LETTERS TO THE EDITORor Asia there might be enormous po-.docx

LETTERS TO THE EDITOR
or Asia there might be enormous po-
tential but littie chance to demonstrate
it. That Clarebrough tries to illustrate
the superiority of the American spirit
through the image of a high-powered
European car-the brainchild of an en-
trepreneurial Italian family-stuck in an
American traffic jam strikes me as more
than a little odd.
Christian Kober
Director
Degussa
Shanghai, China
None of Our Business?
The commentaries in response to Rob-
erta A. Fusaro's case study "None of Our
Business?" (December 2004) all sailed
past an obvious flaw. KK Incorporated's
plan to increase sales using radio fre-
quency identification tags is depen-
dent not only on technology but also
on store personnel welcoming custom-
ers by name and steering them to pre-
ferred items, as stated in the piece. The

store personnel described in the case do
not strike me as up to the task. Perhaps
KK would get more bang for its buck, as
well as fewer ethical or legal entangle-
ments, by tackling its staff motivation
and incentive problems.
Kathlene Collins
Publisher
Inside Higher Ed
Washington, DC
Overloaded Circuits: Why Smart
People Underperform
I read with interest Edward M. Hallow-
ell's article, "Overloaded Circuits: Why
Smart People Underperform," in the
January 2005 issue. The author's term
"attention deficit trait," or ADT, reminds
me of what we in the IT industry used to
cair'thrashing."
In the world of computers, parallel
processing is performed by a central
processor that switches back and forth
quickly among several tasks, doing a lit-
tle bit of each task one at a time. This ac-
tion is performed so rapidly that, to the
observing eye, it appears as if the com-
puter is performing several tasks simul-
taneously. In the old days, a mainframe
computer's hard drive could get so over-
loaded with jobs that it could end up

spending all of its time switching be-
tween tasks without processing any of
them, resulting in thrashing. This phe-
nomenon could bring an entire system
to a grinding halt.
Colleagues in my old IT department
used to measure each other's personal
thrashing levels. The simplest solution,
as with our old mainframe computer
systems, was quite obvious: Take on
fewer tasks, or delegate more to others.
ADT sufferers who want to cut down
on their thrashing levels would do well
to try this approach.
Steve O'Hearn
Vice President
Sysorex
Vienna, Virginia
HOUD U P H T O MlRrtpR ^ANSWER HONESTLY
n !
A Simple question And one that gnaws at you kefepmg^you up
at mght But with the right knowledge
you can lead motivate and inspire your team Wharton Executive
Education is renowned for a curriculum
• that's.a!s"intensive ais it is valuable! Proven leader̂ sKi))
methods. Key insight. Cutting-edge techniques.-,'
, Grdat leaders never stop growing.,Wiil you? ,' ', .' , > '
exscwtivE PHOGBAMS

iNegstisfioAWorfcshopf i>.$ib«i«grcTMnkfng and Management
nijIig. for Advantage* for iCdmpetitive Advantage
^4v; -29,20195 November 7 - « , 20Q5
November l A - »8.2005
> Bxecutive Devetopment Program
/ Crating Value throu^ti September n - 23, 2005
Ffdancrat Management
.Inly )8 - 22, 2O05
'^AHiarton
UNIVERSITY o/" PENNSYLVANIA
Amty IntUtirt* of Extcutlv* Educstfon
215.898.1776 ext. 4341 or 800.255.3932 ext. 4341
http://execed.whaiton.upenn.edu/4341
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The ife Idea
HBR.ORG
Making
Business
Personal
Companies that turn employees' struggles
into groyvth opportunities are discovering
a new kind of competitive advantage.
by Robert Kegan, Lisa Lahey, Andy Fleming, and Matthew
Miller
To an extent that we ourselves are only beginning to
appreciate, most people at work, even in high-performing
organizations, divert considerable energy every day to
a second job that no one has hired them to do: preserving
their reputations, putting their best selves forward,
and hiding their inadequacies from others and themselves.
We believe this is the single biggest cause of wasted
resources in nearly every company today.
April 2O14 Harvard Business Review 45
THE BIG IDEA MAKING BUSINESS PERSONAL
What would happen if people felt no need to do this
second job? What if, instead of hiding their weak-
nesses, they were comfortable acknowledging and
learning from them? What if companies made this
possible by creating a culture in which people could
see their mistakes not as vulnerabilities but as prime

