Better Under Pressure

Justin Menkes: I was doing a succession, I do succession work where a company is trying to choose who their next CEO is going to be and it can be very interesting because I'm working with chief executives who are nearing the end of their term and their sensitivities to it because they're sort of planning for their own corporate death so to speak, they're retiring. So we list the challenges that the next CEO will have, so that we can identify who would be most appropriate to lead in that, and I was working in this situation, it was about five years ago, and it was with an energy company, and we had listed the challenges on the whiteboard that they would have to confront. And this energy company was enjoying and was widely publicized as having the most profitable year in the history of private enterprise, they had made more money than any company had ever made, and yet each one of the challenges on the whiteboard would devastate the company and they weren't challenges that you get at two in the morning when you're lying in bed, these were like completely plausible, like 70 percent of our product supply lines are being threatened to be annexed by the countries in which they exist, massive new taxes are being proposed in 40 percent of our markets, massive, so that that meant that the profitability and even viability of the product was being threatened. And then environmentalists were calling for the product to be replaced entirely, so like they needed to be ceased to be used within the next ten years. So pressure, even in the most profitable companies, and now I see it everywhere, even in office products companies which are the most old school stable non-changing, so it was no longer just tech companies that were under pressure, that with a global competition, global variables affecting your business, the complexity of the world is only going up, so pressure is the new way of life. But how to thrive in that because there are actually individuals who have discovered how to actually use it to thrive in it, in leadership positions, in senior level positions. So I wanted to understand that and explain that, how they do it.

Rachel Salaman: So what research went into this book?

Justin Menkes: My work gives me a unique opportunity to look in depth at a fairly large sample of individuals that are interested in becoming chief executives, so they are being seriously considered to become chief exec, and so I had a database of a large sample and I took about 240, it was actually 242 of these candidates that were being considered for ascension into the CEO role that had been in companies that had gone through massive change, massive disruption, and I had lots of data on these individuals, again because of the work I do, I get to collect things like cognitive ability tests, personality tests, in depth past behavioral interviews, co-worker ratings, and then performance ratings, so I was able to divide these 242 people into quartiles, top performers versus bottom performers, and the top performers I looked at why were they so applauded, what was in the bottom performers, why were they so criticized, like being called incompetent. And it was so consistent what the top ones did that were applauded for that the bottom ones were so criticized for, and it was these three attributes that I talked about, and it really was about their ability to not only drive themselves, thrive themselves in an ever changing environment, but more importantly, much more importantly, as you move up in management ranks to bring out the best in others, to teach others how they can survive and thrive in an environment of pressure. So that was the research.

Rachel Salaman: You mentioned the three attributes that you talk about in the book and those are realistic optimism, subservience to purpose and finding order in chaos, and that these three things stood out as being shared among the top performers, how surprised were you that it was that consistent?

Justin Menkes: I was a little surprised because what I did when I took that data, which has a sort of scientific rigor about it that would appeal to a publisher like Harvard, but for practitioners in the field, people who actually do this, it's a little clinical, so I spent about four years talking to 63 chief executives who had been chief executive for an average of a little over nine years and people who had dominated their industry, about these three attributes, because I wanted to understand what they looked like in real life and do they make sense to them, and then how individually did they make a workforce thrive in a 21st century environment. And I saw how these three things actually came to life, I didn't say tell me about realistic optimism or subservience to purpose or finding order in chaos, I didn't ask that, I just asked them how they helped manage through the various crises that they had, which they had on a recurring basis, no longer from the beginning of my work where it was a turnaround situation that someone had to do a crisis. Now in the last three years it's ongoing, so how do they handle it, and then you could see those attribute emerge on their own, but it brought it to life in a way that I could talk about it and then talk about actual practices that would be useful.

Rachel Salaman: Well let's talk now about the first one, realistic optimism, what does that look like in practice?

