The Corner Office

To Jeanetta, Anna, and Sophia

LIST OF INTERVIEWS

Daniel P. Amos, CEO, Aflac

Richard Anderson, CEO, Delta Air Lines

Steven A. Ballmer, CEO, Microsoft

George S. Barrett, CEO, Cardinal Health

Carol Bartz, CEO, Yahoo

Gordon M. Bethune, former CEO, Continental Airlines

Greg Brenneman, chairman, CCMP Capital

Bobbi Brown, founder, Bobbi Brown Cosmetics

Tim Brown, CEO, IDEO

Ursula M. Burns, CEO, Xerox

Bill Carter, partner and co-founder, Fuse

Eduardo Castro-Wright, vice chairman, Wal-Mart Stores

John T. Chambers, CEO, Cisco Systems

Cristóbal Conde, CEO, SunGard

Andrew Cosslett, CEO, InterContinental Hotels Group

Susan Docherty, vice president, General Motors

John Donahoe, CEO, eBay

Brian Dunn, CEO, Best Buy

Deborah Dunsire, CEO, Millennium

Jana Eggers, CEO, Spreadshirt

Drew Gilpin Faust, president, Harvard University

William D. Green, CEO, Accenture

Mindy Grossman, CEO, HSN

Omar Hamoui, founder and CEO, AdMob

Steve Hannah, CEO, The Onion

Linda Heasley, CEO, The Limited

Tony Hsieh, CEO, Zappos

Jen-Hsun Huang, CEO, Nvidia

Linda Hudson, CEO, BAE Systems

Robert Iger, CEO, Disney

Judith Jamison, artistic director, Alvin Ailey American Dance Theater

Jeffrey Katzenberg, CEO, DreamWorks Animation

Guy Kawasaki, co-founder, Alltop, and managing director, Garage Technology Ventures

Lawrence W. Kellner, CEO, Continental Airlines

Wendy Kopp, founder and CEO, Teach for America

Jacqueline Kosecoff, CEO, Prescription Solutions

Barbara J. Krumsiek, CEO, Calvert Group

Debra L. Lee, CEO, BET Networks

Niki Leondakis, chief operating officer, Kimpton Hotels and Restaurants

Dawn Lepore, CEO, Drugstore.com

Dany Levy, founder, DailyCandy.com

Terry J. Lundgren, CEO, Macy’s

Susan Lyne, CEO, Gilt Groupe

Sheila Lirio Marcelo, CEO, Care.com

Michael Mathieu, CEO, YuMe

Gary E. McCullough, CEO, Career Education Corporation

Nancy McKinstry, CEO, Walters Kluwer

Nell Minow, co-founder, The Corporate Library

Meridee A. Moore, founder, Watershed Asset Management

Alan R. Mulally, CEO, Ford Motor Company

Anne Mulcahy, former CEO, Xerox

Sharon Napier, CEO, Partners + Napier

Shantanu Narayen, CEO, Adobe Systems

Vineet Nayar, CEO, HCL Technologies

David C. Novak, CEO, Yum Brands

Clarence Otis Jr., CEO, Darden Restaurants

Mark Pincus, CEO, Zynga

Joseph J. Plumeri, CEO, Willis Group Holdings

Lisa Price, founder, Carol’s Daughter

Quintin E. Primo III, co-founder and CEO, Capri Capital Partners

James E. Rogers, CEO, Duke Energy

Kasper Rorsted, CEO, Henkel

Dan Rosensweig, CEO, Chegg

Stephen I. Sadove, CEO, Saks

James J. Schiro, CEO, Zurich Financial Services

Robert W. Selander, CEO, MasterCard

Kevin Sharer, CEO, Amgen

Carol Smith, senior vice president and chief brand officer, Elle Group

Jilly Stephens, executive director, City Harvest

Jeffrey Swartz, CEO, Timberland

Teresa A. Taylor, chief operating officer, Qwest Communications

Kip Tindell, CEO, The Container Store

Will Wright, videogame developer

Tachi Yamada, president, Global Health Program, Bill and Melinda Gates Foundation

INTRODUCTION

For investors and business journalists, stock-price fluctuations and quarterly results offer a steady stream of report cards for evaluating a CEO’s work. And then, every spring, when proxy season rolls around and companies disclose the compensation packages for top executives, another round of report cards begins. This transparency keeps people honest and creates a relatively level playing field (except, of course, when the numbers lie). From these data, a story line emerges around the CEOs as strategists, and we focus on their successes, their failures, their challenges. Have they sized up the industry landscape correctly and developed a plan to beat their competitors? Are they executing this plan in a disciplined fashion?