opportunities for personal growth?
For three years now, we've been searching for
such companies—what we think of as deliberately
developmental organizations. We asked our extended
network of colleagues in academia, consulting, HR,
and C-suites if they knew of any organizations that
are committed to developing every one of their peo-
ple by weaving personal growth into daily work. We
were looking for companies anywhere in the world,
public or private, with at least 100 employees and a
track record of at least five years.
All that scanning turned up only about 20 com-
panies. In this small pond, two of them stood out:
Bridgewater Associates, an East Coast investment
firm, and the Decurión Corporation, a California
company that owns and manages real estate, movie
theaters, and a senior living center. Both had been
meeting our definition of a deliberately develop-
mental organization for more than 10 years. Happily,
they were in very different businesses and were will-
ing to be studied in depth.
These companies operate on the foundational as-
sumptions that adults can grow; that not only is at-
tention to the bottom line and the personal growth of
all employees desirable, but the two are interdepen-
dent; that both profitability and individual develop-
ment rely on structures that are built into every as-
pect of how the company operates; and that people
grow through the proper combination of challenge
and support, which includes recognizing and tran-
scending their blind spots, limitations, and internal
resistance to change. For this approach to succeed,
employees (Decurión prefers to call them mem-

bers) must be willing to reveal their inadequacies
at work—not just their business-as-usual, got-it-all-
together selves—and the organization must create a
trustworthy and reliable community to make such
exposure safe.
As you might guess, that isn't easy or comfort-
able. But by continually working to meet these
linked obligations, deliberately developmental or-
ganizations may have found a way to steadily im-
prove performance without simply improving what
they're currently doing. That's because progress for
their employees means becoming not only more ca-
pable and conventionally successful but also more
flexible, creative, and resilient in the face of the
challenges—for both personal and organizational
growth—that these companies deliberately set be-
fore them.
THE COMPANIES
Bridgewater Associates, based in Westport, Con-
necricut, manages approximately $150 billion in
global investments in two hedge funds—Pure Alpha
Strategy and All Weather Strategy—for institutional
clients such as foreign governments, central banks,
corporate and public pension funds, university en-
dowments, and charitable foundations. The com-
pany began in a two-bedroom apartment in 1975
and is still privately held, currently employing about
1,400 people.
Throughout its neady four decades, Bridgewater
has been recognized as a top-performing money
manager; it has won more than 40 industry awards
in the past five years alone. At the time of this writing,

the Pure Alpha fund had had only one losing year and
had gained an average of 14% a year since its found-
ing, in 1991. The All Weather fund, which is designed
to make money during good times and bad, has been
up 9.5% a year since its launch, in 1996, and delivered
an astonishing 34% return from 2009 through 20H,
even as the hedge fund industry as a whole underper-
formed the S&P 500. (The fund apparently did lose
money in 2013, according to the New York Times.)
In both 2010 and 2011 Bridgewater was ranked by
Institutional Investor's Alpha as the largest and best-
performing hedge fund manager in the world. In 2012
the Economist credited the firm with having made
more money for its investors than any other hedge
fund in history. (The previous record holder was
George Soros's Quantum Endowment Fund.)
Across the country, in Los Angeles, Decurión
employs approximately 1,100 people to manage a
portfolio of companies including Robertson Proper-
ties Group, with retail and commercial projects in
California, Hawaii, and the Pacific Northwest; Pa-
cific Theatres and ArcLight Cinemas; and its newest
venture, HoUybrook Senior Living. In May 2011 Retail
Traffic magazine recognized Robertson Properties as
one of the 100 largest shopping center owners and
managers in the United States. Pacific and ArcLight
combined have the highest gross per screen in North
America. ArcLight's revenues have grown by 72%
in four years—from $47 million in 2009 to $81 mil-
lion in 2013. In 2012 Forbes named ArcLight's flag-
46 Harvard Business Review April 2014

