By Kevin Meyer
Last week our entire executive team went out to New York City to attend the World Business Forum. There were nearly 4,000 attendees from 55 countries, plus live streaming video to several universities around the world.
It was a phenomenal experience listening to 21 great speakers on some wildly different perspectives and topics. That variety, and obviously the ideas and concepts, led to some pretty interesting discussions over dinner. Similar to when several members of my team went to the Lean Accounting Summit in 2007, having the team together to experience the same event can lead to rapid change and commitment to new ideas. Highly recommended.
A few common themes emerged:
- Accepting and even promoting failure drives improvement. I recently blogged about this.
- We need to ask many questions, and the right questions, and find ways to break out of mental models and frameworks that prevent us from even knowing what the right questions are.
- The world is becoming highly interconnected and increasingly decentralized and distributed, which is changing leadership, management, corporate, and public functions.
- The increasing availability and flow of information requires a higher level of authenticity and transparency in leadership.
- Defining personal and organizational principles and values is critical to achieve focus and alignment.
Here are some notes from the speakers:
Bill George – Past CEO of Medtronic and now a professor at Harvard Business School.
- A singular focus on shareholder value has destroyed many potentially great companies.
- Focus on understanding, promoting, and living core principles.
- Most leaders start to move from “we” to “I” as power and ego kicks in. Move back to “we” by keeping a focus on your own key principles.
- Just as you develop a strategy for your company and organization, develop a formal development strategy for yourself.
- I only truly began to lead when I stopped trying so hard to lead – that let me connect with my people.
Malcolm Gladwell – Author of best-selling books such as The Tipping Point, Blink, and Outliers.
- Risk taking is at the core of effective leadership.
- There are two types of risk: operational and social.
- Kids and Wall Street bankers take operational risk without understanding the related social risk.
- Understanding and taking big social risks is critical – but you must first understand.
- An elite education decreases the appetite for and understanding of social risk.
- If poverty or a difficult upbringing creates great risk-taking leaders, then why do they then want the best for their kids? Are they ignoring their own lessons?
- There’s a case to be made for the selective impoverishment of adults.
- It is a fact that societies with fewer advantages will compensate in some way.
Tal Ben-Shahar – Expert and professor on “positive psychology” and author of Happier.
- Resilience, optimism, understanding true north principles, and asking the right questions create success.
- Focus on the positive instead of just the negative. Ask what works instead of just what doesn’t. What has gone right instead of just what has gone wrong. Equally important lessons.
- Leaders telling the stories of their development create intimacy within their teams.
- A key driver of intrapreneurship in a company is to give permission to fail, and then guidance and mentoring on how to fail and learn from the experience.
- Great leaders are able to see that seed that, if watered and shed light on, will flourish.
Howard Schultz – CEO of Starbucks and social activitist.
- Every company must create an authentic value proposition for their customer.
- We are a hyperconnected world – traditional marketing and PR has been disrupted.
- New media networks, such as social networks, should be used to develop trust and sharing, not selling. If you focus on selling through those networks you will not succeed.
- Values and authenticity are becoming more important than price and service. Relationships matter.
- Create value for your people and community first, before shareholders.
Gary Burnison – CEO of executive search firm Korn/Ferry International.
- People are no longer motivated by pay and recognition, but want to know “why do I matter?”
- Real leaders don’t run companies, they coach people to run companies.
Angela Ahrendts – CEO of the fastest-growing women’s fashion company, Burberry.
- Social media is creating a new interactive world culture. The large-scale impact is being felt first in B2C areas such as fashion, but will soon impact B2B2C potentially by reducing the value of the intermediate B.
- Social media has already taken down politicians and even governments. It can easily take down companies. Don’t underestimate the downside of a poor social media strategy and monitoring.
- Use social media to add social value – that then creates brand value and only then sales.
- Presentation critique: reading notes off an iPad does NOT create an effective presentation, regardless of how interesting the material is. Sorry Angela. Watch Seth Godin. Over and over.
Benjamin Zander – Conductor of the Boston Philharmonic Orchestra and author of The Art of Possibility. I’ve seen him present before at the AME Conference and once again he was phenomenal. Check him out on YouTube.
- The conductor doesn't make a sound, rather inspires others to be empowered.
- What assumptions am I making that I don’t know I’m making? Force yourself into different perspectives.
- You cannot learn anything unless you make mistakes.
- Do you really know when you’re outside the box, or still in it? Challenge fundamental mental models and frameworks.
- My job is to awaken the possibility in other people.
- “Rule #6”: Don’t take yourself too seriously. There are no other rules.
- For most people success is measured in wealth and fame and power. For me, success is measured by how many shining eyes are around me.
Marina Gorbis – Executive Director of The Institute for the Future and program manager for the Global Ethnographic Network.
