Seven surprises for new CEOs

Being CEO is different than any other executive position. I’ve lived it myself.  I also work with many CEO clients in my coaching practice who are adjusting to the role and are surprised by some of the dynamics around it.

I’ve found that when I share a particular HBR piece from 2004 with them and they read it, those CEOs I work with often breathe a sigh of relief as they recognize they are having an entirely normal experience in the new role. The piece is “Seven surprises for new CEOs” and this is the intro paragraph:

Bearing full responsibility for a company’s success or failure, but being unable to control most of what will determine it. Having more authority than anyone else in the organization, but being unable to wield it without unhappy consequences. Sound like a tough job? It is—ask a CEO. Surprised by the description? So are CEOs who are new to the role. Just when an executive feels he has reached the pinnacle of his career, capturing the coveted goal for which he has so long been striving, he begins to realize that the CEO’s job is different and more complicated than he imagined. [yes, the authors need to work on their gender language. -CD]

The seven surprises are:

  1. You Can’t Run the Company
  2. Giving Orders Is Very Costly
  3. It Is Hard to Know What Is Really Going On
  4. You Are Always Sending a Message
  5. You Are Not the Boss
  6. Pleasing Shareholders Is Not the Goal
  7. You Are Still Only Human

That’s the core list of seven but the explanations of each are worth reading. Be sure to check it out if you’re a new CEO or if you work with one and want to understand him/her better.

Nonviolent communication and the concept of “denial of responsibility”

nvc_book

One of the most important books ever written is Nonviolent Communication: A Language of Life by Dr. Marshall Rosenberg. Microsoft CEO Satya Nadella reportedly gave the book to his team and made them read it when he took over as CEO in 2014 — an admirable leadership move and a serious statement on the kind of culture he wanted to enforce at Microsoft. I’m certain that the concept of nonviolent communication (often referred to as NVC) has contributed to their incredible success since then. I saw a great example of nonviolent CEO communication today and wanted to call it out — but first a little background.

One category of violent communication (“violent communication” being defined as “communication that blocks compassion”) is “denial of responsibility.”  It’s described this way in the book:

Another kind of life-alienating communication is denial of responsibility. Communication is life-alienating when it clouds our awareness that we are each responsible for our own thoughts, feelings, and actions. The use of the common expression have to, as in “There are some things you have to do, whether you like it or not,” illustrates how personal responsibility for our actions can be obscured in speech. The phrase makes one feel, as in “You make me feel guilty,” is another example of how language facilitates denial of personal responsibility for our own feelings and thoughts.

In her book Eichmann in Jerusalem, which documents the war crimes trial of Nazi officer Adolf Eichmann, Hannah Arendt quotes Eichmann saying that he and his fellow officers had their own name for the responsibility-denying language they used. They called it Amtssprache, loosely translated into English as “office talk” or “bureaucratese.” For example, if asked why they took a certain action, the response would be, “I had to.” If asked why they “had to,” the answer would be, “Superiors’ orders.” “Company policy.” “It was the law.”  We deny responsibility for our actions when we attribute their cause to factors outside ourselves:

* Vague, impersonal forces—“I cleaned my room because I had to.”

* Our condition, diagnosis, or personal or psychological history—“I drink because I am an alcoholic.

* The actions of others—“I hit my child because he ran into the street.

* The dictates of authority—“I lied to the client because the boss told me to.

* Group pressure—“I started smoking because all my friends did.

* Institutional policies, rules, and regulations—“I have to suspend you for this infraction because it’s the school policy.

* Gender roles, social roles, or age roles—”I hate going to work, but I do it because I am a husband and a father.

* Uncontrollable impulses—“I was overcome by my urge to eat the candy bar.

We have all seen this type of communication. We are so used to these kinds of “denial of responsibility” statements from our leaders that we no longer see them as the violent language that they are. This type of language is rife in our culture and I’m unfortunately sure that I’ve used it myself. But I think positive examples are worth calling out, and Twilio CEO Jeff Lawson’s tweet today and the post it links to fits the bill:

Twilio is a publicly-traded company so Jeff has substantial responsibilities as a CEO. It is not an easy job (take it from me). But Jeff is also an actual person (and from spending some time with Jeff and following his career, I put him squarely in the “good person” category). It would be really easy for Jeff to say that he doesn’t comment on politics because he’s the CEO of a public company — and many do. He could say he’s not sure of the political views of his shareholders so he will remain silent out of deference to them. He could say he won’t speak out unless he has a “business case” for speaking out (and this Wall St. Journal columnists argues just that: “You’re a CEO: Stop Talking Like a Political Activist.“) These all follow the pattern of “denial of responsibility” described by Rosenberg. In doing all of those things, Jeff would be denying his responsibility as a person and a citizen.