For this book, I was interested in pursuing a different story line about CEOs – their own personal stories, free of numbers, theories, jargon, charts, and with minimal discussions of their companies or industries. I wanted to hear what they had learned from their ups and downs, their stories about how they learned to lead, the mistakes they made along the way, how they fostered supportive corporate cultures, and how they do the same things that every other manager does – interview job candidates, run meetings, promote teamwork, manage their time, and give and get feedback.

While setting overall business strategy is certainly an important part of a CEO’s job, leadership shapes every part of their day. Once they have a plan, the challenge becomes making sure they have the right people on the team, and getting the most out of them and the broader organization. CEOs may not study leadership in books or develop new silver-bullet theories, but they are experts in leadership because they practice it daily. And many of them have spent the better part of a decade or more honing their leadership styles, through trial and error, studying what works and what doesn’t, and then mentoring others.

CEOs have learned firsthand what it takes to succeed and rise to the top of an organization. From the corner office, they can watch others attempt a similar climb, and notice the qualities that set people apart. As they evaluate talent, they learn to divine why one person is more likely to succeed than another. When they bring in talent from the outside, they watch as some new hires blend in better than others. Who succeeds? Who fails? Why? It’s a feedback loop that expands with every additional person they manage, creating a kind of laboratory for studying the qualities that enable people to succeed. CEOs study team dynamics, too. If one division or group consistently outperforms another, why is that? What leadership skills does that division or group leader possess? Finally, there is feedback from the marketplace. In business, there are constant judgments and scores. From quarter to quarter, CEOs can determine whether their strategies and leadership styles are working, and whether they need to be adjusted.

CEOs face criticism from many corners, and it is often deserved. But there is no arguing that they have achieved a great deal, through a combination of smarts, hard work, attitude, and commitment. They have much to offer beyond a return on a shareholder’s investment.

I have spent much of my two decades in business journalism interviewing CEOs and asking variations of the question “What’s the strategy for your company?” But I found myself growing more interested in asking them questions like “How do you do what you do?” “How did you learn to do what you do?” and “What lessons have you learned that you can share with others?”

I developed an appreciation for what effective leadership can mean for a company – and the skills a CEO brings to the table – when I covered the airline industry in the mid-1990s as a reporter for the New York Times. It was a particularly turbulent time in the business, and some of the executives running the carriers were larger-than-life characters. The airline industry, I realized, was like the National Football League. There are team colors and logos – and people have strong passions about which teams they love and hate. Each team has roughly the same equipment, and, as in football, the playing field is reasonably level. One airline can instantly copy an effective strategy from a competitor, whether it’s a fare sale or a new twist to the frequent-flyer program. Like defensive and offensive players in football, the employees of each airline are organized into their own specialized units – pilots, flight attendants, mechanics, baggage handlers, gate agents, white-collar workers. I found that what really made the difference from one airline to another was leadership. The culture and tone started at the top, and each company reflected the personalities of its CEO, whether it was Robert L. Crandall at American, Herb Kelleher at Southwest, Stephen M. Wolf at United, or Gordon M. Bethune at Continental. The leader who understood how to get his employees to work together as a team had an advantage.

Gordon Bethune in particular faced a difficult challenge in 1994 when he took over Continental, which had made trips through bankruptcy court and had become a punch line for airline jokes on late-night television.

He figured out a simple plan about what mattered to customers, and promised to share rewards with the entire workforce if they hit certain performance measures better than their competitors. He believed that the additional revenue from pulling away premium customers from Continental’s competitors and the reduced costs from a better on-time record would more than justify the cost of paying out some of the benefits to workers.

