The Meaning Revolutionirpublicpolicy.ir/wp-content/uploads/2018/06/Fred... · Fred has accomplished a great feat. He has integrated rationality and spirituality to show how transcendent

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ADVANCEACCLAIMFORTHEMEANINGREVOLUTION

“TheMeaningRevolutionmakesthecasethatleadershipisn’tjustaboutthemind.It’salsoaboutthespirit.Fred’sbookshowshowwhenwesetgoalsthatreflectourvaluesaswellasourinterests—whenourteamsstrivetomakeapositive impactontheworldtogether—wecanachievemorethansuccess.Wecanfindgreaterpurposeandmeaning.”

—SherylSandberg,COOofFacebookandfounderofLeanIn.organdOptionB.org

“Welcome to the rigorously reasoned, deeply heartfelt, and always enlightening mind of FredKofman. Trained as an economist, with stops along the way as a management professor andconsultant,Fred’sofficialtitleatLinkedInisVicePresidentofExecutiveDevelopment.ButIhaveashorternameforwhathedoes.IcallhimtheHighPriestofCapitalism.”

—Reid Hoffman, founder and former chairman of LinkedIn; board member ofMicrosoft(fromtheforewordtothebook)

“ ‘TranscendentLeadership’isexactlythekindofenlightenedapproachthattoday’sleadersmustembracetowinintheworkplaceandinthemarketplace.”

—DougConant, founderandCEOofConantLeadership;formerCEOofCampbellSoupCompany

“I believe culture needs to be about realizing personal passions and using the company as aplatformtopursuethosepassions.FredKofmanexploresthatnotionevenmoredeeplythroughvividstoriesandtrulyprofoundreflectionsonbusinessleadershipandconsciouscapitalism.Whatisyournoblepurpose?Areyourkidsproudofyourcompany’smission?Whymight thebiggestbeneficiaryofyourbusinessbeyourcompetitors’customersandemployees?Readon!”

—SatyaNadella,CEOofMicrosoft

“AsFredKofmanmakesbrilliantlyclearinTheMeaningRevolution,realleadershipisnotabouthittingyournumbers—it’saboutcreatingacultureofpurposeandmeaning,andinspiringotherstorealizethattheycanmakealastingdifferenceintheworldaroundthem.”

—AriannaHuffington,founderandCEOofThriveGlobal

“Fred’s teachinghasbeena sourceof inspiration formesince theearlyYahoo!days.As IworkacrossthePacificwithcompaniesandteams,thereisapalpablegroundswellofyearningfornewwaysofharnessingwhatultimatelymatters:peopleandtheirmotivations.Thisbookshowsawayforwardwith a compelling intellectual core and a guiding spiritual path. It comes at a time astechnologies are changing theworld in evermore profoundways, and I hope Fred’s workwillcatalyzeaKuhnianparadigmshiftinleadershipthathelpsacceleratedpaceofhumanprogress.”

—QiLu,CEOofBaidu(China)

“Fred is one of themost enlightened people I’vemet in business.Over the last decade, he hasconsistentlyprovidedmeinsightsthathavechangedthewayIseemyselfandconnectwithothers.


TheMeaningRevolutionwilldothesameforyou.”—JeffWeiner,CEOofLinkedIn

“TheMeaningRevolution reminds us of the importance ofmoral authority, trust, compassion,andintegrity foreffective leadership.Buildingonhisconsultancyexperience, formerMITSloanprofessorandcurrentlyLinkedInVPFredKofmangiveslifetotheseconceptsthroughnumerouspersonalobservations.Wellwrittenandinsightful,thebookisamust-readforallthoseinterestedinleadership.”

—DrewFudenberg(professorofeconomics,MIT)andJeanTirole(NobelLaureateineconomics,ToulouseSchoolofEconomics);authorsofGameTheory

“Ialwaysknewinmyheartthatconsciouscapitalismcannotexistwithoutconsciousleadership,butIdidn’tknowhowtoprovethistothesatisfactionofpeople’sminds.Fredhasaccomplishedagreat feat.Hehas integratedrationalityandspirituality toshowhowtranscendent leadership isthekeyforhumanitytoprosperinpeace.”

—JohnMackey,founderandformerCEOofWholeFoods

“ThepathtoeffectiveleadershipthatFredKofmanlaysoutisn’ttriviallyeasytofollow,butifyoufollow it you’ll be much more than an effective leader. You’ll be an honest, empathetic, andinspiring human being who is living a deeply meaningful life. Kofman argues that vocationalgrowthandpersonalgrowthareinextricable,andheiswellpositionedtomakethatargument.Inadditiontobeingahighlyaccomplishedscholarandbusinessconsultant,heisadeeplyreflectivethinkerwhohas subjectedhis own life to the kindof bracing scrutiny that he recommends forothers.Theword‘spiritual’isoverused,butTheMeaningRevolutiondeservesthatlabel.Youcan’tread this bookwithout asking yourself deep and invaluable questions about your life and yourcalling.”

—RobertWright,seniorlectureratPrinceton;authorofTheEvolutionofGod,TheMoralAnimal,Nonzero,andWhyBuddhismIsTrue

“Apleasuretoread.FredKofmanuseshisacademictrainingandconsultingexperiencetoshowusthat economic concepts are crucial to understand and improve organizations’ leadership andculture.”

—JacquesLawarrée,professorofeconomicsatUniversityofWashingtonatSeattle

“Inthisbrilliantfollow-uptohisseminalbookConsciousBusiness,Kofmandistillsthewisdomhehasaccumulatedindecadesofworkadvisingandcoachingtheleadersofmajorcompaniesaroundtheworld.Beautifullywritten,thisbookilluminates‘thesimplicityontheothersideofcomplexity’thatOliverWendellHolmes said hewould give his life for. It is an essential guide to creatingorganizationsthatbecomesourcesofflourishing,meaning,fulfillment,andhealinginaworldthatcannolongeraffordtheunnecessaryconsequencesof‘businessasusual.’ ”

—RajSisodia,FWOlinDistinguishedProfessorofGlobalBusiness,BabsonCollege;cofounderandchairmanemeritus,ConsciousCapitalismInternational

“Mostofwhatcomes fromSiliconValley todayseems to implyscaryoutcomes forhumansandsocietyatlarge.ButherecomesFredKofman:leadershipisasocialtechnology,whosefunctionisto increase theprideofbelonging toawidereffort, restorepeople’s self-esteem,andultimatelygivetheunreasonablenonsenseof theworld,especially thebusinessworld,achosen,consciousmeaning.Recountedwith the passion of a practitioner and the precision of a philosopher,TheMeaningRevolutionisequalpartspowerfulandpleasurabletoread.”


—LaurentChoain,chiefpeopleandcommunicationsofficer,Mazars,France

“The unique insights that Fred Kofman shares in this book have changed the way I lead andmanage.Theyareatoncesimpleenough tobe immediatelyapplicableandprofoundenough tomeritalifetimeofpractice.”

—MikeGamson,seniorvicepresidentofGlobalSalesSolutions,LinkedIn

“Anexceptional,unbiased,andunfiltereddeconstructionofleadershipandmanagementofpeopleandorganizations.FredKofmancompletelydebunksthe‘onestylefitsall’viewonleadershipandgives us an alternative view onwhat workswhere and howwe can bettermanage and inspirepeople. A simple, direct, and profoundly helpful guide to extraordinary management andconnectingtoothersthroughpurpose.”

—Mohammad Abdulla Al Gergawi, minister of Cabinet Affairs and the Future,UnitedArabEmirates

“Thiswonderfulbookisfullofpracticalwisdom.Kofman’sgreatskill istobeabletodrawuponprofound ideas aboutmeaning, work, happiness, motivation, and even death; to give concreteadvice about how we can live better lives and build better companies. Like the best teachers,Kofmanisanengagingstoryteller,andlikethebestguides,hisstoriescarryweightbecausehehastraveledthispathhimselfandshownmanypeopletheway.TheMeaningRevolutionisapleasuretoreadandwillchangethewayyouthinkaboutyourjobasaleader.”

—JohnWeeks,professorofleadershipandorganizationalbehavioratIMD



Copyright©2018byFredKofman

Allrightsreserved.PublishedintheUnitedStatesbyCurrency,animprintoftheCrownPublishingGroup,adivisionofPenguinRandomHouseLLC,NewYork.PublishedsimultaneouslyintheUKbyVirginBooks,animprintofEburyPublishing,adivisionofPenguinRandomHouseUK.currencybooks.com

CURRENCYanditscolophonaretrademarksofPenguinRandomHouseLLC.

LibraryofCongressCataloging-in-Publicationdataisavailableuponrequest.

ISBN 9781524760731EbookISBN 9781524760748

Coverphotograph:(magnifyingglass)PeterDazeley/Photographer’sChoice/GettyImages

v5.3.1a


http://currencybooks.com

TOTHEYOUWHOYOUAREBEYOND

THEYOUWHOYOUTHINKYOUARE


CONTENTS

CoverTitlePageCopyright

Dedication

FOREWORDBYREIDHOFFMAN

Chapter1:AHotWorkshop

PART1:HARDPROBLEMS

Chapter2:Disengagement

Chapter3:Disorganization

Chapter4:Disinformation

Chapter5:Disillusion

PART2:SOFTSOLUTIONS

Chapter6:Motivation

Chapter7:Culture

Chapter8:Response-Ability

Chapter9:Collaboration

Chapter10:Integrity

PART3:SELF-TRANSCENDENCE

Chapter11:GetOverYourself


Chapter12:DieBeforeYouDie

Chapter13:BeaHero

Chapter14:SuperconsciousCapitalism

Epilogue:WhattoDoonMondayMorning

ACKNOWLEDGMENTS

NOTES

AbouttheAuthor


FOREWORDBYREIDHOFFMAN

Themosteffectiveleaderhasnofollowers.Benevolence, service, and love are the ultimate sources of economic

value.If you treat your employees as resources to optimize, you will never

ascend frommanager to leader.Tomake that leap, youmust recognizeyouremployeesasconsciousbeingswhoyearntotranscendtheirlimitedexistencethroughnobleimmortalityprojects.Welcome to the rigorously reasoned, deeply heartfelt, and always

enlighteningmindofFredKofman.Trainedas an economist,with stops along theway as amanagement

professor and consultant, Fred’s official title at LinkedIn,wherehehasworked since 2012, is vice president of Executive Development. But Ihave a shorter name for what he does. I call him the High Priest ofCapitalism.InthetraditionofAdamSmith,Fredrecognizescapitalismasakindof

spiritual pursuit with alchemical moral power. To achieve long-termsuccessinafreemarket,whereindividualsengageinvoluntaryexchangeaccording to their ownpreferences, businesses and entrepreneursmusttruly understand their customers’ needs and desires. Then they mustservethesecustomersinausefulandequitableway.Capitalism, then, can be a crucible for empathy, compassion, and

fairness.Andthedomaininwhichthistakesplaceistheworkplace.


Butwhilemanypeopleponderthemeaningoflife,fewertendtothinkdeeply about the meaning of work. In addition, capitalism is oftenportrayedasadomainwhereethicsandvaluescanbeputonholdintheexpedient pursuit of profits. “It’s just business” people often say whenthey want to rationalize ethical corner-cutting or outright sociopathicbehavior.That,however,isashort-sightedmind-setandatoxicone.Recognizing

theconceptofservicethatliesattheheartofcapitalism,Fredencouragesus to see the workplace not as an abstract realm of key performanceindicators and profit-and-loss statements, but rather as a supremelyhumanizedplace,aplacearoundwhichmostpeopleorganizetheirlives,achievetheirsenseofself,andpursuemeaningandimpact.Once we begin to embrace this key truth more consciously, we can

begin tomove from an “It’s just (simply) business”mind-set to a “just(justice)business”mind-set,whereinwefullyrecognizehowcompassion,integrity, responsiveness, and service lie at the heart of any high-functioningorganization.This“justbusiness”mind-setappliesnotjusttohowacompanyserves

itscustomersbutalsotohowitservesitsemployees.AsFredexplainsinthese pages, great leaders define and articulate an organization’s noblepurposeanditsvalues.Thentheyputthosevaluesintoactioninpursuitofthatpurpose,andinspireeveryoneelsewhoworksattheorganizationtodothesame.Here’s how Fred put it at the Wisdom 2.0 Conference in 2015,

describingJeffWeiner’sleadershipstyleatLinkedIn:“Alotofleadersarerowing a boat. They’re bringing everyone alongwith them, and saying,‘Comefollowme.’ButthewayI’veseenJeffandothergreatleadersdoit,they’llgoandgetonasurfboard.Theydon’tsay, ‘Followme.’Theysay,‘Comejoinusonthishugewave.’ ”In the formervision,everyone’s literally in thesameboat,doingonly

whattheirleaderallowsthemtodo.Inthelatter,everyone’sonthesamewave and moving in the same direction, but they have much morefreedom to improvise, to act boldly and creatively and set their owncourseofaction.Note,too,thatit’sa“hugewave.”What we see time and time again in Silicon Valley is how the


companiesthatgrowfastest,executemostconsistently,andbecomethedominantplayers in their industries—thecompanies thatdowhat I call“blitzscaling”orgrowingatlightningspeed—aretheonesthatdefinetheircorporatemissionsinbig,noble,andincrediblyambitiousterms.Googlewantstoorganizeall theworld’s information.Facebookwants

toconnecttheworld.Microsoftwantstomakepeopleandorganizationsmore productive. Airbnbwants to help its customers belong anywhere.LinkedIn wants to enable everyone to have their best economicopportunities.These companies commit to service on a global scale, and their big,

clearly definedmissions attract talented professionals seeking personalfulfillmentthroughworkthathasrealmeaningandimpact.But a big, noble goal is not enough. You also need the right kind of

cultureinplace.Entrepreneurship,Ioftensay,islikejumpingoffacliffandbuildinga

planeonthewaydown.Youhaveaplan,butyourresourcesarelimitedand time is running out. In the first chaoticmonths of starting a newventure, your default state is that you’re dead. To escape this fate, youhavetoreversethedownwardcourseofyourtrajectory,andfast.But here’s the thing. Success—and especially blockbuster success—

doesn’teliminatethedangerofafierycrash.Whenastart-upshiftsfromdeath plummet into blitzscaling mode, adding customers, increasingrevenues, and growing the size of its workforce at dizzying speeds, afounder’sjobgetsevenharderandmorecomplex.In this phase of a company’s development, an entrepreneur with a

breakthrough idea must also become an inspirational leader.Micromanagement, after all, is not a mechanism for rapid growth. Toscale quickly, an organization must give its employees the freedom toexecutewithspeed,creativity,andrisk.Which ultimatelymeans that themost productive organizations—the

ones that create the greatest returns for society alongwith the greatestreturns for investors—are the ones built on foundations of trust andintegrity.So read this profound book—but don’t stop there. Just as the best

leadershavenofollowers,andthebestteachershavenopupils,thebestbooksaren’tjustread.They’reactedupon.


In these pages, you can find great inspiration in Fred’s insights andactions.Butitisinyourownvalues,yourowncalltoservice,thatyouwillultimately find the senseofpurpose thatwill compel you towork—andlive—more consciously and productively, with the greatest possibleimpact.The Meaning Revolution is a call not for followers but for fellow

surfers.Areyoureadytocatchthatwave?


Chapter1

AHOTWORKSHOPYOURJOBISNOTYOURJOB

Success,likehappiness,cannotbepursued;itmustensue,anditonlydoessoastheunintendedsideeffectofone’spersonaldedicationtoacausegreaterthanoneself.

—ViktorFrankl

ItwasaswelteringJulyday inVegas,soofcoursetheconferenceroomwas freezing. The participants of my “Conscious Business” workshoppulledtheirjacketstightandgrimaced.Theyweren’tjustcold;theywerepissedoff.Theylookedatmeicily.Iknewwhattheywerethinking.I’ve been in situations like this many times. More often than not,

typicalmanagerswelcomemeaswarmlyas theywouldanonsetof flu.It’s as if we’re all stuck in some Dilbert cartoon, and I can read thethoughtbubblesappearingovereveryone’sheads.Whatthehellarewedoinghere?oneguywasthinking.I’vegotwork

todo!Anotherbullshitworkshop,thoughtsomeoneelse.Ihatethisstuff.Idecidedtoplayintotheirworstfears.“Let’sstartwithanicebreaker!”

Isaidinmycheeriest,mostworkshop-yvoice.“Findsomeoneyoudon’tknowand introduceyourself.Besureto tellyourpartnerwhatyour jobis.”Icouldheartheirmentalgroansastheyallturnedtotheirneighbors.After three painfulminutes, I asked for their attention. “Whowould

liketoshare?”Iaskedsweetly,asifIweretotallyunawareofhowmuchIwas annoying them. Nobody answered, of course. “You two, please,” Icalledonapair.“Tellusyourpartner’snameandjob.”“HisnameisJohn.He’sinlegal,”thewomansaid.


“HernameisSandra,”saidJohn.“Sherunsmarketingcampaigns.”“Wrong,”Isaid.SandraandJohnlookedpuzzled,asdideveryoneelse.Then,Vegasstyle,Ichallengedeveryoneintheroomtoawager:“Ibet

eachoneofyouahundreddollarsthatyoudon’tknowwhatyourjobis.Andthatitwilltakemelessthanaminutetoproveit.”Nobodysaidanything.“Oh,comeon,” Ipushedthem,“youreallyaren’tsurewhatyour jobs

are?”Ipulledoutarollofbills,withthe$100billclearlyshowingontop.“Takethebet.Ifyouwin,I’llgiveyouthehundredbucks.Ifyoulose,I’llcontribute the money to the charity of your choice. Raise your handunlessyoureallydon’tknowwhatyourjobis.”Afewpeopleraisedtheirhands,butmostofthemglowered,suspecting

asetup.“Letmemakeiteasier,”Isaid.“Let’snotbetmoneybuttimeandenergy.IfIwin,youstayintheworkshopandparticipatefully.IfI losewithmorethanhalfofyou,weclosethisworkshopandI’ll takethe fallwithyourmanagers.I’lltellthemIjustcouldn’tdoit.They’llneverknowbetter;whathappensherestayshere.Andtoclinchthedeal,youdecidewhetherIwinorlose.”Peoplegrimaced.Someshooktheirheads,determinednottoplaywith

me.“Come on,” I pleaded. “You’re stuck withme.What have you got to

lose,besidesyourconfusion?Ifyouwin,you’llget ridofmerightnow.Youcantelleveryonethestoryoftheidiotwhomesseduphisworkshopinthefirstfiveminutes.”Finally,Ihadtheirattention.Mostofthemraisedtheirhands.Ichosea

woman sitting in the front. I peered at the name on her badge andthankedher.“Thankyouforplaying,Karen.What’syourjob?”“I’maninternalauditor.”“Andwhat’syourjobasaninternalauditor?”“Toassurethattheorganizationalprocessesarereliable.”“Okay,Karen,let’sbegin.Everyone,pleaselookattheclock.Karen,did

youplayanysportsinschool?”“Yes,”shereplied.“Iplayedsoccer.”“Great! As anArgentinean, I’mwild about soccer.What position did

youplay?”


“Iplayeddefense.”“Whatwasyourjob?”“Tostoptheotherteamfromscoring,”shesaid.Iturnedtotherestofthemanagers.“Thejobofadefensiveplayeristo

stop the other team from scoring. Does anyone disagree? If so, pleaseraiseyourhand.”Nobodymoved.“So now, somebody else answer me, please. What’s the job of an

offensiveplayer?”“Toscoregoals,”severalpeoplesaidinunison.“Great,itseemswe’reallonthesamepage.Mynextquestionis,what’s

thejoboftheteam?”“Tocooperate,”someonesaid.“Tocooperateinordertodowhat?”“Toplaywell,”someoneelsesaid.“Andwhywouldtheteamwanttoplaywell?”“Towin!”cameashoutfromthebackoftheroom.“Bingo!” I replied. “The jobof the team is towin thegame.Anybody

disagreewiththat?”Theyshooktheirheadsandrolledtheireyes,annoyedatthisexercise

infutility.Isawsomeonefakingayawn.Histhoughtbubbleread,What’sthebigfriggingdeal?“Ifthejoboftheteamistowin,”Icontinued,undeterred,“whatisthe

primaryjobofeachandeverymemberoftheteam?”“Tohelptheteamtowin,”someoneelsesaid.“Rightagain!Doyouallagree?”Everyonenodded.“Here’smylastquestion:Iftheprimaryjobofeachandeverymember

of the team is to help the team towin, and if the defensive player is amemberoftheteam,whatistheprimaryjobofadefensiveplayer?”“To help the team win,” a third person muttered, clearly intuiting

wherethingsweregoing.“Yes!”Ipointedtothepersonwhosaidit.“Pleasesaythatlouder.”


“Tohelptheteamwin,”herepeated.“Okay. Please check the time. It’s been fifty-two seconds since we

startedthisdiscussion.”Peoplestilllookedpuzzled,soIexplained.“Whatistheprimaryjobof

adefensiveplayer?Isittostoptheotherteamfromscoringortohelptheteamwin?YouallagreedwithKarenaminuteagothatitwastostoptheotherteamfromscoring.Ihopeyou’llagreewithmenowthatit’stohelptheteamwin.”“What’sthedifference?”askedonecontrarian.“Imagineyouarethecoachofateamthat’slosingonetozerowithfive

minutestogo.Whatwouldyoutellthedefensiveplayers?”“Togoontheoffensiveandtrytotiethegame,”someoneasserted.“Exactly! Sohowwould you react if they told you, ‘Sorry,Coach, but

that’snotourjob’?”“I’dfiretheirasses.”“Why?Doesn’tthatmakeitmorelikelythattheotherteamcouldscore

asecondgoal inacounterattack?If thedefensiveplayer’s job is tohelptheteamtowin,thengoingontheoffensiveistherightthingtodo.Ifhisjobistominimizethegoalsscoredagainsthisteam,itisthewrongthingtodo.”Peopleweresmiling.Icouldfeelthetideturning.Ipushedfurther.“So

what’sthejoboftheoffensiveplayer?”“Tohelptheteamwin.”“Andwhat’sthejobofthewaterboy?”“Tohelptheteamwin.”Several people were giggling, but not everyone. “I still don’t get the

pointaboutourjobs,”someonesaid.“In1961,PresidentJohnF.KennedywasvisitingNASAheadquarters

for the first time,” I replied. “While touring the facility, he introducedhimselftoafellowwhowasmoppingthefloor,andheaskedhimwhathedidatNASA.Thejanitorrepliedproudly, ‘I’mhelpingputamanonthemoon!’ ”Iletthatsinkinforamoment.AndthenIaskedthem,“Howmanyof

you told your partner in the opening exercise: ‘My job is to help mycompanywin?’Howmanyofyourealizethatyourprimaryjobistohelp


yourorganization fulfill itsmissionethicallyandprofitably?Howmanyof you heard your partner describe his or her job as ‘contributing toincreasethevalue(andthevalues)ofmycompany’?”In the now-not-so-icy silence, you could hear the proverbial penny

drop.

BEATINGYOURNUMBERS,UNDERMININGYOURTEAM

In 2014, Veronica Block called to cancel her family’s Comcast Internetservice. She was immediately transferred to a “customer retention”representative who argued with her for ten minutes about why shewanted to cut off the service. Every time Veronica asked therepresentative to simply terminate the service, the reparguedwithher.The representative insisted that it was all about improving Comcast’sservice. “Tell me why you don’t want faster Internet service,” the fast-talkingrepresentativekeptsaying.Frustrated,Veronicahandedthephoneofftoherhusband,Ryan,who

had the presence of mind to record his eight-minute segment of thedialogue.1

Theconversationwaspainful,wheedling,circular,andirrational.“Myjob is to understand why you don’t want Comcast service,” the repargued,hisvoicerising.“Idon’tunderstandwhyyoucan’tjustcutitoff,”saidRyan.“Itsoundslikeyoudon’twanttohavethisconversationwithme,”the

rep whined. “I’m just trying to give you information.” Listening to therecording, you can practically hear the poor guy’s manager breathingdownhisneck.“I’mtryingtohelpmycompanybebetter,”therepsaysalittledesperately.“That’smyjob.”“I can guarantee you right now,” Block replied, “you’re doing an

incrediblygoodjobathelpingyourcompanybeworse.”TheSoundCloud clip thatRyan recorded andpostedonhis blogwas

playedmillionsoftimes.ItresultedinstoriesintheWashingtonPostandthe Los Angeles Times and on Good Morning America and theHuffingtonPost.ItwasdefinitelynotthekindofpublicitythatComcast


was looking for,especiallywhen itwas trying toexecuteawidelyhatedmerger with Time Warner Cable. Comcast later apologized for thesingular behavior of its panicked employee, but not until after thedamagewasdone.Inanycase,hisbehaviorisneithersingularnorpanicked;itissystemic

and rational. As with most companies, Comcast’s customer retentiongrouplivesinitsownsilo:everyoneinthatgroupisevaluatedaccordingtoachecklistofkeyperformanceindicators(orKPIs).Ibetyouthatthishaplessrep’sbonusandcareerdependedonthenumberofcancellationsthatwererecordedonhisshift,regardlessofwhetherornotitwouldbebestforthecompanytostopthoseclientsfromleaving.Hehadascriptthat he had to follow strictly or hewould be reprimanded. (And,mostlikely,hissupervisor’sperformancewouldbeaffected,too.)Hereiswhatthatrepwasstrugglingwith,withoutunderstandingit.To

dothebestforthecompany(inordertooptimizethesystem),youmust,attimes,dosomethingthat’snotthebestforyouoryourparticulararea(suboptimizeyoursubsystem).Forexample,todothebestforComcast,the customer retention representative should have courteouslyterminated the customer’s service, even though that was not what hisarea’sperformanceismeasuredon.Whenheoptimizedforhissubsystem(tryingaggressivelytoretainthecustomer),hesuboptimizedthesystem(annoying the customer and eroding Comcast’s brand). By doing “hisjob,” the customer retention representative ended up doing a greatdisservicetoComcastthroughoneofthebiggestpublicrelationsfiascoesoftheyear.

Inanormalorganization,youdon’tgetpaidtodoyourjob;yougetpaidtoplayyourrole.Yourrealjobistohelpyourcompanytowin;thatis, toaccomplish itsmissionprofitablyandethically.At times,your jobcontradicts your role, since it requires that you sacrifice your agenda,changeyourpriorities,or takeahit inyour individualkeyperformanceindicators. You don’t get rewarded for helping your company win,though; in fact,youmightbepunished for it,which is infuriating.Howcan they be so stupid! youmay think.They are settingme up so thatwhenIdotherightthing,Iendupworseoff.


The point is that too often each individual, and each part of theorganization, pursues his or her own interests at the expense of thewhole.Asthefoundingfatherofthetotalqualitymovement,W.EdwardsDeming, observed: “People with targets and jobs dependent uponmeetingthemwillprobablymeetthetargets,eveniftheyhavetodestroytheenterprisetodoit.”2

If only they tweaked this damned incentive system tomake itmorereasonable, you might think. But it turns out that a perfect incentivesystemisamythicalentity, likeaperfectcar.Youmustchoosebetweencomfort and performance, between crashworthiness and fuelconsumption, between quality and economy. You can’t have a familysedanthatisroomy,safe,reliable,andeconomicalandthatperformslikea sports coupe that is fast, responsive, nimble, and powerful.Organizationalleadershavetomakesomehardchoices:accountabilityorcooperation, excellence or alignment, autonomy or coordination.Unfortunately, collaborationconflictswithaccountability,andcollectiveperformanceconflictswithindividualexcellence.Thus, organizations end up with an insoluble dilemma. It’s like a

blanketthatistooshort.Ifyoupullituptoyourchest,yourfeetgetcold;ifyoucoveryourfeet,yourchestgetscold.Ontheonehand, individualincentives create silos; on the other, collective incentives destroyproductivity. Most organizations stick with the devil they know—individualperformanceindicators—andaccepttheconsequentimpactoncollaboration.The good news is that there is a betterway to address this problem.

And that is through the use of meaning—the ultimate nonmaterialincentive. The bad news is that the kind of leadership that can engagepeopleinmeaningfulworkismuch,muchharderthanyouthink.

THEINSPIRINGLEADER

Idefine leadership as theprocessbywhichaperson(the leader)elicitsthe internal commitment of others (the followers) to accomplish amissioninalignmentwiththegroup’svalues.


Leadershipisaboutgettingwhatcan’tbetaken,anddeservingwhatisfreelygiven.Thefollowers’ internalcommitmentcannotbeextractedbyrewards or punishments. It can be inspired only through a belief thatgivingtheirbesttotheenterprisewillenhancetheirlives.In an organization you are part of a team—internal conflicts

notwithstanding. As a teammember, you cannot win unless thewholeteamwins.Youmaybeanaccountant,anengineer,orasalesperson.Youmay work as an individual contributor, a manager, or an executive.Beyond all professions, roles, and levels, beyond your personal targetsand goals, you are a teammember and you need to align your effortstoward the entire organization’s collective success. Youmust cooperatewithyourcolleaguestowinasateam.Traditional command-and-control leaders think that they can make

peopledothis throughtheright incentives.Theyaskquestionssuchas:How can I motivate my subordinates to achieve their individual andcollective targets? How do I combine rewards and punishments tomaximize results? How do I tickle their greed and fear in the rightcombination?Suchmanagersmayhaveaninklingthattheycanneitherbuynorintimidateinspiredperformance,buttheystillbelievethattheycancoaxextraordinaryeffortsthroughcarrotsandsticks.But this is ludicrous. Imagine a thief pointing a gun at you and

commanding,“Givemeyourrespect!Yoursupport!Yourfriendship!”Great leaders, wherever they are in an organization, ask themselves:

HowdoIinspiremyteamororganizationtoworkinunison?HowdoIencourageeachpersontotakefullresponsibilityforhisorherindividualperformancewhile, at the same time,make the right sacrifices to reachourcompany’sgoal?HowdoIintegrateaccountabilityandcooperation?Howdo I inspiremy teamororganization to accomplish great, lasting,amazing things?Howdo I reachbeyond theoperational issues,beyondprofitsand losses, intosomethingbetterandmorebeautiful,somethingthat all our stakeholders will not only support but also wholeheartedlylove? How do I make my life and the lives of those around me trulymeaningful?Unfortunately, typical management techniques fail to address these

questions effectively, even in the hands of the best leaders. Standardmanagementtoolsdon’thelpgoodleaderstopreventsilos,fiefdoms,and


interfunctional conflicts that kill teamwork. In fact, such tools hinderteamwork.If you hope to be an inspiring leader, the first thing you must

understand is that such leadership has nothing to do with formalauthority;ithaseverythingtodowithmoralauthority.Heartsandmindscannotbeboughtorforced;theycanonlybedeservedandearned.Theyaregivenonly toworthymissionsand trustworthy leaders.Thisappliesnot only to organizations but also to many other domains of humanactivity.Consider thecaseofparental leadership.Asa father-manager, Iwant

mychildrentodotheirschoolworkbeforetheyplay.Iincentivizethembythreatening to take away their iPhones if I see themusing thembeforetheirworkisdone.Iaddacarrottothestick,promisingthatiftheyfinishtheirhomeworktheygeticecreamfordessert.Bycontrast,asafather-leader,Idon’tjustwantmychildrentodotheir

schoolwork. Iwantmychildren towant todo their schoolwork. Iwantthemtodoitbecausetheywanttodoit,notbecauseIwantthemtodoitandcanimposeconsequencesonthem.IwanttoinstillinthemhealthyhabitsbecauseIlovethemandbecauseIknowthataworkdisciplinewillenhance their lives.Butmyknowing that isnot enough. I have tohelpthemknowit,andknowitsodeeplythattheywillinternallycommittoit,andmakethehardchoicesrequiredthroughtheirownwill.Asafather-leader,Ihavetointegrateautonomyandcontrolaccording

to a higher principle: love. (Notice that I wrote “integrate” and not“balance.”Youdon’t“balance”rightandleftturnswhengoingfromhometowork;you turnrightor leftatanypointofyourrouteaccording toahigher principle, which is your destination.) Only when my childrenexperiencemeastrustworthy,andastotallyontheirside,willtheylistento me. Only when my children experience me as a role model, aspracticingwhatIpreach,willtheybelieveme.Asaleader,youdon’twantyourfollowerstodoastheyaretold.Thisis

becauseyoucan’tknowwhattheyoughttodotomosteffectivelyhelptheteamtowin.Andevenifyoudidwantthemtoobey,you’dalsowantthemtoput their discretionary effort and experience intowinning.Youwantthemtoactwithinitiative, intelligence,andenthusiasm;youwantthemto truthfully reveal the opportunities and challenges they see in their


surroundings; you want them to give their best to the organization, inconcert with everyone else. You can’t extract this behavior by force. Itmustbeinspiredbyenthusiasmandlove.Toelicitthisinternalcommitmentinyourfollowers,youneedtoreach

beyondoperational issues,beyondprofits and losses.Youneed to latchonto something better and more beautiful—something that all yourstakeholders will not only support but also wholeheartedly love andembrace.Youneed tomakeyour life and the livesof thosearoundyoutrulymeaningful.Tobeagreatleader,youmustunderstandthatsearchingforsuccessis,

paradoxically, the wrong way to achieve success. Success is likehappiness; it cannot be pursueddirectly. Themoredirectly youpursuehappiness, the less likely you are to achieve it. Pursuing happinessdirectlymayresultinshort-termhedonisticpleasure,butitdoesnotleadtoauthentic,soul-satisfyinghappiness.Toachievesuccessyoumustlivealife of meaning and purpose. You must pursue significance, self-actualization, and self-transcendence—not just for you but also foreverybodywhoworkswithyou.Agreatleadermakesthefollowingoffer:“Inadditiontocompensation

and benefits, I will provide youwith an opportunity to infuse your lifewithmeaning.Iwillprovideyouwithaplatformonwhichyoucanbuildapersonal and social sense of worth. This platform will enable you toprosper not only materially, but also emotionally, mentally, andspiritually: emotionally, because we will relate to you as one of us;mentally, becausewewill respect your intelligence; spiritually, becausewewilljoininaprojectthattranscendsoursmallegosandconnectsustoalargerpurpose.“In exchange,” such a leader proposes, “I want your unbridled

enthusiasm.Iaskthatyougiveyourutmostenergyinserviceofourgreatproject.Iaskthatyouexemplifyourvaluesandcultureandholdothersaccountable fordoing the same, and that you relate to your teammateswith kindness, compassion, and solidarity. I want you to subordinateyour personal agenda and collaborate with your teammates, doingwhateverittakestohelptheteamtowin.Iaskthatyouputyourheart,mind, and soul into fulfilling the noble vision that animates all of us,aligningyoureffortswiththerestoftheorganization.”


MYARGUMENT

Ifyouwanttoleadatrulysuccessfulandenduringorganization,I’vegotthis message for you: Well-harnessed inspiration, born of deepunderstandingandcompassionforourhumannature, isnotjustafairydusttosprinkletomakepeoplefeelgood;it’sthesolutiontothehardestproblems in business and in society today. It answers the toughestquestions:HowcanIalignself-interestedindividualsinthepursuitofacommongoal?HowdoIgetpeoplewhoarefundamentallyinterestedintheir ownagendas (my issues,my to-do list,my agenda,my KPIs,mycompensation) to cooperate with one another in pursuit of a sharedpurpose(ourchildren,our customers,our collective future)?Howdo Igetthemtodotheirbesttoaccomplishtheirindividualmissions,butalsotosubordinatetheirmissionstothelargermissionoftheorganization,sothatthewholeteamwins?HowdoI incentivizetheminawaythatwillmake themmore engaged?What can I, or the organization, offer themthatwill satisfy their deeper emotionalneeds, and give themabroadersenseofcommitmentandpurpose?Inthisbook,Iwillshowyouhowtoresolvetheconflictingagendasof

self-interest and organizational mission into something much richer,more satisfying, and enduring. I will show you how to mobilize anorganization into becoming a source of lasting goodness in the world,creating an enormous sense of accomplishment, service, and joy in allthoseassociatedwithit.Todothis,Iwillshowyouhowtoconfrontyourown personal issues and assume the truly “response-able” mantle ofleadership, in a step-by-step, practicalway. But Iwill go deeper: Iwillshowyouhowtomovepastyourowndeepestfearsandanxietiestoliveatrulyheroic life. It isonly throughbecomingamoralhero thatyouwillearntheauthoritytoinspiregreatnessinthosearoundandunderyou.TheMeaning Revolution addresses two fundamental questions: why

organizationsloseandhowtheycanwin.

1.WHYDOORGANIZATIONSLOSE?

The most difficult organizational problem is aligning self-interestedmembers in pursuit of a common goal. I argue this cannot be done


througheconomic incentives. If theorganization incentivizes excellenceandaccountability,itwilldisincentivizealignmentandcooperation.Iftheorganizationincentivizesalignmentandcooperation,itwilldisincentivizeexcellence and accountability. Incentives for accountability foster silos.Incentivesforcooperationrewardfreeriderswhodon’tcontributefully.The second most difficult organizational problem is to get the right

informationtotherightpeopleattherighttime,andintherightformat,to make the right decisions. This cannot be done through formalcommunications because eachmember holds both private and detailedlocalknowledgeaboutresources,costs,opportunities,andthreats.Evenifanorganizationwereabletoconvinceall itsmemberstoeschewtheirself-interestand fully revealeverything theyknowfor thebenefitof thewhole, that knowledge would be too complex and unstructured to beuseful.Itcan’tbecommunicatedtothedecisionmakersinaformatthatletsthemcomparealternativesandmaketherightdecision.Theseproblemscan’ttrulybesolved.Buttheycanbemanaged.Infact,

most leadershipandmanagerial techniques try todo just that.But theydo itpoorly.Theygoonlyhalfwayand fail touse tools thatcanmakeamassive difference. But even though the situation facing leaders todaymayseemdesperate,itisnotserious.Itremindsmeofthejokeaboutthetwohikerswhowerewalkingthroughthewoodswhentheynoticedabearchargingtowardthem.Thefirsthikerremovedhistrailbootsandputonhis running shoes. The second hiker despondently said, “Why botherchanging out of your boots? You can’t outrun a bear.” The first hikerreplied,“Idon’thavetooutrunthebear.Ionlyhavetooutrunyou.”Thegoodnewsis thattowin inthemarketplaceyoudon’thavetobe

perfect; you only have to be better than your competitors. I guaranteethat any competitor you face will be plagued by exactly these sameunsolvableproblems.Sothegoalisnottosolvethembuttomanagethemmore efficiently. As the popular saying goes, “In the land of the blind(materialist), the one-eyed man (who sees the other dimensions ofhumanexistence)isking.”

2.HOWCANORGANIZATIONS,ANDTHEPEOPLEWITHINTHEM,WIN?

It’s impossible to travel one hundred meters in no time. It’s alsoimpossible to perfectly align all organizationalmembers in pursuit of a


common goal and to take full advantage of their local knowledge.Winningtheracerequiresaddinganewsetoftoolstoyourkit,somethingthattakesyouandyourorganizationwhereotherscan’tgo.By becoming a transcendent leader, you can address the essential

problems of incentives and information much, much better than mostleadersdorightnow.Transcendentleadershipreliesontheinspirationalpowerofnonmaterialincentives—employees’personalsenseofmeaning,achievement, and self-esteem, as well as shared values and ethics, andtheir desire to belong to a community. The transcendent leader invitespeople to join a project that infuses their lives with meaning andsignificance. Such a project promises to leave amark in theworld thatwillfartranscendthelivesofthosewhocarrieditthrough.Thenonmaterialgoodsthatare thepillarsof transcendent leadership

haveararecombinationoftwopropertiesthatenableleaderstoaddressorganizationaldilemmasinwaysthatmoneyandperkscan’ttouch.First, moral and ethical goods are, in the words of economists,

nonexclusive.Thismeans that ifwework in the sameorganization,myenjoyment of our noble purpose, ethical values, and close communitydoesnottakeanythingaway(anditmayevenadd)toyourenjoymentofthese boons. Contrast this, for example, to a bonus pool, where theallocationofacertainamounttoyoumeansthatsuchanamountisnotavailable to me. While material goods are always under a budgetconstraintandcreaterivalryduetoscarcity,moralandethicalgoodsareunconstrained and create cohesion because they are founded in sharedculturalnorms. In thissense, theyare likewhateconomistscall “publicgoods”suchasnationaldefense,alighthouse,orfireworks.Second, in contrast to public goods, moral and ethical goods are

“excludable.”Thismeansthatifyouarenotpartoftheorganization,bothformally and emotionally, these goods are unavailable to you. Contrastthis, for example, to the national defense or the Internet that everyonerelies upon. Excludability creates a sense of boundary that defines acommunity of like-mindedmemberswho share a purpose and a set ofethical values. This shared purpose fosters the cohesion of theorganizationalmembers inabetterway thananymaterialgood. In thissense,moralgoodsarelikewhateconomistscall“privategoods,”likethestuffwebuyandsellinthemarketplace.


Economists call excludable, nonexclusive goods “club goods.” That’sbecauseonceyouareamemberof“theclub,”youcanenjoythemwithouttaking anything away from the enjoyment of other members. But youhavetobecomeamemberoftheclubtoenjoythesegoods.Moral goods allow leaders to discriminate between mission-driven

(missionary) andmoney-driven (mercenary) employees.Byoffering therightmixbetweenmaterialandnonmaterialincentives,youcanappealtodifferentgroupsofpotentialemployees.Compensation isalwaysa “packagedeal.”Likean iceberg, salaryand

benefitsarethevisiblepart.Buttheycompriselessthan15percentofourmotivation. Over 85 percent of the reason people are engaged in theirwork liesunder thesurface.Andthatpart iscomposedofrespect,care,integrity,afeelingofbelonging,asenseofachievement,anoblepurpose,andethicalprinciples.Abraham Maslow, the acclaimed psychologist who described

humankind’shierarchyofneeds,claimedthatoncewehavesatisfiedourbasic needs for survival and security, like food and shelter, our highestdesireisthefeelingthatourlivesmatter,thatwecanmakeadifference,thatwecancontributetomaketheworldabetterplaceforthosearoundusandthosewhowillcomeafterus.Weallwanttolive,tolove,andtoleave a legacy. An engaging organization enables people to achieve allthree.Itistheultimateclubofhappinessandenthusiasm.

ABRUSHWITHDEATH

On February 18, 2004, Mark Bertolini, a senior executive at the gianthealthinsurancecompanyAetna,wasskiingwithhisfamilyinKillington,Vermont,whenhelostcontrol,bouncedoffatree,hurtleddownaravine,andbrokehisneck.Prior to the accident, Bertolini was quite fit, so he had a built-in

resiliencethathelpedhimrecoverremarkablyrapidly.Butafterwardhewas in constantpain.Hisdoctorsprescribed traditionalpainkillers thatheknewcouldhave turnedhim intoanaddict, sohe turned to the lessconventional interventions of yoga, stretching, and meditation. He felt


better,returnedtowork,andwasthennamedchiefexecutive.Bertolinitooktowearingashinymetalamuletaroundhisneckinstead

of a tie. The amulet is engraved with the Sanskrit characters “soham,”whichmeans, “I am That,” amantra used to help control breathing inmeditation. It signifies a spiritual connection with the universe.Everywherehegoesinthecompany,peopletakenoticeoftheamuletandadmirethefortitudeoftheirleader.ThenewCEOdecidedthatwhathadhelpedhimhealsowellwouldbe

good for his employees and customers, too, so he chose to use hiscompany as a laboratory. Two hundred thirty-nine employeesvolunteered for an experiment: one-third practiced yoga, another thirdtookamindfulnessclass,andtherestwereinacontrolgroup.Attheendof three months, the employees in the yoga or the mindfulness classreported significant reduction in perceived stress and sleep difficulties;their blood work also showed a drop in stress hormones. “Thebiostatisticianswerebesidethemselves,”Mr.Bertolinisaid.Later,whenMr.Bertolini reviewedAetna’s financial performance for

2012,henoticedsomethingsurprising:paidmedicalclaimsperemployeehad dropped 7.3 percent, saving roughly $9 million in costs. Becauseproductivity grew, the company raised its minimum wage for hourlyworkers from $12 to $16 an hour, and the company reduced out-of-pockethealth-carecosts,too.“Ifwecancreateahealthieryou,wecancreateahealthierworldand

healthier company,” Bertolini told employees, who took his words toheart.Feelinghappierandmoresatisfiedatwork,theyboretwiceashardintotheirmissionbecausetheirdeath-touchedleaderhadreachedadeepunderstandingthatgoesbeyondmaterialincentives.3

This understanding went right to the heart of the transcendentpurpose: the “I am That.” My guess is that Bertolini is able to extendagape (the ancient Greek word for “compassionate love”) to all hisstakeholders, enacting the commandment “love thy brother as thyself,”becausehefeels,deepinhisbones,thattheyandheareone,aseachoneofthemisalso“That.”ImagineworkingforsomeonelikeBertolini—aliving,breathingsymbol

of this kind of near-death understanding, wearing that symbol on hisneck. How does he compare to the leadership of the company you’re


working innow?Whatwould itbe liketobe inthepresenceofsuchaninspiringperson?(Abighealthinsurancecompanyhasabigadvantageinterms of vision; its raison d’être is sustaining life and health.) Thequestion is: Do the people in your company, division, or team believethis?Oraremanyjustworkingfortheirpaychecks?Bertolini has amuch greater understanding of leadership thanmost

leadershavebecauseofhisbrushwithdeath.Heisno longerdetached,norishebeholdenonlytothefinancialnumbers.He’sthinkingbigger—much,muchbigger.“IamThat”meansthatwe—allofus,fromtheCEOtothejanitor—are

expressions of “That”—an enormous, vital, animating force. When youlearntotapintothatrealization,asBertolinihasdone—youbecomewhatI call a transcendent leader.Whatwould it be like to be such a leader,breathingthisrichunderstandingofthemeaningoftheworld,translatedinawayemployees,managers,andcustomerscanunderstand?

THETRANSCENDENTLEADER

Ibelievethemostdeep-seated,unspoken,anduniversalanxietyinallofus is the fear that our life is beingwasted. That deathwill surprise uswhen our song is still unsung. We worry not just about our physicaldeath, but also, perhaps more significantly, our symbolic one. We areafraidthatourliveswon’tmatter,thatwewon’thavemadeadifference,thatwewillleavenotraceinthisworldafterwearegone.Ifyou’reyoungandhealthy,youprobablydon’tpaymuchattentionyet

tothisanxiety.Itremainsasakindofwhitenoiseinthebackground,likethefainthumfromfluorescentofficelights.Everyonceinawhile,ifyouhavejustdodgedabulletasMarkBertolinidid,youmightreflectonwhatthisamazinggiftoflifeisfor.Youmayaskyourself:WhyamIhere?orWhatdifferenceamImaking?Whatwillmylegacybe?If youare fortunateenough to confront thesequestions, youcome to

realizethateverytickingsecond,everyopportunitytodogoodinthetimeyouhaveleft,becomesmoremeaningful.Youwanttomakethemostoftheprecious timeyouhave, appreciatingbeautyandcreating joy.What


youdon’twanttodoisspendyourdaysperformingworkthatfeelstrivialorwithoutpurpose.Youwanttowakeeverymorningfeelingthatyouaremakingadifferenceintheworld.Onceyoutapintothisrealization,I’vefound,yourtruenatureisallowedtoshinethrough.Youhavetheabilityand reason to become a transcendent leader. You breathe this richunderstandingofwhatalifewelllivedreallylookslikeoutintheworld.You inspirepeople aroundyou toworkwith anew sense of possibility.Youhavetheability to illuminatetheorganization inawaythatrevealsitsultimategift:meaning.Transcendentleadershipdissolvesthehardestorganizationalproblems

ina liquidmixofsignificance,nobility,virtue,andsolidarity.Itoffersaway for those who follow its principles to address the core existentialanxiety of every human being. That’s why a leader who proposes asymbolic “immortality project,” as humanist Ernest Becker called it—aproject of enduring value beyond one’s life—has an amazing way toengagethebestinus.In the past, these immortality projects took the form ofmilitary and

cultural campaigns based on the attitude that “we are better than youbecausewecandefeatandenslaveyou.”Butinthefreemarket,ourgoalisnottoeliminatethecompetition;rather,itistoprovidesomuchvalueto stakeholders that customers choose us over the competition;competitors either have to follow or risk being left behind. Due to thevoluntary nature of transactions, the free market allows each party to“optout”unlessheorshefeelsheorsheisgainingvalue.Theonlywaytoprofit is to make other people profit or do better. It transforms self-interestintoservice,andimperialismintotrade.Ittakesaspecialkindofpersontobeatranscendentleader.Thosewho

embracesuchthinkingdon’tnecessarilyhavetohaveabrushwithdeath,buttheydoneedtohavelookeddeeplywithinthemselvestounderstandtheexistentialanxietyatthecoreofeveryoneofus.Theymustfacetheirown fear of death in order to create a significant and beneficentimmortality project—a service-driven organizational mission thatemployeeswholeheartedlycommitto.Leadersmustfindtheirtrueselvesthrough a “hero’s journey” and share their hard-earned personalawarenesswithothers,withhumility,wisdom,andcompassion.Transcendent leaders work to align the individual purposes of those


under them into a larger collective purpose thatmakes each individuallargeraswell.Theyunderstand that if youwant tomakeaccountabilityandcooperationoccuratthesametime,youneedtoinspirepeopleandcreate a culture of commitment and connection to a larger purpose.When this happens, people look beyond their silos and their smalldecision-making issues. They align their best efforts with theorganization’sinnaturalwaysthatothersystemscan’tleadthemtodo.Itis the difference between rowing and sailing. A boat moved by meremuscleisnomatchforonemovedbywind.Aboatpropelledbythewindflows in harmony with the natural forces. An organization that movesforward by formal authority is like a rowboat. One moved by atranscendentpurposeislikeasailboatwiththewindbehindit,fillingitssails.Transcendent leaders are rare. But they do exist (and I profile a

numberof them in this book).They inspire followersnotby relyingoncarrots and sticks (offering a nice salary, bonus, and tangible perks, orthreateningthemwithdemotionorfiringthem)butbyappealingtothebelief that they have spent their waking time doing some good in theworld.Transcendentleaderstendtobeself-effacing.TheyembraceLaoTzu’s

lesson: “The wicked leader is he whom the people despise. The goodleaderishewhomthepeoplerevere.Thegreatleaderisheofwhomthepeople say, ‘We did it ourselves.’ ” They encourage and empower theirpeople to follow the mission, rather than themselves. In fact, I wouldargue that the truly transcendent leader has no followers—a point I’llreturntolater.Companies and other organizations can become houses of meaning

constructed on foundations of benevolence, service, and love. I believethisistheultimatesourceofeconomicvalue.Connectingpeopletotheirhighestpurposeatworksolvesthebiggest,hardestproblemthere is forthosewhoworkfororganizations(howtoachievesymbolicimmortality),for organizations (how to align employee’s self-interests in pursuit of asharedgoal),forsocieties(howtofosterpeace,prosperity,andprogress),and for humanity (how to coexist in tolerance andmutual respect andavoidconflictandself-destruction).Transcendent leadership demands that we have the ability to look


deeplyinward—beginningwithrecognizingourowninevitablemortality—and the self-discipline to embody theprinciples that inspireothers topassionatecommitment.(Iofferasoberingwarninginthisbook, too.Ifyou attempt to motivate people through high-minded talk withoutactually becoming a living example, your followerswill end up cynical,disengaged, and angry.) I ask you to inspire others through a commonpurpose, a strong set of ethical principles, a community of like-mindedpeople,afeelingofunconditionalempowerment,andapassionatedrivetoachieve.Thesearenoteasytasks,butmeaninghasnothingtodowithease.

HAPPINESSORMEANING?

The pursuit of happiness and the search for meaning are two centralmotivations in every person’s life. Both are essential to well-being andflourishing,yetonlythelatterisdistinctivelyhuman.AsthepsychologistRoyBaumeisterpointsout,“(We)resemblemanyothercreaturesintheirstriving for happiness, but the quest formeaning is a key part ofwhatmakesushuman,anduniquelyso.”4

Happiness and meaning often build on each other, but not always.Living ameaningful life is different from, and can even be opposed to,being happy. Take the “parenthood paradox,” for example. Parents ofgrown-up childrenmay say that they are veryhappy they’vehad them,butparentswhoarestill livingwithchildrenscore lowonhappiness. Itseems that raisingkidsdecreaseshappinessbut increasesmeaning.5Orconsideremergencyvolunteers,whooftengothroughgreatordealsandtraumatic experiences in order to help those afflicted by accidents ornaturalcatastrophes.Sufferingnegativeemotionsforthesakeofanoblepurposebringsmeaningtotheirlives,butitdoesn’tmakethemhappy.What’sthedifference?Happiness,understoodaspleasureandpositive

feelings,hasmoretodowithsatisfyingyourneedsandgettingwhatyouwant.Meaning,understoodassignificanceandpositiveimpact,isrelatedtodevelopingapersonalidentityandactingwithpurposeandprinciples.Youmight findthatyoufeelhappy ifyou findthatyour life iseasyand


youhaveachievedameasureofsuccess,butyoumaynot feel thatyourlifehasmuchmeaning.Ontheotherhand,reflectingaboutthepastandthe future, confronting adversity, and starting a family increasemeaningfulness but not necessarily happiness. Higher levels ofmeaningfulnessarerelatedtodeepthinking,whichisconnectedtohigherlevelsofworry,stress,andanxiety.However,meaningisassociatedwithadaptation capabilities such as perseverance, gratitude, and emotionalexpression.6

Meaninghas twomajorcomponents:makingsenseof life (cognition)and having a sense of purpose (motivation). The cognitive componentinvolves integratingexperiences intoacoherentnarrativeas if itwereastory, taking a third-person perspective on one’s life. Themotivationalcomponent involves actively pursuing long-termgoals that reflect one’sidentityandtranscendnarrowself-interests.Wearemostsatisfiedwhenweengage inmeaningfulpursuitsandvirtuousactivities thatalignwithourbestself.7

“Happiness without meaning characterizes a relatively shallow, self-absorbed,orevenselfish life, inwhich thingsgowell,needsanddesireare easily satisfied, and difficult or taxing entanglements are avoided,”wroteBaumeister. “If anything,purehappiness is linked tonothelpingothers in need.”8While being happy is about feeling good,meaning isderived fromhelping others or contributing to society. Yetwhatwouldyou prefer to havewritten on your tombstone, “Here lies (your name),whostrivedtomakehis/her lifehappybygettingwhathe/shewanted,”or“Herelies(yourname),whostrivedtomaketheworldabetterplacebygivingwhatthosearoundhim/herneeded”?

According toGallup,9 nearly 60 percent of all Americans felt happy,withoutalotofstressorworry,in2012.Ontheotherhand,accordingtotheCenterforDiseaseControl,10about40percentofAmericanshavenotdiscoveredasatisfyinglifepurposeorhaveasenseofwhatwouldmaketheir lives meaningful—half of them (that is, 20 percent of Americanadults)sufferanxietyanddepressiondisorders.Researchhasshownthathavingpurposeandmeaningin life increasesoverallwell-beingandlifesatisfaction, improves mental and physical health, enhances resiliencyandself-esteem,anddecreasesthechancesofdepression.Incontrast,thesingle-mindedpursuitofhappinessmakespeoplelesshappy.11


Ascompaniescompetefortalent,theytrytogiveemployeeswhattheywant, tomake themhappy:higher salaries, lower stress,morebenefits,and fewer difficulties. But this strategy generally backfires. As thepsychiatristViktorFranklwrote, “Thegreatest task foranyperson is tofindmeaninginhisorherownlife.”Mostpeoplediverttheirenergyintotryingtobehappy,but“(i)tistheverypursuitofhappinessthatthwartshappiness.”12Whatpeoplereallywant,whatmakesustrulyhappyinthelong term is not pleasure but meaning. Andmeaning is the offer of atranscendentleader.

WHOISFREDKOFMAN?

Thirty years ago, after earning a degree and becoming a professor ofeconomicdevelopmentat theUniversityofBuenosAires, I came to theUnited States as a graduate student. At UC Berkeley, I focused on theeconomictheoryofincentivesasmyfieldofspecialization.AttheendofmystudiesItookajobasassistantprofessorofmanagementaccountingand control at MIT’s Sloan School of Management. My teaching andresearchtherefocusedonthedesignandimplementationofperformanceevaluation and reward systems. Thanks to MIT’s strong ties withindustry, I had extraordinary opportunities to collaboratewith some ofthemostinnovativecompaniesintheworld.Duringmyyearsinacademia,Itriedtosolvethefundamentalproblem

oforganizations: that is,howto integrate individualaccountabilitywithgroup cooperation through financial incentives. I fulfilled my PhDrequirementsandachievedawardsas“outstandingstudentinstructor”atBerkeley’sEconomicsDepartmentand“teacheroftheyear”atMIT.Ialsoreceivedmanyrequestsfromcompaniestoconsultfortheminthisarea.But throughout the years I came to understand that such integrationcouldn’tbejustmathematical.Thesolutiontothehardestorganizationalproblemmustalsobespiritual;itneedstoengagethe“animatingforce”that gives human life purpose and meaning. So as a mathematician Ifailed; but I failed splendidly. My failure brought me to theunconventionalpaththatgavemylifeadeepermeaningandhasledmetowritethisbook.


ThankstomymentorPeterSenge,authorofthegroundbreakingbookThe Fifth Discipline, I began teaching leadership workshops forcorporations suchasGeneralMotors,Chrysler, Shell, andCitibank.Mywork was well received, and I found that I enjoyed interacting withbusiness leaders more than I did with MBA students—the former hadbeenhumbledbyreality,while the latterstill thought thatmanagementwisdomcamefrombooksandcasestudies.Soaftersixyears,IquitMITandfoundedAxialent,aconsultingcompanythat,atitsheight,employed150peopleinsevenofficesaroundtheworld.Tenyearsago, IpublishedabookcalledConsciousBusiness:Howto

Build Value Through Values. My purpose was to compile what I hadlearned about what anybody who works in an organization needs toknow.Thatbook,translatedintoadozenlanguages,wentontosellmorethanahundredthousandcopies,andIhavebeentoldthatithasinspiredleaders around the world. Since then, I’ve thought much more deeplyabout what it takes to create and lead a conscious business. As aconsultant,I’vetalkedtoalotofmanagers,seniorexecutives,andCEOsin companies all over the world about what it’s like to be a consciousleader, and about how to address the most difficult organizationalproblems.Ileftmyconsultingcompanyin2013tojoinLinkedInasvicepresident

ofexecutivedevelopmentandleadershipphilosopher.MyjobatLinkedInis to help the company to accomplish its mission of “connecting theworld’sprofessionalstomakethemmoreproductiveandsuccessful.”Idothis by helping employees at all levels in the managerial hierarchy todevelopinto“transcendent”leaders—ethicalleaderswhowakeuptotheirownsenseofmeaningandcallotherstopursuealarger,noblerpurpose.I then help these leaders to inspire others towork cooperatively in thepursuit of that purpose, and to stay aligned in the face of competingcommitments. It’sanunusual job,even inanunusualplace likeSiliconValley.My approach to leadership training has very little to do with the

standard things taught inbusinessschool—oranyotherschool, for thatmatter.Instead,itasksthateachoneofustakeaverylong,hard,honestlook in an existentialmirror. It is part economics and business theory,partcommunicationsandconflictresolution,partfamilycounselingandsystemstherapy,andpartmindfulnessandmeditation.


Toomanypeoplefeelthatmeaningfulworkistheprovinceofnonprofitorganizations.Idisagree.Whilewecanhelpothersandalleviatesufferingthroughvolunteerismornonprofitwork,Ibelievenothingholdsacandleto economic development as a way to eradicate poverty and bringhumanity to a higher level of prosperity, peace, and happiness.Entrepreneurs who behave ethically are the engines that propel thegrowthofhumanity,creatingvaluetoalltheirstakeholders.That’swhatconsciousbusiness,andtranscendentleadership,areallabout.

WHATIS“THEMEANINGREVOLUTION”?

InThe Structure of ScientificRevolutions, the physicist, historian, andphilosopher Thomas Kuhn argued that normal science happens inperiodswherethereisanacceptedparadigmthatorganizestheresearch.Over the course of this period, insoluble puzzles or anomalies crop up.Science then enters a revolutionary period in which scientists ask newquestions, move beyond the mere problem solving of the previousparadigm, and change theirmentalmodels to point research in a newdirection.Ineconomics,thereisapuzzleinvolvingtwoapproachestoincentives.

From a “systems perspective,” individualsmust subordinate their localobjectives to cooperate toward a global objective. Therefore, amanagershould use global incentives. For example, a sales manager shouldcompensate each salesperson as a function of the sales of the wholesalesforce rather than his or her own sales. This will avoid raisingartificial barriers between “my” customers and “your” customers, sincetheyareall“thecompany’scustomers.”Froma“principal-agentperspective,”individualsmustbeaccountable

for the results of their work. Therefore, a manager should use localincentives. For example, a sales manager should compensate eachsalesperson as a function of his or her own individual sales. This willencourage every salesperson to put their maximum effort withoutattempting to “free ride” on the effort of others and attract the bestsalespeople.


Economists have mathematically proved both systems theory andprincipal-agent theory.Theproblemis that thepractical implicationsofthese two theories are mutually incompatible. They cannot both beimplementedsimultaneously,andtryingtocombinethemhalfandhalfisworsethaneitherofthem.I propose to resolve this puzzle through nonmaterial incentives.The

MeaningRevolutionexploresaparadigmshiftfrommattertomeaning;from compensation, command, and control to purpose, principle, andpeople; from management to leadership. I propose that rather thanseeing employees asmachinelike entities driven bymaterial incentives,you need to see them as conscious beings who want to achievesignificanceandtotranscendtheirlimitedexistencethroughprojectsthatgivemeaningtotheirlives.This book is about the work of going beyond being what I called a

“conscious” leader in Conscious Business to become a “transcendent”leader.AlthoughIprovidesomeverypracticaladvicethroughout,Iholdthat transcendent leadership supersedes average managerialprescriptions because it is not only away todo leadership or away toknowhowtolead,butitisawaytobealeaderwhoinspiresfollowerstofindwhatismostpreciousintheirlivesandcommittomanifestingit.Thereisnoshortageofbusinessbooksadvisingleadersatalllevelshow

togetthingsdone—howtoorganizechange,hiretherightpeople,executestrategy,andsoon.Theyalloffergoodadvice.Buttheymisssomethingfundamentalaboutthehumancondition,makingthemmoresuitableforoperational managers than for genuine leaders. The very question of“Howdoyou…?”ismanagerial.Thegreaterleadershipquestionis“Whoareyou?”Leadership emerges from our human need to make our lives

meaningful.Nobodywants their accomplishments to just be a “flash inthepan.”Weallwant toextendourselves, touchothers’ lives,andhaveimpactontheworld;wewanttoriseaboveourphysicallimitations,evendeath, by participating in a transcendent project. But books about theimportanceoffindingmeaningaretypicallyfoundintheself-helporthespiritualitysectionsofthebookstore—notthemostpopularonesamongbusiness leaders. In addition, these books don’t deal with the mostfundamental and insoluble problems of personal accountability and


organizationalalignmentinorganizations.Theydonotaddressthebasicquestionsofwhatinnerandouterworkyouactuallyhavetodotobecomethe kindof leaderwhompeoplepassionatelywant to follow, orwhat ittakestobuildatrulyinspiredworkplace.Howcanwebuildareal,honest,human foundation for an enterprise—one that is so trustworthy thatpeople will give just about anything to be part of it? And then, wheneveryoneiscommitted,howdoyouworktogethereffectivelytowinasateam?InPart1,Ipresentthehardestproblemsanyleadermustsolveifhis

or her organization or team is to survive and thrive. These are theKuhniananomaliesthatbringaboutthemeaningrevolution.InChapter 2, “Disengagement,” I discuss why most people lose

their souls in the business world. I explain how the materialistic,produce-earn-consume view of work misses the most importantdimensions of human existence. I argue that the most destructiveorganizational problems cannot be solved through the one-dimensionalworldofmaterialismalone.InChapter 3, “Disorganization,” I ask, Why can’t organizations

aligntheirmembersinpursuitofacommongoal?Here,Idescribethreeissues:(1)mostpeopleareconfusedaboutwhattheir“real”jobsare;(2)wheneveryoneperformsathis orherbest, theorganizationoftendoesnot perform at its best; and (3) economic incentives designed toencouragecooperationworktodiscourageaccountability—andviceversa.InChapter4,“Disinformation,”Iarguethatnobodyreallyknows

thebestway toproceed. I showhowmostpeople falsely evaluate costsand benefits from their limited perspectives. This leads them to makedecisions thathurt theorganization’sperformance.But even if theygetoverthishurdleandtrytoassesstheglobalimpactofalternativecoursesof action, they still miss the most important information: opportunitycosts.InChapter5,“Disillusion,” I issuea three-partwarning for those

who embark on the path of transcendent leadership: (1) what you dospeakssoloudlythatpeopleinyourorganizationwillnothearwhatyousay; (2) peoplewill behypersensitive andhypercritical—nomatter howhard you try to walk your talk, you will be found wanting; (3) powercorrupts—themoreyoutrytoinspirepeople,themorelikelyyou’llbetray


them. If you fall into any of these three traps, youwill poison the verycultureyouaretryingtonourish.In Part 2, I offer “soft,” people-centered solutions to the hard

organizationalproblemsIpresentinPart1.InChapter6,“Motivation,”Iarguethatthehardestproblemshave

aspiritualsolution.Howcanyouinspireaccountabilityandcooperationat the same time? I demonstrate that while it’s impossible tosimultaneouslyincentivizeaccountabilityandcooperationthroughpurelyeconomic means, it is possible to inspire them through nonmaterialmeans.InChapter7,“Culture,”Idescribeforcesthatleadersateverylevel

mustharnessiftheyaretoaligntheirteamstowin.Ishowhowleaderscan shape their organizations by defining, demonstrating, demanding,anddelegating principlednorms.A strong culture is built upon virtuessuchaswisdom,compassion,courage,justice,andlove.Suchvirtuesgiveleadersatall levels,aswellastheirfollowersandteams,thecapacitytotranscendtheiregocentricviewsandintegratemultipleperspectivesintoacomprehensiveworldview.InChapter8,“Response-Ability,”IshowhowwhatIcallabsolute

“response-ability” and accountability are an effective philosophy ofbusiness, and life. Assuming responsibility as a leader, and holdingpeople accountable for their own choices, allows you to turn defensivebehaviorsintocreativeones,andfeelingsofresignationandresentmentintoenthusiasmandcommitment.In Chapter 9, “Collaboration,” I show how even the most

intractable conflicts can be solved through “escalating collaboration.”This is an alignmentprocess that allows intelligentdiscussionof trade-offsandrationaldecisionmaking.InasystembasedonsimilarprinciplestothoseofBritishcommonlaw,leadersintheorganizationcanlettheirdecisions set precedents about their perspective that will guide futuredecisionsatalllevelsoftheorganization.InChapter10,“Integrity,” I showhowhonoring one’sword is as

criticalashonestyforeffectiverelationships,bothinbusinessandinlifeingeneral.Apersonwithintegritykeepsherpromiseswheneverpossibleand still honors them if she is unable to do so. Youmake a groundedpromisebycommittingonlytodeliverwhatyoubelieveyoucandeliver.


You keep the promise by delivering it. And you can still honor thepromisewhenyoucan’tkeep itby letting thepersonyouarepromisingknowofthesituation,andbytakingcareoftheconsequences.InPart3,Iexplainwhytheleaderwhowantstobecometranscendent

must go beyond what I describe in Part 2. To marshal ferventfollowership, the leader must undertake what the mythologist JosephCampbellcalled“thehero’sjourney.”InChapter11,“GetOverYourself,” I turnaroundthetraditional

idea of leaders empowering their followers. I claim that followersempower leaders by committing to the mission a leader proposes.Perhaps themost important decision every humanbeingmustmake iswhere to invest his or her precious time, his or her precious life.Followers “energize” leaders with their life force, just as investorsenergizeacompanywiththeircapital.InChapter12,“DieBeforeYouDie,” I takeadeepdive into the

universal fearofdeath. I showwhyconfronting thatanxiety inyourselfand others is the most important and useful leadership tool there is.ParaphrasingZenwisdom,Iclaimthatyoumust“diebeforeyoudie,soyou can truly live”—and truly lead. You must find what’s unborn andundyinginyourselfandofferthisasamirrorofmeaningtothosearoundyou.Ialsoshowhowthedesiretobepartofanimmortalityprojectisanopen secret of leadership that historians, poets, and philosophers haveminedfromtimeimmemorial.InChapter 13, “Be a Hero,” I explore the development path of

leaders.The journeyof the leader is fraughtwith trials thatreveal, test,andsharpenhisorherspirit.There’sanaturalpatterntohumangrowth.It is a trajectory from unconsciousness to consciousness tosuperconsciousness. It is a process that forces you to face your biggestfears, find your greatest strengths, with the help of allies, and win thebattle to shape your destiny and become themaster of your life. Onlyafteryouhavewalkedthepathoftheheroandvanquishedyourshadowscanyoubringthegiftoftruewisdomtoyourcommunity.Onlywhenyouhave found your deepest truth can you become amodel for others andinspiretrust.InChapter 14, “SuperconsciousCapitalism,” I explain that the

marketisacruciblethattransformsself-interestintoservice,aggression


intocompetition.Thiscrucibleismadeofrespectforthelife,liberty,andproperty of others. If people respect one another, if transactions arevoluntaryandpeaceful,theneachparticipantmustbelievethatheorshegains more than he or she surrenders. Adam Smith argued that evenwhen the social good is not part of anybody’s plans,market forces act“likeaninvisiblehand”thatshepherdspeopletowardsuchagoal.Iarguethat rather than doing this by accident, transcendent leaders do it onpurpose.Throughrespect,freedom,andservice,theybringaboutanew,more conscious type of capitalism. This enlightened economic systemfosterssocialcooperationandsupportsthedevelopmentofhumanitylikenothing ever has before.Beyond fulfilling thematerial needs of humanbeings,itaddressesourspiritualneedsfortranscendenceandconnectiontosomethingmorepermanentthanourselves.In the Epilogue, “What to Do on Monday Morning,” I bring

everything full circle, summarizing the book’s essential lessons andadvisingleadersatalllevelswhattodoonMondaymorning,andbeyond.Itismygreathopethatreaderscomeawayfromthisbookinspiredandempoweredtomakealastingmarkontheworld—notonlyforthemselvesbut also for thosewho follow them, for their organizations, and for thelargerworld.Andnow,Iinviteyoutojointherevolution.


PART1HARDPROBLEMS


Chapter2

DISENGAGEMENTWHAT’STHEPOINTOFWORKING?

Ifmanagement viewsworkers not as valuable, unique individuals but as tools to be discardedwhennolongerneeded,thenemployeeswillalsoregardthefirmasnothingmorethanamachineforissuingpaychecks,withnoothervalueormeaning.

—MihalyCsikszentmihalyi

MarissaMayerwas a successful executive atGoogle before she becameCEO of Yahoo in the summer of 2012. Although she was recruited toreinvigorateadyingdigitalbrand,Yahoostillhadalotgoingforitwhenshearrived:thedigitaladmarketwasbooming;theboardwelcomedherwithahappyandcooperativeattitude;thecompanyhadlotsofcashandabillionmonthlyvisitors.ButMayerwas inoverherhead.Within four years,Yahoo’s finances

dwindled,anditwasfinallyannouncedthecompanywouldbesoldofftoVerizon in what Forbes called “the saddest $5 billion deal in techhistory.”1 (Ultimately, thedealwassealed for$4.48billion,about$350million less thantheoriginaloffer.2)Observersattribute thisdebacle toMayer’s incoherent strategy andhermercurialmicromanagement style.“Mayer’slegacyatYahoomaybeastheCEOwhodroveitintoafiresale,”Varietydeclared.3

Forbes columnist Miguel Helft described an October 2015 off-sitemeetingfor120ofYahoo’stopexecutivesthatwent“downhillfast”whenthetopicturnedtoemployeeengagement.“WhileMayerwasinandoutoftheroom,BryanPower,Yahoo’sheadofH.R.,presentedresultsfromarecent employee survey that showed dramatic double-digit drops inmetrics like morale and trust in the company’s executive leadership.


Variousvicepresidentsbeganventingtooneanother,endinginoutrightheckling when another session—billed as an opportunity to improvecommunication—turnedintoalecturefromYahoo’stopbrassthatmanyfoundpatronizing.Vicepresidentsstartedcallingouttheirsuperiorsfor‘notlistening,’‘notunderstanding’and‘notbeinginterestedinchanging.’Some cursed. ‘It was the most stressful and acrimonious professionalmeetingI’veeverattended,’saidoneparticipant.”4

Mayer’sbiggestmistakeasaCEOwasperhapswhatForbescontributorMikeMayattidentifiedasafailuretounderstandYahoo’sculture,whichhe claims grew toxic under her leadership. “What Mayer has failed tograsp is that you cannot transform a culture you do not understand,”Mayatt wrote. “A corporate culture is a fragile ecosystem with manyinterdependentmechanismsthatmustbenurturedinordertothrive.Astrongcultureisaperformanceaccelerantcapableofcreatinghugeshiftsinmomentum.”5

TheproblemwithdisengagingleaderslikeMayeristhattheydon’tjustdamage theirorganizations.Beyond that, everybodygrowsa littlemoreskeptical of our institutions and their leaders, eroding social trust—withoutwhichaneconomycannotfunction.

ImetMarissaMayerwhenshewasatGoogle,beforeshewenttoYahoo.Atthetime,IwasconsultingforSherylSandberg,whowasthenGoogle’sheadofonlinesalesandoperations.TalkingwithMayerwasaneerie experience; in the hour-long conversation, she didn’t make eyecontactwithmeasingletime.TheinteractionwassocoldthatIsufferedfrom brain freeze. I do recall my thought at the end, though: Iwouldnever work for this lady. I couldn’t engage with Mayer—or anyorganization she led. Her emotional disconnection would make itimpossible forme to givemybest. (Thiswas in stark contrastwithmyfeelingsforSheryl,whoisbotha friendandoneof thebest leadersI’veever met. I admire Sheryl’s combination of personal warmth andprofessional acumen. While Mayer’s brilliance is like a blue star in afarawaygalaxy,Sheryl’sislikeanorangesunnearby.)It’s not that leaders likeMayer aren’t smart and committed or don’t


want to do the right thing. (I recall being quite impressed by herintelligenceanddetermination.)It’sjustthattheyhaveemotionalblocksandintellectualmisconceptionsaboutwhattheirmostimportantjobis—elicitingpeople’s internal commitment toaccomplish theorganizationalmission with effectiveness and integrity so that the team wins. AsHarvard Business School professor Teresa Amabile has warned seniorexecutives, “Youmay think thatyour job isdevelopingakiller strategy.But you have a second, equally important task: enabling the ongoingengagement…ofthepeoplewhostrivetoexecutethatstrategy.”6

Leadershipisnotaposition;itisaprocess.Anyonewhomanagespeople, from a first-line supervisor to the CEO, and even anyone whocoordinates people informally, needs to lead to be effective. People arenot just “resources” that can be managed like other inanimate things.They are conscious beings who need to be inspired to contribute theirbest toward the organizational goals. Human beings require their ownspecialkindofmanagement.As I was explaining this in a leadership seminar for a chemical

company, a participant (who I later learned held PhDs in physics,chemistry,andchemicalengineering)raisedhishand.“Ilovemolecules!”Boris (not his real name) exclaimed with humorous exasperation.Everyone looked puzzled.Hewent on: “Molecules are sowell behaved.Youapplyacertainamountofheatandacertainamountofpressuretothem,andyouknowexactlywhattheyaregoingtodo.”Wealllaughed.“Theproblem,”hewenton,“isthatIdidsowellmanagingmolecules

thattheypromotedmetomanagepeople.Idon’tgetpeople;theyarenotwellbehaved.Youapplyacertainamountofheatandacertainamountofpressure,andyouneverknowwhattheyaregoingtodo.”Boriswantedtodeal with people in the same way he dealt with molecules. It doesn’twork.Incontrasttomolecules,peoplehavemindsoftheirown.Like Boris, too many managers with scientific training miss this

essential fact. According to the economist Murray Rothbard, theseleaderspracticenotsciencebut“scientism.”“Scientism,”Rothbardwrote,“istheprofoundlyunscientificattempttotransferthemethodologyofthephysical sciences to the study of human action.”Whenwe assume that


conscioushumanbeingscanbeasmechanicallydeterminedasmoleculesorotherthingsthatlackconsciousness,wemakeaterriblemistake.“Toignore this primordial fact about the nature of man—to ignore hisvolition,his freewill,”Rothbard insisted,“is tomisconstrue the factsofrealityandthereforetobeprofoundlyandradicallyunscientific.”7

Eventhosemanagerswhohavesomeunderstandingofhumannatureand have the best intentions are not great as leaders. This isunderstandable: while they’ve been well trained in the technicaldimension of management, they’ve been poorly trained in the humanone.Theydon’tknowhowtodealwiththesebeingswhohavemindsoftheir own. Despite their MBAs and executive education courses, theydon’tknowhowtowinheartsandminds.Sotheyfall intotunnelvisionand narcissism. They rely on task-oriented, command-and-controldirectives, particularly in times of stress. They believe that soft skillsmatterlessthantheirhard,cognitiveones,whichtheyuseasabulwarkagainstdeeper,moreintrospectivework.Thisisnotjustabusinessphenomenon.Nonprofitorganizationswith

noble purposes, such as hospitals, schools, and charities, are alsoburdenedwithmanagerswho focus on the trivial andpetty. They treatpeoplebadly; they fail to listen.Theyplaypolitics,draggingpeople intothemud,castingblameinsteadoflisteningandtakingresponsibilityfortheirbehavior.Theycollecttheirpaychecksandholdonuntilretirement.When suchpeople are in power, the organizationwilts.Everyone takesnote, from janitors to executives. Employees shrug their shoulders andsay,“Ifthebosscanactlikeajerk,whyshouldIgiveadamn?”Cynicismandapathyset in likeavirus.The infectedorganizationdiesoff slowly,thankstotheleaders’ignoranceandselfishness.Such leaders can’t possibly inspire others because they haven’t

bothered to look deeply into themselves and develop respect andcompassion for others. They’ve lost their souls. Worse yet, they haveturnedintosoul-eatingzombieswhounderminethepeoplewhoworkintheirorganizations.Theonlyprotectionagainstthemisdisengagement.

THETRAGEDYOFDISENGAGEMENT


According to the Gallup Organization, the news on the work front issobering.Formorethanthirtyyears,Galluphasrunin-depthbehavioraleconomic research on more than twenty-five million employees acrosshundreds of U.S. organizations. Year after year since 2000, thepercentage of those peoplewho feel “actively engaged”—thosewith themost innovative ideas,whocreatemostof a company’snewcustomers,and who sparkle with the most entrepreneurial energy—hovers rightbelow30percent.Another50percentof“disengaged”employeessimplycheckout.Engagedemployeesareemotionallycommittedtotheorganizationand

itsgoals.Theycaredeeplyabouttheirworkandtheircompany.Theyarewilling to put their discretionary effort in the service of the company’sgoals.Theydon’tjustworkforapaycheck,orforapromotion,butfortheorganization’spurpose—apurposethatthey’vemadetheirown.AstoryaboutChristopherWren, thegreatarchitectwhodesignedSt.