- The world – and organizations – have been transitioning from centralized organizations to decentralized and now to distributed. This encompases management, infrastructure, etc.
- Economies of scale in organizations and infrastructure are false. Distributed, networked smaller systems can be more efficient. Example – smaller, even neighborhood-sized power generation can be more efficient by eliminating large-scale power transportation systems and better matching demand with generation. The same exists for social systems.
- The most resilient organism? Bacteria. There are more bacteria on a human than human cells. Are humans really just a transportation mechanism for bacteria? Challenge your perspective.
- Socialstructing (new book): creating large scale value from micro-contributions from distributed networks, such as social networks. Think Yelp, Genomera, etc.
- Will networked community organizing replace management?
Anthony Townsend – Research Director at the Institute for the Future, focusing on the impact of new technologies on cities and public institutions.
- Social networks can create “smart cities” and be far more efficient that government. Example: Paris’ government measures urban ozone at six locations. Two students with no funding created a sensor linked to a social application and GPS that could be mounted on bicycle handlebars. It measured a hundred thousand additional locations in two weeks. Same accuracy and more data at 0.001% of the cost of the government system.
Michael Liebreich – Managing Director of Bloomberg New Energy Finance, providing information and research on energy technology and markets to investors and policy-makers.
- The perception is that wind energy costs more than coal. The reality is that both are close to 6.5 cents/kwh. The key difference is in the cost of storage and level loading.
- There are already three markets where unsubsidized solar is less expensive than conventional sources: Hawaii, Italy, Turkey. Estimate about 30 more in the next five years as solar cost decreases and direct/indirect conventional costs go up. However high volume storage is still a problem.
- However the required investment for solar or wind energy to replace current imported oil is far greater than the investment in coal and oil/gas to make those sources non-polluting. Since the US has centuries of supply of both even to provide 100% domestic supply, which is really the better investment of limited financial resources? From what perspective or paradigm?
Bill Clinton – The 42nd President.
- We can’t reverse the growing interdependence in the world. Interdependence can be both positive and negative.
- We are competing on a global scale with other countries that are doing the same. Our tax and regulatory policies must reflect that. There is nothing that we make that couldn’t be made elsewhere if we make it too difficult to do business with the U.S. or inside the U.S.
- Trade barriers – financial, regulatory, or otherwise - are extremely dangerous at this tipping point.
Patrick Lencioni – Best-selling author of The Five Dysfunctions of a Team, which has radically transformed my own executive team. If you haven’t I highly recommend you take your team through the book (and workbooks) over the course of a year. It takes time – and serious commitment - to do it effectively.
- Teamwork is not a virtue, it’s a choice.
- Vulnerability-based trust creates a bond within teams.
- We need to have productive conflict, not people that choose their battles or calculate political costs.
- People must be able and willing to engage in passionate conflict in order to achieve commitment.
- Disagreement is the pursuit of truth.
- Peer accountability is far more powerful than leader-driven accountability.
- The two key characteristics of effective team members: humble and hungry.
Seth Godin – One of the most innovative thinkers in modern marketing, author of many books including The Purple Cow. Along with Ben Zander he had one of the two best presentation styles, especially how he used presentation media.
- The asset of the future is permission. Deliver personal, anticipated, relevant messages.
- The new economy is about finding products for your customers, not customers for your products.
- Henry Ford was the most important person of the 20th century because didn’t just invent interchangeable parts but interchangeable people. Hmmm…
- Competence is no longer scarce, it is a commodity. So what differentiates you and your product offering?
- If failure is not an option then neither is success. The guy that invented the ship also invented the shipwreck.
- Your job is a platform to make mistakes and thereby do something that matters.
Tamara Erickson – Author of What’s Next, Generation X? and a researcher at the London Business School investigating generational influences on multicultural management.
- The majority of personality and mental models are formed between the ages of 11 and 14.
- External events and environment during those ages- news, wars, people, technology, social norms – create the differences between generations.
- Over 70% of people who grew up in the 70s report a high degree of independence from their parents, but 80% of people who grew up between 1995 and 2002 report a high degree of dependence. This may be a result of parental support during the 2001 attacks, and appears to explain why many of those kids are returning home to live – more than financial factors.
- Managing across generations can be very difficult if those differences are not recognized.
- Generational attributes are different between different countries and cultures. Adding that third dimension adds exponential complexity to effective management.
Claudio Fernandez-Araoz – With executive search firm EgonZehnder International, researcher at Harvard, author of Great People Decisions.
- People decisions (hiring, firing, etc) are the most important determinators of success at the executive level.
- Genetics plays the top role in early education and career success, then choice of jobs and personal development during the intermediate career, then people decisions at the executive stage.
- A typical interview is really a conversation between two liars.