“What you measure is what gets accomplished,” Bethune told me during one of several conversations we had in the mid-1990s. “Most businesses fail because they want the right things but measure the wrong things, and they get the wrong results.”

Bethune was fast on his feet with expressions that crystallized a problem or question. He didn’t apologize, for example, for bringing in high-priced talent from the outside to join his management team. “Now you can hire a brain surgeon, or you can hire a proctologist at half-price who wants to learn,” he said. He invested in better ser vice and employee morale instead of single-mindedly cutting costs. “You can make a pizza so cheap, nobody will buy it,” he was fond of saying.

He understood that basic ideas were reliable tools, and his turnaround success at Continental brought credibility to his keep-it-simple approach. No jargon, no theories. Just memorable insights and stories from a CEO that had the ring of truth.

“If you say three things in a row that make sense, people will vote for you,” he said.

And one good story about leadership and management from an executive who has worked hard to learn it is equal to ten theories about what should be or could be done in a certain situation.

I discovered over the course of in-depth interviews with more than seventy CEOs and other high-ranking executives that they all have remarkable stories to tell, filled with insights and lessons for others. I’ve studied the transcripts for patterns and connections, and organized them into the chapters that make up the three parts of this book: “Succeeding,” “Managing,” and “Leading.”

My goal is not only to offer a new story line about CEOs as managers but also to provide some back-to-basics help for managers at all levels of business, particularly since so many of the grand notions about transformative business practices have failed to live up to their billing amid the rubble of the busted economy. Employees have higher expectations of their employers now, too, and the companies that can engage them deeply will win the battle for talent.

To be sure, not all CEOs are successes, and a falling stock price can be a sign of an executive out of his depth rather than a lesson in adversity that will make the CEO, and his company, stronger in the long run.

But after interviewing dozens of executives, I was reminded of the first line of Leo Tolstoy’s Anna Karenina: “All happy families are alike; each unhappy family is unhappy in its own way.” Many of the CEOs I interviewed resembled one another in their approach. They listen, learn, assess what’s working, what’s not and why, and then make adjustments. They are quick studies, and they also tend to be good teachers, because they understand the pro cess of learning and can explain what they’ve learned to others. They seem eager to discuss their hard-earned insights rather than hold on to them as if they were proprietary software.

They shared many of the same notions about leadership and management. They put a premium on direct and frank communication, and flattening the organization. They try to use questions more than statements, so that their employees take ownership of their roles rather than simply take orders from the CEO. They provide a sharp contrast to command-and-control leadership styles of the past, when CEOs isolated themselves from employees – literally, in some cases, with a private elevator down to a reserved parking space, and in more subtle ways. Now they want to mix it up. “I love that people push back on me, and it gets to better ideas,” said Sheila Lirio Marcelo, CEO of Care.com. “I’m really focused on pushing people to gain the confidence to logically debate with a CEO.”

Many successful CEOs reward honesty and input, and show their interest in learning what others think, by holding town-hall meetings, seeking the advice of people at all levels of the company, and asking employees what they would do if they were in charge. “The best ideas or important ideas or new ideas can come from anywhere in an organization,” said Tim Brown, the CEO of the design consulting firm IDEO, recalling how a boss valued his opinions when Brown was in his early twenties. “So you’d better do a good job of spotting and promoting them when they come, and not let people’s positions dictate how influential their ideas are.”

These CEOs also try to create a culture of learning in their organizations, so that, collectively, employees can adjust to the constant changes and challenges of business. The global business environment requires collaborative learning. No single person has the answer anymore, and smart companies try to harness the multiplier effect of bringing people together to share their unique experiences and perspectives on a problem.

“I like building teams with people who come from very different backgrounds and have very different experiences,” said Susan Docherty, a vice president of General Motors. “I don’t just mean diverse teams, in terms of men and women or people of different color or origin. I like people who have worked in different places in the world than I have, because they bring a lot more context to the discussion. That’s something that I value a tremendous amount. I make sure that when I’m looking at people for my team, it’s not just what’s on their résumé—their strengths or weaknesses or what they’ve accomplished – but it’s the way they think. I can learn twice as much, twice as quickly, if I’ve got people who think differently than I do around the table.”

