GUEST AUTHOR BLOG by Russell Eisenstat the author of "Higher Ambition: How Great Leaders Create Economic and Social Value."
How do you judge the effectiveness of a leader?
Leif Johansson, recently retired CEO of the Volvo Group, has a simple and powerful test. In addition to the usual metrics — return on investment, growth in market share, increases in shareholder value — Johansson uses what he calls the "kitchen table test": At breakfast with his family on Saturday mornings, he asks himself, How easy is it to explain what I have accomplished this week and the decisions I have made? Does my family get it? Does what I say make them proud? Does it make me proud to tell them about it?
Johansson is a prime example of what my co-authors and I call a higher-ambition leader. Higher-ambition leaders seek to do more than outperform the competition. They aspire to win — powerfully and consistently — with their customers, their people, their partners, and their communities, as well as with their investors.
They see winning on all fronts as both good business and a source of pride and purpose.
The higher-ambition leaders profiled in our research are not unique. Rather, I believe there are a large and growing number of leaders who share these values and aspirations.
These leaders believe in the value of higher ambition for both personal and pragmatic reasons. On a personal level, they understand that they will feel a lot better about investing most of their waking hours at work, if their work is genuinely making the world a better place.
On a pragmatic level, anyone who has ever tried to run a business, whether a corner grocery store or a Fortune 100 company, knows that they won't last very long if they don't go the extra mile to provide real and distinctive value for their customers. They also know that it is much easier to win in the marketplace if they have energized and engaged people working on their team. Finally, they know that business doesn't exist in a vacuum. When a company is not seen as a force for good, recruiting good people and partners is tougher, as is working with regulators and governments. Conversely, when everyone in the business — not just the CEO — can pass the kitchen table test with their families and talk with pride about their work, employee commitment and motivation will likely be off the charts.
So, the challenge for most leaders isn't whether they should be trying to excel at providing value to all stakeholders, but rather how to address the genuinely difficult leadership and business decisions that affect employees and communities — such as restructuring, downsizing, and outsourcing — without leaving their humanity at the door. As Peter Dunn, former CEO of Steak ’n Shake, explained, “If you are not strong enough as a human being to withstand a fair amount of heat, and basically know why you’re doing what you are doing, and to energize and inspire yourself in a very grounded way, the odds of your coming out of this alive are almost zero, because it’s too hard.”
"To succeed, leaders must find in their work a larger purpose that can inspire not only themselves, but others.""
To succeed, leaders must find in their work a larger purpose that can inspire not only themselves, but others. As Dunn explained, “The ability to lead and inspire others stems directly — and I mean directly — from the ability to lead and energize and inspire myself. In those moments when I am crystal-clear about what I stand for, and what I’m doing, and why I’m doing it, and why it matters, I can talk to anybody and get them fired up. I have to speak from the heart.”
Higher-ambition CEOs like Dunn and Johansson rely on family friends and trusted colleagues to help them stay centered and be clear about what they stand for. Doug Conant, former CEO of Campbell Soup, remains focused on what really matters for him: “I start out with what’s important to me. And it’s a lot more than work. My work is important, but my family is important. My community is important. I’m involved in my church and my own personal well-being.” To keep all of this top of mind, Conant has a plaque showing his personal mission statement – the five things that are important to him – hanging on the wall of his office. “This is why I’m on this earth,” he said. “Every month or so, I look at that mission statement. I ask, ‘Am I hitting on all five cylinders?’ Now, am I going to go high on them every day? No. Every week? No. But if I can’t look at the list and say, ‘I’m attending to these five things, I’m living a well-rounded life,’ experience says that I won’t be operating at peak performance for very long.’”
Not a bad way to pass the kitchen table test!
Russell Eisenstat is President of TruePoint Partners and a former member of the Harvard Business School faculty. Russ has written extensively for Harvard Business Review and other publications and is co-author with Michael Beer, Nathaniel Foote, Tobias Fredberg, and Flemming Norrgren of a new book, Higher Ambition: How Great Leaders Create Economic and Social Value. For more information, visit www.higherambition.org.