The past few years have been a period of breathtaking change for organizations, and the pace of change is likely to accelerate in coming decades. What are the expectations of future leaders for how business needs to evolve? Adam Bryant, the articles editor of People + Strategy journal, and Diane Gherson, the former CHRO of IBM and a member of the journal’s editorial board, interviewed three Harvard Business School students whom Gherson taught during her tenure as a senior lecturer at HBS—Florian Mandel, Samrath Oberoi and Shruti Rao. Each of them also has at least four years experience working in global organizations.
People + Strategy: What do you want more of or less of from leaders in the future?
Samrath Oberoi: One thing I expect of our leaders is to follow data-driven decision-making. I see organizations as upside-down triangles. All the data is on the bottom level, and all the decisions are being made at the top. But a lot of time, the information doesn't flow in companies. For that to happen, there needs to be a lot of trust from the people who are making decisions so that we're able to freely send that information up to them. Oftentimes that doesn't happen because sometimes people in leadership don't look like you, and the trust hasn't been established between people on the grassroots level and people who are at the decision-making levels. I think that needs to change. Or perhaps decision-making power needs to move slightly lower for organizations to run effectively.
I've decided to go into entrepreneurship, and one of the reasons is that I didn't have enough autonomy or decision-making power when I was working for large companies. My learning as a professional was being impacted because my voice to some degree wasn't being heard. And because of that, I want to seek out more opportunities where I can have a more fulfilling career.
Shruti Rao: As I think about the type of leaders I want to work for, and the type of leader I want to be, there are two main things. First, I want to respect that person, which might actually be new for my generation. Choosing the leader I want to work for is such a big decision. And I have been surprised by how someone's views about politics and other issues that are directly related to the job really do matter to me. I am very understanding of a wide range of viewpoints, but I want to work for someone who carries themself through society in a way that I respect.
The second part is transparency. How does what I do in this organization matter to you as a leader, and how do you make your decisions? It's almost impossible for any leader to make everyone in a company happy, but there has consistently been a lack of transparency from people at the top about why they are making certain decisions. To me, it's low-hanging fruit for leaders to communicate more about what they are doing and why.
Florian Mandel: Building on what Samrath said, there's a big difference between the ideal of data-driven
decision-making and reality. I used to work at a company that said data acts as our thermostat. In reality, I noticed that a lot of people, from middle managers to senior levels, often did not come from a data background. There was a massive appetite for data to be used, but there was not necessarily a lot of support for setting up the back-end systems to make sure you have actionable insights from it. So people would often rely on gut to both question data and make decisions.
One reason I went to business school was to build my data skills so that I could be the kind of leader who uses data when I'm leading larger teams. Another thing that I want and expect from future leaders is a much deeper awareness for how anything and everything that we do touches the climate crisis.
‘It’s low-hanging fruit for leaders to communicate more about what they are doing and why.’ —Shruti Rao
P+S: Your points are well taken about using data to make decisions, but in the most senior leadership positions, data only gets you so far, because you are often encountering brand-new challenges. Strategy, at the end of the day, is really about making bets on educated guesses.
Mandel: But even making gut-driven decisions should involve coming up with a hypothesis and then asking a certain number of questions to test it. And you can probably use data to answer about half those questions. As a leader, you want to make educated guesses based on actionable insights. To get those insights, you need to start somewhere with data. That's where I often see things breaking down at the moment.
Rao: I do think that great leadership is still about having a lot of intuition. Data can help you make very concrete business decisions, but I don't think that AI or data can tell us how to lead. Data is useful for telling us whether to go right or left on more micro-level decisions. But on more open-ended questions of, for example, whether we should expand into a new geography, you do have to trust your gut a bit. We have to learn how to harness data and use it more effectively, but I don't think that data will ever replace leadership.
