The Leadership Skills for CEOs That Will Matter Most in the Age of AI

Conflict is complicated. So sometimes and we've all been in situations where do we bring it up or not? It's there whether you bring it up or not. And it's going to play out in different ways. But I think CEOs or board chairs, or lead chairs understand that. You know, nowadays, given what's going on, we need to talk. We need to say what is our risk appetite as we begin to, for instance, um, roll out AI solutions. I'm Francine Lacqua and this is leaders, the podcast that explores what drives the world's most influential people. Be sure to follow and subscribe now so you never miss an episode. This week, I'm speaking with Linda Hill, professor of business administration at Harvard Business School and faculty chair of its Leadership Initiative. Hill has advised some of the world's biggest companies through her consultancy, Paradox Strategies, and she's written some of the defining books on leadership and innovation, including Genius at Scale and Becoming a Manager. Throughout the season. On the podcast, I've been asking industry leaders how they've navigated big decisions, managed crises, and built successful organizations. So in this conversation, I turned that idea on its head. I use my time with Hill, someone who has spent an entire career studying leadership, asking what actually makes a great boss? What characteristics are indicators of success and how she thinks artificial intelligence could shape the next C-suite generation? Linda, thank you so much for joining us. You've been studying leadership and management for decades. What have you learned that that makes a successful CEO a successful leader, a successful leader, I think really has to know himself or herself because it really starts with you. You're trying to use yourself as an instrument to get things done. And if you don't know yourself, it's hard to do that in a very deliberate way. So I think that's the first piece. And then I think the second part of it is understanding that your job is not necessarily to have all the answers. Does a chief executive really need to lead differently depending on the journey of the company? I think probably so what you need to be able to do is you need to be able to go in and really practice what we refer to as contextual intelligence. You need to figure out what's really important in this context and what's salient. And if I don't understand that those are the levers I need to work on most, because usually our context is shaping our individual behavior. Too often we think, oh, that person's a good person, bad person, resistant, whatever. No. What is it about their context that is leading them to prioritize in ways that aren't suited to what the company needs? Or are they constrained in some way that if I relieve that constraint, they begin to behave in ways that the company really needs? So I think that first thing you need to do is, yes, you need to have emotional intelligence, but you also need to have that contextual intelligence to be able to read things. They often find that being a little bit more vulnerable actually opens you up to getting more assistance figuring out how to ask for help, it actually becomes harder as you become more senior. In the chief executives we speak to, I think clarity of mind is always something that surprises me because they know exactly what they want to do. But then you also must be not afraid to get outshone by anyone. Yes. And that's difficult? Otherwise -Yes. What you need is you need CEOs who fundamentally know that they're there. They're there for the enterprise. It's not about them. So I almost always start by saying, think about not the rights and privileges that come with being a CEO, but the duties and obligations. And people can tell if you care, if you actually do are concerned about the bigger picture or not, because you're going to make many unpopular decisions or I shouldn't say unpopular or controversial decisions because they're tough decisions to be made, and you're going to have to deal with trade offs, and they want to know about your character. And then fundamentally, do you know how to make connection? If you can't connect with people, then they're not going to want to be. Uh, as I talk about now, not so much as following you, but co-creating the future with you. And if you can't get that connection going, that's when you know there's going to be a failure. It's a different if you're in AI something of Dario Amodei. Sam Altman, Elon Musk. They're not traditional chief executives in that sense. I have not studied them specifically, but they don't appear to be. So they would strike me in some ways. You know, when I was doing the work at Pixar. Obviously Steve Jobs was someone who was deeply admired. Now Steve Jobs and people have a point of view about Steve Jobs. So Ed Catmull, who's brilliant, was one of the co-founders. Everyone tells me there's no one who knows Steve Jobs better than him. And two of my business partners worked with Steve Jobs for many years. And one of the things that Steve Jobs understood is that most action that happens is collective action. There would be times when Steve being in the room was not going to be possible, because he was going to throw off the dynamic too much, not because he couldn't behave well necessarily, but because other people would be uncomfortable with him, so he would remove himself. Other times you needed him there, right? So again, being aware and Ed and him trusting Ed well enough to say not this meeting and Ed. Ed has unbelievable emotional intelligence on every dimension. But he knew how to. If you think about the stars they had at Pixar, he understood people and what they needed and didn't need, and what the dynamics would be of a group if a certain mix was there and if they had certain decisions to make. And he thought, it's not the right mix, then he had no problem saying to you, Steve, you can't come. But as you become more senior, people don't give you feedback. That's mistake number one, right? You need to be sure that you have an organization that tell