Leading in the 21st Century, From CEO Rajeev Peshawaria

Photo courtesy of Rajeev Peshawaria

[The following is the full raw transcript for a LEADx Podcast interview, which has been lightly edited for clarity.]

Kevin Kruse: Hello everyone. Welcome to the LEADx Leadership Show. I'm Kevin Kruse and today I talk to the former Chief Learning Officer of Coca-Cola and he talks about how we all have a nuclear button in our pocket, why leaders everywhere today are naked, and why we need less democracy and more autocratic leadership. I'm not sure I agree with everything, but it sure makes for some interesting conversation. Don't forget to visit LEADx.org. Check out our free management training course of the day and check out the LEADx Leadership Academy where you can get on-demand access to over 30 video courses on leadership, management, productivity and more, plus 100 executive book summaries for a pre-launch special price of only $7 a month. That quadruples very soon.

Hey, here's our quote of the day: “The only person you're destined to become is the person you decide to be.” Ralph Waldo Emerson.

Our guest today is the CEO of the Iclif Leadership and Governance Center and former Global Chief Learning Officer of both Coca-Cola and Morgan Stanley. He's held senior roles at American Express and Goldman Sachs as well. His new book is Open Source Leadership: Reinventing Management When There's No More Business As Usual. Our guest is Rajeev Peshawaria. Rajeev, welcome to the show.

Rajeev Peshawaria: Thank you for having me.

Kruse: I always start with the same first question. It's like a tradition on the show. It's because I believe that all failures can be stepping stones to something else. There's no win or lose, it's only “win or learn,” so I'm hoping you can start by telling me a story of one of your best failures. What did you learn from it?

Peshawaria: You know Kevin, my most spectacular failure happened very early in my career. Upon finishing my MBA I accepted a job offer from an international bank and in those days, and I'm talking late '80s, jobs at banking and finance were considered very prestigious and were certainly very high paying.

So after a couple of years in operations, I moved to the trading floor and became a currency trader. At that time to say that you were a trader was really nothing short of sexy. Most people would give an arm and a leg to be in my position. I was “doing so well,” or so everyone thought. Well, three or four years into my career and I realized I was miserable. I did not enjoy finance and finally understood that the only reason I was doing it is because it was “the thing” to do, but as judged by society.

That was my biggest failure. Failure to ask myself what I really wanted to do with my life, what was I good at? What was I passionate about and most importantly, what difference did I want to make through my work?

Kruse: This is so important because I think so many young people find out too late in life that they pursued the wrong career choice. They weren't mindful of thinking about what they wanted to do for themselves. It's either because the classic thing is “I became a doctor because my parents were a doctor” or “I became a lawyer because my parents wanted me to be a lawyer.”

Peshawaria: Exactly.

Kruse: That's kind of classic thing. What do you think enabled you to sort of see the light after only a few years? Was it just you were so unhappy with the role and it caused you to think about what you wanted to be doing or was there anything else?

Peshawaria: You know, funnily enough, while I was unhappy I didn't even know I was unhappy. I was miserable but I didn't kind of know that I was miserable. Fortunately for me, I had a very good mentor who helped me uncover my true strengths and passion. It was after a full six years of doing work that I did not enjoy that through my mentor's help I transitioned into the field of human capital management and the study of leadership, something that I've now enjoyed every day for the last 25 years.

Kruse: Wow, that's a great gift your mentor gave you and really changed the course …

Peshawaria: Absolutely.

Kruse: … of your life.

Peshawaria: Absolutely.

Kruse: Speaking about sort of those who are earlier in their career, before we dive into your book, I'm just curious what advice would you give to a younger first-time manager who wants to grow and become a very effective leader?

Peshawaria: Well, I would say that first of all understand that leadership is not a position or a title. It is not about using your authority to supervise others and get them to do what you want them to do, which is kind of the traditional definition of leadership, right? Leadership, they need to understand, is a state of mind. It is a burning desire to create a better future.

Second, be prepared that if you want to create a better future you will face stiff resistance. The only difference between a leader and a non-leader is that the latter give up in the face of such resistance. Real leaders find the limitless energy to stay the course in the face of such resistance. Finally, to uncover such limitless leadership energy leaders get crystal clear about two things: their deeply held values, which they will never compromise even if it hurts, and two, develop a value-based purpose.