Paul’sCathedralinLondon,illustratesthedifferencebetweendisengagedand engaged workers. One day, Wren was walking among the menworkingonthecathedral.Nobodyrecognizedhim.WhenWrenaskedoneoftheworkmenwhathewasdoing,themanreplied,“Iamcuttingapieceofstone.”Puttingthesamequestiontoanotherworker,themanreplied,“Iamearningfiveshillingstwopenceaday.”WhenWrenaskedathirdmanwhathewasdoing,themananswered,“IamhelpingSirChristopherWrentobuildabeautifulcathedral.”8

Thenthereisanother,moredangerousgroupofemployeesintermsofthe health of the organization—the actively disengaged ones, whocompose thebottom20percentofGallup’s annual survey.Suchpeoplearen’tjustunhappyatwork;theyarebusyactingouttheirunhappiness,undermining their coworkers and criticizing the organization. Theseworkers feel so hostile that they’re willing to resort to conscious orunconscious organizational sabotage. They become “detractors” whospread their negative feelings throughout the company and beyond.9

ActivedisengagementcoststheUnitedStatesanestimated$450to$550billionannually.Galluphasfoundthattheworkplaceswhereemployeesfeeldisengaged

suffernearly50percentmoreaccidentsandareresponsiblefornearly60percentmorequalitydefectsandincurmuchhigherhealth-carecosts.10


Moreover,60percentofmillennials—thechunkoftheU.S.workforceyouwouldthinkhasthemostideasandenergytooffer—aredisengaged,too.Gallupfoundthatjust14percentofmillennialssurveyed“stronglyagree”thatthemissionorpurposeoftheircompanymakesthemfeeltheirjobisimportant.11Picturetryingtocookinanovenwithacrackthroughwhichit loses85percent of itsheat, and youwill have amental imageof thestateofmostcompaniestoday.Bycontrast,Galluphasnoted,workgroupsthatareinthetopquartile

ontheemployee-engagementscaleperformmuchbetterthanthoseinthelowest quartile. Their customer ratings are 10 percent higher.12 Theirprofitability and productivity as a group are 22 and 21 percent higher,respectively.Theyseeatleast25percentlessturnover—inorganizationswhere there is low turnover to begin with, engaged work groupsexperienceasmuchas65percent less turnover.Highlyengagedgroupsexperiencelessabsenteeism,andtheirworkhasfewerdefectsandsafetyincidents,too.13

Theyearly lossesaroundtheworlddueto theengagementgapare inthe trillions. According to Gallup’s most recent State of the GlobalWorkplacereport,only13percentofemployeesworldwideareengagedatwork;14 the rest couldn’t give a damn. Add it all up, and you have anastronomical waste of resources. On the other hand, engagementpresents a gigantic opportunity to improve economic value for allstakeholdersthroughgreaterproductivity,efficiency,andservice.It’s no wonder, then, that organizations everywhere are trying to

increase engagement through all sorts of “engagement programs.” Theproblem is that most of these programs are superficial, phony,hypocritical,andbasedoncoarsemanipulationofpeople’ssensibilitiestoextractmorefromthem.Most of these programs center on an employee survey performed by

the department of human resources. The survey leads to a flurry ofactivity,mostly composed of elaborate presentations.Writing in Inc., aconsultant named Les McKeown noted that “So-called employeeengagement programs are misbegotten, unwieldy, ineffective rollingcaravans of impractical or never-going-to-be-implemented PowerPointpresentations,usuallyspawnedfromanequallybankruptexerciseinso-called ‘benchmarking’ against alleged ‘best practices’ in other


companies.”15 Sometimes these presentations turn into trainingprogramsthatareevaluatedonthebasisofhowmany“heads”havegonethrough them—regardless of whether the owners of these heads werereallypresentand learnedanything that theyactuallyput inpractice toincreaseengagement.Tomakemattersworse,ifacompanyreallydoesimplementachange

based on an engagement survey, the results are generallycounterproductive.Employeesengagewhentheyfeelthattheirmanagersgenuinely care about them, andwhen they believe that thesemanagerswant to provide a work environment that will promote not just theirproductivity, but also their connections with others and their personalwell-being.Bycontrast,ifemployeessuspectthatthechangesaimtoimprovethe

company’s ranking in theGallup survey, or amanager’s ranking in thecompany,theywilldisengageevenmore.Whenmanagerswhoforyearshave treatedpeopleas “less-than-humanresources” suddenlyadopt thesuperficialbehaviors that they thinkwillmake themseemcaring,morepeople feelmanipulated. Employees seemanagers’ claims of “we reallycareaboutyou”asattemptstogaintheirfavorthroughemotionaltreats,justlikeadogtrainerwoulddotohisanimal.Imaginethatyourspousegivesyouasurprisepresentforthefirsttime

in ten years of marriage without any explanation. The following week,yougeta“spousalengagement”survey inthemail thatasks,“Haveyoureceived a present from your spouse in the last month?” Personally, Imightsuspectthatmyspousewasonlydoingsotoraisehisorherstatusinthesurvey.Worseyet,anyinsinceremanagerialcommitmenthasaboutthesame

stayingpowerasaNewYear’sresolutionthatgoesbythewaysideinmid-January. Once the shiny new program loses its luster, managerialbehaviors revert back to their previous state. But the organization’shealthandemployeeengagementtendstodropfarbelowwhereitusedtobeafterthisyo-yodiet.Whenaleadercomesacrossasaphony,makinghypocriticalattempts tomanipulatepeople’ssensibilities,suchbehaviorisnotjustdisengaging;it’senraging.There’snowaytoopenthefuturewithoutclosingthepast.Unlessthe

company’s leadership does a serious examination of their previous


disengaging behaviors, and convinces the workforce that they arecommitted to change that behavior in a serious way, any engagementprogramisdeadonarrival.That’swhy,despiteallthetime,energy,andmoney spent on engagement programs, the statistics continue to beterrible. Engagement programs create the exact opposite results to theonesintended;everyyeartheworldwideworkforceismoredisengaged.

THEDISENGAGINGLEADER

Acoachingclientofmine—I’llcallhim“Bill”—toldmeasadtaleofhowhe became disengaged with his company. Bill traveled regularly acrosstheworldtoleadaprojectintheFarEast.“Beforethisproject,”Billtoldme,“Ihadaprettygoodrelationshipwithmyboss,thevicepresidentofinternational operations. But something changed when I took on thisassignment.TheCEOhadbegunpayingspecialattention tome, callingme directly, often bypassingmy boss.” Bill suspected his boss resentedbeingoutoftheloop.In one of his trips, Bill experienced severe stomach problems. He

conductedhisbusinessmeetingslikeatrouper;nobodynoticedthepainhewasin.Butattheendoftheday,hehadtoexcusehimselffromdinnerandgo to thehospital.Therehe sawadoctorwho, after running sometests, diagnosed him with a bacterial infection. The doctor gave Billantibiotics and,being the can-dokindof fellowBill is, hewentback toworkthenextday.After the hospital visit, Bill sent his assistant the invoice for the

emergencycaretobeprocessedforreimbursement.Thebillcametolessthan$500,whichhethoughtwasquitereasonable.Thenextthinghesawwasane-mailfromhisboss(whohadtoapprovetheexpense)askinghisassistant(cc’ingBillandtheperson inchargeofbenefits) tosubmit theexpenseasaclaimtotheinsurancecompany.Thisreplywasicilycorrect.What shockedBillwas notwhat it said, butwhat it didn’t say:No “HiBill,”no“Youokay?”Nonothing.Aftertheseven-dayrunofantibiotics, the infectionwasgoneandBill

wasbackinphysicalshape.Butheneverrecoveredhisemotionalshape.


“What absolutely flooredme,” Bill toldme, “was that nobody in the e-mailchainwrote toaskmewhyIhadtogotoanemergencyroominaforeign country and whether I was all right, let alone send me goodwishes.Therewasonlythattersebusiness-likemessageaboutprocessingtheinsuranceclaim.“Ididn’tgetangry-hot;Igotdetached-cold,”Billreflected.“Mythought

was,‘ThesepeopleareasdeadtomeasI’mdeadtothem.’First,Ibecametotally numband thenmightily pissed off. I can’t believe this companytakes pride in ‘treating people wonderfully,’ as they stridently tell thewhole world through their marketing campaigns, and when I’m in ahealth crisis, they treat me as a piece of machinery that needs to berepairedunderwarranty.”BillremindedmeofamovieclipIhadshowninoneofmyworkshops.

InthemovieModernTimes,CharlieChaplinisaworkeronanassemblylinewhoseonlyjobistotorqueboltswithawrenchineachhand.Undertremendouspressurefromtheassemblylinespeed(constantlyincreasedby “the boss”), he suffers a mental breakdown and is, literally,“processed”bythemachines.16

“They displayed no feelings for me,” Bill said. “They just wanted toprocesstheinsuranceclaimandmoveon.Ifelt likeacoginamachine;justanotherbrickinthewall.”Againstmyadvice,Bill gaveup.Hewas sodisengaged thathedidn’t

evenwanttoaddresstheissue.“Idon’twanttotalkaboutit,”hetoldme.“What’s thepoint in telling themthat I’mdisappointed that theydidn’tinquireaboutmyhealthaftertheylearnedIwasinahospitalinaforeigncountry? They’d come up with some lame excuse and pretend to beconcerned. But that’s too little too late. There are some commondecenciesIexpecttoreceivefrommymanagerwithouthavingtoaskforthem.”Althoughnothingmaterially affectedBill, he turned from engaged to

actively disengaged, frompromoter to detractor. “If someone askedmetodayifI’drecommendthecompanytoafriendasagoodplacetowork,I’dsay‘absolutelynot.’ ”I don’t know Bill’s boss, but from his story I bet this VP was also

disengaged—infact,sixmonthslater,BilltoldmetheVPhadalsoleftthecompany.HemayhavebeenhurtbythefactthattheCEObypassedhim


to connect with Bill. I don’t know the CEO, either, but I bet that hethought nothing of communicating directlywith Bill. And I bet furtherthatBill’smanagernevertoldtheCEOthatheresentedbeingbypassed.In fact, I’m sure that if theCEOaskedBill’s boss if heminded, theVPwould have lied and said, “Not at all.” I’ve seen this story play outhundredsoftimesintheorganizationsI’veworkedwith.It is impossible to engage others if you yourself are disengaged.

Research shows that emotions spread like the flu.17 If you’redepressedand unmotivated, I’m likely to feel depressed and unmotivatedwhen Iwork with you. Any manager in the organization can start a chainreaction that alienates a large number of employees. And inorganizational life, there are constant small, everyday frustrations that,left unaddressed, coalesce into thick layers of numbness that smothereventhemostpassionatecommitment.Imaginewhathappenswhenthemajorityofanorganization,fromasmallteamtoasociety,feelsthatway.Abadmanagerisagreatliability.Billbeganquietlysendinghisrésumé

aroundandsoonfoundajobatanothercompany.Thecompensationandbenefitswerenobetter,buthe leftanyway, looking foranenvironmentthathethoughtwouldbemoreconducivetohiswell-being.Bill’scaseisoneofmillions.Peoplefeelsohelplessthatthey’vestoppedeventryingtomakethingsbetter.Gallup argues that if companies want to engage their workers, they

need to “focus on putting high-performing managers in place.”18 Butwhere, oh where, are these so-called high-performing managers? I’veworked with thousands of people in dozens of organizations over theyears, and I can tell you that high-performing leaders—if we’re talkingaboutinspirational,trulyengagingones—arerarerthanwhitetigers.So here is the puzzle: If engagement is so crucial to organizational

performance, and if the strategies to produce it are so simple andinexpensive, why aren’t there more engaging leaders, and why aren’tmorecompaniesdramaticallyincreasingemployeeengagement?My conclusion, to paraphrase the Beatles, is because “you can’t buy

love.”


LEARNEDHELPLESSNESS

DuringavisittoAngkorWat,Itreatedmychildrentoanelephantride.Aswepreparedtoclimbonto thebackofourelephant,wenoticedthattherewereseveralotherswhosefrontrightlegsweretetheredtoastakeby only a thin rope. It was obvious that these powerful animals couldeasilybreaktheropesoruprootthestakes,buttheydidn’t.Theystayedquietly in theirplace. I askedour guidehow theymanaged tokeep theelephantstiedbysuchflimsycontraptions.Heexplained thatwhen theelephantsareyoung theirhandlersusea

similarropetotiethemtostakes.Sincetheyaresmall,thatisenoughtokeepthemfromwalkingaway.Atfirsttheelephanttriestowalkoff,buteventually it learns thatsucheffortsare futile.So it juststaysput,evenwhenitgrowsstrongenoughtofreeitself.Theelephantknowsthatitistrapped, so it never even tries to break free. The real binding is notphysicalbutmental.Thiswastheperfectobjectlesson.“Liketheelephants,”Itoldmykids,

“manypeoplespendtheir livesbelievingthattherearethingstheycan’tdobecausetheyhadabadexperienceinthepast.Becarefulnottofallinthismindtrap.Testyourlimitsregularly.”TheAmericanpsychologistMartinSeligmancoinedtheterm“learned

helplessness”backin1967whenhewasresearchingdepression.Learnedhelplessnessistheattitudeofaperson(oranimal)whodoesnottrytogetoutofanegativesituationbecausethepasttaughthimthatheishelplesstodo so.Seligman identified thisbehavior inhumansandanimals thatrepeatedlyenduredpainfulstimulitheywereunabletoavoid.Aftersuchexperience,theexperimentalsubjectstoppedtryingtoavoiddisagreeablesituationsthathe/she/itcouldeffectivelycircumvent.Inotherwords,thesubject learned that it had no control over situations that affected itnegatively,soitgaveuptrying.Seligmanwasdoingresearchonclassicalconditioning,theprocessby

which an animal or human associates one thing with another. In oneexperiment,herangabellandthengavealightshocktosomedogs.Aftera number of repetitions, the dogs reacted as though they had alreadybeenshockedwhentheyheardthebell.One by one, Seligman put the dogs from this first experiment into a


largecratethatwasdivideddownthemiddlewithalowfence.Theflooronone side of the fencewas electrified, but the other side of the fencewasn’t,anddogcouldjumpoverthefencetoavoidtheshock.Seligmanput the dog on the electrified side and administered a light shock. Heexpected the dog to jump to the nonshocking side of the fence, butinstead, the dog lay down and didn’tmove. It was as though the dogsfromthefirstpartoftheexperimenthadlearnedthattherewasnothingtheycoulddotoavoidtheshocks,sotheygaveupevenwhentheshockscouldbeavoided.After the dogs didn’t jump the fence to escape the shock, Seligman

placed somedogs thathadnotbeenpreviously exposed tounavoidableshocks in the cagewith the fence. These dogs quickly jumped over thefence to escape the shocks. Seligman concluded that the dogs that laydown had actually learned helplessness from the first part of hisexperiment.19

Peoplearen’tallthatdifferentfrombabyelephantsanddogs.Whenwefeelwehavenocontrolovernegativesituations,wesimplygiveupandsurrendertotheshocks.Wefeelhelpless,notonlyabouttheunavoidablesituationbutaboutourlivesingeneral.Seligmanandothershavefoundastrong link between learned helplessness and clinical depression. I amsurethatthere’sanequallystronglinkbetweenlearnedhelplessnessanddisengagement. That’s why so many of us stop trying to make thingsbetter.Inmyworkshops, I askpeoplewhat theywould like to changeabout

theirwork.Almostall of themsay theywould likeabetter relationshipwith their bosses and colleagues, but toomany of them have given upaftersomanyemptypromisesandfailedengagementprograms.JustlikeSeligman’sdogs,they’vebecomeresignedtothefactthattheydon’thavecontrol over their work relationships or their working environments.That’show learnedhelplessness sets inandpeople stop caring. (Peoplewho’vegivenupdietingafter tryingoverandoveragain foryearsoftenfeelthesameway;theysimplystopbelievingit’spossibletokeepweightoff,sotheyresignthemselvestobeingfat.)Thesefailuresarenotbecauseit’s impossible to improvematters, but becausepeoplehavebeen givenunrealisticexpectations,badpreparation,andbadadvice.Learnedhelplessness is verydangerous.Whenpeoplebelieve thatno


one—particularlytheirboss—caresforthem,thattheyhavenooptionsorpossibilitiesforgrowth,thattheircompanyisnotaforceforgoodintheworld,andthatthere’snothingtheycandotochangethis,theyloseself-confidence,pride,belonging,andanyreasontobelievethatwhattheydoisimportanttoothers.That’showtheirworklivesbecomemeaningless;that’showtheyactivelydisengage.Itisharrowingtoseewhathappenswhenlearnedhelplessnesssetsin

inanorganization.Peoplefeelunabletoquestionrulesandregulationsortakerisks.Everyonefeelslikeavictimofforcesbeyondhisorhercontrolandconstrainedbybudgetsandprocesses imposedbyalienauthorities.Nobody feels free to take the initiativeor evenaskquestions.Everyoneblamessomekindofexternalcircumstanceforhisorherinabilitytoact;nobodyfeelsaccountable.Thisspreadstocustomers,whonotonlysenseand respond to theunhappiness of employees, butbecome infuriated—justastheComcastcustomersIdescribedinChapter1did.

IT—WE—I

Wecan thinkof thebusinessworld as a three-dimensional space.Let’scallthethreedimensions“It,”“We,”and“I.”Justaseveryobjectcanbemeasured in length, width, and depth, every organization can bemeasuredintermsofIt,We,andI.Overthelongterm,theIt,We,andIaspectsofanorganizationmustoperateinconcert.Althoughitispossibletoachievegoodfinancialresultsintheshorttermwithunhappypeople,coldrelationships,orwastefulprocesses,suchanorganizationcan’tlast.Strong profits will not be sustainable without equally stronginterpersonalrelationshipsandpersonalcommitment.“It” is the dimension of the impersonal. It focuses on the task, the

systems and processes, the efficient allocation of resources andaccountabilities.The Itdimensionconcerns theorganization’s ability tohaveitsmembersworkrationallytowarditsgoals.“We” is the dimension of the interpersonal. It focuses on the

relationships between the individuals, their interactions, the quality oftheir connections, and the kind of community they create. The We


dimensionconcernstheorganization’sabilitytohave itsmembersworkcollaborativelytowarditsgoals.“I” is the dimension of the personal. It focuses on the individual’s

values, beliefs, thoughts, feelings, aspirations, well-being, sense ofmeaning, and happiness. The I dimension concerns the organization’sabilitytohaveitsmemberscommitenthusiasticallytoachievingitsgoals.Ibelievethatoneofthebiggestdetractorsofemployeeengagementis

that leaders see their organizations in only the impersonal dimension.“It” is all about increasing sales, reducing costs, gainingmarket share,and growing shareholder value.20 In this dimension, the leadership’schief concern is for efficiency, effectiveness, and efficacy. This is thedimension in which all managers go through basic training; it’s wheremostof themstay.The focus is onattaining themaximumoutputwiththe minimum consumption of resources. A successful It-dimensionalleaderwillestablishcleargoals,strategies,androlesandprovideaccesstotheknowledgeandresourcespeopleneedtogettheirjobsdone.Whenan organization’s It quotient is low, employees’ efforts aremisdirectedand often conflicting because the employees are disorganized and illequipped.Thissapstheirenergyandkillstheirengagement.Of course, the impersonal dimension is essential. Without a solid

performancealongitslines,anorganization’sverysurvivalisatstake.Ifacompany does not operate effectively, it will fail to draw energy andresources,anditwillcollapse.It-dimensionresultsarenecessary,buttheyarenotsufficienttoengage

peoplebecausehumanorganizationstranscendthisdimension.Strippedof the other two dimensions, business becomes a purely mechanicalactivity inwhich success and failure depend exclusively on the rationalmanagement of rational agents. But in the three-dimensional reality inwhichweliveandbreathe,businesssuccessdependsontheengagementof passionate beings who deeply care about their work. That’s why it’shelpful to understand the two other very real and equally essentialdimensionstoorganizations:theWeandtheI.TheWeisaboutthequalityofinteractionsandrelationshipsamongthe

organizational members. Humans are social beings, which is whysolidarityissofundamentaltolong-termbusinesssuccess.Interpersonalsuccess is required for survival. If people do not cooperate and respect


oneanother,theorganizationwillfail,astheexampleofYahoopainfullyillustrates. TheWe dimension is all about organizational behavior—anareathat feelsunfamiliaranduncomfortable tomanywhoweretrainedonlyintheItdimension.It’saboutgroupcohesion,solidarity,trust,andmutual respect. In this realm, the focus is to create a collaborativecommunityfoundedonageneralsensethat“weareallinthistogether.”A successful We-dimensional leader will establish a collaborativeenvironment in which people work together to accomplish audaciousgoals.Thesearetheemotionalelementsofanengagingworkplace.Whenanorganization’sWequotient is low,employees’effortsdissipate intheform of office politics, ego management, and passive-aggressiveavoidanceoftoughissues.The I is about the human need for personal achievement, self-

actualization, and self-transcendence of each of the organizationalmembers. This dimension is all about personal growth, meaning, andhappiness. In this realm, the goal is to cultivate psychospiritual health.Every person, from the chairman of the board to the guywho unloadstrucksatthewarehouse,wantstofeelwhole,knowingthathisorherlifematters.Whentheyfeelthisway,peoplearemuchmoreproductiveandcreative. They are resilient when suffering setbacks and enthusiasticwhen facing opportunities. They trust themselves to respondappropriately to life’s circumstances, to connect with others, and todeliver exceptional results. To get the best from its employees, theorganization needs to provide them with opportunities for meaningfulengagement.

McKinsey’s research21 shows that while the It and We dimensions(McKinsey calls these the “intellectual” and “emotional quotients,”respectively) are absolutely necessary to create engagement in anorganization, they are not sufficient. For years, McKinsey has askedexecutives what they found most often missing in creating a peakperformanceenvironment—onethatinspiresexceptionallevelsofenergy,self-confidence,andindividualproductivity.Theresponseisinvariably“astrongsenseofmeaning.”“By‘meaning,’ ”McKinseyreports,“theyimplyafeelingthatwhat’shappeningreallymatters,thatwhat’sbeingdonehasnotbeendonebeforeandthatitwillmakeadifferencetoothers.”Whenan organization’s I quotient is low, employees disengage; they put lessenergyintotheirworkandseeitas“justajob”thatgivesthemlittlemore


thanapaycheck.Totrytoengagetheiremployees,leaderslivingintheone-dimensional

worldofrationalmanagement tendto tellonlyItstories.The twomosttypical ones, according toMcKinsey, are the turnaround story and thegood-to-great story.22 The first one goes something like “We’reperforming below industry standard and must change dramatically tosurvive—incremental change is not sufficient to attract investors to ourunderperforming company.” The second one, “We are capable of farmore, given our assets,market position, skills, and loyal staff, and canbecometheundisputedleaderinourindustryfortheforeseeablefuture.”Thetwostoriesareusuallycomplementedby“Ifweaccomplishthis,wewill havemore career opportunities, a higher paycheck, work security,andmorebenefits.”Thesestoriesarenotbad,buttheydon’tstandontheirown.Tocreate

engagement, it isnecessary tocomplement themwithWeandIstories.TheWestoriesdescribehow“Weareanextraordinarygroupofpeople,and we are all in this together.” Take, for example, the U.S. SpecialForces. Their esprit de corps is out of this world. They have endlessstoriesabouteachmember’sheroiccommitmenttohiscomradesandtheforce.These stories inspirepeople in theSpecialForceswitha senseofbelonging inacohesiveenvironmentwhere“we”areproud tohaveoneanotherascolleagues,workingtogetherforanoblepurpose.TheIstoriesdescribehow“eachoneofusisimprovingthelivesofour

customers, benefiting society, andmaking a significant contribution tohumanprogress.”Theyassureorganizationalmembersthatwhattheyaredoing is goodandmeaningful, that itwillmakeapositivedifference intheworld.This isclearlyanextraordinarysourceofengagementforthemembersoftheSpecialForces,whoputtheirlivesonthelineeverydayforthesakeoftheirnobleideals.

ANENGAGINGLEADER

The stories are important, but they cannot be decoupled from thestorytellers. As the cognitive biologist Humberto Maturana observed,


“Everythingsaidissaidbysomeone.”23Leaderscan’tjusttellthestories;theyhavetobreathethem,feelthem,livethem.A2012whitepaperpublishedby theDaleCarnegieorganizationand

MSW Research noted that the three key drivers of employees’engagement are relationshipwith one’s immediate supervisor, belief inseniorleadership,andprideinworkingforone’scompany.Thebehaviorof the immediate supervisor is the most fundamental determinant ofemployees’ engagement, but beyond that, it’s senior leadership’s“willingnesstotaketheirinput, leadthecompanyintherightdirection,andopenlycommunicatethestateoftheorganization.”24Ifanemployeefeelscaredforandrespected,andbelieves that theorganizationreflectshisorherpersonalvalues,thenengagementandloyaltyfollow.Andwhenpeoplefeelengagedandloyal,theydon’t leave—savingthecompanythecostsofrecruitmentandtraining.Study after study concludes that a caring manager is essential to

employee engagement. Employees want their managers to care abouttheirpersonal lives, to takean interest in themaspeople, tocareabouthow they feel, and to support their health andwell-being.Amanager’sability to build strong relationships with employees, build strong teaminteraction,andleadinaperson-centeredwaycreatesanenvironmentinwhichemployeesperformattheirbest.Doug Conant is an example of such a manager. When Conant was

recruited from Nabisco to become CEO of the old25 Campbell SoupCompany in 2001, the company was hemorrhaging both money andmorale.Itwasthepoorest-performingfoodcompanyintheworld.Corebusinesses, even the famous “mm-mmm-good” tomato and chickennoodlesoups,weresuffering.SurveyingCampbell,Gallupfoundthat62percent of the company’s managers were not actively engaged in theirjobs, and another 12 percent felt actively disengaged. Those numbersweretheworstGalluphadeverseenforanyFortune500firm.By 2009, everything had changed. Nearly all the old managers had

been replaced; half the new leaders were promoted from inside thecompany,amovethatincreasedmoraletremendously.Themostcrucialcriterion for new managers was to inspire trust in the people aroundthem. As trust climbed, earnings climbed; so did earnings per share,putting the company near the top of the food industry. By 2009,


CampbellwasoutperformingboththeS&P500andtheS&Pfoodgroup.Sixty-eight percent of all Campbell employees said they were activelyengaged, and just 3 percent were actively disengaged. That’s anengagement ratio of 23 to 1, and Gallup considers 12 to 1 to be worldclass.Itwasaturnaroundstorybeyondimagination.Yet the recipe was simple. Conant put people first. “One of the first

things Idid,”Conant toldForbes, “wasmake it clear Iunderstood thatCampbell…needed to demonstrate its commitment to its people beforethey could be expected to demonstrate their own extraordinarycommitmenttoitanditssuccess.”26Conantlivedbyhismaxim,“Towininthemarketplaceyoumustfirstwinintheworkplace.”27

Conantmadeshowingthathecaredaboutemployeesapriority,andhedemanded that all the managers in the company do the same. Hedemonstratedcaringbyexample.Healways inquiredaftereveryone. Inthe employee cafeteria—wherehe regularly atehis lunch in order to bewithfolks—heaskedhowthecooksweredoing,howtheirkidswere.Heshookhands.Heput an armaroundpeople. The place feltmore like ahomethanabigcompany—whichmadealotofsense,sincethebrandisclosely associated with moms and home. He knew the names ofthousandsofemployeesandpersonallywrotethirtythousandthank-younotestothem.Hementoredhundredsofpeople.Hesentroughlytwentythank-younotesadaytostaffersonalllevels.“Andeverysixweeks,”hesaid,“Ihad lunchwithagroupofadozenorsoemployees, toget theirperspectiveonthebusiness,toaddressproblemsandtogetfeedback.”28

Doug Conant was an authentically caring leader at Campbell. That’swhatmadehimanengagingone.


Chapter3

DISORGANIZATIONTOWIN,EVERYONEMUSTPLAYFORTHETEAM

“Can’twealljustgetalong?Canwestopmakingithorrible?”

—RodneyKing

I had barely foundmy seat on the plane when the well-dressed, tired-looking,overweightbusinessmaninhisfortiessmiledandturnedtome,extendingabeefyhand.“Hi,I’mGreg.”Hewasclearlyanextrovert.Asalesmanand former footballplayer, I

guessed.Hemusthavebeenatleastsixfoottwoandweighedabouttwohundredandfiftypounds.WhenIgetonaplane,Ijustwanttobecocooned.Contrarytowhatyou

mightexpect fromapersonwhospeaks to thousandsofpeoplealloverthe world for a living, I am an introvert. I rarely talk to strangers onplanes—oranywhereelse,forthatmatter,ifIcanavoidit.ButBigGreghadbeatenmetothedraw.Itwastoolatetoploponmyheadphones,lestIbeconsideredrude.I put my smaller hand in his. His eagerness and warmth were

magnetic.Irelaxedandsmiled.“Hi,I’mFred.Nicetomeetyou.”“Hi, Fred.Nice tomeet you, too.”He pushed the recline button and

tookasipofhisbourbon.“WhattakesyoutoSanFrancisco?”“Work,”Isaid.“Whataboutyou?”“I’mgoinghomeforThanksgivingafteralongbusinesstrip.Can’twait

toseemykids.”Hehandedmeabusinesscard.Heworkedforabigsoftwarecompany

withaSiliconValleyaddress.


“Vice President of Field Sales,” I observed. “That sounds like animpressivetitle.Whatdoesitmean,intermsofyourjob?”Herandowna listofhisresponsibilities:“I lookafterthesalesforce,

whichmeansImanagetheirinteractionswithourclientsinthefield.I’malsoinchargeoftraining,operations,andadministration.”“Soundslikeabigjob,”Isaidsympathetically.“Yup,lotsofmovingparts.”Iapologizedfornotreciprocating.“Idon’thavebusinesscards.Iwork

forLinkedIn.Ionlyconnecttopeopleonline.”“Whatdoyoudo?”“I’manorganizationaloncologist.”(Itakeperversepleasureinstartling

peoplewhochatmeup.)“Whatdoesthatmean?Areyouadoctor?”“Onlyineconomics.”Gregsmiled.“Whataweirdjobdescription.Whatdoes‘organizational

oncologist’mean?”“I studywhy organizations die andwhat leaders can do to keep that

fromhappening.”He took a thoughtful sip of his drink. “So tellme,Doc,why do they

die?”“Young organizations can die from many causes,” I replied, “but

organizationsthatdisappearafterbeingsuccessfuldiefromacancerlikedisease I call disorganization. There are entities in them that act liketumors. These entities try to capture ever more energy, ever moreresources,andevermorepowertothedetrimentoftherestofthesystem.Thesemalignantbodiesbecomeparasiticandendupkillingthehost.”“Wow,”saidGreg,“I’veneverheardofanythinglikethat.”“Iguaranteethesetumorsarealloveryourownorganization.”“Howcomenobodyseesthem?”“Everybody sees them. If I tell youwhat they are, you’ll immediately

recognizethem.”“Pleasetellmethen.Whatarethey?”“People.You, youremployees, yourpeers, yourboss,hispeers, every

self-interestedmemberof theorganizationcanbecomemalignantwhen


theorganizationalimmunesystemfailstokeepthemincheck.Andwhenthesegreedycellslumpintoadepartment,afunction,abusinessunit,oranysubsystemoftheorganization,theycanbecomelethal.”Greglaughed.“Wheredidyousayyougotyourdoctorate?”“Ididn’t.Butsinceyouask,IgotitatBerkeley.”“Ah,Bezerkeley,”hesaid.“Thatexplainssomuch.Andwhendidyou

goofftherails?”“People typically think I’m a bit weird at first, I’ll admit. Thosewho

givemea chance to explain, though, change theirminds.Either I havesomethinginterestingtooffer,orI’mquiteaconartist.”Iflashedmybestsnake-oil salesman’s grin. “I’ve been able to fool some pretty smartpeople, including several Nobel laureates in economics and seniorexecutivesofcompanieslikeyours,fortwenty-sixyears.”“Nowthatyoumentionit,therearesome‘entities’inmyorganization

thatfityourdescription.Theyarekillingme!”Hefinishedoffhisdrink.“Perhapsthisflightwillbemuchmoreinterestingthanmyregulartrips,”hesaid,andaddedjokingly,“HowaboutIgiveyouachancetofoolme?”TheflightattendantcametocollectourcupsandaskedGregtoputhis

tray away before takeoff. Imuttered a line fromTheMatrix undermybreath,“Holdontoyourseat,Dorothy, ’causeKansasisgoingbye-bye.”(IalwaysfanciedmyselfasaMorpheusofsorts.)I turned to lookout thewindow. “I lovehow thecitybelowseems to

changeastheplaneclimbs,”ItoldGreg.“Whenyou’reonthegroundit’sall messy, but beautiful geometric patterns emerge as you look fromabove.Iguessthat’swhyIlovetheeconomictheoryoforganization.”

HELPINGTHETEAMWIN

“Thatwasabumpystart,”Gregcommentedasweleveledoff.“Takeofffeltprettysmoothtome.”“Imeanourconversation.This isnottheusualwaythesechatsgo.”I

wasclearlynothisfirstvictim,er,partner,inthiskindofinteraction.“I usually don’t talk to strangers about what I do. My ideas are too


unconventionalformostpeople.Myexperienceisthatonlywhenpeopleare facinga significantchallengeare theywilling to revisit theirmentalmodels.Tosaveyouandmeanawkwardflight,Greg,letmejustaskyourightoffthestart:Areyoufacingasignificantchallengeatwork?”Helookedatmehard.“What,doyoureadminds,too?”“Maybe,”Isaid.“What’sgoingon?”Heletoutalongbreath.“Ourlegaldepartmentrequestedweamenda

contract we were about to sign with our biggest customer, and thecustomer did not agree. I was able to cool things off somewhat, butcouldn’t resolve the issue. The customerwon’t sign, and ifwe lose thissale,we’llnevermeetourforecast.There’sonlyamonthleftintheyear.Alotofmypeoplewillnotmakequotaandwill losetheirbonuses.That’snotgoingtomakethemhappy,oreagertocontinuerejectingthecallsoftheheadhuntersthatkeeptryingtopoachthem.Andallbecauseofthoselawyerswhodon’tgiveadamnaboutthebusinessandonlywanttocovertheirasseswithstupidclausesnoreasonablecustomerwouldaccept.”“Sounds like you have a serious challenge, Greg. If you’re willing to

thinkoutofthebox,perhapsIcanhelpyoufindawaytodealwithit.”“WhatdoyouthinkIshoulddo?”“I don’t know what you should do. But maybe I can help you

understandwhat’sgoingon,soyoucandecidewhatyoushoulddo.Areyougame?”“Goforit.”“Letmeaskyou,Greg,what’syourjob?”“Itoldyou,I’mvicepresidentoffieldsales.”“I heard you, but that’s not your real job.” I proceeded towalkGreg

throughwhathisrealjob—whateveryone’srealjobinacompany—is:tohelptheteamwin.IcouldseethatGregwasbeginningtounderstand.Afterathoughtful

pause,hesaid,“Iunderstandthatmyrealjobistohelpmycompanywin.ButIgetpaidtosell.MyKPIs(keyperformanceindicators)arebasedonsalesandrevenues.”“You’renotalone,Greg.Mostpeoplegetpaidtoplaytheirroles,notto

helptheircompanywin.It’sasthoughinsteadofusingincentivesystemstofighttumors,companiesdecidedtonourishthem.That’swhysomany


dieofcancer.”

DOINGYOURJOBCANBEHAZARDOUSTOYOURCAREER

The flight attendant came by with our meals. As Greg tucked into hissteakIwishedhim“Buenprovecho!”“Whatdoesthatmean?”“Buenprovecho isSpanishfor ‘goodprofit.’Itmeans, ‘Mayyouprofit

fromthefood.’ ”“Gracias,amigo.”“Anyway,tocontinueourconversation,”Isaid,“imagineasoccerteam

wheretheplayers’compensationandcareerprospectsaredeterminedbyKPIs. The ‘obvious’ KPI for the defensewould be goals allowed,wheremoreisworse.TheKPIfortheoffensewouldbegoalsscored,wheremoreisbetter.Agree?”“Agree,”saidGreg.“If youwereadefensiveplayer,wouldyou ratherwin five to four,or

loseonetozero?”“Iwanttosay,‘Winfivetofour,’butI’msurethat’sthewronganswer,

again,Professor,”Gregsaid.“Trythisanotherway,”Isaid.“Ifyouwereadefensiveplayermeasured

and compensated by the KPI of goals allowed, would you be better offwhenyourteamwinsfivetofour,orwhenitlosesonetozero?”“Damn!”Hewas clearlybeginning tograsphowdeep the rabbithole

went.“Andifyouwereanoffensiveplayermeasuredandcompensatedbythe

KPI of goals scored,” I continued, “would you be better off when yourteamwinsonetozeroorwhenitlosesfivetofour?”“Hot damn!” repeated Greg, slumping his shoulders. “Where’s the

trick?”“I’mafraidit’snotatrick,”Isaid.“It’satrap.Inthesimplestexample,

withonly twosubteamsandtotally intuitiveperformancemetrics, Icanfindscenarioswhereeveryplayerprefershisteamtolose.”


“Here’s what I don’t understand, Fred,” Greg said. “To win a soccermatchyouhavetoscoremorethantheotherteam,sothedefenseshouldtrytopreventgoalsandtheoffenseshouldtrytoscorethem.Ifeverybodydoestheirbest,thentheteamshoulddoitsbest,right?”“Wrong. In order to optimize a nonlinear system, you must

suboptimize its subsystems. If you optimize any subsystem, you willsuboptimizethesystem.”“Oh, please,” Greg said. “Is that some kind of economics tongue

twister?”“No,Greg,”Ireplied.“Itsaysthatwheneveryonedoesthebestforhis

position,theteamdoesnotdoitsbestforitsglobalobjective.Inordertowin, everyone must play for the team. The team members mustsubordinate their individual goals to the teamgoal.At times theplayershouldn’tdothebestforhisposition—whichmeanshisKPIswilltakeahit.Andthatmeansthathiscompensationandcareeropportunitieswillalsotakeahit.”“Youmeanyou’dpunishpeoplefordoingtherightthing?”“Iwouldn’t,butyourandeveryoneelse’s companydoesbecause they

arerunbythenumbers.That’swhyIliketosaythatdoingyourjobcanbehazardoustoyourcareer.”Hemulledoverthatlastphrase.“ ‘Doingyourjobcanbehazardousto

yourcareer.’Whatdoesthatmean?”“Take a case where the team is losing one to zero. Suppose that the

defensecouldgoontheattackwitha50percentchanceofscoring.Thatis a risky strategy. Suppose further that the chances of the other teamscoringinacounterattackarealso50percent.Fortheteam,losingonetozeroortwotozeroisexactlythesame;theyloseanyway.”Ipulledoutanotepadandapencilandplaceditonthetraytablenext

tohisnow-emptyplate. “Let’s say that losing isworth zeropoints, andtyingisworthonepoint,”Isaid,scribblingaformulaonthepaper.“Theexpectedpayofffortheteamofsendingthedefensetoattackis1/2(1)+1/2(0)=1/2.Butthedefensiveplayershaveadifferentincentivesystem.Forthem,scoringdoesn’tmatter.RememberthattheirKPIistheinverseof goals allowed, so goals scored benefit only the offense. Suppose thateach goal scored against the team counts as −1 for the player. So, thedefensive players’ payoff is 1/2(0) + 1/2(−1) = −1/2. For the defensive


players,attackingisallriskandnoreward.”“Wow, I never thought of that,” said Greg. “What a raw deal. I just

alwaysthoughtthatsomeplayerswerejustselfish.”“They might well be. But even if they are not, traditional KPIs will

encouragethemtoactselfishly.”“Salescommissionsencouragesalespeopletoactselfishly?”“You bet. I imagine that your company pays commissions on sales

revenue.Salespeoplehave,then,anincentivetosellthemostexpensive,highest-pricedproducts rather than themostprofitable,highest-marginones,ortheonesthataremostsuitableforthecustomer.Iftheyfocusontheonesthatmakethemostmoneyforthem,theywillmakelessmoneyforthecompany,andperhapscreatechurnbypushingaproductthatthecustomer can’t fully utilize. On the other hand, if they focus on theproducts thatmake themost sense for the company and the customer,theywillmakelessmoney.”“It’s like rewarding people for doing the wrong thing and punishing

themfordoingtherightthing,isn’tit?”“Bingo!”Isaid.Greglookedpleased.“So if a company were a soccer team,” I said, “sales would be the

offense andmanufacturing the defense.Winningwould bemaximizingprofits,whichhappensbymaximizingrevenuesandminimizingcosts.Sothe ‘obvious’ KPIs for the sales organization would be focused onrevenuesandtheonesformanufacturingwouldbefocusedoncosts.Doesthatmakesense?”“Ofcourse.IlearnedthatinmyMBAeconclass.”“Youmusthavehadalousyeconomistasateacher.”“Why?”“Because as we just sawwith the soccer example,” I explained, “you

can’tjustpartitiontheteam—whichisacomplex,nonlinearsystem—intotwosubteamsandthensimplyaddtheirresults.Ifyoudothat,youwillincentivizeeachsubteamtooptimizetheirperformanceandsuboptimizetheperformanceoftheteam.”“Areyousayingmysalesteamshouldnotbepaidsalescommissions?”“I’mnotsayinganythingyet,exceptthatsalescommissionshaveadark


side.”“Unlessyoumakea lotofmoneyon them. I’vedoneprettywell.”He

grinned.“I’msureyouhave,butletmegiveyouanotherexample.Whatarethe

namesoftwoofyoursalesreps?”“Phil,”Gregreplied.“AndRachel.They’restars.”“So suppose that Phil has been working on an account for several

months. At that point, he discovers that a key decision maker in thecustomer organization went to college with Rachel. Phil knows thatRachelwouldbemore likely tomake the sale.But ifRachelmakes thesale,shegetsthecommissionandthekudoswhilePhilgetszilch.IfPhilwantstomeethispersonalsalesquotaandearnthecommission,hewillkeep trying to make the sale himself with a lower probability thanRachel.”Gregsmiled.“Terriblyplausible.”“You see, Greg, instead of fighting tumors, your company is feeding

them—justlikeeveryotherorganizationoutthere.”Aspassengersfinishedtheirdinners,theflightattendantscamedown

the aisle with a tray full of ice cream sundaes with chocolate sauce. Ideclinedpolitely.Gregchosethebiggestone,withachocolatechipcookieontheside.

THECONTRIBUTIONCONUNDRUM

“I shouldhaveskippeddessert,” saidGreg regretfully. “I’mnotburningcalorieslikeIdidwhenIwastwenty-five,andthepoundsarepilingup.”“What tastes good is not always good, and what is good doesn’t

generallytastesogood.That’swhyweneedtoeatwithourmindsratherthanourtongues.”“Easiersaidthandone,Mr.Guru.Areyouahealthnut,too?”“Ijusttrytobeconscious,”Isaid.“IwatchwhatIeatbecauseIwantto

live a long and healthy life. Organizations get sick, too. They die fromdisorganizationbecausetheirpeopledowhatisgoodforthempersonally,


ratherthanwhatisgoodforthecompany.”“Amen to that!” Greg said. “I’m being killed by bureaucrats who

couldn’tcarelessaboutthecompany.”“Youmeanthebureaucratsinthelegaldepartment?”“Thoseguyshavenobusinesssense.Every timewemakeasale, they

delaythecontractformonths.Theyinsistontellingusallthethingsthatwecan’toffer,request,orcommittodo.Andthentheywantthecustomertoaccept thesepunitiveclauses. It’samiracle thatwegetanycontractssigned. But this time they outdid themselves. They’re about to kill thisdealandpushthecustomerintothearmsofthecompetition.”“Myguessisthatthelegalteamistaskedwithminimizinglegalrisk,so

they’re trying to prevent anything from going wrong,” I said.“Unfortunately, in their zeal to do that, they are also preventing thingsfromgoingright.”“Yougotit,Fred.”“That’sonlyhalfof thestory,Greg.Fromtheir standpoint,what they

seeisthatinyourdesiretomakethesale,youaredisregardinglegalrisksthatcanhurtthecompany.”“Sowho’sright?”“You’re both wrong. The goal is neither to minimize risks nor to

maximizesales.Thegoal is tohelpyourcompanywin.Whichmeanstoaccomplish its mission ethically and sustainably, growing its economicvaluewhilebenefitingyourstakeholders.”“ButtherearenoKPIsforthat.”“That’swhy you have these ongoing feuds between different parts of

the same team. KPIs and local incentives encourage people to notrecognize each other as teammates. The obvious solution would be tocompensate each employee according to his or her contribution to theglobalobjectiveofthecompany.”“Are you saying that employees shouldbe evaluatednot according to

howtheydotheirjobbutaccordingtohowtheycontributetotheteam?Howcanyoudothat?”Gregasked.“HaveyouseenthemovieMoneyball?”“Yes!Ilovethatmovie.Weuseittoexplaintocustomershowtheycan

benefitfrombigdata.”


“It’sagoodexampleofhowyoucanmeasureeachplayer’scontributionto the global objective. In themovie, thewhiz kid economist fromYalefindsthatthemostexpensivebaseballplayersarenottheonesthatmostcontribute to help the team to win. And some inexpensive players aremorevaluable than theexpensiveones.So themanagerof theOaklandA’s sells the more expensive, less valuable players and buys the lessexpensive,morevaluableplayers.”“Right,”Gregsaid.“Hetookalotofheatforit,butintheendtheA’s

won the division championship, and with the lowest budget of theleague.”“Therealvalueofaplayer,”Isaid,“isnotmeasuredbyhisKPIsbutby

hiscontributiontohelptheteamtowin.”“Thatmaybepossibleinbaseball,Fred,buthowwouldyoudothatfor

a business? It’s impossible to see what people do and keep stats soaccurately.”“You are right, Greg. That’s why bonuses typically depend on some

combinationoflocalandglobalperformance.”“Inmy company,” Greg said, “we have a mixed system like that for

managersandabove.Partofourvariablecompensationdependsonourdepartment’sperformance, toencourageustoworkhard,andtheotherpartdependson thecompany’s results, toencouragecollaborationwithpeopleinotherdepartments.”“Howisthatworkingoutforyou?”“Well,itseemstohitthespot.Weallwanttoachieveourtargets,but

wealsocareaboutthecompanyachievingitstargets.”“But,Greg,doesitwork?”“You don’t think it does?” he said a bit resentfully. “Howwould you

know?Youdon’tworkforus.”“Trust me, I’m a doctor,” I said, trying to lighten things up. “What

would you say is the impact of your personal effort on your company’sglobalresults?”“I’vegotnoidea.Therearesomanythingsthataffectthoseresultsthat

it’shardtomeasuremypersonalcontribution.”“Canwesayit’srathersmall,relativetothecompany’stotalresults?”“Notgreatformyego,butsure.”


“AndwhatwouldyousayistheimpactofyourpersonaleffortonyourKPIs?”“Muchhigher.”“Yousaidthatyourbonusisbased50percentontheglobalresultsand

50percentonyourKPIs?”“Yes.”“So where would you put your efforts to maximize your payoff? To

minimally move the needle of global results, or to maximally improveyourKPIs?”Afteramomentheresponded,“OnmyKPIs.”“Ofcourse.See,we’rebacktotheindividualincentivescheme.The50

percentoftheglobalresultsdoesn’tchangethingsforyou;youputinthesameeffortregardless.Butitdoeschangethingsfortheworseintermsofyourincentives.”Greg’sbrowsfurrowed.“Why?IunderstandthatfocusingonmyKPIs

maynotbe thebest for the team,but I’d still bedoingmybest formyposition.”“Sure,butyouarelessmotivated.Ontheonehand,you’donlyget50

percentoftheincentiveyouwouldhavegotteninapurescheme.Ontheotherhand,you’dbedependentonmanythingsthatareoutsideofyourcontrol for the other 50 percent. That creates uncertainty, especially inthe case of external factors like a recession, or if a big customer goesbelly-up.Anditcreatesconflictwithotherpartsoftheorganization.”“You got that right,”Greg agreed. “Therewas a lot of noise last year

whentheproductmanagersandengineersblamedeachotheraboutlatereleases.Neither side got the bonuses they expected because they tookeachotherdown.Andyoushouldseethenastye-mailsbetweensalesandcustomersupportdiscussingthereasonsforcustomerchurn!”“Wouldyoupreferafifty-fiftyschemeorahundred-zeroone?”“Iguessthehundred-zero.Butwhat ifwechangedthepercentagesto

makepeoplemore focusedon theglobal result?What ifwemadezero-onehundred?Afterall,wewanteveryonetoplayfortheteam,don’twe?”Astheflightattendantspickedupourtrays,Gregpretendedtolookfor

hiswallet. “I’ll takecareof this,Fred,”he joked.“Bytheway,youseemlessweirdbytheminute.”


“Thanks,Greg,butwe’reonlyhalfwaytoSanFrancisco.Whydon’twesplitthebill?”

SPLITTINGTHEBILL

“Your idea of focusing people on the global result through teamincentivesisnotabadone,butI’mafraidit’sbettertostickwiththedevilyouknow,”Isaid.“Here’swhy.Haveyouevergonetoarestaurantwithagroupandsomeoneproposesthatyouallsplitthebill?”“Yeah.MywifeandItriedthatseveralweeksagowithourneighbors.It

wassupposedtomakethingslessawkward,butitlookedliketheywouldpaymorebecausetheyonlyhadsoupsandsalads.AnneorderedfishandwhitewineandIhadasteakandacoupleofbeers.Soitendedupbeingawkwardanyway.”“Restaurantownersloveitwhenpeoplesplitthebilllikethat.”“Why?”“Because itensuresyouallwillspendmorethanyouwouldhavehad

youpaidseparately.Ifyoudothiswithnineotherpeople,eachoneofyoupays only one-tenth of what you order. Nine-tenths come out of yourfriends’pockets. Ifyouorderasteakdinnerwithbeeranddessert, theywillpaynine-tenthsofit.”“Yup,”Gregreplied.“AsIsaid,itwasawkward.”“Itcreateswhateconomistscall ‘moralhazard,’ ”Iexplained.“There’s

moralhazardwhenoneofthepartiestoacontracthasanincentive,afterthe contract is signed, to act in a manner that benefits himself at theexpense of the others. For example, subsidized flood insuranceencouragespeopletobuildinareaspronetofloodingthattheyprobablywould avoid in the absence of such insurance. Or financial bailoutsencouragebanks toparticipate inoperationswith risks that theywouldavoid in the absence of such bailouts. Moral hazard encouragesindividualstodothewrongthingsbecausetheycanoffloadthecostsandrisksoftheiractionsonothers.”“There’saproblemwithyourstory,though.Iwasbotheredbysocking

our neighbors formoremoney, so I insisted we each pay for our own


dinners.Ihavescruples,youknow?”

“Butothersdon’t,”Irepliedwithasmirk.1“That’sallthatmatters.”“Whatdoyoumean?”“Let’ssaythatyou,scrupulousGreg,ordertheleastexpensiveitem,but

your unscrupulous tablemates order the most expensive items. Howwouldyoufeel?”“Iwouldneverdinewiththemagain.”“What if you didn’t have that option? What would you do the next

time?”“I wouldn’t be the sucker that’s left holding the bill again,” Greg

asserted. “I’d order expensive food, since that’s probably what otherswoulddotoo.”“Exactly!Youareallonaracetothebottomor,moreaccurately,tothe

top-priceditems.”Greg looked sheepish. “But what’s the connection to bonuses and

organizationalcancer?”“Bill splitting,” I replied, “isnotabadanalogy fora systemwhereall

the players get paid if the team wins, or all the salespeople get paidaveragecommissions,oralltheemployeesofacompanygetpaidfromaglobalbonuspool.”“Howso?”“Because it shields people from the consequences of their actions. In

thecaseoftherestaurantbill,itisthecostsoftheirorders.Inthecaseofthecommissions,itisthebenefitsoftheirefforts.InthehypotheticalcaseofPhilandRachel,whathappened?”“Phil wanted to make the sale to earn his commission even though

‘passing the ball’ to Rachel had a higher probability of success,” Gregreplied.“Here’sthepoint,”Isaid.“Ifyoureversetheincentivefromindividual

tocollective,thingstilttotheoppositeextreme.IfPhilandRachelmakethe same commission regardless of who makes the sale, each of themwouldprefertolettheothermaketheeffort.Everybodyhasanincentiveto let someone elsedo the job since thatpersonwill bear the costsbuteverybodyreceivesthebenefitsofhisorhereffort.”“Thatisaterriblesystem!”


“Thatiswhycompaniestendnottousecollectiveincentivesoncetheybecomelargerthanaground-floorstart-up,whereatinygroupofpeoplecanobserveoneanother’sbehavior.Moralhazardisabitch.Thenyoudieofadverseselection.”

AVERAGEPAYDRIVESTHEBESTPEOPLEAWAY

“What’sadverseselection?”Gregasked.“Imaginethatyouarethebestsalespersonintheworld,Greg.Youare

so good you could sell air conditioners in the North Pole. Would youprefertobepaidyourdirectcommissions,orwouldyouprefertoreceivetheaveragecommissionofasalespool?”“Direct commission, of course! The average would bring me down

becauseI’mthebest.”“Exactly.”“Andnowimaginethatyouaretheworstsalespersonintheworld,”I

said.“Youcouldn’tsellheatersintheNorthPole.Wouldyouprefertobepaidyourdirectcommissions,orwouldyouprefertoreceivetheaveragecommissionofasalespool?”“Theaveragecommission,becauseifI’mtheworst,itwouldbringme

up.”“Averagepaydrivesthebestpeopleaway,”Isaid.“Superiorsalespeople

whodemandabove-averagepaywillberepelled,whileinferioroneswillbe attracted—thus bringing the company’s average salespersonproductivity further and further down. That’s adverse selection. Thecompany will end up in a death spiral of low-productivity salespeoplewhoexpendminimaleffort.”Gregnodded.“Gotit.”“In economics,” I said, “we call this also ‘the free-rider problem.’

Withoutan immunesystem—bywhich Imeanan incentiveandcontrolsystem—tocheck them, freeriderswill takeadvantageofothers tohidetheirlackoftalent,orindustriousness.”“CollectiveincentivesareevenworsethanKPIs.”


“Theyaredevastating,whichiswhyorganizationsdon’tusethem.Andwhentheydo,theyrunintobigtrouble.ThewaythePilgrimsdidintherealstoryofThanksgiving.”“What has Thanksgiving got to do with anything other than the

season?”“Thanksgiving is a cautionary tale about the dangers of collective

incentives,” I replied. “But very fewpeople know the true story.Wouldyou like to shock your friends and family when you see them onThursday?”“Byallmeans,dispelmyignorance.”“InDecember 1620,” I said, “the Pilgrims landed at Plymouth Rock.

Three years later, theyhada great feast thankingGod for getting themthroughanearlierfamine,andgivingthemnowabountifulcrop.Doyouknowwhatcreatedtheearlierfamineandthenthebountifulcrop?”“Theweather?”“Nope;theincentives.”“Whatdoyoumean?”“At first, thePilgrimsdecided toabolishprivateproperty,which they

thought caused greed and selfishness. Instead, they established acollectivistsysteminwhichallworkwouldbedoneincommon,withtherewards of their collective efforts evenly divided. They expected this toleadtoprosperityandbrotherlylove.”“Butitdidn’tworkout?”“Their experiment failed catastrophically, like all experiments in

collectivismwherethere’snoconnectionbetweeneffortandreward.”I opened my laptop and clicked on a document called “The Great

ThanksgivingHoax.”2

“Itcreated laziness,envy,andpoverty. In fact, itkilledmostof them.Everybody resented working for others, so they didn’t work very hard.For twoyears theharvestwasnotenoughto feedthem.More thanhalfdiedoffamine.”“Thefaminewasn’tanactofGod.”“No,itwasanactofstupidity.Butinthefaceofdisaster,theycameto

theirsenses.Theeldersdecidedtodividethefieldsandgaveeachfamilya piece to cultivate. Whatever product they did not use for their own


consumption,theycouldexchangewiththeirneighbors.”“Andthissolvedtheproblem?”“Yes.Insteadof laziness,envy,andresentment, theysawproductivity

soar. Their production was so great that they not only traded amongthemselvesbutalsowiththeneighboringIndians.”“Ineverheardthatsideofthestory.”“Feel free to share itwith your family on Thursday, as you celebrate

individualincentives.”

“Ladiesandgentlemen,wearebeginningourdescentintotheSanFrancisco Bay Area.We will be landing in twenty-five minutes. Pleasereturntoyourseats…”“Ican’tbelievewe’realmostthere,”Gregsaid.Ismiled.“Timeflieswhenyou’reingoodcompany.”“Yousaidthatthere’dbealightattheendofthistunnel.Ihopeit’snot

anoncomingtruck.”“Neverfear,DoctorFredishere.”“Well, Doctor, your diagnosis is depressing,” Greg said glumly. “My

company has a cancerlike disease because none of us is working inharmonyforthecommongood.Everyoneisbehavinginselfishways,sowe becomemalignant cells that suck resources andmake the companysicker.Andit’sallbecauseofourKPIs.Wecan’tplayfortheteam,andifwe try to change the situation by giving everyone the same incentives,thatwouldonlymakethingsworse.”“Correct,”Ireplied.“Isurehopeyouhaveaprescription.”“Disorganization is not the kind of disease that can be cured with a

pill,”Isaid.“Youcan’tsolvetheincentiveproblem.Youcanonlymanageit. The treatment requires behavioral modifications on the part of theleaders.Ifyouhaveatumorinyourbody,youneedtochangeyourdietand other habits to increase your chances of beating the cancer. If youhavea tumor in your corporatebody, youneed to adopthealthyhabitslike having a shared purpose, clear strategies, strong interpersonal


relationships, and employee engagement. If you and the other leadersmakeconsistentlyhealthychoicesover time,you’ll reduce risksandgetbetteratrecognizingthefirstsignsofthetumor.”“Youmake it soundsoeasy, likeaplan inadietbook.But if reading

dietbookswereenoughtoloseweight,I’dbelightasafeather.”“I’mnotsayingit’seasy,Greg.It’sactuallyquitehard.Butit’spossible.

And thegoodnews is that towin,youdon’tneed to leadperfectly.Youjust need to do it better than your competitors. I guarantee that everycompetitoryourcompanyfaceshasexactlythesesameproblems.Sothegoalistomanagetheincentiveproblemsmoreeffectivelythantheydo.”“Sohowdowedothat?”“That’sanexcellentquestion,withaverylonganswer.I’mafraidthat

unlessyouwanttospendanotherfewhoursontheplaneIcanonlygiveyouasketch.”“Okay.”“Youhavetoturnyourmercenaryorganizationintoamissionaryone.

Youhavetoelicittheinternalcommitmentofyourfollowerstopursueacommon goal, giving the best of themselves because they want to,becausetheyfinditintrinsicallyvaluablebeyondexternalincentives.Youcanonlydothisusinganothersetofincentives;nonmaterialonessuchasanoblepurposethatpeoplefeelproudtopursue,ethicalprinciplesthatpeoplefeelproudtoenact,acommunityoflike-mindedpeopletowhichemployees feel proud to belong, and a sense of power to make adifferenceintheworld.”“Youmeanswitchingfrommoneytononmaterialincentives?Thatmay

befineforvolunteerorganizations,butIdon’tthinkthatwouldworkinmybusiness.Salespeoplearemotivatedbycommissions,notbydreamsofchangingtheworld.”“Ithinkyou’resellingyourpeopleshort,Greg.I’msurethatbeyondthe

moneytheycareaboutthemeaningoftheirwork.Andtoclarify,Idon’tmean switching incentives; I mean complementing them. It’s noteither/or,butboth/and.Torunfasterthanyourcompetitors,youneedtouseyourtwolegs,thematerialandthenonmaterial.”“Howdoyouusethetwolegs,then?”“We’reclosetolanding,”Isaid.“SoI’mgoingtobreakmyownruleand


give you advice. I don’t know if you’ll be able to use it, though, as itrequiressomelevelofskill inconversation,butperhapsthese ideascanhelpyoudealwithyourcolleaguesinlegal.Youneedtogettogetherwithyour counterpart in legal to have a different kind of conversation. Thisconversationshouldstartwithanagreementabouttheoutcomeyouarebothwillingtoseekcollaboratively.”“Fred,theproblemisthatwedon’thaveasharedgoal!Iwanttosign

thedamnedcontractwiththecustomer,andMike,thelegaleagle,wantstostopmefromdoingit.Howcanwecollaborateifwe’retotallyatodds?”“Whatifyousaidtohim,‘Mike,myunderstandingisthatwebothwant

to help our company accomplish its revenue and profit targets withminimalexposuretolegalrisks.Ibelievewehaveadifferenceofopinionabout what strategy would be more conducive for that, but we areperfectlyalignedaboutthegoal.Wouldyouagreewiththat?’ ”“Wow,that’sreallygood!”“HopefullyMikeagreeswiththisstatement.Butevenifhedoesn’t,he

hastoacceptit,orhe’dbeexposedasajerk—notjusttoyou,buttoyourboss.”“Gotit,”Gregsaid.“Next,askhimtoexplaintoyouwhyhethinksthatthecontractistoo

riskyascurrentlydraftedtojustifytherevenueandprofititentails.”“Butitisn’t!”“That’syouropinion,Greg.Ifyouwanttomovethisballforward,you

needtobiteyourtongueandletMikeexplainhisreasoning.”“Okay.Igetit.Goon.”“When he finishes, you need to summarize his position in the most

supportivewayyoucanandacknowledgethathehasgoodreasonstobeconcernedaboutthecontract.”“Buthedoesn’t!”“Greg, letme ask you, how is your currentway of dealingwithMike

workingoutforyou?”“Okay,Igetit.I’llshutupnow.”“AfterMikerecoversfromtheshockofyounotbeingyourcrotchetyold

self,youcanaskhimforpermissiontoexplainyourperspectivetohim.Ibethe’llbereadytolisten.”


“Wenevergotthatfar.Infact,wehaven’tevertalkedface-to-faceaboutthis.It’sbeenjuste-mailssofar.”“It’ssoeasytobebetterthanyourcompetitors.Thebarisreallylow,”I

mused.“ThenextstepistoexplainyourreasoningtoMike,butwithoutclaiming that you’re right. Youhave topresent your viewas your view,instead of as the truth. The easiestway to do this is to start by sayingsomething like, ‘The way I see things, and I realize that this is anincompleteperspective,isthat…’ ”“Icandothat.”TheflightattendantcamebyandremindedGregtoputawayhistray

tableandputhisseatupright.“Good,”Isaidasheclickedtheseatbutton.“Giveitatry.Ilearnedthis

wayofconversationfromoneofmymentors,aHarvardprofessornamedChris Argyris. The first time I saw him at a graduate seminar at theHarvard Business School, he said that he had worked with over tenthousand managers, and not one of them had been able to behaveaccordingtowhathecalled‘Model2,’whichis‘mutuallearning.’Withoutextensive training, each and every one behaved according to ‘Model 1,’which is unilateral control.3 Imust confess that at that time I thoughtthatthiswasoverstated.Buttwenty-fiveyearslater,afterhavingworkedwith over ten thousandmanagersmyself, I have to agreewith Chris. Ihaven’tfoundasingleonewhocandotheapparentlysimplethingsthatcreateamutual learningconversation.Buthey,whoknows,youmaybethefirstone!”“Fatchance.Thenwhat?”“After you both understand the relative costs and benefits of your

proposed courses of action, you try to find a way to meet all of yourneeds.”“Whatifwecan’t?”“Don’tbesoquicktodismissthatoption.Youmightbesurprisedhow

you might be able to come up with a strategy that takes care of yourinterests.Butifnot,IsuggestyouproposewhatIcallajointescalation.”“Awhat?”“Ajointescalation.Yousaysomethinglike:‘Mike,thisisaverydifficult

decision that can have significant implications for the company. I


appreciate your effort to negotiate a solution to our differences, but itseemslikewecan’tmakethisdecisiononourown.Thefinalevaluationofrelativecostsandbenefitsisaboveourpaygrade.Someonehastobetthefarm here, and it’s not us. I suggest we go together to—’ What’s yourCEO’sname?”“John.”“ ‘John,andexplaintohimtheoptionsandimplications.He’stheright

persontomakethejudgmentcall.Wewon’taskhimtomediateorsolveour problem, but tell him we’re there to give him the information heneedstomakethetoughcall.Ifhewantstorequiretheextraclausesinthecontractwiththecustomer,we’lldothat.But ifhedecidesthathe’swillingtobearthelegalriskofleavingthecontractasitis,areyoureadytodothesame?’ ”“Ilovethat.I’mgoingtogiveitatry.”“WillyouwritetomeatLinkedInandletmeknowhowitgoes?”“Sure,it’stheleastIcando.”Thenwefeltthesmoothtouchdown.


Chapter4

DISINFORMATIONWHAT’SREALLYGOINGON?

Sooftintheologicwars,Thedisputants,Iween,RailoninutterignoranceOfwhateachothermean,AndprateaboutanElephantNotoneofthemhasseen!

—“TheBlindMenandtheElephant,”JohnGodfreySaxe

Akingaskedsixblindmentodeterminewhatanelephantlookedlikebyfeelingdifferentpartsofitsbody.Eachoneofthemclaimedtoknowwhattheelephantwas“like,”buteachoneclaimeditwaslikeadifferentthing.Theblindmanwhofeltalegsaidtheelephantwaslikeapillar;theonewhofeltthetailsaiditwaslikearope;theonewhofeltthetrunksaiditwaslikeatreebranch;theonewhofelttheearsaiditwaslikeahandfan;theonewhofeltthebellysaiditwaslikeawall;andtheonewhofeltthetusksaid itwas likeasolidpipe.Thekingsaid to them:“Allofyouareright, and all of you arewrong. You are right because each one of youtouchedanactualpartoftheelephant.Youarewrongbecauseeachoneofyouimaginedthatthewholeelephantwaslikethepartyoutouched.”Thinkoftheorganizationastheelephantandeachofitsmembersasa

blindmanwhotouchesapart,believingthathecanextendhisexperiencetodescribethewhole.Everyonethinksthattheyknowbetterthananyoneelse what is happening in their immediate surroundings. They are allright. Each person believes that his or her knowledge is sufficient todetermine what the whole organizational situation looks like. And,


believing that, each person thinks he or she canmake decisions abouthow the organization should move toward its objective. They are allwrong.In a perfectly aligned organization, people in every division or

department,ineverysubsystem,touseaneconomist’snomenclature,arecommitted to optimizing the system. Yet conflicts among its membersstillarise.“Aligned”meansthateveryoneisplayingtohelptheteamwin,regardlessofhisorherlocalperformanceindicators.Butitdoesn’tmeanthat they can all agree on the best course of action, or on what eachperson shoulddo tohelp achieve the sharedgoal.Because eachpersonhasdifferentinformationandmakesdifferentinferences,theywilloftendisagree as a group about strategic decisions. Worse, if each personassumes that he is right and that the other person iswrong, escalatingclasheswillinevitablyriptheorganizationapart.Icallthisproblem“disinformation.”Anditmakesitimpossibleforan

individual to work in concert with others to pursue the largerorganizational objective—even if everyone agrees on the objective. Theproblemsof“disorganization”leadindividualstopursuetheirlocalKPIsand are not aligned on a common goal;with “disinformation” they arealigned on the common goal but disagree over the best strategy foraccomplishing it. This is because people can only see a fraction of thepossibleimpactthattheiractionswouldhaveontheglobalobjective,sotheydon’tknowhowtheiractionswillaffectotherpartsofthecompany.Whiletheycansensetheopportunitiesandrisksthatappearintheirlocalenvironment,theyhavenoideaoftheopportunitiesandrisksthatexistinotherplaces.To make matters worse, the best strategy for the organization as a

wholeusuallydoesn’tpleaseanybody.Thinkaboutthefamiliarproblemofsettingathermostatinaroomwithfourpeople,eachofwhomprefersadifferenttemperature(say,68,69,71,and72degreesFahrenheit).Thetemperature thatwouldmaximizeoverallcomfortwouldbe theaverageoneof70degrees.Butatthatsetting,everypersonwouldlikelytweakthethermostat to make him- or herself more comfortable. Unless they allagreeonthegoal,andsharetruthfullytheirpreferences,theywillnotbeabletomakeagoodcollectivedecision.Disinformation isaserious issue in itsownright. Itpreventsrational


decision making and coordination, and it creates conflict amongindividualsevenwhentheyarealignedbehindacommongoal.But it isdeadly in combination with disorganization. These two dynamicstogetheryieldanincoherentandself-defeatingpatternoforganizationalbehavior. In the real world—where people are misaligned, and evenincentivized by local KPIs to bias their outlooks and reports to giveprecedencetolocalperformance—disorganizationismorethanenoughtoundermine an organization.But if it doesn’t do the job, disinformationwill provide the coup de grâce, blocking organizational effectiveness,success,sustainability,andevensurvival.

AWHALEOFATALE

Whenwefocusonlyonourimmediatesurroundingsandexperience,welose sight of the larger environment and can make terrible decisions,putting others and ourselves at risk. I learned about the dangers of“tunnelvision”asIwasdivingintheGalápagosinsearchofwhalesharks.Ialmostpaidforthelessonwithmylife.Thewhaleshark is thebiggest fish in theworld. (Thewhale isbigger

butitisamammal,notafish.)Itcangrowuptofifty-fivefeetandweighuptosixtythousandpounds.Itsmouthisoversixfeetwide.Fortunately,thisgentlegianteatsonlyplanktonandhasnoteeth.Still,asmackofitspowerfultailcankillyou.Diversdreamofseeingawhalesharkupclose,butsinceit’sapelagic

(migratory)species,it’sneverasurethingthatyou’llfindit.AsIlookeddown from the deck of the dive boat that day, I wondered whether Iwould be lucky. But before I could possibly get a glimpse of thewhaleshark, I’d have to get past the hundreds of hammerhead sharks thatcircled lazily under the hull. Yum, breakfast, I imagined the sharksthinking.Humanwrappedinneoprene.Ourfavoritedish.ButIhadn’tcomeallthewaytotheGalápagostochickenout.“Be careful down there!” the dive master told me and my six

companions,rightbeforestickingtheregulatorinhismouthandjumpingoverthesideoftheboat.Wefollowedhimintothecold,choppy,shark-


infestedwaters.I followed thedivemaster’s instructions, descending slowly, ready to

bailoutattheslightestsignofaggressivebehaviorfromthesharks.Butthehammerheadsreactedtouswithutterindifference.Foralltheycared,we could have been sinking logs. They ignored us and kept swimmingwiththeirrelaxed,elegantwiggle.Phew.Minuteslater,someonebangingonatankjoltedmeintohighalert.It

was the signal that someone had sighted a whale shark. I scanned allaroundforthemassiveshape,orientingmyselftowardtheclanging.AndthenIsawit—amajestic,breathtaking,awesomecreature.Iwasexcitedand relieved that the trip had not been in vain. From afar, the whaleshark looked like itwasbarelymoving,butwhen Igot closer I realizedthattheenormouscreaturewasswimmingawayrapidly.Ibegantokickwithmyfinsatfullspeed,totallyoblivioustoanything

but themesmerizinganimal. Ididn’t realize that Iwas leavingmydivebuddybehind—adiver’smortalsinthatrisksbothpeople’slives.Inafewminutes,Ifoundmyselfrightnexttothewhaleshark.Imovedbeneathit,turnedmybodyfaceup,andswamjustafewfeetunderitsmassivebelly,myarmsoutstretchedtomysides.Myeyeswelledup.Iwasinanalteredstateofconsciousness,totallyconnectedtothisincrediblelife-forminitsnaturalenvironment.MyfascinationwiththewhalesharkbrokewhenIrealizedthatIwas

sucking air harder andharderwith every breath. Iwonderedwhatwaswrong. I hadbeenunderwater less than thirtyminutes, so I thought Ishouldhavehadplentyofair left. Icheckedmyoxygenpressuregauge.WhatIsawhorrifiedme:Ihadonlyabout100PSIleftinmytank,whichmeans I was practically running on empty.1My dive computermarkedfifty-eight feet.Worstofall, I foundmyself totallyalone; therewerenootherdiversaroundwithwhomtoshareair.Idrewinthe last fumesofmytank,feelinglikeIwassqueezingatubeoftoothpastefromtheinside.Relax,Itoldmyself,youhaveenoughtogettothesurface.Inrecreationaldiving, ifyoustaywithinthelimitsoftimeanddepth,

you can come to the surface without stopping to let the accumulatednitrogen inyour tissues“gasoff.” Ifyougobeyond the limitsanddon’tstoptodecompress,thenitrogencondensedinyourbodybybreathingatdepth can literally make your blood bubble. This can cause rather


unpleasantconsequencesrangingfrom“thebends”(painsinyourjoints)to death. Even when we stay within limits, recreational divers make athree-minute safety stop between twelve and sixteen feet to let theaccumulated nitrogen exit the body as an extra precaution. Althoughstronglyrecommended,thissafetystopisnotrequired.GuessI’llfindoutifthesafetystopisreallyoptional,Ithoughtgrimly.IascendedasfastasIdared,disregardingtheangrybeepsofmycomputertellingmetoslowdownandmakethesafetystop.I finallybroke thesurface,gaspedadeliciousbreathof freshair,and

putonmysnorkel.(Thesizeofthewavesmadeithardtobreathewithoutit.)Ilookedaroundandsawthatthecurrenthadtakenmeawayfromtheboatandthegroup.Iwasutterlyalone,floatingawayinGodknewwhatdirection,amongwavesthatmadeitimpossibleformetoseeanything,orforanybodytoseeme.I reached intomyBCD (buoyancy controldevice, a kindof inflatable

vest)andturnedontheradiobeaconthatIhadbeengivenincaseofanemergency. I also inflatedmy “sausage,” a large,oblongorangeballoonthatstandsaboutthreefeetabovethesurface,andhopedthattherescueteamwouldfindme.Afterthelongesttenminutesofmylife,IheardtheengineoftheZodiac.Twocrewmembershelpedmeclimbin.Wemotoredbacktothemothership.Thedivemasterwaswaitingformeonboard.“WhatdidI tellyouin

thedivebriefing?”heaskedsternly.“Tobecareful,”Irepliedsheepishly.“AndIwas.Ipaidcloseattention

to the hammerheads and didn’t see any of them making jerky oraggressivemovements.”“It’snotthehammerheadsyouhadtowatchoutfor,youknucklehead!”

hechided. “Theyarenotdangerous.Accidentshappenwhenpeoplegetso focused on the sharks that they stop paying attention to air, depth,location,theirbuddy,andthegroup.Youaretheposterchildforhownottodivesafely!”I learnedabig lesson thatday. Iwasso fixatedon thehammerheads

and the whale shark that I didn’t pay attention to the most vitalinformation. I was so captivated by the extraordinary risks andopportunities that I forgot the ordinary precautions, with potentiallydeadlyconsequences.


“It’snotwhatyoudon’tknowthatkillsyou,”goesthemaxim;“it’swhatyouthinkyouknowforsurebutisn’ttrue.”I“knewforsure”thatIhadenoughoxygen in the tanksince Ihadn’t spentmore thanhalfanhourunderwater.ButwhatIthoughtIknewwasn’ttrue.Inmyexcitementatseeingthewhalesharkandtearingafterit,Ihadconsumedtheairinmytankattwicethenormalrate.This episodemademe painfully aware of how often decisionmakers

getso fixatedontherisksandopportunities theyperceive in their localenvironmentsthattheydisregardcrucialinformationaboutotherpartsofthe system. Put another way: we tend to put all our attention on the“sharks”—theobjectsofourambitionoraversion—becomingblindtothewayourbehavioraffectstherestoftheorganization.This tendency to focus on our own experience and interests creates

tremendousproblems. In a complex,highly interconnected system, anyperson’s behavior has a significant impact on many others. However,becausemost of us consider only the local short-term consequences ofouractions,anddiscounttheglobal long-termimpact,wemaketerribledecisionsthatputus,andourorganizations,atrisk.

WHOKNOWSBEST?

“People are going to die!” barked Bruce, the chief vehicle engineer. “Idon’t give a damn about your fuel economy numbers! This vehicle isalready too light. If we take out anymoremass, wemight as well callthemrollingcoffins!”Larry,theexecutiveforregulatoryaffairs,shookhisheadvehemently.

“If our fleet doesn’t meet the CAFE (corporate average fuel economy)standards forgasmileage, therewillbehell topay.Youmaynotgiveadamn,butthegovernmentdoes.”“You’regoingtohavetogetyourcompliancefromsomeothervehicle,”

saidBruce.“Thisoneisbarelycrashworthyasitis!”“Listen,yourvehicleisnotgoingintoproductionunlessIsignoffonit.

Ifyoudon’tmakeitlighteryoumightaswellkissitgood-bye…”2

Ioverheardthisargumentbackinthe1990swhenIconsultedforone


of the major car manufacturers. I was helping the company with thecultural aspects of what they called the VLE (vehicle line executive)system. It was an effort to mirror Toyota’s “heavyweight programmanager” organization (which Toyota calls “Shusha”). At Toyota, the“Shusha”isthecarboss,meaningthathemakesthefinaldecisionsaboutthe vehicle. That allows him to balance the power of the functionalleaders—that is, the senior vice presidents—who want to optimize fortheirsilos.For example,designoptimizes for “reach” (elegance); engineering for

technology; manufacturing for hours per vehicle; procurement formaterialcost,andsoon.Inthatspirit,safetyengineershaveamandatetosavelives,whilefuelefficiencyengineersfocusonsavinggas.For safety engineers, the goal is tomake the cars as crashworthy as

possibletoprotecttheiroccupantsintheeventofanaccident.Therearesome things that have relatively little impact on the rest of the vehicle(suchassafetybelts).Butmostoftheirdecisionssignificantlyaffectthewhole vehicle. For example, one way to make the vehicle safer is toincreaseitsmass.Atank,totakeanextremecase,isthesafestvehicletobeininacrash,whileamotorcycleistheworst.But mass is “expensive” for many reasons. Beyond its direct cost, it

increases the vehicle’s fuel consumption and operating costs. It alsoincreasespollution,whichcancreateregulatoryproblemssincetherearelegal limitstothefuelefficiencyofvehicles.Moreover,aheaviervehiclerequiresamorepowerfulengineaswellasastrongersuspension.Thus,theridewillbeeitherrougher(duetostiffersuspension)orwobblier(duetolessstiffsuspension)becauseoftheextraweight.Thisweightwillalsomake thecar take longer toaccelerateand,perhapsmore important, tobrake.Soeventhoughtheextramassmakesthevehiclesaferintheeventof a crash, it could be less safe overall because of the extra time anddistancerequiredforbraking.LarryandBrucewereeachpursuingimportantgoals.Brucewantedto

protecttheoccupants;Larrywantedtoprotecttheenvironment.Buttheywereat an impasse, anda timely resolution seemed implausible.WhileLarryandBrucediscussedwhattodo,thecompanywaslosingbigdollarsforeveryweekthatwentbywithoutadecision.


MASSIVECOMPLEXITY

Of course, a natural question arises here: Isn’t itmanagement’s job tosettle these kinds of arguments?After all, their job is to take in all theavailableinformationandmakeobjectiveandinformeddecisionsforthegoodofthewhole.That’swhytheyhavetheauthorityandgetpaidthebigbucks.Theproblemwiththisisthattheexperienceofeach“blindman”about

the part of the “elephant” he touches is so rich and nuanced that it’spractically impossible to describe accurately. A true description of theelephantineorganizationwouldhave to includeall relevant informationabouttheorganizationinitspresentandpotentialfuturestates:howitisstructured;what itsprocessesare;whoitsemployees,clients,suppliers,contractors, and consultants are; what its resources are, such as rawmaterials, properties, plants, equipment, finished and semifinishedproducts, component parts, cash, lines of credit, and so on; what itsliabilitiesare;etcetera.Thelistgoeson,andon,andon.Andthat’slessthanhalf of it, as the listwould alsohave to include theorganizationalenvironmentinitspresentandpotentialfuturestates.Conveyingwhatheknows,whathecoulddo,whathewouldneed,and

whatcouldhappen,wouldrequirethattheorganizationalmembermakegross simplifications thatwould render the information almost useless.Theblindmancanonlycommunicateathinsliceofhisknowledgetothesenior managers who make global decisions. This does not suffice tomakerationaldecisionsaboutthebestcourseofaction.(Andrememberthatwearemakingtheheroicassumptionthatthereisperfectalignmentbehindtheglobalobjective,andthatnolocaldepartmentaloptimizationis going on. If people are incentivized to achieve their KPIs, theirinformationmight not be trustworthy, because of their natural bias tobenefittheirownareas.)People in maintenance, for example, may know that the plant can’t

continuetooperateonthreeshiftsformuchlonger.Peopleinsalesmayknowthatcustomersareangrybecausethereisnotenoughinventorytomeetdemand.Peopleinprocurementmayknowthatthere’sapotentialsupplierinChinathatofferssemifinishedproducts.Peopleinengineeringmay know that to process the Chinese products would require an


adjustmentoftheplantequipment.PeopleingovernmentrelationsmayknowthatregulatorswouldfrownuponimportsfromChina—andsoon,toanextent that absolutelyboggles themind.Nooneperson,not eventheCEO,canassessalltheinformationnecessarytocreatethebestglobalstrategy.Nooneknowswhatdecisionisbestforhelpingtheteamwin.Not only is it impossible to integrate all this information into a

common pool to fully evaluate alternatives, but circumstances are alsochanging all the time. The frequency and significance of these changesrequire substantial and constantmodifications of the plans.As soon asknowledge is communicated, it becomes obsolete—which wreaks havoconthefirm’sregularplanningprocess.Ontopofthat,noonepersoncanpossiblytakeinandprocessthevast

knowledgeinherentinanorganization.It’simpossibletogetacompletelyaccuratepictureofthemassiveorganizationalanimalasawhole,evenforthosewhositattheverytop.Justastheblindmentouchingtheelephantwrongly (and arrogantly) extrapolated their experience to describe thewholeelephant,seniorexecutives,seeingtheelephantfromafar,wrongly(and arrogantly) think they can make out and factor in its granularfeatures.Furthermore, theybelieve theycancontrolemployees throughmeasurements, carrots, and sticks. TheNobel laureate FriedrichHayekcalled this “the Fatal Conceit.”3 Many an organization has died fromcentralplanningandmicromanagement.

YOUCAN’TPLEASEALLPEOPLE

WhenIwasachildinArgentina,Iplayedsoccer.Mypositionwascentermidfield. My role was to pass the ball to the player who was bestpositionedtoscore.Theoffensiveplayerswouldalwaysraisetheirhandandscream“I’mopen!”or“Here!”togetmyattention.Icouldonlypasstheball tooneof them, so Ihad todecidewhichoneofmy teammateswasmostlikelytohelptheteamwin.Nomatterwhatmydecisionwas,someonealwaysblamedmefornot

passing to them, claiming they were well positioned. They didn’tunderstand thatmychallengewasnot topass toaplayerwhowaswell


positioned but to the player who was best positioned, from myperspective.We were aligned as a team, but we had many quarrels about my

passing decisions. At some point, I realized that nomatter to whom Ichose topass theball, therewouldalwaysbe severalotherplayerswhowould be unhappy with my decision. They saw only their ownopportunity;theycouldn’tcompareittothatoftheotherplayers.Many years later, when I was climbing mountains, I learned about

what happens when one suffers hypothermia. If the body becomesdangerouslycold,itwillwithdrawbloodfromtheextremitiesandsendittothecore,tokeepitwarm.Thatprotectsthevitalorgansattheexpenseofthetoesandfingersfirst,thefeetandhandssecond,andthelegsandarmsthird.Sendingbloodto thecoremaybe thebeststrategy foryoursurvival,butIthinkthatifthetissuesoftheextremitieshadasayinthematter, they would prefer to decrease a bit the overall probability ofsurvivalbykeepingsomebloodflowingto themsothat they, too,couldsurvive. Ifhypothermiaresponseswereup fornegotiationandvote, theextremities would surely want to reach a “compromise” that wouldmaintaintheirviability.Theorganismsthatfell inthistrapdisappearedfromthegenepool.Thesameistrueforcomplexorganizationsthattrytofunctiondemocratically.