HBR.ORG
THE PROBLEM
Most people at work are doing
a second job that no one's
paying them to do—preserving
their reputations, putting their
best selves forward, hiding
their Inadequacies.
THE PROPOSITION
What if a company was set
up in such a way that instead
of hiding their weaknesses,
employees used them as
opportunities for both personal
and business growth?
THE RESULT
The examples of two very
different companies—a hedge

fund and a movie theater
operator—suggest that it's
possible to meld business
growth with personal growth
in every employee's day-to-
day work.
ship cinema, ArcLight Hollywood, one of the 10 best
movie theaters in the United States.
We have spent more than 100 hours each with
Bridgewater and Decurión, observing their practices
and interviewing their people, from the most senior
leaders to the newest recruits. Virtually no aspect of
either company was declared off-limits to us. From
the extensive data we collected, we extracted the
common traits that, we believe, set these companies
apart. We shared our observations and generaliza-
tions with both of them and seriously considered
their suggestions and impressions. Neither one
asked us to alter any of our conclusions.
We acknowledge that a deliberately developmen-
tal organization is not for everyone—just as the Jesu-
its are not the only good choice for every man with a
fervent religious calling, or the Navy Seals for every
committed commander. But we offer our observa-
tions of these two companies as evidence that quests
for business excellence and individual fulfillment
need not be at odds—and that they can be combined
in such a way that each causes the other to nourish.

THE PRACTICES
Ordinarily, people acknowledge their vulnerability
and imperfections only in rare moments behind
closed doors with trusted advisers who swear to
protect their privacy. But what we saw at Decu-
rión and Bridgewater was a pervasive effort to en-
able employees to feel valuable even when they're
screwing up—to see limitations not as failures but
as their "growing edge," the path to the next level of
performance.
Getting to the other side. Transcending your
limits—which Bridgewater calls geffing to the other
side—involves overcoming the fight-or-flight re-
sponse occasioned by confronting what you are
working on about yourself. In a traditional company,
root-cause analysis of a problem will stop shy of
crossing into an employee's interior world. At Bridge-
water, examining a failed investment decision cer-
tainly includes a root-cause analysis of the specific
data, decision criteria, and steps taken to make the
investments. But it goes further, asking, "What is it
about how you—the responsible party and shaper of
this process—were thinking that might have led to
an inadequate decision?"
Consider, for instance, how one Bridgewater
employee, John Woody, confronted what CEO Ray
Dalio called his "reliability problems," as recorded
in a 2013 Harvard Business School case prepared by
Jeffrey Polzer and Heidi Gardner. Pulling no punches,
Dalio told Woody that the perception across the or-
ganization was that he could not be counted on.
Woody's immediate reaction was to angrily reject

the feedback. But he did not go off to nurse his griev-
ances or even to uncritically accept what he'd heard.
As he began to consider the exchange, he first saw
the irony of his reaction. "Here we pride ourselves
on being logical and facing the truth, but my initial
response was 'You're wrong!' which is me already
being illogical," he says. "Even if what he was saying
was not true, I was giving him no chance to show me
it might be."
After continued reflection and conversations
with many people in the organization over many
weeks. Woody began to recognize in himself a be-
havior pattern "that goes all the way back to when I
was a kid": He resisted others' control and oversight
and was quick to anger when challenged. Looking at
the gap between how he wanted to be seen and how
he was seen, he realized that he wanted to be "the
guy you could give the ball to on the two-yard line"—
but that others did not perceive him that way. "Peo-
ple were saying they are unsure I'll even be there to
catch it, let alone be able to run it in. And that hurt."
Early on, nearly everyone finds this level of vul-
nerability disorienting, no matter how enthusiastic
he or she may have been about the culture during
the hiring process. Dalio acknowledged this fact in
Apri l 2014 Harvard Business Review 47
THE BIG IDEA MAKING BUSINESS PERSONAL
L E A D I N G a Deliberately Developmental Organizatii