But Jeff didn’t follow the “denial of responsibility” pattern and I applaud him for speaking his mind clearly and directly. I think Jeff’s post is a great example of nonviolent communication in action by actively avoiding the “denial of responsibility” traps that are really easy for CEOs to fall into, especially public company ones:

  • Vague, impersonal forces—“the markets might react poorly.”
  • The dictates of authority—“My shareholders wouldn’t like it.
  • Institutional policies, rules, and regulations—“I can’t say anything because public company CEOs don’t talk about politics without a business case
  • Gender roles, social roles, or age roles (I’m defining “CEO as a ‘social role’ here)—”I wish I could say something, but I’m a public company CEO.

Thanks for your leadership, Jeff, and for stepping out into the truth. We can all learn from your example.

Solitude and leadership

lincoln

Lincoln alone, writing the Emancipation Proclamation (source)

One of my favorite talks is “Solitude and Leadership” by William Deresiewicz in a lecture that was delivered at the United States Military Academy at West Point in October 2009. It’s about the critical and often overlooked link between solitude and leadership. We tend to think of leaders when they are “in the arena” or practicing “management by walking around” but not as much about the necessity for leaders to spend time sitting alone, thinking and reflecting.

The transcript of the talk is worth reading in its entirety but I pulled a few quotes below to give you a flavor:

My title must seem like a contradiction. What can solitude have to do with leadership? Solitude means being alone, and leadership necessitates the presence of others—the people you’re leading. When we think about leadership in American history we are likely to think of Washington, at the head of an army, or Lincoln, at the head of a nation, or King, at the head of a movement—people with multitudes behind them, looking to them for direction. And when we think of solitude, we are apt to think of Thoreau, a man alone in the woods, keeping a journal and communing with nature in silence.

Leadership is what you are here to learn—the qualities of character and mind that will make you fit to command a platoon, and beyond that, perhaps, a company, a battalion, or, if you leave the military, a corporation, a foundation, a department of government. Solitude is what you have the least of here, especially as plebes. You don’t even have privacy, the opportunity simply to be physically alone, never mind solitude, the ability to be alone with your thoughts. And yet I submit to you that solitude is one of the most important necessities of true leadership. This lecture will be an attempt to explain why.

. . . . .

We have a crisis of leadership in America because our overwhelming power and wealth, earned under earlier generations of leaders, made us complacent, and for too long we have been training leaders who only know how to keep the routine going. Who can answer questions, but don’t know how to ask them. Who can fulfill goals, but don’t know how to set them. Who think about how to get things done, but not whether they’re worth doing in the first place. What we have now are the greatest technocrats the world has ever seen, people who have been trained to be incredibly good at one specific thing, but who have no interest in anything beyond their area of exper­tise. What we don’t have are leaders.

What we don’t have, in other words, are thinkers. People who can think for themselves. People who can formulate a new direction: for the country, for a corporation or a college, for the Army—a new way of doing things, a new way of looking at things. People, in other words, with vision.

. . . .

Thinking means concentrating on one thing long enough to develop an idea about it. Not learning other people’s ideas, or memorizing a body of information, however much those may sometimes be useful. Developing your own ideas. In short, thinking for yourself. You simply cannot do that in bursts of 20 seconds at a time, constantly interrupted by Facebook messages or Twitter tweets, or fiddling with your iPod, or watching something on YouTube.

. . . . .

You can just as easily consider this lecture to be about concentration as about solitude. Think about what the word means. It means gathering yourself together into a single point rather than letting yourself be dispersed everywhere into a cloud of electronic and social input. It seems to me that Facebook and Twitter and YouTube—and just so you don’t think this is a generational thing, TV and radio and magazines and even newspapers, too—are all ultimately just an elaborate excuse to run away from yourself. To avoid the difficult and troubling questions that being human throws in your way. Am I doing the right thing with my life? Do I believe the things I was taught as a child? What do the words I live by—words like duty, honor, and country—really mean? Am I happy?

. . . .

it’s perfectly natural to have doubts, or questions, or even just difficulties. The question is, what do you do with them? Do you suppress them, do you distract yourself from them, do you pretend they don’t exist? Or do you confront them directly, honestly, courageously? If you decide to do so, you will find that the answers to these dilemmas are not to be found on Twitter or Comedy Central or even in The New York Times. They can only be found within—without distractions, without peer pressure, in solitude.

. . . .