NOSUCHTHINGASAFREELUNCH

Even if one could calculate the global aggregate of every local impacttoday and in the future, one wouldn’t know what the forgoneopportunitieselsewheremightbebecausetherearealways“opportunitycosts.”Basically,thismeansthateverytimeyousayyestosomething,yousaynotoeveryotheroptionyoucouldhavepursuedwiththeresourcesyou allocated todo the thing you said yes to.Even a free lunchhas anopportunitycost.Ifyouacceptmyinvitationforlunch,youcan’tusethesame time to answer e-mails, enjoy a book, exercise, call a friend orfamilymember,orgoforawalk.Opportunitycostisthevalueofthebestoptionnotpursued.Whenever


you make a choice among several mutually exclusive alternatives, youincuranopportunitycost—thatis,thebenefitthatwouldhaveaccruedtoyou by making the best alternative choice. Let’s say you have threeprojects, A, B, and C, each of which requires the same $200 ofinvestment. Suppose that you choose project A and eschew B and Cbecause you have no resources left to fund them. Suppose further thatprojectAendsupyielding$300,foranaccountingprofitof$100.Wouldyousaythatthatwasagooddecision?To answer such a question, you would need to know what the

accountingprofitofprojectsBandCwouldhavebeen.PursuingprojectAis a good decision only if projects B andCwould have yielded a loweraccountingprofit.Thatcanbeextremelydifficulttodetermine.ProjectsBandCneverhappened,soyoucanonlyestimatetheiraccountingprofitscounterfactually. To expand the story of the blind men, people inorganizationsarenotjusttryingtofigureoutwhattheelephantlookslikeby touching a part; they are trying to determine a probability wave of“quantum elephants” thatwill collapse into a “particle elephant” in thefuture(inmyworkshopsIcallthis“Schrödinger’selephant”).4

It’sextremelydifficulttocomparethesystemicbenefitsofaparticularcourse of action with the ones of other alternatives that would haverequired the same resources. The knowledge of available choices andtheir value is distributed throughout the system. It is held by differentorganizationalmemberswhomaynot reveal it inorder to further theirinterests.Furthermore,opportunitycostswouldbeenormouslydifficultto compute even in a grossway due to the system’s complexity. That’swhypeopletendtouseactualexpendituresinsteadofopportunitycosts.But using expenditures ismistaken, like the drunk who looked for hiskeysunderthelightbutnotintheplacewherehedroppedthem.

THEDUAL-ALLEGIANCEPROBLEM

Winning the business game requires that the organizational (global)strategyboth informlocal tacticsandbe informedby local information.The right interplay between strategy and tactics is very difficult toachieve. As I discussed in the previous chapter, local teams are often


incentivized to optimize for their departments or division and competewithotherteams.Inaddition,everymanagerexcepttheCEOhasadualallegiance.To get the best from her employees, a manager has to elicit their

internalcommitment.Sheneedstoengageheremployeestopursuetheteamgoals.Shedoesthisbygivingthemasenseofpurposeandafeelingofprideintheirwork.Shealsodoesthisbycreatinganemotionalbondoftrust among her teammembers and herself. In addition, she providesopportunities for thesemembers toexperienceachievement, autonomy,andmastery in theirwork, aswell as supporting them to grow in theircareers.On theotherhand,shehas tosubordinateher teamgoals,processes,

and even her employees’ welfare to the organizational mission. Thismeans that she commits to doing her best to achieve the higher-ordergoal of her team; that is, the goal of her manager. For example, ifLinkedIn is to function at its best, themanagers of each business unitcompetingforscarceresourcesneedto“putontheircorporatehats,”asit’softensaid,andshareinformationtruthfully,evenifthisinformationdetractsfromthelikelihoodthattheirlocalplanswillbefunded—evenifitmeans that some employeesmight lose their jobs. Thoughmanagersneed at times to “take a bullet for the (organizational) team,” the oneswho most often get shot are their reports—members of their division,department,orteam.Inmostcompanies,managerswhobondwiththeirteamstrytodefend

the interests of the team to the higher-ups. But this can undermineorganizational effectiveness and collaboration. Every level of theorganization can end up working like the U.S. Congress, whererepresentatives see their role as to defend the interests of theirconstituents. As we can see from politics, a collective in which eachperson represents different interests leads to all kinds of conflicts andoperatesincoherently.Ifthemanagertakesherprimaryroletobeamemberofhermanager’s

team and subordinates the team she manages, she runs the risk ofbreaking theemotionalbondwithher reports.Theymightconsiderher“disloyal”orthatshe“isthrowingthemunderthebus”forthesakeofhercareer.Thatwillleadtodisengagementanddisillusion.


It’s a terrible double bind for managers. They are damned if theyoptimize the system, because they will need to suboptimize theirdepartmentsandtheiremployeeswillfeelbetrayed.Andtheyaredamnediftheydefendtheinterestsoftheiremployees,becausetheywillneedtooptimizetheirdepartments,therebysuboptimizingtheorganizationasawhole.Andthentheirmanagerandpeerswill feelbetrayed.Thewaytobreak this bind, as I will explain in Part 2, is through transcendentleadership.

TOCENTRALIZEORTODECENTRALIZE:THATISTHEQUESTION

Because organizations have to adapt quickly to changes in theircircumstances,decisionsarebest left to thepeoplewhoknow themostaboutthosecircumstances,whounderstandthemostaboutthechangesthat need to bemade, and about the resources needed tomake them.“This problem,” Friedrich Hayek explained, “cannot be solved by firstcommunicating all this knowledge to a (planning) board which thenissuesitsorders.”Hayekseemstobearguinginfavorofdecentralization.However,thingsaremorecomplicatedthanthatfortheblindmentryingtofigureoutwhattheelephantis.“The‘manonthespot,’ ”hecontinues,“cannotdecidesolelyonthebasisofhislimitedbutintimateknowledgeof his immediate surroundings. He needs more information to fit hisdecisionintothewholepatternofchangesofthelarger(organizational)system.”5

Put another way, local knowledge is too complex to communicateeffectivelytoglobaldecisionmakers,soitisbesttolettheoneswhohaveitmakethedecisions.Takeawar,forexample.Fieldcommandersknowmuch better than generals what’s happening in their theater ofoperations, so itmakes sense to empower them tomakedecisions.Butlocal knowledge is insufficient to evaluate the global impact of anydecision.Wars are not won by amyriad of tactical successes; an armyneedstofitallitsunits’tacticaldecisionsintoanintegratedstrategy.Conversely, global knowledge is also too complex to communicate

effectively to local decisionmakers. Generals see the big picturemuchbetter than field commanders do, so itmakes sense to let the generals


makestrategicdecisions.Butglobalknowledgeisinsufficienttoevaluatethebest tactic inaparticular timeandplace.Warsarenotwon justbybrilliant strategies; an army needs to execute these strategies throughspecifictacticaloperations.Hayekwroteinthecontextofwhatineconomicsiscalled“thesocialist

calculationdebate.”ThiswasadisputebetweenfreemarketandMarxisteconomistsastowhether itwaspossibletoallocateresourcesrationallyinacentrallyplannedeconomy.FormembersoftheAustrianschoolsuchasLudwigvonMisesandHayek, theanswerwasacategoricalno.Theyarguedthattheonlywaytodothiswasthroughthepricemechanismofthefreemarket,wherepeople’sindividualdecisionsdeterminehowmuchof a good or service should be produced and to whom it should bedistributedbasedontheirwillingnesstopayforit.Hayekshowedthatfreemarketpricesgivepeopletheinformationand

incentivestheyneedtomakeeconomiccalculationsandactaccordingly.ForHayek, theprice system is likeadashboard that enables individualproducersandconsumerstowatchmerelythemovementofafewdialsinordertoadjusttheiractivities.Mises,ontheotherhand,arguedthatthepricingsysteminasocialisteconomycan’tworkbecausethegovernmentcontrols the means of production. And since that’s the case, it’s notpossibletosetmarketpricesforcapitalgoods.Mises’sfamousconclusionwas that “rational economic activity is impossible in a socialistcommonwealth.”6He argued that thiswas sonot only due to incentiveproblems (disorganization) but also due to information problems(disinformation).Unfortunately, this doesn’t help elephantine organizations. As they

grow, organizations substitute the invisible hand of themarket for thevisiblehandofmanagement,tousethetermofeconomichistorianAlfredD.Chandler.7Within the organization, departmentsdon’t set prices fortheirservices.IfIworkinthePRdepartment,Idon’tchargeforapressreleaseaboutanewR&Dcenter. In this sense,a capitalistorganizationresembles a socialist economy. Another economist, Murray Rothbard,explained how this decision-making problem is due to lack of marketprices for intraorganizational transactions. In the absence of amarket,it’s impossible to calculate price.Andwithout calculation, there is onlyeconomicirrationalityandchaos.8


Somecompaniestrytosimulateamarketusingtransferpricesbetweenprofit centers, but this system can’t quite emulate a real marketplace.Managers are not real entrepreneurs with property rights and residualclaims over the economic profits of their centers, so they’re not reallyincentivizedtomaximizeprofits.Insidethecompany,thereisnomarketfor production resources, and therefore no prices. Without prices,economic calculation is impossible. Nobody, especially the planningdepartment,canmakerationaldecisions.Although large corporations are privately owned and operate in a

marketeconomy,theirCEOsandtopteamsfindthemselvesinasituationanalogous to that of the Soviet planning boards (or the characters ofAsimov’s story “The Machine That Won the War”9), trying to makedecisions with highly unreliable information. Imagine trying to run acompanywithoutmarketprices,withoutprofitandlossstatements,andwithoutabalancesheet.Itwouldbeaguessingexercisenotmuchbetterthan reading chicken entrails. Sadly, that’s how most large companiesmakestrategicdecisions.

WHEREDOESALLTHISLEAVELEADERS?

As a leader, youmust also elicit the internal commitment of each andeverymember of your team (and organization) to cooperate with eachandeveryothermemberofyourteam(andorganization) toaccomplishthe organizational mission. In other words, if people have a sharedcommitmenttoworktogetherforthegoodoftheteam,thentheissuesofincentive-driven disorganization and disinformation can be managedmuchbetterthaniftheydon’thavesuchacommitment.Thismeansthatleadersneedtoelicitpeople’spermission(duetotheir

moralauthority,notjusttheirformalauthority)tomakejudgmentcalls.Theyneedtohavea“processconsensus”asinademocracy,wherepeopledisagreeonwhoshouldbethepresidentbuttheyallagreeonthewayinwhich that person should be elected.When leaders gather informationfromaligned teammemberswhowant tohelp the teamwin,andmakedecisions through a process these teammembers consider fair and arecommitted to implement, they can make better global decisions than


their competitors. They can integrate more information under theirdecision rights and better consider trade-offs. This enables the teammembersto“disagreeandcommit”withoutholdingbadfeelings.The leaderneeds togetpeople to share their informationabout local

opportunities, risks, costs, and benefits, so that they can comparealternativesandmakearationaldecision.Thisrequiresthatleadersputdowntheiregosandadoptapositionofhumility,openness,andserviceto a higher goal. In doing this, they serve as an example for teammemberswhocanputtheiregosasideandgivetheirbesttoimplementadecision they would not have made if it were their call. Every teammemberneedstoredefine“winning”sothatit’snotaboutwho’srightormostinfluential,butratherwhohascollaboratedwiththeotherstomakethe best, most informed, most rational possible choice in thecircumstances—the choice most likely to help the team win. (InConsciousBusiness,Icalledthis“adoptingthespiritofthelearner.”)This seems obvious when considered dispassionately, but it goes

against someof themost basicdrives ofhumanbeings.Wewant toberightinordertofeelintelligent.Wewanttodominateothersinordertofeelpowerful.Wewanttogetourwayinordertofeelvalidated.Wewanttowin(evenagainstourteammembers)inordertofeelthatwearebetter(than they are). We want to protect and favor those closer to us (ourconstituents). In short,wewant toprove toourselves, to our followers,andtoothersthatweareworthy,andwedothisthroughbehaviorsthataretheexactoppositeoftheonesrequiredtoplaywellasateam.In Chapter 9, “Collaboration,” I will define a process for managing

these challenges much better than most companies do now. I haverefinedthistechniquewithmyclientsforovertwenty-fiveyears,soIcanguaranteeitworks.Butthereisacatch:itworksonlyif,whenyoureachtheheadoftheorganizationalelephant,youtouchatranscendentleader.


Chapter5

DISILLUSIONWHEREHAVEALLTHELEADERSGONE?

Whatyoudospeakssoloudly,Ican’thearwhatyou’resaying.

—RalphWaldoEmerson

MartinWinterkorn,theformerCEOofVolkswagen,wasbornin1947toethnicGerman refugeeswho fled toHungary afterWorldWar II.1 Lifewasundoubtedlydifficultforhisparents,buttheirsonwasanintelligent,ambitiousoverachiever.EventuallyWinterkornearnedaPhDinphysicsfromGermany’s illustriousMaxPlanckInstitute, thenworkedatBosch,andultimatelyjoinedAudi.HerosethroughtherankstobecomeCEOofVolkswagenin2007.2

Germansareextremelyproudoftheirengineers—particularlythoseinthe car industry, which is home to stellar high-export brands likeDaimler,BMW,andPorsche.WhenhebecameCEO,WinterkornyearnedtomakeVWtheworld’sbiggestcarmaker.ThisrequiredconqueringtheU.S.market,wheresalestargetswerebrutal.Winterkorn displayed a critical, exacting, and authoritarian streak of

character. He was known for being both demanding and precise, andobsessing over “It” stuff. TheGuardian newspaper reported amomentwhen, in the summer of 2013, Winterkorn found a tiny bump in thepaintworkofacar.“Thepaintthicknessexceededcompanystandardsbylessthanamillimeter,butWinterkornstill lecturedengineersaboutthewaste,”thearticlenoted.3

Winterkornhadahabitofcriticizingpeopleandorderingthemaround,even in public. As a result, other executives feared their leader; woe


betide anyonewho told him something he didn’t want to hear. “If youpresented bad news,” an employee told Reuters, “those were themoments that it could become quite unpleasant and loud and quitedemeaning.”4

SowhenVWacknowledged in 2015 amassive fraud inwhich elevenmillionofitsvehiclesworldwide,includingnearlyfivehundredthousandintheUnitedStates,hadpassedemissionstestswhileemittingnitrogenoxide far beyond the legal limits, people around theworld—and proudGermans in particular—were horrified. Winterkorn said that he wasshocked, too. Though he took responsibility for the problems with thediesel engines and apologized repeatedly, he claimed that he was notaware of anywrongdoing on his part.He quickly put the blame on hispeopleintheUnitedStatesandresignedinorder“toclearthewayforafreshstartforthecompany.”5

UponadmittingthewrongdoinginSeptember2015,Volkswagenstockdropped30percent,losing$18billioninmarketcap.6,7Inaddition,theautomaker agreed to pay $4.3 billion in criminal and civil penalties,bringingthetotalcost in theUnitedStatesaloneto$20billion.8 Inthefirsthalfof2016,Volkswagen’sshareoftheEuropeancarmarketfellby10percent,toitslowestlevelsincethe2008financialcrisis.Thedropwasattributed to a consumer backlash the company suffered after theemissionsscandal.9

The loss wasn’t only financial. According to scientists at theMassachusetts Institute of Technology, thousands of people in Europemaydieearlyasaresultofthepollutionfromthecarsfittedwithillegal“defeat”devices.10Thecompany’sdirectorssaidthattheperpetratorshadcaused “immeasurable harm” to Volkswagen and called for thoseresponsible to be prosecuted.11 This call was heeded as U.S. federalprosecutorspressedcriminalchargesagainstsixVolkswagenexecutives,incarceratingtheonetheycouldlaytheirhandsoninFlorida(theothersremainedinGermany).12

Winterkornmaybeinnocentofwrongdoing.Buthe’sguiltyof“wrong-leading.” He was a disengaging, controlling, and arrogant leader whopromoted,andlikelyabetted,behaviorsthatdroveVWoverthecliff.Hewound up resigning under an avalanche of criticism and accusations,leaving his company to face billions of dollars in fines and criminal


investigationsinGermany,theUnitedStates,theUnitedKingdom,SouthKorea,India,Brazil,Australia,France,Italy,SouthAfrica,andNorway.13

Whenpeople are afraid to speakup, errors escalate into catastrophicfailures.14When employees are afraid for their jobs, they will cheat toreachtheirtargets.15Winterkorn’sdemandingstandards,hisinabilitytolisten,andhispubliccriticismofhisownpeopleinfluencedsomeofthemtotakeillegalshortcuts,andmanyotherstohidecrucialinformation.I’msure theyall fearedhiswrath.Heset the toneof the company,and thecompanyplayedthetune.It’s probably safe to say thatWinterkorn isn’t the kind of man who

spendsalotoftimelookinginward,thoughhemaybedoingmoreofthatafterthedebacle.Perhapsthroughthisreflectionhe’lldiscoverwhatparthisleadershipplayedinVW’sdrama.Butit’stoolateforhimandforVWnow.Unfortunately, Winterkorn’s management style is not unique.

EmployeesandcustomersoftheubiquitouscartransportcompanyUbersuffered mightily under the leadership of its brash founder and CEO,TravisKalanick.One video from2010 showedhimarguingwithoneofhisdriversoverfares.16InOctober2014,theBetterBusinessBureaugaveUberan“F”ratingforitsunexpectedlyhighchargesandlackofresponsetocustomercomplaints.17In2017,aformerUberengineernamedSusanFowlercomplainedofsexualharassmentbyamanager,butthecompanydid nothing; it turned out that such harassment was widespread.18 InJune of 2016, the company fired twenty employees as a result of theinvestigation.Thatyear,thecompanylost$2.8billionon$6.5billionofrevenue.Aftertakingaleaveofabsence,Kalanickwasforcedtoresign.19,20

Employeecomplaints,asreportedbytheNewYorkTimesinFebruary2017, were shocking. “One Uber manager groped female co-workers’breasts at a company retreat in Las Vegas. A director shouted ahomophobic slur at a subordinate during a heated confrontation in ameeting. Another manager threatened to beat an underperformingemployee’s head in with a baseball bat.” The article offered thisassessment: “The focus on pushing for the best result has also fueledwhat current and former Uber employees describe as a Hobbesianenvironment at the company, in which workers are sometimes pitted


againstoneanotherandwhereablindeye is turnedto infractionsfromtopperformers.”21

Kalanickandhisbandofmerrymenstartedasapirateship.TheydidreallywellwiththeirunconventionalmethodsofwhatLinkedInfounderReid Hoffman calls “blitzscaling,” which means scaling lightning-fast.Theytookoverthemarket,surpassingtheincumbentLyft,buttheyfailedto organize themselves as a disciplined navy. Although there aremanyreasonsforthis,I’lltakethesimpleexplanation“Asabove,sobelow.”Theorganizational failure, I believe, mirrors the failure of the leadershipteam.

“SQUISHLIKEGRAPE”

In the 1984movieThe Karate Kid, an elderly Japanese karatemasternamed Miyagi takes a bullied teenager named Daniel under his wing.AfterMiyagiasksDanielifhewantstolearnkarate,thekidrespondswithanoncommittal,“Guessso.”Miyagisitshimdown.“Daniel-san,wemusttalk,”he says in stern,brokenEnglish. “Walkon road.Walk right side,safe. Walk left side, safe. Walk in the middle, sooner or later you getsquished,justlikegrape.Karateisthesame.Eitheryoukaratedoyes,orkaratedono.Youkaratedo ‘guessso,’soonerorlateryougetsquished,justlikegrape.Understand?”22

Mywarning to leaders is the same. “Either you leadershipdo yes, oryouleadershipdono.Youleadershipdo‘guessso,’soonerorlateryougetsquished,justlikegrape.”When people follow a leader, they let him or her into their inner

sanctum. They give the leader the power to deeply influence how theythink, feel, and act. They do so because they trust the leader to wieldpowerfairlyandcompassionately.Theybelievethattheleaderwillenablethem to meet their most fundamental needs in the It, We, and Idimensions.That said, hell hath no fury like a follower disillusioned. If people

suspect that their leaderhasbetrayed this trust, theywill exact terriblevengeance upon him or her and on the organization—regardless of


whetherornot thissuspicion isgrounded.Leaderswhowant to inspiretheircompaniesthroughvisionandvaluesmakeadouble-or-nothingbet.If they succeed, peoplewill fully engage and the organizationwill soar.But if they fail, peoplewill actively disengage and the organizationwillsink.Disillusion is like ablackhole. It’s got tremendousgravitationalpull.

Almosteveryleadershipeffort,nomatterhowwellmeaning,isboundtofall into its eventhorizon.Unlessyoumuster theenergy toescape, thisblackholewillswallowyouandyourorganization.

ENTERATYOUROWNRISK

When I’m asked to help with a culture change initiative, I warn theleadershipteamofthetremendousriskthattheyareabouttoundertake.I have seen toomany leaders nonchalantly jump into the fray withouthavingmadea sufficientcommitment to see things through. Inevitably,theirinitiativechangestheculturefortheworse.For example, I workedwith the leadership of a Fortune 50 financial

services corporation for several years with the aim of creating a moreconstructiveculture.Attheoutsetoftheproject,Iwarnedtheexecutivesthatleadershipandcultureinitiativesarelikeplayingthefuturesmarket:the downside risk is not bounded by their investment. I explained thattheir participation in such a program did not mean just going to theworkshops or expressing public support, but actually committing thetime to resolve significant business issues by deploying the values andpracticesoftheirdesiredculture.“Ifyoudon’t,”Iwarnedthem,“youwillcausegreatharmtotheverycultureyouaretryingtoimprove.”Ialsoexplainedthatalthoughwewereputtingalotofattentiononthe

workshops and the culture change program, the most importantmessagesthattheywouldsendtotheirpeoplewouldcomethroughtheiractions,bothasindividualleadersandasaleadershipteam.Soweagreedthattheywouldnotonlyinvestthetimetoparticipateintheworkshops(which they did admirably) but also, more important, dedicatethemselvestoapplyingthematerialoftheworkshops,withmycoaching


assistance,tothetacticalandstrategicchallengesfacingthecompany.The latter never happened. Indeed, my worst fears came to pass.

During the hundreds of hours I spent on the project, I joined theleadership team in their business meetings exactly…zero times. Notsurprisingly, even though the program was declared a success, thecompany’s engagement scores sank tonew lowsover time.Because theleaders didn’t walk the walk, the employees walked away from thecompany—ifnotphysically, at least emotionally. (Andas far as I know,thecompanyhasn’tdoneanyworkinleadershipandculturesince.)It’s embarrassing to confess to this failure. I am tempted to goalong

withtheofficialstorythatdeclaredthisprojectsuccessfulbecauseitmetitsperformancemetrics.ButIhaveseenfartoomanyorganizationsthat,afterimplementingmassiveengagementprograms,endupbeingrunby“theworkingdead,”disengagedpeoplewhohave lostallvitality.This iswhyIcan’temphasizeenoughtheimportanceofintegrityinthepracticeofleadership.Ifyouractionsdon’tmatchyourdeclarations,youwillelicitdistrustandresentmentinsteadofinternalcommitment.

No engagement effort will work unless it starts with the right“why?” Imagine aman proposing to his fiancée. He gets down on oneknee,offersheranengagementring,andasks,“Willyoumarryme?”Thewoman asks him, “Why do you want tomarryme?” “Becausemarriedmenhaveahigherlifeexpectancythanunmarriedmen,”heresponds.23

How would you feel if you were the woman? What would you do?WhenIaskparticipantsinmyworkshopsthesequestions,theyinvariablysay they would feel upset and wouldn’t marry the guy. His answer istotallyselfishanddemonstratesacallousnessthatmakeshimunsuitableasapartner.Hehasnoloveforhisfiancée,noconcernforherwell-being,her flourishing, her happiness. She is just a resource for him, valuableonly as ameans of achieving his ends. “If I were her,” one participantmemorably toldme, “Iwould be thinking, ‘What if you could live evenlongerbyleavingmeinthefuture?Wouldyoustaywithmeifitwerelessconvenienttoyou?Whathappenedto“forbetterorforworse” ’?”But this is uncomfortably analogous to the situation of the vast


majority of leaders who try to improve organizational performancethroughemployeeengagementprograms.Althoughemployeesrarelyasktheirleader“Whydoyouwanttoengageme?”explicitly,don’tdoubtforasecond that they are asking the question implicitly. Depressingly, theanswer they presume is “Because getting a better score on the GallupEmployee Engagement Survey will make the company (and me) moresuccessful.”How would you feel if you believed that your company wanted to

engageyouinordertoexploityou?Howwouldyourespondtoaprogramthat tried to create a positive environment for you to yield more as a“human”resource?Wouldyou feelengagedorenraged?Everybody I’veasked leans toward the latter. Such reasoning feels selfish andobjectifying.Eveninabusinesscontextitstrikespeopleasmanipulative.Material exchanges, such as a salary for a service, yield nomore thancompliance.Engagementrequirescommitment;itcanariseonlyfromanemotionalexchange.It is an open secret in the consulting community that, although

engagementprogramsarequiteprofitable fortheconsultingfirms, theyare rarely profitable for the client organizations. Yet, like a rain dance,wheneverengagementsurveys reveala fundamentalproblem, theknee-jerk reaction is toapplya symptomatic solution.Thisneverworks.Youcan’tcurecancerwithasugarpill.

WHATYOUSAYISNOTWHATTHEYGET

Fromthetimewe’rechildren,werealizethattalkischeap.Growingup,wediscoverthatitispossibletosayonethingandbelieveordoanother.Wesee thecontradictionsbetweenadults’ “espousedvalues”(what theyclaimone ought to do) and their “values in action” (what they actuallydo).Welearnthatlyingmakesuspowerfulwhenwedoittoothers,butvulnerablewhenothersdo it tous.Werealizehoweasy it is todeclaimhighvalueswithoutmakinganyrealcommitmenttothem.WhenIwasingradeschool,Iremembervisitingafriendoneweekend.

My friendgot intoa fightwithhisyoungerbrotherbecausehisbrother


wouldn’t let us play undisturbed. After his brother butted in severaltimes,my friend hit him. The little boy started crying.My friend’s dadintervenedandspankedmyfriendinfrontofme.“Thiswillteachyounottohityourlittlebrother,”hetoldmyfriendwithawhack.Iwasshocked.Myparentshadneverlaidahandonme,andI’dnever

seenanadulthitachildbefore.Theeventstayedwithmethroughouttheyearsbecausesomethingbotheredmeatadeeplevel.AsIgrewolder,IdiscoveredthatwhatIwasmostupsetaboutwasthehypocrisyofitall.Ifitwasnotokayformyfriendtohithisbrother,whywas itokayforhisfathertohithim?Tosurviveinanenvironmentfraughtwiththeseinconsistencies,most

of us become skeptical of lofty declarations, at least until we see themturnintoconsistentbehaviorsovertime.Welearnourfamily’svaluesbyobservingourparents’actionsratherthanlisteningtotheirwords.Whatourparentssaymattersfarlessthanwhattheydo—especiallywhentheyareunderstressanddon’trealizewearewatchingthem.Talkischeapbutbehavior isexpensive;that’swhatmakesbehaviora

credible signal. You can easily declare lofty values, but to behaveaccording to these values requires making hard choices and acceptingtheirconsequences.Irememberbargainingwithmymotherasalittleboyby saying, “If you promise you won’t get upset with me, I’ll tell yousomething.”With amix of amusement and resignation, shewould say,“Tellmewhathappened. Itwill beokay.” Iwaswilling tobehonest aslongas Ididn’thave topay thepriceofhonesty.Whenyou’re four, it’scharming;whenyou’reforty-four,it’scheating.Thosewhohavepoweroverussetthestandardsbyexample.Theway

ourparentsputtheirvaluesinactiontolduswhatwasreallyimportantinourfamilies.Ourteachers’behaviortolduswhatnormswehadtorespectinordertosurviveandthriveatschool.Thesameistrueofleaders;theiractionstelluswhatisreallyimportantinourorganizationsandhowweoughttoacttobeamemberofthecommunity,tobe“oneofus.”Unlessthe leaders of a company exemplify the values they espouse in dailybusiness and, most important, in circumstances that test their mettle,theirdeclarationsareirrelevantatbestanddestructiveatworst.Theonlyway to get your organization engaged and aligned is to model thebehaviorthatyouexpecteveryoneelsetofollow.


ANUNFAIRDYNAMIC

Leadershipisnotfair.Exemplarybehaviorisnecessarybutnotsufficienttoengageemployees.Thisisbecausepeopleperceiveandinterpretyourbehavior through the filters of theirmentalmodels.Even if youdo therightthingyoumaybefoundwanting.Let’ssayyouleadinperfectalignmentwithyourdeclaredvalues.You

shouldbeonsafeground,right?Wrong.Evenwithascleanaleadershiprecord as humanly possible, and even if you are perfectly consistent,employees might feel disillusioned.When people have been under thethumbsof poorparents, teachers, ormanagers (andwhohasn’t?), theysuffer a kind of post-traumatic anxiety. After feeling betrayed byauthority figureswhoraisedtheirhopesonlytodashthemcruelly, theyareafraidofbeingtakenadvantageofagain.Furthermore, when people see someone raise the flag of “noble

purpose”and“values,”thehaironthebackoftheirnecksstandsonend,justasitdoesonanimalssensingdanger.Theybecomeskepticaloffinewordsasawaytoprotectthemselves.Whocanblamethem?Theydon’twant to be fooled again. So they consider any behavior that seems tothemnotperfectlyalignedasconclusivelydamningevidenceagainsttheleader.“Whenleadersbehaveinwaysthatappear(tofollowers)toviolateespoused organizational values,” writes UC Berkeley managementprofessor Jennifer Chatham, “employees conclude that the leader ispersonally failing to ‘walk the talk.’ In short, organization membersperceive hypocrisy and replace their hard-won commitment withperformance-threateningcynicism.”24

Followerscan’tpossiblyknowalltheaspectsofasituationinwhichtheleaderhastomakeadecision.Theycan’treadtheleader’smind,either,toknowwhathe’sthinkingandfeeling,sotheyfillintheblanksoftheirmade-up stories, attributing dubious causes to his behavior. Andwhentheirstorycaststheleaderasa“badguy,”followerswithdrawtheirtrust.They become cynical, and every subsequent negative event furthercements their view. Even if leaders act reasonably, hypersensitive andhypercriticalfollowerswillsuspecttheirmotives.


ATTRIBUTIONERROR

“Weare tooprone to judgeourselvesbyour idealsandotherpeoplebytheir acts” as Dwight Morrow, U.S. Ambassador to Mexico, said in1930.25 We evaluate ourselves in the light of our intentions, but weevaluateothersbytheirbehaviorand itseffectsonus.Wheneverwedosomethingthatseemstomismatchourespousedvalues,werationalizeit,explainingthatwedidn’tmeantodoitorthatwediditforagoodreason.But when other people do something that seems to mismatch theirespousedvalues,weharshlyassert theyarewrong, stupid,mean,or, inextreme cases, evil. We are prone to do this automatically, withoutinquiring about their motives, intentions, or ideals, and withoutconsideringtheexternalcircumstancesthatinfluencedthem.

“Attribution error”26 is the psychological bias that makes us judgeourselvesmuchmorebenevolently thanwe judgeothers,becausewhilewe know what we think and feel, and what options we face, we don’tknowwhatothersthinkandfeel,andwhatoptionstheyface.Sowemakeupstoriestoenhanceourself-esteemanddemonstratethatwearebetterthan others. For example, if I’m driving a car and hit a tree, I wouldblametheaccidentonthecircumstances,suchasswervingtoavoidadog.But if you hit a tree, I would blame you for your careless driving.Alternatively,ifIcatchaneight-poundfishandtellyouthatitweighstenpounds,Iwouldexcusemyexaggerationasawhitelie.Butifyoudothesamething,Imightcallyouabraggart.Alleged leadership inconsistencies become “undiscussable” because

followerssharetheirconclusionsonlywithotherswhoagreewiththem.Followersfear(notwithoutreason)confrontingtheirleaderinawaythatwould give the leader the opportunity to explain that there is no suchinconsistency, or to recognize that they’ve slipped and need to correcttheirmistake.Followersjustifytheirfailurebycriticizingtheleadersfor“notbeingopentofeedback.”Adialoguemightgolikethis:

“You’dbetternotchallengetheseguys.Theydon’trespondwelltocriticism.”

“Howdoyouknow?”

“Well,look!Noonechallengesthem.AndrememberJoe?Hewasfired.”


“Why?”

“Don’tknow;hemusthavechallengedthem.”

As thisdynamic is repeatedover time,peoplebecomeresigned.Theylearnhelplessness.Furthermore, they take theirdistrust of leaders intootherorganizations,wheretheystartoutwithanegativebias.Thismakesitevenharderforleaderstoengagetheiremployees.It’saterriblyviciouscyclethatspiralsdownintoadifficultworkplaceexperiencefortoomanypeople.This unfortunate and unfair dynamic makes your work as a leader

muchmore difficult. First, like everyone else, you evaluate yourself byyourintentionsandexcuseyourownactions,soyouarelikelytoprojectyourbeliefsontoyourfollowersandmisstheirconcerns.Yourfollowers,however,assessyouonly inthe lightofyourbehavior’s impactonthem(which you don’t fully understand), and their inferences about yourmotives (inferences thatdon’t take intoconsiderationyour internalandexternal circumstances). Second, if you believe that people are judgingyou unfairly, you will be prone to discounting their concerns. You willtend to dismiss questions about your actions because, from yourperspective,youareobviouslyrightandtheyareobviouslywrong.Ifyoufeellikeyouarebeingcriticizedunjustly,youcaneasilybecomeavoidant,defensive,oppositional,andaggressive.

I experienced precisely this defensive impulse during a largeweeklongworkshopthatIled.Amongmygoals,Itoldtheparticipants,Ihoped to get to know everyone better through a deep, small-groupconversation during our lunches. Unfortunately, there were about tenmoreparticipantsintheworkshopthanwhatcouldhavemadethisdailyplanfeasible,soIhadtocomeupwithanalternativeschedule.Tomakeupthedifference,Ithoughtitwouldbeagoodideatositwith

the people I hadn’t had a chance to lunchwith during a party the lastevening. This turned out to be a bad idea, due to loud music andcommotion,andthefactthattherewerenotablesandchairs.Thedinnerwascomposedofhorsd’oeuvresthatpeopleatestandingup.TherewasanareareservedforthepeoplewithwhomIwassupposedtodine,butin


themidstoftheloudmusicandthedancingallaroundus(andacoupleofglassesofchampagne),Itotallyforgotabouttryingtogettoknowmydinner companions on a deeper level. Oblivious as I was, I chattedsuperficiallywiththosearoundme,butIneverengagedwiththeminthedeeperconversationIhadheldwitheveryoneelse.ThenextmorningasIwasabout tostart theworkshop,amemberof

my staff told me that the very people with whom I had chatted sopleasantlythenightbeforehadcomplainedtoherthatIdidnothonormycommitment to holding our small-group dialogue. They were right, ofcourse,butIwasshockedbythefactthatnobodyhadsaidanythingaboutthisatanypoint in theevening. I learnedof their feelingsonlybecauseoneoftheparticipantstoldamemberofmystaff,whothentoldme.Evenmoreembarrassingly, Ihaddiscussedwith thewholegroup the

importance of honoring one’s commitments and holding others toaccountfortheirsthedaybefore.Myimmediateimpulsewastoconfrontthem in front of the group saying something like the following: “Whydidn’t you ask me last night? If you had simply reminded me of mycommitment I would have found a way to honor it. And why did youcomplaintootherpeopleratherthancomingtome?Imightneverhaverealized that I broke my promise to you—and you would have neverrealizedhowmuchIcareaboutyou,andabouthonoringmyword.Ioweyouanapology,withoutquestion.Butyoucouldhavemadethingseasierforme!”Thiswasoneof those “integritymoments”onwhichwhole seminars,

and whole enterprises, can pivot. Fortunately, my meditation trainingcametotherescue.Itookadeepbreath,closedmyeyes,andcomposedmyself.IrealizedthatifIexpressedanyofthesedefensiveremarkstothegroup, I would betray my own values, lose their trust, and ruin theseminar.After calmingmyself, I entered the room,walked to thestage,andsaidthis,instead:“IthascometomyattentionthatIdefaultedonmydinnercommitmentwiththegrouplastnight.I’membarrassedtoconfessthatItotallyforgot.IapologizeforthisbreakdownandwanttoaskthosewhomI’ve letdown if they couldmeetwithme todayat the endof theworkshop.Iwouldbeverygratefulifyougivemeachancetomakeituptoyou.”Aftertheworkshopthatday,Ihadaveryconstructivedialoguewiththe


previousevening’sdinnerguests.AtonepointintheconversationIsaid:“Withoutmakinganyexcuses,andfor thesakeofmyownlearningandyours,I’dliketoaskyou:Whatstoppedyoufromremindingmelastnightthatweweresupposedtohavedinnertogether?HaveIbehavedinawaythatwouldmake youwary of raising the issue?”They all laughed. “Wethought youweren’t interested inhaving a conversationwithus after alongday,”oneofthemsaid.I’mgladthattheycomplainedtomystafferandthatthesituationgot

resolved. But I shudder to think how many times I’ve disappointedpeople, have never heard about it, and thus have been unable to setthingsright.When leaders perceive that people around them are judging them

harshlywithoutofferingachancetoexplain,theycanturndefensiveandevenMachiavellian. I’ve had to talk many leaders “off the ledge” aftertheyreadmy360reportsbecausethey’vefeltunfairlycriticizedbysomeofthestatementsIhadgathered.Their impulseistocallameetingandconfrontthosewhoratedthem.Irememberoneiratevicepresidentwhobarkedatme,“Whothehellsaidthis?”Myheartwentouttohim;hefeltpeoplewereunfairlydrawingconclusionswithoutgivinghimachancetoexplain.Iremindedhimthathehadagreedtomaintaintheanonymityoftherespondents.Hebecameevenangrier.“Allright,”hesnarled.“Iwillfindout.” I explained tohim that the slightestwhiffofpunitive inquirywould destroy his reputation.He did calm down eventually, but it wastouch-and-goforawhile.

THEPOWERPARADOX

If you wish to become a transcendent leader, after you vanquishdisengagement, disorganization, anddisinformation, youmust confrontthegreatestandmostchallengingadversaryofall:yourownpower.InhismasterworkTheLordoftheRings,J.R.RTolkientellsthestory

of thequest todestroy theOneRing.TheRingnotonlyconferspower,but italsoimposesserfdomonanyonewhowears it.It’sanallegoryforwhat actually happens in our world every day: powerful leaders, even


well-intentionedandidealisticones,succumbtothelusttobecomeevermore important, more respected, more admired—in short, morepowerful.ForTolkien,powerisalwaysevil.Manyofhisgoodcharactersaskifthe

Ring could be used to pursue a good end. Tolkien’s answer is aresoundingno;evilmeanscanbringaboutonlyevilends—regardlessofwhethertheoriginal intentionsaregood.That’swhy,whenFrodooffershimtheRing,thewiseGandalfcries:“No!WiththatpowerIshouldhavepowertoogreatandterrible.AndovermetheRingwouldgainapowerstill greater and more deadly. Do not tempt me, for I do not wish tobecomeliketheDarkLordhimself!YetthewayoftheRingtomyheartisby(…)thedesireofstrengthtodogood.”27

Tolkien’s allegory is not far off the mark. Research has found thatpower excites the same neural centers that respond to cocaine.28 Thefeeling of power increases the levels of testosterone and its by-product3ɑ-androstanediolinbothmenandwomen.This,inturn,leadstoraisedlevels of dopamine, hijacking the brain’s reward system, which givesblissful short-termpleasurebut leads tomiserable long-termaddiction.Inotherwords,powerliterallygoestoourhead.It’saddictive,anditcandestroyyourlifeifyousuccumbtoit.Take this as a seriouswarning. If you are able to earn the trust and

commitmentofyour followers,youwillacquire tremendouspower.Butthispowerwillrenderyouuntrustworthy.AmericanpsychologistDacherKeltner calls this “the power paradox.” “Being nice is the best path topower,”hewrites,“butachievingpowerreliablyturnspeoplenasty.Theseductionsof power induceus to lose the very skills that enabledus togain power in the first place.” As Tolkien’s friend the British historianLord Acton famously said, “Power tends to corrupt; absolute powercorruptsabsolutely.”AgreatdealofresearchfromsocialpsychologysupportsActon’sclaim:

powerleadspeopletoactinanimpulsivefashionandtofailtoconsiderother people’s feelings and desires. Power encourages people to act ontheir ownwhims, desires, and impulses.When researchers give peoplepowerinexperiments,theyaremorelikelytophysicallytouchothers ininappropriateways,toflirtmoreaggressively,tomakeriskychoicesandgambles, to make rash offers in negotiations, and to speak their mind


without social filters. They eat cookies like the Cookie Monster, withcrumbsallovertheirchinsandchests.People who feel powerful are more likely to have affairs, to drive

inconsiderately,tolie,toshoplift,toarguethatitisjustifiableforthemtobreakrulesothersshouldfollow.Powerseemstoleadtoself-absorption.InexperimentswherepeopleareaskedtodrawtheletterEontheirownforeheads so thatothers can read it,powerfulpeoplearemore likely todrawittherightwaytothemselves,andbackwardtoonlookers,astheynolongerseetheworldfromotherpeople’sperspective.Perhapsmore unsettling is thewealth of evidence that having power

makespeoplemorelikelytoactlikesociopaths.Researchhasfoundthat20 percent of leaders in business and government demonstratenarcissistic and psychopathic tendencies; that’s roughly the sameproportion as prison inmates compared to 1 percent of the generalpopulation.29 High-powered individuals are more likely to interruptothers,tospeakoutofturn,andtofailtolookatotherswhoarespeaking.They are also more likely to tease friends and colleagues in hostile,humiliatingways.Surveysoforganizationsfindthatmostrudebehaviors—shouting, profanities, sexual harassment, and destructive criticism—comefromindividualsinpositionsofpower.Keltner claims that people with power tend to behave like mental

patientswhohavedamagedtheirbrain’sorbitofrontallobes(theregionofthefrontallobesrightbehindtheeyesockets),aconditionthatseemstocause overly impulsive and insensitive behavior.He suggests that “Theexperienceofpowermightbethoughtofashavingsomeoneopenupyourskullandtakeoutthatpartofyourbrainthatiscriticaltoempathyandsocially appropriate behavior.” The paradox is that power is given topeople to advance the greater good, but once people have power, theytendtoabuseit.There’splentyofempirical evidence in thebusinessworld to support

Keltner’s conclusions. A 2016 study from researchers at Stanfordidentified the followingbreachesofconduct in38events thatmade thenewsbetween2000and2015:

34percentinvolvedreportsofaCEOlyingtotheboardorshareholdersoverpersonalmatters—suchasadrunkendriving


offense,priorundisclosedcriminalrecord,falsificationofcredentials,orotherbehaviororactions.21percentinvolvedasexualaffairorrelationswithasubordinate,contractor,orconsultant.16percentinvolvedCEOsmakinguseofcorporatefundsinamannerthatisquestionablebutnotstrictlyillegal.16percentinvolvedCEOsengaginginobjectionablepersonalbehaviororusingabusivelanguage.13percentinvolvedCEOsmakingcontroversialstatementstothepublicthatwereoffensivetocustomersorsocialgroups.30

These transgressions are costly. According to Fortune, when the CEOindulgesinbehaviorslikethese,thecosttothecompanyduetolossesinmarket capitalization (stock drops) is about $226million in just threedays.

Thereisafolktalethatgoeslikethis:Ascorpionwantstocrosstheriver,butitcan’tswim,soitasksafrogforaride.Thefrogsays,“IfIgiveyouaride,you’llstingme.”Thescorpionreplies,“Itwouldnotbeinmyinteresttostingyou,sincewewouldbothdrown.”Thefrogthinksaboutthislogicforawhileandacceptsthedeal.Ittakesthescorpiononitsbackandbravesthewaters,buthalfwayacrosstheriveritfeelsaburningpaininitssideandrealizesthescorpionhasstungitafterall.Astheybothsinkbeneaththewaves,thefrogcriesout,“Whydidyoustingme,scorpion?Now,wewillbothdrown.”Thescorpionreplies,“Ican’thelpit.It’sinmynature.”Unfortunately, power has a scorpion-like nature. Even though the

narcissistic gratifications of authority and control are toxic to theirinterests, most people in power can’t help themselves. They willinevitablystingtheirfollowersanddrowntogetherwiththeminariverofdisengagementanddistrust.TheGoldenRuleprescribes:Dountoothersasyouwouldhavethemdo

untoyou,anddonotdountootherswhatyoudonotwish foryourself.Mostpeopleaccept it in theorybutviolate it inpractice.Andtheydo it


evenmoreblatantlywhentheyareinpower.Isitpossibletoexercisethepoweroforganizationalleadershipwithoutbeingcorruptedbyit?OrisitlikeTolkien’sRingthatwillenslavehewhowearsitasaservantofevil?Morepersonally,ifyouattainthiskindofpower,howdoyouthenuseitforgood?If you want to lead an engaged organization, you must go beyond

intellectualunderstanding.Youneedtohaveheroic integrity inthefaceof corrupting power, working honestly, respectfully, fairly, openly,humbly, caringly, and inspiringly every day. Without that, there is nochance of engaging your followers. These behaviors cannot be faked.Unlesstheyarisefromyourcorevaluesandareenactedthroughskillfulmeans, theoddsarehigh thatyouwillnot succeed.Andunlessyouarealmost superhumanlydisciplined and conscious, thedanger is that youwillbetrayyourfollowersasyouaretestedbythecorruptinginfluenceofpower and by the hypersensitive and hypercritical attitude of yoursupporters.

YOURSTAFFISYOURMIRROR

Your leadership behaviors are not just your direct actions. As a leader,you express your values through the choice of systems, strategies, andprocesses. You have the power to define—or at least significantlyinfluence—how people get recruited, selected, and hired for yourorganization,howtheygetsocializedandtrained,howandwhytheygetrewarded and promoted, and how and why they get reprimanded,demoted, or fired. Each one of these processes exists with yourendorsement, and it communicates to your organization what isimportant, what is right, and what is just for you. Similarly, all themanagers in your organization hold their office with your sanction, sotheir behavior reflects your values and beliefsmore than anything youwriteorsay—andperhapsevenmorethananythingyoudoyourself.I regularly hear leaders complain that they have inherited a

dysfunctionalstafforemployeeorlamentthattheyhaveanextraordinaryperformer (in what we are calling the It dimension) who has “terriblepeopleskills”(meaningheorshetotallylackstheskillstocarefortheWe


andIdimensions).Thatmaybeso,butthemomenttheseleadersaccepttheirpositionwiththepowertopromote,demote,hire,andfire,thereisnoplaceforthemtohide.Whoeverispartoftheirteamissomeonetheyhave chosen, explicitly or implicitly. And that endorsement broadcaststheirtruevaluestotheirwholeorganization.TheItbenefitsofbeingacantankerousrainmakerareobvious;theWe

andIcostsarenot.Forexample,themanagingcommitteeofalawfirmhad a rude awakeningwhen they realized that their unwanted attritionwasgoingthroughtheroof.The firmwas losingsomeof itsbest talent.Theyfacedsometoughdecisionswhentheydiscoveredthatsomeoftheirbestattorneys(asratedbytheirclients)weresomeoftheirworstleaders(asratedbytheiremployees).Intheattorneys’zeal toprovideexcellentservicetotheirclients,theydemandedperfectionfromtheiremployees.In the short term, the firm’s client satisfaction and revenues increased.But in the longer term, the attrition costs increased evenmore. Peoplejoined the firm because of its brand, and they left it because of itsmanagers.Afteryearsofachew-them-up-and-spit-them-outculture,thefirm was in trouble. They called me because their loss of talent anddecliningreputationinthejobmarketthreatenedtheirviability.Themanagementcommitteeaskedmetoworkwithsomeoftheirmost

prominent “hardcases” tohelp themchange. “Whywould theywant tochange?”Ichallengedthem.“Theyaregettingconsistentlyrewardedfortheirbusiness results.Theygotpromoted for theiraggressivebehaviorsby leaders who were as demanding with them as they are with theirjunioremployees.”Afteranawkwardsilence,oneofthelawyersconfessed,“Wewere—no,

actually,weare—thosedemandingleaders.”Isuggestedthatthefirststepwas for them to clarify what kind of culture theywanted, and how farthey’d be willing to go in changing their behavior to become the rolemodelsforsuchaculture.Iemphasizedthatsuchrolemodelingcruciallyinvolveddefiningthepromotionandrewardmechanismsofthefirmandthenacceptingthatsomeoftheirrecalcitrant“bestpeople”mightdecidetoleave.

Ingolf, there isavariantof thegamecalled“bestballscramble.”


Theplayerplaystwoballsoneveryhole.Heorshehitstwoshots,selectsthebestone,hits twoballs fromthatspot,andso forth,untilheorshesinksaballinthehole.Avariantcalled“worstballscramble”istheexactopposite.Theplayerhits twoshots,selects theworstone,hits twoballsfromthatspot,andcontinueshittingfromtheworstballlocationuntilheorshesinksthetwoballsinthehole.Golfishard,butworstballscrambleis wicked. It requires great consistency, since any mistake hascompoundingeffects.Leadershipislikeworstballscrambleintwoways.First,everyleaderis

assessed according to his or her weakest areas. To elicit the internalcommitmentof the followers, a leaderneeds tobe consistently great inthe It,We,and Idimensions.Heor sheneeds todemonstratebusinessacumen, social intelligence, and personal integrity. Any failure willcompoundtoundermineperformanceineveryotherarea.Second, and more demandingly, leadership is a team sport. Every

manager’sauthorityisderivedfromtheCEO,whothereforeunderwritesand is ultimately responsible for themanager’s behavior. Anymanagerwhobehavesinconsistentlywiththepurposeandvaluesofthecompanyplacesablackmarkontheentireleadershipteam.Allthemanagersneedto be consistently great, since the leadership will be assessed by theperformanceofitsweakestmembers.It’s a truism in business that people join companies and leave

managers.31 But even if people feel engaged by their immediatesupervisors, they will disengage from a company that promotes andmaintains bad leaders. Just as the score in the worst ball scrambledependsontheworstshots,engagementscoresdependonthebehavioroftheworst leaders.Thisputsamuchheavierdemandonevery leader.Shenotonlyneedstobegreat,butshealsoneedstoacceptnothinglessthangreatnessineachoneoftheothermembersoftheleadershipteam.

THENO-TABOORULE:FACINGTHEMIRROR

Onceyoucommittotrulyleading,youandyourteamwillneedtoreviewyourbehavior frequently.Youwill need to check the consistency of the


signals the organization is receiving from you in order to avoidcontradictionsthatdestroyengagement.(Remember,whatmattersisnotsomuch themessage you think you are sending but the one that theythink they are receiving.) You can do this only by empowering andencouragingyouremployeestochallengeyouwhentheyexperienceanygaps between your espoused values and your actions—especially whenyoudisagreewiththem.Youmustinvitethemtospeakfreely,andthankthemfordoingso.Toleadeffectively,youcannothavetabootopics.Here’sanexampleofwhatIcall“facingthemirror.”Afewmonthsafter

I joinedLinkedIn,JeffWeiner, theCEO,askedme tohelphimbecomethe best leader he could be.32 I suggested we start with a 360-degreeassessment. I did an in-depth one using not only quantitativeinstruments, but also open-ended interviews with twenty people whointeractedwithhim(boardmembers,directreports,midlevelemployees,and so on). This type of assessment is quite intense, since I ask toughquestionsandgivetheclientexcerptsfromtheanswersasrawdatathatweanalyzetogether.InJeff’scase,someofthequestionsIaskedintervieweeswere:

“WhatdoyoumostappreciateinJeffasaleader?”

“WhatistheonechangeJeffcouldmaketobeabetterleader?”

“DoyouseeanygapsbetweenJeff’sdeclaredvaluesandhisactions?”

“WhatdoyouwishtodiscusswithJeffbutfearmightupsethim?”

The goal of this work was to help Jeff realize that the positivecommentsheheard regularlywerenotall thatpeople saidabouthim—especiallywhenhewasn’tthere.Theassessmentwouldgivehimapictureofhisstakeholders’perceptionsofstrengthsandopportunities,plusopenup conversationsbetweenJeff and those close tohimabout topics thatthey could find difficult to broach. The report was an opportunity todiscussanythingthatcouldhelpthemworkbettertogether.Jeffhadbeenhearingmythesesaboutdisengagement,disorganization,

disinformation, and disillusion since we’dmet each other in 2006. Heunderstoodhowharmfulthesedynamicsareforanyorganization,andhewascommittedtocurbingthem(asbefitsatranscendentleader).That’swhyhewanted to learnhow tobuildonhis constructivebehaviors and


resolve any perceived inconsistencies between his declarations and hisactions,orgapsbetweenhisintentionsandtheexperiencesheproducedinothers,andtomakethosemattersasubjectofconversation.Onthepositiveside,peopleadmiredJeff’sinspirationalenergyandhis

abilitytopaintaverybroadvisionwhileatthesametimeunderstandingthe crucial tactical details necessary to bring this vision about. Theyacknowledged his voraciousmind that could organize vast amounts ofinformation—and use it to ask good questions and provide convincingguidance. They were grateful for his coaching and his compassionatemanagement.ItwashardertogetinformationaboutJeff’sweaknesses.Iexplainedto

my interviewees that the goalwas to help Jeff grow, and that requiredthathelearnhowhecouldsatisfyhisdesiretoalwaysimprove.Theygaveme some good material. Not surprisingly, Jeff’s weaknesses were theshadowsideofhisstrengths.For example, Jeff’s style of interaction, which at times could be

perceived as intense questioning, came off as reluctance to acceptdisconfirming information. This habit deterred people from presentinginformation to him because they didn’t want to be challenged by hissharp mind. Another issue was that his questions sometimes soundedrhetorical. People believed that Jeff would make up his mind aboutsomethingbutinsteadofassertinghispositionhewouldtrytogetpeopletodiscoveritforthemselvesthroughSocraticquestioning.Thisbehaviorseemed patronizing to some and closed-minded to others. Another(surprising) finding was that given Jeff’s intensity, his kindnesssometimesfeltominoustosomepeople.“Whenhebecomesso‘nice,’it’sclearyou’rescrewingupandhe’sholdinghimselfback,”saidoneof theinterviewees.YetanothercriticismwasthatJeff’senergy,charisma,andenthusiasmcouldcreateareality-distortionfield.“Jeffissointensethatothers get swept up in his passion and lose their own perspective,”someonereported.Thesolutiontolevelingoutagoodleader’sstyleisnottodimhisorher

lightbutrathertocomplementtheleader’swisdomwithcompassion.Thefindings of the report became the subject of one-on-one conversationsbetween Jeff and each of his team members, as well as among theleadership team as a whole. At Jeff’s request, they gave him concrete


examples of areas of misunderstanding, through which he was able toidentifythespecificbehaviors(andhisinnerstatewhiledisplayingthem)thatcreatedbarriersbetweenhimselfandthosearoundhim.Hewasalsoable to explain to his team what he wanted to accomplish when hebehaved in these ways. With all this information, Jeff and his teamlookedforwaystobettermeeteveryone’sneeds.Ittookalotofcourageandopennessfortheintervieweestogivetheir

feedbacktoJeff,andanequalamountofcourageandopennessforJefftoconsider it and address it publicly with them. But the payoff wassignificant. Each one of the senior executives reported later that Jeff’swasthebestleadershipteamthey’deverbeenpartof.Toaddanothertwisttothisstory,beforeIhadmydebriefsessionwith

Jeff,LinkedIn’sboardofdirectorsrequestedtheseniorvicepresidentofour talent organization to prepare for them a CEO performanceassessment.Thesetypesofassessmentsaretypicallydonebyconsultingfirms andmostly address hard skills (the It dimension). Theremay besome points about leadership capabilities, but the focus is mostly onbusinessacumen.WhentheSVPbroughtupthetopic,Jeffsuggested—inwhatIthought

was quite a daring move—that the board use the report that I waspreparingforhim.Iopposedtheideabecausemydiagnosticissupposedto be used for leadership development, not for evaluation. It is toopersonalandtoorawtobesharedwithanybody,letalonewithaboardofdirectors. In fact, I don’t even give the report to the personwho is thesubject of the report in advance, as I’ve learned thatmost people needcoachingsupporttoprocesstheinformation.But Jeff insisted, so I created a summary report for the board that I

presentedwithJeffintheroom.Ashadbeenthecasewithhisteam,therewasaveryproductiveconversationabouthowJeffand theboardcouldworkbettertogether,andalsohowJeffwasgoingtofocusonbecomingan even better leader by addressing the findings of the assessment.SeveralboardmemberspraisedJeffforhistransparencyandcommentedthat his CEO assessment was the most constructive one they’d everparticipatedin.Martin Winterkorn and Jeff Weiner represent the polar ends of the

leadership spectrum. Winterkorn could not bear to look in the


metaphorical mirror and do the kind of deep introspection needed tobecome an inspiring leader. He couldn’t hear bad news or brookcriticism; instead of owning his behavior, he attributed its badconsequences to others. He created a culture of fear that produceddisastrous results. By contrast, Jeff had the courage to look at himselfwith the understanding that doing so is an absolute requirement forleadership.Bydoingso,hefosteredacultureofradicaltransparencyandintegrity at LinkedIn. The most talented people in the world wouldprobably not give their best to someone likeWinterkorn; but in 2016,theyvotedJeffthemostadmiredleaderinSiliconValley.33

Once,whileGandhi’strainwaspullingoutofastation,aEuropeanreporterrantohiscompartmentwindow.“DoyouhaveamessageIcantakebacktotheBritishpeople?”heasked.It was Gandhi’s day of silence, a vital respite from his demanding

speaking schedule, sohedidn’t reply. Instead,he scrawled thesewordsonascrapofpaperandpassedittothereporter:“Mylifeismymessage.”Thepoint is that it’snotonly thatyoucan’t just “speak”yourvalues;

you can’t even just “act” them (understood as a pure business-likebehavior). If you want to avoid the scourges of disengagement,disorganization, disinformation, and disillusion, you must fully “live”yourvaluesinawaythatcommunicatestoeveryoneallthetimethatthisisyourlife-definingcommitment.


PART2SOFTSOLUTIONS


Chapter6

MOTIVATIONPURPOSE,PRINCIPLES,ANDPEOPLE

Ifyouwanttobuildaship,don’tdrumuppeopletocollectthewoodanddon’tassignthemtasksandwork,butratherteachthemtolongfortheendlessimmensityofthesea.

—AntoinedeSaint-Exupéry

Aneconomist andapersonwho isnot an economist arewalkingdownthe street. The noneconomist says, “Look, there’s a $20 bill on thesidewalk!” The economist replies, “That’s impossible; if itwere really a$20bill,itwouldhavebeenpickedupbynow.”Justasnatureabhorsavacuum,economistsabhorawindfall.Itmakes

nosensetousthata$20billwouldbeonthesidewalkbecausesomeonewouldhavescoopeditupassoonasitfell.Engaging employees is a huge productivity boost; it’s like picking up

thousand-dollarbillsfromthesidewalk.Butthevastmajorityofleadersjustletemployeessitthere,unmotivatedanddisengaged.Thismakesnoeconomic sense. If American companies are losing an estimate of over$300billion a year in productivity1 plus the additional losses of talent,marketshare,andprofits todisengagement,whyaren’t results-orientedleaders doing something about it? And if they aren’t, why isn’tmarketcompetitionreplacingtheseleaders?A thought experiment can give you a sense of the tremendous

competitiveadvantageenjoyedbyorganizationsthatengagetheirpeople.Let’sassumethatyouworkforoneofthesecompanies.Howmuchmorewouldanotherfirm,knownforitstoxicculture,dysfunctionalemployees,soul-crushingwork,obsessiveandcontrollingmanagement,andterriblebrand,havetoofferyoutolureyouawayfromyourcurrentjob?Andhow


muchmorewouldtheyhavetopayyoutoworkashard,ascooperatively,andascreativelyasyounowdo?MostpeopleIaskthisquestionrefusetogiveanumber;theyjustwouldn’tdoit.Therearethingsthatmoneycan’tbuy.Giventheenormousupsideofengagingtheworkforce,youwouldthink

thatwhenamanagerdoesnotmotivatehisorherpeople,theimmediatesupervisor would put pressure on him or her to change. And if thatmanagerdoesn’tchange,theseniormanagershouldtradehimorherforabetterone(“eitherthepeoplechange,oryouchangethepeople,”asthesayinggoes),andsoonupthefoodchainthroughtheCEOandtheboard.Unlesstheydoso,thecompany’svaluewouldfalluntilthefirmistakenover,oruntilitshutsdownandsomeother(moreengaging)organizationacquiresitsassets.Yetalmost90percentoftheglobalworkforce(andupto98percentin

some countries2) remains disengaged. Puzzling, isn’t it? A disengagedorganization competing against an engaged one is like a mule racingagainst a thoroughbred horse. So how is it possible that disengagingorganizations,andtheirleadersandculture,stillpersist?Theyshouldbeextinct.There are two reasons for this Darwinian travesty. The first is the

mistaken belief that money is what people want most—a belief that’sdeeply embedded in the way organizations are run. The second is apsychological cage inwhichmosthumanbeingsare trapped. InPart2,beginningwith this chapter, I describe themistaken belief and suggestways to avoid it. Although this is by no means an easy task, it’s theshallowendofthepool.InPart3,Idescribethepsychologicalcageandshowyouhowtofreeyourselffromit.Transcendent leaders know that human beings are moved not

primarily by money once their basic needs are satisfied, but bymeaningful purpose, ethical principles, significant people, andpersonalmastery.Theyunderstandthattheycan’tdanglecarrotsorwavesticksinfrontoftheirpeopleandgetanymorethanroteobedience.After thirty years of trying to solve the problems of disengagement,

disorganization, disinformation, and disillusion through standardeconomic tools, I have declared defeat. These hard problems require asoftapproach.Theanswerto thequestion“HowdoImotivatepeople?”


might appear to be driven by economics, but it’s really driven bypsychology.Thisanswerhastodowiththehumanquestformeaningandtranscendence.Whenaleadertapsintothisexistentialthirst—providingan opportunity for followers to create an individual and a collectiveidentity, tobecomesomeone they feelproud tobe, inagroup towhichthey feel proud tobelong—the leader gains access to themost preciousresource:engagedhumanbeings.

BADWORK,GOODWORK

TheGalluporganizationdid themost extensive empirical researchevercarriedouton the subjectofproductivityandengagement. It examinedover four hundred organizations, interviewing a cross section of eightythousandmanagers, andabout twomillion surveys.Usingperformancemeasuressuchassales,profits,customersatisfaction,employeeturnover,and employee opinions, they distinguished between bad and goodworkplaces.3

The first and second job experiences of the daughter of a friend ofmine,amillennial justoutofcollege, illustratetheGallupresearch.Thewoman—let’s call her Amy—first held a job for about six months intelesalesatasoftware firm.Shedidn’tcareabout thebusiness,andsheknewitwasn’tacareerjob,butshetookittopaytherent.Shewaspaid$20perhourplusbonusesformeetingorsurpassingherquota.Herjobwastocold-callpeoplewhohadpreviouslyusedthecompany’ssoftwaretosellthemanewproduct.ThejobhadnothingtodowithAmy’sdesiresortalents;shewasjustacoginamachine.Amy didn’t really know what the point of her work was, other than

pushing the company’s product—which she had never used. She didn’tknow how this product would benefit the customers; she just parrotedher scripted sales pitch in a skull-numbing litany hour after hour. Sheonlyknewthatifshemethersalesquota,she’dgetareward,andifshefailedtoreachittwomonthsinarow,she’dgetfired.“Mymanagerneverpraisedme,onlycriticizedme,”Amycomplained.

“I never seemed to do anything right. Iwas stressed out all the time. I


didn’thavethetoolsIneededtodomyworkwell.AndIdidn’twant toask,asIsawthatwhenanyofmyteammatesaskedforhelpthey’dgetintrouble. I justputmyheaddownanddidwhateverIhadtodo. Ihatedthe job, my boss, my coworkers; and after a while, I began to hatemyself.”Tothegreatreliefofherparents,Amyquitthatawfuljob;andtotheir

greatdelight, she foundanewonewhere she feels totallyengaged.Shenow works at an organization that connects people from the sameneighborhoodonline.Shebelievesthatthisorganizationiscommittedtoachievingsomethinggoodintheworld.Shefeelsgratefultoparticipateina noble purpose in the company of people who support her. Sheunderstands howher efforts fit into the big organizational picture, andsheknowsthatherworktouchesmanylivesforthebetter.Amyknowswhat’sexpectedofherandistrustedtodeliver itwithout

being micromanaged. She has quite a bit of flexibility and autonomyregarding how she does her job and coordinates her efforts with hercoworkers. She knowshermanager is there to support her and tohelpher grow. The manager is always available and often asks Amy if sheneeds any tools, materials, or training to do her job better every day.Periodically,he’llengageherinacareerconversation,encouraginghertoplotacoursethatmakesthebestuseofhertalentsandpassions.Amy gives her best, and hermanager acknowledges her efforts with

generouspraise.Amyfeelsusefulandtunedintotheworkthatbestfitsher.Everybodyaroundcaresabouther,too.Someofherbestfriendsareher coworkers. She’s helping them andwatching them thrive, and viceversa. If there’s any disagreement among themembers of Amy’s team,they discuss the situation, trusting that their collective intelligencewilllead to a wise resolution that integrates everybody’s needs andperspectives.Amyfeelsthatsheispartofanextraordinarilyhigh-performanceteam,

whereeverybodyiscommittedtodoingaqualityjob.She’sproudofwhatshedoes,howshedoesit,whatshedoesitfor,andwithwhomshedoesit. Changing jobs or retiring is not even a remote consideration in hermind;shewantstoriseintheorganizationtohelpitthrive.Accordingtoa2014studyofthreehundredcompanies,94percentof

millennialswanttousetheirskillstodogoodintheworld.4Morethan50


percent say they would take a pay cut to find work thatmatches theirvalues.5Ifyoudon’twanttoleaveallthose$1,000billsonthesidewalkandengagetheteamyoulead,youneedtoseethroughtheillusionthatextrinsicrewardsarewhatemployeescareaboutmost.Youneedtostopfocusingsolelyonmaterialgoodsandfocusonnonmaterialones.

THEFOURPILLARSOFINTRINSICMOTIVATION

OrganizationsthatengagetheirpeoplerelyonwhatIcallthe“fourpillars”ofintrinsicmotivation:1. Purpose:Significance,meaning,impact,service,self-transcendence2. Principles:Integrity,ethics,morality,goodness,truth,dignity3. People:Belonging,connection,community,recognition,respect,praise4. Autonomy:Freedom,creativity,achievement,learning,self-mastery

MONEYDOESN’TMOTIVATE

TheprobleminthefirstscenarioaboveisthatthesoftwarefirmassumesthatmoneyiswhatprimarilymatterstoworkerslikeAmy.It’samistakenbelief that’s been embedded in our culture ever since Adam Smithdescribedtheproductivityof thepinfactory inTheWealthofNations.6

Managers have been taught that monetary incentives and behavioralcontrolsaretheessential,ifnottheonly,toolsforcontrollingbehaviorinorganizations.Theassumptionislikeholywrit.Wehumanscareaboutmaterialgoods, forsure,butmostofusdoso

only insofaraswehaveenoughforourselvesandour lovedones.Then,the importance of additional money and the stuff it can buy dropsprecipitously—oraseconomistswithapenchantforobscurelanguageliketosay,“Themarginalutilityofincomedecreasesatanincreasingrate.”According tomanagement psychologist Frederick Herzberg, material

rewards are a “hygiene factor.”7 This means that their absence orunfairness can cause people to disengage, but their presence doesn’tmake them feel engaged. As the management author Daniel Pink


remarks,whenitcomestomotivation,theonlyreasontoputmoneyonthetableistotaketheissueofmoneyoffthetable.8

Misunderstanding this fact about human nature has perverseconsequences.Forexample,according toa2013surveybyGallup, two-thirdsofAmericanworkerswouldcontinuetowork,eveniftheyhadtenmillion dollars.9 People want to work so much that the money barelymatters.Butthentheygotoworkandfeeldisengaged,sotheycanhardlywaittoleaveattheendoftheday.Thesadfactisthatorganizationsaredesigned, led, and operated to squeeze the most out of the workers,rather than to inspire the best in them—in spite of the overwhelmingevidence that thosewho tradequality forquantityofeffortendupwithneitherquantitynorquality.Rewards and punishments certainly do induce compliance. If your

objectiveistogetpeopletoobey,bribingorthreateningthemmaywork.But if your objective is to garner their commitment, then rewards andpunishments are useless. In fact, they areworse than useless; they areactuallycounterproductive.10Peoplearen’tlikeratsinamazeorPavlov’sdogs responding to a bell—although treating them as such will inducethem to behave that way. Monetary incentives can’t inspire people tocare, to work for a common goal, or to support intelligent decisionmaking.Monetaryincentivesareemotionallyinert;theycanfillpockets,but they can’t touch hearts.Moreover,monetary incentives are easy tomatch, so they don’t give any organization a competitive edge forrecruiting,retaining,andengagingtoptalent.Itmaywellbethecasethatforthelogicalmind,twowaystomotivate

employees are better than one. But for the emotional heart, the mathdoesn’t always add up. Sometimes instead of adding, reasons subtractfrom each other. In fact, forty years of psychological and economicresearchproves that “Adding financial incentives to situations inwhichpeople are motivated to work hard and well without them seems toundermine rather than enhance the motives people already have,” thepsychologistBarrySchwartzhasnoted.“Extrinsicmotivation,suchasthepursuitofmoney,underminesintrinsicmotivation.”11

Themoreacompanyusesmaterialrewardsandpunishmentstodrivebehavior, the less people will invest their discretionary and internallymotivatedeffort.


There’s an illustrative study by a behavioral economist named UriGneezy, who described a day-care center in Israel that wanted toincentivizeparentstopickuptheirkidsontime.12Moreandmoreoftheparents—including Gneezy and his wife—were coming late to pick uptheirkids,regardlessoftheappealsofthewomanwhoranthecenter.Sothecenterdirectorestablishedasmallfineforlatenesstogiveparentsanadditional reason to comeon time.Being latewouldn’t just break theircommitment;itwouldalsohaveafinancialcost.Surprisingly,latenessincreasedinthewakeofthedecision.Beforethe

director imposed the fine, roughly a quarter of the parents showed uplate. Severalweeks after she imposed the fine, about 40 percent of theparentswerelate.Gneezyfoundthattheparentsinterpretedthefinenotasapunishment fora transgression,butasa fee for extendedday-careservice.Andbecausethefinewassmall,theywerehappytopayit.Theylostthenotionofanethicalbreach.Beinglatestoppedbeing“wrong”;itbecameaservicethatparentspaidfor.Essentially,thefinesunderminedwhathadbeenanethicalconversationabouthowtheteachersneededtogethometotheirownfamiliesontime.Financial incentivescandangerouslyreframethequestion inpeople’s

mind from“Is this right?” to “Is thisprofitable?”Once lost, this ethicaldimension is hard to recover.When the fines were lifted at the Israeliday-care center, the percentage of late parents increased to about 50percent.Thismakesperfecteconomicsense.Whenthefeeforextracarewent down to zero, demand increased. Being late simply became evenmoreconvenient.Theethicalconcernshadbeensweptaway.There is amonetary principle in economics called Gresham’s law. It

states that bad money drives out good. For example, if there are twoformsof commoditymoney incirculation—say,mintedgoldcoins—thatarelegallysettohavethesamefacevalue,themoreintrinsicallyvaluablecommodity(e.g.,thecoinswithhighergoldcontent)willdisappearfromcirculation as people hoard it. Thus, if “good” and “bad” money arerequired by law to be accepted at equal value, the bad money willdominatecirculation.Peoplewhoarespendingmoneywillhandoverthe“bad” coins rather than the “good” ones, keeping the “good” ones forthemselves.13

There’sasimilarlawinemployeemotivation:badincentivesdriveout


thegoodones,astheexampleoftheday-carecentershows.Themorealeaderreliesonfinancialincentives,thelessheorshewillbeabletorelyonengagement.Andthelesstheleadercanrelyonengagement,themoreheorshewillneedtorelyonfinancialincentives.Itisaviciousandfutilecycle because financial incentives cannot possibly produce excellence.Financialincentivescanneverdrivepeopletodogoodworkbecausetheywantto,becausetheycare,andbecauseitistherightthingtodo.

WHYMEANINGTRUMPSMONEY

Fromaneconomicstandpoint,meaningtrumpsmoneyforthreereasons.First,asIexplainedearlier,materialgoodsareexclusive.Thereisonlysomuchmoney to go around. So if I get a portionof thebonuspool as arewardformyperformance,youdon’t.Ifyougetit,Idon’t.Ifwebothgetit,theshareholdersdon’t.Thisresultsinwinnersandlosers—rivalry,turfwars,bickering,envy,andresentment.Nonmaterialgoodssuchasmeaning,purpose,ethicalpride,autonomy,

and belonging are not exclusive. If you are inspired by the company’smission,ittakesnothingawayfrommyowninspiration.Onthecontrary,nonmaterialrewardsexpandratherthanshrinkthepie.Thecommunitythatsharesavisionenjoysanetworkeffectthatenhancestheinspirationandsenseofbelongingforeachofitsmembers.Ifyouaresincerelyproudof the values our organization expresses andwe exemplify through ourwork,thatdoesn’ttakeanythingawayfrommybeingproudaswell.Andifwearebothproud,wetakenothingawayfromtheshareholders’pride,either.Infact,eachoneofusmakeseveryoneelseprouder.Second, the value of material goods is disconnected from the way

they’reachieved.WhetherIgetthemoneybecauseIdeserveit,becauseeveryonegets it, orbecause I game the system, themoney isworth thesametome.Asapureeconomicbeing,I’ma“mercenary”;thatis,IcareonlyabouthowmuchIcanget,bywhatevereffort-minimizingmeans Icangetawaywith.Nonmaterial goods, on the other hand, are highly dependent on the

mannerinwhichthey’reachieved.IfIamamercenary,Idon’tcareabout


ourcompany’snoblepurpose.Hence,thevalueofthenonmaterialaspectofmycompensationiszero.Ifyouarea“missionary,”ontheotherhand,youcaredeeplyaboutthecompany’spurpose.Therefore,thenonmaterialaspectofyourcompensation isquitevaluable toyou.Furthermore,youcan’t enjoy the nonmaterial goods you haven’t rightfully earned. Formissionaries, an unearned nonmaterial reward is like a white-hot coinstraightoutofasmelter;itburnstheirfingers.Third, material incentives are punitive and contingent on external

factors beyond the control of employers. “If you achieve the results Iwant, you get a reward,” the employer tells the employee. “But if youdon’tachievethem,regardlessofthereason,youdon’tgetareward—andmay be punished instead” (by being fired or demoted). This kind ofstatement appeals to two unrefined human emotions: greed and fear.Thinkofthesetwodriversasdirtyleadedgasoline.Theymaypropelyourvehicle forward, but eventually they’ll clog the engine and pollute theenvironment.Bycontrast,nonmaterialgoodsarenotcontingentonexternalfactors.

What provides meaning is the pursuit of our noble purpose, whileexpressing ethical principles in community with people whom weappreciate andwho appreciate us. These don’t depend on any externalforces,onlyontheactionsofthosewhocommittothem.In my previous work, I’ve distinguished between pursuit of goals or

successthatisdependentonacontingentfutureandthecommitmenttoprocess values—to success beyond success.14 Success yields immediatepleasure,whichisshort-livedandsubjecttotheanxietyofloss.Youwonachampionship,butyoumayloseyourtitleinthenextround,quarter,orfiscalyear.Successbeyondsuccessyieldspeaceofmind,whichismuchmore stableand freeofanxiety.Youmaywinoryoumay lose,butyoucanalwaysdoyourbestandpromoteethicalvalues.I like to think of meaning, integrity, and belonging as a climbing

harnessonmywaytoarockypinnacleofsuccess.Itprovidesmewithasense of security and self-confidence, because I can trust that even if achallengeproves toodifficult formy current capabilities, Iwill not fall.Holding fast to these values allows me to commit enthusiastically tonoblegoals,withtheknowledgethatIamguaranteedtosucceedbeyondmaterial success. This knowledge letsme engage fearlessly and have a


senseofperspectivesoIdon’tsweatthesmallstuff.Itallowsmetolearnfromanymistakeswithoutself-recrimination.InastoryfromHomer’sOdyssey,Odysseusaskshissailorstotiehim

toamastso thathecanhear thesirens’songwithoutharminghimself.Meaning, integrity, and belonging are like that mast. It gives you thesecuritytorejectthedangeroussongsofthesirensthatwillsinkyouandyourfollowersintoaseaofmisery.Itisasafetydevicetokeepyouonthepathofrighteousness,fendingoffthecallsofyourbaserinstincts.Thesevaluesarethebasisforthegoodlife,alifewelllived,thelifethatAristotlecalledeudaemoniaor“activityinaccordancewithvirtue.”15

InChapter1,Iusedtheanalogyofablanketthat’stooshorttoexplainthe contradiction between global incentives to foster cooperation, andlocal incentives to fosteraccountability. Ifyoupull theblanketup,yourfeetgetcold;ifyoupullitdown,yourchestgetscold.There’snotenoughblanket to cover both ends of your body at the same time. However,through purpose, principles, people, and the granting of autonomy,there’sanonmaterialwaytomakethisblanketlargeenoughtokeepyouandyourorganizationwarm.

THELEADER’SJOB

Elicitingpeople’s internal commitment topursuea commongoal is thejob of every leader.Howdo youdo it?Bymaking a transcendent offerthat gives people a sense of significance: “If you give themission yourbest,”aleaderproposes,“youwillgetnotonlymaterialrewardsbutalsopride,fellowship,freedom,andmeaninginyourlife.Youwillgobeyondyourselfandconnectwithsomethinglargerandmoreenduringthanyourphysical existence.” And as you model ethical behavior and provideopportunities for employees to flourish, theywill rewardyour companywith their best efforts—which properly harnessed will turn intoextraordinarygrowthandprofits.A transcendent leader seeks what he cannot demand—internal

commitmentratherthancompliance,enthusiasmratherthanobedience,loveratherthanfear.Thesearepreciousgifts,givenonlytoaleaderwho


is trulyworthy of them, andwho reciprocateswith an equally preciousgift:meaning.To become a transcendent leader, you need to ponder what really

motivatespeople. If you are a leader, invite yourwhole organization toanswerthesequestions:

PURPOSE

Whydoweexistasanorganization?What’souruniquecontributiontoourcustomersandtheworld?Whywoulditmattertoanybodyelsethatwesucceed?Whyisourorganizationworthyofourbestefforts?Doeseachoneofusunderstandhowhisorhereffortscontributetooursharedpurpose?

PRINCIPLES

Whatvaluesdowewanttoexpress?Howarewedemonstratingawayofbeingandrelating(toeachother,andtoallourexternalstakeholders)thatwewishextendedtoallhumanity?Whatbehaviorswillmakeusproud,regardlessoftheoutcomeofourefforts?Arewemanifestingthetrue,thegood,andthejustineverythingwedo?Whatbehaviorswillfostercollaborationwhilemaximizingindividualfreedomandresponsibility?

PEOPLE

Howdowecreateaninclusiveenvironmentwhereallthosewhoshareourmissionandvaluesfeelliketheybelong?Howdoweconnecttooneanotherauthentically?Howdoweensurethateverybodywhobelongsfeelsrecognized,respected,andappreciatedasamemberofthiscommunity?Howcanwedeepenourbondsoftrustandsolidarity?Howcanwebettersupportoneanothertolearnandgrow?

AUTONOMY


Howdowefosterinformedchoiceandinternalcommitmentsothateachoneofuscanexercisediscretioninserviceofourmission?Howcanwegetbetterandbetteratthethingsthatmattertous?Whatchallengesarewetakingontotestandstretchourabilities?Whatactivitiescanhelpeachandallofuslearnandgrow?Whatfeedbackmechanismscansupportourimprovementefforts?

PURPOSE

WhenmydaughterMichelle(“Michi”)wasaboutsevenyearsold,shesawme packing for a business trip. I was going to the insurance companyAxa’sheadquartersinParis.Shepleadedwithmetostay.“Please,Daddy,don’tgo,”shebegged.Andshepiercedmyheart.Iwastemptedtogiveheraperfunctoryanddismissiveresponselike“I

wishIcould,sweetie,butDaddyhastowork,”butIdidn’tdothat.SuchananswerwouldhavemadeitlookasifIwereforcedtomakethetripbypowersbeyondmycontrol,andthatwasn’t true.Iopted insteadtogiveher an answermore in linewithmy philosophy of response-ability, ananswer that spoke to what at heart Axa’s business provided to itscustomers: I was choosing to go because it mattered. Here is how Iexplainedit:“If I died,Michidear, itwouldbe a verybad thing,” I said. “Iwould

missyoualot.Iwouldnotgettoseeyougrow.Andyou’dmissme,too.We’dmissalotoffunthingsIamplanningforustodotogetherformanyyearstocome.”Shelookedatmewithbigeyes,wetwithtears.“ButifIdied,itwouldbeworsethanthat,”Iadded.“Why,Daddy?”sheasked.“NotonlywouldIbegone,”Iexplained,“butyouandMommywould

havefinancialhardships.Mommywouldhavetoworkmanymorehourstopayforfood,thehouse,thecar,yourschool,andmanyotherthingsall


byherself.”Bythistime,Michellewasbecominggenuinelyupset.“I’ve done something to make all this less bad,” I told her. “Even

though I can’t ensure that the first partwon’t happen, thepeople I amgoing to work with on this trip will make sure that you and Mommywouldbeokay.I’vemadeadealwiththemsothatifsomethinghappenstome, theywillgiveMommyenoughmoney tobuyall the thingsshe’llneedtotakecareofyouwithouthavingtostayatworkanymorehoursthan she does now. The people who do this know that people likemewanttoprotecttheirlovedonesincasetheyarenotthere,soIpaythemasmallmonthlyfee,andinexchangetheywillpayMommythemoneysheneedsifIdie.It’scalled ‘insurance,’andit isabeautifulthing.Itallowsme, andmany other peoplewho love otherswhoneed them, to go outintoasometimes-scaryworldwithpeaceofmind.Iamgratefultothemandproudtohelpthemdothisbetterandbetter.”Hereyeswerestillwet,butshesmiledandsaid,“Go,Daddy,go.”Duringmymeetingat25AvenueMatignon,IsharedthestorywithAxa

executives.“Youareright,Fred,”oneofthemcommented.“Wedon’tsellinsurance;weselllove.”