you, tells you when problems crop up. Right. And many, many senior people do not have organizations like that. They will tell you that they will admit it. One of the big issues about this is some CEOs. You can only approach one on one. You have to make sure they, you know, you're not embarrassing them or whatever. Um, other CEOs, you can tell them in a group what the story is. So one of the capabilities we see is really key to building a successful company. And the CEO needs to think about is do you have enough of what's referred to as creative abrasion? Yeah. Do people do you have enough diversity of thought? Yeah. And do our people, do you know how to embrace that diversity of thought? Deal with that conflict. You need to amplify difference. Yeah. But many CEOs minimize difference. So what many leaders do and we have we measure this across organizations. What you see is that yes there is diversity of thought. So let me talk about this. Everybody has a slice of genius. This is what they said. Everybody has talents and passions. If you have very talented, passionate people and you let them say what they think, they're not letting go easily. So you as a leader have to be able to take those talented, passionate people. And kind of if you've unleashed their ideas now, you have to leverage and harness them to make sure you get some good solution out of it. Many people are not real comfortable with conflict. So we were studying at the time, the man who was building out the infrastructure of Google early on and, you know, really incredible time pace that they had to work, etc. he was quite comfortable with conflict. And he said, you're hiring them for their ideas and you don't get those ideas, then shame on you. So he he said, uh, actually in talking to him and I'm using paraphrasing now, it's been a while. He said, you know, you need to have top chefs, and if you can't work with top chefs and get them to cook a delicious meal that someone wants to buy, then you're not going to be a very good CEO. This goes back to being able to hire people who are smarter than you. It's not like you're trying to hire mediocre chefs. But I remember, you know, someone said, well, you can't do that because you have too many cooks in the kitchen. He said, you know how hard it is to do business nowadays. You can never have too many cooks in the kitchen. You need talented people. It's on you to figure out how to convince those people that they benefit from work, collaborating together and working through their differences. Is that the only way to foster innovation? So what you're talking about is a chief executive has to, you know, I guess not mind abrasiveness. They're nurturing people. They need to get along and influence board and people that they don't have direct authority over. Mhm. And then they have to innovate. Yes. It's a lot. It's a lot. But I think that when you become a CEO one of the things we, we have learned actually. Boris Kreuzberg, one of my colleagues studies when he refers to as portability of talent. Mhm. And he and Nithya Noria, another colleague they studied, they made predictions on which CEOs would succeed and which ones wouldn't, based on the past experiences of those CEOs from entry level or actually literally CEOs. So say, you know, there can be there have been these very public situations where, you know, 2 or 3 people are being considered to become the CEO of some large company, and then one of them gets it, and then the other two take CEO job somewhere else. So they look at those sorts of situations and predict whether those other two who don't get it. Are they going to be successful in their new environment? And it doesn't matter what company or what stage of the company. Well, they pay attention to that. It's really about leadership. They're looking at the leadership of that person. And part of what they have found is that people aren't as portable as people think. And it's often because they can't build the connections too much. Selecting on competence and not paying attention to what's their network of relationships, what's going to be, you know, they're not going to be able to bring that network. And and what they find is that people who are successful in one context, turns out you've been successful in part because of the network of people you've been working with who know you and in various ways help you, etc. and when they move to the new environment, they don't have that that group, they actually struggle. There's a big debate right now about the role charisma plays in leadership. Does it help inspire people and drive change, or has the obsession with charismatic CEOs created unrealistic expectations while sidelining effective leaders who don't fit the traditional mold? Do you need to be charismatic to be a good leader? Charisma is a source of power. Well, first off, we need to feel that it's authentic. But sometimes with charisma, it may be sent as authentic, but you may not perceive it that way or you just don't understand. I mean, who's the most charismatic leader you've met? So I've been studying, uh, Joe Mazzulla, the head coach of the Celtics. And I studied him when he first became coach. And then the year after when they finally won the championship for the 18th time. And, you know, when you said charisma, but, I mean, I was just blown away with how deliberate he was about everything he does. Now, you may or may not know the Celtics have won the most championships. You know, of any basketball team in the world. But they when he came in, there had just been a scandal and he came in as an interim to a fairly beloved coach. He was not the one everyone thought should be the successor. He came from the back bench as opposed to the front bench that's usually who becomes the head coach and then he just got to it. He got to work and he is so grounded in who he is. But he really understood these. I need to make sure I take care of the whole man. They're all men, right? Obviously on this basketball team and they are young men. And he was, I think 34, 35 is one of the youngest coaches. I need to take care of the whole