Justin Menkes: You would think that in a world of ongoing pressure and competition that is coming from markets, particularly emerging markets, that are so threatening to established markets where they actually may lose their businesses entirely and they're having to shift what they're selling and what they're doing in a continuous way. You would think that optimism is good because optimism helps you get through challenges, but it turns out that optimism is actually very destructive. The bottom quartile was very criticized for having what we would call blind optimism, just thinking everything would be fine; they actually were terrible, incompetent, but the top quartile had a particular kind of optimism, they were still optimistic but it was realistic optimism which meant that they were very explicit with their workforces about the challenges and risks that they had to face and they remained confident that together we will get there, that these are real, that this is what we face, these are our plans to face them and they will change as we learn and stumble, but we will get there. And so it was a particular kind of optimism that struck me.

Rachel Salaman: You used this phrase in the book, an awareness of actual circumstances, that's what you're talking about here?

Justin Menkes: Yes, so much so, what happens with human beings who are not prepared for pressure, the whole book, this whole theme and the world that we're actually coming into, we can judge it, we can complain about it, we can do any sorts of things but the world is indifferent to that, I mean it is happening, so we just need to learn how to take advantage of it and thrive in it. And the realism, being aware of actual circumstances is tied into facing what things are as they really occur because in a sophisticated workforce, they know, our people are more sophisticated, this workforce is more sophisticated than any that have ever existed and they have access to more information than anyone ever had, so they know what is happening and what is threatening our business. So being in touch with what's really happening, but then actually using that information and bringing it together in a way that you say, okay we are going to solve this, any big problem can be solved, we've seen it but we have to face what those realities are first and then address them.

Rachel Salaman: And interestingly you discuss the importance of humility as part of this attribute, can you explain a bit about that?

Justin Menkes: Yes, one of the things that we see so much is that people remove themselves, anxiety about uncertainty can cause people so many reactions because human beings don't like that, so we've developed all sorts of mechanisms. I'm a psychologist so what I have to do is try and help people move from what's hurting them to get where they want to go, and often it's these mental habits that we as human beings, for good reason have developed, that remove us from threats. But what this awareness of actual circumstances and staying in touch with that, it's more about addressing these things we do that blind us to what's actually happening and help us say okay, I can handle this uncertainty.

Rachel Salaman: How can someone actually face something that their instinct tells them to run away from or to block out?

Justin Menkes: It's initially self-esteem, real confidence is developed by actually tolerating threat, tolerating thoughts that I might not be able to do this, the things that float in. Those thoughts only emerge around circumstances that matter, so if it doesn't matter, you won't have those thoughts, so confronting anything meaningful will have those thoughts, so we need to learn how to see those thoughts for what they are, oh this is fear, and then actually find our way through because along with it is challenge and enthusiasm. With the thoughts of fear is well maybe I can do it, and then we need people around us that help create a context of success, we can't do it alone, so we need leaders, that's what we're trying to help here, is have people learn how to help their teams set up a context for success so that those voices in someone's head, we are a committee of voices, each one of us, one saying oh god I'm scared of this and the other saying maybe I can do it if you have a team around you saying of course you can, yes you can.

Rachel Salaman: And does link into what you call a sense of agency in this part of the book?

Justin Menkes: Yes, so when we talk about mental blocks that can prevent people from getting where they want to go, where in the short term they blind themselves, but in the long term because they've blinded themselves to a real problem it hurts their self-esteem because they don't actually get anywhere. So we're trying to help them see their way through that and a sense of agency is critical because human beings actually range very widely in how much they think they have control over their circumstances. So some people actually think, and you will sit down and you will say, often I'm asked to help a chief executive who is in trouble and they will say can you save them or are they even worth saving, and the first thing that I am always looking for is how much do they believe that their circumstances in general are their fault or the world just giving them a bad shake. If they think everything is out of their control it's extremely to save them, but the truth is that you have to help people to see their flexibility, the elasticity within something that might seem like a knot and another way of shifting things that give you an opportunity to get where you want to go, because there always is.

Rachel Salaman: So it's a mixture of being able to shape your own circumstances and having to deal with things are beyond your control?