Deepdown,everycompanyhasanoblepurpose—it justneedstofindit.IwasproudtohelpAxaenablepeopletotakecareoftheirlovedonesevenbeyondtheirphysicalexistence—allowingthemtofaceariskyworldwithconfidenceandpeaceofmind.Andtheirpurposeinspiredmeto give themmy absolute best. I was proud to explain tomy daughterwhatIreallydid.IcouldhavetoldherthatIwasgoingtoworktomakemoney—Axa was certainly paying me for my services. But that wouldhavebeenonlyahalf-truth,andthelessimportanthalfofit.Thehighertruthwas that Iwas fulfillingmy lifemissionbyaligningmyselfwithacompanythathelpedpeoplelivebetterlives.In my leadership workshops, I ask participants: “How would you

describetoaseven-year-oldchildwhatyourcompanydoesinawaythathe or she would be proud of you?” I encourage them to open thisconversation with their colleagues when they get back to their


organizations. By discovering the human need that your company’sproductorservicemeets,youcanconnectyourpeopletoanoblepurpose,onethatcanbringmeaningandpridetoyou,yourcolleagues,andyourfamily.Howwouldyouanswerthequestion?Whatwouldyourmanagersay?Whataboutyourcolleagues,youremployees,yourcustomers?We all want to work for organizations that understand how best to

deploy their technology, their resources,and their talent for thegreatergood.Weallwanttocreatevalue,makepositivesocialandenvironmentalchanges, and increase opportunities for those we care about. No oneaspirestoworkforacompanythatharmsitscustomerswithitsproductsor ruins the environment with its processes. What that means is thatleaderswhowanttoengagetheirorganizationsneedtothinkabouthowtheyaremakingapositivedifferenceintheworld.Ifyouaretoengageyourcolleagues, they(andtheir families)haveto

believethattheproductorserviceyouareofferingistrulylifepromoting—as is the work process through which you produce it. This requiresempathizingwithyourcustomersandunderstandingwhat’simportanttothem.Howdoeswhatyouareofferingallowthemtomeettheirneeds?Italsorequiresempathizingwithyouremployeesandunderstandingwhat’smeaningfultothem.Howdoestheworkyouareofferingyouremployeesallowthemtomeettheirneeds?

PaulPolman,theCEOofUnilever,oncethoughtaboutbecomingapriest and spending his life as a spiritual leader. It’s not all thatsurprising; as the head of the world’s third-largest consumer goodscompany, Polman has earned a reputation as a global business leaderwithaconscience.Atall,round-facedDutchmanwithatwinkleinhiseye,heisastandard-bearerforthenoblepurposeofbusiness.When Polman took over the company in 2009, he vowed to cut

Unilever’senvironmentalfootprintinhalfby2020,todoublethesizeofits business at the same time, and to help one billion people achievebetterhealthandwell-being.Thosearedaunting—somewouldsaycrazy—goals, but Polman believes in what Jim Collins and Jerry Porras call“big, hairy audacious goals” (BHAGs for short).He also insists that “Ifyoubelieveinsomething,youhavetofightforthatandhavethecourage


totakethetougherdecisionsthatcomewithit.”16

At the heart of Polman’s thinking is the desire to provide a concreteexampleof thebusinesscase forsustainability.Forexample,heworkedwithformerUNsecretary-generalBanKi-moontoexaminehowbusinesscanworkmoreeffectivelywiththeUnitedNations,andhehelpedcreatetheConsumerGoodsForum,whichhas agreed, amongother things, tostopbuyingpalmoil,paper,soy,orbeeffromillegallyforestedareasby2020.“Wearetryingtoshowthatyoucanbesuccessfulasabusinessandatthesametimeshowthefinancialcommunitythisshouldbeoneofthebetterdriversfortheirinvestments,”Polmansays.“Wearegrowingandour share price is doing well. So we gain credibility. Themore we canreinforcethatlinkandshowittoothers,themorewecanbeagalvanizerinthisworldforgood.Thatiswhatsuccesswilllooklike.”17

Polmanhasalignedhishugemultinationalcompanyintheserviceofanoblepurpose.“Makingsustainabilityastrategyandanoperatingmodelopensdoors that are beyondpeople’s imagination,” he adds. “Whowillrefuse that journey, who will refuse to jump on the train for a betterworld?”A noble purpose, consistently managed, fulfilled, and modeled by

leaders, can drive individual and organizational projects through an“invisible hand” as a benefit to society. A company with a meaningfulprojectlikeUnilever’sisnotdesignedto“destroythecompetition”or“benumberone”butrathertocreateeconomicvalue(whichishumanvalue)through mutually advantageous exchanges with customers, employees,shareholders,lenders,suppliers,andotherstakeholders.

PRINCIPLES

“Youwhoareontheroadmusthaveacodethatyoucanliveby,”Crosby,StillsandNashsang.Althoughtheyreferredtoparentsandchildren,theymighthaveaswellbeenreferring to leadersand followers.Humansareethicalanimals.Wecaredeeplyaboutwhatisgoodandjust.Askanyonewhyheorshedidsomethingandyou’llgetanethicaljustification.Fromthefive-year-old’s“Hehitmefirst!”tothefifty-five’s“Ihavetheright!,”


we seek to legitimize our actions by appealing to moral principles. Tofullyengage,weneedacodethatwecanlivebywithpride.Asaculturearchitect,everytranscendentleaderneedstodefinemoralprinciplesfortheorganization.InhisbookTheMoralLandscape,theneuroscientistandphilosopher

Sam Harris argues that “Questions about values…are really questionsaboutthewell-beingofconsciouscreatures.”18Goodisthatwhichfosterstheflourishingofconsciousbeingsanddirectsourattentiontothesetofattitudes, choices, and behaviors that influence it positively. Harrisclaims that human sciences can help us understand what any personshouldvalue,want,anddoinordertolivethebestlifepossible,whileatthesametimesupportingothersinlivingthebestlivespossible.Forhim,thereare rightandwronganswers tomoralquestions, justas therearerightandwronganswerstoquestionsofphysics.The moral principles that have proved most effective in fostering

human development are respect for self-determination and propertyrights. The founding fathers of the United States predicated as a self-evident truth that every human being is endowed with “unalienable”rights to life, liberty, and the pursuit of happiness—towhich I’d like toadd the search formeaning. Transcendent leaders hold these truths asthefoundationalprinciplesoftheirorganizationalcultures.Theircodeisbasedonunconditionalrespectforeveryhumanbeingasanendinhim-orherselfratherthanasameansforothers’ends.Transcendent leaders establish moral principles that respect

individuals’ self-determination. They give everyone, from employees tocustomerstovendors,theopportunitytomakefreeandinformedchoicesto promote their happiness, limited only by the equal rights to life,liberty,andpropertyofeveryoneelse.They also establish effective principles that engage employees in

pursuing a common purpose and using their dispersed knowledgeintelligently. As I’ve noted, this is preciously rare. Most people inpositions ofmanagerial authority believe that they canbest accomplishthisthroughextrinsicmotivationandcontrol.Thesemanagersbelieveitis their jobtostandbetweenchaosandawell-functioningorganization.They design structures, put processes in place, establish rules, andenforce them through sanctions. This is a mistake. To reiterate: the


leader’s job is to elicit people’s internal commitment to collaborate toaccomplishtheorganizationalgoal.An effective organization functions as the result of the employees’

individual commitment, regardless of the will of those in power. Thisallows it to achieve orderwithout control; in fact, a certainmeasure ofself-organization is essential for a company tomaintain coherence in avolatile,unpredictable,complex,andambiguousenvironment.DeeHock,founderandformerCEOoftheVisacreditcardassociation,summarizedhis ideasaboutself-organizingsystemsthisway:“Simple,clearpurposeandprinciples give rise to complex, intelligent behavior.Complex rulesandregulationsgiverisetosimple,stupidbehavior.”19

Too many leaders arrogantly (and ineffectively) try to shape theenvironmentaroundthem,ratherthanallowingtheenvironmenttohelpinform and guide their choices. By contrast, transcendent leaders areacutelyawareof their limitations,whichmakes themhumble.Theyarenotintentonshapingtheorganizationtotheirwill.Rather,theybecomestewards of principles that foster alignment, collaboration, and use ofknowledgetofurthertheorganizationalmission.Netflix, for example, has simplified its rule book to nothing. “Rules

annoyus,”theyannounce.“Rulescreepintomostcompaniesastheytryto prevent errors by less-than-stellar employees. But rules also inhibitcreativity and entrepreneurship, leading to a lack of innovation. Overtimethisdrivesacompanytobeinglessfunandlesssuccessful.Insteadofaddingrulesaswegrow,oursolutionistoincreasetalentdensityfasterthanweincreasebusinesscomplexity.Greatpeoplemakegreatjudgmentcalls and few errors, despite ambiguity. We believe in freedom andresponsibility,notrules.”20

PEOPLE

Among the most significant sources of well-being at work (and life ingeneral)are thegoodrelationshipswehavewithpeoplearoundus.Formostofourexistence,humanshaverelatedmostcloselytothoseofourkin—asuccessfulDarwinianstrategytoreplicateourgenes.21


Abstract language, as noted by the Israeli historian Yuval NoahHarari,22hasallowedustovastlyexpandthereachofourcommunities,enabling cooperation and collective action at a much larger scale,reaching into the billions. This “memetic” kinship, to use the termpopularizedbythebiologistRichardDawkinstorefertomentalgenes,23

allowslargenumbersofpeopletofeelliketheybelongtothesamegroup,creating a sense of identity that transcends any familial or racialdistinctions. For example, people from different ethnicities will definethemselvesasAmerican,aswillthosewhocametoAmericafromdiversenational,cultural,orreligiousbackgrounds.The samehappenswith companies.AsHarari asserts,Homo sapiens

came to dominate the world because we are the only animal that cancooperate flexibly in largenumbers.This isdue toouruniqueability toconceiveofandbelieveinobjectsexistingpurelyintheimagination,suchasgods,nations,money,andlimitedliabilitycorporations.Harariclaimsthat all large-scale human cooperation systems—including religions,governments, trade networks, and business organizations—derive fromourdistinctivecognitivecapacity for imagining fictionalentities: “Largenumbersofstrangerscancooperatesuccessfullybybelievingincommonmyths. Any large-scale human cooperation—whether amodern state, amedievalchurch,anancientcityoranarchaictribe—isrootedincommonmyths that exist only in people’s collective imagination.”24 Largenumbersofstrangerscancooperatesuccessfullybecause,bybelievingincommonmyths,theystopfeelinglikestrangerstooneanother.Transcendent leaders are able to create social bonds based on a

common narrative. Bob Chapman, CEO of Barry-Wehmiller, chose thecommonnarrativeofthefamily.Chapmandidn’tstartouttryingtobeatranscendentleader.Hetookoverhisfather’smanufacturingtechnologyand services company in 1975whenhis fatherdied suddenlyof aheartattack. Chapman was a traditionally trained, by-the-numbersbusinessman;profitswereeverything,andhesawpeopleasmeremeanstoanend.Thatwasuntiloneday,asheandhiswifeattendedawedding,hehada

sudden“Eureka!”moment.Ashesawthelovewithwhichthefamiliesofthe bride and groom supported their union, he realized that caring foremployeesthewayonecaresforpreciousfamilyisthejobofaleader.So


he set about treating every employee of Barry-Wehmiller and itssubsidiarycompaniesthesameway.25“AtthecoreofBarry-Wehmiller’sphilosophy is the belief that leaders shouldn’t manage people; theyshouldstewardthem,”Chapmansays.“Afterall,whoinyourlifedoyou‘manage’? Your spouse? Your children? No, you care for them. Youacknowledgethedeepresponsibilityyouhaveforthem.”Chapman came to a startling conclusion: “We measure success the

wrongway in this country.Wemeasure itby the financialperformanceandgrowthofacompany,andyetwe’vegotpeoplewhoselivesarebeingdestroyedeverydaybythewayinwhichmanycompaniesoperate.”Sohemadehiscoreresolution: “Wearegoing tomeasuresuccessby thewaywe touch the lives of people. All the people: our team members, ourcustomers,ourvendors,ourbankers.Foreveryactionwetake,weneedtounderstandtheimpactithasonallthepeoplewhoseliveswetouch.”Chapman’sconcernwasnotonlytheinterestsofBarry-Wehmiller’sdirectstakeholders.“Ifeverybusinessdidthat,”headded,“theworldwouldbeamuchbetterplacethanitistoday.”26

The sense of community atBarry-Wehmiller is palpable. “Thosewhowork [at the company] talk of their ‘love’ for the company and eachother,”SimonSinekwritesinLeadersEatLast.27“Theyproudlywearthelogo or the company’s name as if it were their own name. They willdefend thecompanyand their colleagues like theywere theirown fleshand blood.” This devotion has paid off. Since 1998 the company hasgrownfrom$38millionto$2.4billionandmorethaneightycompanies.Sinek also found that Barry-Wehmiller “continues to outperform theircompetitionyearafteryear.Twentypercentyearafteryearcompoundedgrowththepasttwentyyears.”28

I understand the appeal of trying to establish a lifetimerelationship with a sense of belonging, but I worry that in doing soleaders may set themselves up for a misunderstanding. In a family,parentscan’t firetheirchildrenfor financialorperformancereasons,orbecause there is a slowdown in the business or the economy. In acompany,managers do lay employees off for these reasons. Employees


whobelieveinthefamilyanalogycouldfeelbetrayed—andjustifiablyso.ReedHastings,theCEOofNetflix,says,“We’reateam,notafamily.”

Hechallengeshismanagers to ask themselves, “Whichofmypeople, iftheytoldmetheywereleavingforasimilarjobatapeercompany,wouldI fighthard to keep atNetflix?Theotherpeople should get a generousseverancenowsowecanopenaslottotrytofindastarforthatrole.”29

LikeLinkedInfounderReidHoffman,Ibelievethatthemetaphorofasportsteamisabetteranalogyforacompany.Bythat,Imeanithasthefollowingcharacteristics:

Aspecificmission(towinthegamesandthechampionship)forwhichtheteammemberscometogether.Flexibilityincomposition.Theplayerschangeovertime,eitherbecausetheychoosetoleaveorbecausethecoachdecidessomeoneelseisbestsuitedforthatposition.Commonprinciplesoftrust,mutualinvestment,andmutualbenefit,whichprioritizeteamsuccessoverindividualglory.Successforall.Whentheteamsucceeds,individualmembersdo,too.Acommitmenttowinning(purpose)together(people)throughfairplay(principles)andhighperformance(mastery).

This doesn’t mean that a company doesn’t care about relationships.Whileaprofessional sports teamoffersonly limitedemployment for itsplayers,theemployer-employeerelationshipstillbenefitswhenitfollowsthe principles of trust, mutual investment, and mutual benefit. Teamswin when their individual members trust one another enough toprioritize team success over individual glory. Such an approach isperfectlycompatiblewithindividualincentives.Theteam’ssuccessisthebestwayforindividualteammemberstosucceed.Instead of creating bonds of loyalty as in a family, both leaders and

members of a sports team seek the benefits of alliance. “As allies,employer and employee try to add value to each other,” ReidHoffmansuggests.“Theemployersays,‘Ifyoumakeusmorevaluable,we’llmakeyoumorevaluable.’Theemployeesays,‘Ifyouhelpmegrowandflourish,I’ll help the company grow and flourish.’ Employees invest in the


company’s adaptability; the company invests in employees’employability.”30

MysonTomásbeatmeatScrabbleforthefirsttimewhenhewassevenyearsold.IfeltmorejoyandprideonhisbehalfthanifIhadwonmyself.Iwashappiertoseehimsucceedthantoprevailoverhim—whichIwascertainlytryingtodo.Because I love Tomás, I am committed to supporting his well-being

anddevelopment.Seeingthebelovedpersonflourishisthegreatestjoy,ajoyworthspendingintenseeffortsandtakinggreatrisks.

TheGreekscalledthiskindofloveagape.31“Agapehastodowiththemind:itisnotsimplyanemotionwhichrisesunbiddeninourhearts;itisaprinciplebywhichwedeliberatelylive.”Wearenotresponsibleforourfeelings—wecan’thelphowwefeel—butweareresponsibleforouragapebecauseagapeisnotafeelingbutanactofwill.Agapeisacommitment,independentofourlikesanddislikes.Transcendentleadersextendagapebeyondtheirfamilyandfriends,to

the stakeholders in their organization and beyond. This is the key topreserving personal bonds in the workplace, without falling intodangerousconfusionsbetweenfamilytiesandprofessionalrelationships.

AUTONOMY

Everyhumanbeingcravesautonomy.Weallwanttobethesovereignsofourlives.Whenweworkforothers,wecansellourphysicalandperhapsevenourmentalenergy,butweneversellouremotionalenergy.Wemaysellourbodiesandourminds,butweneversellourheartsandsouls.Thelatterwegiveonlyasagift,tothosewhodeservethem.Whoeverattemptsto curtail our self-determination through authority will never get ourbest.There’s tremendous power in giving employees autonomy and the

opportunitytousetheirownbestjudgment.Nordstrom,forexample,has


asimplestatementofpurposeforitsnewemployees:“We’regladtohaveyouwith our company.Ournumber one goal is toprovide outstandingcustomer service.” And then they present an equally simple rulebook:“Rule #1: Use your good judgment in all situations. There will be noadditional rules.Please feel free toaskyourdepartmentmanager, storemanager, or division general manager any question at any time.”Nordstromdoesnotrelyoncomplexproceduresandcontrols toensurequality service. They rely on hiring and training employees who careabout their customers, and then inspiring these employees todemonstratetheircarejudiciously.LeeCockerell, the COOofDisneyWorld formany years, created the

rules that Disney theme parks operate by. Their “cast members” weregiven responsibility to handle customer complaints immediately at thepark,withouthavingtogotoamanager.Afterthishappened,complaintsplummeted and customers were delighted. There were a few instanceswhen an employee overcompensated, such as giving a golfer a freecompletesetofclubsinresponsetoacomplaint,butthatwaspartofthegrowing pains of giving employees increased responsibility. And theupsidewasahugeuptickinengagementandlessturnover.32

Incontrasttotop-downcommand-and-controlmanagement,employeeautonomy is a gold mine; it’s a much better motivator and driver ofproductivity than money because each of us wants most of all to feelrespected and supported in our growth. Allowing employees to maketheir own decisions, and to learn from the consequences, encouragesworkerstobemoreengagedandmoreloyaltothecompany.Havingthechancetodesigntheirworkgivespeopleasenseofpersonalpowerandself-respect.They see themselvesas self-determinedbeingswhoexertagreatmeasureofcontroloverwhattheydo.In 2005, a couple ofmanagement consultants came upwith an idea

called“Results-OnlyWorkEnvironment”(ROWE)basedontheideathatemployees have total autonomy overwhere theywork, how theywork,andwhen theywork.Employees aremeasuredonly on the results theyproduce—nottheamountoftimetheyspendattheirdesks,thenumberofmeetingstheyattend,andsoon.InaROWEorganization,employeeshavetotalautonomy.Theideahasprovenitselfincompaniesthatrequirelessphysicalspace


and where employees are highly self-disciplined. ROWE-certifiedorganizations (SpinWeb, GAP Inc., American Family Insurance, andothers)33reportthatemployeesusefewersickdaysandtakelesstimeoff,becausetheycanbetterworkaroundappointments, illnesses,andotherevents, and that employees are healthier, happier, and have lesswork-related stress. ROWE increases employee satisfaction and decreasesturnover, thereby reducing hiring and onboarding costs; and then theyhaveamajorincreaseinproductivity.“Pay doesn’t have the power it used towhenup against the ultimate

benefitofautonomy—controloverone’stime,”saysJodyThompson,oneofROWE’screators.“Thislevelstheplayingfieldandcreatesaworkforcethat is focusedonwhat’srelevanttothebusiness.It’s theworkplaceforadults.Managersmanage thework (clear,measurable results), not thepeople(mytimeandplace).”34Whenpeopleareengaged,managingthemisnotnecessary;whentheyarenot,itisnotsufficient.“Autonomousmotivationinvolvesbehavingwithafullsenseofvolition

andchoice,”researchersEdwardDeciandRichardRyanwrite,“whereascontrolledmotivationinvolvesbehavingwiththeexperienceofpressureanddemandtowardspecificoutcomesthatcomesfromforcesperceivedtobeexternaltotheself.”35

DeciandRyan,alongwithPaulBaardofFordhamUniversity,carriedoutastudyofworkersatanAmericaninvestmentbank.AsDanielPinkreports, the three researchers “found greater job satisfaction amongemployees whose bosses offered ‘autonomy support.’ These bosses sawissuesfromtheemployee’spointofview,gavemeaningfulfeedbackandinformation,providedamplechoiceoverwhattodoandhowtodoit,andencouraged employees to take on new projects. The resultingenhancement in job satisfaction, in turn, led to higher performance onthejob.Theresearchersfoundthatthebenefitsthatautonomyconferstoindividualsextendtotheirorganizations.”36

Anorganizationoffersitsemployeesfarmorethanmoneywhenpeoplewithin it are given ameaningful purpose, autonomy, challengingwork,collaborating colleagues, and opportunities to stretch and grow whilethey express their values in action. Business is based on win-winexchanges, on trading formutual benefit. To get employees engaged inyour organization, youmust give them something that they find more


valuablethananyalternativeuseoftheirlifeenergy.

During one of his visits to MIT, I had the opportunity to hostRussellAckoff,WhartonEmeritusProfessor,organizationaltheorist,andfoundingfatherofsystemsthinking.37Inacasualconversation,hemadea comment that has stuck withme throughout the years. “Money to acompanyislikeoxygentoahumanbeing.Ifyoudon’thaveenough,youhaveaseriousproblem,”hesaid.“Butifyouthinkthatlifeisjustaboutbreathing, you are missing the point.” Nobody wants to just breathe.Nobodywantstolivetoworkorworktolive.Inourhearts,everyoneofus wants to be fully alive, to contribute something worthwhile to theworld, and to experience the enormous satisfaction that comes frombeingpurposefullyalive.Transcendent leaders see through the cultural and psychological

illusionsthatalienatepeople.Theyunderstandthat thevastmajorityofus are not moved primarily by money. We are moved by meaningfulpurpose, ethical principles, and connections to other people.We valueautonomy,mastery,and learning.Weareatourbestwhenwe’re in thecreativeandplayfulflowandwhenwe’rechallengedtostretchourselvesin the face of exciting challenges. We don’t live from the outside-in,seekingtofillouremptiness;rather,welivefromtheinside-out,seekingto express the fullness that we are. To get our best, companies mustrecognizeusandtreatusaccordingtoourtruenature.Theconnectionsbetweenpositiveleadershipbehaviors,employeewell-

being, andproductivity are as scientifically groundedas the connectionbetweenwholesomehabitslikedietandhealth.Butifyouhavedevelopedunhealthy leadership habits, adopting the habits of the transcendentleaderisashardasitistoquiteatingsugaryfoods.That’swhy,tobecomeatranscendentleader,youneedtoundergothepersonaltransformationI’lldescribeinPart3.It’snotafadoracrashdiet;it’sanewwayofeatingforlife.


Chapter7

CULTUREDEFINE,DEMONSTRATE,DEMAND,ANDDELEGATE

Cultureisasegmentofthemeaninglessinfinity…onwhichhumanbeingsconfermeaning.

—MaxWeber

Among theannoyancesmanyofusendurewhen flying, fromsurlyTSAagents to gum stuck in seat pockets, overbooked flights take a specialplace.Airlinesdothisbecausetheyassumethatsomepeoplewon’tarriveat the gate on time. So when all the passengers show up, the gateattendants have to entice some of them to surrender their seats andreschedule their flights with travel vouchers, gift cards, or cash. Thisarrangementworks if enoughpeoplehave flexibility, butwhathappenswhenthisisnotthecase?On Sunday, April 9, 2017, a nightmarish incident took place on UA

3411, a completely full United Airlines flight bound from Chicago toLouisville,Kentucky.Despitetheofferofupto$1,000,peoplerefusedtovoluntarily surrender their seats to accommodate four off-dutycrewmemberswhohadtogettoLouisvilleforanotherflightthenextday.When selected to give up their seats involuntarily, three passengersgrudgingly deplaned, but a sixty-nine-year-old Vietnamese-Americandoctor, David Dao, refused to leave, claiming he was needed at aLouisville hospital. That’s when United’s employees decided to deploytheirmuscle.Thecrewengagedsecuritypersonneltothuggishlydragthescreaming doctor off the plane. Cellphone videos taken by otherpassengersshowedDao’sfacebloodiedashisglassesfellfromhisface.1

Thevideoswentviral;theywereseenbyhundredsofmillionsofpeoplearound the world. The outrage they drew was universal. Everywhere


there were calls for boycotts.2 Twitter and Facebook were filled withsnarky comments such as “not enough seating, prepare for a beating.”The late-night comedian Jimmy Kimmel created a fake ad starring aUnitedflightattendantwearingbrassknuckleswhosaid,“We’llbeatyouso badly you’ll be using your own face for a flotation device.”3 The PRdisastergotworsewhenUnited’sCEO,OscarMunoz, congratulated thecrew’sbehaviorindealingwiththepassenger,whomhecalled“disruptiveandbelligerent”4(presumablyforscreamingwhilebeingdraggedofftheplane) and then tweeted euphemistically, “I apologize for having to re-accommodate these customers.” (The word re-accommodate, someoneresponded,“soundslike‘I’mgoingtore-accommodateyourfacewithmyfist.’ ”5)Followingtheepisode,United’ssharesdroppedasmuchas4.3percent,

or $3.10 per share, losingmore than$950million inmarket cap. Lessthan amonth after the incident,Munozwashauled beforeCongress toexplain himself. He accepted responsibility, calling the event an “epicmistake,”andrepeatedlyexpressedhisregrets.Nevertheless,hisbelatedapologydidn’tearnhimanysympathy.United’sbrandremainsoneoftheworstintheairlineindustry(afactthatitscompetitorsareconvenientlyexploiting), and Congress pushed hard on Munoz and other airlineindustryexecutivestomakethingsrightforcustomers.Why did United’s employees act so callously? Why didn’t they care

abouttheircustomers?Whydidn’ttheythinkabouttheepicdisastertheywere about to create for the brand?Why didn’t they look for creativealternativewaystogettheirstafftoLouisville—justafive-hourdrivefromChicago? Why did they think such brute tactics were called for? Whydidn’tthepilotintervene?AndwhydidtheCEOthinkthatwhatJimmyKimmel described as “sanitized, say-nothing, take-no-responsibility,corporateBSspeak”wouldsootheanangrypublic?The answer, in short, is a dysfunctional culture. In United’s value

structure, sound decision making, autonomy, and responsibility areclearlynotapriority.Unitedseemstohaveindoctrinateditsemployeestoblindlyfollowrulesandproceduresratherthantrainingthemtothinkontheir feetanddealwithsituationson theirmerits,ordoingwhatseemsbest to help the team to win in alignment with ethical values. Even ifcustomercare isnotashighavalue inUnited’scultureas thecompany


claims, I’m sure that financial performance is. The actions of United’semployees were not just insensitive, they were also counterproductive.Theydestroyedatremendousamountofbrandvaluefornorealreason—except covering their backsides by doing what they were told by theirsuperiorsorarulebook.

InPart1,Isaidthatthehardestproblemofanorganizationistoalign its members in pursuit of a common goal. This difficulty isexplained by the clash between two economic theories. “Nonlinearoptimization,” aswe economists call it, prescribes that employeesmustavoid attempts to improve their individual or team performanceindicators (e.g., sales revenue, productivity, customer satisfaction,employeerotation,debtdaysoutstanding,inventoryturns,andsoon)ifthose indicators clash with the organization’s global performanceindicators (such as profits, growth, and economic value added). Toencouragethemto“optimizethesystem,”touseanothereconomicsterm,theirperformanceneedstobemeasuredandincentivizedbasedontheseglobalindicators.On the other hand, “optimal contract theory” proves that when self-

interested employees know more than their managers about theconditionssurroundingthem,theircapabilities,andtheirefforts,theonlyway to financially motivate them to work hard is to make themaccountable by basing their compensation on their individualperformanceindicators.This,unfortunately,incentivizesemployeestodotheexactoppositeofwhatnonlinearoptimizationtheoryprescribes.For example, United employees are promised a reward (such as

continued employment, a bonus, or a promotion) if they follow theirmanagers’ instructions, and a punishment (getting fired, losing theirbonus,orgettingdemoted) if theydon’t.This incentivizesemployees todoastheyare toldby theirbosses.Suchanarrangement is expeditiousandworkswellinmostcircumstances.Butthissystemencouragespeoplenot to apply their special knowledge to a given circumstance or thinkabout the consequences that their actions might bring about for thecompany. When the United crew members saw the situation escalatebadlywithDr.Dao,theymighthaveconsideredthatitwouldbebestfor


thecompanyiftheyleftthepoorfellowinhisseat.Butsincetheirjobwastodowhattheyweretold,theyshutdownanysuchdoubtsandreceivedastarringroleinaninfamousviralvideo.In the previous chapter, I explained how a leader could realign an

individual’s interest in the mission through appealing to an ethicalpurpose. In this chapter, I argue that anequally important tool foranyleaderisaneffectiveculture.Cultureactsasanemotionalforcefieldthatalignsorganizationalmembersinthesamewaythatamagnetalignsironshavings.Anditdoessowithoutrequiringfinancial incentivesbasedonindividual performance indicators. This is because peers observe oneanother’s environmental conditions, talent, and effort much moreaccurately thananymanager.Andculturalnormsenforced through thethreatofsocialsanctionssuchasembarrassment,exclusion,andisolationare much more effective than financial incentives to align anorganization.

WHATISCULTURE?

“Culturemighteatstrategyforlunch,”thegreatmanagementguruPeterDruckersupposedlysaid.6Yetcultureseemslikeanabstractconcept,formost of us, difficult to grasp and impossible to design. But ignoringcultureisanexpensivemistake.WhenRamCharanandGeoffreyColvinaskedwhyCEOsfail,7theyfoundthatitwasbecausetheywereunabletofully execute their strategy.What these CEOs don’t understand is thatcultureisthekeytostrategyexecution.Ithinkofcultureasahuman-centeredoperatingsystem,asetofbasic

instructionsthatguidesthebehaviorofthemembersoftheorganization.Like an information systems platform, culture provides the essentialcapabilities required to run the business processes—most important,strategyexecution.Ifthecultureisnotadequate,thestrategywillnotbefullyexecuted,justasMicrosoftOfficeforWindowswon’trunonaMac.Andwhenthestrategyfailstoexecute,theCEOandtheorganizationfail.MIT professor Edgar Schein defined culture as a pattern of shared

assumptions, beliefs, and expectations that guide members’


interpretations andactionsbydefining appropriatebehaviorwithin theorganization.8Iprefertosimplydefinecultureasthesetofbeliefspeoplehold about “whatwe value and howwe do things around here.” Thesevaluesandnormssetexpectationsabout“whatonehastothink,say,anddoinordertobeoneofus.”Ontheotherhand,cultureincludesalsothesetofbeliefsaboutthingsthatonecannotthink,say,ordoifonewantstobeoneofus—thatis,thetaboos.Cultureexistsinthemindsofthepeoplewholiveit.It’snotwhatanyonesays,butwhateveryoneunderstands.Itis amostly subconsciousmapof how to proceed in alignmentwith thegroup’snormsandremainasamemberingoodstanding.An effective culture addresses the hard organizational problems of

disengagement, disorganization, disinformation, and disillusion. Itengages employees around a noble purpose, ethical values, andmeaningfulgoals.Thiselicits their internalcommitmentandprovidesasenseofindividualandcollectiveidentity.Italsocoordinatesemployees’expectationsandbehavior.Mostimportant,aneffectiveculturedoesthiswithoutdependingonformalcontrolsystemsorreducingtheautonomyrequired for excellent performance in complex, ambiguous, andconstantlychangingsituations.Formal “thou shalt” and “thou shalt not” rules never yield

extraordinary performance. Requiring employees to follow formalproceduresislikeaskingthemtopaintbythenumbers.There’snotalotof originality, capability, or thinking involved.Formal rules standardizeperformance,buttheyareusefulonlyinrecurrentpredictablesituationssuchasapreflightinspectionroutine,andinhigh-safetyorganizationsinarenas such as emergency response, deep-ocean oil drilling, or themilitary,wherestickingtotherulescanmeanthedifferencebetweenlifeanddeath.

To really enjoy our jobs, we need work that is varied andchallenging,work thatnotonlyallowsbutalsodemandsautonomyanddiscretion. In fact, one of the crucial attributes of the most effectiveorganizations (as identified by Jeffrey Pfeffer in his book The HumanEquation9) is that they rely on self-managed teams and decentralizeddecision making. That is, employees are given a lot of discretion and


autonomy.The less leadersdirect employees, themoreownership they take and

thebettertheyperform.In1983,forexample,ToyotatookoverafailingGeneralMotors assembly plant in California. Toyota didn’t change theequipmentortheworkers.Theonlythingthecompanychangedwastheproduction system from one based on formal rules to one that gaveworkersmuchmoreautonomy.Theresultwasadramatic improvementinproductivityandquality.Laborcostsdroppedalmost50percent.Unlike formalrules,cultureempowersemployees to thinkandacton

their own, increasing their engagement and the bonds among them.Letting theircolleaguesdown ismuchmoreofaconcern thanbreakingrules.Thus,organizationalmembersmonitornotjusttheirownbehavior,but also the behavior of their colleagues against the organization’sstrategic objectives. This frees up their managers, who do not have tomicromanagethemandcaninsteadfocusonthereallyimportantworkofleadership: engaging their employees in pursuit of the organization’sgoal.StoriesofSouthwestAirlines’ employeeempowermentwith regard to

customers are the stuff of legend. Consider this one from 2011: A LosAngeles man’s grandson was beaten into a coma by his daughter’sboyfriend.Theunfortunatechildwasneardeath.Theman’swife calledSouthwesttoarrangealast-minuteflighttoDenversothathecouldsaygood-byetothechild.ButgettingtotheL.A.airportwasanightmare,andgettingthroughsecuritywasworse.NobodyatTSAgaveadamn.Finally,themanmadeittothegatetwelveminutesaftertheplanewasscheduledtodepart—buthewasshockedtofindthatthepilothadheldtheplaneforhim.Themanthankedthepilotprofusely,andthepilotsaid,“Theycan’tgoanywherewithoutme,andIwasn’tgoinganywherewithoutyou.Nowrelax.We’llgetyouthere.I’msosorry.”10ComparethatkindoftreatmenttowhatDr.Dao received at the hands ofUnitedAirlines, and you canunderstandwhycustomerswouldmuchratherflywithSouthwest.CompanieslikeSouthwest,Nordstrom,Zappos,andothersthathavea

greatreputationforoutstandingservice11allempowertheiremployeestodowhatittakesforcustomers.Oncethesecompaniesstartedoperating,their strategies were obvious to everyone—and yet, nobody could copythembecause their cultures grew stronger employee by employee, year


after year. Such companies prove that culture is the ultimate source ofcompetitive advantage because it takes years for any competitor toreplicate.That’swhyit’ssuchastrongbarriertocompetition.

THEFOURPILLARSOFANEFFECTIVECULTURE

An effective culture is built on four pillars: high consensus, highintensity,productivecontent,andhighadaptability.Consensusisthedegreetowhichmembersagreeonvaluesandnorms.

Intensityisthestrengthwithwhichmembersholdvaluesandnorms.Aneffectivecultureneedsbothconsensusand intensity. If intensity ishighbut consensus is low, an organization can break apart into “warringfactions”12 where one group (say, sales) battles another (say, productengineering). If consensus is highbut intensity is low, the organizationwillwallowinmediocrity.(Insuchadisengagedculture,membersagreeonwhat’simportant,butnobodycaresenoughtoputintheirbestefforttoachieveit.)Contentconsistsofthespecificattitudesandbehaviorsdefinedbythe

behavioralnorms.Ahigh-consensus/high-intensityculturethatupholdscounterproductive values and behaviorswill handicap the organization.Forexample,considerafirminwhichpoliticalgamesmanshipisthewayto achieve status and power. In such a place, people undermine eachother,andaperson’sstatusismoreimportantthanwhatheorshedoesorsays.Insuchaculture,thegoalistoprovethatoneisrightandothersare wrong, and destructive criticism is the surest way to climb thecorporateladder.Suchanorganizationmaypaylipservicetocultureandespouse collaborative values, but these values never turn into action.Those are the organizations that attract egocentric, hypocritical,narcissisticleadersandfollowers.There are two typesof organizational content: platformand strategy.

Platform norms are the foundation of every interaction amongorganizational members and their external stakeholders. (In thefollowing chapters, I’ll describe three platform norms that I consideressential for any organization: response-ability, collaboration, and


integrity.)Strategy norms are the ones that focus employees’ attentiononthekeyvariablesrequiredtofullyexecutetheorganization’sstrategy.They help negotiate priorities and make decisions for the sake of thecommon goal. An effective culturemust support strategy execution; itsnormsmustbestrategicallyrelevant.Infact,it isimpossibletoevaluatethe effectiveness of a culture, without relating it to the organization’sstrategy.Consider how Southwest supports its strategy with platform norms.

The airline’s simple strategy is to offer short, convenient flights at lowcost.Todothis,itfliesjustonekindofplane(Boeing737)andeliminatesfirst-class seats. Because its airplanes fly point-to-pointwithout forcingpassengersthroughhubs,itsarrivaltimesarecarefullycoordinated(andpassengers don’t have to face the hassle of transferring). It doesn’t askpassengerstopayhiddenfees,suchasforcheckedbags.Becauseitkeepsitspromisestocustomers,ithasatremendousreputationforservice.SouthwestAirlines’ employee values are “awarrior spirit” (which the

airlinedescribesasfearlessnessingivingworkerseverythingtheyneedtosupport customers); a “servant’s heart” (treating others with respect,followingtheGoldenRule);anda“fun-luvingattitude”(reflected in theword luving).13 Employees at Southwest know they must “do what ittakes tomake the customer happy,” including friendly, open joking onthe public address systems (something like “Hi, I’m Captain AmandaSmith.Yes,I’mafemalepilotandasabenefit,ifwegetlostontheway,Iwon’t be afraid to stop and ask for directions”).14 They have room tomaneuver around the rules in order to deliver on the brand promise.Theyunderstandthecompany’sgoalsandthestrategiestoachievethem.Andtheycareaboutwhattheircoworkerswillthinkofthemiftheydon’tupholdthevaluesandnormsoftheculture.Southwest has a team-based culture in which people support one

another to execute the strategy of on-time departure and arrival. OneForbeswriter,CarmineGallo,describedit thisway:“Likeapolishedpitcrew in auto racing, eachmember of the team feels responsible for thesuccess of their colleagues.” A pilot told Gallo that “We genuinely likeeachother.Andwhenyou likeeachother,youhaveeachother’sbacks.Wetakeonefortheteam.”ThefounderandformerCEO,HerbKelleher,added this: “Attitude is very important and has to be weighed with


experience and skills. Someone with a high IQ who is a backbiter is adisaster for your organization. Someone who is outgoing and altruisticandcanworkconviviallywillbeahugeasset.”15

Whenatrustingculturesupportsstrategythisway,companiesbecomeindustry leaders.Apparel retailersNordstromandZappos, for instance,focus on a “customer service” strategy supported by people who areempoweredtodowhateverittakestomakethecustomerhappy.Apple’sstrategy of innovation is supported by people encouraged to thinkcreatively,andsoon. Inorganizationswitheffectivecultures like these,thestrategynormsquicklyandpowerfullyalignpeoplebehindthemostimportantsuccessdrivers.16

Adaptabilityistheeasewithwhichnormscanchangetomaintaintheorganization’s viability in the face of environmental changes. AsMIT’sEdgarScheinargued,culturemustaddressnotonlytheneedforinternalintegration but also the need for external adaptation.17 An effectiveculture needs to have high adaptability to avoid the dangers of rigidconformityandtobecomeflexible,innovative,andcreative.Adaptabilityacts as a sort of antidote for traditionalism, encouraging divergentbehaviorsasapartof“whatitmeanstobeoneofus.”Adaptabilitygivessocial approval to exploratory, creative, and innovative activities thatbring about change. Researchers have found that organizations with ahigh consensus, high intensity, and strategically relevant cultureoutperformthecompetitionoverthelongrun,providedtheyhavenormsandvaluesthatpromoteadaptability.18

While a high-consensus, high-intensity culture can improveperformanceinastaticenvironment,itmayworsenitinturbulentones.Suchacultureoffersemployeeconsensus,discipline,andwillingness topursue the organizational goals. But strong norms can induceorganizational members to always take the status-quo position andchastisethosewhodeviatefromit.Cohesivegroupstoleratelessvariationinmembers’behavior,sotheycaneasilyfallintogroupthink.Inturbulentenvironments,thisconstrainsanorganization’sabilitytorespondtonewchallenges. For example, when Japanese carmakers entered the U.S.market in the 1970s, American companies dismissed them based onassumptions such as “Japanese don’t know how to make cars,”“Americanswon’tbuylow-qualityJapanesecars,”“Americanswon’tbuy


small vehicles,” “Fuel economy is not a significant factor in vehiclechoice,”andsoon.Theyheldonto thesehigh-consensushigh-intensitybeliefs until it was too late to catch up with the Japanese companies.Today,Honda,Toyota,andNissanbuildmorecars in theUnitedStatesthanGM,Ford,andChrysler.19

Thus, an effective culture must promote the freedom and supportnecessary for people to challenge assumptions, take risks, learn, andgrow.20Whenpeoplefeelsafe,theyaremuchmorelikelytoofferideas,questionthestatusquo,seekfeedback,experiment,reflectonresults,anddiscuss errors or unexpected outcomes openly. If you instill theperceptionthat“takingintelligentrisks,”21aswesayatLinkedIn,is“thewaywe do things around here,” people will bemore willing to discussproblems,developnewideas,andtrynewthings.

HOWIBMCHANGEDITSCULTURE

In2003,theyearafterSamPalmisanotookoverasCEOofIBMfromLouGerstner (who saved the iconic firm from near shipwreck during amassivemarket shift in themid-1990s22), the company ran a seventy-two-hour experiment called Values Jam. The goal was for IBM’semployee hive-mind to help update IBM’s century-old corporate values(firstwrittenin1914byPresidentThomasWatsonSr.as“BasicBeliefs”:“respectfortheindividual,”“thebestcustomerservice,”and“thepursuitof excellence”). Fifty thousand of the company’s 750,000 employeesengagedinaforumconductedoverthecompany’sintranettoanswerthequestion,WhatdoesIBMstandfor?“Unfortunately, over the decades, Watson’s Basic Beliefs became

distorted and tookon a life of their own,”Palmisano told theHarvardBusinessReview.23“ ‘Respectfortheindividual’becameentitlement:notfair work for all, not a chance to speak out, but a guaranteed job andculture-dictated promotions. ‘The pursuit of excellence’ becamearrogance: We stopped listening to our markets, to our customers, toeach other.We were so successful for so long that we could never seeanotherpointofview.Andwhenthemarketshifted,wealmostwentout


ofbusiness.”Palmisanoprintedoutthetwohundredthousandcommentsfromthe

ValuesJam, took themhome,andread themover theweekend.Peoplelet off all kinds of steam, and there was vociferous criticism. “Theelectronic argument was hot and contentious and messy,” Palmisanosaid. He received plenty of criticism himself, but he put his ego aside(“not easy for a CEO to do,” he noted). For him, the Values Jam hadproducedinvaluableinsightintowhatneededtohappen:“Youcouldsay,‘OhmyGod,I’veunleashedthisincrediblenegativeenergy,’ ”hesaid.“Oryoucouldsay, ‘OhmyGod,Inowhavethisincrediblemandatetodriveevenmorechange in thecompany.’ ”The followingMonday,Palmisanosuggestedthathisexecutiveteamreadeveryoneofthecomments.“Ifyouthinkwe’vegotthisplaceplumbedcorrectly,thinkagain,”hetoldthem.After a long andmessy process, the company agreed on three values

that are now embedded in its strategy: (1) “dedication to every client’ssuccess,”whichmeans“havingskininthegameofyourclient’ssuccess”;(2) “innovation that matters for our company and the world,” whichmeans inventing and building products that can make a positivedifference in theworld;and (3) “trustandpersonal responsibility inallrelationships” (with employees, suppliers, investors, governments,communities).These aren’t just feel-good values; all strategic decisions aremade in

alignment with them. In line with its first value, “dedication to everyclient’s success,” IBM changed its management compensation scheme.Bonuses and raises for managing directors are based on clientevaluations, and the longer horizon gives managers an additionalincentivetosatisfytheclientoverthelongterm.24 “I thinkvalues injectbalance in the company’s culture and management system: balancebetween the short-term transaction and the long-term relationship,balance between the interests of shareholders, employees, and clients,”Palmisanosaid.“Ineverycase,youhavetomakeacall.Valueshelpyoumake those decisions, not on an ad hoc basis, but in a way that isconsistentwithyourcultureandbrand,withwhoyouareasacompany.”Forexample,thevaluesdictatedanewpricingsystem,whichnotonly

spoketothecare-for-client issuebutresolvedinternalalignmentissues.Instead of having multiple units offer separate and confusing bids for


hardware,software,services,andfinancing,IBMnowoffersasinglepricefor each integrated offering. “To be honest, we’d been debating thepricing issue at the executive level for a long time.Butwehadn’t doneanything about it,” Palmisanonoted. “The values initiative forcedus toconfronttheissue,anditgaveustheimpetustomakethechange.”Understanding that IBM stood for its second value, “innovation that

matters for our company and the world,” was crucial for all its smartpeople. IBM research has been making forays outside the computingrealm and into areas such as health care. For example, the companycodevelopedwithPfizerasystemforParkinson’ssufferersthatspeedsupclinical trials. Off-the-shelf sensors and mobile devices work to definepatients’ digital signatures, see how they’re feeling and responding tomedication, and send their information in real time to researchers anddoctors. Then anAI component looks for connections and clinical datasuchasmedicinedoses.25

“There is an unmistakable yearning for this to be a great company,”Palmisano said of the conclusions from the Values Jam. “They[employees] want to be part of a progressive company that makes adifference in the world. They want to be in the kind of company thatsupports research that winsNobel Prizes, that changes theway peoplethink about business itself, that is willing to take firm positions onunpopularissuesbasedonprinciple.Wecan’tofferthemthepromiseofinstantwealth,whichtheymaygetatastart-up,orajobforlife,asintheold days. But we can offer them something worth believing in andworkingtoward.”Another thing IBM did was to allocate first-line managers a

discretionary fund of up to $5,000 annually that could go towardgenerating business, developing and enhancing client relationships, orresponding to an emergency. Trusting managers to make intelligentdecisions about spending this walk-aroundmoneymade the point thatIBM lives by its third value, “trust and personal responsibility in allrelationships.”“Instead of galvanizing people through fear of failure, you have to

galvanize them throughhope and aspiration,”Palmisano said. “You layouttheopportunitytobecomeagreatcompanyagain—thegreatestintheworld,whichiswhatIBMusedtobe.Andyouhopepeoplefeelthesame


need,theurgencyyoudo,togetthere.Well,IthinkIBMerstodaydofeelthaturgency.Maybethejam’sgreatestcontributionwastomakethatfactunambiguouslycleartoallofus,veryvisibly,inpublic.”26

DEFINETHESTANDARD

Establishing culture norms is a four-step process that I call the “FourD’s”:define,demonstrate,demand,anddelegate.Definemeansexplicitlyclarifying the standards for expected behavior (e.g., when and how toescalate a disagreement to higher-ups, as I discuss in Chapter 8).Demonstratemeanscomportingoneselfaccordingtothestandard(e.g.,escalating a disagreement collaboratively).Demand means confrontingthose who deviate from the standard (e.g., challenging anybody whoescalatesadisagreementunilaterally).Anddelegatemeansrequiringthateveryoneontheteamdefines,demonstrates,anddemandsthestandardforthosewhoreporttothem(e.g.,holdingthesameconversationaboutcollaborative escalation with their teams). Beyond any standard,however,theultimatenormofaneffectivecultureisthateveryoneintheorganizationpursuesitspurposeethically.After establishing the values and the mission through stakeholder

input,asIBMdidthroughitsValuesJamexercise,thenextstepistohaveaconversationwithyour teaminwhicheveryoneagreesontheways toexecute the organization’s strategy, achieve its mission, and enact itsvalues. Beyond that, the conversation should establish the ways ofthinking andacting that you allwant tomodel for everyone else in theorganization. I have found that the best standard-setting conversationsfollowthispattern:Propose:Explainwhyyouthinkagivenbehavioralstandardcanhelp

the groupworkmore effectively and ethically. For example, I startmyworkshops with this proposal: “In order to better work together andrespectpeople’sneedtoconcentrateonthematerial,Isuggestthatweallputourphones insilentmode,and thatwedonotuse themwithin theroom.Ifsomeoneabsolutelyneedstoansweracallorcheckmessages,heorshecanstepoutsidetheroomtodoit.”


Check: Make sure that everybody agrees that the standard isworkable, ethical, and truly improves effectiveness. For example, aftermaking the proposal about phones, I add, “Does that seem like a goodwaytoworktogethertoyou?”Ifpeoplesayyes,wemoveon.Butthisisnot a perfunctory step. It’s quite possible that someone might have aproblemwiththesuggestion.Inthatcase,anegotiationisinorder.Forexample,I’vehadmorethanoneparticipantsay,“Sorry,Fred.I’m

expecting an important message that requires an urgent response. I’mhappytostepoutof theroomtoread itandreply to it,but itwouldbeterriblycumbersometostandupandleaveeverytimemyphonevibrates.I’dliketobeabletoquicklylookandseeifit’stheimportantmessage.Ifitis,I’llstepout.Ifitisn’t,I’llwaittillthebreaktoreadit.Wouldthatbeokaywithyou?”Commit: At the end of the negotiation, ask people to make a

commitment. Admonishments, ground rules, or agreements meannothing if they don’t turn into commitments. What binds people tobehaveinacertainwayistheirword,notmine.AskingforapromiseisthecrucialstepIusetoengagepeople’sintegrity.That’swhythestandardcannot be just a request or, even worse, an order. It needs to be acollectivecommitment.(MoreonthisinChapter10,“Integrity.”)Inmyworkshops,afterthenegotiation,Iconcludebysaying,“Wehave

agreedthatwewillkeepourphonessilent.Wemightlookatthemtoseewho’s calling orwhatmessage is arriving, but anything requiringmorethanafewsecondshappensoutsideoftheroom.Canyouallcommittothat?”AndthenIdon’tcontinueuntilIgetayesfromeveryonepresent.

DEMONSTRATETHESTANDARDS

Just as children learn the culture of their family by observing theirparents,newmemberslearnthecultureofanorganizationbyobservingtheirleaders.Anyonewhowantstoachieveagoodstandingwillemulatethebehaviorsofthosewhoreachedthetop.Asatranscendentleader,youmust behave according to the standards that you’ve set. After all, yourbehavior,andtheirs,istheorganization’sbrand.


AsI’vealreadypointedout inChapter5,nothingmakespeople inanorganization more cynical than a leader who says one thing and doesanother, especially when demanding that people do as he or she says.Imaginetheeffectif,fiveminutesafterpeopleinmyworkshopandIalldefinea standardofbehavior suchas “Wewon’tuseourcellphones inthis room,”myphonerangandI took thecall. Itwouldbedevastating.Suchbehavioronmypartwouldconvinceeverybodythatmywordisnottobetrusted.Anycontradictorybehaviorofaleaderdestroystrust.Andwithouttrust,organizationalmemberscan’tcoordinateactionseffectivelyanddeliverontheircollectivepromises.The problem is that even if a leader believes her behavior doesn’t

appear to contradictherdeclarations,otherpeople canhaveadifferentviewofhowthestandardworksinagivensituation.Itispossiblethatyoubelieve you are behaving in line with the standard—but someone elsethinks you are not. This is why it’s crucial to discuss the difference ofopinionandtakewhateveractionsareneededtodissolvethetension.Thepermission to question anybody who seems to break the standard,especiallytheleader,isacrucialnorminitself.Inmy workshops, I encourage people to express any questions they

mighthaveaboutmybehavior.Iexplainthatmycommitmentisfirm,butattimesImaymakeamistakeoractunconsciously,andthatIwelcomepeopletochallengeme.I’malwayswillingtodiscusswhetherornotIamalignedwiththepromisesImade.Anyleadercanrecoverfromamistake.But he or she cannot recover from a refusal to discuss the possiblemistakewithoutundermining the standard,hisorher identity, and theorganization’sengagement.You don’t demonstrate your values only through personal, direct

actions. You also express your values through the formal systems andprocessesyouinstitute.Perhapsthemostimportantoftheseprocessesisrecruitmentandselection.AsbestsellingauthorJimCollinswrote,“Youmustgettherightpeopleonthebus,evenbeforeyouknowwherethebusisgoing.”27

Culturallynaiveleadersfocustheirrecruitmenteffortsontheperson-jobfit,discountingtheimportanceofperson-culturefit.Theunintendedconsequence of eschewing person-culture fit is that the organization’sculturewill growhaphazardly, likeaweed, rather than likea cultivated


plant. It will “eat strategy for lunch,” making it impossible for theorganizationtoexecute.Obviously,ifanewhireissuccessful,heorshewillgrowintootherjobs

intheorganization.Thesejobsmayrequiredifferentskills,buttheywillexistwithin thesameorganizationalculture.So it isbest tohirepeoplewhofitwiththeculture,eveniftheydon’thavealltheskillsnecessaryfortheirfirstjob.Peoplecanlearnnewskillsmuchmoreeasilythantheycanincorporatenewvaluesandnormsintotheirpersonalitystructure.TheonlineshoeandclothingshopZappos,whichisroutinelyvotedone

ofFortune’s“BestCompaniestoWorkFor,”28hirespeoplewho fitwiththecompany’scorevalues:

DeliverWOW(customerdelight)ThroughServiceEmbraceandDriveChangeCreateFunandaLittleWeirdnessBeAdventurous,Creative,andOpen-MindedPursueGrowthandLearningBuildOpenandHonestRelationshipswithCommunicationBuildaPositiveTeamandFamilySpiritDoMorewithLessBePassionateandDeterminedBeHumble

The CEO, Tony Hsieh, also wants altruistic people to work for thecompany. “A lot of our candidates are fromout of town, andwe’ll pickthemupfromtheairportinaZapposshuttle,givethematour,andthenthey’llspendtherestofthedayinterviewing,”Hsiehtoldareporter.“Atthe end of the day of interviews, the recruiter will circle back to theshuttledriverandaskhowheorshewastreated.Itdoesn’tmatterhowwellthedayofinterviewswent, ifourshuttledriverwasn’ttreatedwell,thenwewon’thirethatperson.”29

Allnewhires,regardlessoftheirskillsandexperience,areexpectedtowork in the customer call center for a month, an experience thatimmersesthemintotheculture.Aweekintothistraining,thenewhiresareoffered$3,000toleavethecompany,becauseiftheyaren’tfittingin,Zapposwouldratherhavethemleave.Iftheytakethemoney,theycan’t


comeback.Nearly100percentofthenewhiresrefusetheoffer.30

Cultureisalsosetinemployeerecognitionandpromotion.Whomyourewardandpromoteandwhatyourewardthemforsendsatremendouslyimportantmessagetoeveryoneintheorganizationabouttherightwaytobehave. Your choice of whom to empower with formal authority tomanagethepeopleofyourorganizationisoneofyourmostfundamentalleadershipchoices.Thesameholdstrueforthosewhomyoureprimand,censure,sanction,deselect,andfire.IfUnited’sCEOhadfiredtheflightattendants and pilot of Flight 3411 instead of praising them, he wouldhavesentapowerfulmessagethat“wedon’ttreatanycustomerthisway.”At Zappos, new hires are carefully acculturated through socialization

(meetingavarietyof employees,working in thecall center,andsoon).Socializationistheprocessbywhichanindividualcomestointegratethevalues, abilities, expected behaviors, and social knowledge that areessentialforassumingaroleasanorganizationmember.31Keyaspectsofsocializationincludeensuringthatemployeesacquireculturalknowledgeandthattheybondwithoneanother.AtLinkedIn,newhireshaveachancetorevealsomethingthatisnotin

theirLinkedInprofileandtodemonstrateauniquetalentorspecialskillinourbiweeklyall-handsmeeting,hostedbyourCEO.Peopleareinvitedtoshowamorepersonal sideof themselves to theirpeers.Thishas thebenefitofbreakingtheice.

DEMANDTHESTANDARDS

It’snotenoughtodemonstratethestandards.Asaleader,youmustalsoconfrontpeoplewhoappear tobedeviating from them. If aparticipanttook a call or started texting during my workshop and I didn’t sayanythingaboutit,itwouldbeasbadasifIhadtakenthecallmyself.BothactionswouldbeequallyharmfultothecultureI’mtryingtoset fortheworkshop.Peoplecanhavedifferentinterpretationsofwhatagivencommitment

might demand in a specific situation.One of the teammembersmightbelieveheorsheisbehavinginlinewiththestandard,whileyoubelieve


thatisnotthecase.It’simperativetoclearthatdifferencecollaboratively;thatiswhyIsuggestthatanychallengestartwithinquiryaboutthepointofviewofthepersonwhoseemstobetransgressingthestandard.Demandingthestandardisnotwithoutrisks.Issuesofself-esteemand

publicimagecantripupeventhemostskillfulefforts.Ican’temphasizeenoughhowsoftlyaleaderhastotreadwhenheorshewantstoraiseateam’s consciousness about acting impeccably. One of my saddestprofessionalmemoriesispreciselyaboutmyfailuretodothiseffectively.

Icalledtheroomtoattention.Everyonewasbackontime—exceptMax,theteamleader.IaskedthepeopleintheroomwhetherMaxhadletanyoneknow thathe’dbe late.Theembarrassed silencemeant thatmysecretprayerhadnotbeenanswered.This product marketing team had a reputation among its internal

customers forbeingunreliable anduntrustworthy.That’swhyMaxhadhired me to work with them. The topic of commitments was thecenterpiece of theworkshop. Right before the break, we had discussedthe importance of honoring commitments. We agreed to make theworkshop an experiment in creating a culture of trust. “In order tooperatewith efficiency and respect, I request that you comeback fromthebreakontime,”Ihadsaid.“Canyoucommittothat?”Theyallnoddedtheirheads.“Ifforanyreasonyoulearnduringthebreakthatyouneedmoretime,”

Iadded,“pleaseletsomeoneknowsoheorshetellstherestofthegroup.Let’sestablishthestandardthatit’sokaytocomelateifyouletusknowaheadoftime,butit’saproblemifyoushowuplatewithouttellingus.Isthatacceptabletoyou?”Again,theyallnoddedtheirheads.“Great,”Isaid,“Itakeyourheadnodsasayes.Wehavedefinedanew

culturalnorm.Let’sgotothebreakanddemonstrateitwhenwereturn.”At the riskofappearingcompulsive, Ihadputgreatemphasison the

impeccability of commitments, especially the ones that define groupnorms. I wanted the people in the room to feel the stress of having tokeeptrackoftimeduringthebreak,goingtothebathroombeforethelastminute,perhapscuttinganinterestingconversationshortornotmaking


that lastphonecall inorder to returnon time.Preparing for theworst,andnotwantingtoalienateanybodywhomadeamistake,Igavethemanout:“Ifsomethingimportantcomesup,”Iexplained,“youcanhonoryourcommitment even without fulfilling it. If you get stuck and can’t findanybodytoletusknow,pleaseapologizewhenyougetbackandjusttellusthatyouneededtotakecareofsomethingandcouldn’tfindawaytoinformus.”Ifeltsurethataftersuchemphasis(overemphasis,someoftheirfaces

said) they’d all be back at the agreed time, or they would let someoneknowthey’dbe late,orat least they’dwalk into theroomapologizing. Ididn’texpectthatsomeonewouldstrikeout,leastofallMaxhimself.SoIfeltbewilderedwhenIsawthatMaxdidn’treturnontimeandthathe’dtoldnoonehe’dbelate.Ididn’tknowhowthiswouldend,butIdoveintothenexttopic:holdingpeopleaccountablefortheircommitments.Fifteenminuteslater,Maxcameinandquietlytookaseatintheback

oftheroom.IopenedapregnantpausetoletMaxapologize.Mylastbitof hope was that he’d say “Sorry” and explain that during the breaksomething urgent had come up and he’d been unable to find a way toinformus.Owninguptothebreakdown,explainingwhathappened,andreestablishing his commitment would have honored his word andpreservedthetrustofthegroup.Itwouldhavealsomademyworkshop-leaderlifemuch,mucheasier.Nosuchluck.Maxremainedquiet.Idon’tbelievehewastestingme;he

seemedoblivioustothefactthathislatearrivalcalledforanapology.Tomakemattersworse,nobodyseemed toexpectanythingdifferent,or tonote that there was any problem withMax’s behavior. No wonder theteam’sreputationwasabominable.I took a deep breath. I wanted to be the wise and compassionate

teacher,andtoshowMaxandhisteamhowtodemandculturalnormsasa show of support for the mission and values of the team. My fear,though,was that Iwould alienate the hell out of themby holdingMaxaccountablebeforehisteam.Thatwastherock.ThehardplacewasthatunlessIbroughtuptheissue,myowncredibilitywouldbeundermined—at least inmyeyes, ifnot in theirs.SinceMaxhimselfhadhiredme toraisehisteam’sawarenessaroundcommitments,I’dbebreakingmyownwordifIslidtheissueundertherug.


“Max,”Isaidwithalittlehesitation,“you’relate.”“Oh,yeah,sorry.Somethingcameup,”herepliedbreezily.“I understand,” I said, “but I thought we had all agreed that if that

happened,youwouldletsomeoneknow.”“Oh,right.Sorry,”heacknowledged.“Iwasinmyoffice.”I was debating whether to ask him if he couldn’t have asked his

assistant tocontactus,orwhyhehadn’tapologizedwhenhecame intotheroom,butoneoftheparticipantsbeatmetothepunch.OrperhapsIshouldsay,beatmewithapunch.“Whatpoint are you trying tomake?” theparticipantquestionedme.

“WhyareyoubeingsodisrespectfultoMax?”“Yeah,whyareyoupickingonMax?”someoneelseadded.“Hewasjust

afewminuteslate.”Thiswasgoingsidewaysfast.“Idon’tmeantopickonMax,”Isaid.“I’mtryingtomakeapointabout

commitmentsandgroupnormsthatisatthecoreofthisworkshop.”Oneof thepremisesof theworkshop, I explained, is that thewaywe

manage any commitment is a pretty good indicator of thewaywemaymanage every commitment. “I was called here because you want toimprove your reliability and trustworthiness as a team,” I said. “Soweneedtoexamineandchangethebehaviorsthatyour internalcustomersare complaining about. I think thatwe can turn this breakdown into abreakthrough,ifwetakeitasalearningexperience.”The stern faces staring at me flashed red, but I was in too deep to

backtrack, so I doubled down. “We agreed to return on time from thebreak. We further agreed that if that became inconvenient we’d letsomeoneknow.Maxdidn’tdothis.Moreover,hecameintotheroomandsat down without apologizing. When I questioned him, his responseseemedcasuallydismissive.Nowyou’reallupsetatmeforpointingoutthis clear breakdown in commitment. If I were an external observer, Iwouldnottrustthisteam’scommitments.Wouldyou?”“All’swellthatendswell,”wroteShakespeare,butthisdidnotendwell.

Wegotthroughtherestoftheworkshopawkwardly,butthatwasmylastinteractionwithMax’steam.Afewmonthslater,IlearnedfromsomeoneelseatthecompanythatMaxhadlefthisjob.Idon’tknowifhequitor


wasremoved,butIdoknowthat it tookanewleader tohelp this teamregainitscredibility.Manyyearslater,Imetoneoftheparticipantsofthisfatefulworkshop,

whorememberedwhathadhappened.Unfortunately,thelessonhedrewfromitwasthatIwassuchahard-assaboutpeoplebeinglatethatIwenttoe-to-toe against the leader of his previous organization. I wasdisappointed,asthiswasdefinitelynotthelessonthatIwantedpeopletolearn,or theway inwhich Iwantedpeople to rememberme. I realizedthat I hadn’t earned themoral authority I needed to coach them in anareaasthornyastheoneofintegrityandtrust.Ihadoverplayedmyhandasaworkshopleaderandmissedthechancehelpthemgrow.

DOUBLE-DEMANDTHESTANDARDS

Ifyouwanttoleadahealthy,functioningculture,youhavetoturnyourstandardsintosocialnorms.Thismeansthateveryteammemberneedstofeelpersonallyresponsibleforupholdingthem—includingdemandingthatothersabidebythem,too.Forexample,whenIworkwithaleadershipteam,Isetastandardthat

requires everyone to listen respectfully to other teammemberswithoutinterrupting. During our time together, some teammember invariablybreaksthestandard.Here’showIhandlesuchsituations.Let’ssay“Rob”cutsoff“Rachel”

inmidsentence.Insteadofcallingoutthebreach,Iremainquiet.Almostalways,everyoneelsedoesthesame.WhenRobfinisheshisstatement,Iask: “Did anybody notice that Rob interrupted Rachel?” Of course,everybodynotices;mostofthemnoduncomfortably.That’smycuetoaskthecrucialquestion,“Whydidn’tanybodychallengeRob?”Ithenremindthemthatnotinterruptingisastandardthatwehadall

set collaboratively; itwas neither a rule that I imposed on them, nor acommitment that everyone made to me. Not interrupting is acommitment all of usmade to everyone else. I clarify that I’mnot justdemandingthattheteammembersfollowthestandard;Iamdemandingthattheydemanditofoneanotheraswell.


“Idon’twanttobethebadcopthatkeepseverybodyinline,”Iadd.“Ihopethateachoneofusholdseachother—includingme—accountableforour commitment to listen respectfully to one another.Are you ready tosharethisresponsibilitywithme?”

In a paper for theCaliforniaManagementReview,UCBerkeleyprofessorJenniferChathamdescribed,inthirdperson,herexperienceofgoingtobuyshoesataNordstromstore.AsalesassociatenamedLanceshowedherninepairsofshoes.Nonewerethesizeorcolororstylethatshewaslookingfor.“Asshewasleaving,”Chathamwrote,“anothersalesassociate, Howard, approached and suggested that he could call a fewother Nordstrom stores to find the shoes. Ten minutes later, Howardexcitedly informed her that, though he had not found the shoes atanotherNordstromstore,hedidfindthematanearbyMacy’s(aprimaryNordstromcompetitor).“RatherthansendinghertoMacy’s,Howardhadalreadyarrangedfor

the shoes to be overnight mailed to her home. ‘Of course,’ Howardinformedher,‘Macy’swillbillyoufortheshoes,butNordstromwillpayfortheovernightdeliverycharge.’Howardunderstoodtheimportanceofcustomerserviceandwaswillingtogoaboveandbeyondthecallofdutyto ensure that even Lance’s customer was completely satisfied.Furthermore, while leaving Nordstrom, Chatham overheard aninteractionthatshewas,clearly,notsupposedtohear.Howardhadgoneback to Lance and said, ‘I can’t believe you didn’t work harder to findthoseshoesforher.Youreallyletusdown.’HowardwasnotLance’sboss—theywerepeers—andyet, thenorms encouraging customer service atNordstromaresostrongthatmembersarewillingtosanctioneachother,regardlessofstatus,forafailuretoupholdthosenorms.”32

DELEGATETHESTANDARDS

Asa leader, inaddition todemanding that eachof your teammembersdemonstratesthestandardsandthatheorshedemandsthestandardsof


everyotherteammember,youmustinsistthatthey,inturn,demonstrateanddemand the standards from theirown teammembersandask thattheydelegatethesamethingtothenextleveldown.Delegationmakesthestandardsgoviral.Ifthisdoesn’thappen,theculturalnormnevertakes.ManyleadershipteamsI’vehelpedcomeupwithexcellentstandardsin

theiroff-sites.Mostof themdoaprettygood jobofdemonstratingandholdingoneanotheraccountableforthosestandards.Themostcommonfailure I’ve experienced is this last step. Leaders fail to replicate theirconversationwiththeirteamsandtocascadethestandardsallthewaytothefrontlines.Thiscreatesadisruptioninthefabricoftheorganization,sincethere’san“in”groupthatupholdsthestandardsandan“out”groupthatdoesn’tknoworunderstandwhytheseniorpeoplebehave insomeunusual ways in their off-site—including getting mad at themoccasionallyforthingsthatusedtobefine.

Whenaninformationsystemfailstoproduceitsexpectedproduct,programmersfirstlookattheprogramtheyexecutedtocorrectanybugs.Iftheprogramissound,theyneedtogofurtherupstreamanddebugtheoperating system, the presumption being that it’s not providing therequisiteprocesscapabilities.Asaleader,youneedtodothesamethingwhenyourorganizationfails

tofullyexecuteitsstrategy.Perhapsthestrategyisflawed,butmostoftenthisisnottheproblem.Thebuginthesystemcomesfromtheinadequacyoftheculture.Inthefollowingchapters,Iexplainthreeessentialprocesscapabilities

thatarenecessarypartsofanyeffectiveculture.


Chapter8

RESPONSE-ABILITYTOBEPARTOFTHESOLUTION,BEPARTOFTHEPROBLEM

Thebasicdifferencebetweenanordinarymanandawarrioristhatawarriortakeseverythingasachallenge,whileanordinarymantakeseverythingasablessingoracurse.

—DonJuan,Mexicanshaman

“SorryI’mlate.Myothermeetingranover.”Howmanytimeshaveyouusedthisexcuse?Tacitly,youaresaying,“Don’tblameme.Ifmypreviousmeetinghad

finishedearlier,Iwouldhavebeenontime.”Suchajustificationmaybetrue,butit’sdisempowering.Why?Becausetoclaimthatbeinglateisn’tyourfault,youhavetoclaimthatitwasnotinyourpowertobeontime.Thepriceoffalseinnocenceisimpotence.The fact that the othermeeting ran over is just that, a fact. It didn’t

make you late; youmade you late. Youmade either a deliberate or anunconscious choice to stay put rather than leave. You may not beresponsible for the meeting running over, but you are accountable foryourchoicewhenitranover.“It’s notmy fault!” youmight say. “I stayed at the previousmeeting

becauseitwasmoreimportanttothecompanythanthelaterone.Sayingthatthepreviousmeetingranoverisjustapolitewayofsayingthatthesecondmeetingwasnotasimportanttomeasthepreviousone.”Iamnot saying that it’syour fault.NoramI saying thatyoumadea

bad choice or that you should have left the previousmeeting to be ontime.IcanthinkofmanycircumstancesinwhichIwouldrationallymakethechoicetobelate.WhatIamsayingisthatit’samatterofchoice,andif Iwant toestablishacultureofaccountability, Ineedto fullyownmy


choice.Asaleader,IneedtobetheexampleofwhatIwanttosee.Moreover, I need to take responsibility to minimize the negative

consequences for thosewho expectedme to fulfillmy commitment. Inthiscase,Imayhaveareasonablejustificationforbeinglate;forexample,thatIwasinacrucialmeetingwiththeCEOandtheleadershipteamofthecompany.But it’smuchharder to finda reasonable justification fornotsendingaquickmessagetothepeoplewhoarewaitingformeinthefollowing meeting. As we’ll see in Chapter 10, sometimes you need tobreakapromiseandmakeamess,but you canalways letpeopleknowimmediately,apologize,andcleanitup.It’s tempting to appear as a “victim” to duck from responsibility and

avoidembarrassment,butthepriceofanexcuseishigh.Ifyouwanttobea transcendent leader, you need to accept full accountability for youractions inanycircumstance,even incircumstances thatarenotofyourdoing.Thismeansconsciouslychoosingyour response toevents, ratherthantellingaself-justifyingstoryinwhicheventsdriveyou.Ifyouwantyour organization to control its destiny, youmust lead from the front.Instead of seeing and presenting yourself as a victim of forces beyondyourcontrol,youmustseeandpresentyourselfasaplayerrespondingtoachallenge.Onlythenwillyouhavethemoralauthoritytodemandthateveryoneelsedothesame.Once,whenIwasclimbingamountainwithLeslie,acolleaguewho’s

also an Outward Bound instructor, we found ourselves in a storm. Icursed the badweather. Leslie laughed and shared her favorite saying:“Thereisnosuchthingasbadweather,onlybadgear.”ThesayingmakesmethinkofothertimesI’vecomplainedaboutthingsthatarebeyondmycontrol—andhowfruitless that is.Thestormdoesn’tcarewhetherIamhappyorsad,orwhetherIliveordie.Thestormisjustaforceofnature.It iswhat it is, exactly as it is, andperfectly so. It is up tome todressappropriatelyandtodealwithit.SincethatdaywithLeslie,I’veadoptedanewpractice.WhenI’mdealingwitha“difficultperson”—someonewhoposes a challenge towhich I don’t know how to adequately respond—Iswitchinto“OutwardBound”mode.Iseethepersonasaforceofnature.He iswhohe is, exactly ashe is, andperfectly so. It isup tome to actappropriatelyindealingwithhim.I’vealsorealizedthattherearenosuchthingsashardproblems,only


situations Iamunable to resolve. If I can’t lifta certainweight, it’snotbecauseit’sheavy,butbecausemymusclesarenotstrongenoughtodoit—at least not yet. There are certainly weights that are too heavy foranyone to lift—now or ever, but that doesn’t contradict the point I’mtryingtomake.Myargumentisthatit’salwaysmoreempoweringtotellthestoryof theplayer:whenI fail, it’sbecauseIdon’tyetknowhowtoeffectivelyrespondtothechallengesIface.Andthesameistrueforyou—oritcanbetrueifyouarewillingtoeschewfalseinnocenceasthepriceyoupayforpower.Response-ability is the foundation of transcendent leadership.

Considertwowaysinwhichthepeopleinyourorganizationcanexplainadelay: (a) “The project was too hard. Therewere toomany difficulties,andnobodyhelpedus.” (b) “Theprojectwas challenging andwedidn’tknow how to deal with those challenges effectively. We failed to askpeopleforhelpinawaythatwouldelicittheircommitment.Andwewereso focused on finishing on time that we didn’t let people know of thedelaywithenoughtimetominimizethedisruptionswecaused.”InthischapterIwillshowthatwhatIcallabsolute“response-ability”

and accountability are an effective philosophy of leadership, business,andlife.Byexemplifyingresponse-abilityasaleader,andholdingpeopleaccountable for their own response-abilities, you can turn defensivebehaviors into creative ones, and negative feelings like resignation andresentmentintogenuineenthusiasmandcommitment.

ABUMPYRIDE

OnabrightNovembermorning in2010,QantasAirwaysFlight32tookoff from Singapore en route to Sydney. Just before reaching eightthousandfeet,passengersheardaloudboomandthenacrashingsound.Oneoftheengineshadcaughtfire.Theensuingexplosiontorefragmentsthrough the underside of the plane. A red alarm flashed on the pilot’scontrolpanel.Asirenshriekedinthecockpit.Theplanestartedshaking.Suddenly everything started to fail—fuel pumps, electrical systems,hydraulics. Twenty-one of the plane’s twenty-two major systems weredamagedorcompletelydisabled.


Thepilot,RicharddeCrespigny, turned theplaneback toSingapore.On the emergency descent, the computer system sounded, “Stall! Stall!Stall!”;deCrespignyignoredtheautomatedvoiceandstayedfocusedonhistask.Therunwaywasjustlongenoughfortheplanetoland—ifthecaptain

overshot the asphalt, the plane would crash into sand dunes. Onehundredmeters short of the dunes, the plane skidded to a stop. That’swhendeCrespignyturnedonthePAsystemandsaidtothepassengers,“Ladies and gentlemen, welcome to Singapore. The local time is fiveminutes tomidday on Thursday, November 4, and I think you’ll agreethatwasoneofthenicestlandingswehaveexperiencedforawhile.”Investigators later said thatQantas Flight 32was themost damaged

AirbusA380evertolandsafely.DeCrespignywasdeclaredahero.1

Inmyworkshops,Iaskpeopletoimaginethattheyareflyingwithmeinthissameplane,andsuddenlyweheartheexplosionandseepiecesoftheenginefallaway.Aminutelaterweseethepilotcomingoutofthecockpitand takinga seat in thecabin.Freakingout,weaskhimwhat’sgoingon.Heresponds that there’sanuncontained failure inoneof theengines. “Then what the hell are you doing here?” we ask him. “Whyaren’tyouinthecockpit?”Toourshock,hereplies,“Becausefixingthisproblemisnotmyjob;thisisamaintenanceproblem.”AtthatpointIaskparticipants,“Whatwouldyoutellhim?”Aftersome

discussion,thegroupalwaysconcludesthatitdoesn’tmatterwhoorwhatcausedtheproblem.Whatmattersisthecaptain’sabsoluteresponsibilityforthesafetyofthepassengersandcrew.Anythingthathappensonthecaptain’swatchishisorherresponsibility.I’vehadtoapplythishardlessonmanytimesasthecaptainofmyfifty-

foot sailboat, Satori. Everything that happens during the sail is myresponsibility. If a storm surprises me, I didn’t look at the weathercarefullyenough.Ifsomethingbreaks,Ididn’tinspectitcarefullyenough.Ifoneofmycrewdoessomethingunsafe,Ididn’ttrainherwellenough.If one of my passengers hurts himself, I didn’t brief him thoroughlyenough or check that he understood and was able to execute my


instructions.Everythingthathappensonmyboatisonme.Ifyouwanttobethecaptainofyourbusinessandyourlife,youmust

accept full responsibility, accountability, and ownership for everythingthathappensinit.Ratherthanbeingavictimofexternalcircumstances,youmustbethemasterofyouractions—theonewhomakeschoicesandproducesconsequenceswithultimateresponse-ability.Intheplaycalled“YourBusinessandYourLife,”youareonstageasthe

central character. You are not a spectator; you are the writer-director-actor.Youcontributetobringeventsabout,andyoucontributetoshapethefuture—always.Asaplayer,youareinthegame;youaffecttheresult.As a victim, you are out of the game; you are at themercy of those towhomyouhavesurrenderedthefield.Whatkindofleaderdoyouwanttobe?Moreimportant,whatkindofleaderwillyouchoosetobe?

WHATISRESPONSE-ABILITY?

I define response-ability as the ability to choose one’s response to asituation. It’s about focusing on the aspects of reality that you caninfluence,insteadoffeelingvictimizedbycircumstancesthatyoucannot.It’s about being themain character of your own life. Instead of asking,“Why is this happening to me?,” a person who is response-able asks,“What can I dowhen this happens?”Response-abilitymeans youdon’ttake anything personally. It doesn’t rain on you; it just rains, period.Instead of blaming the rain, you carry an umbrella to stay drywhen itrains. And if you get wet, you know it’s because you didn’t bring anumbrella,becauseyouwerenotprepared.The same applies to your team and your organization. You and your

colleagueshavetheabilitytochooseyourresponsetoanysituation.Youcanfocusonwhatyoucandoinsteadofonwhatisoutofyourcontrolbyasking, “How are we going to accomplish our mission in spite of thischallenge?”Manypeopleconfusetheabilitytochoosearesponsewiththeabilityto

choose an outcome. Response-ability does not mean success-ability.Thereisnoguaranteethattheactionsyouandyourteamtakewillyield


theresultsthatyouwant.Theonlyguaranteeisthatyoucanrespondtoyourcircumstances inpursuitofyourgoalsand inalignmentwithyourvalues.That’s thebestwecandoashumanbeings—andit’snotasmallthing. Our response-ability is a direct expression of our consciousnessandfreewill.Tobeaneffectiveleader,infacttobecomefullyhuman,youneedtobecomefullyresponse-able.Whenyouplaycards,forexample,youhavenocontroloverthehand

youaredealt.Ifyouspendallyourtimecomplainingandmakingexcusesforyourcards,youwillfeeldisempoweredandmostlikelylosethegame.But if you see yourself as having a choice in playing your cards, yourfeelingswillchange.You’llhaveasenseofpossibility.Even ifyoudon’twinagivenhand,youcanalwaysdoyourbestwiththecardsyou’vebeendealt,playfair,andimproveyouroddsofwinningtheoverallgame.Responsibilityisnotaboutassumingguilt.Youarenotresponsiblefor

your circumstances; you are response-able in the face of yourcircumstances.Totakeanextremeexample:Youarenotresponsibleforpoverty. You didn’t create it; it’s not your fault; you’re not to blame.Povertyexistsindependentofyou.Itwastherebeforeyouwerebornandit will be there after you die. In a reasonable sense, poverty is not aproblemofyourdoing.Youare,however,able torespondtopoverty. Ifyouarebornintopoverty,youcanworkhardandlookforavenuesthatwillleadyououtofpoverty.Ifyoucareaboutthepovertyyouseearoundyou insociety,youcanmake it yourproblem.Poverty is abrutal fact—youcanlearnaboutit,studyhowtoameliorateit,donatetimeandmoneyto the right causes and organizations, you can start your ownorganization or volunteer for the Peace Corps. You can, if you wish,devoteyourlifetohelpingthepoor.We are not automatons. Rather, we are “autonoms”—self-guiding

beings.External factsare information,notstimuli.Wedon’tanswerthephonebecause it rings.Rather,wechoose toanswer thephonewhen itrings, because we decide it is better to answer the call than not to.Externalcircumstancesandinternalimpulsesinfluenceourbehaviorbuttheydon’tdetermineit.Theymaytemptus,buttheydon’t“makeusdoit.”Wearehuman;weareconscious;wearefree.Most people define freedom as the ability to dowhatever theywant.

Theywanttobe“freefrom”constraints.Thiskindoffreedomdependson


factors beyond their control. Freedom does not mean doing what youwant without limitations or consequences. Such “freedom” is animpossible fantasy. True freedom is your capacity to respond to asituationbyexercisingyourconsciouswill.This isyourbirthright.Truefreedomisabasicfeatureofhumanexistence.Youalwayshavethepowertorespondtosituationsasyouchoose.Youcannotmakerealitydifferentthanitisorchoosewhetheryouractionswillbesuccessful.Butyoucanchoosetheresponsemostconsistentwithyourgoalsandvalues.Whenyouexpressthisresponse-ablefreedom,youinspireotherstobe

response-able as well—within your organization and beyond. Atranscendent leader exemplifies thepowerof conscious choice inawaythatempowersthewholeorganizationtoexerciseit.

