
00:15:13
the mid-ranks were some great ideas on
00:15:15
how to make Japanese cars, the Nissan in
00:15:17
particular, more effectively that were
00:15:20
not being recognized further up the food
00:15:23
chain there. And as a result, he reached
00:15:25
down and he said, "Okay, I want people
00:15:27
in the mid-ranks to help us lead out of
00:15:30
lead us out of our doldrums." And that
00:15:31
did happen. And then that raises a great
00:15:35
separate point, which is that I think
00:15:37
senior management increasingly is called
00:15:40
upon to draw ideas up from the mid-ranks
00:15:44
below them. I tend to call that leading
00:15:48
up. Getting people below you to lead up
00:15:50
to bring an idea to you before you blow
00:15:52
it to uh speak truth to power. A lot of
00:15:55
ways to put the same thing. That's a
00:15:58
long-winded way, Dan, of saying that one
00:15:59
of the new features of leadership
00:16:01
increasingly in addition to what you
00:16:03
said, which is the articulation of
00:16:06
purpose and meaning, is the ability to
00:16:10
draw people below you into what you're
00:16:12
doing and to help them lead you. It's a
00:16:15
little bit ironic when I put it that
00:16:17
way, but it's very important.
00:16:19
>> Is it fair to say then that a lot of
00:16:21
those components are things that leaders
00:16:23
at various levels have really either had
00:16:28
already in their mix or have built up
00:16:31
and added to their mix, especially in
00:16:33
the last 5 years or so. when you think
00:16:35
about where we started at the beginning
00:16:37
of the pandemic and obviously all that
00:16:39
we had to deal with there and on all
00:16:42
we've had to deal with in the last
00:16:43
couple of years as well.
00:16:46
Yeah, I think to to make it very
00:16:48
tangible in response to your question
00:16:49
there, we've tracked a chief executive.
00:16:53
Now he's moved on, but for a while he
00:16:56
was the chief executive of a very large
00:16:58
firm and he often said publicly,
00:17:02
certainly privately. I heard him say
00:17:04
this on many occasions that as he
00:17:06
reached higher and higher levels of the
00:17:08
company, finally becoming its chief
00:17:10
executive officer, a huge company,
00:17:13
150,000 employees, he said he noticed
00:17:16
two things. Number one, uh the news got
00:17:19
better,
00:17:20
>> which is a way of saying the bad news
00:17:23
was not coming up. Yes. And the joke got
00:17:25
his jokes got funnier which is also a
00:17:28
way of saying that there was more
00:17:30
difference to him. And thus he adopted
00:17:33
this is leadership 101 these days in my
00:17:36
view. He adopted a whole host of methods
00:17:39
of reaching down reaching out on the
00:17:43
premise that people in the mid-ranks
00:17:44
often have great ideas about an
00:17:46
innovative product. And your job as a
00:17:49
senior leader is to help them appreciate
00:17:52
that they can lead you. Even though it's
00:17:54
a bit ironic to say it that way. And by
00:17:56
the way, a footnote on that. When it
00:17:58
comes to leading up, you want to do it
00:18:00
without your ending up getting your head
00:18:03
handed to you on a platter.
00:18:04
>> Yes.
00:18:05
>> Right. So there's a warning there.
00:18:08
>> But uh again, life often does begin at
00:18:11
the top. We strongly encourage people in
00:18:13
senior ranks to spend time in the
00:18:17
employee cafeteria sitting down just
00:18:20
taking a seat. What's going on, guys?
00:18:22
>> Mike, always a pleasure to get your
00:18:24
insight and spend time with you. Thanks
00:18:26
again.
00:18:27
>> All right, Dan, great to talk with you.
00:18:29
Best wishes.
00:18:30
>> You got it. Mike Yim, who's professor
00:18:31
ameritus of management here at the
00:18:33
Wharton School. Thank you for listening
00:18:36
to the Ripple Effect. We hope you found
00:18:37
this episode informative and engaging.
00:18:40
Don't forget to subscribe and leave us a
00:18:42
review so that we can continue to bring
00:18:44
you the best insight from the Warden
00:18:46
School.