Justin Menkes: Yes, so recognizing what's beyond your control but then finding opportunity within it, there's a wonderful of example of this where a CEO of a large hospital system in San Diego, he is one of the most recognized chief executives of turning around a hospital system that was absolutely dysfunctional, serving an enormous population they had strikes by their nurses, by their hospital workers, they had horrible quality measures, lots of patient deaths that shouldn't have been happening, he actually turned this around and it's one of the models, the Scripps Hospital system has been a model in the United States for the past nine years under his leadership. His name is Chris van Gorder and Chris was a cop, he was a police officer and that's what he wanted to do with his life, he wanted to be a cop and when he was 21 he actually became a police officer after he got out of college, the first thing he did, and two years into his time in the force he was responding to a domestic abuse call and the woman he was trying to save gunned her engine and rammed his car head on. Chris spent just under four years learning how to walk again and when he was finally on his feet walking the police department had to give him permanent leave because he couldn't do the job any more, his life dream was gone, so he thought what am I going to do, the reality of his circumstances was that his dream as it was as a child, had been taken away so he said well what can I do, well I know hospitals now, I've been a patient for four years, so he started calling local hospitals and found one that needed a security guard and then at night he took hospital administration courses and it took him about 18 years but eventually he became a chief executive of a hospital system and his sense of agency is what he brought to Scripps Hospital system, this highly dysfunctional system and it wasn't about firing people, it was about teaching them how a sense of agency, how within circumstances that they thought were beyond their control, they could find ways, options to get where they wanted to go. Which for Chris was maybe not about being a cop but it was about making a difference. So he could no longer be a police officer so he had to say why did I want to be a cop, I wanted to make a difference, well maybe helping saving lives would make a difference. So it's helping people find their sense of agency, it's so much about getting them out of the knot that they put themselves in. Every human being is a fish in a fish bowl seeing only the water around them, you must have somebody you trust, somebody you help, more than one that can help you see and redefine problems in a way that you can find a solution that still satisfies that core objective.

Rachel Salaman: If we move on now to the second attribute of a great leader that you talk about in your book which is subservience to purpose, what does this mean to you?

Justin Menkes: Subservience to purpose is so essential as a competitive advantage, so we will shift back from maybe people's life dreams, it does sort of connect to subservience to purpose, but companies that have a competitive advantage today which is this ongoing duress in a world of not just one crisis that happens every ten years, but serious threats to the viability of your company happening in a recurring way, how do you thrive in that and how do you help your people stay enthusiastic through that. Never has it been more important to help a workforce understand why your organization is trying to do what it's trying to do, beyond just a paycheck, that you have to have a meaningful purpose to what you're trying to do. So there is an example that I use, but there are many, every model company that's thriving today has meaningful purpose and here Southwest Airlines, Herb Kelleher built an airline where the bag agents don't believe that the bag they're putting on the plane is just another suitcase, they believe it's somebody's insulin or somebody getting on an airplane that they're trying to help, it's not customer 183 that you're trying to get the load up, it's a grandmother trying to get to their grandson's first birthday. And that they all believe in general that in terms of a low cost airline, why do they need to maybe watch their costs and stay productive and show up for work, rather than take a sick day or a holiday, it's because they believe that not only rich people should be able to visit their families, that everybody should be able to go and see their loved ones, not just the rich, so they're keeping costs affordable so that they can help people do that, that creating a company that people see why what they're doing matters, that's a universal human value. In China there's an example that David Novak at Yung Brands brought, they're one of the largest and fastest expanding companies in China, Kentucky Fried Chicken talk about that, and their desire to feed the world. It's a huge competitive advantage if a company and its workforce believes and sees a purpose to what they're doing versus competitors who don't really see it, you have an advantage.

Rachel Salaman: That makes perfect sense but how do you as a leader actually manage to instill that throughout your workforce?

Justin Menkes: You must define what you're doing and the purpose of your company in a broader sense that your people can understand.

Rachel Salaman: So you explicitly define it?