THEVICTIM2

In Conscious Business, I made a distinction between a “victim” and a“player.”Inthetenyearssinceitspublication,thousandsofpeoplehavetoldme that thedistinctionbrought clarity,power, and control to theirlives.Effective,transcendentleadersareplayers.SoI’dliketointroduceacentralconceptof thatbooktoyou(orreintroduce it, ifyou’vereadmypreviouswork).Althoughthedistinctionisverysimpletograsp,it’squitedifficulttoapply—especiallywhenitcountsthemost.A victim pays attention exclusively to factors he cannot influence,

seeing himself as passively suffering the consequences of externalcircumstances. The victim wants to avoid blame and claim innocence.Since he believes he has nothing to do with the problem, he doesn’tacknowledge that he’s contributed to it or can contribute to solving it.When things gowrong, the victim seeks to place blame on anybody oranythingbuthimself.Consequently,sinceheisnotpartoftheproblem,hecannotbepartofthesolution.For the victim, life is a spectator sport. His favorite place is on the

sidelines,not the field.He loves to criticize thosewhoare in thegame.Buthisopinionscrowdouthisactions.Thismakeshimfeelsafebecause,althoughhecandonothingtohelphisteam,hecannotbeblamedwhen


histeamloses.Hetendstoblametheplayers,thecoach,thereferees,theopponents, the weather, bad luck, and everything else. Although hisexplanationsmaybe technically correct, they aredisempowering.Whatheblames,heempowers.Forexample,onesummerdayasIwasworkingonthischapter,Ifelt

thirsty. My wife, who was working next to me, asked me if I wantedsomethingtodrink.“Yes,”Itoldher,“somesodawater,thankyou.”Shesaidshe’dbringittome,“Rightaway,assoonasIsendthise-mail.”AsIwaitedforhertogetsomethingformetodrink,I feltadeepersenseofthirstandatingeoffrustration.IrealizedthatIwasblamingherformythirst;Iwasstuckinmychair,feelingsorryformyself.ThenIthought,IfI’mthirstyandwantwaterrightatthismoment,whydon’tIgetupandget thewatermyself? So Idid.When I returned,mywife asked, “Whydidn’t youwait forme to finish?” I explainedmy victimmind-set—andmyneedtogetmyselfoutofit.Iletherreadthisparagraph,andwebothhadagoodchuckle.Human beings seem predisposed toward victimhood, just as we are

predisposed toward sugar. Both of themgive us short-termpleasure atthe expense of long-term pain. In their early years,my childrenwouldcomplainwhen“thetoybroke.”Ineverheardthemsay,“Ibrokethetoy.”Justlikelittlechildren,wechoosetoadoptthe“it’snotmyfault”victim

stance when we want to protect ourselves from blame. It is notuncommon in organizations to hear that “The project got delayed,” or“Thecustomerwasunreasonable,”or“Theystartedit.”Wewanttolookgood,toprojectanimageofsuccess—oratleasttoavoidtheblemishthatcomeswithfailure.3Victimhoodisanattempttocoverupourfailuressothatwelookmorecapablethanwereallyare.Whetherornotweliketoadmitit,manyofusdependonotherpeople’sapproval.Thus,weexpendagreatdealofenergybuildingan“unblamable”publicidentity.Besides disempowering us from acting appropriately in the face of

reality, the victim story prevents us from learning. As long as ourproblemsarenotourfault,wetendtowaitforotherstochangeorsolvethem.Asaleaderandasaplayer,youneedtoaskyourselfwhatyouneedtolearninordertobetterrespondtothesituationortobetteravoidthissituationinthefuture.Victimhoodislikeadrugthatsimultaneouslyrelaxesandexcitesus.It


relaxesusbecausewhateverhashappened isnotour fault. Itexcitesusbecause we feel that we have the right to blame others. The righteousindignationoftheinnocentvictimisasaddictiveasheroin.Butitstopsusfromlookinginthemirrorandaskingourselves:WhatdoIneedtodoinordertostopcocreatingthis?Ratherthanasking,Whoscrewedup?Whowrongedme?Whatshould

theyhavedoneinstead?Whoshouldpay?,askyourselfwhatyoucandotosolvetheproblemorpreventitfromoccurringagain.Blameobscureswho and what is contributing to cause the problem. When things gowrongbetweenpeople,eachindividualownsapieceofthemess.Butthisis not how most of us assess things. As the saying goes, “Success hasmanyparents,butfailureisanorphan.”The truth is thateachofuscontributes toabadsituation.Weareall

response-able for finding a way to make things right. It will be mucheasier to address the situation if all those involvedbecomeplayers andacknowledgetheircontributions.Icallthis“200percentresponsibility.”

THEPLAYER

Leaders are players. The player pays attention to the factors she cancontrol.Shedoesn’tdenythattherearemanythingsoverwhichshehasnopower,butshechoosesnottofocusonthesethings,preciselybecauseshe cannot control them. Instead of feeling overwhelmed by externalcircumstances, she sees herself as someone who can respond to them.Her self-esteem is foundedupondoingher best, expressingher values,and learning how to be ever more capable. If something beyond hercontrolhappens,herexplanationsfocusonherownparticipationintheevent,sincesherealizesthatsheisthedefiningfactorintheoutcome.“Ifyou want to be a part of the solution,” she reasons, “you have to seeyourselfasapartoftheproblem.Unlessyourecognizeyourcontributionto a bad situation, you won’t be able to change that situation.” Shechoosesself-empoweringexplanationsthatputherincontrol.Forleadersandplayers,theworldisfullofchallengesthatcallonthem

to respond as what the shaman Don Juan would call a “warrior.” The


player does not feel omnipotent, but she faces challenges squarely andrealistically and manages her emotions with equanimity. The playeralways describes herself as a significant part of her problems. She iswillingtotakethehitofaccountabilitybecauseitputsherinthedriver’sseat.Becauseplayersfeelempowered,theycarrythemselvesandspeakwith

amoralauthoritythatinspiresconfidenceinothers.Andthechoicestheymake—even when the outcome isn’t perfect—pay off in one way oranotherdowntheroad.Bybehaving ina response-ableway, theybringanextrameasureofgoodnessintotheir livesandthelivesofthosewhofollowtheirlead.Taking the stance of the player is not without cost. Freedom and

accountabilityaretwosidesofthesamecoin.Butifyouownyouractions,you can be asked for your reasons for your decisions and heldaccountablefortheirconsequences.Thepriceofpowerisaccountability.

EXTREMEOWNERSHIP

“Mymindwas racing,” SEAL commander JockoWillink recalled in hisaccountofthemostimportantleadershiplessonheeverlearned,andtheunbearable price he almost had to pay for it. “Thiswas our firstmajoroperationinRamadi,anditwastotalchaos.”Four separateSEALunits in various sectors of the citywereworking

withU.S.Armyand Iraqi forces to clear out an entireneighborhoodofheavily armed insurgents, building by building. In total, about threehundredAmerican and Iraqi troops—friendly forces—were operating inthesamehotlycontestedareaofthecity.Thefogofwar“wasthickwithconfusion, inaccurate information, broken communications, andmayhem.”4

Willink’scommandposthadreceivedtwocallsforhelp,onefromU.S.advisers embeddedwith the Iraqi army, the other from a SEAL sniperteam.Bothwereinvolvedinfirefightsagainstheavilyarmedinsurgents.Willink decided to respond first to the Iraqi army position. When hearrived, a gunnery sergeant was coordinating an air strike to wipe out


what was believed to be a group of hard-coremujahideen in a nearbybuilding. “I’m working on getting some bombs dropped on ’em,” thesergeanttoldhim.Willinkhadabadfeelingaboutthis.Somethingdidn’taddupforhim.

TheywereveryclosetowheretheSEALsniperteamthathadalsoaskedfor support was supposed to be. In addition, the Iraqi soldiers hadenteredtheareabeforetheSEALshadachanceto“deconflict”it—thatis,todetermine theirexact locationandtocommunicate it toall theotherfriendlyunitsintheoperation.WillinkwasnotsurewhetherthefirefightwaswiththeactualenemyorwiththeSEALsniperteam.“Holdwhatyougot,Gunny,”Willinkorderedthesergeant.“I’mgoing

toseewho’sinthatbuilding.”Heapproachedthedoortothecompound,whichwasslightlyopen.“WithmyM4rifleattheready,Ikickedthedoorthe rest of theway open only to find Iwas staring at one ofmy SEALplatoonchiefs.Hestaredbackatmeinwide-eyedsurprise.”Willink and the SEALs in the building quickly figured out that they

were in themidstof a “blue-on-blue,”or friendly-fire situation.Willinkwasshocked.“Ifeltsick.Oneofmymenwaswounded.AnIraqisoldierwasdeadandotherswerewounded.”Blue-on-blueistheworstthingthatcanhappen,accordingtoWillink.

“Tobekilledorwoundedbytheenemyinbattleisbadenough,”henoted.“But to be accidentally killed or wounded by friendly fire becausesomeonescrewedupisthemosthorriblefate.”5

WhentheSEALscompletedthelastmissionoftheday,Willinkwenttothebattalion tacticaloperationscenterwherehehadhis fieldcomputerset up to receive e-mail from higher headquarters. “I dreaded openingand answering the inevitable inquiries about what had transpired,” heremembered. “I wished I had died out on the battlefield. I felt that Ideservedit.”6

As he began gathering information for the ensuing official inquiry,Willink discovered serious mistakes made by many individuals, bothduringtheplanningphaseandonthebattlefieldduringexecution:“Planswerealteredbutnotificationsweren’tsent.Thecommunicationplanwasambiguous,andconfusionaboutthespecific timingofradioprocedurescontributedtocriticalfailures.TheIraqiarmyhadadjustedtheirplanbuthadnottoldus.Timelineswerepushedwithoutclarification.Locationsof


friendlyforceshadnotbeenreported.Thelistwentonandon.”Not all the errors came from the Iraqis. Willink’s own SEAL troop

made similar mistakes. “The specific location of the sniper team inquestionhadnotbeenpassedontootherunits.Positiveidentificationofthe assumed enemy combatant, who turned out to be an Iraqi soldier,hadbeeninsufficient.AthoroughSITREP(situationreport)hadnotbeenpassedtomeaftertheinitialengagementtookplace.”7

Willink put together a presentation summarizing his findings. Theinformationwasallthere,buthefeltsomethingwasstillmissing.Hestillhadn’tidentifiedthesinglepointoffailurethathadledtotheincident.“Then it hit me. Despite all the failures of individuals, units, and

leaders,anddespitethemyriadmistakesthathadbeenmade,therewasonly one person to blame for everything that had gone wrong on theoperation:me.Ihadn’tbeenwithoursniperteamwhentheyengagedtheIraqi soldiers. I hadn’t been controlling the friendly Iraqis that enteredthe compound.But thatdidn’tmatter.”The lessonWillink learnedwasthatastheseniorleaderonthegroundinchargeofthemission,hehadtobecome responsible for everything that happened and take completeownership of what wentwrong. “That is what a leader does—even if itmeansgettingfired.”8

Willink presented his conclusion to his commanding officers in aformal review,as is customary,attendedbyallhis soldiers.Despite thetremendousblowtohisreputationandhisego,hetookfullownershipofthesituationandapologized to thewoundedSEAL.Doing thisnotonlypreserved the trust of his officers and the respect of his troops, but ithelped him keep his job. It also allowed everyone to learn valuablelessons to avoid repeating these mistakes. These lessons were laterincorporatedinthetrainingdrillsforallSEALs.“Therearenobadunits,onlybadofficers,”wroteWillinklater.“Thisis

a difficult and humbling concept for any leader to accept. But it is anessential mind-set to building a high-performance, winning team.” Heconcluded that on any team or in any organization, the ultimateresponsibility for success and failure rests with the leader. “The leadermustowneverythinginhisorherworld.Thereisnooneelsetoblame.The leader must acknowledge mistakes and admit failures, takeownershipofthem,anddevelopaplantowin.Thebestleadersdon’tjust


take responsibility for their job. They take ‘extreme ownership’ ofeverythingthatimpactstheirmission.”9

IagreewiththespiritofWillink’sconclusion.AndIwouldliketomakeadifferentpoint.Inadditiontothe leadertakingtotalresponsibility foranything that affects the performance of the unit, every teammemberneeds to take total response-ability in the faceofanycircumstance thataffectsthemission.Eachpersonisaccountableforthewayinwhichheorsheprepares,responds,andlearnsfromthechallengesthatheorshehastoconfront.Thereisnoblameforeventsthatdependonfactorsbeyondone’s control, but there must be full accountability for preparing anddealingwiththemwitheffectivenessandintegrity.

ABSOLUTERESPONSE-ABILITY

“We got screwed,” complainedStu. “We announced this product as thehottestthingsinceslicedbread,butafterwesoldittoourbestcustomers,theproductandfinancepeoplerealizedthatitwasnotasprofitableastheearlierversion.Sotheywithdrewitfromthemarket.NowI’vegotalotofpissed-offclientswhohavelosttheirtrustinus.”Stu is a sales executive at an enterprise software company I advise.

Severalmonths before, the company had launched amuch-anticipatednew version of their flagship product. The company had touted itsupgradedsystemtoitsbestcustomerswhileitpreparedtolaunchasalescampaigntoacquirenewcustomers.Thesalespeoplehadworkedhardtosellthenewversiontotheirexistingcustomers,whohadprovedeagertoadoptit.But theproducthadproved significantlyharder touse than anybody

had expected. The heavy demands for training and technical supportmade it uneconomical. The support costs erodedmargins to the pointthat the previous version was much more profitable. So the companydecidedtowithdrawit.Thisdecisionwasmadewithouttheparticipationof,andevenwithoutgiving informationtill the lastminuteto, thesalesorganization.ForStu, this felt likea terribledoublewhammy.Notonlydid the salespeople look terrible to customers as representatives of the


company, but they also looked stupid for beingout of the loopofwhatwashappeningor,iftheywereintheloop,maliciousforbeingunwillingto communicate the problem to their customers until the very lastminute.This is the kind of thing that salespeople, to say nothing of the

customers,deeplyresent.Theresentmentmanifestsasa lossof trust inthebrandand in thepeoplewhorepresent it. Inparticular, salespeoplecanbebitterlyangrytowardtheproductdevelopmentpeople,seeingitasabetrayal.WhenIranaworkshopon“becominga trustedadviser” for thesales

executivesofthissoftwarecompany,theparticipantstookthepositionofvictims.Theyfeltjustifiedintheirfeelings.Theyweremadashellandfeltmiserable.“Theproductpeoplescrewedus.Therewasnothingwecoulddoaboutit!”theycomplained.TheygotmadatmewhenIinterruptedtheircomplaints.“Idisagree,”I

challenged them. “There is always something you can do about it, andevenmorethingsthatyoucouldhavedonebeforeit.Buttoseethethingsyou could have done, youmust give up your victim story and take thepositionoftheplayer.”Here’sanaccountofthedialoguethatIhadwithStu,themostvocalof

thevictims:

Stu:Theproductpeoplescrewedus.Howcancustomerstrustusanymore?

Fred:Obviously,unlessweaddressthisissue,callingasalespersonacustomer’s“trustedadviser”isdeadonarrival.Doyouhaveanyideas?

Stu:Sure!Ifadecisiontopullsomethingoffthemarketisbeingconsidered,weshouldbeinvolvedinthediscussions.Andifthedecisionismade,weshouldhaveastrategytoannouncethistocustomerswithplentyoftimetoletthemadjustwithminimalconsequences.

Fred:Thatallsoundsgoodtome.Canyoudoit?

Stu:No.It’snotuptome.ThisissomethingthatProductshoulddo.


Rightnow,wesalesexecutiveshavenosayinthesematters.

Fred:Yourideaseemsreasonable,butyoucan’timplementit.Sowheredoesthatleaveyou?

Stu:Upshitcreekwithoutapaddle.

Fred:Isthatwhereyouwanttobe?

Stu:Ofcoursenot.

Fred:Sothenwhysticktothatstory?Itgivesyouajustification,butitdoesn’tgiveyouasolution.

Stu:What’sthealternative?

Fred:Considerthesituationasachallengethatyouarefacing,ratherthanassomethingsomeoneisdoingtoyou.Canyoudescribetheessenceofthischallenge?

Stu:ThechallengeisthatI’mtryingtobuildarelationshipwithcustomersbasedontrust,wheretheybelievethatIhavetheirinterestsatheartandthatIwilltakecareofthem,whileotherpartsofmyorganizationaredestroyingthistrustbydiscontinuingproductsthatIsoldtomycustomers.

Fred:Excellent.Nowcomesareallyhardquestion.Howhaveyoucontributed,bydoingorbynotdoing,tocreatethissituation?

Stu:What?Areyousayingthisismyfault?

Fred:No,Stu.I’msayingthatyouarepartofthesystem,soyoumusthavebeeninvolvedinsomewayincocreatingthis.Ifyouwanttobethesolution,youhavetoplaceyourselfaspartoftheproblem.Thisisnotaboutyourfaultsbutaboutyourabilitytoinfluencethings.

Stu:OK.I’llgiveitatry.IfIwasgoingtoblamemyself…

Fred(interrupting):Pleasedon’tblameyourself,Stu.Iamasking


youtoempoweryourself.

Stu(laughingsarcastically):IfIweregoingtoempowermyself,IwouldsaythatIsoldtheproducttothecustomers,makinganimplicitcommitmentthatwewouldcontinuewithitforsometime.Ineverdiscussedthisopenlywiththem,butit’sanobviousassumptionthatweallmade.Ididn’tcheckthisassumptionwiththeproductorganization.Infact,ifIweregoingtobereallyhardonmyself,I’dhavetoadmitthatthisisnotthefirsttimethatsomethinglikethishashappened.SointhebackofmymindIwasworriedthatthisproductwouldnotmakeit.ButIdidn’tsayanythingtomycustomers,ortotheproductpeopleinmycompany…Shit,Ifeelterriblesayingthis.

Fred:Igetit,Stu.Itstings.Butyou’redoinggreat.Thisisthepriceofpower.Youcandosomethingabouttheproblemandperhapsregainthecustomers’trust.Thenextquestionis,Couldyouhavedonesomethingtopreventthisfromhappening?

Stu:Clearly,yes.IcouldhavenegotiatedwithProductsomeconditionsaboutmaintainingtheproductforacertaintime.OrifIcouldn’tdothat,Icouldhavetoldthecustomersthatthisproductwasinatestingperiodandthatwecouldn’tguaranteethatwewouldcontinuetosupportit.Icouldhavenegotiatedsomeconditionswiththecustomer—maybetheycouldtestitwithadiscountedprice,orbereimbursedifwediscontinuedtheproduct,orsomething.Idon’tknowifmybosswouldhaveletmedoanyofthis,butIcouldhaveraisedit.

Fred:Didyouask?

Stu:No.IguessIwastooeagertosellthenewproduct.AndIwasafraidthatI’dgetchastisedfornotbeingateamplayer.

Fred:Sincewe’repracticinghere,let’stakeittothelimit.Let’ssayProductdoesn’tbudgeandthecompanydoesn’tallowyoutonegotiateanyconditionswiththeclient.Isthereanythingyoucoulddotopreservetrustwithyourcustomer?

Stu:Ihavetoansweryestoyourquestion.Man,I’membarrassedI


didn’tthinkofthisbefore…Ifworsecametoworst,Icouldhavetoldthecustomerthetruth.Icouldhavediscussedthepotentialforanynewproducttonotbecomewhatwecall“commerciallyviable”andbeingdiscontinuedsummarily.Onceaproducthasbeenoutforayearorsoanditbecomespartofourcore,weareverycarefulaboutanychangesinit,butuntilitprovesitsworthit’satrisk.Ifacustomerdoesn’twanttotakethatrisk,Iwouldadvisethemtonotbuyit,atleastrightaway.Rightnow,thatdisclaimeris,literally,inthesmallprintthatnobodyreads.

Fred:Howwouldyoufeelaboutdoingthat?

Stu:LikeI’mbetrayingmycompany.

Fred:Itsoundstomelikeyou’rebeingresponsibleandactingwithintegrity.Ifthecompanyisnotwillingtobacktheproduct,andevenputsthatcaveatinsmallprintinthecontract,it’snotabetrayalforyoutobestraightwithyourcustomers.Youknowthattheirassumptionsaboutthecontinuityoftheproductaremistaken.Alertingthemaboutthetruthiswhatatrustedsalespersonwoulddo.Mynextquestionis:Whatcanyoudonow?

Stu:Icantalktomycustomerandownuptothefactthatwewerenotastransparentwiththemabouttheproductasweshouldhavebeen.

Fred:We?

Stu:Sorry,Iwasn’tastransparentasIshouldhavebeen.ButbeforeIdothatIneedtospeakwithmymanagerandclearit.AndIalsowanttoaskmymanagerandmyteammatestojoinourvoicestodiscussthismatterwithProduct.Andifwecan’tgetsatisfaction,thenwecantakethemattertotheCEO.

Fred:Whatlessondoyoutakefromtheexperience,andfromthisconversation?

Stu:Itismucheasiertobethevictiminasituationlikethis.Buttheonlywaytosolveitistobeaplayer.


ADEFECTISATREASURE

TheJapaneseproponentsoftotalqualitymanagementsaythat“adefectisa treasure.”Inthesamewaythata feveralertsyouthatsomething iswrongwithyourbody,adefectalertsyouthatsomething iswrongwithyourbusiness—orthedomainofyourlifeinwhichthedefectappears.Thedefectisoftenburiedunderthesurface.Tofindit,it’snecessaryto

avoidthetemptationtojustfixtheproblemwithoutlookingfortherootcause. If you lower the fever with medication, you’ll suppress thesymptom, but you’ll never find the underlying infection. Treatingsymptomsinsteadof thecausecanhaveseriousconsequences, the leastofwhichisthattherealcauseoftheproblemcontinuestocreatetrouble.To find a cure you have to diagnose the source of the fever and thenprescribeatreatmentforit.Thetotalqualityrecommendationisto“askfivetimeswhy.”Underthis

scrutiny, thedefect reveals its source. If you find and address this rootcause,youwill improve thesystemata fundamental level.Youwillnotonly solve the specific problem that caught your attention, but manypotential others that an out-of-control process could produce. Forexample, when LinkedIn users or customers report an error, ourengineersdon’tjustrushtofixit.Theygo“underthehood”todebugthesystem.Adefect,moregenerally,isanygapbetweenwhatyoudesireandwhat

youget,betweenyourvisionandyourreality.Thetensionbetweenthesetwopolesislikethatbetweenthetwopolesofabattery.Thedifferenceincharge between positive and negative generates the electricity that canenergize a circuit. Action springs from dissatisfaction. Dissatisfactionwiththecurrentstatedrivesyourefforttoshapeadifferentfuture.Before you can prescribe, you need to diagnose. Before you take

effectiveaction,youneedtofindtherootcauseoftheproblem.Whenyougetaresultyouwant tochange, firstaskyourselfwhy ithappened.Toooften our first impulse is to attribute causality to factors beyond ourcontrol.AsI’veargued,thismaybepartofthetruth,butit’sthetruthofthevictim.Thisexplanationdischargesthebatteryandmakesusunabletoimproveanything.


FROMVICTIMTOPLAYER

An essential step in shifting from victim to player is to change yourexplanation of events. Instead of saying, “Themeetingmademe late,”say, “I stayed late at the meeting.” Here are some examples of playerstatements: “I didn’t back up the file”; “I missedmy deadline”; “I losttrackof timeandstayedtoo long”; “Icouldnot findaway toreachourprofit targets”; “I did not establish rapportwith the client”; “I couldn’tconvinceseniormanagementtosupporttheproject.”Evenwhenunexpectedthingshappen,usethelanguageoftheplayer.

Insteadoffocusingontheevent,acknowledgethatyoudidnotanticipatethe possibility. You can say, for example, “I did not prepare for such atraffic jam,” “I did not foresee that the weather could turn nasty,” “Ididn’t think that our suppliers wouldn’t deliver on time,” or “Iunderestimatedtheriskoftheproject.”Thespecificwordsarelesscrucialthantheframeofmind.Considerthe

differencebetween the first and the second statements in the followingpairsofsentences:

VICTIM PLAYER

It’simpossible. Ihaven’tfoundawayyet.

Someoneshouldhavedoneit. Ididn’tcheckonit.

Icouldn’tdoit. Ichosenottodoit.

Youshouldn’tdothat. Iaskyoutonotdothat.

I’mbeingkickedoutoftheroom. Ineedtofreeuptheroom.

The victim sentence of every pair argues that “I’m not in charge.” Theplayerclaimsthat“I’mmakingachoice.”Inmyworkshops, I help people understand this shift from victim to

playerthroughthefollowingexercise:“Consider a bad experience you had, or are having right now: an

ineffective meeting, a harsh conversation, a business or personalproblem.Choose a situation you thinkwas brought about by people or


forcesbeyondyourcontrol.Nowanswer the followingquestions fromavictim’sperspective.”Thequestionstoelicitthestoryofthevictimare:

1. Whathappenedtoyou?2. Who’stoblameforit?3. Whatshouldthispersonhavedoneinstead?4. Whatshouldthispersondonow?5. Whatpunishmentdoesthispersondeserve?

Idothisexerciseinsmallgroups.Whileonegroupmembercomplains,I encourage the others to “help” himby sympathizingwith expressionssuchas “I can’tbelieve theydid that toyou.” “That is sounfair.” “Theyshouldn’ttreatyoulikethat.”“Thosepeoplearesomean!”“Youdeservebetterthanthis.”Once everybody has answered the questions, I ask people to look

around the room. Everybody is beaming and laughing. The mood isboisterous.AsI’vesaid,victimhoodisadrug.ThenItell thepeople intheworkshopthehardtruth.“Validatingthe

victim’s helplessness is not friendly,” I say. “Just as you don’t reallysupport an alcoholic by buying him another drink, you don’t reallysupportavictimbytellinghimthathehasbeentreatedunfairly.Alcoholandvictimexplanationsmaysoothethepersonwhoconsumesthem,buttheyareultimatelydestructive.Yourdrugdealerisnotyourfriend.Arealfriendoffersyoulong-termwellnessratherthanimmediategratification.He blends a compassionate acknowledgment of your painwith a fiercechallengeofyourself-disempoweringbeliefs.”Atthatpoint,peoplestopsmilingandbecomequiteserious.Intheworkshop,Igoontothesecondroundofquestions.Butletme

put inacaveatbeforewecontinuehere. Inreal life, ifyouare trying tohelp someonebecomeaplayer, you can’t just ask thesenextquestions.Youmustfirstvalidatethenegativeimpactthatthesituationhasonyourcounterpart while at the same time not buying into their victim story.(The best way to do this is through empathetic listening and inquiry,whichIwilldescribeinthenextchapter.)BeingaplayerdoesnotmeanbeingSupermanorWonderWoman.Problemsdoupsetuswhentheyarecaused by others’ negligence orwrong behavior. Being a player doesn’tmeanthatyoudenythesepainful factsof life;rather, itmeansthatyou


don’tgetstuckinthem.Yourfeelingsarethebeginningofthestory,nottheend.Whensomeonehashadachancetoexpressandreleasetheirgriefand

anger,youcaninvitehimorhertoanswerthefollowingquestionsfromtheplayer’s perspective. It is vital that yourefer to the same situation.Thefactsremainthesame;whatchangesisthestory.Thepurposeoftheexerciseistoseehowtheplayer’spointofviewilluminatesopportunitiesforactionandlearningthatwerehiddenbefore.Thestoryoftheplayerisnot more truthful than the one of the victim, but it is more effectivebecauseitshiftstheplayerfromthepassenger’stothedriver’sseat.Thequestionstoelicitthestoryoftheplayerare:

1. What’sthechallenge?2. Howdidyoucontribute(bydoingornotdoing)tocreatethis

situation?3. What’sreallyimportanttoyou?4. Whatcanyoudonowtoaccomplishthat?5. Whatcanyoulearnfromthisexperience?

Thesequestionsareasusefulinpersonalasinprofessionalsituations.Amanagercanusethemtohelpemployeesletgoofthevictim’sstory,aspousecanusethemtohelpahusbandorwife,andparentscanusethemto help their children deal with challenges. The important thing torememberisthatwhenyoupresentthesequestionsasalovingchallenge,love—intheformofempathyandcompassionfortheother’spain—comesfirst,andchallenge—intheformofpoignantinquirytoinvitetheothertoownhispowerandaccountability—comessecond.

ACRIMESTORY

Andrés,anArgentineanwhoattendedoneofmyworkshops,returnedtohishomeintheoutskirtsofBuenosAires.Hearrivedaround6p.m.andparked his car on the street. As he stepped out, two armed robbersassaultedhim.Thethievespointedagunathimandorderedhimtoopenthedoorof


hishouse.Andréstoldthemcalmly,“Listen,guys,mywifeanddaughterare inside. If I come inwith you, they’ll freak out and start screaming.Nothinggoodcanhappenafterthat.Youcantakemycar,mywallet,myphone, evenmy life, but you can’t takemy family. Iwill not open thatdoor.”Thethievestookallhisvaluablesandranaway.Andréslatertoldmewhathadhappened.Afterexpressingmysorrow

and outrage, I asked himwhat he thought in that criticalmoment.Hesaid,“Iwasn’tgoingtoopenthatdoor.Imadeitcleartothemthatthey’dhavetoshootmeiftheywantedtogetintothehouse.I’mgladthattheyjustrobbedme.Buteveniftheyhadshotme,I’dstillfeelIhaddonetherightthing.“If they shot me in the street just because I didn’t open the door,”

Andréscontinued,“Godknowswhattheywouldhavedoneinsidetomywifeanddaughter.Andiftheyshotme,thenoisewouldhavealertedtheneighborswhowouldhavecalledthepolice.Imighthavedied,buttheywould have run away, and so I would have saved my wife and mydaughter.” He laughed. “Not quite a happy ending, but not theunhappiestone,either.”Andrés was more than a player; he was a hero. He was clearly

victimized by ruthless thugs. He was innocent. He didn’t do anythingwrongorbringthisonhimself.Hefacedahorriblethreatwithpoise;hekepthiscoolandchosehisresponsewithcourageandlove—eventhoughhehadaguntohishead.Heisarolemodelforme.Anytimeyoufeelthatyouhavenochoice,IsuggestyoudowhatIdo:rememberAndrés’sstoryand realize that even though you may not like your options or theirconsequences,youalways,always,haveachoice.


Chapter9

COLLABORATIONESCALATIONISNOTCONFRONTATION

Ifyouwanttogofast,goalone.Ifyouwanttogofar,gotogether.

—Africanproverb

Before I came to work at LinkedIn, I was a leader at Axialent, theconsultingfirmIcofounded.OuroperationscenterwaslocatedinBuenosAires, where we ran administration, finance, marketing, executiveassistance,andmaterialsproduction.Itwasanarrangementthatallowedustoserveourworldwideclientsefficientlyandatlowcost.Inoneofourone-on-ones,Skip,themanagerofourSydney-basedAsia

Pacific subsidiary, complained that he was not getting the service heneeded from Buenos Aires. Due to the eleven-hour time difference,coordinationwas sloppy,materials were not ready on time, schedulingclient appointments took forever, and communications in general wereextremely cumbersome—squeezed to a one-hour window that wasawkward on both ends. “I want to hire an administration person, butCharlie (themanagerof theoperations center) is blockingme,”he saidwithsomebitterness.IlistenedtoSkipandtoldhimthathehadagoodpoint,soI’dspeaktoCharlie—somethingIlaterregretted.IcalledCharlieandtoldhimaboutmyconversationwithSkip.Hisfirst

comment was an untranslatable and irreproducible Argentineanexpression that refers to thegenitaliaof the femaleparakeet.That, andthefactthathereferredtoSkipasabackstabbingsonofabitch,mademeguess that he was not happy at all that Skip had talked to me. ThenCharlieproceededtoremindmethatitwascompanypolicytocentralizeoperations in Buenos Aires, and that this policy was decided (by me,


mainly) for many good reasons: it was cheaper, it was better formanagingoperationsemployees,itcreatedasenseofcommunityamongthem, and it allowed us to leverage them as they could shift from oneregion to theotherwhen therewassomepeak indemand,andsoon. Itold him he had good points, so I’d speak to Skip again. (I ended upregrettingthis,too.)After several individual conversations with Skip and Charlie without

gettinganyclosertoasolution,Irealizedthatmymanagerialprocesswasflawed.IwassickofthevirtualshuttlediplomacybetweenBuenosAiresand Sydney, of the escalating conflict between Charlie and Skip, and Iresentedhaving tocomeupwithasolutionbymyself.SoIsatdowntodevelopaconflictresolutionprocessthatwouldpreventallthis.Icalledit“escalatingcollaboration.”BeforeIdescribethisprocess,letmedescribewhathappenswhenpeoplehavetoworktogetherunderpressure.

COLLABORATIONVERSUSHELP

A gasoline pipeline explodes in a drought-parched town. The firedepartment and ambulances rush to a nightmarish scene: thick flameslicking throughdrybrushand trees,black smoke,housesandbarnsonfire,screaminganimalsandburnvictimswrithingontheground.Afirstresponderradiosthelocalhospital’semergencyroom.“Wehaveatleasteighteen burn victims here. Howmany can you take?” “We don’t haveenoughstafftodealwiththis,”theemergencyroomcoordinatorreplies.“You’vegottotriage.”Inemergencyrooms,disasters,andonbattlefields,triageistheprocess

of sorting victims based on their need for immediate treatment whenmedicalresourcesarelimited.Tomaximizethenumberofsurvivors,firstresponders and medical personnel divide the victims into threecategories: (1) thosewhoare likely to live, regardless ofwhat care theyreceive; (2) thosewho are unlikely to live, regardless ofwhat care theyreceive; and (3) those for whom immediate care might make thedifference between living or not. Only people in the last group receiveimmediatemedicalattention.


Onthefaceofit,triagemayseemcruelbecausesomepeoplearelefttosuffer and others to die, but it is the only rational response to such asituation—theonethatmaximizesthenumberofsurvivors.Mistakesbyfirst responderscanresult inavoidabledeaths.Thereare threepossiblemistakes:(1)treatingsomeonewhowilllive,evenwithouttreatment;(2)treatingsomeonewhowilldie,evenwithtreatment;and(3)nottreatingsomeonewhocouldhave livedwithtreatmentbutwilldie for lackof it.Thefirsttwoerrorsarecalled“falsepositives”becausetheresponderhasaccepted a patient who should have been rejected, thereby wastingpreciousresources.Thethirderroriscalleda“falsenegative”becausetheresponder rejects apatientwho shouldhavebeenaccepted.As you canimagine, having to make fast, life-or-death decisions in an emergencysituationputsterrificstressonfirstresponders.1

Now, imagine that you and I are first responders treating two burnvictims.Eachofthemhasbeenassessedasworthyofmedicalattention—meaning that each can probably livewith treatment but is likely to diewithoutit.Asweworksidebyside,yourpatientgoesintocardiacarrest.Youcouldsurelyusemyassistancetosavehim.Butasyouareabouttoaskme forhelp,you lookoverandsee thatmypatient isalso inadirestate.WouldyouwantmetostopwhatI’mdoing inorder tohelpyou?Would you accuse me of lack of collaboration if I remain focused onsavingmypatient?If you are committed to saving themaximumnumber of people, the

answertobothquestionsisno.Inthisinstance,teamcollaborationisnotabout trying to help each other “horizontally” as friends do, but aboutworking together “triangularly” in the pursuit of a shared goal.Paradoxically,thebestwaytocollaboratemaynotbeforustohelpeachother,sincewhateachofusisdoingismorevaluableforthegoal.Sowecanworksidebyside,withoutanyinteraction,andstillbecollaborating.WhilethelogicofthisargumentisunassailableforsomeonelikeStar

Trek’sMr.Spock,innormalhumansemotionscanblockrationality.Wetake itpersonallywhenothers refuseour requests forhelp;we can feelthattheyarenotbeingcollaborative.Ihaveheardpeoplecomplainthatsomeone is not being collaborative when what they reallymean is “herefusedtodowhatIneeded.”Then there is the familiarproblemof attributionbias.Toparaphrase


Matthew7:5,wealltendtoseethespeckinourbrothers’eyesandmissthe log in our own. We use a totally different standard to definenoncollaborationwhensomeonerefusestohelpus(“Sheonlycaresaboutherneeds!”)thanwhenwedothesametohim(“I’mstayingfocusedonwhattheorganizationneedsmost!”).Whenmycoachingclientscomplainthatsomeonehasn’tcollaboratedwiththem,Iaskthem,“Doyoubelieveyouhavetoacceptallrequestsforhelpfromthosearoundyou?”They’reoftenstumped.

I’ve shown earlier how disengagement, disorganization,disinformation, and disillusion can tear a company apart. BecauseindividualsworktoachievetheirownKPIs(keyperformanceindicators),they optimize their subsystems, disregarding the system.They considerthosewhocontributetotheirindividualgoalsascollaborative,andthosewho don’t as uncooperative. True collaboration disappears becausenobody is willing to consider the best way to help the team win—regardless ofwhether doing someans pursuing theirKPIs or deferringtheirowntaskstohelpsomeoneelseachieveamoreimportantgoal.Andso it is that organizations stumble along, behaving inefficiently,incoherently,andself-destructively.RecallingtheanalogyoftheblindmenandtheelephantfromChapter

4, each of us holds specific information about our piece of theorganization,butnoperson—noteventheseniormanagerswhoonlyseethewhole elephant’soutline fromafar—cancalculate thebest courseofaction. Even the most truly engaged people who are committed toaccomplishing the organizational mission can disagree about strategicchoices.Theymaybealignedaround thegoalbutmisaligned regardingthewaytoachieveit.That’swhyconflictisafactoflife,eveninthebest-ledorganizations.Skip and Charlie were touching different parts of the elephant. Skip

caredaboutserving theclients inhis region ina time-efficientmanner;Charliecaredaboutefficiency,flexibility,andkeepingalidoncosts.Theirinterests led themtodifferent recommendations.Theybothwanted theorganizationtosucceed,buttheydisagreedvehementlyonhowitwouldhappen. To make matters worse, they became so attached to their


opinions that they saw each other as enemies—which led to personalstrife,lossofcohesion,andpoordecisions.

HOWNOTTORESOLVECONFLICTS

When people disagree with each other, their discussions typically turnintoatug-of-warinwhichonepersontriestoconvincetheotherthatheor she is right and the other is wrong. This zero-sum dynamic alwaysendsupinastalemateoranargument,witheachpersontryingtoprovehisorherpointandunderminetheother’s,makingitimpossible(a)foreitherofthemtolearnsomethingnewor(b)forthetwoofthemtoworktogethercreativelytocomeupwithbettersolutions.When twoparties fail to reachanagreement inaone-off interaction,

theycanjust“agreetodisagree”or“walkawayfromthedeal.”Butwhenthe parties are members of a team with a shared objective, that isn’tpossible.Theyhavetofigureoutawaytoworktogetherinpursuitoftheteam goal. So when two parties fail to reach an agreement inorganizational settings, each party resorts to a kind of lobbying I call“unilateralescalation”—theequivalentofsiblingsrunningto“tellon”theother to Mommy or Daddy. Each party goes to the manager (usuallybehind the other’s back) to argue in favor of his or her position andagainst the other party’s. Their commongoal is to enlist themanager’shelptooverwhelmtheiropponentwithsuperiorforce.Thisescalatestheconflict and further erodes the relationship. The “loser” feels defeatedandresentful,whichisespeciallybadinalong-termworkrelationship.This kind of contention also fosters a political atmosphere, creates a

dividebetweenwinnersand losers,andputs themanager in the roleofchoosingafavorite.Insteadofreinforcingcommitmenttothegoal,sucharguments generatemalicious compliance. The losing partymay try toprovethatheorsheisrightbysabotagingthedecisionwhileappearingtotoe the line, just toproveapoint.Asaclientonce toldme:“Oneof thegreatestsatisfactionsinlifeisbeingabletosaytothosewhomadeabaddecision,‘Itoldyouso.’ ”When managers need multiple conversations with each of the


conflictingpartiestofindoutwhatthedifferentpartsoftheelephantare,everyone’s time is wasted. There’s no joint problem solving; there’s noexploring of creative alternatives. Productivity goes out thewindow. Inshort, this kind of triangulation is a disaster. Unfortunately, suchbehaviorisstandardpracticeinmostorganizations.

HOWTORESOLVECONFLICTS

Escalating collaboration allows people to express and understand eachother’sneedsandcreatenewsolutions.ItaddressestheItdimensionoftask through intelligent decision making, the We dimension ofrelationshipsthroughmutualrespect,andtheIdimensionofself-worththroughtheconsiderationofeveryone’sneedsandvalues.Anditdoesallthisinthecontextofthesharedgoaltheteamispursuing.In escalating collaboration, people focus on winningwith the other

ratherthanagainsttheother.Collaboratorsunderstandthattocreatethemost value, they need a working relationship, and that such arelationship can only be founded on respect for each party’s interests.Thisapproachrevealspeople’spreferencesandconstraintsandengageseveryone in building solutions that go way beyond the originalalternatives.Itmaximizesefficiencythroughcooperation.In escalating collaboration, the disagreeing parties work together to

prepare a shared narrative that integrates their arguments withouthostility. If they can’t come to an agreement after conducting anintegrative negotiation, following the rules of escalating collaboration,theyinviteaseniorpersonintothediscussionasafacilitator-arbitrator.The senior person’s job is to contextualize the information of bothparties,bringinamoresystemicperspective,andmakeajudgmentcallifnecessary.Escalating collaboration doesn’t guarantee the right decision, but it

produces amore intelligent process that strengthens relationships andhelpseverybody feelappreciatedasvaluablecontributors.Theobjectiveistouseallavailableinformationandeveryone’screativepowerstoreachasuperiordecision,adecisionthateverybodywillbuyintoandcommitto


implement because they’ve participated in it. Escalating collaborationkeeps everyone engaged in the pursuit of the organizational mission,withoutanysourfeelingsbetweenapparentwinnersandlosers.

THESEVENSTEPSOFESCALATINGCOLLABORATION

Escalating collaboration requires the attitudes and skills I explained in my earlier bookConsciousBusiness.2 Iwon’trepeat thoseexplanationshere; instead I’llbrieflysummarize thespecificinstructionsforthisprocess.Iencourageyoutomakethisprocessoneoftheculturalnormsofyourorganizationanduseittodefinethewaytoresolveanyconflictsamongallyouremployeesfromdayone.

Whentwopeoplewithdifferentpointsofviewenterintoadiscussion,thegoalisnotforeitherofthemto“win”ortoprovethatoneofthemisright,butrathertofigureoutthebestdecisionfortheteam.Therulesare:

1. Those in conflict frame the issue collaboratively. Every conflict among organizationalmembersisadisagreementaboutthebeststrategytoachieveacommongoal.Thedifferenceofopinionaboutwhattodoarisesinthecontextofalargercollaborationtoachieveamissiontheyarebothcommittedtoaccomplish.

2.Inadialoguewitheachotherandintheabsenceofthemanager,eachpersonpresentshisorherpointofview.Theotherlistensappreciatively(asIdescribebelow).Todefinetheirpointsofview,eachspeakeranswersfivequestionsputtothembytheircounterpart:

(a) Whatdoyouwant?

(b) Whatdoyouplantoachievewiththat?

(c) Howwillthatfurthertheorganization’smission?

(d) Whatleadsyoutothinkso?(Whatfactsandwhatlogic?)

(e) Whatdoyouproposewedo?

3.Eachperson inquires, tryingtounderstandnotonlyeachother’spointofviewbutalsohis orher reasoningand the larger context inwhich that point of viewmakessense. Theyrespectfully check each other onmatters of fact and logic, clarifying assumptions, beliefs,andinferences.

4.Thetwopartiesusecreativeproblemsolvingandintegrativenegotiation(see“HowtoBeUnderstood” below) todissolve the conflict. That is, theywork to find away inwhich bothpartiesgetwhattheyneedwhilerespectingtheresourceconstraints.Iftheyfindit,thenthereisnomoreconflictandeveryonecommitstoimplementingthedecision.

5. If the parties can’t find a way for everyone to get what they need, they look for acompromisebothcanlivewith.Iftheyfindone,thenthereisnomoreconflictandeveryonecommitsto implementingthedecision. (If theycan’tcompromise, it isessential thatneitherpartysurrendersinorderto“notraiseafuss,”“getonwiththeprogram,”or,ironically,“beateamplayer.”Bothmusthold theirpositionsso that theorganizationcan find thebestnewequilibriumthroughsteps6and7.)


6.Ifnocompromiseisacceptabletobothpartiesbecauseitappearstojeopardizeoneortheotherperson’sabilitytocontributetotheorganizationalgoalastheyhavecommitted,theparticipantsexplorehowrelaxingsomeconstraintsmightdissolvetheconflictorhelpthemreachacompromise.

7.Thenthepartiesjointlyescalatetheconflicttothenextlevelofmanagement.Together,theymeetwiththemanagerandaskforhisorherhelpincreativeproblemsolving,relaxingtheconstraints,orprioritizingthealternativesthroughajudgmentcall.

Escalatingcollaborationmeansthatallthepartiestoaconflictengagetheirmanagerstogetherrather than separately. It’s out of bounds to ask amanager for an intervention or resolutionwithout the other party being present. Nor can any manager intervene unilaterally in theconversationbetweenconflictingparties—or,worseyet,discusstheissuewithanotheroftheirmanagers.

APPRECIATIVELISTENING

Admittedly,therearetimeswhensomeonecanbejustplainwrong.Butthosetimesaremuchfewerthanyoubelieve,andeventhenitisbesttofirstelicitthereasoningthatbringsthepersontothewrongconclusionbyseeking to understand his or her point of view. Then you can explainmuchmoreeffectivelywhyyoubelievethatthepersonisinerror.Let’s say that you and a colleague are touching different parts of the

elephant,asSkipandCharlieweredoing.Toavoidtriggeringaconflict,consider thatyouandyourcounterpartholdyouropinionsbecauseyouhave different points of view, different experiences, different beliefs,different assumptions, different needs, and different tactical goals.Against all your instincts, youmust findouthowyour counterpart, theone who disagrees with you, is “right”—meaning his or her positionmakes sense given his or her information, beliefs, assumptions, goals,andvalues.Furthermore,youhavetolethimorherknowthatyoureally“get where he or she is coming from.” That’s what you do withappreciativelistening.“Seektounderstandbeforeyouseektobeunderstood”isawonderful

recommendation.Butmost peoplehaveno idea of how todo it. Inmymany years of teaching people how to communicate, I haven’t found asingleclientwho,withoutintensivetraining,wasabletodoconsistentlythe five things I describe below when under the slightest hint of


emotionalstress:

1. Listenquietly,withoutinterruptingorcompletingtheotherperson’ssentences.

2. Lettheotherpersonknowyouarelisteningbyfocusingallyourattentiononhimorher(insteadofonyourphone),maintainingeyecontact,nodding,andsaying,“mm-hmm.”Occasionallyencouragetheotherwithshortphrasessuchas“Goon,please,”“Tellmemore,”or“Howwasthatforyou?”Aparticularlyeffectivetechniqueistorepeatthelastfewwordsoftheother’sstatementinaninquisitivetone.

3. Whentheotherpersonfinishesanidea,summarizeitsessenceandaskifyouunderstoodhimorhercorrectly.Lettheothermodifyoraddtoyourunderstandinguntilheorsheisaresatisfiedthatyoureally“got”whatheorshewantedtosay.

4. Askquestionstounderstandthereasoningthatleadsyourcounterparttohisorherpointofview.Useopenquestionsasmuchaspossible,andavoidconfrontationalquestions(youcanchallengetheother’sideaslaterintheconversation).Duringtheanswerstothesequestions,continuetoapplypoints1,2,and3.

5. Validatethattheother’sperspectivemakessenseandseemsreasonable(givenhisorherbeliefs).Ifyoudisagreewithsomethingtheothersaid,don’tgetintoanargumentaboutit;rather,acknowledgehisorherpointofviewandwaitforyourturntoexplainyourselftopresentanydisagreement.3

There’s a funny story that illustrates how radical these simpleinstructions can be. I was in Shanghai, teaching a workshop forexecutives of a financial services company. As usual, I gave them anassignment after teaching them the “seek to understand” process. “Goback home and, without saying anything about the workshop, asksomeoneinyourfamily(orafriend), ‘What’sonyourmindthesedays?’(or simply ‘Howwasyourday?’).Then just seek tounderstandwithoutsayinganythingelseforatleasttenminutes.”BeforeIcouldsay“goodmorning”thenextday,oneoftheparticipants

saidhewantedtosharesomething.HewassoeagerthatIgavehimthefloor.Hepulledouthisphoneandtoldusthathehadcalledhiswife(in


Beijing,wheretheylived)andhadaconversation,whichherecorded.Heproceededtoputthephonenexttothemikeandpressedtheplaybutton.I couldn’t understand anything from the recording because it was inChinese, but after about thirty seconds the whole room burst out inlaughter.PeoplewerelaughingsohardandspeakinginsuchananimatedtonethatIwasverycurious.Afterthejokesdieddown,theownerofthephonetranslatedforme.Theconversationwentmoreorlesslikethis:

Husband:What’sonyourmind?

Wife:Whydoyouask?

Husband:I’minterestedinlisteningtoyou.

Wife:What’swrong?

Husband:Nothingiswrong,Ijustwanttoknowwhat’sonyourmind.

Wife:Something’swrong.Youneverlistentome.

Husband:Iwanttolistentoyoutoday.Don’tyoulikeit?

Wife:No!Itmakesmewonderwhat’swrong.

I’ve since changed the instructions so workshop participants don’tshock the people in their professional and personal lives by suddenlybehaving strangely. “Most people are used to you not seeking tounderstand them,” I tell the participants, “so you might raise theirsuspicionsifsuddenlyyoustartbehavingasIpropose.Irecommendyouexplaintothemwhatyou’velearnedandmakeanagreementtotryitoutasanexercise.”Peoplemightuseappreciativeinquirydeceptively,justasmuchasthey

canlieaboutanyfeelingsorintentions.Butappreciativeinquiryisnotamanipulationtool.Itisanethicaltoolformutuallearningthatfollowstherule“Seektounderstandothersasyouwishtobeunderstood.”

HOWTOBEUNDERSTOOD

Ifyouwanttomakeiteasierforacolleagueoremployeetounderstandyou,youneedtopresent


your view as a personal perspective, rather than as “the exclusive truth.” Instead of saying,“You’rewrongandI’mright,”yourattitudeshouldbe,“Youhavevalidreasonsforholdingyouropinion,andsodoI.”Here’swhatIsuggest.

1.Explaintoyourcounterpartthatyoudon’twanttoarguethatyouareright.Rather,youwanttopresenttohimorherwhatyouconsiderisanargumentworthyofconsideration.Youwouldlikehimorhertounderstandyourpointofviewtocompareitwiththeoneheorshepresented,correctitifitseemswrong,orintegrateitifitseemsuseful.

2.Present yourpointof view in firstperson.Use “Myopinion is,” “I think,”or “Ibelieve.”Avoid saying anything in second person, as it can be inflammatory. “You arewrong,” “Youshould,” “You don’t know,” and other such expressions will almost surely derail theconversation.Alsoavoidusingthirdperson.“Thisisthewayitis”or“Thefactofthematteris”arealmostasbadas“Youarewrong.”Avoidusingfirstpersonpluralaswell.“Weneedto,”“Wearesupposedto,”or“Whatweoughttodois”willsoundtotheotheras“Youshould”andcauseareaction.Thereisno“we”withoutanalignmentofthe“I”s.Really,theonlysafewaytospeakisinfirstperson.(Andnocheating.Youcan’tsay,“Ithinkthatyouarewrong.”“Ithinkyouareanidiot”isnobetterthan“Youareanidiot.”)

3.Explainwhyyouthinkwhatyouthink;sharetheevidenceandreasoningthatleadyoutoyour conclusion. Illustrate your argument with examples and concrete stories. Tell yourcounterpart or team member what you believe are the implications for action of yourreasoningandwhatyou’d like toseehappen. Includeanyproposals fornextstepsthatyouhave.

4.Offertoclarifyanythingthattheotherpersonwishestounderstandbetter.Invitehimorhertoaskanyquestionsheorshehasaboutyourpointofview.

5. Invite the other to state any questions about the accuracy or completeness of yourevidenceandreasoning.

6.Asktheotherforhisorheropinionofyourpointofview.This isthewayyouopenthenext phase of the conversation, where you try to integrate the arguments into a singlenarrative.

GETTINGTOYES

If you have a disagreement with someone, the way to stimulate aconstructive resolution is to frame the issue collaboratively, building anarrative that findsamutuallybeneficial outcome for the conversation.Thisisobviouslythecasewhenpeoplebelongtothesameorganization,but even in apparently oppositional situations it is always possible toframetheissuecollaboratively.


For example, instead of the buyer saying, “My goal is to buy theproductforthelowestprice,”andthesellersaying,“Mygoalistoselltheproduct for the highest price,” both could say, “Our goal is to find amutually beneficial transaction.” Then you must acknowledge eachother’s interests, concerns, and needs and discuss the bestway to takecareofthemforbothofyou.In the classic book about negotiation called Getting to Yes, Roger

FisherandWilliamUryshowedhowindividualswhodisagreeachieveawin-win outcome. They call their process “integrative bargaining.” Thekeytointegrativebargainingistonegotiatebasedoninterestsratherthanpositions. For example, aftermy wife suggests we go out for dinner, Imight tell her: “I don’t want to go out tonight.”When I stake out mypositioninthismanner,Iamsettingmyselfupforanimpasse,sincemywifewillsurelysay,“Well,Ido.”Ifmygoal is toresolvethesituation,Imightaskinstead,“Whyiseatingouttonightimportanttoyou?”Supposesheanswers,“I’mtiredandI’drathernotdealwithcookingorcleaning.”(Our deal is that one cooks, the other cleans.) Then I have severaloptions.Icouldsay,“Iwouldliketowatchtonight’sgame.DoyoumindifwestayhomefordinnerbutItakecareofthecookingandcleanupafterthegame?”Or“Doyoumindifweordertakeout?”or“Doyoumindifwego to the sports bar in the mall?” Or we could explore several otheroptionsthatwouldallowmetowatchthegameandhertoavoidcookingor cleaning. By identifying the interests thatmotivate both of you, youcancomeupwithcreativesolutionsthatintegrateeveryone’sneeds.

WHENNOTTOLISTENTOYOUREMPLOYEES

TheGoldenRuleisthefirstrequirementofanyfairprocess.WhenSkipand Charlie escalated unilaterally to me as a manager, I should haveaskedthem,“Howwouldyoufeelifyourcounterpartcametomealonetoadvocateforadecisionthatfavorshim?Whatwouldyoulikemetodointhatcase?”Theobvious replywouldbe something likeCharlie’s colorfulSpanish

curse.Bothwantedmetoheartheirsideofthestory.Theonlywaytodothat fairly is in a three-way conversation. (The exception is when an


employeefearsretribution,asinawhistle-blowingorharassmentcase.Insuch an event, the employee should speak to themanager privately.) Irealizedthatbydiscussingtheproblemwithonlyoneofthepartiestotheconflict, I was rewarding their unilateral escalation and fostering thepracticeinthefuture.Iwasgettingonlybiased,incompleteinformation,and putting myself in between two people who’d never learn to workthroughtheirdifferencestogether.To nip this dynamic in the bud, transcendent leaders have to get a

commitmentfromeveryoneintheorganizationtoabidebytheprinciplesof escalating collaboration. Everyone has to understand that this is thewayinwhichanyconflictwillberesolved,andthatanydeviationswillbefrowned upon. Of course, this doesn’t prevent someone from sharinginformationwith someone else, or asking for coaching from his or hermanager;onlyunilateralescalationsarediscouraged.Sometimesthisisafuzzyboundary,butmostoftenmanagerscantellwhethertherequestforhelp, communication, or coaching is genuine, or if it’s a subtle way toadvocate for a position in violation of the established escalatingcollaborationprocess.Ifoneofyouremployeesattemptstoescalateaproblemunilaterallyto

you,youmustdemonstratethestandardandholdhimorheraccountableto it. The first time someone tests the boundaries I tend to be soft,educatingthepersonabouttherulesoftheprocess.Afterthat,Itendtobehard,confrontingthepersonaboutbreakingthecommitmenttoonlyescalatecollaboratively,notunilaterally.KnowingwhatIknownow,thisishowIwouldhaverespondedwhen

CharliecametometolobbyagainstSkip:

1. I’daskCharlie,“HaveyoudiscussedthismatterwithSkip?”Ifhesaysno,I’dremindhimofthecommitmentagainstunilateralescalationsandaskhimwhyheisbringingthemattertomewithouthavingdiscusseditfirstwithhiscounterpart.I’dexplainthatI’mwillingtohelphimandSkipiftheycan’tfindasolutionbythemselves,butthatI’monlygoingtoparticipateinathree-wayconversationthathasbeenproperlyprepared.

2. IfCharlieanswersyes,I’daskhim,“HaveyouinvitedSkiptocomewithyoutoseeme?”Ifhesaysno,I’dremindhimofthecommitmentagainstunilateralescalationsandaskhimwhyheisbringingthe


mattertomewithouthavinginvitedhiscounterpart.I’dexplainthatI’mwillingtohelphimandSkipiftheycan’tfindasolutionbythemselves,butthatI’monlygoingtoparticipateinathree-wayconversation.

3. IfCharlieanswerssomethingalongthelinesof“Yes,buthesaiditwasn’tworthit,”I’daskhim,“HaveyoutoldSkipthatyouwouldcometoseemealone?”Ifhesaysno,I’daskhimtotellthistoSkip,becauseifhedoesn’t,SkipislikelytobelievethatCharliewenttoseeme“behindhisback.”

4. IfCharlieanswersyes,I’dthankhimforbringingthemattertomyattentionandexplainthatIwouldliketodiscussitwithbothpartiespresent.ThenI’dcallSkipandaskhimwhyherefusestojointlyescalatethemattertome.I’dexplaintohimthathedoesnothaveachoiceonthis,astheagreementisthatwhenpeoplecan’tagree,theymustescalatetheissuecollaboratively.

AtLinkedIn,weestablishedagroundrulecalled“Five-dayalignment.”It prescribes that if two people cannot agree on a decision within fivedays, then they automatically escalate jointly to their managers. Weestablished that rule after some decisions that had been delayed forweeks and months were finally escalated to the leadership team, whowere able to resolve the issue in less than an hour. It’s understoodthroughout the organization that refusing to escalate jointly when twopeoplehavefailedtoreachalignmentafterfivedaysgoescountertoourculturalnorms.

THEROLEOFTHEMANAGER

Escalating collaboration emulates the court system; managers in thehierarchy are analogous to appellate judges, with the senior leadershipteam being like the Supreme Court. After going through their initialnegotiationwithoutamutuallysatisfactoryresolution,bothpartiescometogethertothemanagerwithacommonnarrativeandasharedobjective.Noperson canargue forhisproposal on thebasis that itwill affecthisindividualorhis team’sperformance.Suchargumentwouldbe rejected


asillegitimate.Thegoalisnottoscoreapointforhissubteam,buttowinthegameasapartoftheorganizationalteam.Managers carry the decision authority because they represent the

“propertyrights”oftheorganization’sowners.Theygettomakedecisionsnotbecausetheyareright,butbecausetheyhavebeenempoweredbytheownersoftheassetstodoitontheirbehalf.Themanagers,inturn,haveafiduciary responsibility to act on behalf of the owners. If they make amistake, the price will be paid by the owners—who in turn could losetrust in the management. So the managerial authority comes withresponsibilityandaccountability.Themanagersmakeadecisionbecausethey have a wider perspective of the organization, because they caninternalize costs andbenefits that are externalities to theparties of theconflict, and because it’s their head on the chopping block if theymissout. They put the owners’ money where their mouth is and have toexplainthemselvesifresultsarenotwhattheownersexpect.It’simportantforeverybodytounderstandthattherearenowinnersor

losersfromtheprocess.Managersdon’tmake“therightdecision.”Theymakeadecisionthatseemsbesttothem,buttheycouldbewrong.Whenmanagersruleinfavorofonealternativetothedetrimentoftheother,it’sessentialthattheyexplaintoallthepartiesintheconflictwhytheydoso,in alignment with the organization’s mission and values. Themanagershould also praise thosewho escalated collaboratively the conversationforallowinghimorherto learnthenecessarydetailsof thesituationinorder tomakean intelligentdecision.It’sessential thatmanagersneverchastisethosewhoescalatecollaborativelytothem.Once the issue is resolved, the “case” remains as a precedent that

informs the members of the organization how the court (seniormanagers) is likely to rule (decide) in similar instances. If a managerbelievesthattheissueisbeingimproperlyescalated,heorshecanrefusetohearitandsenditbacktothe“lowercourt.”Escalatingcollaborationallowsmanagerstopreserveculturalintegrity

because it takes triangulation and end runs out of the equation. Byforcing the teammates to communicate respectfully before presentingtheir evidence and viewpoints to their supervisors, and to describe indetail what their concerns and interests are, management alsounderscores that strong interpersonal relationships and individual


engagementareessentialforthehealthoftheorganization.

AfterIthoughtlongandhardaboutescalatingcollaborationatmyconsultingfirm,Axialent,Idecidedthatwehadtodemanditasaculturalnorm.Iexplainedtoalltheemployeeswhythisprocesswouldbeagoodwaytoaddressanyconflictanddiscussedwith themwhat they thoughtabout it. What, if anything, would they recommend beyond mydefinitions to be able to commit to the process? At the end of thatconversation, all of us agreed to the ground rules, including Skip andCharlie.BecauseSkipandCharliecouldn’tcometoanagreement,thethreeof

usagreedtomeetbyvideoconference.“Fred,”Charliestarted,“weneedyourhelp,becausewecan’tdecideby

ourselveswhatwouldbethebestcourseofactionforthecompany.”Afteraskingthemtoexplainthetrade-offsinmoredetail,Iaskedthem

whatcreativeideasthey’dexplored,eveniftheyhadn’tagreedonthem.“We talkedabouthiring someone inBuenosAiresbutput themona

different schedule,”Skipvolunteered. “Thispersoncouldcome into theofficeat5p.m.BuenosAirestime,whichis6a.m.inSydney.Theycouldspendanhourwith therestof theoperationscrewtocoordinate thingswiththem,andthenstaytill1a.m.,whichis2p.m.inSydney.ThiswouldgivethemplentyoftimetoconnectwiththeAsiaPacificemployeesandclients.”“Theproblemisthatwecan’tleavetheofficeopentill1a.m.withanew

person,”Charlieadded.“Anditwouldbedepressingforthemtobealoneinsuchabigspace.Inaddition,thepartofthecityinwhichwehavetheofficeisnotthesafestatnight.Iwouldn’twantoneofouremployeesonthestreetafterbusinesshours.”Before I could speak, Skip took thewords out ofmymouth. “Wait a

second.Idon’treallyneedthispersontobephysicallyattheoffice.Theycould just as easilywork fromhome. If there are things the personwehire needs from the office, we could have them sent to their house, ormaybetheycanpickstuffupintheafternoon.”“Whoeverwehirewouldstillfull-linereporttoyou,Charlie,”Iadded,


“withadottedlinetoSkip,butthey’dworkfromhomemostlyfocusedontheneedsofAsiaPacific.Wouldthatworkforyou?”“Itcouldwork,”Charliesaidtentatively,“butIdon’thavethebudgetto

hire an additional person. Right now the regular crew manages AsiaPacific’srequestsduringbusinesshours.Idon’thaveadedicatedpersonwhomIcouldask toswitchschedules,andIdon’t feel like lettinggoofany ofmy staff as they areworkingwell serving operations inAmericaandEurope.”IturnedtoSkipandaskedifhewouldbewillingtofundthisemployee

fromhisbudget.“Itwouldbemuchcheaper foryoutohiresomeone inArgentineanpesosthaninAustraliandollars.”“Iwould,”Skip replied, “but then I’dwant them tobe full line tome

anddottedlinetoCharlie.IfIfundthathire,Iwanttobeabletoassignworkaccordingtomypriorities.”BeforeIcouldask,Charliesaid,“Icanlivewiththat.”Intheend,wehiredanAussiewomanwhohadmovedtoBuenosAires

afterfallinginlovewithanArgentinean.SheworkedoutsowellthatweimplementedasimilarsystemforourEuropeanoffices.SkipandCharlieendedtheconversationongoodterms,feelingthattheirneedshadbeenmetthroughafairprocess,mostlyledbythem.(Indeed,theycouldhavereachedallbutthelastpointofagreement—aboutbudgets,overwhichIhadfinalauthority—withoutme.)

Justastriagerulesareallaboutsavinglivesandmakingintelligentdecisions in crisis situations, escalating collaboration offers leaders acrucial tool for building a cohesive, respectful, and high-achievementculture.Itforcespeopleawayfromtheirangry,self-righteousdesiretobe“right” and to show others they are “wrong.” It answers the question“Whatistherealgoalhere?”with“Theorganizationalmission.”Itsetsacultural norm of cooperation in the interest of the organizationalpurpose. It offers managers a way to harness the forces of conflict topropeltheorganizationforward—verymuchlikethetensioninabatterycan energize a circuit. If, as a leader, you are able to achieve this, yourorganizationwillgainagreatcompetitiveadvantage.


Chapter10

INTEGRITYYOURWORDISYOURBOND

Deldichoalhechohaygrantrecho.(“Fromsaidtofactthere’sgreatgap.”)

—Spanishproverb

Five frogs are sitting on a log. Four decide to jumpoff.Howmany areleft?Answer:Five.Why?Because there isagreatgapbetweendecidinganddoing.Decisions are worthless unless they turn into commitments, but

commitments are worthless unless they are made, kept, and honoredwithintegrity.Integrityisanessentialconditionforeffectivework.Whenpeoplecannotcountoneachothertodeliverontheircommitments, it’simpossible to execute plans and achieve goals. Besides the materiallosses,lackofintegrityhasatremendouscostinhumanrelationshipsandpersonal stress. It’s very demoralizing towork in a communitywithoutintegrity.Theimpactofintegrity(orlackthereof)issimilartotheoneofhonesty.

Imaginehowdestabilizingitwouldbetoworkinanorganizationwherepeoplearedishonest,inaplacewhereyouneverknowiftheotherpersonis telling the truth or lying. It would be impossible to accomplishanything.Worseyet,itwouldbeimpossibletorelatetoothersonalevelbeyondpretense.Imaginehowdisengagedanddespondentyou’dquicklybecome.Lying is straightforward: it’s the opposite of telling the truth. But

integrityishardertodefine:wedon’talwaysclearlyunderstandwhenweviolateit.Althoughwedounderstandintheabstractthatlackofintegrityisbad,weconsidertransgressingagainstitaminorissue.Butintegrityis


ascriticalashonesty foreffectiverelationships,both inbusinessand inlife in general.We need a practical definition that lets us seewhenwetransgress.Andweneedtounderstandthatwhatevershort-termbenefitswe imagine lack of integrity can afford us, they are dwarfed by theextraordinarylong-termcostsintheIt,We,andIdimensions.Idefineintegrityashonoringyourword.Apersonwithintegritykeeps

herpromiseswheneverpossible,andstillhonorsthemifsheisunabletodoso.Youmakeagroundedpromisebycommittingonlytodeliverwhatyoubelieveyoucandeliver.Youkeep thepromisebydelivering it.Andyou can still honor the promise when you can’t keep it by letting thepersonyouarepromisingknowof the situation, and taking careof theconsequences.Some commitments are explicit. For example, youpromise todeliver

your work product by April 9, or you promise to pay themortgage byOctober10.Othercommitmentsaretacit:everybodyexpectsyoutoabideby social rules of clothing, speech, action, and so on. Still othercommitments are in the middle: when you enter into an employmentrelationship,youcommittoabidebythecompany’spoliciesandtoholdafiduciaryresponsibilitytoactinthebestinterestsoftheowners.In an interview before a World Championship match, a journalist

askedMikeTyson’sopponentwhathisplanwasforthefight.TheboxergaveadetaileddescriptionofhowhewasgoingtofightTyson.Thenthejournalist turned to Tyson and asked, “What do you think about that,Mike?”Tyson’sanswerwassopithyitmadeheadlines:“Everybodyhasaplanuntiltheygetpunchedinthemouth.”1

Realityoftenpunchesusinthemouth.Thingsdon’tgoasplannedduetoinnumerablefactorsoutofourcontrol.Sometimesnaturegets inourway in the form of a big storm. But most of the time, the disruptivefactorsspringfromhumannature.Theproblemisnotthatthingsgetoutofourcontrol.Whatdestroysanorganization’sability toexecute in thefaceofinevitablesurprisesisthatpeopledon’tactwithintegrity.Worsethanthat,mostpeopledon’tevenknowwhatintegritymeans.In this chapter, I’ll show you how to build and operate an integrity-

basedexecutionsystem.Thegoal isthreefold:todeliverresults(theIt),toenhancetrust(theWe),andtoconductoneselfwith integrity(theI).You’lllearnhowtomakecommitmentsinawaythatenhancestrustand


promotes efficiency. More important, you’ll learn how to preserveintegrity,trust,andefficiencywhenthingschangeandyou,orothers,areunabletodeliveroncommitments.

ANEXPENSIVEMISTAKE

Jared,theCEOofSuperNuts,Inc.(notarealcompanybutastand-inforarealclientofmineinadifferentindustry),wasfurious.Hehadlostthebiggestoutsourcingcontractinthecompany’shistoryduetoablunderbyVictor, his operations manager. Furthermore, Victor’s blunder was aninfringement of a company policy that Victor knew very well. Jaredwanted to rake Victor over the coals, but he was worried that Victorwouldgetsoupsetthathe’dquit.Angryashewas,JaredwantedtokeepVictor on because Victor was one of his oldest and most respectedemployees.When Jared asked me for help, my first question was, “What

happened?”“Victorreallyscrewedup,”Jaredsaid.“Wesignedahugeoutsourcing

agreementwithOrganicFoodStorestoproducetheiralmondbutter.Thecontractspecifiedthattoavoidcontaminationfrompeanuts,thefacilitiesthatproducedthealmondbuttercouldnothandleanypeanutproducts.Isignedthecontractwithoutasecondthought,sinceourcompanyhasthesamepolicy.“Last week, while we were setting up, Organic Food Stores sent a

surprise audit team to the plant that would be making their almondbutter. They analyzed empty containers and found traces of peanuts.2

Theyaskedtheworkersattheplantiftherewerepeanutsbeingprocessedsomewhereinthefacility,andtheyconfirmedthatinadifferentsectoroftheplanttherewasalineproducingpeanutbutter.“When the auditors reported their finding, Organic’s outsourcing

managerwentballistic.Hereferredthemattertotheirlawyers,whosentus notice that they were rescinding the contract due to ournoncompliance.Asifthiswasn’tfunenough,theyinformedusthattheywereconsideringsuingus.Whatamess!”


Jared toldme thathe’ddiscovered that severalmonths earlierVictortried to improve efficiency and utilization by producing both almondbutterandpeanutbutterindifferentlinesatthesameplant.Heandtheplant manager devised a cleaning procedure for the containers thatprevented contamination. Victor asked the plant manager to conductexhaustiveteststocheckthattheprocedurewassafe.Theyfoundittobeso,soVictorgavetheordertolaunchthepeanutbutterlineinthealmondbutter plant. The decontamination process worked—so well that therewasnotasingleproblemforseveralmonths.That’swhynobodyoutsidetheplantknewthatthecompanypolicywasbeingcircumvented.“Infact,theOrganicauditorsdidnotfindanycontamination;theyonly

foundminimal tracesof thewrongmolecule in someof the containers.Without thesupersensitiveequipment theywereusing theywouldhavenot found it, because the microscopic quantities were well below thedetectionlimitinanyproducttest.Butfindittheydid,andallhellbrokeloose.“Thiscreatednotonlyafinanciallossforus,”Jaredcontinued,“butit’s

also a public relations nightmare. Organic reported the reason forrescinding the contract to the trade media. Our industry is small, soeveryoneknowsthatwereallymessedupwithoneofthebigplayers.Ourreputation and credibility have taken a big hit, to say nothing of thepersonalembarrassmentI’mfeeling.”Jaredwanted tohave a constructive conversationwithVictor, buthe

wassoangrythathefeltlikehewouldblowit.SoIproposedthatJaredandIdoa“Houdini,”aspecialrole-playingexerciseInamedforthegreatescapeartistHarryHoudini.Iplaymycounterpartand,insodoing,putmyself intoaconversationalbarrel.Then, likeHoudini, Idomybest togetoutof thebarrelbefore IplungeoverametaphoricalNiagaraFalls.TheHoudiniroleplayallowsmetomodelconstructivebehaviorsformyclient(Jared),andforhimtoempathizewithhiscounterpart(Victor).Italso lets Jared experience how disarming it can be to interact withsomeonewhousesaskillfulconversationalmethod.Inthesescenarios,everythingIsayhastobealignedwiththebeliefs,

emotions,andvaluesof thepersonI’mworkingwith.Ihavetoplaymyclientmore authentically,more collaboratively, andwithmore integritythan theycanevenplay themselves.This roleplaying isa real thrill for


bothparties,andit’sveryeffective.3

InmyHoudinidialoguewithJared,ItoldhimIwouldplayhimandhewouldplayVictor.Beforewe launched into thedialogue, I asked Jaredwhathewantedtoachievethroughtheconversation.Iinquiredabouthisgoalsforthetask,fortherelationshipwithVictor,andforhimself.Here’swhatwesaidtoeachother:

Jared:I’dliketounderstandwhathappenedandwhyVictormadethedecisiontobringthepeanutbutterproductionintothefacilityagainstthecompanypolicy,especiallywithouttellingme.Iwanttomakeitcleartohimthatthiswasabigmistakeandmakesureitwillneverhappenagain.IwantVictor,andeverybodyelse,tofollowtherules.

Fred:Anythingelse?

Jared:I’dliketorepairthethreedimensionsyoumentioned—theIt,theWe,andtheI.Withregardtothetask,I’dliketogetVictor’shelptoownuptohismistakeandapologizetoOrganicFoodStores,andaskthemtoreconsidertheirdecisiontorescindthecontract.Sincehemadethedecision,IwanthimtobeintheroomwithmewhenItalktoOrganicFoodStores’sexecutives.Regardingtherelationship,I’dliketoreestablishtrust.Ifeelbetrayed,andmyconfidenceinVictorhasbeenshaken.He’sbeenasolidcontributorformanyyears,soI’dliketonotlosehimoverthisbreach.Asfarasmypersonalfeelingsandvaluesgo,I’dliketorestoreasenseofintegrity.IwouldlikeVictortoapologizeandtoforgivehim.Idon’twanttostayresentful,andIdon’twanthimtocarryachiponhisshoulder.

Fred:ItlookstomeliketheproblemisnotjustwithVictor.Therewerealotofpeopleintheplantwhoshouldhaveknownaboutthecompanypolicyofkeepingpeanutproductsseparate.ItconcernsmethatnobodyraisedaredflagwhenVictorgavetheordertostartthepeanutbutterline.Thefactthatnobodysaidanythingtellsmethattheproblemismuchdeeperthanjustonepersonmakingabaddecision.

Jared:You’reright.ThisisnotjustaconversationwithVictor.ThisisaculturalissuethatVictorandIneedtoaddresswithhisstaff.


Fred:Thenlet’salsoaskforVictor’shelptoreinforcethecompanystandards.

Jared:Soundsgood.

Fred:Let’sstarttheroleplay.I’llplayyou,Jared,andyouplayVictor.I’llsaysomethingsthatmaysurpriseyou,soyou’llhavetoimprovise.Justletyourintuitionguideyou,anddon’tworryabouttryingtoplayVictorexactly.Don’tmakehimnicerthanheis,butdon’tmakehimnastier,either.Putyourselfinhisshoesandspeakasyoufeellikedoing.Let’ssetthestageinmy(Jared’s)office.I’vecalledyou(Victor)todiscusstheproblemofOrganicFoodStores.

(Now the role play starts. I’ve marked the following role play withasteriskstodistinguishitfromthedialogueabove.)

Victor*(playedbyJared):I’msorry,Jared.Thissurpriseauditreallyscrewedus.Wehadaveryreliableprocessfordecontamination,buttheseguyscamelookingfordirt.Thetracesofpeanutbuttertheyfoundwouldhavenevercausedanyproblems.

Jared*(playedbyFred):Iunderstand,Victor,thattheunexpectedauditfoundaverysmallresidueofpeanutbutterinthecontainers.

Victor*:Yes,itwasbarelydetectable.

Jared*:Victor,I’dliketohaveaconversationwithyouaboutwhathappened.Mygoalistounderstandwhatledyoutotakethedecisiontostartapeanutbutterlineinthealmondbutterplant,andwhyyoudidthatwithoutdiscussingitwithmefirst.I’dalsoliketofindifthere’sawaytomakethingslessterriblethantheyare,notjustwithOrganic,butalsowithinourowncompany.Thisisabreachoftrustthatweneedtofixsowecanworktogetherasateam.Doesthatsoundgoodtoyou?

Victor*:Yes.Ifeelverybadaboutwhathappened.

Jared*:Whatactuallyhappened,Victor?


Victor*:Theplanthadexcesscapacity,andourotherplantthatproducespeanutbutterwasnotabletocopewiththehighdemand.SoIthoughtthatifwecouldensurethatthetwosubstanceswouldnevermix,itwouldbegreattouseourexcesscapacityinthealmondbutterplanttocoverfortheproductiondeficitinthepeanutbutterplant.Otherwisewewouldhavetooutsourceproductionwhilehavingsomeofourequipmentstandingidle.Itwouldhavebeenquiteexpensive.Allourtestsofthescrubbingprocedureweresatisfactorysoafewmonthsbackwestartedthepeanutbutterline.Andweneverhadaproblem.Untillastweek.

Jared*:Irealizethatthescrubbingwasquiteeffective.AndIcan’tblameyoufortryingtosavethecompanymoneythroughefficientutilization.Infact,Ithinkthatthesecondlineisagoodideagiventhatwecanavoidcontamination.

Victor*:I’mgladyouseeitthatway!Ithoughtyouwereupsetwithme.

Jared*:Iamveryupset,butnotbecauseyoutriedtoimproveourprocesses.Iappreciateyourcommitmenttotrytodotherightthingfortheorganization.You’vebeenagreatcontributorformanyyears,Victor.That’swhyIchoseyouformyleadershipteam.

Victor*:Thenwhyareyouupsetwithme?

Jared*:IamupsetwithyoubecauseyouandIhadanagreementnottomixalmondbutterandpeanutbutterinthesameplant.Youbrokethatagreement.Youchangedyourcommitmentunilaterally,withoutlettingmeknowandrenegotiatingitwithme.

Victor*:Agreement?Commitment?Whatareyoutalkingabout?

Jared*:There’sacompanypolicythatspecifiesthatalmondbutterandpeanutbutterproductionwillnottakeplaceinthesameplant.Youcommittedtoimplementingthatpolicy.That’sapromiseyoumadetome.


Victor*:Ineverthoughtofthepolicyasapromise.

Jared*:Whatdidyouthinkitwas?

Victor*:Idon’tknow.Ineverthoughtaboutitthisway.Iassumeditwasasafetyrule,somethingthatyouwantedmetofollowtoavoidcontamination.ButsinceIfoundawaytoavoidcontamination,IthoughtIwasrespectingthespiritofthepolicyevenifIdidn’tfollowitsletter.

Jared*:Iseethat.PerhapsIfailedtoexplaintoyouthatwhenyouagreedtofollowthispolicyItookthatasapersonalcommitmentfromyoutome.Icountedonyouabidingbyit.That’swhyIsignedthecontractwithOrganic,whichhadacovenantsayingwewouldnotproducepeanutproductsinanyoftheplantswherewe’dproducetheiralmondbutter.Sinceyounevertoldmeyouwereplanningtodootherwise,Iassumedthatyouwerefollowingourpolicy.

Victor*:Soyouthinkitwasamistaketorepurposeourexcesscapacity?

Jared*:Notnecessarily;Idon’tknowifitwasoritwasn’t.Whatwassurelyamistakewasnotdiscussingitwithmefirst.That’swhatbothersme,Victor.YouandIhadanunderstandingthatyou’dfollowthepolicy.Youchangedyourmind,butyounevercheckedwithme.Youdidn’ttellme.Youdidn’taskme.Youdidn’texplaintome,orgivemethechancetoparticipatein,thedecision.SoIsignedacontractwithOrganicthatwasindefaultbeforetheinkonitwasdry.Iwasoutofintegrity,asIamultimatelyaccountableforeverythingthatourcompanydoes.

Victor*:Whenyouputitthatway,IfeellikeIhaveletyoudown.Ishouldhavetoldyoubut,youknow,Ithoughtitwouldbebettertoaskforanapologythanforpermission.

Jared*:Thatisthebigmistake,Victor.That’saget-out-of-jail-for-freecardthatyoucanusetobreakanypromise.Ican’tbelieveyou’dwantotherstoarguelikethiswhentheybreakpromisestoyou.That’sthe


deathoftrust.Ifpeoplecandisowntheirpromisesbecausethey’dratheraskforanapologythanforpermission,whatvaluewouldanybody’swordhave?

Victor*:You’reright,Jared.Itotallyscrewedupbynotdiscussingthematterwithyou.I’mverysorry.

Jared*:Iacceptyourapology.Iassumethatthiswillneverhappenagain.

Victor*:Ilearnedahardlesson,Jared.Iwillfollowthepoliciesreligiouslyfromnowon.