This book is meant to be that meta phorical table, at which dozens of CEOs, from vastly different backgrounds, countries, and industries, share their insights on how they lead and manage and the best lessons they’ve learned. These executives don’t live up to their own ideals every day – nobody does – and at times some of them have fallen well short. But that doesn’t diminish the value of their specific insights or the benefits from hearing them discuss their goals for their companies, and for themselves as leaders. The conversations that inform this book are a kind of time-out from the weekly churn of business – earnings, strategy statements, PowerPoint presentations, SEC filings – and are designed instead to reveal more about CEOs as people, not just as the faces of their companies.

In the chapters that follow, I have tried to play the role of dinner-party host, encouraging lively discussion and pointing out connections among the people gathered. My goal is to frame the conversations but not to dominate them, and to let the people around the table share their stories in their own voices. It’s not just what they say that’s important – how they say it is revealing, too.

Everybody will read this book differently. Some passages will resonate more than others, and some readers will connect more closely with the experiences and insights of certain executives. That’s the nature of collaborative learning. There is no single way to lead or to manage. We all have to figure out what makes sense on our own, and develop our own story lines as leaders. The insights offered by the CEOs in these pages can help speed the learning pro cess for those coming after them and offer fresh approaches to peers looking for new ideas. It doesn’t have to be so lonely at the top, or during the climb along the way.

PART ONE
SUCCEEDING

Chapter 1
PASSIONATE CURIOSITY

Imagine one hundred people working in a large company. They’re roughly the same age, around thirty-five. They’re all vice presidents and share many of the same qualities that got them where they are. They’re smart, collegial, and hardworking. They consider themselves team players. They have positive attitudes and they’re good communicators. They’re conscientious about their jobs. They have integrity.

If everyone shares these qualities, what is going to determine who gets the next promotion? Who is going to move up not just one level, but the one after that, and the one after that? As they move up near the peak of their companies and the ranks thin out, the competition for the top spots is even tougher. Who will land the jobs that report directly to the CEO? What will set them apart from the crowd? When it’s time for the CEO to move on, who will get the nod from the board to move into the corner office?

In other words, what does it take to lead an organization – whether it’s an athletic team, a nonprofit, a start-up, or a multinational corporation? What, at the end of the day, are the keys, the x-factors, to achieving the highest levels of success?

Interviews with CEOs and other leading executives point to five essentials for success – qualities that most of the CEOs share, and which they look for in others when they hire.

The good news: these keys to success are not genetic. It’s not as if you have to be tall or left-handed. You don’t have to be born into the kind of family that has you swinging a golf club or playing chess not long after you’re out of diapers. These qualities are developed through attitude, habit, and discipline – factors that are within everyone’s control. They will make you stand out in any setting or organization. They will make you a better employee, manager, and leader. They will lift the trajectory of your career and speed your progress along it.

The qualities these executives share: Passionate curiosity. Battle-hardened confidence. Team smarts. A simple mindset. Fearlessness.

These aren’t theories. They come from decades of collective experience of top executives who have shared their perspectives and stories about their own rise through the ranks, and why they promote some executives over others in their organizations. Each of these qualities is important and multifaceted enough to have a chapter of its own, starting with passionate curiosity.

Many successful CEOs are passionately curious people.

It is a side of them rarely seen in the media and in investor meetings, and there is a reason for that. In business, CEOs are supposed to project calm confidence and breezy authority as they take an audience through presentations filled with charts predicting steady gains in revenue and profit. Certainty is the game face they wear. They are paid to have answers, to see around corners, and to have a firm grasp of the competitive landscape. When they are right, their pictures appear on the covers of glossy business magazines. The message is, they’ve got it figured out. They’ve cracked the code.

But get them away from these familiar scripts and settings and ask them instead about important lessons they’ve learned over the course of their lives, how they lead and manage day-to-day, and a different side emerges. They wrestle with tough issues. They share stories about failures and doubts and mistakes. They ask big-picture questions. They seem like eager students who devour insights and lessons, and are genuinely, enthusiastically interested in everything going on around them. Take them away from balance sheets and strategy and they seem more like natural teachers with agile minds. They wonder why things work the way they do and whether those things can be improved upon. They want to know people’s stories, and what they do.