If you are a leader who vi/ants to build
a DDO, you should understand that
you can't want it just for the company.
You must want it for yourself. You
must be prepared to participate fully
and even to "go first" in making your
own limitations public. You must also
not want it just to generate extraordi-
nary business results—you must put
equal value on leading a company
that contributes to the flourishing of
its people as an end in itself. You will
need patience: It takes time to develop
an environment in which people feel
safe doing the personal work they'll
be asked to do on a regular basis.
And you must continually support,
defend, and champion this new form

f community.
Building an effective DDO also
requires that new people be chosen
very carefully, with an eye to their
appetite for personal reflection and
their comfort with examining their
own limitations. Even so, it may take
12 to 18 months to be sure that a new
hire will do well in this culture, so you
should be prepared for a higher rate
of turnover than you might otherwise
expect. But the people who make it
through this induction will most likely
display dramatic levels of commitment
and engagement.
A sustainable DDO culture depends
on a critical mass of people who are
together long enough to build strong

relationships and gain experience with
the practices that facilitate develop-
ment over time. Thus we question the
value of this approach for companies
that work on a contractor model
and maintain flexibility by depend-
ing heavily on free agents, because
turnover for them might be too high,
and commitment to the organization
too low.
a companywide e-mail with the subject line "I fail
every day," in which he challenged employees with
this question: "Do you worry more about how good
you are or about how fast you are learning?" Shifting
focus from the former to the latter can lead simulta-
neously to important personal changes and increased
business effectiveness.
When Inna Markus, a member of our research
team, asked Woody what progress he was making on
his reliability problem, he insisted that he still had a
long way to go. Yet it is clear that he has come quite
a distance already: "I prioritize more ruthlessly," he
says, "pause longer and more thoughtfully before
promising things to others, visualize more granu-
larly how I will actually get something done, check

in with those who ask things of me more frequently
and with more questions, and lean on those around
me much more explicitly now than I ever did."
Bridgewater uses a variety of tools and practices
to help people leam to treat errors as growth oppor-
tunities. For instance, all employees record problems
and failures in a companywide "issues log," detailing
their own contributions to mistakes. Logging in er-
rors and problems is applauded and rewarded. Not
recording a mistake is viewed as a serious breach of
duty. Another reflective practice involves a "pain but-
ton" app, which is installed on everyone's company-
issued iPad and allows employees to share expe-
riences of negative emotions at work—especially
those that raise their defenses.
Openly acknowledging those experiences
prompts follow-up conversations among the par-
ties involved as they seek to explore the "truth of
the situation" and identify ways to address the un-
derlying causes. In one such conversation, a senior
manager led members of a work group through a col-
lective diagnosis of why a previous meeting had me-
andered and failed to reach a productive conclusion.
Everyone offered thoughts. The employee who'd led
that meeting agreed that he'd gotten wrapped up in
defending his own and his colleagues' shoddy work.
More than that, he allowed, this was an instance of
a bigger, previously unacknowledged tendency he
had to worry more about looking good than about
achieving the business goal. At most companies
a conversation like this would rarely turn toward
examining an employee's habitual way of think-
ing—and if it did, it would be in a closed-door perfor-

mance review. At Bridgewater such analysis happens
in routine meetings with colleagues.
Closing the gaps. Ordinarily, in an effort to pro-
tect ourselves, we allow gaps to form—between plans
and actions, between ourselves and others, between
who we are at work and our "real selves," between
what we say at the coffee machine and what we say
in the meeting room. These gaps are most often cre-
ated by the conversations we are not having, the syn-
chronicities with others we're not achieving, and the
work that, out of self-protection, we're avoiding.
To help close these gaps, and to gain more imme-
diate access to the business issues at stake. Bridge-
water and Decurión have created discussion formats
that allow employees to speak authentically about
the personal dimensions of those issues. Bridge-
water uses a group probing of an individual's reason-
ing, as described above. Decurión conducts what it
calls a fishbowl conversation, in which several peo-
ple sit in the middle of a circle of their colleagues. In
one such conversation we watched three employees
from the IT, marketing, and operations arms of the
theater business talk about why a new customer-
loyalty program seemed to be stalling. The COO of
the theater division suspected that these three key
players were not communicating effectively. So she
asked them to describe how they were experienc-
ing the situation. The fishbowl format enabled the
wider theater managers' group to listen to, learn
from, and participate in the conversation. With care-
ñil facilitation by another senior manager, the three