Jared*:That’sthewronglesson,Victor.Policiesarenotdogma.Idon’twantyoutofollowthemreligiously.Iwantyoutothinkoutoftheboxandconsiderwaystoimproveouroperationseveniftheychallengeapolicy.ButwhatIwantyoutodothenistobringthematteruptomesothatwecanrenegotiateouragreements.Bytheway,that’sthesamethingthatI’dneedtodowiththeboardifIagreewithyouandwanttochangeapolicyIhaveestablishedwiththem.Thelessonisthatthereisabsolutelynolegitimatewaytobreakapromiseunilaterally.Itisalwaysbettertoaskforpermissionthanforanapology.

Victor*:Thatmakesperfectsense.Butthisisn’tthewaymanypeoplework.Lotsofpeopleinandoutsideourcompanydon’tdeliverontheirpromisesontime.

Jared*:Inthatcase,we’vegotabusinessproblemaroundexecution,andaculturalproblemaroundintegrity,Victor.Andmybeliefisthatthesearetwosidesofthesamecoin.Ifeelresponsible,andI’dlikeyourhelpinaddressingit.Butbeforewedothat,I’dliketogowithyoutoOrganicandofferourapologiesforthebreach.I’dlikeyoutoexplainwhathappened.Ifwecanregaintheirtrust,perhapsthey’llreconsidertheirdecisionabouttheoutsourcingdeal.

Victor*:IwasgivenspecificinstructionsfromourlawyerstoavoidanycontactwithOrganic.


Jared*:I’llspeakwiththelawyers.There’sanissueofintegrityhere.Wemadeamistakeandwemustownuptoit.Organichasbeenveryreasonableinthenegotiations.Itrustthatifwecomecleanwiththem,theywillnotusethatagainstus—andtheymayevenforgiveusjustlikeI’mforgivingyou.Ontheotherhand,ifourapologyendsuphurtingus,we’lltakethatasthepricewemustpayforourdefault.I’mwillingtoescalatethisuptotheboardifourchiefcounseloflegaldoesn’tapproveofit.

Victor*:It’skindofembarrassing.I’drathernotrubsaltinourownwounds.

Jared*:Itstings,forsure.Butwhat’stheoption?Tohideandpretendnothinghappened?Whatmessagewouldwebesendingtoourownpeople?Iwantthistobeaculture-settingevent,Victor.Myfirstgoalisthatpeopleunderstandthatpoliciesarenotimposeduponthem.Theyareproposed,andpeopleagreetoabidebythem.Thisagreementisacommitmentthatputstheirpersonalintegrity,aswellastheirtrustworthiness,atstake.Iwanteverybodytobeclearthataskingforpermissionisnotjustthebestwaytodealwiththeneedtorenegotiateanagreement;itistheonlyway.

TherealJaredsteppedoutofhisroleandremarked,“Youmakeitlooksonatural!YousaidexactlywhatIwishIhadsaidinourearlierroleplaysasmyself.Whycan’tIdoit?”“Don’tbesohardonyourself,Jared,”Ireplied.“Thisisas‘natural’asa

great golf swing. It takes practice. So let’s start practicing. Let’s replaythis conversation,butyou’llbeyou (Jared)and I’llbeVictor. I’llplayaveryeasyVictor,first.Andonceyouareabletoengagemeconstructively,I’llrampupthelevelofchallengeprogressivelytoseehowyouhandleit.”Wedidthat,andafteracoupleofrepetitionsJaredwasreadytohave

therealconversationwithVictor.HewassoexcitedthathecalledVictorinto his office right then, taking advantage of the fact that Iwas there.Victor looked forlorn and apprehensive, no doubt because he knew hehadscreweduproyallyandthathisheadwasonthechoppingblock.Buthebehavedverywell.HeacknowledgedhismistakeandaskedJared toforgivehim.Jareddida fantastic jobandaccomplishedallhis goals. It


wastheeasiestfacilitationI’veeverdone.Ididn’thavetoopenmymouthatallduringthemeeting.

HOWTOMAKEACOMMITMENT

Thepreferablepath to integrity is tokeep yourpromises; that is, todowhatyoucommittedtodo.YoudelivertheworkproductbyApril9;youpay yourmortgagebyOctober 10.Whenyoumakea commitment, youincur adebt;whenyoudeliver, youpay thatdebt.Therefore, youmustmakeonlypromisesthatyouintendtokeep.Borrowonlythemoneyyouintendtorepay.Herearetheconditionsforintegritywhenyoumakeapromise:

1. Promiseonlywhatyoubelieveyoucandeliver.Ifyoudon’tthinkyoucankeepyourcommitmentorhavesignificantdoubtsaboutit,don’tmakeapromiseuntilyouclearthem.Sincethepromiseisaboutthefuture,there’salwaysariskthatyoumaynotbeabletodeliver.Butthisshouldn’tstopyoufrompromising.Apromisemadewithintegritythatturnsouttobebeyondyourreachislikeastatementyoumakewithhonestythatturnsouttobefalse.Justasanerrorislegitimatewhilealieisnot,apromisebasedonanerroneousassessmentofcapabilityhasintegrity,whileonedonewiththeknowledgeofincapabilitydoesnot.

2. Makeaplan.Toassessyourabilitytodeliver,youneedarobustplanthatcountsonskillsandresourcesthatyouhaveorcanreliablyacquire.Theplanmustincludeforeseeablecontingenciesandstrategiestodealwiththem.Ifyouknowofcontingenciesthatcouldderailtheplan,youhavetoletyourcreditorknowatthetimethatyoumakethecommitment—whichisnowconditionaluponthecontingency.Toooftenpeoplemakepromiseswithoutanyideaofhowtheywilldeliver.Thisisthesourceofendlessbreakdownsandbreachesofintegrity.

3. Haveatrackingmechanism.Youmustassesswhethertheplanisontrack.Ifyoudetectasignificantdeviation,youneedtoconsiderthatyourcommitmentisinjeopardyandletyourcreditorknowright


away.4. Haveacommunicationprotocol.Inthisway,youcaninformyour

creditorofanyproblemsinatimelymanner.Forexample,myassistanthasinstructionstoincludethetelephonenumberande-mailaddressofanypersonwithwhomI’vescheduledanappointment,sothatIcanreachhimorherifsomethinggoeswrong.Myassistantalsogivesmycounterpartsmyphonenumberande-mailaddressincaseanyofthemneedstoreachme.

5. Promiseonlywhatyoureallyintendtodeliver.Becarefulaboutthetemptationtobe“nice”andpleaseothers—especiallythoseinauthority.Beforeyoupromise,checkinwithyourselfandconsiderwhetheryoutrulyintendtodowhatyouareabouttopromise.IoftenfeelinclinedtomakecommitmentsthatIknowIwilllaterregret.Butaftermanycasesof“morningafter”stressanddisappointmentinmyselfforcommittingtodothingsthatIknewIshouldn’thavecommittedtodo,I’verealizedthatitisbesttoavoidthe“nightbefore”promise,evenifthatfrustratestheotherperson.

HOWTOASKFORACOMMITMENT

There’saworldofdifferencebetweenanorderandarequestedpromise.The order relies on the authority of the person who issues it, but apromise relies on the integrity of the one who accepts the request. Anorderistypicalofaboss,andit’sallaboutelicitingcompliance.Arequestis typical of a leader, and it’s all about eliciting commitment. Coercionandthreatswill,atmost,getyouobediencebutneverdiscretionaryeffort.Whensomeonefailstoexecuteanorder,theboss’scomplaintisusually

“Youdidn’tdowhatIorderedyoutodo.”Whensomeonefailstodeliveron a promise, the leader’s confrontation is usually “Youdidn’t dowhatyoupromisedtodo.”Whichonewouldholdmoreswayoveryou?For a commitment to holdproperly, it’s important that thepromisor

feelshisorherintegrityisatstake.Acommitment,afterall,isacontract,sothepromisorhastounderstandtherequestandfreelyacceptit.(Thinkof this as “informed consent.”) If you are going to get someone’scommitmentratherthantheircompliance,theymustfeelthey’re“signing


on the dotted line” willingly, because they believe your request isproductive,reasonable,andfair.Ican’tcountthenumberoftimesI’veheardemployeesallegethatthey

can’tsaynoto theirbosses’requests.Targets,goals,budgets,andplansareoftenimposedonemployeeswithoutaskingfortheircommitment.Inthe employees’ minds, this means that their integrity is not at stake,becausetheydidn’treallysaythattheycoulddowhattheywereaskedtodo.Ifyouwanttobeatranscendentleader,yourauthoritymustbemoralrather than formal. You have to allow your reports to respond to yourrequests with something different than an obedient “yes, sir” or “yes,ma’am”—becauseapersonwhocan’tsaynocan’treallysayyes,either.That doesn’tmean that your reports can just say no without further

discussion. The basic employment contract specifies that they will dotheir best to honor your requests within the limits of their skills,resources,andvalues.Asaleader,youwillhaveexplainedtoyourreportsthateverythingyouandtheydotogetheristohelptheteamtowin,andtoplaybytherules(i.e.,inalignmentwiththeorganization’smissionandvalues).So if theydeclinearequest, itbehooves themtoexplain toyouwhy,inawaythatcanallowacollaborativenegotiation.For example, my own employees have often declined my requests

because theirplatewas full.Theyexplained tome thenwhat theyweredoingandthedatesbywhichtheirexistingcommitments(mostlytome)weredue.Iwasnearlyalwaysabletoreprioritizetheirtasksinawaythatfittheirschedules,andthatwascompatiblewiththeurgencyofmyneed.Thecommitmentistheresultofaninteractionbetweensomeonewho

requests (the requester) and someone who receives that request (thereceiver).Iusethefollowingguidelinestostructureclearrequests:

1. Explain.Describethegapbetweenwhat’sgoingonandwhatyou’dliketoachieve.Presenttherequestasawaytobridgethisgapwiththehelpofthereceiver.

2. Ask.Beexplicitwithyourask.Usethedirectformoftheverb(“Iaskyouto…”“Irequestthatyou…”“Ibegyouto…”“Iinviteyouto…”andsoon).Specificallydefinetheconditionsforsatisfactionoftherequest,includingdeadlines.

3. Inquire.Givethereceiversachancetorespond.Aretheyreadytomakeapromise?Dotheywanttodeclineyourrequest,ordothey


needsomethingmorefromyoubeforeresponding?

Aformulathatintegratesthesethreestepsis:“InordertomovefromAtoB,IaskyoutodeliverCbyD.Canyoucommittothat?”or“IneedyourhelptoaccomplishB.MyrequestisthatyoudoCbyD.Canyoudoit?”(whereA is the current state,B is the desired state,C is what you areasking,andDisthetimebywhichyouareaskingforit).

HOWTOGETACOMMITMENT

It’s essential that aftermaking a clear request, you don’t accept a lessthan full commitment. People often try to hedge, so they don’t say nodirectlybut insteadgiveyouamurkypseudo-commitment like “LetmeseewhatIcando,”“Noworries,”“Someonewilltakecareofit,”“We’lldoourbest,”or“I’lltry.”InthefamouswordsofMasterYoda,“Doordonot.Thereisnotry.”Theonlyanswerthatisacommitmentisthisone:“Yes,Ipromise,”or“Yes,Icommit.”No“trying,”no“seeing,”no“someone,”no“we”—nothingbut“Ipromise”isacceptable.Thebestwaytochallenge“weasel”answers(andeventodouble-check

the ones that seem clear) is to rephrase them as well-formulatedpromises,alongthelinesof“IunderstandyouarepromisingtodeliverCbyD.DidIgetthatcorrectly?”Ibetthatmostofthetimeyou’llgetsomehesitationfromtheotherperson,signifyingthatheorshewasnotreallymakingapromise.Andoftenyou’llgetaclear“No,”signifyingthatyourcounterpartwasreluctanttodeclinebutunwillingtocommit.In my years of teaching this material, I have found only three

acceptable answers (the last one with four subanswers) to a request.These answers clearly define who commits (or not) to deliver what bywhen:

1. “Yes,Ipromise,”or“Yes,Icommit.”2. “No,Idecline.”It’smuchbettertoknowthattheotherpersonis

unableorunwillingtomakethecommitmentthantobelievethatthey’repromisingtodosomethingthatthey’rereallynotcommittedtodelivering.


3. “I’mnotreadytocommityetbecause…”Thereceivermaynotunderstandhowyourrequesthelpsyouwithyourneed,orhowitmeetstheobjectiveoftheorganization.Perhapsthereissomeconflictbetweenyourrequestandthereceiver’spreexistingcommitments,somepolicyoftheorganization,orsomethingelse.

Whenyouhold formalauthorityoverothers, youmustestablishveryclearlythattheyalwayshavetherighttosay“I’mnotreadytocommit.”Youarenotgivingpeopletherighttodeclineyourrequests,butyouaregiving them the right to explain why it may be problematic to acceptthem.It’sperfectlylegitimateforthemtodothisforanyoneofthesefivereasons:(1)theydon’tunderstandwhatyou’reaskingthemtodo,orbywhen;(2) theydon’tbelieve theyhave theskillsorresources todeliver;(3)theirabilitytodeliverdependsonfactorsoutoftheircontrolthatmayderailtheirplan;(4)theythinkthatwhatyou’reaskingthemtodowouldgoagainsthelpingtheteamtowin,oragainstacompanyvalue,standard,or policy; or (5) fulfilling your request would conflict with a priorcommitmentthey’vemadetoyouorothers.Ifthereceiversays,“Ineedclarification,” itmeansheorsheneedsto

better understand your need or the conditions of satisfaction of yourrequest.(Bytheway,thisisanextremelyusefulanswerwhenyoureceiveapoorly formulatedrequest.)If thereceiverdoesfullyunderstandwhatyouareasking,theymaysay,“IcancommittogiveyouCbyDifyougiveme X by Y (or if X takes place before Y).” This is a conditionalcommitmentthatdependsonsomeconditionbeingfulfilledbyyou,orbyreality.Alternatively,theymaysay,“Ican’tcommittodoCbyD,butIcoulddo

XbyY.Wouldthatworkforyou?”Thisisacounterofferthat,shouldyouacceptit,becomesacommitment.“IcommittorespondtoyoubyY”isanappropriateresponsewhenthe

receiverneedstocheckhisorherresourcesbeforemakingadefinite(orconditional)commitment(ordeclines,orcounteroffers).Noticethatthecommitmentistogiveyouananswerataspecificdate.Whenleadersgivefollowerspermissionnottoacceptrequests,theyare

givingthempermissiontodowhat’srightfortheteam.Alongtheselines,I remember a story I heard in first grade about General José de SanMartín,theArgentineanequivalentofGeorgeWashington.


Beforeoneof thebattles,SanMartínwent to themunitionsdepot tocheck on supplies.Hewas about towalk inwhen a soldier blockedhispath. (In the Argentinean army, it is unthinkable for a plain soldier toevenspeaktoanawe-inspiringgeneral,letalonestandinhisway.)Whenthe soldier stepped in front of him, SanMartín orderedhim to let himthrough. The soldier said respectfully, “With your permission, mygeneral, yougaveus specificorders tonot letanyonewithspursonhisboots into the munitions depot.” Whereas a lesser commander wouldhave reprimanded the soldier for insubordination, San Martíncongratulatedthesoldierandmadehimanexampleofintegrity.HehadvowedtoenforceSanMartín’sorder,andhedid—evenuponSanMartínhimself.

HOWTORENEGOTIATEACOMMITMENT

Nomatterhowrobustyourplansare,youwillnotalwaysbeabletokeepyourpromises.Thatisamanageableproblem,though,sinceyoucanstillhonor your word. To maintain integrity, you must inform all partiesinvolved as soon as you know that you may not be able to keep yourpromise. And you need to take care of the negative consequences thatyourfailuretodeliverwillproduceforthem.Evenifyouareholdingyourselftothehighestpossiblestandardswhen

makingyourpromise, therewillbe timeswhenyousimplycan’tdeliverbytheduedate.Youwanttoship,buttheplantdidnotfinishproduction.You want to pay your debt, but someone did not pay you. Life isunpredictable; sometimes you might find yourself unable to followthroughonyourcommitment—ormaybedeliveringissoonerousthatitdoesn’t make sense to do it. In these circumstances, it is all themoreimportanttomaintaineffectiveness,trust,andintegrity.Whenyoucan’t,won’t,or thinkyoushouldn’t fulfillapromiseyou’ve

made, the secondarypath to integrity is to “honor” it. Thatmeans thatyoudoyourbesttotakecareofyourcreditor(therecipientandholderofyour promise) tomaintain trust in the relationship, and to reinforce acultureofintegrity.


Doingthisinvolvesthefollowingsteps:Announce.Letyourcreditorknowthatyourdeliveryisatriskassoon

asyouconsiderthatthisriskismaterial.Don’twaituntilthelastmoment—or,worseyet,pasttheduedate—toinformyourcreditorthatyouwon’tbeabletofulfillyourpromise.Toooften,peopletrydesperatelytoavoidthe awkward moment of informing their creditors of a possiblebreakdown,missingthechancetominimizeitsconsequences.Theyworkuntil the last minute and then default, surprising their unsuspectingcreditor. (And then they resent itwhen thecreditorgetsupset.) If yourcreditorasksyou, “Whydidn’tyou tellmeearlier?,” theonlyhonorableansweris“BecauseIdidn’tknow.”The earlier you issue the warning, the better, as long as it’s a real

warningofamaterialrisk.TheruleofthumbIuseistoputmyselfinmycreditor’s shoesandaskmyselfwhether I’dwant toknowthat there’saproblem.Apologize. Tell your creditor that you recognize your commitment

and that you would like to renegotiate it in a way that minimizes thenegative consequences, maintains trust between you, and honors yourword.Explain. Let your creditor know what unforeseeable circumstances

are preventing you from fulfilling your promise. Don’t use this as ajustificationoranexcuse.Makeitclearthatyouarefullyresponsibleandaccountableforyourcommitmentandaretellingyourcreditorwhathashappenedsothatheorsheunderstandsthatthebreakdownwasn’tduetoyournegligence(orifitwas,toownuptoyourmistake).Thisiswhyit’ssoimportanttoannouncetheproblemassoonasitbecomesmaterial.Inquire.Askyourcreditorwhatconsequencesarelikelytoensuefrom

your inability todeliver. Focus on thepractical costs that your creditorand otherswill have to bear due to your unfulfilled promise. Then askwhatyourcreditorwouldlikeyoutodotominimizetheseconsequences,and to make it up to him or her with some compensation for theunmitigatedlosses.Whatyoucan’tresolve,youcanrestitute.Thegoalistotakecareofyourcreditorandotherswhowillsufferconsequences.Negotiate.Seeifyoucanoffersomethingevenbetterthanwhatyour

creditorasked for in the firstplace.Taking intoaccount your creditor’sconcernsandcostsaswellasyourownresources,trytocomeupwitha


recoveryplanthattakescareofthesituationasbestaspossiblegiventheconstraints.Ifyoucan’tdowhatyourcreditorrequests,explainwhyandengage in a collaborative negotiation (i.e., put in practice what youlearnedinthepreviouschapter).Recommit.Make a new commitment to deliverwhat you and your

creditornegotiated.Makesureyouspecifywhatyouwilldeliverandbywhen.Check and learn. Ask your creditor whether he or she is satisfied

withtheprocess,orifthere’sanythingmoretoclearup.Makesurethattrusthasbeenreestablishedandintegritymaintained.Also,takenoticeofthecauseofthebreakdownandrememberitasarisknexttimeyoumakeasimilarcommitment.Inmyworkshops,Iaskpeopleiftheywouldlikeotherstofulfillthese

conditionswhenmakingcommitments, and Ialwayshearaunanimous“yes.”ThenIaskthem,“Whenwasthelasttimethatanyonerenegotiateda commitment with you following these principles?” The silence isdeafening, but it gets even louder when I ask about the last time theyrenegotiatedacommitmentinthisway.Paradoxically,itispossibletoincreasetrustwhenyoucan’tkeepyour

word, if you honor your word. People know that, sooner or later,circumstancesbeyondyourcontrolwillpreventyoufromfulfillingoneofyourpromises.Butaslongasyoudeliver,theywon’tknowhowyouwillbehave—andwhethertheycantrustyou—whenyoucan’t.Whenthatdoeshappen, if you takecareof themwith integrity, theywill redouble theirconfidenceinyou.

MYAPOLOGIES

My daughter Sophie’s birthday is on August twenty-sixth. I was in theUnitedKingdom theweek before her fourteenth birthday, facilitating averyimportantexecutivemeetingforaclient.ThemeetingwasscheduledtofinishonFridaynight.IwasgoingtoflybacktotheUnitedStatesthefollowing day and be at Sophie’s birthday party on Sunday, as I’dpromised.


Someoneoncetoldme,“IfyouwanttomakeGodlaugh,tellhimyourplans.” God must have had a good chuckle, because the team did notreachadecisiononFridayanddecidedtofinishthemeetingonMonday.The leader of the team asked me to stay and help them the followingweek.Iwantedtodothis,butifIstayed,Iwouldbreakmypromisetomydaughter.ItoldtheteamleaderthatIwouldgetbacktohimby9p.m.Iwent tomyhotel, calledSophie, andexplained the situation toher.

“Sophie,”Isaid,“ifyouwantmetoreturnasIpromised,Iwilldoit.Istillhavemyticketfortomorrowmorning.Butbeforeyousayyoudo,letmeaskyouaquestion.IsthereanythingthatIcoulddowithyoutocelebrateyourbirthdaythefollowingweekendthatwouldbebetterthanhavingmeatyourpartythisSunday?”Withoutamoment’shesitationSophiereplied,“Skydiving!Oh,Daddy,

I’vealwayswantedtodothat!Itwouldbeevenbetterthanhavingyouatmyparty.”ItoldherthatIwoulddosomeresearchandgetbacktoherinanhour.Igoogled“Skydiving”inourcityandfoundthattherewasaflightclub

that offered tandem jumps, but it turned out that Sophie had to be atleast eighteen years old to do such a jump. So I called Sophie andexplained that she wasn’t old enough to jump, but that the flight clubofferedwhatwasdescribedtomeas“veryexcitinggliderflights.”Afterabriefnegotiation,weagreedona two-partdeal. I could stay inLondonand, in exchange, I would take her on the glider flight the followingSundayandonatandemjumpwhensheturnedeighteen.And so it was settled. I stayed, helped the team complete their

discussions successfully, then flew back to Sophie and took her on aglider ride the followingSunday…whichdelightedSophieandmademesickerthanherfavoriteroller-coasterridedid.

Earlyinmycareer,Iconsultedtwocompanies(let’scallthem“A”and“B”).CompanyAhadengagedmetodoathree-dayworkshoponaspecificdateandagreedtopaymeXdollars.Amonth before the date of theworkshop, CompanyB askedme if I

wouldbeakeynotespeakerandfacilitatorforanall-dayconferencewith


theirtopfivehundredleaders.Thisconferencewasonthemiddledayofthethree-dayworkshopIhadcommittedtodoforCompanyA.ForthiskeynoteandfacilitationIwouldgetpaid2Xdollars.Idefinitelywantedtodobothengagements(andmake3Xdollars).But

if I couldn’t do that, then I’d rather do Company B’s keynote, since itdemandedone-thirdofthetimefordoublethemoney.ButIhadalreadygivenmy promise to Company A, so I was afraid that I would have todeclinetheengagementwithCompanyB.IcalledthelearninganddevelopmentmanageratCompanyAandtold

her, “Mary, I’vebeenaskedtodoakeynoteonaday thatconflictswithour upcoming workshop. I know that you have already invited theexecutives and that several of them have confirmed their attendance. Irealizethatchangingthedateatthisstagewouldbecostlyforyou.SoIhave the following proposition: If you’d likeme to do theworkshop asplanned,thenIwilldoit.Butifyouarewillingtorescheduleit,Iwilldoitatalaterdateforfree.I’llwaivemyfee.You’donlypayforthetravelandaccommodation.Whatdoyouthink?”Marydidn’tneedto thinktoomuch.“Deal!”shereplied immediately.

“Ourbudgetisquitestretched,soitwouldbeawelcomerelieftosavethemoney.I’lldealwiththechangeofdate.Ifanybodycomplains,I’llexplaintothemwhywe’redoingit.”Attheend,werescheduledtheworkshopforthefollowingweek.Iwas

abletodobothjobs,andgot2Xdollarsforthem,whichwasagooddealfor me. In addition, my reputation as a supportive, flexible, andtrustworthy consultant grew significantly. I worked with both thesecompaniesformanymoreyears.

HOWTOHOLDOTHERSTOACCOUNT

Let’s say that, like Jared in the almond-butter story presented earlier,you’vebeen letdown.Somebodymadeapromise to you thatheor shedidn’tfulfill.Youareupsetandwantsatisfaction.Executionissuffering,trusthaseroded,andintegrityisinquestion.Youfeelbad,andyouwanttomake your defaulting counterpart feel bad, too.My advice:Don’t. If


yougowithyourimpulse,youwillmakeeverythingworse.Resentmentcallsforrevenge,butthat’saterriblewaytodealwiththe

problem. Like a sugary soda that tastes good but doesn’t really quenchyour thirst and compromises your health, self-righteous indignationdoesn’t really solve the problem. And it can leave your relationship intatters.On the other hand, if you want to execute with efficiency, preserve

trust,andmaintainintegrity,youcan’tstayquietifthere’sabreakdown.Silence is consent, so if you say nothing, you will be endorsing thebehavior.Youneedtomakeaproductivecomplaint.When you complain productively, you seek to restore effectiveness,

trust, and integrity. You confront only once, and you follow through toresolution. At best, you end up with a new agreement that closes thematter.Atworst,yourealizethatyourcounterpartisnottrustworthy,andyoucanresponsiblydecidewhatyouwanttodoaboutit.Therearesevenstepsforaproductivecomplaint.

1.SETYOURINTENTION.

Review your purpose for complaining and ensure that it is productive.Youwanttohaveamutuallearningconversationtorepairthebreakdownandlaythegroundworkforbetterfutureinteractions.

2.ESTABLISHACOLLABORATIVEGOAL.

Share your intention with your counterpart as an invitation. For theconversation to succeed, both of you should want to improve yourworking relationship, not to accuse each other and defend yourselves.Yoursharedgoalshouldbetoaddressabreakdownthatisaffectingyourwork,yourrelationship,andyourwell-being.Again,yourmantrashouldbe“Repairandprepare.”

3.VERIFYTHECOMMITMENT.

Many problems result from miscommunication at the time ofcommitment. You think you requestedX; your counterpart thinks shepromised Y. If this is the case, have a new conversation about the


commitment and then discuss how to avoid repeating thismisunderstandinginthefuture.

4.VERIFYTHEBREAKDOWN.

Check that your counterpart agrees that he or she did not fulfill thecommitment. Your counterpart will probably give you a justification.Don’tengageinadiscussionaboutit.Atthispointyouarejusttryingtoestablishthefacts.

5.ASKWHATHAPPENED.

Besides helping you understand the other person’s perspective, inquiryshows respect. It helps you evaluatewhether the causes for the defaultaroseafter thepromisewasmadeandwereunforeseeable. Italsohelpsyou separate thepractical issues from the trust and integrity ones.Thepractical issues are related to keeping one’s word; trust and integrityissuesareabouthonoringit.Forexample,ifoneofmycolleaguesmissedameetingwithoutletting

me know in advance that he or shewouldn’t attend, Iwould ask themwhat happened. If they tellme that ourCEOhad demanded an urgentmeeting, I would say this: “I can certainly understand that the CEO’srequesthaspriorityovermine.Ifhecalledme,Iwouldhavecanceledthemeetingwithyou,too.WhatIdon’tunderstandiswhyyoudidn’tletmeknowrightawaythatyoucouldn’tmakeit.Itwouldhavetakenyoujustthirtysecondstocallorsendmeatextmessagetoapologizeandexplainwhathappened.”

6.NEGOTIATEARECOMMITMENT.

Torepairthebreakdown,youmayneedyourcounterparttorecommittotheoriginalpromise,oryoumayrequiresomeadditionalconditions.Thekeyistoclearlyaskforwhatyouneedtoclosetheissue,restoretrust,andfeelatpeace.Ifyoudogetsatisfaction,droptheissue,forgive,andforget.Don’t keep the matter as a “resentment trump card” to play in futureconversationswiththisperson.

7.CHECKANDLEARN.


Askyourcounterpartifheorsheissatisfiedwiththeprocess.Makesurethat trust has been reestablished and integrity maintained. Also, takenotice of the cause of the breakdown and consider it as something youcanbothforeseethenexttimeyoumakeasimilaragreement.

INTEGRITY,PROSPERITY,ANDEVOLUTION

Theevolutionofhumankindowesmore to thedivisionof labor than totheinventionofthewheel.Manycivilizations,suchastheearlyEgyptian,thrivedwithoutthewheel,butnosocietiesthrivedwithoutspecialization.With increasing specialization, however, any society needs to developmethods of integration. Otherwise, the parts will break apart and theoriginal whole will dissolve.When differentiation leads to fracture andindependence rather than to relation and interdependence, the systemcollapses. And when this happens in the economic sphere, prosperity,well-being,anddevelopmentgobackward.Themarketeconomyisthebestintegrationmechanismforhumans.It

promotessocialcooperationwithmaximalfreedomandminimalconflict.It has evolved through thousands of years of social experimentation.Mutuallyvoluntarytransactionsbetweenbuyersandsellersofgoodsandserviceswithintheinstitutionalframeworkofpropertyrightsandtheruleof law have allowed for the biggest demographic explosion, the biggestincrease in the standard of living, and the biggest extension of lifeexpectancyinthehistoryoftheworld.Eachoneofthetransactionsinthemarketorinanorganizationismediatedbyaprioragreementandbythetrustthatcommitmentswillbefulfilled.Whetherwe are coordinating our actions as buyers and sellers orwe

are working together as fellow organizational members, our ability toproduce results depends on the integrity with which we exchangerequestsandpromises.Integrityisthegluethatallowsustoreintegratethespecializationthatunderpinsmodernsociety.Integrityandtrustareessential factors of production. As the political economist and authorFrancisFukuyamahasnoted, “Economic lifedependson…trust.This isthe unspoken, unwritten bond between fellow citizens that facilitatestransactions, empowers individual creativity, and justifies collective


action….Thesocialcapitalrepresentedbytrustisasimportantasphysicalcapital.”4

But it is not only economicwell-being that dependsonour integrity.Thesocialbondsoftruststrengthenorweakenwithitaswell.Whenyoupromise frivolously or default carelessly, you harm your relationships.That’s why, if you want to be a transcendent leader, you need to beimpeccableaboutyourcommitments.Yourwordmustabsolutelybeyourbond.And youmust demand that everyone else operatewith the samelevelofintegrity.


PART3SELF-TRANSCENDENCE


Chapter11

GETOVERYOURSELFTOLEADEVERYBODY,BENOBODY

Thewickedleaderishewhothepeopledespise.Thegoodleaderishewhothepeoplerevere.Thegreatleaderishewhothepeoplesay,“Wediditourselves.”

—LaoTzu

BeforeJeffWeinerbecameCEOatLinkedIn,IcoachedhimwhilehewasanexecutiveatYahoo.Oneeveningoveranicemealanda fewpintsofBelgianbeer,Jeff sharedwithmehispersonalmission: “Toexpand theworld’scollectivewisdom.”“That remindsmeof aBuddhist teaching,” I said. “ ‘Wisdomwithout

compassionisruthless;compassionwithoutwisdomisfoolish.’ ”“Hmm,”Jeffreplied.“MaybeIshouldmodifythemission.Howabout

‘toexpandtheworld’scollectivewisdomandcompassion’?”“Yes!Ifthat’syourquest,countonmeasyourally.”Wesealedthepact

withatoast.Afewyearslater,afterJeffbecametheCEOofLinkedIn,heinvitedme

in as a consultant and then asked me to join the company as a vicepresident.Iwasflatteredbuthadreservations.I’dbeenmyownbosseversinceI’dleftMITin1996tostartaconsultingcompany.I’dspentnearlytwentyyearspartneringwithmanyclients.Theprospectofcommittingtoasingleoneof themgavemecold feet. I felt likea jungleanimalbeingluredintoaverynicezoo;I’dhaveallmyneedsmetbutwouldnolongerbeabletoroamfree.HowwouldItransitionfrombeinganentrepreneurowner to an employee without feeling disempowered? Would I stillrespectmyselfinthemorning?


I told Jeff that his offer was very appealing, but something was stillholdingmeback.“What’syourconcern?”heasked.I confessed that I was worried about surrendering some of my

autonomy and freedom. “I join your company, I work for you,” Iexplained,“that’smycode.Theproblemis thatI’mnotsureIcanworkforyouwholeheartedlyasanemployee.”“Don’twork forme,Fred.Work forourmission,”Jeff responded. “If

you are serious about expanding the world’s collective wisdom andcompassion,let’sdoittogetheratLinkedIn.”“Whatdoyoumean?”“Helpusbecomeanexampleofcompassionateandwisemanagement,

andthenletususewhatwelearntohelpprofessionalsandorganizationsallovertheworld.Weplayakeyroleinhowcompanieshireanddeveloptheirtalentandhowpeoplefindjobs.Whereelsecouldyouhavethiskindofimpact?”“Hmm,” I replied, “I think I should modify my code to: ‘I join the

company,Icommittothemission.’ ”“WelcometoLinkedIn.”Jeffsmiled.

Inarace,therunnersseemtobefollowingtheleader,butthatisanillusion.Thetruthisthateachofthemisracingtothegoal.Theleaderissimplytheoneclosesttoit.Atrueleaderistheclosesttothemission,itsfirstfollower.Itmayseemthattheothersarefollowinghimorher,buttheyareallpursuingthemission.Ameditationteacheroncetoldme,“Ifyouwanttoteach,youmustlove

thetruthmorethanyouloveyourself.”Inleadershiptermsthistranslatesto “If youwant to lead, youmust love themissionmore than you loveyourself.” Becoming a mission-driven leader requires a redefinition ofwhoyoutakeyourselftobe.Insteadofconstantlytryingtoprovethatyouare worthy of admiration, praise, obedience, and awe, you have to getyouregooutoftheway.Toaddressthehardproblemsofdisengagement,disorganization,disinformation,anddisillusion,youmustinspirepeopletofollownotyoubutameaningfulmission.


THEEGOTRAP

IonceheardastoryaboutaRussianwomanwhodreamedofbecomingaballerina.Shepracticedhardandeventuallywounduptakingworkshopswithrenownedmasters.Duringonesuchworkshop,sheaskedaRussianteacherforhisassessment.Hetoldherbluntlythatshedidn’thavewhatittooktomakeittostardom.The news crushed her. She gave up her dream and became a

choreographer instead. Many years later she crossed paths with theRussianteacherandtoldhimthatshehadgivenupdancingbecauseofwhat he had said to her. “Oh,” he said nonchalantly, “I say that toeveryone.Thedancersthathavewhatittakesdon’tpayattentiontome.”Like the ballerina, your ego stands between you andwhat it takes to

become a transcendent leader. This brittle, self-doubting and always-ready-to-quit part of yourself cannot withstand anything less thanperfection. It would rather be great at mediocrity than to strive forgreatness.In their bookEgo Free Leadership:Ending the Unconscious Habits

That Hijack Your Business, Shayne Hughes (of the leadershipdevelopment firm Learning as Leadership) and Brandon Black (theformerCEOofEncoreCapital)defineegoasthepartofyourpsychethatisconstantlypreoccupiedwithself-worthandstatus.(Ifindithelpfultothink of Ego metaphorically—as a person with a strong, dominantpersonalitywholikestobossyouaround.)Imagine that Ego is like a character in a play about your life. Ego

adopts defensive or aggressive behaviors when its value is in question.Ego endlessly asks, “Do I look competent, smart, attractive, powerful,right, good, in control? Am I respected, admired, liked, appreciated,envied,revered?”Whentheanswerisyes,itfeelsprideandpeace;whentheanswerisno,itfeelsshameandanxiety.1

Egowants endless acknowledgment, recognition, and success.Underits spell, each of us yearns to be the best, the smart one, the hero.Wewantotherstoneedus,tolookuptous,tofollowus.Whenweknowtheanswerordelivertheimpossible,wefeelworthy,powerful,superior;weglowwithpride.Ourbrainisonfirewithdopaminefloodingourpleasurecenters, just like a drug. The problem is that Ego’s insatiable need for


acknowledgment causes us at times to knock others down. Too manyleaderscravepoweroverpeopleandgroupsbecauseEgotellsthemthatthey’llbeworthyonlyiftheyareontop.Egofocusesonourpersonalsuccessasthemeasureofvalue.Thelust

for success and the fear of failure drives it. It creates constantperformance anxiety because the rush of success is short-lived and thechance of failure is ever present. Even the slightest underperformanceactivatesitsfearofnotbeinggoodenough.Noamountofpraisesatisfiesego’sendlesshungerforreassurance.Egoiscompetitive.It’salwayscomparingustothosearound,tryingto

increase our status by making us overvalue ourselves and undervalueothers.Itconsiderscolleaguesaspotentialthreats—iftheylookbetter,wefear we look worse in comparison. Consequently, it prioritizes ourindividualsuccessovertheteam’smission—especiallywhenmeasuredbyindividualperformanceindicators.ButifyouleadfromEgo,youwillneverengageyouremployeesoryour

colleagues or your customers. Ego is so concerned with itself that itdoesn’t leave room for anything or anyone else. It’s impossible to trulyunderstand and support your employees and your customers if you’reself-absorbed.Unfortunately, unless youdo yourpersonal developmentwork,Egowillremainincontrol.

Wedevelopautomaticroutinestodealwithouranxietyaboutself-worth at the outset of our life. As children, these defensive routinesprotectusfrompainfulfeelingsofhurt,fear,embarrassment,andguilt.Ifwetouchahotstove,ourpainquicklyteachesusnottodoitagain.Thesame goes for emotional pain; when we experience it, we drawconclusionsaboutwhatcauseditandhowtoavoiditinthefuture.Wekeep reenacting thesedefensive routinesbecause theyprovideus

with what psychologists call “secondary gains.” Even though thesedefensive routines harm our deep aspirations and sever our authenticconnectionswithothers,theysootheouregos.Forexample,byavoidingadifficult conversation with a low-performing employee, we make itimpossible to address the root of the problem; we also accumulate


resentmenttowardhimthatgenerallyendsinablowup.Butbecausewefearbeingdislikedandjudgedasameanboss,wesaveouregofromtheanxietyofconfrontinghim.Theproblemisthatourexperienceofego-painisalwaysambiguous;its

lessons are never clear. One of my favorite Aesop’s fables is about adonkeythatwaswalkingalongapathcarryingheavysacksofsaltandfellinariver.Thesaltdissolvedinthewaterandthedonkeycameoutfeelinglightasafeather.Thenexttimeittraveledthepath,thedonkeyjumpedinto the river to lighten its load. But this time the sacks were full ofsponges and the donkey drowned. Like the donkey, our egos learn thewronglessonsearlyinlifeanddrawself-limitingconclusions.For example, I learned to link approval and love with academic

performance,soIspentmylifetryingtoproveIwaslovable—allthewaytoanMITprofessorshipandadivorce. (WhenIwas teachingatMIT, IreadaBostonGlobe letter to theeditor thatmademe feel like Iwas ingood company. It was fromGeorgeWald, a Nobel laureate in biology.“The truth iswhatone reallyneeds isnotNobel laureatesbut love,”hewrote.“HowdoyouthinkonegetstobeaNobellaureate?Wantinglove,that’show.WantingitsobadoneworksallthetimeandendsupaNobellaureate.It’saconsolationprize.Whatmattersislove.”2)Anytimeyouknowwhatyoushoulddobutyoucan’tbringyourselfto

doit,itisasignthatyouregoistryingtodefenditself.Ifyoufeellikeavictim of circumstances or people beyond your control, your ego is incontrol. I’m sure that at a conscious level, you know that pursuingambitiousgoalsandgrowingorcreatingauthenticrelationshipsismoreimportant than not failing, looking good, or avoiding rejection. But it’smuch harder to feel it in your bones. That’s why, in spite of our bestjudgment and intentions, unlessweworkon it,we keep repeating ego-drivenreactivepatternsthatfalselyprotectandlimitus.

DISRUPTTHEPATTERN

Because ego-defensive routines are stored as unconsciousmemories inthe parts of your brain that develop earliest, trying to use your adult


willpowertochangethemisliketryingtoconvinceyourselftotouchahotstove.Nomatterhowmuch you tell yourself that you shouldhave thatconversation with the low-performing employee or listen quietly tosomeonewhodisagreeswithyou,doingsofeelsdangerous.HughesandBlackargue thatwhileyoucan’tbecomecompletelyego-

free, you can become more conscious and realize that you can chooseeithertogiveintoyouregotisticalimpulsesortobreakfreeofthem.3Themomentofchoiceiswhenyoufeelwhattheycallan“emotionalpinch”—your body literally reacts to the perceived threat by tightening yourmuscles, frowning, hastening your breathing, and so on, and the egostartsengagingyourolddefensiveroutines.When pinched, we become ineffective, even destructive. Our egos

might drive us to become perfectionistic, oppositional, and critical ofothers. (When I’m under stress, for example, I tend to becomehyperrational,icecold,razorsharp,andoverlycritical.Myegofindsandmagnifies flaws in others, seeking to prove that I’m right and they arewrong.) It could make you become competitive, controlling, anddemanding. It could make you sarcastic, contemptuous, orcondescending. You could procrastinate or become avoidant,withdrawing, and aloof. Each of us has his or her favorite reactivebehaviors, which we use to assuage our ego’s anxiety about not beinggoodenough.Thekeytodefusingsuchareactionistolookdeeplyatwhateverprimal

and childish interpretation is driving the fear of potential failure,judgment,embarrassment,orrejection.Forexample,whenI lookedfortherootofmyperformanceanxiety,IrememberedanepisodewhenIwasfive years old, the night before I was due to start first grade. I had ameltdowninbed.Myparentsheardmecrying,sotheycametocheckonme.WhentheyaskedmewhyIwascrying,ItoldthemthatIwasafraidthattheywouldgetmadatmeifIdidn’tdowellatschool.“Don’tworry,”they said, “you will do very well.” Needless to say, what I was reallyhoping for was “We’ll always love you, regardless of how you do inschool.”LikeAesop’sdonkey,mychild-selfabsorbedthewronglesson:IfI’msuccessful,I’llbeloved.Thisdeepdive into therootcauseofegotriggers isnevereasy,but it

doesgeteasierwithpractice. “Thegoal isnot toavoidhavingpinches,”


HughesandBlackpointout,“butrathertonoticeandwelcomethemasopportunitiestolearnandgrow.”4Theysuggestthatthewaytodispeltheillusorydangertoyouregoistoshiftfromareactivedefensive-aggressivepatterntoacreativeconstructiveorientation.Herearefivestepsthattakeyoufromheretothere:

1. Noticethemomentsinyourlifewhenyouexperienceapinch.Thismightbeaneventorsomethingsomeonesaysordoes.

2. Insteadofreactingtosomethingexternalthatpinches,searchforwhatistriggeredinyou.Ifsomeonepushesyourbuttons,don’tfocusonhimorherbutonyourbuttons.Whatisthatvisceraldiscomfortyou’retryingtonumborblameothersfor?Howdoyoufeelyoursenseofself-worthisbeingthreatened?

3. Whenyounoticeotherpeoplehidingbehinddefensiveveneersofbravado,aggression,orindifference,considerthevulnerabilitiesthatmaybedrivingthem,andempathizewiththeirdeeperfear.

4. Focusonyourownhighestgoalsandvalues.Whatdoyoureallywantforyourself?Whatwouldyouliketoconveytotheotherperson?Whatdoyoucareaboutthemost?Whatexamplewouldyouliketosetthroughyourownbehaviorandleadership?Connectwiththedeeperintentionthatmotivatesyoutobreakyourdefensivepatterns.

5. Intalkingwithanother,taketheriskofsharinghowyouyourselffeelvulnerable.Shareyourfeelingsabouttheperceivedthreat,notyourmentalchatter.Modelacontextofsafetyformutualdisclosureandconnection.5

For example, I notice that when one of my colleagues presents abrilliantidea,myegofeelsapinchofenvyandthedesiretofindaflawintheir thinking. Instead of surrendering to it, or pushing against myfeelings, I become curious about them.When I look deeper, I discoverthatIfeelvulnerableaboutnotbeingthesmartestpersonintheroom.Ihave invested so much of my self-esteem in being admired for myintelligencethatanytimesomeoneappearstobeassmartasorsmarterthanIam,Ifeelunderthreat.Myfirstinstinctistotrytoknockhimorherdownwithsomeevenmorebrilliantcriticism—deliveredwithjusttherighttouchofsarcasm.WhenIseethistendencyinmyself,Istopmyselfimmediately.Thatis


notthewayIwanttorelatetoothers.WhatIcareaboutmorethanbeingadmiredformybrainpowerissupportingthosearoundme,sothattheycan shine as brightly as possible. I take delight in their brilliance andsuccess. I allowmyself to relax and appreciate their light; if there’s anopportunity tohelp thepersonpolishhisorher ideaevenmore, Ioffermyopinionrespectfully,asabuildingblockratherthanasamissile.ItrytobethetranscendentleaderIseemyselfas.Togetbeyondanemotionalpinch,Itrytoconnecttoahigherpurpose

andtothevaluesthatIespouseandthatsustainme,throughself-inquiryquestionssuchas:

Howisthisanopportunityformeandforotherstogrow?Whatwillmosthelpallofustakeadvantageofthisoccasion?WhatkindofrelationshipdoIwanttodevelopwiththisperson?Whatismyintentionforhimorher?Whatmattersmoretomethanmyownsuccess?Whatmattersmoretomethanbeingliked?HowdoIwanttoshowupinthissituation?WhatvaluesandbehaviorsdoIwanttoexemplify?

I’vefoundthatacceptingmyfeelingswithunderstandingandempathy,and then reconnecting tomy deepest goals and best intentions for thecompany, the team, and the individualsunderme,bringsmeback to amorecreativeandeffectivestateofmind.

Ifyouwanttobecomeatranscendentleaderandcreateahealthyculture in your organization, this kind of self-contemplation is not justpart of your personal growth; it is an absolute requirement.6 If you’redefensive,territorial,competitive,aggressive,avoidant,andsoon,you’llproducesimilarlydysfunctionalbehaviorsinyourfollowers.AsI’vesaid,transcendent leaders need not only to define the standards of theorganization, but, most important, demonstrate them—especially whenunderstress.


THEEGOVS.THESOUL

Tolead is to inspireothers togivetheirbest to themission.This“best”comesfromwhatMihalyCsikszentmihalyi,therenownedauthorofFlow,calls “the soul.” “We attribute soul,” Csikszentmihalyi wrote, “to thoseentitiesthatusesomeportionoftheirenergynotonlyfortheirownsake,but tomake contactwith otherbeings and care for them.”7Theenergyfreed up from the self-preoccupation and self-absorption of the egobecomesavailableforconnectingwithothers.8

While the ego asks, “Am I the best, the most admired, the mostvalued?,” the soul asks, “Am I contributing to others andhelping themgrowanddevelop?AmIconnectingauthenticallytothem?AmImakinga difference in the world, living my values and purpose?” When theanswerisyes,wefeelhappy,confidentthatweareonameaningfulpath.There’s no performance anxiety in these questions, for external factorscaninfluenceonlysuccessorfailure,notintegrityorpeaceofmind.When the soul is in charge, I believe we experience a kind of

unconditionalpower,knowingthatwearecapableofpursuingournoblepurpose and demonstrating our ethical values in the company of thosewho share them. We might not be able to win the game, but we canalwaysdoourbestandplayhonorably.

Nobodywantstojustmakealiving.Weallwanttomakealife,tocontributesomething important toothersandtheworld.Ifyouwant toleadasoulfulorganization,youmustlookinthemirrorandask,“Whatisthepointofwhatwearedoing?Whydoesitmatter?WhatamI,andthepeopleIlead,reallytryingtoaccomplishhere?What’souruniquevalueto theworld?How is our product or service enhancing our customers’lives?Whywouldthebestpeoplewanttoinvesttheirlifeenergywithustoachieveourmission?”Yourcustomersandemployeescanenergizeyourorganizationonly if

they think that yourproductor service is truly lifepromoting, and thatthe conditions in which you produce it are worthy of admiration andemulation. This requires engaging their souls in a meaningful, ethical,


transcendentproject.Thesesoulsaresovereign;theydon’tsurrendertosomeone else’s authority. No person can have authority over another’ssoul. Soul is what you cannot extract by any extrinsicmeans. You canonlyreceiveitasagift,becauseoftheother’sintrinsicmotivation.Togetemployeesengagedinyourorganization,ortogetcustomersto

buyyourproducts,youhavetolookhardatthepurposeofotherpeople’slives.Youhavetogivethemsomethingthattheyfindmorevaluablethanalternativeusesoftheirtime,attention,andresources.Otherwise,they’lldecline your offer, or accept it grudgingly. Value is in the eye of thebeholder;avaluableopportunityisonethatfurthersyouremployees’orcustomers’life’spurpose.Themomentyoulosesightofthat,yourcultureand your business will suffer. This isn’t just a moral matter; it’sEconomics101.That’s why you need to reflect on how the service you are offering

allows your customers to take care of their own concerns, andhow theworkyouareofferingallowsemployeestotakecareoftheirs.Whenyouaddress these questions, customers will become brand advocates andemployeeswillbecomemissionaries.Youmustdisruptyourego’sdefensesandmovetoasoulorientationin

order to foster a positive culture. When people feel supported andrespected, they more easily lower their own ego defenses and facechallengesconstructively.Ontheotherhand,ifpeoplefeelunsafeduetofearsorthreats,theywillacttoprotectthemselvesfirst,dotheirjobs(theones on which they are evaluated) second, and contribute to theorganization’smissionlast.This soul-work is difficult and demanding. But there is no other

alternative.AsIapproachedmyforties,Ihiredaphysicaltrainertohelpmegetin

bettershape.“Iwanttorunamarathon,”Itoldhim.“Thequestionisnotwhetheryouwanttorunamarathon,”hereplied,

“butwhetheryouarewillingtotrainforit.”When you get attached to an outcome without committing to the

process,youfail.Togenuinelycommittoagoal,youhavetobewillingtodowhat it takes to achieve it.My coach’s commenthelpedme throughthemanyhoursoftraining.Asitturnedout,theracewastheeasypart.Thehardpartwas getting ready for it.During the longpractice runs, I


repeatedaphraseIgotfromabookabouttheU.S.SpecialForces,“Trainhard;fighteasy.”The transcendent leader is like a flag. People don’t fight for the flag

itself,butforwhatitsymbolizes.Greatleadersunderstandthattheyarenot managing human resources, but conferring value and meaning tohumanbeings.Atranscendentleaderhasnofollowers;heorshemustself-effacetolet

peopleconnectdirectlytothemissionandthevalues.Theleader’sjobisto“getoutoftheway.”

INVESTORSRATHERTHANFOLLOWERS

Eachoneofushasprecious capital, our soul energy.As such,wemustinvestitwiselytoenergizeanorganizationthatpursuesanoblepurpose,onethatwe’reproudof,incommunitywithpeoplewhoshareourvalues.Thatisoneofthesecretsofpersonalhappiness,passionateengagement,andorganizationalsuccess.WhileIwascontemplatingwhethertojoinLinkedIn,Ihaddinnerwith

ReidHoffman,itscofounderandchairmanatthetime.Oversomeofthebestsushi I’veevereaten, IaskedReidwhyhehiredJeffasCEOofhiscompany.Hereplied,“BecauseItrusthimtomanageLinkedIninawaythatrealizesmyvisionbetterthanIcanmanageitmyself.”Infact,Reiddoesn’trefertoJeffasanemployeebutasalate-stagecofounder.I feel thesameway. Iamthe founderandchairmanofmyself.When

LinkedIn hiredme, I simultaneously “hired” Jeff asmy CEO and late-stage cofounder. I hired him because I trust his commitment to oursharedmission, and his ability tomanageme to realize it—an ability Ibelieveexceedsmyown.ItistruethatIworkforJeff,sinceIgivehimtheauthoritytoallocatemyeffortsinserviceofLinkedIn’smissionaccordingto his best judgment. But Jeff also works forme, just as he works forReid,managingmymost significant asset (myself) to achievemy life’smission,whichistohelppeoplereconnectwiththeirtruenature.JustasJeff selectedme toworkatLinkedIn tohelpaccomplish the company’smission, I selected Jeff as the person to best manage my energy and


commitmenttobringwisdomandcompassiontothebusinessworld.Sojustas Iwork forLinkedInasvicepresident,LinkedInworks formeastheplatformthatenablesmetopursuemypurposefarbetterthanIcouldonmyown.An example of this happened a year after I joined LinkedIn, when I

finishedproducingandpilotingafifteen-module,seventy-videoprogramof my Conscious Business book for LinkedIn employee development.WhenIproposedtopublishthisonLinkedIn’sopenplatformsothatthewholeworldcouldshareinit,Iwasmetwithsomeresistance.Thevideoprograms had been an intensive, and expensive, effort.Why would wesimply give this unique content away? Best to keep it as a uniqueprofessional development opportunity for our employees, some of mycolleaguesargued,togiveLinkedInsomethingspecialtoofferourpeople.I proposed that publicizing the material would attract even morepotentialcandidates.MycounterpartsandIfollowedalltheprinciplesofcollaboration I described in Chapter 9, but we still couldn’t reach aconsensus.SowejointlyescalatedourdebatetoJeff.Helistenedtothearguments,

and after he understood and acknowledged all of us he said, “Botharguments are reasonable, so I’d like to decide this on the basis of ourmission. How do you believe that we are more likely to connect theworld’sprofessionalstomakethemmoreproductiveandsuccessful?”“If we’re serious about expanding the world’s collective wisdom and

compassion,”Isaid,recallingmyoriginalconversationwithJeffwhenIjoined LinkedIn, “we should share this knowledge freely.” Lookingaround the room, Jeff asked, “Does anybody have an objection to thisbeyondwhat we’ve discussed?” Nobody did, so we decided to post theprogramatwww.conscious.LinkedIn.com,whereitisfreelyavailable.By making the decision to publish the videos online, we kept our

commitment to our members. And Jeff kept his commitment to ourshared mission. This was a return on the life energy I invested inLinkedIn.One way to think of followers is as investors. The leader is the

entrepreneur,thefirstfollowersarethe“angel”and“seriesA”investors,thefollowingonesarethe“seriesB”and“C”ifnecessary,allthewayuntilthe company becomes “public.” One by one, individuals “hire” the


https://conscious.linkedin.com

leadership of the company to manage their personal capital, their lifeenergy,andputitinserviceofamission.In 2010, an entrepreneur named Derek Sivers opened his TED talk

(“How to Start a Movement”) with a short video of a scene from anoutdoorsummerrockconcert.Ayoungmanstandsupandstartsdancingtothebeat,wavinghisarmsintheair,doingsomersaults,andgenerallylooking like an escapedmonkey.He looks ridiculous.But then anothermanstandsupandjoinstheleader.Thefolloweristheleader’sequal;astheydance, the first follower calls his friends to join in.Then someoneelsegetsintotheact,andanotherandanother.“Ifyounurturetheotherdancersandyoumakeiteasytofollow,”thenarratorsays,“youcanstartamovement.”9Siversmakesthepointthatwithoutthefirstfollower,andthesecond,andthethird,therewouldbenocollectiveeffortatall.“Beingafirstfollowerisanunderappreciatedformofleadership.”One of the first followers at LinkedIn is Mike Gamson, senior vice

presidentofsales.WhenIaskedhimwhyhe“hired”Jeffasaleader,hetoldme, “I follow Jeff because he’s worthy of it; what he’s aspiring tobringusto(ourmission)isworthyofit.Themissiondemandsleadersofmy caliber in subordinate roles in order tomake it happen. Jeff needsleaderslikemefollowinghiminordertoaccomplishourmission.”10Ego-freemission-drivenleadersattractego-freemission-drivenfollowers.

Notlongago,Igaveatalkonthistopicforagroupofgovernmentofficials, corporate officers, and international consultants in Riyadh,Saudi Arabia.When the time for questions arrived, a portly gentlemanwitha thickbeardanddressed in the traditionalSaudiattire raisedhishand. “Why didn’t you give the leadership example of the Prophet(Mohammad)?”hesaidinwhatsoundedtomelikeaharshvoice.I tookadeepbreathandsaid,“Becausemyknowledgeof theMuslim

faithisfarbelowthatofanyoneintheaudience.I’maguesthere,soI’dliketorespectfullyaskifyoucouldtellmetheleadershipexampleoftheProphet.”“ThewordinArabictodescribethefollowersoftheProphetis‘saheb,’ ”

he quickly replied. “But the word does not mean ‘follower’; it means


‘friend.’ The Prophet had no followers; he had spiritual friends whofollowedAllah.”As I thanked the gentleman (who turned out to be a university

professor),IfeltthecollectivesighofrelieffrommyLinkedIncolleagueswhohadorganizedtheconference.Attheend,themancameonstageandgavemeoneof thewarmesthugs I’ve ever received after a talk. Itwasbothembarrassingandinvigoratingtofeelmyworriesaboutmylackofculturalunderstandingmeltunderthisman’sembrace.

APASSIONATEFOLLOWER

Afewyearsago,IreceivedagreatgiftfromLinkedIn:theopportunitytoworkinDubai,adazzling,cosmopolitanportcityandoneoftheUnitedArabEmirates (UAE). I’dadmiredDubai for its economicprogressandlegalinfrastructureformanyyears,andIfoundithardtobelievethattheplacehadbeenadustyBedouinoutpostonlyfiftyyearsbefore.Fullofgigantic,wildlyarchitectedbuildingssituatedalongabeautiful

stretchofcoastline,Dubaiisadreamtoliveandworkinfortheworld’sprofessionals.Infact,nineoutoftenmembersoftheDubaiworkforceareexpatswhochoosetoinvesttheir lifeenergythereeveryday.Dubaihasbranded itself as a city with the highest quality of life, able to attractglobal talent. In the last severalyears, ithasbecome the topcity in theworldforMiddleEasternprofessionals.Whileanexpatcansavedoublethemoneyworkinginotherplaces,theforeignerswhoworkthereprefertostayinDubaiforitslifestyle,itscleanliness,itssafety,itsgreathealthcare,education,andculture.In2015,Ihadachancetoexperiencedirectlytheeconomicandsocial

miraclethatthepeopleofDubaihavebeenabletocultivateinthedesert.WhenIasked,“TowhatdoyouattributeDubai’ssuccess?,”invariablytheanswerwas“Leadership,”referringtoSheikhMohammedbinRashidAlMaktoum,theconstitutionalruler.“Leadership,” Mohammed Al Gergawi, the government’s minister of

cabinet affairs, told me, “is the ultimate resource to unleash passion.Somepeopledrillforoil,wedrillforleadership.”Here’sthestorythathe


toldmedirectlythatillustrateshowleadershiptricklesdowninDubai.11

Gergawi had been a midlevel functionary working as director ofbusinessregistrationforDubai,buthewasnotatypicalbureaucrat,andhe never saw himself as the boss. For him, all people were important.Gergawi didn’t work in a back office while other people helped thecustomers.Instead,heputhisdeskinthewaitingarea.Hewantedtoseehowcustomersweretreated,andhetriedtofindwaystohelpthem.Oneday,anoldlocalmancamein,lookingconfused.Gergawisawhim

andoffered tohelp;hegave theoldmansomecoffeeand satwithhimwhiletheoldmanwaitedforhisturn.Thenheaccompaniedthemantothe service counter when he was called, tomake sure everything wentsmoothly.Whenthemanfinishedhisbusiness,hethankedhimandleft.Gergawinevergavehimasecondthought.Acoupleofyears later,Gergawireceivedanemploymentofferfroma

private company tripling his wage, so he resigned. Then SheikhMohammedhimself sentGergawia lettergivinghimabigpromotion—somethingextremelyunusual,sinceGergawiwasfairlylowonthetotempole.Thiswasanofferhecouldn’trefuse.Gergawi was torn between his duty to thank the sheikh and his

nervousnessaboutcomingbeforethecountry’sruler.“Partofourcultureis to say ‘thank you’ in person, but I was reluctant to talk to SheikhMohammed because he is such an awesome person,” he toldme. “Mymotherkeptpushingme todo it, soafter twomonths Iwent toSheikhMohammed’s Majlis.” (The Majlis is a council during which ordinarypeoplecantakeanemptyseatnexttothesheikhandtalktohimone-on-one.) “Atonepoint the chairwasempty, so I gatheredmycourageandtooktheseattothankhim,”Gergawiremembers.“ItoldhimwhoIwas,said ‘thanks,’ and stoodup to leave in ahurry.Butheputhis handonmineandheldmedown.Hesaid,‘Iknowyou.Ihavebeenwatchingyou.’Iwasfrozeninmyseat.”One of the ways people get demoted or promoted in the UAE

government is when a “mystery shopper”—someone who shows upincognitoatvariousgovernmentdepartmentstoseehowthingsaregoing—reportsthem.Asitturnedout,theoldmanwhohadvisitedGergawi’sdepartmentwassuchamysteryshopper.Afterhisexperience,hehadtoldthe sheikh about the kindness with which Gergawi had treated him.


WithoutGergawi’sknowledge,thesheikhhadputhiminahighpotentiallistandfollowedhisprogresseversince.

BURN,BABY,BURN

During a ceremony in theMexican desert, Iwas sittingwith a shamanwatchingafire.Theshamanhandedmealogandaskedmetomeditateon what part of my ego I was ready to let go of. Then he told me toimagine that Ihad transferred thatenergy to the log,andhe instructedmetoputthelogonthefireandwatchitburnwithfullattention.Whilewatchingthelogburn,Ihadaflashofinsightregardingmylife

that a voice insideme expressed inwords: I, too, am a log, and I amalready burning. Every cell in my body is using oxygen to produceenergy, just like this fire in frontofme.Andwhenmy fuel runsout, Iwilldie,justlikethisfirewilldieout.Iambeingconsumedbythesacredfireoflife.Ihavenochoiceaboutthat.ButIdohaveachoiceaboutthealtaron

whichIplacemyself.TowhatwillIoffermyself?Ihaveputmyselfonthealtarofsuchunimportantmaterialandegocentricthings.Itistimetomakeadeliberatechoiceandstartburningonthealtarofmeaning,love,andfreedom.ItwasthemomentinwhichIbegantowritethisbook.Icommittedto

mypersonalmissionof“helpingpeopleremembertheirtruenature,andexpressitconsciouslyinbusinessandbeyond.”You,too,areburning.Onwhichaltarareyouplacingyourself?


Chapter12

DIEBEFOREYOUDIEFINDYOURTRUENATURE

Andsolongasyouhaven’texperiencedthis,todieandsotogrow,youareonlyatroubledguestonthedarkearth.

—Goethe

In a celebrated address to theStanford graduating class of 2005, SteveJobssaid:“Ihavelookedinthemirroreverymorningandaskedmyself:‘Iftodaywerethelastdayofmylife,wouldIwanttodowhatIamabouttodotoday?’Andwhenevertheanswerhasbeen‘No’fortoomanydaysin a row, I know I need to change something.” The message wasparticularly poignant because Jobshadbeendiagnosedwithpancreaticcancerayearearlier.Hisreflectionondeath,however,wasnotaconsequenceofhisillness.

Jobs shared how an awareness of death had served him as a valuablecoachthroughouthislife.Herecalledthatatageseventeenhehadreadaquote that remindedhim to live eachday as if itwashis last, “becausesomedayyou’llmostcertainlyberight.”Understandingthathemightdiesoon, Jobs said,was “themost important tool I’ve ever encountered tohelp me make the big choices in life, because almost everything—allexternal expectations, all pride, all fear of embarrassment or failure—thesethingsjustfallawayinthefaceofdeath,leavingonlywhatistrulyimportant.”Henotedthat“deathisverylikelythesinglebestinventionoflife. It is life’s change agent. It clears out the old tomake way for thenew.”1


JobsexemplifiedtheZensaying“Diebeforeyoudie,soyoucantrulylive.” The first “die” means “confront the fact of your mortality”; thesecond,todieliterally.Dyingbeforeyoudiemeanscomingtotermswiththe finite nature of your existence in order to fully comprehend life’srichnessandpossibility.Ifyouleavethinkingaboutyourdeathuntilyouareabouttodie,youwillmissdeath’swisecounsel.Paradoxically,dyingbeforeyoudieistheanswertotheJewishprayer,“LetmenotdiewhileIamstillalive.”It’seasyforanyone,eventranscendentleaders,toconducttoomuchof

life on autopilot, constantly distracted by everyday busyness. We cansleepwalkthroughlife,focusingourattentiononthetrivialandfrivolous.Weindulgeintoomanyactivitiesthatleaveusemptyandunfulfilled.Butinsteadoffillingthisemptinesswithadisciplinedpursuitofmeaning,wesoothe our anxious nerve cells with more empty busyness and trivialpursuits.Imaginethatyouhaveonlythreeminutestolive,andyouwanttomake

onefinalphonecalltosomeone.Whomwouldyoucall?Whatwouldyoutellthatperson?Andwhatareyouwaitingfor?Whenyouhavejustthreeminutes to live,youmaynotevenbeable tomake thatcall.After Iaskpeople inmyworkshops these questions, I see them calling loved onesduringthebreak.Once we understand that the clock is ticking and there’s no time to

waste,wewanttoelevateoursights,pursuesomethingworthwhile,makeeverydaycount.Theprospectofdeathdirectsustofocusonwhattrulymatters: truth, happiness, meaning, love, friendship, gratitude, awe,compassion,peace,fullness,andfreedom.Andthisresponsibilityisevenmoretrueifyouaspiretobeatranscendentleader,helpingothersfulfilltheirmostmeaningfulpurposesintheorganizationandintheirpersonallives.

ABRUSHWITHDEATH

In2008,themanagementconsultingfirmGrantThorntonsurveyed250CEOs of companies with revenue of $50 million or more. Twenty-two


percentsaidtheyhadhadanexperiencewhentheybelievedtheywoulddieand,ofthose,61percentsaiditchangedtheirlong-termperspectiveon life or career. Forty-one percent said it made them morecompassionateleaders.2

OneseniormanagerwhoexperiencedacloseencounterwithdeathwasRandLeeb-duToit.InFebruary2014,Leeb-duToitworkedasaresearchdirectoratGartner,theworld’sleadingresearchandadvisoryfirminIT.He lovedhis jobasoneof the leadersofabraintrustadvisingamixofFortune 500 and high-growth businesses. Despite the pressures of hisjob,hetookexcellentcareofhimself.Heatehealthyfood,meditated,andenjoyed running, surfing, and stand-up paddling. He’d get out on thewaterandreallypushhimself.OneSundaymorning,whenitwasstillpitchblack,hewentforastand-

up paddle session on Narrabeen Lake, close to his home in suburbanSydney.Afteranhouron thewater,he felt that somethingwasn’tquiteright. “I feltabitmoredrained thanusual,but thenagain Ihadn’thadbreakfastand thought itwassimply lowbloodsugar level,”he recalled.Hewent to the office andworked all day, but thatnight feltworse.Hetriedtogettothebathroomandbecamedisoriented.“Then,Icollapsedanddied.”Whentheambulancearrived,theparamedicsdiscoveredthathisheart

ratewas running at 200 beats perminute.Hewas undergoing suddencardiac arrest,which involves the electrical circuitryof theheart ratherthan the plumbing. Only 5 percent of people survive such an event,typically through resuscitation. He was in a state of heightenedventricular tachycardia—arrhythmia—and yet he was conscious(somethingthatalmostneverhappens).Leeb-du Toit felt extremely grateful to be in the small percentage of

peoplewhosurvivesuchanexperience.“ThatgratitudehasmademefeelIhavearesponsibilitytomakemoreofadifferenceintheworld,”hesays.“I’vebeengiventhisincrediblyraresecondlife—what,though,amIgoingtodowithit?”For Leeb-du Toit, sudden cardiac arrest was the trigger for

transformation. “The experience altered my perception of timecompletely,” hewrote in an essay.3 “I no longer feel the same sense ofurgency to be busy and to track myself against a linear, progressive


timeline.Instead,thepastandfuturearecompressedandIseemeonlylivinginthenow.”Theencounterwithdeathtaughthimtofocuslessonthingsthatsatisfy

hisego—makingmoney,focusingonhiscareer,buildingabusiness,andsoon—andmoreonlisteningtohisinnervoice,hissoul,andthethingsthatresonatewithhimmostdeeply.Breakingthroughsocietalconstructsand personal constraints helped him truly come alive and find joy.Hequit his job and started a consulting company, coaching leaders tobecome more connected and empathetic, more transcendent. “Beingmoreempatheticwithotherscannotonlycreatedeeperconnectionsandstrongerleaders,”henoted.“Italsoactsasaforcingfunctionforsolvingmanyofthebigissuesinourworld:hunger,poverty,suffering,andwar.”Leeb-duToithasachievedagreaterunderstandingofpurposebecause

of his brushwith death.He’s thinking bigger—much,much bigger.Hisexample, like those of others, is permeating the wider corporateconsciousness,likewelcomerainintoanexhaustedsoil.Leeb-duToit’srareopportunityforasecondlifecompelledhimtoask,

“WhatamIgoingtodowithit?”Isyourlifeanylessrare?Whynotasknow,withequalgratitude,“WhatamIgoingtodowiththeremainderofthispreciouslife?”

THEWORMATTHECORE

AccordingtothephilosopherandpsychologistWilliamJames,the“wormatthecore”ofthehumanconditionisthegnawing,usuallysubconscious,awareness of our own impending death. Death is at the core of thesymbolic fruit of the Tree of Knowledge. After eating this apple, AdamandEvewereforcedfromignorantblissinparadiseintotheharshrealityofmortality:“Foryouaredust.Andtodustyoushallreturn.”InTheDenialofDeath,theanthropologistErnestBeckerobservedthat

thecentraldriverofhumanbehaviorisourefforttodenyandtranscendthefactofourowndeath.4Thenotionthatmostofhumanindividualandcultural activity arises as a response to deathmight sound far-fetched,but Becker made a compelling (and Pulitzer Prize–winning) argument


that all civilizationsarise fromdeathawareness.Heargued that all ourreligious,social,military,political,andeconomic institutions,aswellasthe traditions, rituals, and taboos that support the social order, arefundamentallydefensemechanismsagainstourmortality.“Although likeall life-forms,humanshaveabiologicalpredisposition

toward self-preservation in the service of reproduction,” Beckerexplained, “we are unique in our capacity for symbolic thought. Thisallows us to reflect on the past and imagine the future, realizing thatdeath is inevitableandcanoccuratany time.We thenneed tomanagethisterrifyingawarenessbyconstructingsharedbeliefsaboutrealitythatminimizeexistentialdreadbyconferringmeaningandvalue.Allculturesprovideasensethatlifeismeaningfulbyofferinganaccountoftheoriginoftheuniverse,prescriptionsforappropriatebehavior,andassuranceofimmortalityforthosewhobehaveinaccordancewithculturaldictates.”5

Aswebecomeawareofourmortality,webecomeanxious;tomanagethisanxietywetrytocreateorbecomepartofsomethingthatwebelievewill last beyond our physical death—art, music, literature, religion,political movements, institutions, nations, and empires. This is theultimate motivating force behind many human endeavors. Morespecifically,itisthemotivatingforcebehindeveryorganization.The people who found, lead, and staff organizations expect to be

rememberedbecauseofwhat theyhavedone.Theywant toachieve thekind of notoriety that will last beyond their lives. It is the samepsychological force that causes us to carve our initials in the bark of atree,ortoleaveournameonabrickinFenwayPark,oronthewingofahospitaloruniversity ifwehaveenoughmoney. Ifwe feel thatwehavedonesomethingworthwhileandenduring,ourfearofdeathlessens.Ifwearerevered,honored,orevensimplyremembered,ouranxietysubsides.We try to protect ourselves against mortal anxiety through two

psychologicalmaneuvers.First,wetrytoshoreupour“I”self—ourself-esteem—throughouraccomplishments.Wetryto“lookgood,”decoratingour bodies and our homes and accumulating all kinds of toys.We alsobuild our identity bymaking a difference, having impact, and claimingownership of memorable feats. “Unlike the baboon who gluts himselfonly on food,” wrote Becker, “man nourishes himself mostly on self-esteem.”


Second,we shore up our “we” self by aligning ourselveswith groupsthatshareourworldviews—ourreligions,ourlanguages,ournations,ourpoliticians, our favorite sports teams, and so on. We defend ourselvesagainst death anxiety through culture—by which Becker means all ourreligious, social, and organizational institutions and the traditions,rituals, and taboos that support the social order. The closer our deathanxietybubblestothesurface,themoretightlywebindtothegroupsthatweidentifywith.ThedrivesforI-basedself-esteemandwe-basedculturalbelongingare

double-edged.Ifweareluckyandhavepositiveself-esteem,weenhanceitbydoinggoodworkintheworld—workingtocurecancer,contributingtoourcommunities,becomingadmiredleaders,andsoon—andthemoretolerantwe tend tobe towardotherswithalternativeworldviews. Ifwehavepoorself-esteem,weshoreitupbybragging,belittlingothers,andengaging in risky behaviors, and the more likely we are to demean orattackthosewhodon’tshareourworldviews.(Fascinatingly,thegreateryourfearofdeath,theloweryourself-esteem—andviceversa.)Becker claimed that human beings have two selves, a “physical” self

and a “symbolic” self. Our physical selves attend to our day-to-dayproblems.Oursymbolicselvesyearntobepartofsomethinggreaterthanourselves.Weareabletotranscendtheproblemofourphysicalmortalitythroughactsofsmallandlargeheroism,whichallowthesymbolicselftoendure beyond the physical one. Anything we do that involvescommunity—whetherit’sgoingtochurch,temple,ormosque;servinginsoup kitchens; working for positive change on a community orgovernmental level; and going to the office when we feel engaged—touchesonan“immortalityproject,”thatis,abeliefsystemthatletsthesymbolicselftranscendphysicalreality.Throughsuchprojects,wecometofeelthatwearepartofsomethingbiggerandmoreeternalthanouralltoo brief existences. This, in turn, confers meaning on our lives, thefeelingthatourlivesaresignificantinthegrandschemeofthings.From the cave dwellers who left their artwork on stone walls to the

programmerswholeavetheirsinbits,humanbeingsarealwaystryingtoleavetheirfingerprints(or“soul-prints”)onhistory.Weallwanttosay,“Ilivedanditmattered;seeme,knowme,rememberme.”Weallwanttofeelthatwehavebeen“personsofvalueinaworldofmeaning,”asBeckerputit.


WilliamJamesobservedthat“thegreatestuseofalifeistospenditonsomething that will outlast it.”6 A big part of it is being remembered.Everypersonwantstocreateorbepartofsomethingthatcanlastbeyondhis or her physical existence. Very few of us can quench this thirst fortranscendence on our own. Some of us satisfy our search formeaningthroughourfamiliesandchildren.Butmostofusneedsomethingmore,animmortalityprojectormissionthatwillmakeadifferencetoothersinourcommunityandtheworld.7

Unfortunately,immortalityprojectscanbebothgoodandbad.Besidesbeingdriversofmeaning,theyarealsodriversofwar,genocide,bigotry,andracism.Whenoneimmortalityproject—say,areligionoranation—collideswithanother,conflictarisesasatestofwhosewayoflifeisrightand whose is wrong. Such tribalism triggers aggressive and defensivebehaviors, since both parties want to prove that their belief system issuperiorbyeliminatingtheother.Muchofhumanstrifespringsfromtheincompatibility of immortality projects that have generally beeneliminative andunethical—eliminative because such aproject seeks theobliteration of the rival, and unethical because it does so throughaggressionandviolence.

DEATHAWARENESSATWORK

The worm at the core has long gnawed on Wharton professor andbestselling author Adam Grant. As a child, he suffered an activeimaginationthatbecameakindofcurse(heusedtoworryaboutthesunburning out, for example) and later turned into frequent existentialmusings.In 2009, Grant and a coauthor published a paper that laid out how

reminders of death affect people’s behavior at work. They found thatwhenpeople’sreactionstoremindersofdeathare“hot”(i.e.,anxiousandpanicked),theytendtowithdrawintotheirownbeliefsandbecomemorearrogant, judgmental, and bigoted. But when the reminders of deathproduce “cool” responses (i.e., reflective ones, as those in helpingprofessions likemedicineand firefightingdo),peoplearemore likely to


thinkaboutthemeaningoflifeandtheirpotentialcontributions.8

Grant and his colleagues also found that when people think aboutdeathwith equanimity, they aremore “generative” (i.e.,more engaged,productive,andhelpful)iftheirjobsfeelmeaningful.Butiftheirjobsfeelmeaningless,theyarelikelytoquitandtrytofindajobthatallowsthemtobemoregenerative.Moreover,peoplewhofeela“calling”atworkaremoremotivated to leavebehindameaningfulcontribution,and tocrafttheir jobs in order to make themmore meaningful (e.g., by taking onhelpinginitiativeslikementoring).Bycontrast,peoplewhofeelliketheyare merely job oriented (doing tasks to collect a paycheck) are lessmotivatedtodoso.Grant’s research revealshowmuchwe sufferwhenwedon’t feel that

we are persons of value in a world of meaning at work. We becomeanxious, disconnected, and disengaged. Moreover, these feelings arehighlycontagiousandspreadlikeadiseasethroughagroup,destroyingits cohesion and effectiveness. Furthermore, organizations, just likehuman beings, can die of the disease of disengagement. In deadorganizations,nobodycares.Everyone’sjusttheretoexchangeminimumeffortforasalary.Ifyouare theaverageworkingperson inadeadorganization,you lie

underadoublecurse—the inescapable factofyour individualmortality,andthedeadlysocialatmosphereoftheorganizationyouworkfor.Thisdouble attack undermines the individual and cultural pillars of yourstrategyforovercominganxiety.Bycontrast, transcendent leadersofferemployeesachance toengage

in an immortality project. They understand that all human beings feelhaunted by the prospect of their own insignificance. To help themthrough this fear, such leaders offer followers, in exchange for theirpassionate commitment to the mission, the chance to manage theiranxiety through meaningful work and membership in a noble, ethical,and successful community.AsMihalyCsikszentmihalyiwrote, “When aleader demonstrates that his purpose is noble and that the work willenablepeople to connectwith something larger—morepermanent thantheirmaterialexistence—[then]peoplewillgivethebestofthemselvestotheenterprise.”9

The question of a manager is “How do you…?” (do something, fix


something, etc.), but thequestionof a transcendent leader is “Whoareyou?”(asaconsciousbeing).Thelatterquestioncannotbeputtopeoplein a dispassionate, arm’s-length way. The leader needs to be “on fire”herselfinorderto“lightup”andinspireherfollowers.That’swhylookingtodeathforadviceisnecessary.Atranscendentleaderunderstandsthatanoblepurposeovercomesthelimitationsofphysicallife,projectingthosewhopursueitintoakindofsymbolicimmortality.Byofferingpeoplethisawesomepossibility,thetranscendentleaderbecomessomeonewhocanguideherfollowersthroughthemostfearsomeprospectofall.A transcendent leader proposes amission throughwhich individuals

canachieve symbolic immortality.They can reduce theirdeath anxiety,replacing it for feelings of significance, self-esteem, and belonging to ameaningful community. The transcendent leader elicits passionatecommitment to a collective, noble purpose—which is the only way tomanagedisengagement,disorganization,disinformation,anddisillusion.When this occurs, people really care and give their best. They lookbeyond their silos and their small decision-making issues. They aligntheir best efforts in ways that no financial incentives or othermanagement system can. Organizations that offer workers symbolicimmortality through moral projects, in solidarity with peers, withopportunities to learn and grow autonomously, outcompete those thatdon’t, reaping tremendous economic rewards as they become thedominantforminthememepool.Considerthedifferencebetweenrowingandsurfing.Aboatmovedby

muscle is nomatch for natural forces. A board propelled by thewavesflows in harmony with these forces. An organization moved bymanagerialauthority is likearowboatplowingagainst thecurrent.Onepropelledbytranscendentleadershipislikeasurfboardonabigwave.

DEATHASATEACHER

Dyingbefore youdiemeans coolly confronting your ownmortality andintegratingtheawarenessofitintohowyoulead.Dyingbeforeyoudieisthehardestandmostimportantworkthatyoucandoifyouwanttotrulylive and truly lead. It does not require that you face death in a literal


sense,butitdoesmeanthatyouhavetolookdeeplyatyourownlifeandits inevitable end and realize that everyone around you is on the samelifeboat.Onceyoucometo termswithmortality,youcanbegin toelicitand inspire the internal commitmentof those youare leading.You canfulfilltheirhungerformeaningthroughacollectivemissionbecauseyouaremuchmoreawareandempathetic.Dyingbeforeyoudiemakesyouthekindofinspiringleaderpeoplewanttofollow.As a leadership coach,my job is towake leaders up towhat ismost

essential in them (which is, paradoxically, universal and far beyond“them”) so that they can truly engage others at the deepest level. Themost powerful leadership development process I’ve discovered is the“cool”considerationofone’sdeath.Nobody likes to think, much less talk, about the prospect of death.

