In this episode of KYN, we capture a dialogue between leading management thinker Simon Sinek and Arne Gast, McKinsey senior partner and cofounder of Aberkyn. They jointly hosted a keynote session at the Global Peter Drucker Forum 2020 on the topic of “The Crisis of Leadership.” Their dialogue was also stimulated by questions that listeners asked in the chat. Together they tried to explore an idea: What happened to all the great leaders? Some believe that for the past 30 to 40 years, we’ve been trending away from good leadership, which has affected our businesses, economies, and politics. How did we get here, and what can we do about it?
Simon, when you thought about the core question we will explore today, “What happened to our great leaders?,” what was on your mind? What triggered the question?
We used to have these larger-than-life leaders, in politics and in business. You had the Ronald Reagans, the Margaret Thatchers, and the Lee Iacoccas, these larger-than-life people who commanded inspirational followings. Where are these larger-than-life leaders who brought about remarkable change and inspired hundreds of thousands, if not millions, of people? I think we can trace it back. In the mid- to late 1970s, Dr. Milton Friedman theorized that the responsibility of business was very one-dimensional, which is to maximize profit. That was it. Forget ethics. We started to see new philosophies of leadership in business arise from that proposition. Shareholder supremacy, for example, came to bear in the ’80s and ’90s. The use of mass layoffs to balance the books and remain profitable and faithful to an arbitrary profits projection.
Were there societal changes, too?
Yes. We have also seen the breakdown of reforms that were designed to help protect economies. From the Great Depression to the dismantling of the Glass-Steagall Act, the total number of stock-market crashes that we had was zero. And then, since the dismantling of these controls, we’ve had three significant stock-market crashes. And I think in the West, we over indexed on this idea of rugged individualism. Unfortunately, the style of leadership goes in and out of fashion. And those people running businesses were of the same mentality we saw enter politics and government, so we saw a dramatic increase in short-termism, selfishness, seeing the world in binary ways. We’ve had this steady drumbeat away from good leadership, away from selfless leadership, favoring selfish leadership.
And what is the moment you realized this, Simon? What was the trigger for you thinking we are on the wrong path?
The statistics are alarming. Over 80 percent of people don’t feel passionate about their work. They, in fact, don’t love their work. They’ve grown up incredibly cynical of the corporation. And I don’t blame them. We see discretionary effort and engagement inside companies at all-time lows. We see companies complaining that young generations aren’t loyal—they’re quitting or leaving. Now that’s not a fixed state. We have an opportunity to make changes and make repairs, and those repairs simply come with good leadership.
Let’s go there a little bit, okay? So you say generations grew up cynical. They see their parents losing their jobs, and they lose faith in corporations. Are there any other root causes? Is it about the business-school curriculum? Or the media? One of my most through-provoking professors was Deirdre McCloskey, author of “The Bourgeois Era” trilogy. She argues that we don’t celebrate business leaders enough. Given the often enormous positive impact of business, we should have a more positive narrative. What is at the lack of leadership supply?
There’s no single underlying cause, but many things have contributed to it. [Take business schools.] If you ask them how they develop their curriculum, it’s based on what the market demands. There’s very little leadership training in a B-school today. We teach management. We teach [students] to view people as a line item, as a number on an expense. And we don’t teach leadership. We’re not teaching skills of listening, empathy. We’re not teaching how to have an effective confrontation. We’re not teaching people how to give and receive feedback. We’re not teaching how to have difficult conversations.
Can I also push back a little bit? You said you’re an optimist, maybe an optimist that just worries a lot, like Madeleine Albright said. Maybe you’re a little bit biased about your lack of leaders.
Yes, of course they exist. A number of companies have great leaders. I write about them. But we need them at scale.
What then are the barriers to change?
My thinking on this was influenced by the theologian and philosopher, James Carse. In the mid-1980s, he articulated two types of games: finite games and infinite games. A finite game he defined as known players, fixed rules, and an agreed-upon objective; for instance, football: there’s always a beginning, middle, and an end. And if there’s a winner, there has to be a loser. Then you have infinite games. Infinite games are defined as known and unknown players, which means new players can join at any time. The rules are changeable; you can play however you want. The objective is to perpetuate the game, to stay in the game as long as possible. And this is a problem, because when we play with a finite mindset in an infinite game, when we play to win in a game that has no end, there are consistent and predictable outcomes. The big ones include the decline of trust, the decline of cooperation, and the decline of innovation.
Thank you for sharing your ideas on the infinite game. Let’s also reflect on our own game, your game and my game. Like the great Warren Bennis, who talked about leadership, wrote about leadership, and once said, “Boy, I talk a lot”—he become provost of a university to “do leadership,” not just talk about it. You and I talk a lot about leadership too. What are you personally doing?
I’m publishing books and giving talks, trying to offer ideas, with theories on how we can change the way we lead. All of my work is optimistic, and it’s about a bold future. I am optimistic, and I am bullish. But I think what’s very important is we cannot be against something. I want to be for something.
What are you “for”? What is the new definition of the responsibility of business?
I believe that the responsibility of business exists on three levels. Businesses need to exist to advance a cause, protect people, and maximize profit. In that order, which is how they have to offer value to the world. You have to make our lives and our world a little bit better.
And how do you think of value here?
Value is how I define it and how the consumer defines it. And if I think it’s valuable to my life, I’ll spend money on it. So you have to advance something. You have to make the world a better place, or my life better. You have to protect those who work for you, those who consume your product, and the communities in which your factories exist. And you have to make money, because if you don’t have fuel for the vehicle, the vehicle doesn’t go anywhere. So I think we need a more dynamic definition of the responsibility of business that fits the dynamism of business. Business is not one-dimensional.