You have those two things, you have limitless leadership energy. So coming back to your question about aspiring leaders, what should they do? Well, start asking yourself the questions, what are my values and what is my purpose as early in life as possible, something as I said earlier I failed to do when I started my career.

Kruse: I think that's great advice and I actually reflect on my own personal purpose statement and values every single morning as part of sort of my morning ritual. Just to be clear you're suggesting that individuals should identify and carry with them their own values and their own purpose even though the organization they work for might have a set of organizational values and an organizational mission statement. This is your own. It's not to mimic or copy the company you might work for.

Peshawaria: You bet. You have to understand “Who am I? Why am I in this work? What do I want to do with my life?” Right? Then either create that better future yourself with your leadership energy, which is fueled by your values and your purpose, or join an organization whose vision mission and purpose you like and gels with your own.

A lot of times people ask me this question, but what if my personal vision, values and purpose sort of clash with the company's or the organizations? I tell them “Well, you have to understand they'll probably never be a perfect match. You have to ask yourself how much is the discord? How much of a mismatch is it? If it is a complete mismatch, 180 degrees, then you know what to do. You have to quit. You have to go somewhere else, but if it's a small difference, then you can learn how to live with it.”

Kruse: Great advice. Rajeev, your new book is Open Source Leadership: Reinventing Management When There's No More Business As Usual. So in a short format show we can't get into all the details, but let's start with what's the big idea of your book?

Peshawaria: Okay, so very difficult to do in a short format as you said, but let me try to make six very quick points, yeah?

Kruse: Okay.

Peshawaria: First, as I said, leadership is not a position or title. It is the art of harnessing human energy towards the creation of a better future. How do you do that is one part. Second, the world is changing faster than ever before and what we see today in terms of technological progress is only the tip of the iceberg. Speed is everything today, so contrary to conventional wisdom, a democratic style of leadership will not work.

We need to be autocratic to create breakthrough success in today's high-speed environment. Now I know that sounds surprising, but in Open Source leadership they back this assertion with a 28 country research study. So that's the big idea behind it. But, here's point number three. In today's uber-connected world, leaders are completely exposed and ordinary people have more empowerment than ever before in human history.

Using a smartphone and social media they can destroy anyone's reputation within minutes, so while the data suggest from our global study that we need to be autocratic, the 21st-century leadership dilemma is that ordinary people with their newfound power will not let you. Which leads me to point number four. So one has to earn the right to be autocratic. The book talks about five keys for doing so, but let me just talk about one of them, which is to be completely autocratic about one's values and purpose while at the same time being fully humble and respectful with people.

Now they seem like opposites, but that's what leadership in the 21st century is all about, balancing seemingly opposite ideals. Number five… Sorry, go ahead. You were going to say something.

Kruse: No, no, no. Go ahead on the fifth. That's great. Go ahead.

Peshawaria: Yeah, so I'll do five and six. Talent and innovation are not scarce. They are abundant. If there was ever a war for talent, it is over because connectivity now allows us to reach talent wherever it is and crowdsourcing is just one example of how this can be done. Finally, point number six, many management practices that have been enrolled for the last 50 years are irrelevant for today's gig economy. From succession planning to managing employee engagement, most management dogma needs to be turned upside down.

For example, we argue in the book that in order to maximize productivity employees must be set free to do as little or as much as they want. It actually works. We cite many examples including how allowing unlimited vacations is actually beneficial for the company. So I know that was a very quick sort of summary, but I hope you get a flavor for the book.

Kruse: Absolutely. I did read the book and this is a very good summary. I had a separate set of notes I was going to come back to, but with this summary it helps me too, it sets up what I plan in terms of a follow-up because I want to send this message to my listeners in that when I first got one of the key messages of your book, I'll be honest with you, my reaction was to oppose it because I thought in today's world with my values, we don't need another message that we need more strongman leaders. We don't need more autocratic rulers.

In this time of going back to populism and nationalism, all the rest of it, I thought oh boy, this message is just supporting that view, but then the book really dives in and you touched on here some things that it's not as you would expect in terms of an autocratic approach because you're saying no, no, you need to be fully humble. Even on your last point, I'd like you to talk more about this, you're saying it's autocratic leadership, but you need to set your people free. They could even just do whatever they want on vacations. So these are not opposing ideas in your mind.

Peshawaria: No, actually they're not. You see the beauty of the time that we live in, which is what I'm calling the Open Source Era, is this, the point that I made earlier, that on the one hand leaders or for that matter, everybody is so exposed even to the extent of being naked. You look at the last presidential election and you see what I mean by leaders are naked. Every misspoken word, every misdeed was out in the open for both candidates, right?