person if we're going to win. And I need to- So like spiritual, intellectual and understand the pressures on them and create the space for them to each individual to do what he needed to do, but then also to think about the culture of the whole. And when he was set up, when he got into this role, at first he didn't change very much because he needed to let them play it out, and it was a tough time and he needed to deal with their stresses. It wasn't about him, it was about the pressures on them. It's a very pressured to be in those situations. And what was fascinating to me was how he really combined figuring out what each individual player needs, because they also need to be the carrot and stick or whatever, but then making sure they all felt a part of the team and it was a cohesive team. Just like at Pixar. They believe that everything is teamwork, and so the CEOs who actually see the potential individuals can figure out what does that individual need at the same time is understanding we can only win if we're all working together. So you have to be quick. Yes. And as a CEO, um, and he was not the CEO, but as the head coach, he's the CEO of that basketball team. He understood going back to these imperatives, it's not just the team. I also need to think about the whole basketball operations. So he would talk to the people in the kitchen. Everybody makes a difference because it's the whole context. Then he also built relationships with the business operations to make sure we're all in it together very proactively. They were somewhat surprised at how much time he spent with the business operations, not just the basketball operations, and finally with the whole Boston community and the media. So he invited the media in. It's usually a pretty complicated relationship between the media and sports teams in some ways, particularly when they're not winning. And he invited them in and was very transparent because he understood that it was the whole. It takes a whole village, right, to make a team successful. One leadership trend that's been gathering momentum is a rise of the co-CEO. Companies including Netflix, Oracle, Spotify and Comcast have embraced the model, even though history suggests it's often a difficult balancing act, one that's frequently undone by competing egos, blurred accountability or disagreements over strategy. So I wanted to ask Linda Hill, when does shared leadership actually work? And what does it take for two people to successfully lead as one? And so, Linda, talk to me a little bit. There's movement in having co-CEOs. You see it in technology companies more because often there's the tech, the person who's the tech visionary, if you will. And then there's the person who knows the business side of it. So two in the box, as it's called, is actually not unusual in tech companies. It's become it's more unusual at the very top. But um, does it work? It does if they get along very well together and if they can be honest with each other, different skill sets. Yes. Or different different focus. But they also need to be able to work seamlessly because you've been in companies where you've even had the CEO and the COO don't really see eye to eye, the rest of the organization has trouble being aligned. But now we see more and more of that. In fact, I'm getting ready to work with a company who has new CEO co-CEOs, and they were put in that position because neither one actually covered everything. That's where the business is going. Now, I saw it also in another company where what the future was going to look like was probably the future's going to look very different than the present. So one of the CEOs was sort of more focused on building the future, diversifying the business. And the other one was kind of kind of do the core. But so you have to have a clear division of labor. Yeah. When you have two in the box, if you will. So now I actually and I'm getting ready to work with another client who just put in place, as I said, co-CEOs, because a lot of times people are feeling, you know, there's so much happening right now to be able to deal with the dynamism. Do we have the competence? How is that going to play out? Is something that, uh, I think again, that's why we see more of a team structure. So it used to be, I don't know. When I first started as a professor, you really focused on what's the CEO doing? And then I think, I don't know, by the time I got into the late 90s, you really wanted to understand how that senior team worked. The job of the leader is changing faster than it has in decades. In part because of artificial intelligence and geopolitics playing a bigger role in the boardroom, I wanted to ask Hill what skills will define the next generation of leaders. Is the CEO of the future different to what that CEO was in the last 20 years? I think the CEO is different because of the to the extent that it really matters nowadays that you build an agile organization that can adapt to anything, to anything, because the news is so formidable. Right? Changes by the day. Yes. Somebody down there is going to hear it sooner than you, and you want to make sure you've empowered them enough. There have there has to be guardrails here and things that they will make the decision. That's the local decision that needs to be made at that time. And or they will understand they need to escalate to you. So really one of the things that I first work with when I'm working with CEOs is decision making rights. Being real clear, who has decision making rights for what and what do you want to hear before they make a decision? And how do you need to set up the way you work so that you're comfortable having delegated that to that person or that group of people to get done what needs to get done? The other thing that very senior people don't necessarily talk about and I you know, I understand it in some ways. And even boards, they don't talk about risk really. They can have very different risk appetites. Oh yes. They can have very different risk appetites on the board. But they don't ever really address the fact that they have different risk