You have spent three-plus decades on Wall Street. Describe how leadership has changed in that timeframe.
As an investment banker, I’ve had a front-row seat to observe the changes. I’ve executed hundreds of deals and had the opportunity to work closely with countless CEOs from a wide range of industries. During the 1980s and 90s — and frankly, for the 30 years before that — it was an organization’s leaders who defined its agenda. They called the shots and decided what needed to happen and when. For a long time, this ‘my way or the highway’ leadership mindset was considered effective. There was no war for talent in this period, and production and volume were valued over innovation and convenience.
Today’s environment is very different. Innovation has become the dominant competitive parameter and speed to market and the ability to directly engage consumers follow closely behind. These are the table stakes for competing and surviving in today’s marketplace.
You have noted that workers’ needs and motivations have also changed. How so?
The pandemic has given workers everywhere time to reflect on their lives and consider their career choices. They’ve been asking themselves questions such as, Am I pursuing a career that makes me happy? Does my boss treat me well? At a minimum, many are considering why they are with a certain employer, and many others are contemplating leaving their jobs. I believe the consequence of all of this will be a great shift of employees from one employer to another, or from corporate or philanthropic work to entrepreneurship.
As a result, employers are being forced to re-evaluate their value proposition for workers and will have to market that proposition in a way that will help them retain their best people and attract new talent.
You believe companies also need to rethink how they reward their leaders. How so?
In most industries, especially financial services, if you are a great producer, generating millions of dollars, you are paid very highly, while people who are heralded as great managers — whose teams love them and who tend to be great developers of talent — are not valued or rewarded in the same way. In today’s environment, organizations must show that they value people who can attract, develop and retain great talent as much as they value those who generate lots of revenue.
Today, when the boss says, ‘Jump’,
Millennials ask, ‘Why?’
What is one of the most common mistakes you see leaders make?
On many occasions I’ve seen people in senior positions make decisions that don’t go as expected and immediately blame others for the poor outcome. They have faulted the vice president for not checking the associate’s work, or the analyst for not verifying the model. They look to blame anyone but themselves, accepting no responsibility for the failure. This is not an example of poor leadership; it is an example of no leadership. Great leaders own the outcome, whatever it is, even if the information they received led to a poor decision. A good leader’s stance is always “It happened on my watch. I am ultimately responsible.”
How has social media impacted all of this?
Past leaders — corporate leaders in particular — had three constituents to worry about: shareholders, customers and employees. Now a fourth constituent has emerged and is a major focus: the community. Emboldened by social media, the community can use these powerful tools to, in minutes, take down a brand that took decades to build.
Digital communication has made it so easy to share information that people with bad reputations are exposed much faster. If a leader is difficult to work with, it takes only one junior worker to send a note to his or her community of colleagues. Then everyone knows to avoid that person. Twenty years ago, four or five people would have the unfortunate experience of working with a difficult manager before they became known as someone to avoid. In some cases, because Boomers and Gen Xers didn’t share information in the same way Millennials and Gen Zers do, that reputation might never have been solidified, and the difficult individual had the opportunity to destroy a lot of great talent.
Millennials and Gen Zers are entering the workforce in droves. What else do leaders need to know about them?
I like to joke that, in decades when Boomers were still the dominant population in the workforce, if the boss said, ‘Jump’, Boomers asked, ‘How high?’ Today, when the boss says, ‘Jump’, Millennials ask, ‘Why?’ Millennials and Gen Zers highly value transparency. The more transparent you can be about the organization’s intentions for their career and the direction they might take, the more likely they will stay.
Young workers also care deeply about working for managers who take the time to invest in them. I would argue that they value personal development much more than Boomers and Gen Xers. This is not surprising. Young professionals have access to so many vehicles where they can learn on their own — such as Google, YouTube, or LinkedIn Learning — that they really value people who take the time to teach them things that only experience can teach.
For leaders accepting a new role, what are some of the key things to do right away?
As you begin a new role as head of a team, it is important to quickly establish yourself as a collaborative leader. One of the first steps is to go on a ‘listening tour’. This will help you understand what is on people’s minds, how they feel about the way things have been going, what could be done better, and what is working just fine. In your first few interactions with your new team, be inclusive and collaborative, intentionally soliciting everyone’s voice and opinion on matters big and small.
After you have had a chance to have several meetings and understand the most urgent issues the organization is facing, then you must quickly establish priorities and your expectations of each member of your team. Immediately working to empower your team very early in your tenure will serve you well as you move swiftly to establish and execute the company’s future goals.
It is also important to get the organization to understand that focusing on diversity, equity and inclusion (DEI) is not a zero-sum game where someone must lose in order for someone else to win. As a leader, you must educate others, especially your leaders, about the strategic benefits of making DEI your culture’s default instead of an ‘add- on.’ If you are successful, everyone stands to gain.
Talk a bit about how leaders evolve from oversight to insight.
As a leader focused on oversight, your role is simply to make sure that people are doing what is expected of them. As you progress to becoming an insightful leader, you continue to provide guidance and direction, but you are also evaluating whether people are focusing on the right issues, problem-solving in a creative way, and anticipating the next course of action. At this stage your job is to get people to think ahead and get comfortable taking risks.
You noted earlier that innovation is now the most important competitive differentiator. What are the implications for leaders?
Great leaders are always questioning the status quo and asking, What can we do differently? What can we do better? For the last few years, I’ve been challenging leaders to approach each day with a ‘blank sheet of paper’ mentality, which means, If I were starting this business today, what would I do differently, knowing what I know now about the business, changing demographics, and the role of technology in our industry? What partnerships would I foster? How would I collaborate with competitors? With emerging companies? How could I make this a more attractive environment to work in? If you can’t come up with something that needs to be changed or improved, you very likely have some blind spots. My advice: Identify them before someone else does.
Why is it important for leaders to take steps to influence what people think about them?
It’s important to execute behaviour that is consistent with the adjectives you want people to use to describe you when you are not in the room. As a leader, at a minimum you want the board to say that you are thoughtful, strategic, a great executor and a great relationship builder, which means that everything you do should in some way demonstrate these attributes. When you are speaking to members of the board, be mindful to also use these words when you are describing yourself as they get to know you.
I like to say that those under your leadership experience you. They walk away from interacting with you with a feeling about you and about themselves, and you have the power to influence that feeling. Do you want them to walk away feeling inspired, encouraged and happy to be working with you? Or discouraged, demotivated and wishing they worked for somebody else? It’s your decision. Always keep in mind: How someone feels about you as a leader will impact how they perform and what they deliver.
Carla Harris is a Senior Client Advisor at Morgan Stanley and author of Lead to Win: How to be a Powerful, Impactful, Influential Leader in Any Environment (Avery, 2022). She was Vice Chairman of Wealth Management at Morgan Stanley from 2013 through 2021 and Chair of the Morgan Stanley Foundation from 2005 to 2014. In August 2013, she was appointed by President Barack Obama to chair the National Women’s Business Council.
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