Within this new world of business, is the idea of the individual leader not fading out? Shouldn’t we think more about the power of teams? Leadership is now becoming more of a collective. What is your experience?
Leadership is not about the individual or the team. It’s not either-or. There’s a paradox to being human. Every moment we are both individuals and members of groups. And we’re confronted with big and small decisions. Do I put myself first at the sacrifice of the group, or do I sacrifice myself for the good of the group? And the answer is you’re both right and wrong. It’s both. That’s why it’s a paradox.
And this is what Maslow got wrong. In his hierarchy of needs, he put number one as food and shelter and number three was personal relationships. I’ve never heard of anyone committing suicide because they were hungry. We commit suicide because we’re lonely, right? Maslow only considered us as individuals. He failed to consider us as members of groups.
And the same goes for leadership. No leader can lead by themselves, of course. But at the same time, a collective can’t lead. We are a hierarchical species whether we like to admit it or not. You take any group of people. We’re going to sift ourselves out. There’s going to be someone who’s going to take charge, and there are others who are going to defer, right?
And as we can’t put an idea on the cover of a magazine; we put a person on the cover of a magazine, and they embody the belief. When Martin Luther King Jr. was assassinated, the cause did not die with him. The cause went on beyond him because he embodied the cause: we say, “I follow Dr. King,” but we really mean, “I follow the cause.”
Maybe the new heroes are the social influencers, advocating causes in a new technologically driven way? In the COVID-19 crisis, I see some European governments trying to use influencers with millions of followers to influence people to wear masks or to stay at home [during a lockdown]. What do you think about social-media influencers, are they leaders?
Well, I think an influencer is not a leader. And so, no, those people are not our leaders. And I think the fact that we keep trying to get them to lead misses the point.
I think we have to grow a new generation of leaders, which means teaching the skills and mindsets of leadership, and having a million followers is not a skill of leadership.
So then, let’s go there, teaching leadership. Do we do it on the screen? Is it 50 Zoom sessions? Is it two days, 20 people sitting in a circle in a hotel with a flip chart? How do we teach, inject, create a culture of the leadership needed? What’s the recipe, according to you?
We don’t [actively] teach it in our high schools. We don’t teach it in our universities. I think we need to start teaching it in our business schools. Businesses [too] need to start teaching these skills—listening, how to have difficult conversations, how to give and receive feedback.
And talking of feedback, I’m watching some of these questions. Did Greta Thunberg get taught leadership? Well, no, but yes, she did. She learned it from her parents. She wasn’t born that way. Of course, she learned it from somewhere. She had ideas, and her parents encouraged her, and her parents guided her.
What I’m saying is that we can build our own leaders. We can create a generation that is better equipped to lead.
The question now is, what is the world we want to create, where do we want leaders to lead us? Imagine you had a magic wand—Simon Sinek the optimist—how would you accelerate the change we need?
One of the great things is the people who are doing a good job, they have systems and processes that are shareable. So I’ll give you a perfect example. When I first met the company Barry-Wehmiller, and I wrote about them extensively in my book, Leaders Eat Last [Portfolio, January 2014], I was introduced to this company, and to the CEO, Bob Chapman, and I visited all its factories. And I was astonished at how much he was doing right. He thought that I would just fall in love with his company. And after traveling around the country, we went back to his corporate headquarters. He said, “So, what do you think?” And I sat there, and I said, “I think you might be one of the most selfish companies I’ve ever met in my life.” He was shocked. I said, “What you have created is absolutely incredible. You literally are doing everything that I write about … but you’re only giving it to 6,000 people. What about the millions of people who have to suffer at work every day? You figured out something amazing. How dare you not share it with the rest of us.”
So you think great companies should be helping other companies to be great so that we can perpetuate the goodness of business?
Yes, and the question is where are we going, not what’s holding us back. The question is what can we build, not what do we reject.
I really like your notion of optimism—we are riding a positive wave, and we can improve, and we’re going to build something even better. I think it was William Faulkner who said, “Man will not merely endure, he will prevail,” because there’s passion and empathy.
Right. That’s why I offered the definition “advance a cause, protect people, and maximize profit”—it’s all three. Those three things shouldn’t be different. Those should be all in one person, or all in one organization; if you look, in great organizations that have good leadership, they tend to operate like great entrepreneurs, socially responsible and philanthropic in how they conduct themselves.
Thank you Simon for this dialogue. Let’s close with a thought of the late and great Peter Drucker, in whose honor we have this 12th Global Forum. When he was at a late age, leaders would come to his place, and he would say: “It is going to be an interesting weekend, but please don’t thank me after that, just send me an email on Monday saying what you already did.” So we need to move to action. You and I are both optimists, and this is our time. This is our time. Let’s look forward. What are we learning here today together? And what are we going to do on Monday?
If we’d had this conversation in the ’90s, we’d be laughed out of the room. Now it’s almost required that a company has a statement of purpose on their website whether they believe it or not.
And I think what we can do on Monday goes directly to one of the questions you asked here. First of all, things are changing. It took us 40 years to get to where we are right now. It’s going to take us 20 years to get away from it. So the point is that the momentum is going in our direction. I think what we need to do is invite people to join us. We need to preach a positive vision of the world and start by talking about where we’re going rather than criticizing where we’re coming from. I’m very optimistic about the path that we’re on.