Thinking for yourself means finding yourself, finding your own reality. Here’s the other problem with Facebook and Twitter and even The New York Times. When you expose yourself to those things, especially in the constant way that people do now—older people as well as younger people—you are continuously bombarding yourself with a stream of other people’s thoughts. You are marinating yourself in the conventional wisdom. In other people’s reality: for others, not for yourself. You are creating a cacophony in which it is impossible to hear your own voice, whether it’s yourself you’re thinking about or anything else. That’s what Emerson meant when he said that “he who should inspire and lead his race must be defended from travelling with the souls of other men, from living, breathing, reading, and writing in the daily, time-worn yoke of their opinions.” Notice that he uses the word lead. Leadership means finding a new direction, not simply putting yourself at the front of the herd that’s heading toward the cliff.

. . . .

I started by noting that solitude and leadership would seem to be contradictory things. But it seems to me that solitude is the very essence of leadership. The position of the leader is ultimately an intensely solitary, even intensely lonely one. However many people you may consult, you are the one who has to make the hard decisions. And at such moments, all you really have is yourself.

Again, here’s the link to the full speech.

Quantitative data on diversity and business results from McKinsey and Goldman

Note: I’m experimenting with publishing content first in my newly-launched newsletter, Fieldnotes, and then here on my blog. Aside from some minor edits, this blog post is taken from the first edition of Fieldnotes sent out earlier this week. Subscribe here or feel free to take a peek at the first issue.

Diverse boards (and executive teams) lead to better results for shareholders and there is rigorous research from reliable sources to prove it. McKinsey released a report on diversity this month that got a fair amount of coverage but I also uncovered some intriguing data from Goldman that barely got any coverage. Below is what you need to know from each.

McKinsey’s “Delivering through Diversity” report (PDF) contains an analysis of 1000+ companies in 12 countries. This WSJ story has a good summary. Key data:

  • Companies that ranked in the top 25% in terms of the ethnic mix of their executive teams turned out to be 33% more likely to outperform competitors on profits than those in the bottom 25%.

  • Companies with the most women on their management teams were 21% more likely to achieve above-average profitability, compared with those with relatively few women in senior, decision-making roles.

  • Still a LOT of work to do. Among the 346 companies included in its 2015 study, the collective share of women on executive teams has since risen only 2 percentage points to 14%, while the proportion of ethnic and cultural minorities has climbed just 1 percentage point to 13%. This is, of course, pathetic.

Research that got very little coverage but is must-read is Goldman’s detailed 40-page report “The PMs Guide to the ESG Revolution: From Article of Faith to Mainstream Investing Tool” (PDF). The report focuses purely on ESG measures that boost stock price and generate “alpha” (see this for extended definition of “alpha”) over a 3-5 year period. The key finding: gender diversity ranks the highest of all of the factors they studied as companies with higher ratios of female employees saw an average annual alpha of 3.3% across all sub-sectors. If you don’t want to read the report, listen to Derek Bingham of the GS research team discuss it in this podcast (btw, Goldman’s podcast series is quite good).

At this point, if you’re a CEO or other senior leader and you don’t have a direct hand in building a more diverse company, you’re being negligent as a business leader and working against the long-term interests of your company.

(Yet. . . activist investors are more likely to target female CEOs. Firms with female CEOs were 50% more likely to be targeted by activists and approximately 60% more likely to be targeted by multiple activists as noted in Harvard Business Review. Go figure.)

Becoming a Reboot CEO coach

I’m really honored and excited to announce that I’ve joined forces with my friends at Reboot and am now a CEO coach and facilitator under their umbrella. Reboot is helping shape the next generation of leaders who are reimagining the way business is done and I deeply identify with the vision. Jerry Colonna is a co-founder of Reboot and has been my coach since the summer of 2011, when I stepped into the CEO role at Etsy. When Jerry started coaching me back then, he was more or less a solo operation. Jerry reached a point where he wanted to scale his vision for coaching but realized he needed to build an organization to do that. I was honored to witness Jerry conceiving of Reboot and scaling it with his equally amazing co-founders. Jerry and Reboot have life-changing impact on the lives of entrepreneurs as evidenced by some of the testimonials and this beautiful portrait of Jerry and his work in Wired. Working with Jerry and Reboot has definitely been a life-changing experience for me and very much shaped my high-level philosophy on leadership as stated in my Reboot bio:

I believe “strong back, open heart” leadership is the key to building great companies. The strong back is represented by fiscal discipline, strong process, and accountability. The soft, open-hearted front are values, purpose, connectedness, and compassion. Organizations and people are at their best when they manifest both in equal balance.

I’m profoundly honored to be coaching under the Reboot umbrella and to have the opportunity to help and support CEOs in their leadership journeys. (Yes, I used the word “honored” a lot above because I truly am!)