Justin Menkes: All the way down to the person, Kroger Groceries is the dominant grocery store in the United States and they have some different brands around the world, Dave Dillon is the CEO, his great-grandfather started Kroger, this is the fourth generation and yet they completely dominate groceries, but they experience threats, Wal-Mart wanted to go into the grocery industry and did go into the grocery industry, and anywhere Wal-Mart goes, disruption. Kroger had that threat 15 years ago, they are crushing Wal-Mart in groceries under Dave Dillon. You talk to a deli counter person and they believe, not just that they're helping someone to get meat, they know that more than 12 percent of American families go through one of the Kroger stores every week and that to just help a little bit, to smile, to just do a little extra to make their life a little easier, to clean up the spill on aisle seven so that when a person at the end of their long workday, a working mother who has three kids to go home to doesn't have to step in something, has a clean and a smiling checkout, that that improves the lives of the people in their country and that's a good thing.

Rachel Salaman: Your book is written from a very strategic overview position, how much did you talk to the CEOs that you interviewed about the nuts and bolts of that type of communication, were they using emails, were they using town hall meetings, were they going out onto the shop floors, how were they getting the message across?

Justin Menkes: Everything and there is no one way. I work with a lot of new CEOs who are trying to grow into the position, next in line, and they get worried with that question. They have to show up on the floor, they have to show up and it's one of the weakest links they have because they've been growing as stars, because if they've going to be next in line, they get more and more removed from the floor and so actually it becomes so human why they don't show up, people forget that, what happens when you have a private conversation is that they get more and more removed from the person that's serving at the deli counter or taking the ticket at the end, so they don't feel comfortable, they don't have anything to talk about, but they must show up. And companies that do it well make sure that their executives in an ongoing way don't get removed, that they keep showing up, but they have to find comfort in doing that. They say oh I'm so busy, and they are busier than ever but what they underestimate is the power of showing up just once in a while in a meaningful way becomes legend. So I've a CEO who shows up every Christmas because he knows that he has part of his workforce who has to work Christmas Day, so every Christmas he takes time away from his family to show up at some location and help them do their jobs, he goes out and helps wrap packages with them and he just has to do it for a couple of hours, but everyone around the world hears through an email or a text or whatever, hey I spent the day with whoever. The magnification of that, it magnifies, they must do it.

Rachel Salaman: The third attribute that you identify in great leaders is a little bit different, it's the ability to find order in chaos, what do you mean by this, perhaps giving an example.

Justin Menkes: Finding order in chaos may seem like an eternal quality, so I remember Jack Welch who was in my last book talking about pattern matching being important, but with today's world the puzzle never gets figured out, the puzzle is ever changing, so one must find invigoration in an ever changing puzzle. So finding order in chaos is talking about how strategy is ever changing, so you have to find gratification in that curiosity. There is an example, one of my favorites is AG Lafley at Proctor and Gamble, how they had a laundry detergent that they invested so much money in for the developing world that failed and it cost them so much money, billions of investment, and it should have been a huge success because it didn't require a rinse cycle and in the developing world clean water is a huge issue, so to not require a rinse cycle it should have sold like crazy and yet it didn't, no one wanted it. So AG, seven years into his tenure, he was down in Brazil and he skipped a couple of days of meetings and I heard from another CEO I was seeing, I heard about some crazy gringo CEO down by the river watching housewives do their laundry and I said I bet you that's AG and it was, and he was trying to understand why they didn't and it was because the soap didn't make suds. So after two days of talking to the women, if it doesn't make suds they don't think it's going to clean, and so they added suds and now it's a big success. I said why, you're a CEO seven years and at this stage he was a celebrity, he was eternal as a great CEO and you're still down by the river, and he said human beings are endlessly fascinating and unpredictable. So the desire, the curiosity to solve the puzzle, you have to have it because you're not going to just solve it and move on.

Rachel Salaman: And interestingly, in your book you say that people can learn these attributes, they do sound like something you would be born with rather than something you can learn, have you met CEOs who had varying levels of success with these attributes?