Oberoi: I agree that we need to harness data better, because I think we can all agree that you can make a spreadsheet say whatever future projection you want. This is why the purpose of an organization is so important. If an organization is a tree, the values are the roots, the beliefs would be the trunk, the strategy would be the branches, and the actual decisions would be the leaves. That's where purpose-driven decision-making comes into play.
‘Many decisions that CEOs were primarily hired to make can now be handled more by data and technology. So the responsibility of the CEO shifts to mobilizing employees, influencing them, giving them a sense of purpose and pushing them forward.’ —Samrath Oberoi
P+S: A lot of purpose statements can be so high-altitude and general—some variation of "make the world a better place"—that I wonder how useful those statements are in guiding decision-making.
Mandel: Purpose is tied to values and culture, and I would want everyone on my team to have the guts to disagree and enrich the conversation when decisions have to be made. The values have to be codified in a way that allows you to go up to someone who is a couple levels above you and challenge them because their decision isn't supported by data or because it isn't in line with the mission. You need something that levels the playing field for those conversations. It gives you permission to dissent or to just propose alternatives. And the more discussion, the more alternatives we have, the better the solution will be.
Oberoi: I'm more on the side of keeping the purpose vague, especially in large organizations. Because there will be so many different teams working on so many different projects, keeping the purpose vague helps cast a wider net and also allows different segments of your organization to craft their own derivative version of the larger purpose and drive strategy based on that. It's a different story for small to medium-sized companies, but keeping that 10,000-foot, high-level purpose is a smart strategy for large companies.
Rao: People are seeking purpose, but I think that these pie-in-the-sky statements from companies to pick up on this sentiment is a bit of a lost opportunity. In order for these mission statements to really be effective, they need to be authentic to the company and be reflected in its actions. For example, many companies put out statements in response to Black Lives Matter about how they support the protests, but they lose a ton of credibility because there may be only one person of color on the entire leadership team. Purpose statements can be powerful, but they have to be authentic.
P+S: Is the CEO job sustainable the way we expect people to do it now?
Oberoi: There is a shift because so much technology has come into the decision-making process. Many decisions that CEOs were primarily hired to make can now be handled more by data and technology. So the responsibility of the CEO shifts to mobilizing employees, influencing them, giving them a sense of purpose and pushing them forward.
You have to think about what motivates employees to give 100 percent. For a lot of people, jobs are just a 9-to-5 proposition, and they're giving it 75 to 80 percent effort. But that delta of 25 percent really matters, and that compounds over time as you get bigger. So the purpose of the CEO has become more about finding ways to motivate employees.
Mandel: I wonder if all the challenges of being a CEO is a crisis created by the CEOs themselves. I don't support the idea of the CEO as a supernatural figure who needs all the power and information and who is being paid 150 times more than the average worker. The CEO is just one person, and the focus should be on the organization. Maybe the way out of this is distributing more power among teams within the organization. We have all these new tools and there's so much opportunity to distribute decision-making so that it doesn't flow through one person.
‘I don’t support the idea of the CEO as a supernatural figure who needs all the power and information and who is being paid 150 times more than the average worker. The CEO is just one person, and the focus should be on the organization. Maybe the way out of this is distributing more power among teams.’
P+S: CEOs don't necessarily want to make all decisions, but a lot of the big decisions—that have huge consequences and for which there is no clear right answer—do roll up to the CEO.
Rao: The CEO job is getting harder. CEOs are transitioning from being leaders of their organizations to being tasked with acting as leaders of society. These societal issues bubble up and start to become their problem in a way that they probably didn't necessarily expect it to be. I can imagine that that is immensely challenging.
But to me, another interesting question around sustainability of roles is, what is it like to be a junior employee in a company? What is it like to be a mid-level manager in a company? Employees at those levels have always faced challenges, but we are only now starting to increasingly understand them and talk about them, especially now that so many people have to be on email and in Zoom meetings all the time.