Perhaps baby boomers, now in their late fifties, sixties, and earlyseventies, privatelywonder howmuch longer they have to live as theiraches and pains kick in. But besides some boomer senior executives,many of the leaders I help are fairly young—between the ages of thirtyandforty-five.Mostareinprettygoodhealth.Fewhavegiventhetopicoftheirowndeathmuchthoughtatall.Thesubjecthascertainlyneverbeencoveredintheirbusinessschoolcurricula.With that existential perspective in mind, I invite my workshop

participantsto“diebeforetheydie”inareflectiveor,touseGrant’sterm,“cool”way.Ifirstproposeanexercisebasedonanotionthatproducesavicariousnear-deathexperience.Itgoeslikethis:“Imagine that you are at the end of a long and rich life. You’ve

accomplished everything youwanted, behaving honorably and buildingmeaningful connections with your family, friends, and colleagues. Youare proud of yourself for leaving a great legacy, and for having led anorganization that brought great value to the world. You’ve done yourworkhere,andyoufeelreadytogo.Sowhenyoulearnthatyourdaysarenumbered, you take the news in stride. A lot of peoplewho appreciateand admire you want to pay their respects, so they organize a ‘livingfuneral.’(Alivingfuneralisacelebrationinwhichalivingpersonwithalife-limitingillnesslistenstotheeulogies,praises,andfarewellsoffamily,friends, neighbors, and colleagues.) In the ceremony, a dear friendwillstand in frontof the audience and reada eulogy.Write the eulogy that


youwouldlikeyourfriendtogive.”For this exercise, I ask the participants not to be humble; themore

ambitiousandgrandiose they canbe, thebetter.Thatway, they set thehigheststandardsforthemselves.“Thiskindofeulogycanbecomeatruenorth star for your life,” I tell them. “It canhelp youdiscoverwho youwanttobeandhowyouwanttoactinordertoleavethelegacyyouwanttoleaveandfeelproudofyourself.”AsIaskpeople toreadtheireulogies tooneanother insmallgroups,

everyoneistouchedbythebeautifulaspirationstheyhear.Next, I ask them to do a “gap analysis” in which they consider the

differencebetweentheircurrentlivesandthethingstheywouldhavetodo in the future to justify suchabeautiful eulogy.What changeswouldtheyhavetomake?AndthenIchallengethembyasking,“Areyoureadytomakethesechanges?”(Therelevantcommitmentisnottotheoutcomebuttotheprocess.Analogously,thequestionisnotwhetheryouwanttoloseweightbutwhetheryouarewillingtosticktothedietthatgetsyoutoyourgoal.)Followingthoseexercises,Itheninvitethemintoa“darker”one.Iask

them to imagine that theyhave just died andhavenothad the time tochange anything in their lives. I ask them to answer the followingquestionsinthethirdperson,asiftheyweretheirown“devil’sadvocate,”substitutingtheirownnamesforthe“X”:

WhatdreamsdidXnotpursue?WhatfearsdidXnotovercome?WhatlovesdidXnotexpress?WhatresentmentsdidXnotresolve?WhatapologiesdidXnotmake?WhatgiftsdidXnotgive?

Whenthey’refinished,Iaskthemtosharesomeoftheiranswerswiththegroup.Sometypicalstatementsare:

“Hedidn’tstarthisbusiness.”

“Shenevervolunteeredforthenonprofit.”

“Hediedwithoutmakingthetrip.”


“Sheneverlearnedtoplaythepiano.”

“Hewasalwaysafraidofnothavingenough.”

“Shecouldn’tovercomeherfearofspeakinginpublic.”

“Hedidn’ttellhiswifehowmuchhelovedher.”

“Shenevertoldheremployeeshowimportanttheyweretoher.”

“Hefailedtomakepeacewithhisson.”

“Shedidn’tforgiveherself.”

“Hewisheshehadapologizedtohispartner.”

“Heshouldhavespentmoretimeplayingandlesstimeworrying.”

“Hergreatideadiedwithher.”

Many of the workshop participants return home with an existentialbucket list. They feel more committed to pursuing their dreams,overcoming their fears, forgiving those who hurt them, apologizing tothosewhomthey’vehurt,andgivingtheirgiftstotheworld.Monthslater,they sendmemessages and pictures as they cross off their bucket listitemsandflowerintotheirtrueselves.Try an experiment.Ask yourself the questions I listed above and see

what comes up. Even this short brush with the prospect of your ownmortalitycanheightentheintensityofyourlife.Facingtherealityofyourowndeath canbeprofoundly frightening, so it demands great courage.Butitwillalsoopenyouupinawaythatnothingelsecan,settingyouonfirewithpurposeandenablingyouto inspireothers.AsSteveJobstoldtheStanfordstudents,“RememberingthatyouaregoingtodieisthebestwayIknowtoavoidthetrapofthinkingyouhavesomethingtolose.Youarealreadynaked.Thereisnoreasonnottofollowyourheart.”

CANYOUDIEWITHTHAT?

“Canyoulivewiththat?”isatypicalquestionthatpeopleusetoevaluateanoption.I’dliketopropose“Canyoudiewiththat?”asacomplement.Theideaisthatwhenyou’redeliberatingaboutasignificantdecision,you


imaginethatwhatyou’reabouttodomaywellbethelastgestureofyourlife.Thenaskyourselfwhetheryou’dbeatpeacewithyouraction,andifso,howyouwoulddoit.Likeacorrosiveacid,deathawarenessdissolvesthesuperficial,leaving

only the essential, which is why it makes an excellent leadershipcounselor.Forexample, imagine sitting inameeting.There isa seat inthe corner where dark-hooded, skull-faced Death sits watching, andeveryone iskeenlyawareof itspresence.Youcanaskyourselfhowyouwouldbehaveifyouknewthatyou’dneverhaveanothermeetingwiththepeople in the room. The meeting is a final and unique opportunity toexpressyourauthenticvaluesinaction.Everyutterance,everyexchange,everydecision,wouldbe“death-proof,”meaningthatyoucould“diewiththat.”Iactuallydotakeafewminutes(oratleastadeepbreath)tomeditate

onthisideabeforeIenteracoachingconversation,teachaworkshop,orengageinanimportantdialogue.Ipreparemyselflikethistoalwaysgivemy best parting gift, moment by moment, opening my heart and notholdingback,asthere’snothingtoprotectwhenI’mattheendofmylife.

WHATPSILOCYBINTAUGHTME

Ina2015studyabouttheuseofpsychedelicstoreducethefearofdeath,researchers found that cancer patients receiving just a single dose ofpsilocybin experienced immediate and dramatic reductions in anxietyand depression, and that these effects were still holding six monthslater.10Theyfeltthattheexperiencewithpsilocybinwasamongthemostmeaningful of their lives. They described feelings of unity, sacredness,ineffability, peace, and joy, “as well as the impression of havingtranscendedspaceandtimeandthe‘noeticsense’thattheexperiencehasdisclosed someobjective truth about reality.”These feelingswere everybitasrealtothemasanyotherexperience.Subjectsovercametheirfearofdeathbyvicariouslyexperiencingit.“A

high-dose psychedelic experience is a death practice,” said KatherineMacLean, a John Hopkins University psychologist. “You’re losing


everythingyouknowtobereal,lettinggoofyouregoandyourbody.Thatprocesscanfeellikedying.”11

ItcertainlyfeltlikethattomeShamanic journeys have fascinated me ever since I read Carlos

Castaneda’s stories about Don Juan.12 Castaneda’s experiences innonordinary states of consciousness left an indelible impression onmyyoung mind. For many years I dreamed of going to Mexico to find ashamanwhocouldguidemeintononordinaryrealities.13

In1998,a friend toldmeabout theceremoniesashamanheld in thedesertusingsacredplants.Iimmediatelyapplied.Eventually,Iendedupin the desert of my fantasies with a shaman and a group of fellowpsychonauts. I sat at the center of the circle andheld thepipe that theshaman had ceremoniously loadedwith a white powder. Since I didn’tsmoke,mymainconcernwasthatI’dembarrassmyselfbycoughingandexhaling the smoke that Iwas supposed tohold inmy lungsas longaspossible. I closed my eyes and cleared my mind, taking three deepbreaths. Ibrought thepipe tomy lipsand inhaledas theshaman lit itscontents. Immediately, I feltmymindon fire.Mythroat itchedandmylungsached,butIdidn’tcough.Invisiblehandshelpedmeliedown.ThatwasthelastseminormalfeelingIhadforthenexthour.I had entered into an extraordinary realm, not because anything

changed outside but because something inside me finally relaxed anddissolvedintowavesofbliss.Thefeelingswerelikeintenselightandheat,like spiced honey running through my veins. (As I write this, theexpressionmakesnosense,butmymemoryoftheexperienceisasclearasthefeelingofmyfingersonthekeyboard.)Thewavesgrewstronger.Ibegantofeelanecstaticsortofpain.Aftera

while, I started feeling as if I were burning from the inside. I felt anuncontainable, unbearable bliss that “exploded me out” of myself.Awareness was there, but it wasn’tmine. I was there, but I wasn’t theordinary “me.” I felt as if therewas lightdissolvingme from the insideand, simultaneously, light dissolving me from the outside, penetratingthrougheveryporeofmyskin.Thelightoutsidewantstomergewiththelightinside,Ijustknew.Itis

the false belief in the separateness that prevents this beautiful act oflove.For the first time, I (asanego)amunable toblock the light.The


light isgoingthroughme,appearingasme,becomingme,beingme.IamtheoceanoflightappearingasthewaveofFred.I feltmyself lettinggoofmyfearofdeath. I feltcompletelysafe—not

becausetherewasnorisk,butbecausewhatwasatriskwasnotreally“I.”Iwaslaughingandcrying,tearsofjoyandreliefstreamingdownmyface.I rolled with the ecstatic waves of pleasure-pain.You die theway youlive, an inner voice said. If you live in darkness, you are right to feardeath.Ifyouliveinthelight,there’snothingtofear.The author and neuroscientist SamHarris has explained the shift in

awarenessproducedbynonordinarystatesofconsciousnessbetter thananyone else I know. InWakingUp, he describes how his sense of thehumanmind’spotential shiftedprofoundly throughhisexperiencewithEcstasy(MDMA).

Mysenseof thehumanmind’spotential shiftedprofoundly.(…) My capacity for envy, for instance—the sense of beingdiminishedby thehappinessor successof anotherperson—seemed like a symptom ofmental illness that had vanishedwithouta trace. (…) Itwouldnotbe toostrong tosay that Ifelt sane for the first time inmy life. (…) Ihadceased tobeconcernedaboutmyself.Iwasnolongeranxious,self-critical,guarded by irony, in competition, avoiding embarrassment,ruminating about the past and future, ormaking any othergesture of thought or attention that separated me fromanother.14

“Thefeelingthatwecall ‘I’ isan illusion,”claimsHarris.“There isnodiscreteegolivinglikeaMinotaurinthelabyrinthofthebrain.Andthefeelingthatthereis—thesenseofbeingperchedsomewherebehindyoureyes,lookingoutataworldthatisseparatefromyourself—canbealteredorentirelyextinguished.”When the illusion of the ego disappears, what is left is a stance of

transcendentconnectioninagape.Agape isaveryhealthyplatform foran organization to build upon as they unite in a mission and anexpressionofvalues.Inmypersonaljourney,IsawthatthefeelingthatIcall“I”isamirage.

Myordinarystateofconsciousness—theoneinwhichIexperiencemyself


asanegohavingperceptions, thoughts, and feelings,makingdecisions,andtakingactionfromaboutfive inchesbehindmyeyes—isadelusion.AlthoughI’dhadpreviousglimpsesofthisawarenessthroughmeditationpractice, thenoeticqualityof theexperiencewith theshamanic journeyconvincedme,inawaythatIcannotdoubt,thatIamnotwhoIusedtothinkIwas.Beyond the scientific accounts I have read, I now know in a direct,

undeniablewaythatmy“ego,”mysenseofbeingaunifiedsubject,isanillusion.Likeblueskies,multicoloredrainbows,andturquoisewaters,theego is not what it appears to be. In fact, it is nothing but an opticalillusion of consciousness. I still have the strong impression that “I” amthe owner of my experience, the one who perceives, thinks, feels, andwills from somewhere behindmy face, but that “I” now vanishes everytimeI lookat itcloselyinmeditation.It isnomorerealthanthedesertoasisthatappearsinthedistancebutdisappearsasIgetclosertoit.Such psychedelic experience can alter the fear of death very

profoundly, and at the same time bring sanity to ordinary life.“Existentialdistressattheendoflifebearsmanysimilaritieswithmentalillness, including excessive self-reflection and an inability to jump thedeepeninggroovesofnegativethought,”writesMichaelPollan.“Theego,facedwith the prospect of its own dissolution, becomes hyper-vigilant,withdrawing its investment in theworldandotherpeople. It is strikingthatasinglepsychedelicexperienceshouldhavethepowertoalterthesepatternsinalastingway.”15

Wearealldying.Weknow itbutwehide it fromourselves.Untilweface up to it, our existential distress will always be there in thebackground, as a low-grade mental illness. We become self-absorbed,unabletoconnectwithothersortheworld.Weloseoursouls.Webecomehypervigilant, hypercritical, hyperanxious. For most of us, shamanicsubstancesarenotsafe.Howcanwethenwakeupfromthebadegotripinwhichwe live? I believe that we can do so throughmeditation, andparticipation in a community of purpose, engaged to a transcendentproject,ledbyaherowhohastakenajourneytotheundersideandcamebacktoshareherorhisgiftofawarenesswithus.


“OH,WOW”

In his Stanford commencement speech, Steve Jobs said that deathwas“very likely the single best invention ofmy life.” Death is the ultimatewake-upcall.Deathisareminderofthepreciousnessofyourhumanlife,andofyourlimitedtimetoexperienceandmanifestit.“Isupposeit’snotquiteaccuratetocallthedeathofsomeonewholived

withcancerforyearsunexpected,”SteveJobs’ssisterwroteinhereulogyforhim,“butSteve’sdeathwasunexpected forus.WhatI learned frommybrother’sdeathwasthatcharacterisessential:Whathewas,washowhedied.”“Theworkofdyinghad tobedone,” shewrote. “Evennow,hehada

stern,stillhandsomeprofile,theprofileofanabsolutist,aromantic.Hisbreath indicated an arduous journey, some steep path, altitude. Heseemedtobeclimbing.Butwiththatwill,thatworkethic,thatstrength,therewasalsosweetSteve’scapacityforwonderment,theartist’sbeliefintheideal,thestillmorebeautifullater.”Andhisfinalwordswereamysterious,beautifulobservation,repeated

likeamantra,threetimes:“Oh,wow.Oh,wow.Oh,wow.”16


Chapter13

BEAHEROTAKETHEJOURNEY

Pleasecallmebymytruenames,SoIcanhearallmycriesandlaughteratonce.SoIcanseethatmyjoyandpainareone.PleasecallmebymytruenamessoIcanwakeup.Andthedoorofmyheartcanbeleftopen.Thedoorofcompassion.

—ThichNhatHanh

Since the beginning of time, human beings have thrilled to archetypalstoriesofeverydaymortalswhoaretransformedthroughaconfrontationwithdeath.Thesestoriesfollowcyclicpatternsthatbeginandendinthehero’sordinaryworld.Theplotisalwaysthesame:Theheroiscalledtoadauntingquestthat

forces her out of her home and into an unfamiliar, strange, anddangerous world. Along the way she receives help from some kind ofmessengerorally.Shefacesallkindsofchallengesontheway—shemayhavetosolveimpossibleriddles,escapefromatrap,avoidaseducer,slayamonster,oralloftheabove.Thenshemustfaceanenormouschallengethat ends in crisis, typically a near-death experience. The journey isfrightening and terrible, and the hero undergoes loneliness, pain,exhaustion,illness,anddespair.Ifshesurvives,shewinsagift(includingthatofgreaterself-knowledge)andreturnshometobestowthegiftandher wisdom on others. In the process, the hero is transformed from ameremortalintoawiserandmoretranscendentbeing.These stories are so timeless and universal that the great American


mythologist Joseph Campbell called them by a single name: the“monomyth.”Whetherareligiousfigure(Jesus,Moses,Osiris),aliteraryorhistoricalfigure(Odysseus,JoanofArc,WilliamWallace,HenryV),oramoviecharacter(LukeSkywalkerinStarWars,DorothyinTheWizardof Oz, Maximus from Gladiator, Katniss Everdeen from The HungerGames,GeorgeBaileyinIt’saWonderfulLife,andinnumerableDisneymovies), thehero isalwayscut fromthesamebasicclothbecause,afterall,hisorhersisthestoryofourownliveswritlarger.Heroismisnecessary for transcendent leadership.Theheroearns the

moralauthoritytoleadothersbygoingfirst.Shehastoprovehervaluesinthefaceofchallengesinordertobecomeaguide.Uponherreturnshecan be trusted to lead wisely and compassionately, since she wouldn’thavesurvivedwithoutthosequalities.Allofusarecapableofbecomingheroes,butnotallofusmuster the

courage to undertake the quest by ourselves. The journey requiresdigging deep, going into unfamiliar and threatening territory, andovercoming enormous challenges. It requires further that you discoverthetruthaboutyourself,whichrevealstoyouthetruthabouteveryself:we all long to connect to something larger than ourselves, to join it, tocontribute to itmeaningfully in our own uniqueway, to upholdwhat’strue,good,andjust.The journey is daunting. Joseph Campbell points out that in most

stories,theherorejects“thecalltoadventure.”Mostofusaresuckedintothe journey by forces beyond our control, kicking and screaming. Wedon’t have a choice, but we can choose how we walk the path. As theScottishheroWilliamWallacesaysinthemovieBraveheart,“Everymandies;noteverymanlives.”Tofullylive,weneedanimmortalityproject.Weneedaheroicquestto

makeour livesmeaningful.Theneed for significance is the energy thatpropels extraordinary enterprises. To elicit the internal commitment ofyour followers for such an effort, you have to become a hero. And youcan’tbecomeaherountilyoufacedownyourowndemons.

MYJOURNEY


“NoGermaninthishouse!”mymothersnappedatmygrandmother,whohad said something in Yiddish. Her sharp tone is one of my earliestmemories. Many years later, I realized that although they didn’texperienceviolencedirectly,myparentssharedthesiegementalityoftheJewswholivedduringtheHolocaust.My grandparents fled Russia with their parents in the late 1800s,

following a rising wave of anti-Semitism and a pogrom in which mymother’sgrandfatherwaskilled.Forthem,Argentinamusthavefeltlikeanewplanet.Theywereterriblypoor;foratime,mymotherlivedinanorphanagebecauseherparentscouldn’taffordtokeepher.

As children duringWorldWar II, my parents learned about Hitler.1

After the war ended, they discovered the horror of the concentrationcamps. Despite the ten-thousand-mile gulf between themselves andEurope, they were deeply shocked, not least by the fact that even thecountries fighting against Hitler, Britain and the United States, hadrejected Jewish refugees who’d managed to escape, returning them toEurope’sgaschambersandcrematories.IlearnedthestoryoftheHolocaustinschool.Isawthepicturesofmy

peoplewith theStarsofDavidsewnon their jackets,being loadedontotrains.Isawthehorrifyingpicturesofstarvinganddeadprisoners.Iwasfullofjudgment.Icouldnotbelievethat“goodGermans”stoodbywhiletheir Jewish neighbors were swept into ghettos. How could they justwatchanddonothingwhilesomethingsoterriblewastakingplace?ThesiegementalitybecamelessabstracttomewhenIwasfifteen.In

1976, a military coup took place in Argentina. Everyone I knew feltrelieved when the generals took over the government because theypromised peace, stability, and a reprieve from left- and right-wingterrorism. Something had to be done; control had to be restored. ThusbegantheArgentinean“DirtyWar.”2

Life under the juntawas both orderly and frightening.Everyonewasnervous; the regime had imposed a state of martial law. My parentsconstantly warned me to be cautious and to stay away from signs oftrouble.Itwasdangeroustogooutatnight.Everyonewasbeingwatched.Wekept our eyes open and ourmouths closed. Iwas careful to alwayscarry my cédula de identidad (“identity card”), ready for the armedsoldierstoboardthebusandaskthedreaded“Papers,please.”Morethan


once,themilitarypolicesearchedbagsandbackpacks,takingthosewhodidn’tcarrytherightidentificationorwhocarriedthewrongbooks.In1979,whileIwasatcollege,Iworkedthenightshiftatacomputer

center.AsIexitedthetrainstationatthePlazaDeMayoeveryThursday,I saw a gathering of womenwho carried a big banner andwore whitekerchiefs marked with the initials of their own children andgrandchildren who had disappeared without a trace. The “Mothers ofPlaza DeMayo” demanded to knowwhat had happened to their lovedones. Theywere nearly always surrounded by large numbers of police;sometimes therewere arrests.Occasionally I saw thewomenandotherprotesterswhohadjoinedthemseekingsanctuaryinthehugecathedralofBuenosAires,mistakenlybelievingthatthepriestswouldprotectthem.As more and more people disappeared and the economy began to

crater, the regime lost support. To gin itself up in public opinion, thegenerals decided to invade the Falkland Islands—Islas Malvinas, asArgentineans call them—starting a war with Britain. It was a swift,unmitigateddisasterthatshamedthemilitaryandreturnedArgentinatodemocracy.Shortly after the FalklandsWar, when the grip of themilitary eased

andtheircensorshipstartedtocrack,Igotaholdofamind-bendingbookcalledLasLocasdePlazadeMayo(TheCraziesofPlazadeMayo) thatdescribedwhathadhappenedtothechildrenof thosemothersIpassedevery Thursday in the Plaza. I began reading the book one evening ateightandfinisheditatsixthenextmorning.Iweptallnight.ThechildrenofthemothersIsawonthePlazahadbeentorturedtodeath.Theyhadbeendrugged,putonplanes,anddumped into the sea.Theywere shotand buried in unmarked mass graves. They were made to disappear;that’s why they are called “los desaparecidos.” The junta stole theirvictims’babiesandgavethemtofamiliesfriendlytotheregime.Betweentwenty thousand and thirty thousand people vanished. Fewer than sixhundredhavebeenfoundandidentifiedsincethen.3

I felt terrible shame, horror, and rage at what the regime had doneundermy nose. Looking in themirror, I realized that Iwas one of themillionsdupedin1978,whenwealltooktothestreetsofBuenosAirestocelebrateArgentina’s firstplace in the soccerWorldCup.Whilehumanrights organizations boycotted the championship, decrying themilitary


government’shorrificrecordofabuses,thepropagandacampaigninsidethe country blared nonstop: “Los Argentinos somos derechos yhumanos” (“WeArgentineans are right andhuman”).Weallwanted tobelieve, as the government asserted categorically, that the internationalcampaignwasbeingwagedagainstusasArgentineans, andnotagainstthemilitaryregime’sindiscriminatesavagery.Uponreadingthatbook,Ifeltlikesomeonewhohadjustbeenreleased

fromaninsaneasylum.IrealizedthatIhadbeensleepwalkingpastthosemothers and grandmothers. It was a classic case of what psychologistscall “disassociation”—the kind of thing that trauma victims experience.When you are in the nightmare or undergoing the trauma, the dreammakes sense; but when you wake up, you realize that you’ve beensuffocatingbeneathathickcarpetofpropaganda,enforcedfromthetopandsupportedbyall the individualcarpet fibers thatareyourrelatives,friends,andneighbors. Iwasangryateveryone—not justat the terriblejuntaandthemediabutalsoatthe“silentmajority”thatstoodby,doingnothingwhilethekillingsweregoingon.Ididn’tseesoclearlythenthatIwasamemberofthislattergroup.Disgusted, I left Argentina as soon as I got my university degree. I

didn’twanttolivethereanymore.IwenttoUCBerkeleyandthengotajob atMIT. In between, through psychotherapy,meditation, andmanypersonaldevelopmentworkshops,Itriedtohealthepainofmycountry’scollusion in murder—and my part as a not-so-innocent bystander. Ibecameateacherofconsciousbusiness,helpingexecutivesworkandlivemoremindfully.Mywork became a bridge between theworld of hard-core economics and business theory on the one hand, and one ofphilosophy,ethics,andspiritualwisdomontheother.

AsItriedtocometotermswithmyangerandshame,IreadShivitti,4

the autobiographical account of a Holocaust survivor who used LSDtherapytorecoverfromhistrauma.5Guidedbythetherapistandunderthe influence of the drug, the author remembered being in a truck inwhich he and others were being killed by noxious fumes. He recalledseeing a German guard smoking a cigarette outside. Then, in thetherapeuticsituation,he“became”theguardhehadobserved.Hestoodoutsidethetruck,smokingacigaretteonacoldday,thinkingnothing.Hebore no hatred ormalice toward the people hewas killing; he just felt


coldandwishedforthewartobeover.In that moment, the patient realized that he was now “out” of the

scene.Thathecouldexperiencethesituationsimultaneouslyasboththeguard and the prisoner—which meant he was neither. He was able toseparatehisidentityfromhistraumatizedselfandadoptatranspersonalperspective. This LSD-driven inner psychodrama helped him heal. Ilongedtoexperiencethatkindofhealing.Each step I took in my hero’s journey toward healing opened new

doors,butthedeepesttruthdidn’tdawnonmeuntilyearslater,duringacoachingworkshop in Germany. Aman in theworkshop stood up andsharedthathis fatherhadbeenaconcentrationcampguard,a fact thatburdenedhimwith terribleguiltandshame. I feltgreatcompassion forhissuffering.Iinvitedhimtocomeonstagetohaveaconversation.AsIlistenedtohim,somethingclickedinme.Tearsstartedstreamingdownmy face. I explained to him that I was Jewish but that I felt my ownshameasdeeplyashedidhis,forhehadn’tdoneanything,hewasmerelythe son of someone who did something terrible. I, on the other hand,blamedmyselfforstandingbylikea“goodArgentinean”duringtheDirtyWar.IsawthemothersinthePlazabuthurriedpastthem.Isawpeoplepulled forcefully into the feared green Ford Falcons of the intelligenceservices,but lookedtheotherway.Iknewsomethingevilwasgoingon,butdidn’twanttoknow.Thatwasmy“Shivitti”moment.Allofasudden,Irealizedmostofthe

“goodGermans”Ihadsoabhorredmusthavebeenscaredtodeath,justasIhadbeen.IsawmyselfintheplaceoftheGermanswatchingtheJewsbeing taken. I felt like I was at once the German, the Jew, and theArgentineanboywhohadwalkedpastthedistraughtwomeninthePlaza.Iwasthe“desaparecido”andthetorturer,thekidnappedbabywhogrewupwith thepeoplewhokilledmyparents, and themilitary officerwhoadoptedthisbabytoraisehimashisown.Itwasaprofoundexperience.Myheartopened;my judgmentsdissolved. I felt like Iwas lookingatadiamond with infinite facets. The man and I wept and hugged. I wasovercomewithcompassion.Theterriblefeelingsofguiltandshamebothhe and I had felt for so many years dissipated. It was a life-alteringexperienceforusboth.I experienced a vast openness at the center of myself, a space of


serenityandpeacethatwasmuchbiggerthanthe“I”thatIhadbelievedmyselftobe.ForabriefmomentIfeltthattherewasno“other,”nosenseofseparation.Identificationwithmysmallselfceased,andmysenseofI-ness extended to encompass everything human—and, beyond that, allsentient beings. It forever changed the meaning of the biblical dictum“Lovethybrotherasthyself”becauseIexperiencedmybrotherasmyself.Afewyearslater,IfellinlovewithaGermanwomanandlivedwithher

in Germany for several years. Together, we visited many Holocaustmemorials; I felt that our love was the best response to the evil thatplagued our unique national histories. Though the relationship didn’tworkoutintheend,Ifeelblessedforhavingexperiencedthegoodnessofthe German people through her, her family, and her friends. Evenmymothercametolovethiswoman,whoshatteredallherstereotypes,andtowhomsheoccasionallyspokeinYiddish.6

CRUCIBLESOFLEADERSHIP

Crises caneventually lead toawakening,provided the leader isopen tolearningfromthepainfulexperience.Whenfacingterriblecircumstances,the hero undergoes an ego death. Hemust lose himself to realize thatwhatwaslostwasnothistrueself.Tolivefearlessly,hehastolearnthehard way that what doesn’t kill him (and even what does) makes himstronger.7

Before JeffWeiner came toLinkedIn, heworked atYahoo,wherehehad been a fast-rising young executive. But when a big project he wasmanagingdidn’tgoaswellashehadhoped,hehadtotakeahardlookathimself.Jeffhaddeliveredconsistentlygreatresults,sohewasaskedtotakeon

a very difficult project—stepping in to oversee a team that had beentasked with rebuilding a legacy advertising platform to compete withGoogle’s. He knew that pulling off the project would be immenselydifficult, but he accepted the challenge because he thought it wasimportantforYahoo.The team worked day and night. Although they accomplished some


things thathad seemed impossible, they still didn’tmeet the ambitiousexpectations set by the company.Despite all the team’s hardwork, theprojectwasdeemedafailure.BecauseJeffhadinpartdefinedhimselfbyhisprevioussuccesses,hisself-esteemtookahit.Inoneofourcoachingconversations, he toldme that he was afraid he’d “lost hismojo.”8Hestarted to question some of his previous accomplishments. “I wonderwhethermyprior successes have been specific and situational, andnotrelatedtomyabilityorcontributions,”hetoldme.Healsoworriedaboutwhatimplicationsthatwouldhaveforhiscareer.“Youwillemergefromthisjourneyfarstrongerthatyou’veeverbeen,”

Ipredicted.“It’syourjobtotellmethat,”herepliedskeptically.“Myjobistotellyouthetruth.”As I interviewed Jeff for this book, he shared with me that the

confidence I had in him is the one he took into his heart, the one thatallowedhimtowithstandtheheatofhiscrucible,andtheonethathenowshares with those whom he coaches. “What did you see in me thatallowedyoutomakethatstatement?”heaskedme.“Yourhero’sjourney.”Theproblem,ItoldJeff,wasnotthathewasn’tgoodathiswork.The

problemwasthathehadhadtoolittleexperiencewithfailure;hehadn’tlearnedyethowtofailgracefully.Helackedresiliencebecausehehadn’tyet realized that he could turn failure into a source of wisdom andmeaning.Havinggiveneverythinghehadtotheproject,heallowedittodefinewhohewas,despitethefactthatthechancesofsuccesswereslimfromthebeginning.“The faster you realize that you are not defined by your results, the

fasteryou’llrealizethatyoucanderiveyoursenseofselffromthingsthatareunderyourcontrol;fromyourpurpose,yourvalues,yourdrive,yourcommitment, your intelligence, your care,” I suggested. “When you getthat, not only will you not regret this failure, but you’ll appreciate it,becauseitwillteachyouthisgreatlesson.Inthelongterm,you’llseethatyoucanachievemuchmorebyhavinggonethroughthis.”Jeffdrewfromthatafirstprinciple,alife-affirminglessonthathenowoffersasadvicetothemanypeoplehementors:“Don’tgiveyourpowerawaytothingsyoucan’tcontrol.”


Jeff provedme right.Not only did hewalk through the valley of theshadow of failure unscathed, he finished his hero’s journey gaining anunshakableconfidenceandreturning tohiscommunitywithgreatgifts.Heendedupbecoming theadmiredCEOofLinkedIn,andsharing thistransformativeepisodewidely.

Resilience in the face of adversity is an absolutely fundamentalrequirementforleadership.In2002,RobertJ.ThomasandmanagementguruWarrenBennispublishedtheirfindingsthatoneofthemostreliableindicators and predictors of true leadership is an individual’s ability tofindmeaning innegativeeventsandto learnfromeventhemost tryingcircumstances.InaHarvardBusinessReviewarticleentitled“CruciblesofLeadership,”theynotedthatcertainpeople“seemtonaturallyinspireconfidence, loyalty, andhardwork,whileothers (whomayhave just asmuch vision and smarts) stumble, again and again.” What makes thedifference?“It’satimelessquestion,andthere’snosimpleanswer,”theywrote. But we have come to believe it has something to do with thedifferent ways that people deal with adversity.” Put another way, theskills required to conquer adversity, and emerge stronger and morecommitted than ever, are the same skills that make for exceptionalleadership.9

ThomasandBennisfoundthattheextraordinaryleaderstheystudiedall had one thing in common: they could point to “intense, oftentraumatic,alwaysunplannedexperiences”(orcrucibles)thatturnedintoasourceofstrength.Someexperiencesbrushedwithdeath,likeLeeb-duToit’s. Otherswere hugemoments of self-doubt, like Jeff’s. For others,thecruciblecameinworkingwithachallengingmentor.All the leaders that Thomas and Bennis profiled had four essential

skills:(1)theabilitytoengageothersinsharedmeaning;(2)adistinctiveand compelling voice—the ability to use language to deal intelligentlywithadifficultsituation;(3)integrityandastrongsetofvalues;and(4)“adaptive capacity” or “applied creativity”—an almostmagical ability totranscend adversity, with all its attendant stresses, and to emergestronger than before. Adaptive capacity, the authors suggested, is acombinationoftheabilitytoweighanumberoffactorsandputtheminto


a context understood by all. Someone who combines all four of theseskillshasthequalitiesofatranscendentleader.

SHERYLSANDBERG’SCRUCIBLE

SherylSandbergembodiestheskillsthatThomasandBennisidentified.SheearnedherstripesasaneconomistfortheWorldBankandaschiefofstaff for the U.S. Treasury Department. She then proved herself atGoogle, where she built and led the online sales and operations team.Today, she’s not only the chief operating officer at Facebook, but she’salsoawell-knownandpassionateadvocateforwomenintheworkplace.(Herbestseller,LeanIn, has soldmore than 1.5million copies andhassparked a movement.) The organization she founded, LeanIn.org, haslaunchedmorethan33,000“circles”—communitiesfocusedonwomen’sempowerment—that includehundredsof thousandsofmenandwomenin more than fifty countries. Through her work, she has become aninspirationtomillions.10

Sherylhasfacedmanychallengesinherlife,butthetoughestonewasdealingwiththedeathofherbelovedhusband,Dave,whodiedsuddenlyin2015attheageofforty-seven,leavingherasinglemomoftwoyoungchildren.Here’sabitofwhatshepostedinFacebookfollowingamonthofmourning:11

Achildhood friendofminewho isnowarabbirecently toldmethatthemostpowerfulone-lineprayerhehaseverreadis:“Let me not die while I am still alive.” I would have neverunderstoodthatprayerbeforelosingDave.NowIdo.I thinkwhentragedyoccurs, itpresentsachoice.Youcan

give in to the void, the emptiness that fills yourheart, yourlungs,constrictsyourabilitytothinkorevenbreathe.Oryoucantrytofindmeaning.Thesepastthirtydays,Ihavespentmanyofmymomentslostinthatvoid.AndIknowthatmanyfuturemomentswill be consumed by the vast emptiness aswell.


ButwhenIcan,Iwanttochooselifeandmeaning.[…]SoIam sharing what I have learned in the hope that it helpssomeone else. In the hope that there can be somemeaningfromthistragedy.I have lived thirty years in these thirty days. I am thirty

yearssadder.IfeellikeIamthirtyyearswiser.Ihavegainedamoreprofoundunderstandingofwhatitis

to be amother, both through the depth of the agony I feelwhenmy children scream and cry and from the connectionmymotherhastomypain.[…]IhavelearnedthatIneverreallyknewwhattosaytoothers

inneed. I thinkIgot thisallwrongbefore; I tried toassurepeoplethatitwouldbeokay,thinkingthathopewasthemostcomforting thing I could offer. A friend of mine with late-stagecancertoldmethattheworstthingpeoplecouldsaytohimwas“Itisgoingtobeokay.”Thatvoiceinhisheadwouldscream,“Howdoyouknowitisgoingtobeokay?DoyounotunderstandthatImightdie?”Ilearnedthispastmonthwhathe was trying to teachme. Real empathy is sometimes notinsistingthatitwillbeokaybutacknowledgingthatitisnot.[…]I have learned how ephemeral everything can feel—and

maybeeverything is.Thatwhateverrugyouarestandingoncan be pulled right out from under you with absolutely nowarning.[…]I have learned to ask for help—and I have learned how

muchhelpIneed.Untilnow,Ihavebeentheoldersister,theCOO,thedoerandtheplanner.Ididnotplanthis,andwhenit happened, I was not capable of doingmuch of anything.Thoseclosesttometookover.[…]Ihavelearnedthatresiliencecanbelearned.[…]Irealizedthattorestorethatclosenesswithmycolleagues

[…]Ineededtoletthemin.AndthatmeantbeingmoreopenandvulnerablethanIeverwantedtobe.[…]Ihavelearnedgratitude.RealgratitudeforthethingsItook

forgrantedbefore—likelife.AsheartbrokenasIam,Ilookat


my children each day and rejoice that they are alive. Iappreciateeverysmile,everyhug. Ino longer takeeachdayforgranted.[…]

BeforeDavedied,Sheryl toldme,sherarely thoughtaboutmortality.Now she thinks about it all the time, and it spurs her feelings of theimportance of focusing onmaking theworld a better place. In activelychoosingmeaning,gratitude,andresilience,shebecameevenmoreofaninspirationalleaderthanshewasbeforeherloss.IaskedSherylhowsheherselfwantedtoberemembered.“BeforeDave

died,” she told me, “I would have said, ‘She was a good friend, wife,mother…’ personal stuff. But now, in addition to that, I want to berememberedasfightingforequalityforwomen,forhelpingmorepeopleunderstandwhyweneedequalityandmorepeopleembraceambitionforwomen.Andfinally,tohelppeopleovercomeadversity.Noonelooksforopportunitiestogrowthisway,butthishappensandwedo….Weoweittoourselvesandeachothertoembraceeachotherandfindwaystohelpbuildeachother’sresilience.”12

After freeingherself fromego, facingdeath,and findingher trueself,thearchetypalhero/leaderreturnstohercommunitywiththegiftofherpersonal growth. Her example and way of living inspires others toundertaketheirownjourneysandachievesymbolicimmortality.In Lean In (written before Dave’s death), Sheryl’s message is this:

“Bringyourwholeselftowork.”Herbattlecrychallengedbothmenandwomentounderstandthatworkisn’tallaboutIt,butalsoisabouttheIwith all its needs and emotionalmessiness, and theWe of community,teamwork, and friendship.After Sheryl Sandberg lost her husband anddoveintounfathomablegrief,shecamebacktoworkanddiscoveredthedeeperpurposeofwhatshewasworkingfor.Eventually,Sherylbroughther gift back to her community throughher blog posts and her secondbook,Option B, written with Adam Grant, which is a deep dive intoresilience. The “Oprah of corporate America,” as BloombergBusinessweek called her, has been leading by example.13 She’s sharingher journey and encouraging other people to open up, be vulnerable,welcometheunknown,andfacesetbacksinawaythatonlyshecando.Everyday,shehaschangedFacebook’sculturetobemoreopenandforitspeopletobemoreemotionallyawareinfulfillingFacebook’smission


“tomaketheworldmoreopenandconnected.”Sheryl’sleadershipgoeswellbeyondherprofessionalrole.Sheinspires

averylargenumberofpeople,includingme,toworkforabetterworld,aworld that ismore just,connected,open, inclusive,andsupportive.Shehas gone through the fire of her transformation, earning the right toinspirethoseofuswhoadmirehertostepintothefireofourownheroicjourneys.

SERVANTLEADERSHIP

Exemplary leadership is like a seed that falls on the followers’ fertilehearts. It requires care and cultivation. Itmeans learninghow to listenand communicate in a way that keeps people aligned with thetranscendent purpose of service; learning to negotiate differences onbehalf of the immortality project; learning to coordinate and executethroughimpeccablecommitments;andgoingbeyondgivingfeedbacktocreateacontinuous improvementalliance thatcanwithstandthe fireofcriticismforthesakeofthemission.14Thesearethebehaviorsofatrue“servantleader.”Theexpression“servant leadership”comes fromRobertK.Greenleaf.

“A servant-leader focuses primarily on the growth and well-being ofpeople and the communities to which they belong,” Greenleaf wrote.“While traditional leadership generally involves the accumulation andexerciseofpowerbyoneatthe‘topofthepyramid,’servantleadershipisdifferent.Theservant-leadersharespower,putstheneedsofothersfirstandhelpspeopledevelopandperformashighlyaspossible.”15

Transcendent leadership differs from servant leadership. Atranscendentleaderistheservantofaninspiringmission.Sheoffersanimmortalityprojectthatallowsherpeopletoembarkontheirownheroicjourneys.Atranscendentleaderservesherfollowersinthesensethatsheenables them to infuse their lives with meaning, but she doesn’tnecessarilyservetheirindividualneeds.Thinkofamilitarycommanderwho’swillingtoputhisownlife,aswell

asthelivesofhissoldiers,ontheline.Hewouldgoalongwaytoprotect


hissoldiers,buthewouldalsobewillingtoputhimselfandthematriskforthesakeofthemission.Thiskindoftranscendentleadershipisbestexemplifiedbyoneofthe

most celebratedmonologues in theEnglish language—the “St.Crispin’sDay”speechfromShakespeare’sHenryV.OnthefeastdayofSt.Crispin,young King Henry is about to lead his wet, miserable, sick, exhaustedtroopsintoagreatbattleagainsttheFrench,whooutnumberthemfivetoone.It’sobvioustoallofthemthattheirchancesofsurvivalareveryslim.But King Henry rallies his men by appealing to their desire for honor(“Thefewerthemen,thegreatertheshareofhonor,”heclaims).Hetellsthem that their nameswill become as “Familiar…as householdwords.”But he doesn’t stop there.He also promises that his troopswill rise instatustobecomehisequalsinheroism:

AndCrispinCrispianshallne’ergoby,Fromthisdaytotheendingoftheworld,Butweinitshallberemember’d;Wefew,wehappyfew,webandofbrothers;Forheto-daythatshedshisbloodwithmeShallbemybrother;behene’ersovile,Thisdayshallgentlehiscondition;AndgentlemeninEnglandnowa-bedShallthinkthemselvesaccurs’dtheywerenothere,Andholdtheirmanhoodscheapwhilesanyspeaks

ThatfoughtwithusuponSaintCrispin’sday.16

Henry acknowledges that he could die along with his followers. Henever promises victory; instead, he offers honor, integrity, fellowship,and history-making heroism. Henry and his men can achieve thesenonmaterialgoodsunconditionally.Asopposedtotheexternalvictoryinbattle,whichdependsonmany factorsoutof their control, the internalvictory in spirit is within their grasp. AsHenry tells his followers: “Allthingsareready,ifourmindsbeso.”Against all odds, Henry and his men win the battle. Shakespeare

suggests that Henry’s stirring speech is at least partly responsible for


instilling the men with such an overwhelming sense of purpose andcourage that theyprevail in the end. (General StanleyMcChrystal oncetoldme that for hundreds of years this speechhas been read to troopsabouttogotobattle,andthatit’sstillusedtodaytoinspiresoldiersabouttoputthemselvesinharm’swayforanoblepurpose.)

YOURHEROICJOURNEY

Think of a time when you learned something very significant aboutyourself, others, and theworld—a scary, painful, angering, or shockingsituation that changedyour life, yourattitude,yourapproach to things.Howdidyoufeelasyouenteredthisexperience?I’veaskedthisquestionofthousandsofparticipantsinmyworkshops.

Typical answers are “Scared,” “Apprehensive,” “Full of self-doubt,”“Surprised,” “Terrified,” “Confused,” “Shattered,” “Betrayed,” “Upset,”“Angry,”“Ashamed,”“Hurt,”andsoon.Aftertheyponderthisquestionforawhile,Ithenaskparticipantshow

manyofthemwould,atthatmoment,choosethatexperienceagain.Mostreplythattheywouldgotogreatlengthstoavoidit.That kind of response is what Joseph Campbell describes as the

“refusal of the call to adventure.” When he finds the gate to theunderworld opens, the hero runs in the opposite direction. “Whyme?”asksMoseswhenGod commands him to speak to the Pharaoh. “I’m astutterer!”I point out that we rarely feel good when we’re about to learn

somethingofutmostsignificance.Suchlessonsarequiteexpensive.I thenask them tobreak into small groups.The rules are as follows:

Eachpersonshareshisorherstorymemoryoftheshockingexperience,concludingwithaconsiderationaboutwhatheorshe learnedandwhatimpact that experiencehadonhisorher life.Everyoneagrees to listenquietlyand respectfully toeveryoneelse; theonlyexpressionallowed isoneofappreciation for thestoryteller’sgift.Noonemustgiveadviceortrytocoachthepersonwhosharedthestory.Theonlyvalidresponsesare“Thanks,”“Ohwow!,”and“Oh,wow.Thanks.”


I thenaskpeoplehowthey feltat theendof the learningexperience,once they were able to integrate into their life their new hard-earnedknowledge. Typical answers are “At peace,” “Joyful,” “Proud,”“Complete,” “Loving,” “Compassionate,” “Appreciative,” “Grateful,”“Fulfilled,”“Satisfied,”“Happy.”“Howmanyof youwouldbewilling, at themoment you experienced

that shock,” I ask, “to embrace your experience as theprice youhad topayfortheknowledgeyoureceived?”Mostofthemraisetheirhands.“Iwould not choose to go through what I went through,” a typicalparticipantwill comment, “but given that I hadno choice, I feel itwaspowerfultogiveitmeaningandlearnsomethingimportant…”Andthenwith a smile he’ll add “…which I surely don’t ever want to have torelearn.”I then invite them to consider that many significant learning

experiencesstartwithadifficultchallengeandinvolvesomesortofcrisis.It seems that the crisis process is necessary to replace a beliefweholddearforanotheronethatisdeeper,truer,wiser.I then ask each participant to reimagine the experience to emerge

victorious.Iencouragethemtolookforboththeirinnerresources(suchastheirvalues,virtues,beliefs,andsoon)andtheirouterones(suchasfamily,friends,andmentors).Finally,Iaskthemtorememberascary,painful,angering,orshocking

situationthattheyareexperiencingintheirlivesatthiscurrentmoment,and see that experience as the beginning of a meaningful lesson thatcould enrich their lives. I propose they apply their inner and outerresources to the current situation and think of what they imagine theycould learn fromitnow,whatvaluewouldsuchunderstandingbring tothem,andhowwould they feelwhen theyemergewith that gift ofnewknowledge.When we come back together, the energy in the room feels more

settled,moresolid.People’sfaceshaveanalmostluminousexpression,asif they have vicariously experienced the hero’s journey and come backwithagift.Theheatandpressureoftheordealhasturnedtheircoalintoadiamond.This sameexercise canbebeneficial foragroupexperiencinga crisis

situation, only writ larger. For example, when a regional telecom


company was bought by amultinational corporation, the employees ofthe smaller firm, who had felt protective of their culture, were bothfrightenedand inshock,and thecombinednew leadership teamhad tomanagethetransition.Iaskedtheteammemberstowritea letter fromthefuture—Whatwouldbeingapartofthenew,biggercompanyoffertoteachthem?Theteamemergedfromtheworkshopwithagreatdesiretomakethenewcombinationwork.I’vefoundthatonceateamgoesthroughthehero’sjourneyinthiskind

ofway, eachmemberhasearned themoral right to lead the restof thecompanyinanalliance.

Transcendent leadership requires a deep and strong interior lifethat aligns a leaderwith a transcendentpurpose. I believe every leaderneeds to tunehim-orherself up like amusical instrument, in order tomakemusicthatconnectspeoplewithanoblepurpose.Inadditiontothetechnical tools that can be learned in a classroom, the leader needspsychological and spiritual tools that can be attained only throughpersonal transformation. The most powerful tool for eliciting others’commitment to the mission you want to accomplish is to extend youragape to them by supporting their growth andwell-being and offeringthemwaystomaketheir livesmeaningful,noble,andworthy.Todoso,leadersmust stop identifyingwith and giving in to their power-hungryego. Theymust experiencewhat I call “ego death,” in order to achieveleadershiprebirth.Thejourneyoftheheroic leaderis fraughtwithtrialsthattestusand

revealandsharpenourspirit.There’sanaturalpatterntohumangrowth,a trajectory from unconsciousness to consciousness tosuperconsciousness. This process forces the would-be transcendentleader to take a hard look at herself, face her biggest fears, find herstrengths with the help of allies, andwin the battle to become herself,createherdestiny,andbecomethemasterofherlife.Onlyafteryouhavewalkedthepathoftheheroandvanquishedyourshadowscanyoubringyourgiftofwisdomtoyourcommunity.Onlywhenyouhavefoundyourdeepesttruthcanyoubecomeamodelforothersandinspiretrustratherthancynicism.


By working to enact your values and transcend your ego, you canbecomethekindofinspiring,transcendentleaderthatpeoplewillfollowinthefaceofthemostdauntingchallenges.


Chapter14

SUPERCONSCIOUSCAPITALISMRETURNTOTHEMARKETPLACEWITHHELPINGHANDS

Unlessyouhaverealized[others]asonewithyourself,youcannotlovethem.Yourloveofothersistheresultofself-knowledge,notitscause.Whenyouknowbeyondalldoubtthatthesamelifeflowsthroughall,[…]youwillloveallnaturally.

—NisargadattaMaharaj

Oneoftheoldestdepictionsofhumanevolutionisaseriesoftenimagescalled“TheOxHerdingPictures,”fromtheZenschooloftwelfth-centuryChina.1 In thesewoodcarvings, the spiritualpath is representedby thejourney of an oxherd. The first three images, in which the herderdesperately searches for his ox, represent the unconscious state of thehumanbeing.Thesecondthree, inwhich theherdercatchesandtamestheox,representtheconsciousstate.Thethirdthree,inwhichtheherderrealizes he and the ox are one with everything, represent thesuperconsciousstate.The last image offers a surprising insight about enlightenment. The

tenth ox-herding picture is called “Entering the Marketplace withHelpingHands.”Theoxherd,finallyawakened,appearsas“ajollyrusticwhose body is overflowing with life-energy, and whose heart is full ofcompassionate love.” “He enters the town marketplace, doing all theordinarythingsthateveryoneelsedoes.Butbecauseheisdeeplyaware,everythinghedoes isquite extraordinary.Hedoesnot retreat from theworld,butinsteadshareshisenlightenedexistencewitheveryonearoundhim.NotonlydoesheleadfishmongersandinnkeepersinthewayoftheBuddha,butsuch ishiscreativeenergyandtheradianceofhis life thatevenwitheredtreesbloom.”2


Someseekersseetheendoftheirspiritualevolutionasablissfullossofinterestindailyaffairs.Forthem,self-transcendencemeansdisappearingfrom ordinary life. However, according to the Zen masters,enlightenmentdoesnotleadtooblivion.Onthecontrary,itleadsbacktofull, loving participation in the humanworld.Genuine spirituality doesnotendinabandonment,butinpassionateengagement.When you “enter the market with open hands,” as a transcendent

leader, there is no sense of ultimate separation. You find it natural to“loveanotherasthyself”becausethereisnohardboundarybetweentheotherandyourself.Ofcourse,youseeyourbodyasseparatefromotherbodies,justasyouseeoneleafasseparatefromanotherleafonthesametree.Butyoudon’tseeyourselfasemotionallyseparatefromotherselves.Youcanseeonewaveasseparatefromotherwaves,andyetrealizethatall of them aremovements of the same sea. In enlightened awareness,thereisonlyaunifiedfieldofwholeness,suffusedwithwisecompassion.Out of this field arises the impulse to help people flourish through

meaningfulwork, toorganize their efforts for anoblepurpose, throughethical principles. That’s what the marketplace looks like to asuperconsciousmind. Yet that’s not theway it looks tomany ordinaryminds.

THEFIRSTGREATMISUNDERSTANDING

A client once asked me how I could square an organization’s noblepurpose with the capitalist ambition to make money, suggesting thatcapitalismwasresponsibleformanyevilsintheworld.Thesedaysit’sfashionabletoblamecapitalismforahostofproblems.

A 2016HarvardUniversity survey of young adults between the ages ofeighteen and twenty-nine found that 51 percent of respondents do notsupport capitalism.3 For many, capitalism is the territory of greedy,exploitativebusinesspeople.Capitalists’mainoccupation,asitappearstothem,istotakeadvantageoftheneedy,tryingtomaximizetheirprofitswithout any ethical scruples—and in the process destroying humanbeingsandtheenvironment.


Those who criticize capitalism have valid concerns, but I believe theproblem is not capitalism per se—a system of property rights and freeexchangethathasconferredgreatgooduponhumanity,asIwillexplainin amoment—but cronyism. The reason I raise this is that unless youunderstand thedifference, andareable to clarify it for your coworkers,youwillnotbeable to inspire them.Itwillbe impossible toperforminthe marketplace with open hands if you don’t make clear, anddemonstrate,yourhighestethicalprinciples indoingso.Youhavetobeable to showeveryone in theorganization, andother stakeholders, thatyoucanmakeaprofitandstillbeproudofyourselfandyourbusiness.Cronyismisapoliticalandeconomicsysteminwhichthegovernment

is controlled by corporations and intervenes in the market using itscoercivepowerontheirbehalf.Cronybusinesspeoplethrivenotbecausethey serve their stakeholders but because they exploit the power of thestate, circumventing the discipline of the freemarket.While capitalismchannelspersonalambitionintotheserviceofothers,cronyismchannelspersonalgreedintoabuse.Crony politicians crush competition by handing out special permits,

government grants, and tax breaks to those whom they favor, and byimposing tariffs and restrictions on their competitors and consumers.Cronycorporationstake inordinaterisks fearlessly,knowingthat if theywin,theirearningswillbeprivatized,butiftheylose,theirlosseswillbecovered through bailouts and special aid packages. Crony businessesmakemoneynotbyprofitingintheeconomicmarketthroughtheirvalue-addingservices,butbyprofiteeringinthepoliticalmarketthroughvalue-destroyingtakings.4

Crony businesspeople fully deserve blame. They are rapacious,predatory, and immoral. They harm people and the environment inpursuit of endless greed.They knowno limits and trample overpeoplewithoutregardfortheirrights.Perhapsthat’swhytheMarxistargumentsof a century ago about the exploitation of the workers have foundpurchase in people’s minds. But to me, crony businesspeople are notcapitalists;theyareMafiosi.Capitalismdoesn’toperatethisway.Infreemarketsundertheruleof

law,businessesdon’tprofitbybeingcallous,manipulative,andgreedy—although behaving that way may give them short-term advantages.


Businesses really profit over the long run by being empathetic(understanding their customers, employees, and other stakeholders),compassionate (serving them), and equitable (being fair to them). TheonlyreasonnarcissisticMachiavellianpsychopathiccompaniessurvive—andpromotenarcissisticMachiavellianpsychopathicleaders—isthattheycanpreemptcompetition(throughtheirgovernmentcronies)fromothersabletoprovidebettervalue.Itisatragedyofourtimethatcapitalismisconfusedwiththebehavior

ofacriminalsyndicate. It isnotrecognizedas thegreatboontosocietythat it is (as Iwillexplain inamoment).This is likeconfusingabrutaldictatorship with a republic. The fundamental difference betweencapitalismandcronyism,likethedifferencebetweenadictatorshipandarepublic,isrespectforpropertyrightsandthebasicfreedomsentailedbythem.Conscious leaders are the peoplemost responsible for upholdingthesevalues.As PeterDruckerwarned, “Tyranny is the only alternative to strong,

performing autonomous institutions. Tyranny substitutes one absoluteboss forpluralism. It substitutes terror for responsibility.”According toDrucker, tyranny subsumes free-market organizations in an all-embracingpoliticalbureaucracy—theendofcronycapitalismisfascism.Itdoesproducegoodsandservices,butatanenormouscostinsuffering,humiliation, and frustration. Drucker wrote, “Tomake our institutionsperformresponsibly,autonomously,andonahighlevelofachievementisthustheonlysafeguardoffreedomanddignityinthepluralistsociety.”5

Consciousleadersmakeinstitutionsperform.Consciousleadershipisthealternativetotyrannyandourbestprotectionagainstit.

THESECONDGREATMISUNDERSTANDING

Inaddition toblaming capitalismas an economic system,manypeoplereactnegativelytospecificfor-profitbusinesses.Adominantsocialmemegoessomethinglikethis:“Businesspeoplearenottobetrusted.Theyareexploiters who take advantage of employees and customers.” This is afalseconclusion,arisingfromconfusionaboutthesourceofprofit.Somepeoplethinkitspringsfromanexploitationofweakness.Infact,itcomes


fromaprovisionofstrength.Here’sanexamplefromaneventthathappenedtomeasIwasworking

on this book. I was free-diving off the coast of Belize when I startedseeingwhatlookedlikealightningstorminmylefteye.6Itwasasthougha strobe light started flashing directly intomy brain. The cause of theshowwasadetachedretina—as I learnedseveraldays laterwhenIwasabletoreachland.Attheurgingofalocalophthalmologist,IflewbacktotheUnitedStatesthatsamedayandaspecialistperformedsurgeryonmyeyethatveryevening.Althoughmyinsurancecoveredthecosts,I’msurethedoctormadeagoodsumofmoneyfromtheprocedure.I could blame the surgeon for “profiting from my suffering.” He

benefitedfrommymisfortuneandwasbetteroffbecauseIwasworseoff.IcouldimaginehimfeelinghappythatIhadthisterriblethinghappentome,asitcreatedaprofitableopportunityforhim.Iknowthisisnottrue—his primary focus was in saving my vision and helping me tosuccessfully recover. Yes, he makes his living from his profession, butmost of the doctors I know go into the long and arduous training inmedicinefirstandforemosttohelppeople.Thecauseofmyeyeproblemisunknown.Perhapsithadtodowithmy

age.Perhapsitwasduetothewaterpressureduringmydives.PerhapsithadtodowiththeLasiksurgeryIunderwenttwentyyearsago.Perhapsitwassomethingelse.Orperhapsalloftheaboveplayedarole—Iwillneverknowforsure,anditreallydoesn’tmatter.WhatIdoknowisthattheeyedoctorhadnothingtodowithit.Ifoundmyselfalmostblindinmylefteye.Ifeltlost,confused,scared,

and vulnerable. The doctor examinedmewith great kindness, honestlyshared with me the diagnosis, and discussed treatment options. Myconditionwas serious; although the surgery posed some risks, I wouldalmostsurelyhavelostmyeyewithoutit.Thedoctordidn’tprofitfrommysuffering;heprofitedfromalleviating

it.Ipaidhimbecausehehadpreparedhimselftohelppeoplefacingmycondition—andhedidhisworkmasterfully.Iwasfullofadmirationandgratitude. In fact, I would have paid much more than what I did toreclaimmyvision.In the sameway, I believe it is unfair, even insulting, to blame food

manufacturers forprofiting frompeople’shunger,clothesproducers for


makingmoney at the expense of people’s need for protection from theelements,constructioncompaniesforpeople’sneedforsafehousing,andso on. Food manufacturers, clothes producers, and constructioncompaniesprovidepeoplewiththegoodstheyneedtostayalive.Life isnot guaranteed in any way by nature; only death is certain. It is oursociety,anditseconomicsystem,thatprovidesthemeanstosustainandimprove our lives. To stay alive and thrive, every being has to toil andprovideforhisorherneeds.It isunfair toarguethat thosewhosupplythemeanstosatisfytheseneedsaretheoneswhocreatedthem.Although all this might seem obvious, too many businesspeople I’ve

encounteredfeelguilty,stainedbythepresumptionthattheyprofitfromothers’ misfortune by exploiting those who need jobs. That’s why theythinkthattheyhaveto“givebacktosociety”aftertheymaketheirmoney.I’ve always had a problem with this notion, because the hidden

implicationbehind“givingback”isthatthepeoplewhomademoneytooksomething that didn’t belong to them. I’m all in favor of givinggenerously, wisely, and compassionately. I’m just opposed to idea thatsuccessfulbusinesspeoplefeeltheyhavetomakeupforapreviousfault.BillGates, forexample,earnedhiswealth fairlyandsquarely,andhe

can do whatever he wants with it. His philanthropic works arepraiseworthy and generous—but they are not compensatory. FormanyyearsGatesamassedafortunebycreatingproductsthatpeopleacquiredtoenhancetheir lives.7RegardlessofwhatyoumightthinkofGates,hedidn’t violate people’s rights by taking their money against their will.Anyone who boughtMicrosoft’s software did so voluntarily (or boughtthe computer voluntarily thatwaspreloadedwithMicrosoft’s operatingsystemandapplications).Hebuiltanastoundingamountofwealth.ButIwouldarguehispersonalwealthisrelativelysmall incomparisontothewealth he produced for all of us who boughtMicrosoft’s products andservices.MostpeopleonlyacknowledgedBillGatesasanethicalpersonwhenhe

startedgivinghisfortunetocharity.Ifindthisodd,becauseinadditiontobenefitingitscustomers,Microsoftgrewthenationaleconomy,advancedour technological prowess generally, turned the Seattle area into atechnologycenter,andproducedmanyothersocialbenefits.HundredsofthousandsofpeopleandtheirfamilieshavebenefitedfromMicrosoft,as


employees, and as employees of its network of suppliers, partners, andbusinesscustomers.PeoplepresumethatGates’s intentionasabusinessmanwas tomake

money,andthathis intentionasaphilanthropist is to improvepeople’slives. But Gates the businessman and Gates the philanthropist are nottwo separate people. Apparently, some people can’t conceive of thepossibility that Gates wanted to make money by improving people’slives.8

Ialso take issuewith the idea that it is impossible for capitalistsandentrepreneurs to make profits without “exploiting” their employees.9

After I left MIT, I cofounded and led consulting companies that usedcontractors.We paid these contractors roughly 50 percent of what wechargedourclientsfortheirservices.(Tosimplifythings, let’sdisregardallourothercostsandassume thatwemadea50percentnetmargin.)Some would accuse me of exploiting our contractors by buying theirservicesathalfofwhattheywereworthinthemarketplace—justastheyaccusebusinessesformakingprofitsonthebackoftheirworkers.What’swrongwiththisargument?The fallacy lies in the expression “what they are really worth in the

marketplace.”Contractorservicesareworthonlywhatsomeoneiswillingto pay for them. If the contractors could sell their services in themarketplace for twice asmuch asmy company paid them, why wouldthey sell them to us rather than to our final clients? They sold theirservices to us because they couldn’t sell them for better conditions toother clients. They decided that ours was the best deal they could get.Otherwisetheywouldhaveusedtheirtime,energy,andskillsdifferently.(Infact,therewerelotsofconsultantswhodidnotworkwithmyfirm—surelybecausetheythoughttheywerebetteroffstrikingoutontheirownorwithanotherconsultingfirm.Ialwaysfeltnothingbutgoodwilltowardthem as they competed againstmy company. Competitionmade us allbetter.)10

Our clients contracted with my company because they trusted us toprovideaconsistent,scalable,globalservice,supervisedbymypartnersand me, through proprietary processes and materials that we haddeveloped, andwith a logistics and administration structure that couldmatchtheirown.Theytrustedusbecausewehadinvestedinmarketing


andresearchmaterialsandhada salesorganization thatexploredwhatwecoulddoforthem.Thecorporationsthatengagedusdidnotwanttodealwithindividualconsultants,butwithareliableconsultingcompanywithacrediblehistory.Andthecontractorswhoengagedwithusdidnotwanttosellanddelivertheirservicesdirectly.Theywantedaconsultingcompany that would support them. It was a win-win-win deal for theclients,thecontractors,andus.

THEGREATBOON

“TheprogressivepoliticalphilosophyIbelievedin,”wroteJohnMackey,founder of Whole Foods and coauthor of Conscious Capitalism, “hadtaughtme thatbothbusinessand capitalismwere fundamentallybasedon greed, selfishness, and exploitation: the exploitation of consumers,workers,society,andtheenvironmentforthegoalofmaximizingprofits.(…)Ibelievedthatprofitwasanecessaryevilatbest,andcertainlynotadesirablegoalforsocietyasawhole.”11

BecominganentrepreneurandstartingabusinesscompletelychangedMackey’slife.“AlmosteverythingIhadbelievedwasproventobewrong,”hewrote.“Themost importantthingI learnedinmyfirstyearwasthatbusiness isn’t based on exploitation or coercion at all. Instead, Idiscoveredthatbusinessisbasedoncooperationandvoluntaryexchange.Peopletradevoluntarilyformutualgain.”12

Startingandrunningabusinessisanopportunitytoserveayetunmetneedmoreefficientlythanotherexistingalternatives,combiningfactorsofproductioninnovelandmoreprofitableways.Capitalism,asMackeycame to understand, is based on the concept of service. Unless thebusiness serves its customers, it will have no customers. Unless thebusiness serves its employees, it will have no employees. Unless thebusinessservesitssuppliers,itwillhavenosuppliers.Detangled from cronyism, capitalism is the greatest mechanism for

socialcooperationandhumanprogresstheworldhaseverknown.“Therecordofhistoryisabsolutelycrystalclear,”wroteNobellaureateMiltonFriedman. “There isnoalternativeway, so fardiscovered,of improving


the lot of the ordinary people that can hold a candle to the productiveactivitiesthatareunleashedbyafreeenterprisesystem.”13

Capitalism has dramatically improved living conditions, decreasedpoverty, extended life expectancy, reduced child mortality, increasededucation,promotedequalityofrights,andmuchmore.Ifyoulookatthelasttwohundredyears,theamountofgoodthatcapitalismhasbroughtto theworld isastonishing.Until the1900s, theaverage lifeexpectancyworldwidewasundertwenty-fiveyears(forty-fivefortheUnitedStates);today it is seventy-two years (eighty for the United States).14 In the1800s, 85 percent of the world’s population lived in extreme poverty(defined as less than $1.25 a day); that number is now less than 10percent.15Infact,averageincomepercapitagloballyhasincreased1,000percent since 1800.16 Today, the overall level of global violence aroundtheworldislower,thoughourawarenessofwhat’shappeningaroundtheworldishigher.17Comparedtoevenfiftyyearsago,thingshavechangeddramatically for the better because entrepreneurs and their companieshavedevelopedamyriadofgoodsandservices,fromrefrigeratorstocellphones, from cars to televisions, from indoor plumbing to air-conditioning, that make the lives of even the poor of our developedeconomiesmateriallybetterthantheroyaltyofpreviouscenturies.18,19

It tookover twohundred thousandyears (when it’s believed that thefirst Homo sapiens appeared on Earth) for the human population toreachonebillion(whichhappenedapproximatelyin1800).Theaverageannualgrowthratefrom10,000BC(whenit’sestimatedthattherewerearound four million humans) was around 0.05 percent. The spread ofcapitalism,theIndustrialRevolution,producedauniqueinflectionpointinhistory.Ittookonlytwohundredyearstogofromonebilliontosevenandahalfbillionpeople,withanaverageannualgrowthrateofaround1percent—twentytimeshigherthantherateoftheprevioustenthousandyears.Consider thatwithout capitalism, sevenoutofeveryeightpeoplewouldnotbealivetoday(there’san85percentchancethatyouwouldnotbearound).Plus, depending on your age, the odds of your survivingwould have

beenquitesmall,becauseformostofhumanhistorylifeexpectancywasaround twenty-five years. Before the Industrial Revolution, you wouldhave had only a fraction of the income that you have today, and you


wouldhavebeeninmuchworsephysicalhealth.20“Theaveragepersonof100,000BCwasbetteroff(intermsofhoursoflaborrequiredtoobtainbasicnecessities, life expectancy,physicalhealth, etc.) than theaveragepersonof 1800,”writes the economichistorianGregoryClark. “Indeed,the bulk of the world’s population was poorer than their remoteancestors.”21,22,23

As a transcendent leader, it is important to be able to articulate thestrengths of capitalism and its power to enhance our lives, and tocondemn cronyism.24 Why? Because ultimately, I believe we humanbeingsaredrivenbyanethicalcore.Wewanttoseeourselvesandbeseenbyothersasgood,asjust,asdoingtherightthing.

UNCONSCIOUSCAPITALISM

Itispossibletoparticipateinafreemarketandtobenefitsocietywithoutany understanding of its principles. The critical rule is that companiesand individuals do not encroach on other people’s property and fulfilltheir contracts. As long as this holds, economic interactions serve thegreatergood.Whena voluntary transaction takesplace, eachpartymust receive at

leastasmuch(andgenerallymore)satisfactionfromwhatshegetsthantheonesheforgoesthroughwhatshegivesup.Forexample,ifIwanttotrademyorange foryourapple, Imustvalueyourapplemore thanmyorange.Similarly,ifyouacceptthetrade,youmustvaluemyorangemorethanyourapple.Thus,thetransactionisbasedontwoinequalities.Thisdisparitygeneratesanetsurplusinsatisfaction:bothpartiesexpecttobebetteroffafterthetransactionthantheywerebefore.This iswhy cronyism is sodetrimental to the social good.The safety

mechanism of capitalism, the one that disciplines the potentiallyrapacious ambition of a company or an individual, is the possibility ofopting in or out of any transaction—guaranteed by property rights andfree exchange. Once legal coercion blocks this safety switch, the wholesystemderails.Ifpeoplearecoerced(illegally,asincrime,orlegally,asinpolitics)intoparticipatingintransactionsthattheywouldprefertoavoid,


“naturalselection”intheecosystembreaksdown.Capitalismcreatesaforcefieldthatchannelspersonalambitiontoward

support forothers, and it organizes society for cooperation through thedivisionof labor, and through innovation toward the satisfactionof theneeds of its members. As Adam Smith explained, “It is not from thebenevolenceofthebutcher,thebrewer,orthebaker,thatweexpectourdinner,butfromtheirregardtotheirowninterest.”Andyet,theyare“ledbyaninvisiblehand”topromoteasociallybeneficialendthatwasnopartoftheirintention.25

This iswhy capitalismworks evenwhen people are unconscious anddriven by selfish desires. Even if an entrepreneur is no moral hero,capitalismwill turnhimorher intoaservantofsociety.Propertyrightsandfreeexchangedistillself-interestintoservice,makingitnecessarytoenter the marketplace with an intention to help.26 Capitalism is thealchemicalcrucibleinwhichhumanitytransformsitsbaseinstinctsintogold.

CONSCIOUSCAPITALISM

Capitalismworksevenbetterifpeopleareconscious.Justasanengineerwhoknowswhat she isdoingcanuseacomputermoreeffectively thansomeonewhodoesn’t understand the technology, a conscious capitalistcan participate in a free market more effectively than someone whodoesn’tunderstanditseconomicprinciples.Rather than “doing it by accident,” conscious capitalists have a

deliberate intention to profit by serving others. They pursue their ownwell-being by promoting the well-being of their investors, theircustomers, their employees, their vendors, and all thosewho exchangewith their enterprise. They understand that in doing so, they benefitmany others they don’t even know. Contributing to society is notsomethingtheydoasacollateralbenefitofrunningtheirbusinesses;itisthewaytheyruntheirbusinesses.Several years ago, I asked JohnMackey who he thought the biggest

beneficiaries ofWhole Foodswere.He predictably responded that they


were itscustomers.Idisagreed.He lookedatmequizzicallyandmoveddownthelistofstakeholders:employees,shareholders,suppliers,andsoon. Ikeptshakingmyhead. “Ofcourse,” Iexplained tohim, “there isaprimaryimpactonthetraditionalstakeholders.Butinthesamewaythatapebbleinapondcreatesexpandingripples,acompanyinaneconomy—especiallyifitisledconsciously—createsexpandingwavesofgoodness.”Themore conscious one is, the further one can see the reach of thesewaves. Two of the less obvious beneficiaries are the competitors’customersandthecompetitors’employees.Customers of other grocers benefit becauseWholeFoods’s additional

supply puts downward pressure on price and upward pressure on thequalitythatthesecompetitorshavetooffertoattractthemtotheirstores.For example, when I lived in Boulder, Colorado, I noticed that theSafewaystoreinwhichIshoppedraiseditsqualitywhenaWholeFoodsMarketopenednearby.WholeFoods’s revenuewasabout$13billionatthe time, while Safeway’s was about $36 billion. Many more peopleshoppedatSafewaythanatWholeFoods,sothebeneficialsocialimpactofthecompetitionwentwaybeyondWholeFoods’sdirectcustomers.Additionally, employees of competitors—that is, of any company that

wants tohirepeoplewhocouldwork forWholeFoods—benefitbecauseWholeFoods’sadditionaldemandputsupwardpressureonthemonetaryand nonmonetary compensation that these competitors have to offeremployeestoattract themtotheirworkplaces.Toattract theemployeesthe competitors need, Safeway and other grocery stores must improvetheir offer to make themselves more appealing to people who mightotherwisedecidetoworkatWholeFoods.Youdon’tneedtobeanentrepreneurtobeaconsciouscapitalist.You

have the chance to “vote”with yourmoney, investing in or patronizingcompaniesthatbehaveethicallytowardthoseintheirsupplychain(e.g.,the emergence of fair trade, green, treatment of animals, and similarcertifications),theiremployees,theircustomers,andsoon.Capitalismisaneconomicdemocracyinwhicheverydollargivesyouarighttovote.AsMises remarked, “The real bosses are the consumers. They, by theirbuyingandbytheirabstentionfrombuying,decidewhoshouldownthecapitalandruntheplants.Theydeterminewhatshouldbeproducedandinwhatquantityandquality.Theirattitudesresulteither inprofitor in


lossfortheenterpriser.Theymakepoormenrichandrichmenpoor.”27

Eachofusalsohasthechancetovotewithourmostpreciousresource:ourself.Wemustselectinwhichenterpriseto“invest”ourenergy.Firmscompete to offer each of us not only money, benefits, and careeropportunities. At the highest level, they offer us a project that givessignificancetoourlife.Theultimateattractorisnotmoneybutmeaning.Each of us can choose where to work, becoming an employee in acompanyweadmirefor its transcendent leadership,noblepurpose,andethicalprinciples.Finally, as a transcendent leader, you can raise your employees’ and

colleagues’ and customers’ consciousness about capitalism andentrepreneurship.Youcanhelpthemunderstandwhyandhowfreedomandrespectinthemarketplaceworkforthebettermentofhumanity.Andyou have a chance to participate in public discourse defending theseprinciples in personal as well as in social interactions. And mostimportant, you can become a role model for conscious living, whichincludesconsciousparticipationinthebusinessworld.

SUPERCONSCIOUSCAPITALISM

“Workislovemadevisible,”wroteKhalilGibran.28Whenanenlightenedperson with few ego anxieties enters the marketplace, he or shesubstitutesAdamSmith’sinvisiblehandfortheoxherd’shelpinghand.I believe it isagape (support for others’ growth andwell-being) that

driveswhat I call a superconscious capitalist. Such a person enters themarketplace with the commitment to alleviate the suffering and tosupport the flourishing of all sentient beings. Earlier in the process oftransformation from unconsciousness to consciousness, service is ameanstosuccess;itisnecessarytooffervaluetostakeholdersinordertoobtainvaluefromthem.Atthisstage,successisameanstoservice;itisnecessarytoobtainresourcesinordertodelivervaluetomoreandmorepeople.DuringamonthlongmeditationretreatinthemountainsofColorado,I

tookwhatIcalleda“business-sattva”vow.Icommittedtoreturntothe


marketplacewithhelpinghands—andwiththeseideasaboutleadership.Ahugeweightliftedfrommyshoulders.Igotatasteofwhatitfelttobefreeoftheegoanxietythathadmademeanoverachiever.IrealizedIhadbeenrunningon fear,anunclean fuel thatclogsmindandheart.AndIcouldenvisionwhatitwouldbeliketorunonlove.Attheendofthatretreat,asIwalkedsilentlyinthesnowymountains,I

remembered the story of Moses being banned from entering thepromised land.When I learned the story in Hebrew school, I couldn’tunderstandwhyGodpunishedMosessoseverelyfor justhittingarock.Butatthatmoment,Icouldgiveitamoremeaningfulinterpretation.GodhadcommandedMosestospeaktoarocksoitwouldpouroutitswater.InsteadMoses“strucktherockwithhisstaff”andtookthecreditinfrontofthecommunityforbringingforththewater.Thatstruckmeasaperfectmetaphor for theegoandenlightenment.

Thebeginningofthesearchforawakeningisalwaysdrivenbyego.Howcould it be otherwise?Ego is themaster until youwake up and realizeyourtrueself.Forfortyyearsegowandersinthedesert,strivingtoreachthe land of milk and honey. But when the promised land is finally insight,egoisnotpermittedtoenter.Itcannotcrossintothepromisedlandbecause liberation means its dissolution—or rather, its dis-illusion.Liberationhappenswhenonerealizesthatthereisnoegoatthecenterofawareness, and that there are no hard boundaries within the field ofconsciousness.But for the unenlightened mind, “I” (the ego) needs permanent

protectionandreassuranceasitfacesadangerousworldthatthreatenstoshatter its self-worth.Typical of ego-defensivepatterns are the traits ofarrogance and pride.Many ofmy clients have toldme theywant theircompanytobeknownas“thebestandmostadmiredXcompanyintheworld,”whereX stands for their industry.My usual response is to askthem what they would think of me if I told them that I wanted to berenownedas“thebestandmostadmiredconsultantintheworld.”Theylaugh and respond that I would sound arrogant, cocky, and shallow. Ilaugh,too,andtellthemthatthat’showtheysoundtome.Ahealthygoalcan’tbejusttoberecognizedasthebest.Thetwoessentialquestionsare:Whatwouldyouwanttobeadmiredfor,andforwhatpurpose?Thosewhowanttobeadmiredfortheirfinancialperformancearenot


at the superconscious stage. If youareat the superconscious stage, youwanttobeadmiredbecause,inadditiontobeingfinanciallyhealthy,youdeveloped an exemplary culture based on universal human values,becauseyouwereabletoconsistentlybringtomarketnewproductsandservicesthattransformpeople’slivesforthebetter,andbecauseyouleadinawaythatinspirespeopletobeandgivetheirbest.If youwant tobe admired in order to satisfy your cravings for fame,

power, status, and wealth, you will have little impact and leave littlelastinglegacyontheworldaroundyou.Ontheotherhand,ifyouwanttobeadmired inorder tohave thematerialmeansandmoralauthority tohelp other organizations emulate yours andmentor other people alongtheirheroes’journeys,“youwillmakeevenwitheredtreesbloom.”29

What would you do if you had enough money (success, power,status, fame, sex appeal, and so on) to extinguish financial andnonfinancialanxietyforever?30OfthethousandsofpeopletowhomI’veposed this question, not one of them has ever responded “I’d retire.”Someof them (whoactuallydohavemoremoney than they could everspend) respond that they would not change anything they are alreadydoing.Others imagine startingbusinessesornonprofit organizations toservehumanity.The interesting thing is that when the material motive is gone, the

spiritual one takes over. Peace of mind—which is much more aconsequence of ego relaxation than of resource acquisition—triggers arush of excitement. People feel free to manifest some of their mostcherisheddreams.Theywanttodowhattheyloveandcontributetotheworldthroughit.Insteadofseeingthemarketplaceasameanstoprovetheirsuperiorityoverothers,theyseeitasameanstoexpresstheirlove.Whenpeopledobusinessfromanenlightenedperspective,thereisno

tension between material and spiritual pursuits. Enlightened businessintegrateswisdomandcompassion insupportofhumandevelopment—throughit,spiritualwisdomandpracticaleconomicsbecomeoneandthesame.


SELF-TRANSCENDENCE

Ourprofessional activitiesdefineour identities.Theyprovideuswith acommunity,offerusasenseofpurposeandmeaning,providechallengesandopportunities forachievementand integrity,and lendusasenseofpower and skill. People feel happy at work when they feel respected,listened to, valued, supported, entrusted with meaningful andchallenging work that allows them to contribute to the mission of theorganization with autonomy, power, and integrity. This is what thepsychologistAbrahamMaslowcalled“self-actualizingwork.”Maslow asserted that self-actualization through a commitment to

worthwhileworkistherealisticpathtohumanhappinessintheWest—asopposed to sitting full-time in a cave. Self-transcending work is apowerfulwaytogobeyondego,tofreeoneselffromattachmentandself-preoccupation:“Theinnerandtheouterworldfuseandbecomeoneandthesame.”31

Thelargerpurposeofbusiness,then,isnottowinormakemoneybutto flourish through self-transcending service. The enlightened effort towininthemarketplaceissubordinatedtothecommitmenttosupporttheflourishingofallhumanbeings.Businesssuccessisnottheendanymore;itbecomesameanstoexpressone’shighestnature:love.Andthereismuchlovingtobedone.Billionsofpeoplealivetodayare

no better off than our ancestors thousands of years ago. For example,abouthalfoftheworld’spopulationliveswithincomeoflessthan$2.50aday.32And71percentof theworld’spopulation liveson less than$10aday. (Thepoverty line in theUnitedStates isaround$35aday.)Thesenumbers are not just about poverty. They summarize social conditionsthataffectthesensibilitiesofanyonewhocaresabouthumanbeings.Theopportunitiesfordevelopmentareendless,andwehavebarelybeguntotapthem.33

Connecting people to their highest purpose at work solves thehardest problem there is for individuals (how to achieve symbolicimmortality), for organizations (how to align self-interested individuals


inpursuitofasharedgoal),forsocieties(howtofosterpeace,prosperity,and progress), and for humanity (how to avoid self-destruction andcoexistinagape).Transcendent leaders build organizations that span the whole

spectrum—from economic entities that provide for people’s materialneeds, totemplesofmeaningthatprovidefortheirspiritualones.Oncesecurityandsuccesshavebeensatisfied,significanceiswhatmatters.Inourageof extremewealthandextremepoverty, there is a greateronusthaneveronbusinessleaderstoliberatetheworkplaceasagreatforceforgoodintheworld.Humanity has reached the state of consciousness in which we can

harness the desire for meaning into a commitment to serve othersthrough the marketplace. Now we need leaders with thesuperconsciousnessrequiredtodoit.“Whenaleaderdemonstratesthathispurpose isnoble,”notesFlowauthorMihalyCsikszentmihalyi,“thatthe work will enable people to connect with something larger—morepermanentthantheirmaterialexistence—[then]peoplewillgivethebestof themselves to the enterprise.”34 When people give the best ofthemselves in serving a noble purpose, they become the highest selvestheycanbe—andcreatethebestworldtheycanconceive.


EPILOGUE

WHATTODOONMONDAYMORNING

Aftertheecstasy,thelaundry.