HBR.ORG
were able to express the ways in which they each felt
shut out or shut down by the other two when deci-
sions were made and information should have been
shared. Each also identified some personal trigger
or blind spot that had led him or her to shut down
one of the others. They could then reach agreement
in the presence of colleagues about how to proceed
in a different way. Because dialogues like these are
routine, people view them as a healthy exercise in
sharing vulnerability, rather than a rare and threat-
ening experience.
Over time, exposing one's ovm vulnerability feels
less risky and more worthwhile as people repeatedly
witness and participate in conversations about con-
flict, revelations of their colleagues' weaknesses, and
discussions of the undiscussable. In fact, these orga-
nizations' most surprising and hopeful accomplish-
ment may be converting their employees' default
view of the "unimaginably bad" (If I risk showing my
weaknesses, it will be fust horrible!) into a sense of de-
velopmental progress {If I risk showing my weaknesses,
nothing bad will happen to me, I'll probably learn
something, and I'll be better for it in the end). The gap
between who they really are and who they think they
need to be at work diminishes or even disappears.
Constructive destabilization. Deliberately
developmental organizations don't just accept their
employees' inadequacies; they cultivate them. Both
Bridgewater and Decurión give a lot of attention to
finding a good fit between the person and the role.

But here "good fit" means being regularly, though
manageably, in over your head—what we call con-
structive destabilization. Constantly finding yourself
a bit at sea is destabilizing. Working through that is
constructive. At both companies, if it's clear that you
can perform all your responsibilities at a high level,
you are no longer in the right job. If you want to stay
in that job, having finally mastered it, you'll be seen
as someone who prefers to coast—and should be
working for a different kind of company.
Many organizations offer people stretch assign-
ments. Some commonly rotate high potentials
through a series of stretch jobs. At Bridgewater and
Decurión all jobs are stretch jobs. As Daho puts it,
"Every job should be like a towrope, so that as you
grab hold of the job, the very process of doing the
work pulls you up the mountain."
Decurion's ArcLight Cinemas has an elaborate
set of practices that allow managers at all levels to
facilitate constructive destabilization by matching
individuals and groups to appropriate development
ü O I N I N G a Deliberately Developmental Organization
Ray Dalio and one of us (Bob Kegan)
were present for the initial presenta-
tion of a Harvard Business School
case on Bridgewater. Heidi Gardner,
a case coauthor, asl<ed the students

toward the end of the discussion, "So
how many of you would like to wori<
at Bridgewater?" Just three or four
hands went up in a class of 80. "Why
not?" she asked. One young woman
who'd been an active and impressive
contributor to the case conversation
replied, "I want people at work to
think I'm better than I am; I don't want
them to see how I reaily am!"
Clearly, people who consider joining
a DDO must be willing to show them-
selves at their worst. And those who
join with a distinguished record must
be willing to consider big changes in
the way they operate. Senior hires at
both Decurión and Bridgewater told
us: "I heard the words about how it

was going to be different, but I didn't
understand what that would mean
for me."
A DDO makes work deeply engaging;
it becomes a way of life. If you want
to be able to go home and leave work
completely behind, this may not be
the right place for you.
The brand of happiness a DDO of-
fers—which arises from becoming a
better version of yourself—involves
labor pains. Some people might think
they would appreciate that but really
would not. Others simply cannot imag-
ine that pain at work could lead to
something expansive and life changing.
Finally, a DDO is continually evolving.
If you expect a workplace to never fall

short of its most inspiring principles
and guiding ideas, you will quickly be.
disappointed. A DDO makes space for
its people to grow; they must make
space for it to develop in return.
I
I
I
opportunities. The general manager at each location
uses data about individual growth to identify ideal
job assignments for every employee every week—as-
signments meant to serve both the crew member's
development and the company's business needs.
The management team at each location meets
weekly to discuss the goals and performance of each
hourly employee and to decide whether someone is
ready for more responsibility—say, a reassignment
from ticket taker to auditorium scout. (Scouts move
from one screen to another looking for ways to assist
customers; the job requires a fair amount of initia-
tive, creativity, problem solving, and diplomacy.)
As employees demonstrate new capabilities, their
progress is recorded on "competency boards," which
are set up in a central back-of-house location in each
theater. Colored pins on these boards indicate the
capability level of each employee in 15 identified job
competencies. This information is used to schedule
shift rotations, facilitate peer mentoring, and set