With that bit of news out of the way — what is “coaching” anyway? Doug Silsbee’s book The Mindful Coach: Seven Roles for Facilitating Leader Development offers a simple definition that I really like: “any relationship where you are interacting with another person in service to his or her learning, growth, and change.” Being a CEO can be absolutely insane all by itself and Jerry helped me deal with the pressures of the roles during a period of extraordinary growth and change at Etsy, from chaotic startup to public company. But it wasn’t just “business.” During my time as CEO of Etsy, my wife and I adopted a child and I became a father. The coaching experience was highly integrated, meaning that it took my whole life into account. The same heart and soul that you put into being a CEO are the heart and soul you put into the rest of your life and relationships. As much as our culture demands the separation of “personal” and “business,” they are fundamentally integrated. Thinking of them separately means “dis-integration” and ultimately harms organizations and teams.

I see the work ahead as paying forward at least a small part of the generosity, care, and presence that I have received in being coached by Jerry. One Saturday morning last May, I got the call that meant my time at Etsy was over. My last day was Tuesday, just three days later. I hung up, stepped away from the phone, told my wife the news, and then immediately called Jerry. In the blur of the next three days, I was in regular contact with Jerry as all the logistics of my departure left little room for anything else. On my last night as CEO, Jerry came over to the Etsy office and we sat in the dark on the roof and talked. I don’t remember much of what we we talked about but I remember that Jerry was there and present for me during a difficult time. If I do nothing else in my role as coach, I hope to model the presence that Jerry taught me through his presence.

I am focusing on a very small number of high-impact engagements with my coaching practice. If you think I can be helpful to you, feel free to reach out or fill out the contact form over at Reboot and someone will be in touch.

Dr. King’s dream is my dream, too

Today, we in the US pay tribute to Dr. Martin Luther King, Jr. in a national holiday honoring his legacy. I am grateful that we have such a holiday to honor Dr. King. The meaning of the holiday is expressed beautifully through the words of King’s widow, Coretta Scott King:

On this day we commemorate Dr. King’s great dream of a vibrant, multiracial nation united in justice, peace and reconciliation; a nation that has a place at the table for children of every race and room at the inn for every needy child. We are called on this holiday, not merely to honor, but to celebrate the values of equality, tolerance and interracial sister and brotherhood he so compellingly expressed in his great dream for America.

It is a day of interracial and intercultural cooperation and sharing. No other day of the year brings so many peoples from different cultural backgrounds together in such a vibrant spirit of brother and sisterhood. Whether you are African-American, Hispanic or Native American, whether you are Caucasian or Asian-American, you are part of the great dream Martin Luther King, Jr. had for America. This is not a black holiday; it is a people’s holiday. And it is the young people of all races and religions who hold the keys to the fulfillment of his dream.

The expression of Dr. King’s dream in his famous “I have a dream” speech (full video) is all the more remarkable because it wasn’t planned. It came forth spontaneously when gospel singer Mahalia Jackson — there on the podium behind Dr. King — raised her voice and said, “Tell ‘em about the dream, Martin!” You don’t hear her exclamation in the audio, but you can see the change in Dr. King in the video. He had been looking down at his notes throughout the speech but after Mahalia Jackson’s plea, he looks up from the podium (video) and doesn’t look down again for quite a while as he utters his soaring words, sometimes with his head tilted towards the sky. Even setting aside the incredibly inspiring content of the speech, it is a remarkable display of rhetorical skill.

Dr. King’s dream has grown more personally meaningful to me with every passing year. Five years ago, my wife and I welcomed an adopted son from Korea into our family, making our family a multi-race family. Our family is a tribute to the purity of love — my wife, son, and I are not related to each other by blood but bonded only by our love for each other. That unconditional love for my beautiful son has opened my eyes to racism in a way they had never been opened. My son has been asked what is “wrong” with his beautiful eyes. People have said upon just meeting him, “I bet he’s good at math” (he isn’t particularly good at math). I’ve learned that these comments and other things are “normal” and that Asians are the most-bullied in school. We simply do not live in a color-blind, post-racial society even in 2017. That is why Dr. King’s words remain so important today and more meaningful to me than ever before: “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.” (video)

Like Dr. King, I can see a world where we can reach across the boundaries of race and culture to build lasting bonds of love based on our common humanity. I know this is possible because I’ve experienced it with my own family. I’ve learned that one of the tragedies of racism is that it prevents people from seeing the humanity of others and opening themselves to love and be loved by people who are only superficially different from us. I’ve experienced the profound love that can happen when you erase those boundaries and it gives me hope.

On this “people’s holiday,” Dr. King’s dream is my dream, too. And I will always be grateful to Mahalia Jackson for saying to Dr. King: Tell ‘em about the dream, Martin!