Kruse: Yes.

Peshawaria: That's how naked they are. On the other hand, you and I, ordinary people are more empowered than ever before in human history. We all now carry weapons of mass destruction, which is smartphones, in our pockets, right? With social media connectivity, we can either make or destroy anybody within minutes. So what this time, exciting time does is it has a built-in audit mechanism, so while you need to be autocratic to change the world, right, because speed is everything, this newfound power of people will not let you be autocratic. So what do you do about it? It's a dilemma.

Which is why I offer those five keys in the book. You need to give people freedom within a framework, so every company, for example, has a set of values and a set of rules, but as the company becomes bigger, rules, policies, procedure keep getting bigger and bigger, whereas what we are saying is built a culture where people live values rather than rules. You know? Interestingly, the United Airlines saga where they kicked out Dr. Dao in a bloody state from the aircraft because he refused to give up his seat.

Kruse: Right.

Peshawaria: The first appearance from the CEO's office was, “My employees did nothing wrong. They followed stated company procedure.” Now I'd like to ask the CEO well, what if instead of following stated company procedure or rules they had followed stated company values? Do your values say that you should beat somebody up and take them off your plane?

Kruse: When that CEO released that first public response, I just shook my head and I thought they either have the worst crisis control team in history with their PR agency or this guy is flying solo because even an amateur like me knew that that was not the right message to send after that incident.

Peshawaria: There you go, you see. So you talk about rules versus values, which is one of the keys is give freedom within the framework.

Kruse: That's right.

Peshawaria: Yeah, so they're not opposing ideas. The day and age in which we live, because by some estimates 40% of the US workforce is already free agents, right?

Kruse: Right.

Peshawaria: In the gig economy. They have all the freedom they need and so big organizations have no choice but to give their employees freedom. The good news is the more freedom you give, the more productivity, the more responsibility you get.

Kruse: I want to ask a follow-up because the other sort of shocking thing in my mind when you say the war for talent is over, talent is abundant. Of course your entire career has been in human capital management except for those first few years, so of course, you know that ever since I think it was the McKinsey white paper that coined that term, war for talent, which was probably now I don't know, 20, 30 years ago. I'm not even sure, but I think a lot of companies would say, “What are you talking about? We're still struggling to find talented, skilled people for jobs that are relevant for the future.” What's your answer to that?

Peshawaria: You know, it's because… Yes, you are right, they are struggling to find good people. Almost every CEO says, “My biggest challenge is to find the right talent,” right?

Kruse: Right.

Peshawaria: It's so hard. I believe that it is because we are going about it the wrong way. Now how do we develop the talent of the future? We give people a battery of psychometric tests, we put them through assessment centers and then we say a certain population of our employee-base is so-called high potential. Then we send the high polls if you will to Harvard or Stanford for executive courses. We get them executive coaches. We give them mentors. We give them stretch assignments and turnaround assignments hoping that with all this investment and these people in five years time they will be future leaders, right?

Kruse: Right.

Peshawaria: Now how can a psychometric test determine whether you're going to be a future leader five years from now? The whole idea that if you invest five years into them, what's the guarantee that they're even going to stay? Instead, if you open it up to the whole company and say every year you throw out a CEO's challenge and say anybody who has any idea to add value to this organization in any way, form a team, submit your idea by a certain date. We'll evaluate all the good ideas. The top 10 ideas will be presented to the board.

Nobody is going to be forced to participate. We are not going to give you any test to tell you whether you're a high poll or a low poll. Anybody can participate. No compunction, but no barriers either. Now, the people that raise their hands every year and say, “I'm willing to do this over and above my day job. Here's my thinking,” they're showing you their leadership energy.

They're telling you that, “I want to be a leader.” You're spotting talent, you're spotting innovation at virtually no cost. So instead of anointing somebody, Open Source it.

Kruse: That's exactly what I was going to say, back to your idea of Open Source. Make it wide open and watch what talent emerges from that process.

Peshawaria: Absolutely, and the whole idea of what I just talked about is what we call internal crowdsourcing, right? Then you can go outside the company as well and have crowdsource contests for innovation, which a lot of companies are doing now. When GE Aviation wanted to find an innovative solution to a big problem that they were facing, they ran a contest and found the solution out of a small town in Indonesia.