- The top predictor of executive success is not IQ or experience, but emotional intelligence. Yet what do most people evaluate when interviewing potential executives?
Jack Welch – Former CEO of GE.
- Employees know who the turkeys are in leadership positions. Funny he should mention turkeys…
- Authenticity counts more today than ever because people have more access to information (ie the truth), are more enlightened, can more easily collaborate, and secrets no longer create power.
- US manufacturing output (in dollars) is higher than ever even after outsourcing – but we have become far more productive therefore fewer jobs are required.
- “Extra” people cost far more than we think. It’s not just the direct cost of those people, but the cost of the extra decisions they make, the extra management they require, and what they do when trying to justify their jobs. This is especially true in organizations than cannot scale rapidly (up or down), such as government.
- There is not an unemployment problem for good people – only for unmotivated, unpassionate, second-stringers.
- I learned the most from my worst failures – such as literally blowing up my first factory to acquiring Kidder-Peabody without understanding the impact of culture.
- We need to invest to enlarge the pie, not just transfer wealth from the wealthy to the less wealthy. That’s not teaching them how to fish.
- Bill Clinton did one helluva job and even I commend him. George H.W. Bush was the most honorable president we’ve had in decades. Barack Obama is destroying the competitive position of the U.S. just as other countries become strong competitors – a recipe for disaster.
Gary Hamel – Professor of International Management at the London Business School, best-selling author of Leading the Revolution, Competing for the Future, and The Future of Management.
- Power is shifting from institutions to individuals.
- Consider the words executives typically use to communicate to employees: value, quality, etc. New employees prefer an emotional response – can we use words like joy, truth, wisdom? Steve Jobs did this very well.
- Reclaim the noble in your organization.
- Management is the least efficient and has the lowest ROI of any activity in an organization.
- There is a “management tax” on organizations for overhead, risk aversion, friction, bias, and tyranny.
- As decisions get bigger and are therefore made at higher levels, there is less and less oversight. There is more oversight on a $1,000 shop floor expenditure than on a $20M decision made by the CEO himself. Shouldn’t it be the opposite?
- Management is not good with change – inertia.
- Today’s earnings are becoming a poorer and poorer predictor of future earnings.
- Some companies like HP must be benchmarking leadership against countries like Libya and Afghanistan.
- In your company does anyone notice if a first-line employee innovates?
- Rethink and then drive core principles.
- Management 2.0: radical trust and transparency, disaggregation, natural hierarchies (WL Gore with no job titles and no org structure), variety, employees decide who leads them, internal markets, communities of passion, self-determination and autonomy, openness.
- The world is becoming more turbulent faster than companies are becoming more adaptable.
Robert Rubin and Martin Feldstein – Rubin was U.S. Treasury Secretary under Clinton, Feldstein is Professor of Economics at Harvard. The two did a combined interview.
- The economy will get worse before it gets better, even if the upcoming numbers look better. (Feldstein)
- The economy will continue a very slow recovery but with tremendous uncertainty. (Rubin)
- Fiscal policy, or the lack thereof, is having a tremendous impact on business confidence, which is preventing business spending. (Rubin)
- The Obama FICA tax reduction has now created the direct link between Social Security and the deficit that was theoretical before but is now indisputable. (Feldstein)
- The difference in politics today is that the extremes of both sides are refusing to compromise – ie the left refuses to discuss cuts to entitlements and the right refuses to consider a tax increase even if it is offset by spending decreases or closing loopholes. (Feldstein and Rubin agreed)
- In the past Reagan and Tip O’Neil, and Clinton and Trent Lott, came together from opposite sides to create significant policy changes that were compromises.
- The CPI and poverty level calculations are no longer valid because neither captures value created within new technology frameworks – such as designers working at home on iPads. This is creating significant distortions in financial and social policy, not to mention perception. (Feldstein and Rubin agreed)
- Tax and regulatory policy must reflect our interconnected globalized world. Corporate taxes can be lowered and be revenue neutral if loopholes are closed. As popular as it is, the “Buffett Rule” is not valid – dividend income has already been taxed at the corporate level. The solution may be a combination of vastly simplified income (personal/corporate) and a consumption tax – surprisingly Herman Cain is the only candidate from either side to really grasp this. (Feldstein and Rubin agree, believe it or not).
Bruno Ferrari - Secretary of the Economy, Mexico, interviewed by Daniel Doctoroff, President of Bloomberg LP.
- Mexico buys more from the U.S. than China and Japan together.
- Every dollar of export from Mexico includes 50 cents of content sourced from the U.S.
Daniel Lamarre – CEO of Cirque du Soleil. This concluded with a performance by the Cirque!
- Use your imagination to step outside of paradigms and frameworks.
- Then execute, execute, execute with practice, practice, practice.
- Leadership should leverage the power of emotion and the senses.