It's very hard because you don't have a level of autonomy to be able to say to a senior person, "This is where I stop, this is when I start." How do we create organizations that make it easier for people to find purpose and meaning in their work and have a full life? To me, that's a worthwhile conversation, as well.
P+S: As organizations and their employees try to figure out the future of work, it seems like there can be a mix of reasonable and unreasonable expectations in the conversation. What are your thoughts?
Mandel: One issue I would bring up is that it's unreasonable for employers to assume that every one of their employees is going to be 150 percent all in. And I don't think you want to structure your organization so it can only succeed if you find these type of employees. That's a pipe dream. You might be able to get them really excited about something for a brief period, but people's priorities change. When you have a family, just figuring out day care can be more important than getting a raise. There's a rigidity of the system now that needs to change. It should become more fluid and allow for more individualization.
Oberoi: I don't think monetary compensation is going to prevail as the most important draw for the best talent anymore. Companies need to find unique ways to attract the very best talent.
Another thing that's changing is transparency around issues like decision-
making and compensation. For example, because companies are now required by state legislation to share more information about compensation, it has changed the entire game for tech hiring.
Rao: In this post-COVID world, being 100 percent required to be in the office just feels incredibly unreasonable. I also think that being fully remote is not necessarily the best way to run an organization either. And so a lot of these in-between compromises work best, because we need to have some in-office interaction but we also need to provide employees some flexibility to live their lives. There is a lot of joy that you can provide for people by giving them autonomy.
Mandel: I agree we need more individualization, and it can also happen more at the team level. If you think of a company with 15,000 employees, you can keep breaking down the work so it's organized around teams of, say, 10 people each. Right now, there are a lot of policies spread like peanut butter across entire organizations. Companies should be a bit more flexible. Yes, there will be people who will try to game the system, but everyone will be slightly better off in the aggregate.
The Student as Teacher: What's The Message to Their Previous Employers?
In addition to pursuing an MBA at Harvard Business School, each of these roundtable participants has worked for at least four years at global organizations. People + Strategy asked them this question: If you could write an open letter to the leaders of companies you worked at so far, what would you tell them?
RAO: BETTER TREATMENT = BETTER RESULTS.
I used to work on Wall Street, which is notorious for being a hard industry to work in. But over time, the industry has become more focused on treating its junior people better, which is great. A lot of very strict policies have been put in place to protect people's time, including weekends. And they did work. But I think it's also been confusing for senior leaders who didn't have these policies when they were more junior.
So you have gaps in understanding and expectations. The work is still getting done to the highest caliber, but people are being treated a bit better. Why wouldn't we want that? But I've learned that it can be really hard in industries where there's a legacy of people who operated in a different environment. These changes are permanent, and they need to understand that.
MANDEL: MORE COMMUNICATION, CONSTANT FEEDBACK.
One point I would make is around communication. I would be hard-pressed to name any person who actually communicated enough. That is a recurring theme among leaders of teams and their managers and their skip-level managers. Everybody always thinks they communicate everything and they're super transparent, but just having a weekly half-hour call with a few minutes for questions doesn't really cut it.
Another point would be about feedback. My company used to do biannual performance reviews, and for some reason they always managed to make it a bad experience for everyone. Everyone was always dreading them, and managers would resist writing them. But giving feedback is one of the most crucial roles of being a leader. You want to give everyone on your team constant feedback. But people seem to want to make this unpleasant, and then the process ends up being unpleasant. I wish there wasn't the expectation that feedback has to be painful.
OBEROI: ENCOURAGE CROSS-FUNCTIONAL GROWTH. Feedback was one of my main points, too. It's almost like the 360 review is just nonexistent in many organizations, and it should be core to how they operate.
I also think that organizations could do more to encourage cross-functional growth. My value as an employee increases when I understand how my role fits in through different parts of an organization. And a lot of times, organizations just don't encourage that. There are not enough programs out there for the employees within an organization to grow cross-functionally. That's something that's very valuable, but companies are missing out on it.