Now, who would have thought that 150 billion dollar aviation giant in Cincinnati, Ohio would spot their innovation talent all the way in a small town in Indonesia for a total investment of under $20,000?

Kruse: Yeah. You just gave me actually a very practical idea because as we're speaking I have an open job out there for our startup looking for a conversation user experience designer to write for AI-driven chatbots. So it's a very specific role, one that this job type didn't exist two years ago, so as you can imagine right now I'm doing the traditional process of searching on LinkedIn for keywords or similar jobs, reaching out to people, all the traditional things and struggling because it's such a tough role.

Yet, it's really not a hard role and anybody who has a flair for writing and is analytical and wants to download some free software could actually create a little chatbot conversation. They could choose them self, do an Open Source. So you just gave me the idea. Maybe next week I've got a huddle with my team and say, “Let's take some of what we would have spent on recruiting or paid to a recruiter and open up a little contest and just see who pops up and who wins the contest. Maybe they or their network would be the right person for us.”

Peshawaria: You're absolutely right. By going to sites like Upwork.com and putting it out there for people to bid for your stuff you get to try out people without hiring them. If they're really good, then you want to consider hiring them.

Kruse: That's great. Rajeev, we've got a couple more minutes. I want to throw a bonus question at you, which I know you haven't prepared for, but it's a very just tactical question. I've been talking to a lot of people about just it's more of a management practice than a leadership practice, but it's getting a rhythm of meetings, a rhythm of communication with your team. I know I became a much better leader when I started doing one-on-one meetings with my direct reports.

I would typically do them weekly. I know a lot of people do them every couple of weeks. Now you've managed some very large teams in your career in some very large companies. I'm just curious about your own practice in terms of communicating with your direct reports and making sure that there was a good cadence to that communication and information flow. What were your own practices?

Peshawaria: Exactly what you just said, a weekly meeting one-on-one. Now, if you don't have enough time to do a weekly meeting with your direct reports it's probably because of a couple of things. A, you have too big a direct report team to handle or B, you're doing things that you should be delegating.

Because your number one task is to talk to your people and make sure. So at the beginning of the year, the first protocol of communication is to sit down with the team and imagine that better future that you want to create. Then throughout the year have those weekly conversations on an ongoing basis.

One of the things I did throughout my career was put that hour down once a week with each person in the calendar whether we needed it or not. If sometimes we didn't have anything to talk about, just go for a coffee, but make sure it's there. Even if you were traveling you would do it on the phone. I think that rigor is more important than anything else.

Kruse: What I like about, well, I like a lot about what you just said, but one thing in particular that you said even if there isn't a hot issue, use that time, grab a cup of coffee because part of these meetings are about building the relationship. It's not just to solve work problems. It's building that one-one-one relationship as well.

Peshawaria: You bet. You absolutely bet because you want to build that trust capital with people. I'm sure you do this too, but I facilitate a lot of senior management teams and people, when you do little silly things like icebreakers, get to know each other, “We've known each other for 25 years. We know each other well.” I said, all right, and I get them to share something intimate about them. They're all surprised. “Wow, I didn't know that about yourself.” I said, “But you just told me you've been working together for 20 years.” You know?

Kruse: It is amazing. That is amazing. Well, I really appreciate your time in joining me and the audience. These are some real pearls and I love new ideas and a contrarian approach, counterintuitive approach to leadership these days. As you mentioned, our world is changing so fast. The way we need to lead and manage today is very different than what worked 10 or 20 years ago. So Rajeev, let me ask you, what's the best way for our listeners to find out more about you and your book?

Peshawaria: Well thank you. Well, in today's uber-connected world the best thing to do is to connect, right? People can connect in one of many ways. One is first of all, join me on LinkedIn or Twitter and I'm fairly active on both of those. I share thoughts. I have a blog on Forbes which they can follow or finally, visit my websites. I have two of them. One is RajeevPeshawaria.com, which is my personal website and the other is my company's website, which is Iclif.org. So I would say those would be ways to keep in touch. I look forward to that.

Kruse: Perfect. We'll make sure we put all those links in the show notes and articles that come out of this conversation. Again, Rajeev, thanks for coming onto the LEADx Show.

Peshawaria: Thank you very much, Kevin, for having me.

CEO of LEADx, and NY Times bestselling author, of Great Leaders Have No Rules and Employee Engagement 2.0. Get a FREE demo of the LEADx platform at https://leadx.org/preview.