It’s this relentless questioning that leads entrepreneurs to spot new opportunities and helps managers understand the people who work for them, and how to get them to work together effectively. It is no coincidence that more than one executive uttered the same phrase when describing what, ultimately, is the CEO’s job: “I am a student of human nature.”

The same mental agility enables a CEO to engage with every one of his or her direct reports – in marketing, finance, operations, R&D – and be able to grasp the key issues, without the specialized experience of each of their subordinates. The CEOs are not necessarily the smartest people in the room, but they are the best students – the letters could just as easily stand for Chief Education Officer. They learn, they teach, and they understand people and the business world, and then bring all that knowledge together to drive their organizations forward.

“You learn from everybody,” said Alan R. Mulally, the CEO of the Ford Motor Company. “I’ve always just wanted to learn everything, to understand anybody that I was around – why they thought what they did, why they did what they did, what worked for them, what didn’t work.”

Dawn Lepore, the CEO of Drugstore.com, took advantage of her role as the chief technology officer at Schwab to learn from other CEOs about leadership.

“I had the benefit of being able to interact with a lot of technology CEOs, because they would come to sell to me,” Lepore said. “So I got to meet with Scott McNealy, Bill Gates, Steve Ballmer, John Chambers, and others. And I would always say to them, ‘Let’s talk about your product, but I’d really love to hear more about your company, your culture, your leadership.’ So I really picked their brains. I learned something from every single one of them. And I’ve served on a bunch of different boards, and I’ve had an opportunity to just learn from the CEO of the company as well as all the other board members.”

Some people consider themselves more left-brained, analytical thinkers, while others see themselves as more creative, right-brained types. But not these executives. Nothing is ruled out. Everything can be important and interesting, a new area to be studied and grasped.

“I’m not a high numbers person and I’m not a high emotional person,” said Carol Smith, senior vice president and chief brand officer for the Elle Group, which publishes Elle magazine. “I’m a total combination of the two. I definitely have a middle brain, which I think might be a very nice brain to have in this position. I think it’s served me well.”

David C. Novak, the CEO of Yum Brands, which operates fast-food chains like Pizza Hut, Taco Bell, and KFC, likes to hire people who have this balance.

“In the best of all worlds,” Novak said, “you want someone who’s whole-brained – someone who is analytical and can also be creative enough to come up with the ideas and galvanize the organization around a direction that’s going to take us to someplace that we might not have known we could go to. I think it’s easier to find left-brained people than it is to find truly creative people. I think what we need in our leaders, the people who ultimately run our companies and run our functions, is whole-brained people – people who can be analytical but also have that creativity, the right-brain side of the equation. There’s more and more of a premium on that today than ever before.”

Jen-Hsun Huang, the CEO of Nvidia, the computer graphics company, said both sides of his brain play important roles in finding new opportunities.

“I don’t like making decisions with analytics,” he said. “I actually like making decisions with intuition. I like to validate the decision with analytics. I don’t believe you can analyze your way into success. I think it’s too complicated. You have to use intuition, which is everything – your artistic sensibility, your intellectual sensibility, experience. Now once you pick a direction, you want to try to validate it as often as you can. I think successful people have wonderful capabilities with both.”

Why “passionate curiosity”? The phrase is more than the sum of its parts. Many CEOs will cite passion or curiosity as an important trait in the people they look to hire.

They make persuasive cases for why each is important.

“What I really want to know is what kind of person I’m dealing with,” said Joseph J. Plumeri, the CEO of Willis Group Holdings, an insurance broker. “So I only ask one question. I say, ‘Tell me what you’re passionate about.’ That’s it. What ever you want to talk about. Tell me what you’re passionate about. Digging holes. Riding bikes. I’m looking to see if they’ve got a passion. I’m looking to see if there’s anything inside, other than what they do. And how passionate could they be, therefore, about being here? And how excited and involved could they be? I’m not looking for a mirror image of me. I’m just looking for somebody who gets turned on about something. If you find that kind of person, then these are the people you want to climb hills with and climb mountains with.”