Justin Menkes: Absolutely but the one thing that I was so struck by and it's so fundamental, is that they are absolutely learned, so we are all born with certain traits that are more elevated than others but any individual it's not a fixed entity, you can be hardworking or lazy, the same person. The smartest person can be rendered stupid given the right context, I've seen it, so that you're trying to emerge, we're all a committee of selves, we're trying to bring out our best self. I remember I studied under Peter Drucker in the 90s when I got my doctorate and one of the questions he used to open with when we were talking to senior executives is, do you have any dead wood, incompetent people in your organization and every hand would go up, and then he would ask were they incompetent when you hired them or did they become so under your command, and the silence was incredible, but what he's talking about is that you absolutely can grow and teach people how to be successful. And so this is about teaching people, they must learn a sense of agency, they must learn subservience to purpose, you're not born with that, somebody teaches you and helps you see, flick the switch of engagement because anybody can be lazy. I have examples in the book of so many CEOs that when they were teenagers you couldn't get them to do anything, but somebody taught them to flick that switch, taught them the gratification, the universal human gratification of doing something that matters, of being somebody that matters, that is universal. So it is absolutely taught, you're not born with that, you're born with the desire for it, but not an understanding of how to achieve it.

Rachel Salaman: Your book is really a leadership book, it's aimed primarily at leaders, does it also have relevance for people lower down the ladder?

Justin Menkes: Yes and many of the CEOs never even aspired to be leaders, it's about how do you find a way to create a gratifying life and not in that sort of soft positive psychology, sort of give everybody a hug, this is about actually how to achieve, how to turn on your own internal engine such that in ten years from now you will look back at your life and say wow I really did something with it, and each one of these attributes is how you do just that. I'll never forget talking to, I was just with him, he's 72 now, Fred Hassan, he was born in Pakistan and he was not particularly hardworking as a teenager, he never wanted to be a CEO, one of the most accomplished CEOs of all time, 72 and he still doesn't want to stop working, he just took on being a chairman of Bausch & Lomb, a turnaround, a huge job. He's so accomplished and someone taught him how good it feels to win, to triumph, the sense of triumph, and he was a teenager and he had a teacher who forced him to take the entrance exams to a great engineering school in London and he didn't want to, it sounded too hard and the teacher wouldn't let up and finally he took them and then he saw how good it felt to study for something and then win, and then he went on and other things he said oh I will try it and tried hard and saw what it like, the taste. So it's about giving somebody a taste of that, a taste of triumph because once you've given them that taste, even at a young age, then the flywheel starts and then they say no, I don't want to just lie around and watch television because it starts to get itchy, and they know ahead of time that at the end of the day after I've finished on the couch, I'm not going to feel very good and I don't want that.

Rachel Salaman: So if someone listening wanted to bring out the best in their people or perform better themselves, what tips would you give them to help them on their way at the start of that journey?

Justin Menkes: One thing at the start of that journey is to stop romanticizing people, stop romanticizing heroes, so at the very beginning of my book because I wanted to understand the techniques that people who had proven themselves to be masters of teaching other people how to bring out their best selves, I used them, but those people are so easily romanticized, so I have a section of people that are so made into gods, Peter Drucker, Jack Welch, and having the good fortune of personal contact with them, they are so human and we have a desire to make caricatures of human beings, oversimplify them, but each person has fallibility and moments of weakness. So what we have to understand is there is our beginning point, skills that we can start to develop, things like finding order in chaos, so in the beginning you can start with exercises that sort of help you under pressure find success in thinking through, not freezing up, not forgetting your own name because people are looking at you. Well if that happens, find a situation where you can start to memorize or do things with people that are supportive and experience yourself remembering your own name in front of them and then escalate it a little bit. So there are ways to start, everyone has to start because even the most talented individual, the most gifted, you can flood them, you can make them panic if they're not prepared for their circumstance. All of this is about preparation and we have to prepare because the world is not going to get simpler and it's not going to get less pressured, so you can learn how, in fact human beings are gratified by it, we're a terrible species with nothing to do, we're terrible, we're not built for that, we're built to achieve, as long as we're prepared for it we can actually enjoy it.

Rachel Salaman: That was Justin Menkes talking to me in London. The name of his book again is "Better Under Pressure: How Great Leaders Bring Out the Best in Themselves and Others."

I'll be back in a few weeks with another Expert Interview, until then goodbye.