—JackKornfield

Once you reach clarity about who you really are, then comes the harddaily work of staying conscious. To be a transcendent leader, after theecstasyofdiscoveringyourtruenatureandcomingbackfromyourhero’sjourneywithagiftforyourcommunity,youhavetodothemetaphoricallaundry. You need to enact your fundamental commitments every day.You have to manifest your noble purpose, your ethical principles, andyourconnectiontopeopleineverysinglethingyoudo.Bydoingthis,youwillnotonlyleadyourorganization,butthankstothemarketdynamics,youcanbringaboutamuchbiggerchange.Anyorganizationthatisledfromthetranscendentheart,inadditionto

the head, inspires—and compels—others to adopt admirable businessmodels. A companywith a great talent brand, one that receives a highscoreonemployeeengagement,forexample,setsastandardthatattractstalentlikeamagnetandkeepsturnoverlow.Thisistalentthatdoesn’tgoto other organizations that would like to profit from it. Just ascompetition in the product market benefits consumers, stimulatingimprovements in innovation, service, quality, and price, competition inthelabormarketbenefitsemployees,stimulatingworkplacesthatsupporthumanflourishing.In exchange, those who do well at work help their organizations do

well, too. According to Gallup, the forty organizations that receive itsannual “Great Workplace Award” “understand that employeeengagement is a force that drives real business outcomes” and are


rewardedwith “higher employee engagement, greater efficiency, higherquality and increased productivity.” Gallup claims these organizationsaverage nine engaged employees for every one actively disengagedemployee, “which ismore than five times therate in theU.S.andmorethan16timestherateforworkforcesglobally.”1Suchengagementcreatesa virtuous cycle. The companieswith higherGallup engagement scoresattract the best talent, which makes them more financially successful;this, in turn, allows them to grow and attract more talent, and so on.Moreimportant,thesecompaniessurpassthosewhorefusetohumanizetheir work environments, just as innovators extinguish obsoletecompetitorsintheproductmarket.Forthousandsofyears,humanbeingshavereliedoncommunityasan

insurancepolicyofsorts.Youmake“deposits”bygettingalongwithyourneighborsandhelpingthem,andyoucountontheirreciprocitywhenyouneed aid. The same thing happens in an organization. When a leadertakescareofhispeopleandoffersthemanopportunitytotranscendtheirmortal shrouds, they reciprocateby taking careof theorganizationandgivingtheiralltothemission.Takingcareofpeoplemeansgivingthemapurpose,amission,astrategy,asenseofcommunity,respect,kindness,attention, support,pride, andahostofothernonmaterial goods,whichendinwell-being,flourishing,andlastinghappiness.What does all this imply for your own behavior as a transcendent

leader,beginningonMondaymorning?

Defineyourorganization’snoblepurposeandsticktoit.Inspireyourteamtopursueitinaccordancewiththehighestethicalvalues.Discusswhyyourorganizationdoeswhatitdoes,whoitbenefits,andhowyougoaboutdoingit.Forexample,thetwelve-thousand-employeeABCSupplyCompany,aneleven-timewinneroftheGallupawardthatdistributesmaterialslikewindows,roofing,andsidingtobuildingcontractorsintheUnitedStates,isbuiltona“dreamtotakecareofourcustomersbetterthananyoneelse,”saysthechairman,DianeHendricks.2

Describethemissionofyourorganizationinawaythatwouldmakeyourchildrenproudofyouiftheytoldtheirfriendsatschoolaboutit.Encourageeverybodytoexplaininhisorherown


wordshowthismissiongetsfulfilled.Makesureeveryoneunderstandstheorganization’snoblepurpose(ABC,forexample,is“dedicatedtopromotingandpreservingtheAmericanDreambyhelpingpeopleaccomplishtheextraordinary—basedonourfundamentalbeliefthateverypersonhaswithinthemselvestheabilitytodogreatthings”)andhowtheirspecificworkcontributestoit.Transformcomplianceintocommitment.Invitepeopletochoosetobeapartoftheorganizationbecausetheworkitdoesisalsopartoftheirlife’smission,notbecauseworkingthereistheirjob.Distinguishbetweenanyone’sroleandeveryone’sjob.Clarifythattheirapparentjobistheirrole,buttheirrealjobistohelptheteamtowin.Constantlyreinforcethisideatobreakdownthemiragethatoptimizinglocalperformanceindicatorswilloptimizeglobalperformance.RemembertheNASAcustodianwhoproudlytoldPresidentKennedyhewasworkingto“putamanonthemoon.”Establishethicalprinciplesthatpromotethewell-beinganddevelopmentofeveryonewhocomesincontactwiththeorganization.Behaveinalignmentwiththoseprinciplesineveryoneofyouractions,anddemandthateverybodyaffiliatedwiththecompany,notjustemployeesbutalsocontractors,vendors,andevenclients,doesthesame.InthewordsoftheGreekphilosopherHeraclitus,“Doonlythosethingsthatareinlinewithyourprinciplesandcanbearthelightofday.Thecontentofyourcharacter[andyourorganization’sculture]isyourchoice.Daybyday,whatyouthink,whatyouchoose,andwhatyoudoiswhoyoubecome.Yourintegrityisyourdestiny.”3

Createamission-andvalues-drivenbandofbrothersandsisters.Fosterthesenseofcommunitythroughrespect,inclusion,andbelongingforallthosewhosharetheorganization’smissionandvalues.Strengthenpersonalbondsupanddownandsidewaysinthehierarchy,andbeyondtheorganization’slegalboundaries,forallthosewhoparticipateinitsproject.Ensurethatallmembersoftheorganizationhavesomemeasureofautonomyoverhowtheydischargetheirduties.Allowthemtoservethepurposewithasmuchautonomyaspossible.Empower


themtoowntheirworkenvironmentanddeliverresultswithmaximumdiscretion.Urgepeopletotakeupchallengesthatwillstretchandforcethemtolearnnewwaysofthinkingandacting.Promoteagrowthmind-set,drivingoutfearandsupportingpeopletoworkinastateofflow.Celebrate“intelligentrisk-taking,”especiallywhenanexperimentdoesn’tpanout.Redeemitasalearningexperienceand“activate”thelessonaspartoftheorganization’sknowledgecapital.Compensatepeoplecompetitivelyandequitably,butdon’trelyonfinancialincentivestomotivatethem.Attractmissionariesandrepelmercenaries,offeringapackageofmaterialandnonmaterialbenefitsthatappealtotheformerbutnottothelatter.Usemoneyonlytotakemoneyoffthetable.Developastrategy-enablingculturethroughtheFourD’s:definethestandards,demonstratethestandards,anddemandthestandards.Thendemandthateveryonedemandthestandards,andthattheydelegatethestandardstothenextlevels.Exemplify,exemplify,exemplify.Justasyourparents’actionstoldyouwhatwasreallyvaluedinyourfamily,letyouractionstellthepeoplewhoobserveyouwhatyourvaluesare.Confrontthosewhoappeartodeviatefromthesevalueswithhumilityratherthanblame,askingthemfortheirreasoning.Invitethosewhothinkyouappeartodeviatefromthesevaluestoconfrontyouwithhumility,inquiringforyourreasoning.Correctanyactualdeviations.Assumeunconditionalresponse-abilityinthefaceofanycircumstancesyouencounter.Ownyourpartintheproblemtobeapartofthesolution.Focusonthoseaspectsofthesituationthatareunderyourcontrol.Explainproblemsasyourinabilitytorespondeffectivelytothechallengethatyouface,andconsiderwhatyouneedtolearntoexpandyourabilityinthefuture.Inviteeveryoneelseinyourorganizationtoadoptthisstance.Rememberthatyoucan’talwaysguaranteesuccess,butyoualwayshavetheunconditionalpowertoguaranteeintegrity—whichissuccessbeyondsuccess.Challengeeverybodyaroundyoutostopthinkingofthemselvesasvictimsofcircumstanceand


becomemastersoftheirchoices.Lookatconflictsasstrategicdisagreementsaboutthebestwaytoreachthegoal.Understandthattheyareinevitableinanycomplexorganization,becausepeoplearedealingwiththeirownsubsystemicperformancemetricsandincompleteinformation.Rememberthateverypersonistouchingjustonepartofthe(organizational)elephant,andthosewhoseetheelephantfromadistancehavenoappreciationofthedetails.Resolvetheseconflictscollaboratively,usingtheorganization’smissionandvaluesasthemeasureofgoodness.Openconversationstoresolveanyconflicts,especiallythoseyou’vebeenavoidingbecauseyoufearnotbeinglikedorupsettingothers.Starttheseconversationsbycodefiningasharedgoal.Understandyourcounterpart’spointofview.Explainyourpointofview.Developamutuallyagreeablesolution,ordefinethetrade-offsforjointescalation.Don’tfinishtheconversationwithoutfirmcommitmentsforimplementinganyagreements.Establishasystemof“escalatingcollaboration”inwhichpeoplebringunresolvableconflictstotheattentionofseniormanagers,providingthemwiththegranularinformationrequiredformakingintelligentglobaldecisions.Ensurethatsuchescalationsareseenasexamplesofescalatingcollaborationratherthanescalatingconflict.Usethissystemtopreserveworkingrelationshipsinthefaceofdifficultdecisionswithdecentralizedandambiguouscostsandbenefits.Useitalsotoexposeanyattemptstooptimizesubsystemstothedetrimentofthesystem.Fulfillyourpromiseswheneverpossible,andwhenit’snotpossibletodoso,honoryourwordbylettingtheotherknowwhattheroadblockisandtakingcareofanyconsequencesofyourdefault.Establishthisasabasicruleofbehavior,requiringthatanypersonaffiliatedwiththeorganizationlivebyit.Remindyourselfandothersthatnothingworkswithoutintegrity.Consideranyrepeatedtransgressionasseriouslyasyouwouldfraudorabusivedisrespect.ConstantlyseektolearnandimproveintheIt,We,andIdimensions.Askothershowyouyourselfcanpersonallydobetter—andinviteotherstodothesame.Discusswithothers—notjust


yourpeersbutthoseaboveandbelowyouinthehierarchy—howyoucanjointlyimprovethewayyouworktogether,thewayyourelate,andthewayyousupporteachother’swell-being.Don’ttellpeoplewhatyouexpectfromthem.Instead,tellthemwhattheyhavearighttodemandfromyouandyourleadershipteam,includingyourunabashedhonestyandpersonalsupport.Rememberthatatrueleaderhasnofollowers.Atrueleaderhas“energyinvestors.”Getoutofthewayandbethewayinwhichpeopleconnecttothemissionandvalues.Offerthemaplatformtoplaybigandachievesymbolicimmortality.Tameyourego.Stopworryingaboutwhetheryou’rethemostvaluableplayer,andstopactingaggressivelyordefensivelytoappearassuch.Disruptyourautomaticroutinesfordealingwithyouranxietyaboutyourself-worthbynoticingandrelaxingyour“emotionalpinches.”Diebeforeyoudie.Letdeath,theawarenessofourpreciousandlimitedtimeonEarth,dissolvetheunimportantandleaveonlywhatmatters.Wakeupfromthedreamofcomplacency,anddisconnecttheautopilotthatkeepsyoustuckintherutoffamiliarity.Focusonyourlegacy,your“symbolicimmortalityproject,”andmakethatthetruenorthstarofyourexistence—andyourorganization’s.Substitutewinningformeaningandhedonism(pleasure)formoralism.Takethehero’sjourney.Acceptthecallofadventureinspiteofyourfears.Gointotheunderworld,connectwithyourallies,learnwhoyouare,fightyourinnerbattle,comebacktofighttheouterbattle,andthencomebacktogiveyourgiftofawarenessandwisdomtoyourcommunity.Becomeanally,supportingthosewhoundertaketheirowndifficultjourneys.Returntothemarketwithhelpinghands.Beasuperconsciouscapitalist,profitingfromyourservicetothosearoundyou.Inspirepeopletobuildabetterworldthroughagape,thecommitmenttosupportthewell-beinganddevelopmentofotherhumanbeings.


AsI’vestated fromtheoutset,weallwantour lives tomatter, toconfermeaninginsomeway,toservesomethingbiggerthanourselves,todosomethingthatleavesamarkandmakesadifferenceinthecompanyof like-minded comrades.We understand that our existence is fleetingand that the future isdauntinglyvast.Howcanweachieve significancewith our comparatively little energy in our extremely limited time onEarth?That’sthequestionallhumanbeingsmustconfrontandansweriftheywanttofullylive.Asatranscendentleader,youwill inspiretheinternalcommitmentof

people to fulfill their hunger formeaning through a collectivemission,which is pursued through ennobling values that create a community ofpurpose.IfyoudothethingsI’veadvocatedinthisbook,peoplewillgivetheir

very best to you and to your organization, and youwill find happinessbeyondyourwildestdreams.Asyou letgoofyourperformanceanxietyandfocusonthenoblemission,youwillgainthemeaningthatmakesyouimmortal.InthewordsofViktorFrankl:“Don’taimatsuccess.Themoreyouaimatitandmakeitatarget,themoreyouaregoingtomissit.Forsuccess, like happiness, cannot be pursued; it must ensue, and it onlydoes so as the unintended side effect of one’s personal dedication to acausegreaterthanoneself.”4

FROMSLAVERYTOSERVICE

While Iwasworkingon thisbook, I tooka cruisedown theNile. Ihadbeen to Egypt many years ago, but not with my partner, Magda, whoalways dreamt of visiting the great pyramids and temples. We flew toAlexandria and boarded the riverboat. I braced myself for a less thanexciting time, since Ihaddone the tourbefore. It’s a gesture of love, Iconsoledmyself.It’llbegoodforourrelationshipandformysoul.Tomygreatsurprise,though,Ifoundthetripevenmoreinterestingthanitwasthefirsttime.IsaweverythingthroughbothMagda’sandErnestBecker’seyes. I saw immortality projects everywhere: the architecture, themonuments, the rituals, the hieroglyphics, the temples, the mummies,thepyramids,theobeliskswereallattemptstomanagedeathanxiety.


What impressed me the most were the graffiti carved by theNapoleonic soldiers on a temple built by Ramses II. English soldierscarved their names on it, too. Wildly different people sent the samemessage:“Iwashere.”TheEgyptiansbuiltthetemplefivethousandyearsago as proof of their imperial superiority, and the French and Englishconqueredtheplacemillennialater,inscribingtheirnamestoprovetheirimperial superiority. Although they were all separated by a culturalchasm, theancientEgyptiansand themodernEuropeanshad the samedesire: to be seen, admired, and remembered as people of significance.WhileImusedaboutthehumanpursuitofsymbolicimmortality,feelingproudofmyobjectiveanalysisofpastcivilizations,Iwasjoltedbyavoiceinmyhead:Don’tfeelsosmug,Fred.Isn’tthisalsowhyyouarewritingyourbook?

A meaning revolution is brewing in the crucible of superconsciouscapitalism.Transcendent leadersare its catalytic converters,developingimmortalityprojectsaimedat the flourishingofall sentientbeings.Thesamefreemarketthattransformsself-interestintoservicecan,operatingat ahigher level of consciousness, transformconquest into community,separation into union, and ego fear into soul love. This revolution willrequire transcendent leaders who can engage people in a fantasticproject: creating socioeconomic structures in which radical respect foreverybeingushersinaneweraforhumanity.Areyoureadytojointherevolution?


ACKNOWLEDGMENTS

Thanksto:

JeffWeiner,whoinspiredandsupportedme.

ReidHoffman,whoexpandedandrefinedmyideas.

SherylSandberg,whosharedhertruthheroically.

MikeGamson,whohelpedmecrossthefinishline.

BronwynFryer,whohelpedmewrite.

SteveRoss,whohelpedtransformthisideaintomatter.

RogerScholl,wholetmerunwithit.

LinkedIn is a company of over 10,000 human beings who all makemistakes; it’s not a perfect culture, but it is trying to get there and it’sbetterthanmostI’vedealtwith.OneofthereasonsthatmakesLinkedInagreatplace towork is that it supportsemployees in theirprofessionaldevelopment.I’mappreciativeofLinkedIn’spermissiontocandidlysharemy experiences with a broader audience outside the company. It’simportantformetomentionthatthecontentofthisbookrepresentsmyown personal views and interpretations and not necessarily those ofLinkedIn.


NOTES

CHAPTER1:AHOTWORKSHOP

1. Youcanhear theSoundCloudcliphere:https://soundcloud.com/ryan-block-10/comcastic-service.

2. https://brainyquote.com/quotes/w_edwards_demiry_672627.

3. DavidGelles,“AtAetna,aC.E.O.’sManagementbyMantra,”NewYorkTimes,February27,2015, http://www.nytimes.com/2015/03/01/business/at-aetna-a-ceos-management-by-mantra.html.

4. RoyF.Baumeister,KathleenD.Vohs,JenniferL.Aaker,andEmilyN.Garbinsky,“SomeKeyDifferences Between a Happy Life and a Meaningful Life,” The Journal of PositivePsychology8,no.6(2013):505–16.

5. I’vepersonallyexperiencedthe“authorhoodparadox”multipletimes.I’mveryhappyIwroteMetamanagement(3vols., inSpanish),ConsciousBusiness,andTheMeaningRevolution,butIcan’tsayIenjoyedwritingthem.Itwaslikeninemonthsoflaborafteryearsofmentalpregnancy.Forme,writingbooksdecreaseshappinessbutincreasesmeaning.

6. Baumeister,Vohs,Aaker,andGarbinsky,“SomeKeyDifferencesBetweenaHappyLifeandaMeaningfulLife.”

7. https://blogs.scientificamerican.com/beautiful-minds/the-differences-between-happiness-and-meaning-in-life/.

8. Baumeister,Vohs,Aaker,andGarbinsky,“SomeKeyDifferencesBetweenaHappyLifeandaMeaningfulLife.”

9. http://news.gallup.com/poll/154607/Americans-Emotional-Health-Reaches-Four-Year-High.aspx?utm_source=alert&utm_medium=email&utm_campaign=syndication&utm_content=morelink&utm_term=USA%20-%20Wellbeing%20-%20Well-Being%20Index.

10. http://onlinelibrary.wiley.com/doi/10.1111/j.1758-0854.2010.01035.x/abstract.

11. http://www.huffingtonpost.com/todd-kashdan/whats-wrong-with-


https://soundcloud.com/ryan-block-10/comcastic-service

https://brainyquote.com/quotes/w_edwards_demiry_672627

http://www.nytimes.com/2015/03/01/business/at-aetna-a-ceos-management-by-mantra.html

https://blogs.scientificamerican.com/beautiful-minds/the-differences-between-happiness-and-meaning-in-life/

http://news.gallup.com/poll/154607/Americans-Emotional-Health-Reaches-Four-Year-High.aspx?utm_source=alert&utm_medium=email&utm_campaign=syndication&utm_content=morelink&utm_term=USA%20-%20Wellbeing%20-%20Well-Being%20Index

http://onlinelibrary.wiley.com/doi/10.1111/j.1758-0854.2010.01035.x/abstract

http://www.huffingtonpost.com/todd-kashdan/whats-wrong-with-happines_b_740518.html

happines_b_740518.html.

12. ViktorFrankl,Man’sSearchforMeaning(Boston:BeaconPress,1946,2006).

CHAPTER2:DISENGAGEMENT1. BrianSolomon,“YahooSellstoVerizoninSaddest$5BillionDealinTechHistory,”Forbes,July 25, 2016, http://www.forbes.com/sites/briansolomon/2016/07/25/yahoo-sells-to-verizon-for-5-billion-marissa-mayer/#62c080fd71b4.

2. ArjunKharpal, “VerizonCompletes Its$4.48BillionAcquisition ofYahoo;MarissaMayerLeaves with $23 Million,” CNBC, June 13, 2017, https://www.cnbc.com/2017/06/13/verizon-completes-yahoo-acquisition-marissa-mayer-resigns.html.

3. Todd Spangler, “Yahoo’s False Prophet:HowMarissaMayer Failed to Turn the CompanyAround,”Variety,May 24, 2016, http://variety.com/2016/digital/features/marissa-mayer-yahoo-ceo-1201781310/.

4. Miguel Helft, “The Last Days of Marissa Mayer?,” Forbes, November 19, 2015,http://www.forbes.com/sites/miguelhelft/2015/11/19/the-last-days-of-marissa-mayer/#5463c48b6bff.

5. MikeMyatt,“MarissaMayer:ACaseStudyinPoorLeadership,”Forbes,November19,2015,http://www.forbes.com/sites/mikemyatt/2015/11/20/marissa-mayer-case-study-in-poor-leadership/#56d238e93795.

6. Teresa Amabile and Steven Kramer, “How Leaders Kill Meaning at Work,” McKinseyQuarterly, January 2012, http://www.mckinsey.com/global-themes/leadership/how-leaders-kill-meaning-at-work.

7. MurrayRothbard, “TheMantle of Science,” inScientismandValues, ed.Helmut SchoeckandJamesW.Wiggins(Princeton:D.VanNostrand,1960).

8. “Louise Bush-Brown,” Bartleby.com, last modified 2015, http://www.bartleby.com/73/458.html.

9. Amy Adkins, “Majority of U.S. Employees Not Engaged Despite Gains in 2014,” Gallup,January 28, 2015, http://www.gallup.com/poll/181289/majority-employees-not-engaged-despite-gains-2014.aspx.

10. “State of theAmericanWorkplaceReport 2013,”Gallup, http://www.gallup.com/services/178514/state-american-workplace.aspx?g_source=EMPLOYEE_ENGAGEMENT&g_medium=topic&g_campaign=tiles.

11. Brandon Rigoni and Bailey Nelson, “Millennials Not Connecting with Their Company’sMission,” Gallup, November 15, 2016, http://www.gallup.com/businessjournal/197486/millennials-not-connecting-company-mission.aspx?g_source=EMPLOYEE_ENGAGEMENT&g_medium=topic&g_campaign=tiles.

12. Gallup,“StateoftheAmericanWorkplaceReport2013.”

13. RobynReilly,“FiveWaystoImproveEmployeeEngagementNow,”Gallup,January7,2014,http://www.gallup.com/businessjournal/166667/five-ways-improve-employee-engagement.aspx.

14. Ibid.


http://www.forbes.com/sites/briansolomon/2016/07/25/yahoo-sells-to-verizon-for-5-billion-marissa-mayer/#62c080fd71b4

https://www.cnbc.com/2017/06/13/verizon-completes-yahoo-acquisition-marissa-mayer-resigns.html

http://variety.com/2016/digital/features/marissa-mayer-yahoo-ceo-1201781310/

http://www.forbes.com/sites/miguelhelft/2015/11/19/the-last-days-of-marissa-mayer/#5463c48b6bff

http://www.forbes.com/sites/mikemyatt/2015/11/20/marissa-mayer-case-study-in-poor-leadership/#56d238e93795

http://www.mckinsey.com/global-themes/leadership/how-leaders-kill-meaning-at-work

http://Bartleby.com

http://www.bartleby.com/73/458.html

http://www.gallup.com/poll/181289/majority-employees-not-engaged-despite-gains-2014.aspx

http://www.gallup.com/services/178514/state-american-workplace.aspx?g_source=EMPLOYEE_ENGAGEMENT&g_medium=topic&g_campaign=tiles

http://www.gallup.com/businessjournal/197486/millennials-not-connecting-company-mission.aspx?g_source=EMPLOYEE_ENGAGEMENT&g_medium=topic&g_campaign=tiles

http://www.gallup.com/businessjournal/166667/five-ways-improve-employee-engagement.aspx

15. LesMcKeown,“AVerySimpleReasonEmployeeEngagementProgramsDon’tWork,”Inc.,September 10, 2013, http://www.inc.com/les-mckeown/stop-employee-engagement-and-address-the-real-problem-.html.

16. “Chaplin Modern Times Factory Scene,” YouTube, September 5, 2015,https://www.youtube.com/watch?v=HPSK4zZtzLI.

17. Elaine Hatfield, John Cacioppo, and Richard Rapson, “Emotional Contagion,” CurrentDirectionsinPsychologicalSciences2,no.3(June1993):96–99.

18. Amy Adkins, “U.S. Employee Engagement Flat in May,” Gallup, June 9, 2015,http://www.gallup.com/poll/183545/employee-engagement-flat-may.aspx.

19. “HowSeligman’sLearnedHelplessnessTheoryApplies toHumanDepression andStress,”Study.com, last modified 2017, http://study.com/academy/lesson/how-seligmans-learned-helplessness-theory-applies-to-human-depression-and-stress.html.

20. Thegoalofanonprofitcouldbetocareforthesick,feedthehungry,oreducatechildren,butitstillneedstofulfillthedemandofitsstakeholdersanddonors.

21. Susie Cranston and Scott Keller, “Increasing the ‘Meaning Quotient’ ofWork,”McKinseyQuarterly, January 2013, http://www.mckinsey.com/business-functions/organization/our-insights/increasing-the-meaning-quotient-of-work.

22. JamesC.Collins,GoodtoGreat:WhySomeCompaniesMaketheLeap…andOthersDon’t(NewYork:HarperBusiness,2001).

23. “Quotes, Authors, Humberto Maturana,” AZ Quotes, last modified 2017,http://www.azquotes.com/quote/703356.

24. “WhatDrives Employee Engagement andWhy ItMatters,” Dale Carnegie Training, 2012,https://www.dalecarnegie.com/assets/1/7/driveengagement_101612_wp.pdf[INACTIVE].

25. CampbellSoupCompanywasfoundedin1869.

26. TerryWaghorn,“HowEmployeeEngagementTurnedAroundatCampbell’s,”Forbes,June23, 2009, http://www.forbes.com/2009/06/23/employee-engagement-conant-leadership-managing-turnaround.html.

27. Doug Conant (@DougConant), “To win in the marketplace you must first win in theworkplace,” Twitter, August 29, 2015, https://twitter.com/dougconant/status/373155799222480896.

28. Waghorn,“HowEmployeeEngagementTurnedAroundatCampbell’s.”

CHAPTER3:DISORGANIZATION1. SeeUriGneezy,ErnanHaruvy,andHadasYafe,“TheInefficiencyofSplittingtheBill,”TheEconomic Journal 114, no. 495 (April 1, 2004): 265–80, doi:10.1111/j.1468-0297.2004.00209.x.

2. RichardJ.Maybury, “TheGreatThanksgivingHoax,”Mises Institute,November27,2014.https://mises.org/library/great-thanksgiving-hoax-1.

3. ChrisArgyris,“TeachingSmartPeopleHowtoLearn,”HarvardBusinessReview,May–June1991,https://hbr.org/1991/05/teaching-smart-people-how-to-learn.


http://www.inc.com/les-mckeown/stop-employee-engagement-and-address-the-real-problem-.html

https://www.youtube.com/watch?v=HPSK4zZtzLI

http://www.gallup.com/poll/183545/employee-engagement-flat-may.aspx

http://Study.com

http://study.com/academy/lesson/how-seligmans-learned-helplessness-theory-applies-to-human-depression-and-stress.html

http://www.mckinsey.com/business-functions/organization/our-insights/increasing-the-meaning-quotient-of-work

http://www.azquotes.com/quote/703356

http://www.forbes.com/2009/06/23/employee-engagement-conant-leadership-managing-turnaround.html

https://twitter.com/DougConant

https://twitter.com/dougconant/status/373155799222480896

https://mises.org/library/great-thanksgiving-hoax-1

https://hbr.org/1991/05/teaching-smart-people-how-to-learn

CHAPTER4:DISINFORMATION

1. A full tank has 3,000 PSI of oxygen, which allows a bottom time of almost an hour in anormal dive.Divemasters require that divers come up to the surfacewhen the tank fallsbelow1,000PSI,sothatthediverhasenoughairforasafetystop.Theabsolutelimitis500PSI,atwhichpointthegaugegoesredandscreams“Danger!”

2. I told a version of this story inConscious Business:How to Build Value Through Values(Boulder,CO:SoundsTruePublishing,2006).

3. FriedrichA.vonHayek,TheFatalConceit:TheErrorsofSocialism(Chicago:UniversityofChicagoPress,1988).

4. I base this on the famous Schrödinger’s cat experiment, a paradox explained very simplyhere:http://astronimate.com/article/schrodingers-cat-explained/.

5. FriedrichA.vonHayek,“TheUseofKnowledgeinSociety,”TheAmericanEconomicReview35,no.4(September1945):519–30.

6. Ludwig vonMises,Socialism: An Economic and Sociological Analysis (New Haven: YaleUniversityPress,1951).

7. AlfredChandler Jr.,TheVisibleHand:TheManagerialRevolution inAmericanBusiness(1977;repr.,Cambridge:BelknapPressofHarvardUniversityPress,1993).

8. Murray Rothbard, “Man, Economy, and State, with Power and Market,”Mises Institute,2004, https://mises.org/library/man-economy-and-state-power-and-market/html/pp/1038.

9. Isaac Asimov, “The Machine That Won the War,” Scribd.com, last modified 2017,https://www.scribd.com/doc/316453610/The-Machine-That-Won-the-War.

CHAPTER5:DISILLUSION1. “VolkswagenExecutivesDescribeAuthoritarianCultureUnderFormerCEO,”TheGuardian,October 10, 2015, https://www.theguardian.com/business/2015/oct/10/volkswagen-executives-martin-winterkorn-company-culture.

2. Joann Muller, “How Volkswagen Will Rule the World,” Forbes, May 6, 2013,https://www.forbes.com/sites/joannmuller/2013/04/17/volkswagens-mission-to-dominate-global-auto-industry-gets-noticeably-harder/.

3. “VolkswagenExecutivesDescribeAuthoritarianCultureUnderFormerCEO.”

4. “Former VW CEO Quits as Audi Chair as Emission-Scandal Probes Continue,” Reuters,November 12, 2015, http://www.reuters.com/article/us-volkswagen-emissions-audi-idUSKCN0T10MR20151112#uO2kaAmSzGO27E4g.97.

5. MarkThompsonandChrisLiakos,“VolkswagenCEOQuitsover‘GraveCrisis’,”CNNMoney,September 23, 2015, http://money.cnn.com/2015/09/23/news/companies/volkswagen-emissions-crisis/index.html?iid=EL.

6. Paul R. LaMonica, “Volkswagen Has Plunged 50%.Will It Ever Recover?” CNNMoney,September 25, 2015, http://money.cnn.com/2015/09/24/investing/volkswagen-vw-emissions-scandal-stock/.


http://astronimate.com/article/schrodingers-cat-explained/

https://mises.org/library/man-economy-and-state-power-and-market/html/pp/1038

http://Scribd.com

https://www.scribd.com/doc/316453610/The-Machine-That-Won-the-War

https://www.theguardian.com/business/2015/oct/10/volkswagen-executives-martin-winterkorn-company-culture

https://www.forbes.com/sites/joannmuller/2013/04/17/volkswagens-mission-to-dominate-global-auto-industry-gets-noticeably-harder/

http://www.reuters.com/article/us-volkswagen-emissions-audi-idUSKCN0T10MR20151112#uO2kaAmSzGO27E4g.97

http://money.cnn.com/2015/09/23/news/companies/volkswagen-emissions-crisis/index.html?iid=EL

http://money.cnn.com/2015/09/24/investing/volkswagen-vw-emissions-scandal-stock/

7. SarahSjolin,“VolkswagenLoses€14BillioninValueasScandalRelatedtoEmissionsTestsDeepens,” MarketWatch, September 21, 2015, http://www.marketwatch.com/story/volkswagen-loses-14-billion-in-value-as-scandal-related-to-emissions-tests-deepens-2015-09-21.

8. Hiroko Tabuchi, Jack Ewing, and Matt Apuzzo, “6 Volkswagen Executives Charged asCompany Pleads Guilty in Emissions Case,” New York Times, January 11, 2017,https://www.nytimes.com/2017/01/11/business/volkswagen-diesel-vw-settlement-charges-criminal.html?ref=todayspaper&_r=1.

9. PeterCampbell,“Volkswagen’sMarketShareFallsAfterScandal,”FinancialTimes,July15,2016,https://www.ft.com/content/35575f80-4a75-11e6-b387-64ab0a67014c.

10. BenWebster,“VolkswagenEmissionsScam‘MeansEarlyDeathforThousandsinEurope,’ ”TheTimes,March4,2017,http://www.thetimes.co.uk/edition/news/volkswagen-emissions-scam-means-early-death-for-thousands-in-europe-rmhcgsnrx?CMP=TNLEmail_118918_1415750.

11. ThompsonandLiakos,“VolkswagenCEOQuitsover‘GraveCrisis.’ ”

12. Tabuchi,Ewing,andApuzzo,“6VolkswagenExecutivesChargedasCompanyPleadsGuiltyinEmissionsCase.”

13. ElizabethAnderson,“VolkswagenCrisis:HowManyInvestigationsIstheCarmakerFacing?”The Telegraph, September 29, 2015, http://www.telegraph.co.uk/finance/newsbysector/industry/11884872/Volkswagen-crisis-how-many-investigations-is-the-carmaker-facing.html.

14. HarvardprofessorAmyEdmondsonhasdonealotofresearchintopsychologicalsafety.SeeAmy Edmonson, “Managing the Risk of Learning: Psychological Safety in Work Teams,”Harvard Business School, March 15, 2002, http://www.hbs.edu/faculty/Publication%20Files/02-062_0b5726a8-443d-4629-9e75-736679b870fc.pdf; and AmyEdmonson, “Building a Psychologically Safe Workplace,” TEDx Talks, May 4, 2011,https://www.youtube.com/watch?v=LhoLuui9gX8.

15. Behavioral economists have found that just thinking about money can lead to dishonestbehavior.SeeGaryBelsky,“Why(Almost)AllofUsCheatandSteal,”Time,June18,2012,http://business.time.com/2012/06/18/why-almost-all-of-us-cheat-and-steal/. See DanAriely, The (Honest) Truth About Dishonesty: How We Lie to Everyone, IncludingOurselves(NewYork:HarperCollins,2015).

16. EricNewcomer, “InVideo,UberCEOArgueswithDriver overFallingFares,”Bloomberg,February 28, 2017, https://www.bloomberg.com/news/articles/2017-02-28/in-video-uber-ceo-argues-with-driver-over-falling-fares.

17. Mike Isaac, “Uber Flunks the Better Business Bureau Test,”New York Times, October 9,2014, https://bits.blogs.nytimes.com/2014/10/09/uber-flunks-the-better-business-bureau-test/?_r=0.

18. MikeIsaac, “InsideUber’sAggressive,UnrestrainedWorkplaceCulture,”NewYorkTimes,February 22, 2017, https://www.nytimes.com/2017/02/22/technology/uber-workplace-culture.html.

19. Mike Isaac, “UberFounderTravisKalanickResignsasC.E.O.,”NewYorkTimes, June21,2017,https://www.nytimes.com/2017/06/21/technology/uber-ceo-travis-kalanick.html.

20. Pascal-EmmanuelGobry,“HowYouKnowtheCEOIsaGoner,”Bloomberg,June23,2017,


http://www.marketwatch.com/story/volkswagen-loses-14-billion-in-value-as-scandal-related-to-emissions-tests-deepens-2015-09-21

https://www.nytimes.com/2017/01/11/business/volkswagen-diesel-vw-settlement-charges-criminal.html?ref=todayspaper&_r=1

https://www.ft.com/content/35575f80-4a75-11e6-b387-64ab0a67014c

http://www.thetimes.co.uk/edition/news/volkswagen-emissions-scam-means-early-death-for-thousands-in-europe-rmhcgsnrx?CMP=TNLEmail_118918_1415750

http://www.telegraph.co.uk/finance/newsbysector/industry/11884872/Volkswagen-crisis-how-many-investigations-is-the-carmaker-facing.html

http://www.hbs.edu/faculty/Publication%20Files/02-062_0b5726a8-443d-4629-9e75-736679b870fc.pdf

https://www.youtube.com/watch?v=LhoLuui9gX8

http://business.time.com/2012/06/18/why-almost-all-of-us-cheat-and-steal/

https://www.bloomberg.com/news/articles/2017-02-28/in-video-uber-ceo-argues-with-driver-over-falling-fares

https://bits.blogs.nytimes.com/2014/10/09/uber-flunks-the-better-business-bureau-test/?_r=0

https://www.nytimes.com/2017/02/22/technology/uber-workplace-culture.html

https://www.nytimes.com/2017/06/21/technology/uber-ceo-travis-kalanick.html

https://www.bloomberg.com/view/articles/2017-06-23/uber-s-boss-wasn-t-fired-for-bad-behavior.

21. Isaac,“InsideUber’sAggressive,UnrestrainedWorkplaceCulture.”

22. “ ‘SquishlikeGrape’fromKarateKid,”YouTube,May29,2010,https://www.youtube.com/watch?v=Y3lQSxNdr3c.

23. “Marriage and Men’s Health,” Harvard Men’s Health Watch, July 2010,http://www.health.harvard.edu/newsletter_article/marriage-and-mens-health.

24. Here is Professor Chatman’s fuller quote: “Leaders who emphasize values should expectemployees to interpret those values by adding their own layers ofmeaning to them.Overtime, an event inevitably will occur that puts the leader at risk of being viewed as actinginconsistentlywiththeveryvaluesheorshehasespoused.Employeesaredrivenby(…)thehuman tendency to explain one’s own behavior generously (…) and to explain others’behavior unsympathetically (…). When leaders behave in ways that appear to violateespousedorganizational values, employees conclude that the leader ispersonally failing to‘walk the talk.’ In short, organizationmembers perceive hypocrisy and replace their hard-woncommitmentwithperformance-threateningcynicism.Worseyet,becausesuchnegativeinterpersonal judgments are inherently threatening, employees say nothing publicly,precluding a fair test of their conclusions and disabling organizational learning from theevent. The process cycles as subsequent events are taken to confirm hypocrisy, andeventuallyalargenumberofemployeesmaybecomedisillusioned.”SeeJenniferA.Chatmanand Sandra Eunyoung Cha, “Leading by Leveraging Culture,” California ManagementReview45,no.4(2003):20–34,doi:10.2307/41166186.

25. DwightMorrow,U.S.AmbassadortoMexico,1930.

26. VictorHarris andEdward Jones, “TheAttribution of Attitudes,”Journal of ExperimentalSocialPsychology 3, no. 1 (1967): 1–24,doi:10.1016/0022-1031(67)90034-0.Formoreonattributionerror,seehttps://en.wikipedia.org/wiki/Fundamental_attribution_error.

27. http://gandalfquotes.com/dont-tempt-me-frodo/.

28. DacherKeltner,ThePowerParadox:HowWeGainandLoseInfluence(NewYork:PenguinRandomHouse,2016).

29. LisaJ.Cohen,“WhatDoWeKnowAboutPsychopathy?”PsychologyToday,March14,2011,https://www.psychologytoday.com/blog/handy-psychology-answers/201103.

30. David Larcker and Brian Tayan, “We Studied 38 Incidents of CEO Bad Behavior andMeasuredTheirConsequences,”HarvardBusinessReview,June9,2016.

31. There are many citations of this truism. For example, see Victor Lipman, “People LeaveManagers, Not Companies,” Forbes, August 4, 2015, https://www.forbes.com/sites/victorlipman/2015/08/04/people-leave-managers-not-companies/#464f55c347a9; “HowManagers Trump Companies,” Gallup, August 12, 1999, http://www.gallup.com/businessjournal/523/how-managers-trump-companies.aspx; “WhyPeopleLeaveManagers,Not Companies,” Lighthouse, https://getlighthouse.com/blog/people-leave-managers-not-companies/.

32. Isharethisstory,aswellasotherslaterinthetext,withJeff’spermission.

33. “GlassdoorAnnouncesHighestRatedCEOs for2016,Employees’ChoiceAwardWinners,”MarketWatch, June 8, 2016, http://www.marketwatch.com/story/glassdoor-announces-highest-rated-ceos-for-2016-employees-choice-award-winners-2016-06-08-7160029.


https://www.bloomberg.com/view/articles/2017-06-23/uber-s-boss-wasn-t-fired-for-bad-behavior

https://www.youtube.com/watch?v=Y3lQSxNdr3c

http://www.health.harvard.edu/newsletter_article/marriage-and-mens-health

https://en.wikipedia.org/wiki/Fundamental_attribution_error

http://gandalfquotes.com/dont-tempt-me-frodo/

https://www.psychologytoday.com/blog/handy-psychology-answers/201103

https://www.forbes.com/sites/victorlipman/2015/08/04/people-leave-managers-not-companies/#464f55c347a9

http://www.gallup.com/businessjournal/523/how-managers-trump-companies.aspx

https://getlighthouse.com/blog/people-leave-managers-not-companies/

http://www.marketwatch.com/story/glassdoor-announces-highest-rated-ceos-for-2016-employees-choice-award-winners-2016-06-08-7160029

CHAPTER6:MOTIVATION

1. JackZenger,JoeFolkman,andScottEdinger,“HowExtraordinaryLeadersDoubleProfits,”ChiefLearningOfficer(July2009):30–35,56;DanielH.Pink,Drive:TheSurprisingTruthAboutWhatMotivatesUs(NewYork:RiverheadBooks,2009).

2. CitedbyDanielH.Pink,WhatMatters?TenQuestionsThatWillShapeOurFuture,ed.RikKirkland(NewYork:McKinseyandCo.,2009),80.

3. Marcus Buckingham and Curt Coffman, First Break All the Rules (London: Simon &Schuster,2000).

4. Kathy Gurchiek, “Millennial’s Desire to Do Good DefinesWorkplace Culture,” Society forHuman Resource Management, July 7, 2014, https://www.shrm.org/ResourcesAndTools/hr-topics/behavioral-competencies/global-and-cultural-effectiveness/Pages/Millennial-Impact.aspx.

5. WhitneyDaily,“Three-QuartersofMillennialsWouldTakeaPayCuttoWorkforaSociallyResponsible Company, According to the Research from Cone Communications,” ConeCommunications, November 2, 2016, http://www.conecomm.com/news-blog/2016-cone-communications-millennial-employee-engagement-study-press-release.

6. AdamSmith,An Inquiry into theNature and Causes of theWealth of Nations (London:Methuen&Co.,1776),http://www.econlib.org/library/Smith/smWN1.html.

7. FrederickHerzberg,BernardMausner,andBarbaraB.Snyderman,TheMotivationtoWork,2nded.(NewYork:JohnWiley&Sons,1959).

8. DanielH.Pink,Drive:TheSurprisingTruthAboutWhatMotivatesUs,35,Kindleedition.

9. FrankNewport,“InU.S.,MostWouldStillWorkEvenIfTheyWonMillions,”Gallup,August14,2013,http://www.gallup.com/poll/163973/work-even-won-millions.aspx.

10. AlfieKohn,PunishedbyRewards:TheTroublewithGoldStars,IncentivePlans,A’s,Praise,andOtherBribes(NewYork:MarinerBooks,1995).

11. BarrySchwartz,WhyWeWork(London:Simon&Schuster,2015),53.

12. UriGneezyandJohnList,TheWhyAxis:HiddenMotivesandtheUndiscoveredEconomicsof Everyday Life (New York: Public Affairs, 2013), 19–21. See also Uri Gneezy and AldoRustichini,“AFineIsaPrice,”JournalofLegalStudies29,no.1(2000):1–17.

13. “Gresham’s law,”Wikipedia, lastmodifiedAugust27, 2017, https://en.wikipedia.org/wiki/Gresham%27s_law.

14. Fred Kofman, Conscious Business: How to Build Value Through Values (Louisville, CO:SoundsTruePublishing,2013),ch.3,“EssentialIntegrity.”

15. Mistakenlytranslatedas“happiness,”eudaemoniaalsomeans“activitythatproduceshumanpeace of mind and flourishing.” See “Eudaemonism,” Encyclopaedia Britannica,https://www.britannica.com/topic/eudaemonism#ref273308.

16. JoCofino, “PaulPolman: ‘ThePower Is in theHands of theConsumers,’ ”The Guardian,November 21, 2011, http://www.theguardian.com/sustainable-business/unilever-ceo-paul-polman-interview.

17. Ibid.

18. SamHarris,TheMoralLandscape(London:Simon&Schuster,2010),1.


https://www.shrm.org/ResourcesAndTools/hr-topics/behavioral-competencies/global-and-cultural-effectiveness/Pages/Millennial-Impact.aspx

http://www.conecomm.com/news-blog/2016-cone-communications-millennial-employee-engagement-study-press-release

http://www.econlib.org/library/Smith/smWN1.html

http://www.gallup.com/poll/163973/work-even-won-millions.aspx

https://en.wikipedia.org/wiki/Gresham%27s_law

https://www.britannica.com/topic/eudaemonism#ref273308

http://www.theguardian.com/sustainable-business/unilever-ceo-paul-polman-interview

19. Dee Hock, “The Chaordic Organization: Out of Control and into Order,” Ratical,https://www.ratical.org/many_worlds/ChaordicOrg.pdf.

20. BarryBrownstein,TheInner-WorkofLeadership(Thornton,NH:JanePhilipPublications,2010),54,Kindleedition.

21. This strategy has stringent limitations, though, as the natural group with which we canmaintain stable social relationships given our cognitive limits can growup to roughly 150people—thisiscalledtheDunbarnumber.See“Dunbar’snumber,”Wikipedia,lastmodifiedAugust20,2017,https://en.wikipedia.org/wiki/Dunbar%27s_number.

22. Yuval Noah Harari, Sapiens: A Brief History of Humankind (New York: HarperCollins,2015),27.

23. RichardDawkins,TheSelfishGene(Oxford:OxfordUniversityPress,1990).

24. Harari,Sapiens:ABriefHistoryofHumankind,27.

25. BobChapmanandRajSisodia,EverybodyMatters:TheExtraordinaryPowerofCaringforYourPeoplelikeFamily(NewYork:Portfolio/Penguin,2015).

26. Ibid.,54.

27. SimonSinek,Leaders Eat Last:Why Some Teams Pull Together andOthersDon’t (NewYork:Portfolio/Penguin,2017),ch.2.

28. Ibid.

29. Reed Hastings, “Culture,” SlideShare, August 1, 2009, https://www.slideshare.net/reed2001/culture-1798664.

30. BenCasnocha,ReidHoffman, andChris Yeh, “YourCompany IsNot a Family,”HarvardBusiness Review, June 17, 2004, https://hbr.org/2014/06/your-company-is-not-a-family;and ReidHoffman, Ben Casnocha, and Chris Yeh,The Alliance:Managing Talent in theNetworkedAge(Boston:HarvardBusinessReviewPress,2014).

31. AccordingtoC.S.Lewis,agapeisaChristianvirtuetodevelop.C.S.Lewis,TheFourLoves(London:GeoffreyBles,1960).

32. SeeLeeCockerell,CreatingMagic:10CommonSenseLeadershipStrategiesfromaLifeatDisney(NewYork,Doubleday,2008).

33. “OurClientOrganizations,”Gorowe,http://www.gorowe.com/rowe-certified-organizations/[INACTIVE].

34. Authorinterview.

35. EdwardL.Deci andRichardM.Ryan, “FacilitatingOptimalMotivation andPsychologicalWell-Being Across Life’s Domains,”CanadianPsychology 49, no. 1 (February 2008): 14.QuotedinPink,Drive:TheSurprisingTruthAboutWhatMotivatesUs,225.

36. Pink,Drive:TheSurprisingTruthAboutWhatMotivatesUs,91.

37. “RussellL.Ackoff,”Informs,https://www.informs.org/Explore/History-of-O.R.-Excellence/Biographical-Profiles/Ackoff-Russell-L.

CHAPTER7:CULTURE


https://www.ratical.org/many_worlds/ChaordicOrg.pdf

https://en.wikipedia.org/wiki/Dunbar%27s_number

https://www.slideshare.net/reed2001/culture-1798664

https://hbr.org/2014/06/your-company-is-not-a-family

https://www.informs.org/Explore/History-of-O.R.-Excellence/Biographical-Profiles/Ackoff-Russell-L

1. “United Airlines Passenger Forcibly Removed from Overbooked Flight—Video,” TheGuardian, April 11, 2017, https://www.theguardian.com/world/video/2017/apr/11/united-airlines-passenger-forcibly-removed-from-overbooked-flight-video.

2. ThisisnotthefirsttimeUnitedhashadtodealwithembarrassingviralvideos.See“UnitedBreaksGuitars,”YouTube,July6,2009,https://www.youtube.com/watch?v=5YGc4zOqozo.

3. EdMazza,“JimmyKimmelCreatesaBrutallyHonestNewCommercialforUnitedAirlines,”Huffington Post, April 11, 2017, http://www.huffingtonpost.com/entry/jimmy-kimmel-united-commercial_us_58ec7654e4b0df7e2044b81e.

4. As it turned out, the flight was not, in fact, overbooked. See John Bacon and BenMutzabaugh, “United Airlines Says Controversial Flight Was Not Overbooked; CEOApologizes Again,” USA Today, April 12, 2017, https://www.usatoday.com/story/news/nation/2017/04/11/united-ceo-employees-followed-procedures-flier-belligerent/100317166/.

5. Lauren Thomas, “United CEO Said Airline Had to ‘Re-Accommodate’ Passenger and theReactionWasWild,”CNBC,April 11, 2017, http://www.cnbc.com/2017/04/10/united-ceo-says-airline-had-to-re-accommodate-passenger-and-twitter-is-having-a-riot.html.

6. Noonereallyknowstheoriginofthissaying.See“DidPeterDruckerActuallySay ‘CultureEatsStrategyforBreakfast’—andIfSo,Where/When?”Quora,https://www.quora.com/Did-Peter-Drucker-actually-say-culture-eats-strategy-for-breakfast-and-if-so-where-when.

7. RamCharanandGeoffreyColvin,“WhyCEOsFail,”Fortune,June21,1999,68–78.

8. EdgarSchein,OrganizationalCultureandLeadership(SanFrancisco:Jossey-Bass,1996).

9. JeffreyPfeffer,TheHumanEquation:BuildingProfitsbyPuttingPeopleFirst(Cambridge:HarvardUniversityPress,1998).

10. Christopher Elliott, “Southwest Airlines Pilot Holds Plane for Murder Victim’s Family,”Elliott, January 10, 2011, http://elliott.org/blog/southwest-airlines-pilot-holds-plane-for-murder-victims-family/.

11. Elias Parker, “7 Companies with Crushworthy Customer Experience,” ICMI, February 17,2016, http://www.icmi.com/Resources/Customer-Experience/2016/02/7-Companies-with-Crushworthy-Customer-Experience.

12. C. O’Reilly, “Corporations, Culture, and Commitment: Motivation and Social Control inOrganizations,”CaliforniaManagementReview31,no.4(Summer1989):9–25.

13. Ken Makovsky, “Behind the Southwest Airlines Culture,” Forbes, November 21, 2013,https://www.forbes.com/sites/kenmakovsky/2013/11/21/behind-the-southwest-airlines-culture/#4f7273833798.

14. “What Are the Funniest Things Southwest Flight Attendants Have Said,” Quora,https://www.quora.com/What-are-the-funniest-things-Southwest-flight-attendants-have-said.

15. CarmineGallo, “HowSouthwestandVirginAmericaWinbyPuttingPeopleBeforeProfit,”Forbes,September10,2013,https://www.forbes.com/sites/carminegallo/2013/09/10/how-southwest-and-virgin-america-win-by-putting-people-before-profit/#3338b574695a.

16. It’simportanttonoticethataneffectivecultureisfocused.Thatis,althoughitappreciatesallthe factors that contribute to strategic success, it emphasizes themost essential one withdetermination.Ifaleadertriestoestablishaculturewithalltheaboveattributes,itwillend


https://www.theguardian.com/world/video/2017/apr/11/united-airlines-passenger-forcibly-removed-from-overbooked-flight-video

https://www.youtube.com/watch?v=5YGc4zOqozo

http://www.huffingtonpost.com/entry/jimmy-kimmel-united-commercial_us_58ec7654e4b0df7e2044b81e

https://www.usatoday.com/story/news/nation/2017/04/11/united-ceo-employees-followed-procedures-flier-belligerent/100317166/

http://www.cnbc.com/2017/04/10/united-ceo-says-airline-had-to-re-accommodate-passenger-and-twitter-is-having-a-riot.html

https://www.quora.com/Did-Peter-Drucker-actually-say-culture-eats-strategy-for-breakfast-and-if-so-where-when

http://elliott.org/blog/southwest-airlines-pilot-holds-plane-for-murder-victims-family/

http://www.icmi.com/Resources/Customer-Experience/2016/02/7-Companies-with-Crushworthy-Customer-Experience

https://www.forbes.com/sites/kenmakovsky/2013/11/21/behind-the-southwest-airlines-culture/#4f7273833798

https://www.quora.com/What-are-the-funniest-things-Southwest-flight-attendants-have-said

https://www.forbes.com/sites/carminegallo/2013/09/10/how-southwest-and-virgin-america-win-by-putting-people-before-profit/#3338b574695a

updilutingeachoneofthemcreatingahodgepodgethatyieldsonlyaverageperformance.

17. Schein,OrganizationalCultureandLeadership.

18. JohnKotterandJamesHeskett,CorporateCultureandPerformance(NewYork:FreePress,1992).

19. https://www.bizjournals.com/columbus/news/2016/06/01/japans-big-3-automakers-built-more-cars-in-u-s.html.

20. Jennifer Chatham, David Caldwell, Charles O’Reilly, and Bernadette Doerr, “ParsingOrganizationalCulture:HowtheNormforAdaptabilityInfluencestheRelationshipBetweenCulture Consensus and Financial Performance in High-Technology Firms,” Journal ofOrganizationalBehavior35(February12,2014):785–808,doi:10.1002/job.1928.

21. Mike Gamson, “Take Intelligent Risks,” LinkedIn, February 23, 2015,https://www.linkedin.com/pulse/take-intelligent-risks-mike-gamson/.

22. GeorgeParker,“LessonsfromIBM’sNear-ImplosionintheMid-1990s,”Quartz,November9,2012, https://qz.com/26018/it-companies-could-learn-how-ibm-turned-around-in-the-nineties/.

23. Paul Hemp and Thomas Stewart, “Leading Change When Business Is Good,” HarvardBusiness Review, December 2004, https://hbr.org/2004/12/leading-change-when-business-is-good.

24. It seems Palmisano was able to combine material and non-material incentives withoutconflict.

25. Laura Lorenzetti, “Pfizer and IBM Launch Innovative Research Project to TransformParkinson’sDiseaseCare,”Fortune, April 6, 2016, http://fortune.com/2016/04/07/pfizer-ibm-parkinsons/.

26. HempandStewart,“LeadingChangeWhenBusinessIsGood.”

27. Collins,GoodtoGreat.

28. “Zappos.com, No. 86 in 100 Best Companies to Work for 2015,” Fortune,http://fortune.com/best-companies/2015/zappos-com-86/.

29. Keith Tatley, “Zappos—Hiring for Culture and the Bizarre Things TheyDo,” RecruitLoop,July 13, 2015, http://recruitloop.com/blog/zappos-hiring-for-culture-and-the-bizarre-things-they-do/.

30. Ibid.

31. Jennifer Chatman, “Matching People and Organizations: Selection and Socialization inPublicAccountingFirms,”AdministrativeScienceQuarterly36(1991):459–84.

32. JenniferChatmanandSandraEunyoungCha, “LeadingbyLeveragingCulture,”CaliforniaManagementReview45,no.4(Summer2003):5–6.

CHAPTER8:RESPONSE-ABILITY

1. SeeCharlesDuhigg,SmarterFasterBetter:TheTransformativePowerofRealProductivity(New York: Random House, 2016), https://www.amazon.com/Smarter-Faster-Better-Transformative-Productivity-ebook/dp/B00Z3FRYB0; and Charles Duhigg, “The Power of


https://www.bizjournals.com/columbus/news/2016/06/01/japans-big-3-automakers-built-more-cars-in-u-s.html

https://www.linkedin.com/pulse/take-intelligent-risks-mike-gamson/

https://qz.com/26018/it-companies-could-learn-how-ibm-turned-around-in-the-nineties/

https://hbr.org/2004/12/leading-change-when-business-is-good

http://fortune.com/2016/04/07/pfizer-ibm-parkinsons/

http://Zappos.com

http://fortune.com/best-companies/2015/zappos-com-86/

http://recruitloop.com/blog/zappos-hiring-for-culture-and-the-bizarre-things-they-do/

https://www.amazon.com/Smarter-Faster-Better-Transformative-Productivity-ebook/dp/B00Z3FRYB0

Mental Models: How Flight 32 Avoided Disaster,” Lifehacker, March 16, 2016,https://lifehacker.com/the-power-of-mental-models-how-flight-32-avoided-disas-1765022753.

2. ThissectionbuildsonKofman,ConsciousBusiness,ch.2.

3. The psychological term for this impulse is “self-serving bias,” which is the belief thatindividuals tend to ascribe success to their own abilities and efforts, but ascribe failure toexternal factors.SeeW.KeithCampbellandConstantineSedikides, “Self-ThreatMagnifiestheSelf-ServingBias:AMeta-AnalyticIntegration,”ReviewofGeneralPsychology3,no.1(1999):23–43.

4. JockoWillinkandLeifBabin,ExtremeOwnership:HowU.S.NavySEALsLeadandWin(NewYork:St.Martin’sPress,2015),17–18.

5. Ibid.,22.

6. Ibid.,24.

7. Ibid.,25–26.

8. Ibid.,26–27.

9. Ibid.,30.

CHAPTER9:COLLABORATION

1. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2791717/.

2. I’veexplainedthematconscious.linkedin.com.

3. See Kofman, Conscious Business, ch. 5; and conscious.linkedin.com (section oncommunication).

CHAPTER10:INTEGRITY1. https://www.brainyquote.com/authors/mike_tyson.

2. Peanutscancausesevereallergiesinsomepeople.

3. Youcanfindexamplesoftheseroleplaysinmycoachingsessionsatconscious.linkedin.com.For example, Kofman, “How to Establish and Maintain Commitments: A CoachingConversation (8.6),” LinkedIn, October 9, 2015, https://www.linkedin.com/pulse/how-establish-maintain-commitments-coaching-86-fred-kofman.

4. Francis Fukuyama,Trust: The Social Virtues and the Creation of Prosperity (New York:FreePress,1995).

CHAPTER11:GETOVERYOURSELF1. BrandonBlackandShayneHughes,EgoFreeLeadership:EndingtheUnconsciousHabitsThatHijackYourBusiness(Austin,TX:GreenleafBookGroupPress,2017).


https://lifehacker.com/the-power-of-mental-models-how-flight-32-avoided-disas-1765022753

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2791717/



https://www.brainyquote.com/authors/mike_tyson


https://www.linkedin.com/pulse/how-establish-maintain-commitments-coaching-86-fred-kofman

2. GeorgeWald’s letter is cited in JackKornfield,A PathwithHeart: AGuide Through thePerilsandPromisesofSpiritualLife(NewYork:Bantam,1993).

3. BlackandHughes,EgoFreeLeadership.

4. Ibid.

5. Ibid.

6. In Good to Great, Collins found that the keystone of a great organization is “Level 5leadership.” Level 5 leaders are those who are, among other qualities, humble. “Level 5leaderschanneltheiregoneedsawayfromthemselvesandintothelargergoalofbuildingagreat company,” Collins wrote. “It’s not that Level 5 leaders have no ego or self-interest.Indeed, they are incredibly ambitious—but their ambition is first and foremost to theinstitution, not themselves.” The irony is that transcendent leadership is the completeoppositeofwhatmostpeopleassumeitmeanstobealeader.SeealsoJimCollins,“Level5Leadership:TheTriumphofHumilityandFierceResolve,”HarvardBusinessReview,July–August 2005, https://hbr.org/2005/07/level-5-leadership-the-triumph-of-humility-and-fierce-resolve.

7. Mihaly Csikszentmihalyi,Good Business: Leadership, Flow, and theMaking of Meaning(NewYork:PenguinBooks,2003).

8. Onemight call people and institutions that have plenty of soul “magnanimous” (magnus,animus,or“greatsoul”)andthosewithlittleofit“pusillanimous”(pusilus,meaning“petty”).Synonyms for magnanimous include: generous, high-minded, noble, worthy, upright,benevolent, altruistic, considerate, and kindly. Synonyms for pusillanimous include:cowardly,nervous,spineless,faint-hearted,tremulous,spiritless,andmiserly.

9. “First Follower: Leadership Lessons from Dancing Guy,” YouTube, February 11, 2010,https://www.youtube.com/watch?v=fW8amMCVAJQ.



CHAPTER12:DIEBEFOREYOUDIE

1. SteveJobs,“ ‘You’veGottoFindWhatYouLove,’Jobssays,”StanfordNews,June14,2005,http://news.stanford.edu/2005/06/14/jobs-061505/.

2. DelJones,“CEOsShowHowCheatingDeathCanChangeYourLife,”USAToday,March9,2009,http://usatoday30.usatoday.com/money/companies/management/2009-03-09-near-death-executives_n.htm.

3. Rand Leeb-du Toit, “How Dying Redefined My Career,” Thread Publishing,http://threadpublishing.com/stories/how-dying-redefined-my-career/.

4. ErnestBecker,TheDenialofDeath(NewYork:FreePress,1997).

5. For more on the way humans manage the terror of death (also known as “terrormanagement”),seeSheldonSolomon,JeffGreenberg,andTomPysczynski,TheWormattheCore:On theRoleofDeath inLife (NewYork:RandomHouse,2015);andErnestBecker,TheBirthandDeathofMeaning(NewYork:Simon&Schuster,1962).


https://hbr.org/2005/07/level-5-leadership-the-triumph-of-humility-and-fierce-resolve

https://www.youtube.com/watch?v=fW8amMCVAJQ

http://news.stanford.edu/2005/06/14/jobs-061505/

http://usatoday30.usatoday.com/money/companies/management/2009-03-09-near-death-executives_n.htm

http://threadpublishing.com/stories/how-dying-redefined-my-career/

6. https://www.brainyquote.com/quotes/quotes/w/williamjam101063.html.

7. SusanDominus,“IsGivingtheSecrettoGettingAhead?”NewYorkTimes,March27,2013,http://www.nytimes.com/2013/03/31/magazine/is-giving-the-secret-to-getting-ahead.html.InChapter14,“SuperconsciousCapitalism,”Iwillarguethatthefreemarketisagroundinwhichbusinessimmortalityprojects,unlikereligionsandnation-states,canactuallycompeteconstructivelyandpeacefully.Afreemarkettransformsself-interestintoserviceandconflictintocompetition.Thewaytowin is tobethemostefficientproviderofgoodsandservicesthat improve human life. That’s why I claim that business is the best way to bring backmeaningtotheworld.

8. AdamGrantandKimberlyWade-Benzoni,“TheHotandCoolofDeathAwarenessatWork:Mortality Cues, Aging and Self-Protective and Prosocial Motivations,” Academy ofManagementReview34,no.4(2009):600–22.

9. Csikszentmihalyi,GoodBusiness:Leadership,Flow,andtheMakingofMeaning.

10. Michael Pollan, “The Trip Treatment,” The New Yorker, February 9, 2015,http://www.newyorker.com/magazine/2015/02/09/trip-treatment.

11. Ibid.

12. “CarlosCasteneda,”Wikipedia,lastmodifiedSeptember14,2017,https://en.wikipedia.org/wiki/Carlos_Castaneda.

13. Ilaterdiscoveredmuchsaferandequallyeffectivemethodsofaccessingtheseextraordinarystates through meditation and “Holotropic Breathwork,” a technique developed by thepsychiatristStanislavGroff(http://www.stanislavgrof.com/).Meditation,I’drecommendforeverybody; breathwork, I’d be more cautious because it’s psychologically demanding; Iwouldn’trecommendpsychedelicsunlessunderthesupervisionofaspecializedtherapistorteacher.

14. SamHarris,Waking Up: A Guide to SpiritualityWithout Religion (New York: Simon &Schuster,2014),p.4.

15. Pollan,“TheTripTreatment.”

16. Mona Simpson, “A Sister’s Eulogy for Steve Jobs,” New York Times, October 30, 2011,http://www.nytimes.com/2011/10/30/opinion/mona-simpsons-eulogy-for-steve-jobs.html.

CHAPTER13:BEAHERO

1. TheArgentineanNationalist general andpresident JuanDomingoPerón’s friendshipwithMussoliniandHitlerwasnosecret.

2. For background on Argentina’s Dirty War, see “Dirty War,” Wikipedia, last modifiedSeptember11,2017,https://en.wikipedia.org/wiki/Dirty_War#Casualty_estimates.

3. VladimirHernandez, “Painful Search for Argentina’sDisappeared,” BBCNews,March 24,2013, http://www.bbc.com/news/world-latin-america-21884147. Many books and movieshavebeenmadethatdescribethehorrorsoftheDirtyWar,amongthemTheOfficialStory,which won the 1982 Oscar for best foreign film, and Kiss of the Spider Woman. BooksincludeGuerillasandGenerals by Paul Lewis;The Little School: Tales of DisappearanceandSurvivalbyAliciaPartnoy;RevolutionizingMotherhood:TheMothersof thePlazadeMayobyMargueriteGuzmanBouvard;NuncaMas/NeverAgain:AReportbyArgentina’s


https://www.brainyquote.com/quotes/quotes/w/williamjam101063.html

http://www.nytimes.com/2013/03/31/magazine/is-giving-the-secret-to-getting-ahead.html

http://www.newyorker.com/magazine/2015/02/09/trip-treatment

https://en.wikipedia.org/wiki/Carlos_Castaneda

http://www.stanislavgrof.com/

http://www.nytimes.com/2011/10/30/opinion/mona-simpsons-eulogy-for-steve-jobs.html

https://en.wikipedia.org/wiki/Dirty_War#Casualty_estimates

http://www.bbc.com/news/world-latin-america-21884147

National Commission on Disappeared People by Argentina Comision Nacional sobre laDesapariciondepersonas;ALexiconofTerror:ArgentinaandtheLegaciesofTorture byMarguerite Feitlowitz; God’s Assassins: State Terrorism in Argentina in the 1970s byPatriciaMarchak.

4. Ka-Tzetnik,Shivitti:AVision(NewYork:HarperandRow,1989).

5. “Psychedelic therapy,” Wikipedia, last modified September 14, 2017,https://en.wikipedia.org/wiki/Psychedelic_therapy.

6. YiddishiscloselyrelatedtoGerman;it’sfairlyeasyforGermanspeakerstounderstand.

7. BeforehebecameCEOofCampbellSoupCompany,DougConantfacedsuchasituationatRJRNabiscoduringabiddingwar for thecompany (a situationmade famous in thebookandthemoviecalledBarbariansattheGate:TheFallofRJRNabisco).

8. IsharethiswithJeff’spermission.

9. WarrenBennisandRobertJ.Thomas,“CruciblesofLeadership,”HarvardBusinessReview,September2002,https://hbr.org/2002/09/crucibles-of-leadership.

10. “Sheryl Sandberg,”Wikipedia, lastmodifiedSeptember 17, 2017, https://en.wikipedia.org/wiki/Sheryl_Sandberg.

11. “SherylSandbergposts,”Facebook,June3,2015,https://www.facebook.com/sheryl/posts/10155617891025177:0.


13. “How Sheryl Sandberg’s Sharing Manifesto Drives Facebook,” Bloomberg Businessweek,April 27, 2017, https://www.bloomberg.com/news/features/2017-04-27/how-sheryl-sandberg-s-sharing-manifesto-drives-facebook.

14. SeeKofman,ConsciousBusiness,ch9.

15. “What Is Servant Leadership,” Greenleaf Center for Servant Leadership,https://www.greenleaf.org/what-is-servant-leadership/.

16. SeeAct4, scene3. “TheLifeofKingHenry theFifth,Scene III,TheEnglishCamp,”MIT,http://shakespeare.mit.edu/henryv/henryv.4.3.html.

CHAPTER14:SUPERCONSCIOUSCAPITALISM1. Youcan find the images inKakuanShien, “TheTenOxherdingPictureswithCommentaryand Verses,” Es (abs.), Nicht, https://sites.google.com/site/esabsnichtenglisch/kakuan-shien-the-ten-oxherding-pictures-with-commentary-and-verses.

2. JohnKoller,AsianPhilosophies (UpperSaddleRiver,NJ:PrenticeHall, 2001), 253. JohnKoller, “Ox-Herding:StagesofZenPractice,”DepartmentofCognitiveScience,RensselaerPolytechnicInstitute,http:www.columbia.edu/cu/weai/exeas/resources/oxherding.html.

3. Max Ehrenfreund, “A Majority of Millennials Now Reject Capitalism, Poll Shows,”WashingtonPost,April26,2016,https://www.washingtonpost.com/news/wonk/wp/2016/04/26/a-majority-of-millennials-now-reject-capitalism-poll-shows/?utm_term=.526aa75dfde7.

4. FrederickBastiatpennedasatirical“petitionofthecandlemakers”totheFrenchparliament


https://en.wikipedia.org/wiki/Psychedelic_therapy

https://hbr.org/2002/09/crucibles-of-leadership

https://en.wikipedia.org/wiki/Sheryl_Sandberg

https://www.facebook.com/sheryl/posts/10155617891025177:0

https://www.bloomberg.com/news/features/2017-04-27/how-sheryl-sandberg-s-sharing-manifesto-drives-facebook

https://www.greenleaf.org/what-is-servant-leadership/

http://shakespeare.mit.edu/henryv/henryv.4.3.html

https://sites.google.com/site/esabsnichtenglisch/kakuan-shien-the-ten-oxherding-pictures-with-commentary-and-verses

http://www.columbia.edu/cu/weai/exeas/resources/oxherding.html

https://www.washingtonpost.com/news/wonk/wp/2016/04/26/a-majority-of-millennials-now-reject-capitalism-poll-shows/?utm_term=.526aa75dfde7

to stop the “ruinous competition” of the sun. It can be found at http://bastiat.org/en/petition.html.

5. Peter Drucker, Management: Tasks, Responsibilities, Practices (William HeinemannLimited,London,1973),ix.

6. Iwasdivingwithoutanybreathingapparatus,thatis,holdingmybreath.

7. Full disclosure: LinkedIn, the company I work for, is now a wholly owned subsidiary ofMicrosoft.

8. This is not wise, but it is understandable if one believes that intentions translate intoconsequences.Thisisnotthecaseingeneral(theroadtohellispavedwithgoodintentions),andespeciallyincapitalism.“ThomasHobbesQuotesfromLeviathan1651,”RichardGeib’spersonalwebsite,http://www.rjgeib.com/thoughts/nature/hobbes-quotes.html.

9. Foranappealing(anddangerouslywrong)Marxistperspectiveofexploitation,seeRichardWolff,“Marx’sLabourExploitationTheory(inUnderFourMinutes),”YouTube,March27,2016,https://www.youtube.com/watch?v=-XED2nmCFNk.

10. As stated byMises, “Competitors aim at excellence and preeminence in accomplishmentswithin a system ofmutual cooperation. The function of competition is to assign to everymemberofthesocialsystemthatpositioninwhichhecanbestservethewholeofsocietyandall its members” (Ludwig vonMises,Human Action [New Haven: Yale University Press,1949],117).“Itismerelyametaphortocallcompetitioncompetitivewar,orsimply,war.Thefunctionofbattleisdestruction;ofcompetition,construction”(LudwigvonMises,Socialism:AnEconomicandSociologicalAnalysis[NewHaven:YaleUniversityPress,1951],285).

11. John Mackey and Raj Sisodia, Conscious Capitalism (Boston: Harvard Business ReviewPress,2013),13.

12. Ibid.

13. https://www.brainyquote.com/quotes/quotes/m/miltonfrie412622.html.

14. JohnR.Wilmoth,“IncreaseofHumanLongevity:Past,PresentandFuture,”DepartmentofDemography, UC Berkeley, 2009, http://www.ipss.go.jp/seminar/j/seminar14/program/john.pdf;“Listofcountriesbylifeexpectancy,”Wikipedia,lastmodifiedSeptember15,2017,https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy.

15. MarianTupy,“FortheFirstTimeinHistory,LessThan10%ofHumanityLivesinExtremePoverty,” Postlight Mercury, October 6, 2015, https://mercury.postlight.com/amp?url=https://fee.org/articles/the-end-of-extreme-poverty-and-the-great-fact/.

16. “Last 2,000 Years of Growth in World Income and Population (REVISED),” VisualizingEconomics, November 21, 2007, http://visualizingeconomics.com/blog/2007/11/21/last-2000-of-growth-in-world-income-and-population-revised.

17. StevenPinker,“NowfortheGoodNews:ThingsReallyAreGettingBetter,”TheGuardian,September 11, 2015, http://www.theguardian.com/commentisfree/2015/sep/11/news-isis-syria-headlines-violence-steven-pinker.

18. Chapter1ofMackeyandSisodia,ConsciousCapitalism,hasmuchtosayaboutthis,asdoesJohnMackeyandMichaelStrong,BetheSolution(Hoboken:JohnWiley&Sons,2009).

19. Today, 99 percent of Americans officially designated as “poor” have electricity, runningwater,flushtoilets,andarefrigerator;95percenthaveatelevision,88percentatelephone,71 percent a car, and 70 percent air-conditioning. Cornelius Vanderbilt, as author Matt


http://bastiat.org/en/petition.html

http://www.rjgeib.com/thoughts/nature/hobbes-quotes.html

https://www.youtube.com/watch?v=-XED2nmCFNk

https://www.brainyquote.com/quotes/quotes/m/miltonfrie412622.html

http://www.ipss.go.jp/seminar/j/seminar14/program/john.pdf

https://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy

https://mercury.postlight.com/amp?url=https://fee.org/articles/the-end-of-extreme-poverty-and-the-great-fact/

http://visualizingeconomics.com/blog/2007/11/21/last-2000-of-growth-in-world-income-and-population-revised

http://www.theguardian.com/commentisfree/2015/sep/11/news-isis-syria-headlines-violence-steven-pinker

Ridleypointsout,hadnoneofthese.MattRidley,TheRationalOptimist(NewYork:Harper,2010).

20. https://justsomeideascom.files.wordpress.com/2016/05/worldgdppercapita500bc.jpg?w=656, sourced from J. Bradford De Long, “Estimates ofWorld GDP, OneMillion B.C.–Present,”DepartmentofEconomics,UCBerkeley, 1998,http://delong.typepad.com/print/20061012_LRWGDP.pdf.

21. GregoryClark,AFarewelltoAlms(Princeton:PrincetonUniversityPress,2007).

22. Thepremiseabout theexploitationofworkersby capitalistshasbeenentrenchedby “fakehistorians.” Take, for example, the case of the IndustrialRevolution, falsely chronicled byanticapitalists such as Thomas Carlyle and Frederick Engels. These political ideologuesspread the now dominant myth that capitalism was a curse to the working poor, that itimprisoned them into “dark satanicmills” for the benefit of equally satanic industrialists.That was not the case, asMises argued passionately: “Of course, from our viewpoint, theworkers’ standard of living was extremely low; conditions under early capitalism wereabsolutelyshocking,butnotbecausethenewlydevelopedcapitalisticindustrieshadharmedtheworkers.Thepeoplehired towork in factorieshadalreadybeen existing at a virtuallysubhuman level. The famous old story, repeated hundreds of times, that the factoriesemployedwomenandchildrenandthatthesewomenandchildren,beforetheywereworkingin factories, had lived under satisfactory conditions, is one of the greatest falsehoods ofhistory. Themotherswhoworked in the factories had nothing to cookwith; they did notleavetheirhomesandtheirkitchenstogointothefactories,theywentintofactoriesbecausetheyhadnokitchens,andiftheyhadakitchentheyhadnofoodtocookinthosekitchens.And the childrendidnot come fromcomfortablenurseries.Theywere starvinganddying.Andallthetalkabouttheso-calledunspeakablehorrorofearlycapitalismcanberefutedbyasinglestatistic:preciselyintheseyearsinwhichBritishcapitalismdeveloped,preciselyintheagecalledtheIndustrialRevolutioninEngland,intheyearsfrom1760to1830,preciselyinthoseyearsthepopulationofEnglanddoubled,whichmeansthathundredsorthousandsofchildren—whowouldhavediedinprecedingtimes—survivedandgrewtobecomemenandwomen.”

23. Thecorrelationbetweencapitalismandprosperityisnotonlyobviousovertime,itisequallyclearincross-sectionstudies,whereeconomicfreedomisveryhighlycorrelatedwithwealthand economic development. But perhaps the most dramatic evidence of the boon ofcapitalism comes from two “controlled experiments” in political economy: Korea andGermany. At some point in their histories, these two countries split up into a morecapitalisticpartandamoresocialisticpart.Oneofthem,Germany,reintegratedin1989.Thedata is incontrovertible.Thesocialistportionsof thesecountriessuffered terriblesetbacks,whilethecapitalistportionsthrivedtobecomesomeofthemostpowerfuleconomiesoftheworld. (See“Southv.NorthKorea:HowDotheTwoCountriesCompare?Visualised,”TheGuardian, April 8, 2013, https://www.theguardian.com/world/datablog/2013/apr/08/south-korea-v-north-korea-compared; and “Germany’s Reunification 25 Years On,” TheEconomist, October 2, 2015, https://www.economist.com/blogs/graphicdetail/2015/10/daily-chart-comparing-eastern-and-western-germany.)

24. Dan Sanchez, “Mises in Four Easy Pieces,” Mises Institute, January 22, 2016,https://mises.org/library/mises-four-easy-pieces;RobertMurphy’sThePoliticallyIncorrectGuide to Capitalism (Washington, DC: Regnery, 2007); and Matt Ridley’s The RationalOptimistareexcellentintroductions.

25. “Everyindividual…neitherintendstopromotethepublicinterest,norknowshowmuchheis


https://justsomeideascom.files.wordpress.com/2016/05/worldgdppercapita500bc.jpg?w=656

http://delong.typepad.com/print/20061012_LRWGDP.pdf

https://www.theguardian.com/world/datablog/2013/apr/08/south-korea-v-north-korea-compared

https://www.economist.com/blogs/graphicdetail/2015/10/daily-chart-comparing-eastern-and-western-germany

https://mises.org/library/mises-four-easy-pieces

promoting it…he intends only his own security; and by directing that industry in such amannerasitsproducemaybeofthegreatestvalue,heintendsonlyhisowngain,andheisinthis,asinmanyothercases,ledbyaninvisiblehandtopromoteanendwhichwasnopartofhis intention.” Adam Smith, TheWealth of Nations (London: W. Strahan and T. Cadell,1776),bookIV,chapterII,456.

26. AsAdamSmithsaid,“Themostlikelytoprevail[inthemarketplace]arethosewhocandrawothers’self-loveintheirfavor.(…)‘GivemewhatIwant,andyouwillhavewhatyouwant,’isthemeaningofeveryoffer.”“Everyactofcommerceisanactofmutualservice.Regardlessofthe level of consciousness of business organization, the market system will direct self-centered energy towards helping others.” “Adam Smith—Quotes,” Goodreads,https://www.goodreads.com/author/quotes/14424.Adam_Smith.

27. LudwigvonMises,Bureaucracy(1944;repr.,Indianapolis:LibertyFund,2007).

28. KahlilGibran,TheProphet(NewYork:AlfredA.Knopf,1923).

29. ThephrasecomesfromaJapanesefairytale,“TheStoryoftheOldManWhoMadeWitheredTrees to Flower” by Yei Theodora Ozaki. See http://etc.usf.edu/lit2go/72/japanese-fairy-tales/4879/the-story-of-the-old-man-who-made-withered-trees-to-flower/.

30. Admittedly, egodesires are infinite.They can’tbe satisfiedbyanyamountof success.Theegocentricpersonsimplykeepscomparinghim-orherselfwithricher,moresuccessful,morefamous,morepowerful,ormoreattractivepeersagainstwhomheorsheisalwaysatriskofnotbeingthebest.Thecompetitiveanxietytoproveone’sself-worth isnotsomethingthatcanberelaxedthroughachievements.

31. AbrahamH.Maslow,TheMaslowBusinessReader, ed.Deborah C. Stephens (NewYork:JohnWiley&Sons,2000),p.13.

32. “Bottom of the pyramid,” Wikipedia, last modified August 24, 2017,https://en.wikipedia.org/wiki/Bottom_of_the_pyramid.

33. AsMichaelSpence,NobellaureateineconomicsandchairoftheUNCommissionforGrowthand Development, declared: “We focus on (economic) growth because it is a necessarycondition for theachievementofawiderangeofobjectives thatpeoplecareabout.Oneofthemispovertyreduction,butthereareevendeeperones.Health,productiveemployment,theopportunitytobecreative,allkindsofthingsthatreallymattertopeopledependheavilyon the availability of resources and income, so that they don’t spend most of their timedesperatelytryingtokeeptheirfamiliesalive.”UnitedNationsCommissiononGrowthandDevelopment, The Growth Report: Strategies for Sustained Growth and InclusiveDevelopment,2008.

34. MihalyCsikszentmihalyi,GoodBusiness:Leadership,Flow,andtheMakingofMeaning.

EPILOGUE1. “CurrentandPreviousGallupGreatWorkplaceAwardWinners,”Gallup,lastmodified2017,http://www.gallup.com/events/178865/gallup-great-workplace-award-current-previous-winners.aspx.

2. “ABC Supply Co. Inc. Becomes 10-Time Recipient of Prestigious Gallup GreatWorkplaceAward,”ABCSupplyCo.Inc.,May16,2016,https://www.abcsupply.com/news/abc-supply-


https://www.goodreads.com/author/quotes/14424.Adam_Smith

http://etc.usf.edu/lit2go/72/japanese-fairy-tales/4879/the-story-of-the-old-man-who-made-withered-trees-to-flower/

https://en.wikipedia.org/wiki/Bottom_of_the_pyramid

http://www.gallup.com/events/178865/gallup-great-workplace-award-current-previous-winners.aspx

https://www.abcsupply.com/news/abc-supply-co.-inc.-becomes-10-time-recipient-of-prestigious-gallup-great-workplace-award

co.-inc.-becomes-10-time-recipient-of-prestigious-gallup-great-workplace-award.

3. “Heraclitus—Quotes,” Goodreads, https://www.goodreads.com/author/quotes/77989.Heraclitus.

4. “Viktor E. Frankl—Quotes,” Goodreads, https://www.goodreads.com/quotes/34673-don-t-aim-at-success-the-more-you-aim-at-it.


https://www.goodreads.com/author/quotes/77989.Heraclitus

https://www.goodreads.com/quotes/34673-don-t-aim-at-success-the-more-you-aim-at-it

ABOUTTHEAUTHOR

FREDKOFMAN is the vice president of executive development and leadership philosopher atLinkedIn.Asanexecutivecoach,heworkswithCEOsandexecutivesinSiliconValleyandaroundtheworld.BorninArgentina,KofmancametotheUnitedStatesasagraduatestudent,whereheearnedhisPhDinadvancedeconomictheoryatUCBerkeley.HetaughtmanagementaccountingandfinanceatMITforsixyearsbeforeforminghisownconsultingcompany,Axialent,fromwhichhedesigned and taught leadershipworkshops tomore than fifteen thousand executives. SherylSandbergwritesabouthiminherbookLeanIn,claimingKofman“willtransformthewayyouliveandwork.”


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Documents

The Meaning Revolutionirpublicpolicy.ir/wp-content/uploads/2018/06/Fred... · Fred has accomplished a great feat. He has integrated rationality and spirituality to show how transcendent