Robert Iger, the CEO of Disney, said curiosity was a key quality he looked for in job candidates.

“I love curiosity, particularly in our business – being curious about the world, but also being curious about your business, new business models, new technology,” he said. “If you’re not curious about technology and its potential impact on your life, then you’ll have no clue what its impact might be on someone else’s life.”

Passion. Curiosity. Both are important. But those words, separately, fall short of capturing the quality that sets these CEOs apart. There are plenty of people who are passionate, but many of their passions are focused on just one area. There are a lot of curious people in the world, but they can also be wallflowers.

But “passionate curiosity”—a phrase used by Nell Minow, the co-founder of The Corporate Library – is a better description of the quality that helps set CEOs apart: an infectious sense of fascination with everything around them.

Passionate curiosity, Minow said, “is indispensable, no matter what the job is. You want somebody who is just alert and very awake and engaged with the world and wanting to know more.”

People with this quality are sponges for information, for insights, wherever they are, what ever they’re doing.

“I think that the best leaders are really pattern thinkers,” said David Novak of Yum Brands. “They want to get better. Are they continually trying to better themselves? Are they looking outside for ideas that will help them grow the business? I look at it in the context of their own personal development. They’re constantly trying to learn how they can become better leaders and they’re constantly trying to learn how they can build a better business. They soak up everything they can possibly soak up so that they can become the best possible leaders they can be. And then they share that with others.”

Though CEOs are paid to have answers, their greatest contribution to their organizations may be asking the right questions – a skill that starts with passionate curiosity.

They recognize that they can’t have the answer to everything – that’s why they hire specialists to handle different parts of their organization – but they can push their company in the right direction and marshal the collective energy of their employees by asking the right questions. That, after all, is where the new opportunities are.

“In business, the big prizes are found when you can ask a question that challenges the corporate orthodoxy that exists in every business,” said Andrew Cosslett, the CEO of InterContinental Hotels Group. “In every business I’ve worked in, there’s been a lot of cost and value locked up in things that are deemed to be ‘the way we do things around here,’ or they’re deemed to be critical to – in the hotel world – a guest experience. So you have to talk to people and ask questions. I just keep asking people, ‘Why do you do that?’ ”

It’s an important lesson. For all the furrowed-brow seriousness and certainty that you often encounter in the business world, some of the most important advances come from asking, much like a per sis tent five-year-old, the simplest questions. Why do you do that? How come it’s done this way? Is there a better way?

“I do think that’s something we forget,” said Tim Brown, the CEO of IDEO, the design consulting firm. “As leaders, probably the most important role we can play is asking the right questions. But the bit we forget is that it is, in itself, a creative pro cess. Those right questions aren’t just kind of lying around on the ground to be picked up and asked. When I go back and look at the great leaders – Roosevelt, Churchill – one of the things that occur to me is they somehow had the ability to frame the question in a way that nobody else would have thought about. In design, that’s everything, right? If you don’t ask the right questions, then you’re never going to get the right solution. I spent too much of my career feeling like I’d done a really good job answering the wrong question. And that was because I was letting other people give me the question. One of the things that I’ve tried to do more and more – and I obviously have the opportunity to do as a leader – is to take ownership of the question. And so I’m much more interested these days in having debates about what the questions should be than I necessarily am about the solutions.”

Jen-Hsun Huang of Nvidia said that his leadership style today is defined by questions rather than answers.

“It’s not possible for the CEO to know everything, but it is possible for us to add value to literally everything,” Huang said. “And the reason for that is, if you’re the CEO, you’re probably better at looking around corners than most. You probably have better intuition than most. You’re probably able to see the forest better than most. You’re probably able to deal with complexity better than most. And so you bring a perspective that is unique. By asking the right questions, you can get to the heart of the issue right away. It’s almost possible now for me to go through a day and do nothing but ask questions and have my sensibility, my perspective and what’s important to me be perfectly clear to everybody without making a statement at all.”