appetites. But amongst board members? Even as board members no because I don't think board members like to have conflict. You know, conflict is complicated. So sometimes and we've all been in situations where do we bring it up or not? It's there whether you bring it up or not, and it's going to play out in different ways. But I think CEOs or board chairs or lead chairs. Understand that. You know, nowadays, given what's going on, we need to talk. We need to say what is our risk appetite as we begin to, for instance, um, roll out AI solutions. And that conversation is a really hard one to have. I mean, I work with some of our board programs and they how do we have that? So we don't make that person look like, oh, you're too conservative or you're resistant to the future. Is it different being a leader to being a manager? So this is, uh, the distinction that my, my, uh, my mentor John Kotter so I, John Kotter was the person who recruited me to come to Harvard Business School. And Warren Bennis also, they talked about leadership and management. So leadership is about dealing with change and management. is about dealing with complexity. And we have complexity and change happening now. So what they found is for many large companies, um, he and Warren both found that large companies over time for very logical reasons. What you'll find is companies will be over managed and under led And people often think of that. Under-led is going back to this issue of charisma. No, it was about vision. There's different ways you can communicate that, etc.. So what I found, though, when I began to look at innovation, is that innovation is not so much about vision. It's more about purpose. And and it's an important distinction in that vision means you know, the direction. And we still it's going to be really hard to get us to go there. And I need you to kind of follow me there. When you're talking about innovation, as the leaders I first studied told me you actually in the news they said you have no vision. You don't know the answer. Now, every leader I've ever written about in a book on innovation, they have been unbelievably visionary. The thing that happens, though, is by definition as a few of them told me if it's a breakthrough innovation, you have no answer. You have no vision to tell people, this is this is it. So what's happening right now is that many leaders have no vision about what's really going to go on with AI. They just don't. When you ask them, they're perplexed. So what they do know is- Which is maybe honesty Linda. People that say, actually, I know and we, you know, at this juncture in time, maybe we don't know. No, we don't know. So that's why we call that wayfinding as opposed to pathfinding. Okay. So the wayfinding is we don't know the destination nonetheless how we're going to get there. Yeah. That requires a lot of confidence in the capacity, your capacity to help people figure this thing out. So we were talking about a leader if he was the head of Cleveland Clinic Abu Dhabi. Mhm. It's an unbelievable hospital. I mean this is a man is a Rhodes Scholar, a pioneer in robotic surgery, cardiac surgery. I'm just a brilliant individual. And when I was talking to him once about this leadership, he said I feel like I'm leading through a fog. And how do you lead when you can't see when you have no vision? Not leadership is about vision. I have no vision, I can't see. Things are so uncertain right now. One of the things that he said was, I have. I thought I should steer the ship, but I'm. Where am I steering it to? That's not decent. So he said, you know what I need to do? My job is first convince everyone in this organization that there is nothing called business as usual. We'd like to think there is nothing. Everything is a working hypothesis. Now, Abu Dhabi had one of the most successful handling of. And the hospital is a part of that story of Covid of any hospital, because he told everyone in the hospital, all of you need to become innovative problem solvers. And what he did every time when he could was he made sure that there was someone on the team making decisions who had never seen an epidemic before. He didn't just want the experts, he wanted someone who had the beginner's eye, who would ask. And he didn't put it this way, that so-called stupid question, because they didn't know it was a stupid question and would force all of the other experienced people to question their assumptions. Linda, are you ready for the rapid fire questions? All right. What's your take on career coaches? I think career coaches are helpful because they basically can be mirrors to you. You can add new. They get you to ask the right questions. But you in the end have to figure out what the answers to those are. What is one leadership practice that you think is overrated? Empowerment. As people think about it, and what I mean by that is often when people think about empowerment, they have a rather smushy a very technical term definition. Empowerment simply means that you're sharing with people the potential to have influence. So whether or not they get to exercise that potential is your call. And I think sometimes people like I empowered them. Well, you know what? In the end it's on you. So you need to make sure that they actually know what they need to know or they're going in the right direction. Otherwise, you need to take back that potential and you need to tell them, not this time. What leadership skill will matter more in ten years than it does today? In ten years, I think your capacity to collaborate will continue to matter a lot and more as you move forward. What's a piece of advice about management that you disagree with that you need to make sure that people know you're the boss. That feels very 80s and but it's very present right now. I don't know that it might feel very 80s, but trust me, there are many people who want you to be clear about who the boss is, right? I think formal authority as a source of power is actually quite limited in many ways, in what you need to do now to influence people to get the job done. Linda, thank you so much. Thank you.