expectations for learning as part of a development
pipeline. The process meshes individuals' skills with
organizational requirements; everyone can see how
important individual growth is to the business and
how everyone else's job knowledge is expanding. At
weekly meetings about a dozen home-office execu-
tives and movie house general managers review a
dashboard showing theater-level and circuit-level
April 2014 Harvard Business Review 49
Over time, exposing one's own
vulnerability feels less risky
and more worthwhile as people
repeatedly witness and
participate in conversations
about conflict, revelations of their
colleagues' weaknesses, and
discussions ofthe undiscussable.
business metrics, which include not only traditional
industry data on attendance and sales but also the
number of crew members ready for promotion to the
first tier of management.
Matching a person to an appropriate stretch job
is only half the equation. The other half is aligning
the job with the person. Decurión creates numer-
ous opportunities for employees to connect their
so Harvard Business Review Apri l 2014

day-to-day work with what is meaningful to them.
At most team meetings, for instance, structured
check-ins at the beginning and checkouts at the end
allow people to identify ways in which they feel con-
nected to—or disconnected from—the work at hand
and their colleagues. A manager might, for instance,
describe a communication breakthrough with a col-
league and how it has made a shared project even
more meaningful. Another manager might report
on progress in curbing her tendency to jump in and
save the day rather than let the team step up and
feel fully accountable.
At one-on-one "touchpoint" meetings with their
managers—which happen frequently at all levels of
the company—employees can discuss how to real-
ize their personal goals through opportunities tied
to Decurion's business needs. One member of a the-
ater crew, for instance, who aspired to become a set
decorator (outside Decurión), told us that such a dia-
logue prompted her general manager to involve her
in decor for special events at the cinema—an activity
far beyond the scope of her job—in order to align her
personal interests with an organizational goal.
For a company to match people with jobs on a
continual and granular basis requires that no partic-
ular job be dependent on or identified with a single
person. That means relinquishing the security of be-
ing able to count on someone with long tenure and
expertise in a certain role. One senior executive told
us, "The purpose of your expertise is to give it away
[to the next person coming up]. That sounds won-
derful, but in practice—and I have experienced this
personally—it is not always easy." Still, all those peo-

ple constantly growing into ever-changing roles cre-
ate an organization that becomes more resilient even
as it improves the execution of its current strategy.
Everyone is a designer. If something isn't
working optimally at Bridgewater or Decurión, it's
everyone's responsibility to scrutinize and address
the design ofthe underlying process. For example,
frequent "pulse-check huddles" at Decurión allow
theater crew members to analyze how a previous
set of shows went. In these huddles we saw 17-year-
old employees give and receive feedback with their
peers and managers about problems in floor opera-
tions and ways to improve service for the next set
of shows. These young people had learned early on
to read the details ofthe theater's profit-and-loss
statement so that they could understand how every
aspect of operations (and, by extension, their own
actions) contributed to its short- and long-term prof-
HBR.ORG
itability. When offering ideas for improvements-
such as changes in food preparation or readying
3-D glasses for distribution—they spoke in terms of
their effect on the guest experience and the financial
health of the business.
If a new line of business is being launched, a
team will spend lavish amounts of time designing
the right process for managing the work. Decurion's
employees operate on the assumption that struc-
ture drives behavior, so they often focus on subtle
aspects of organizational design, such as how offices

£ire airrzinged, how frequently conversations happen,
and what tasks will require collaboration among
which people. Unlike Lean Six Sigma and other qual-
ity improvement approaches, process improvement
at Decurión and Bridgewater integrates a traditional
analysis of production errors and anomalies with
efforts to correct employees' "interior production
errors and anomalies"—that is, their faulty thinking
and invalid assumptions.
A major initiative at ArcLight, for example, in-
volved creating teams made up of marketing profes-
sionals from the home office and general managers
of individual theaters. The company reasoned that
if the friction and misunderstanding that typically
exist between these groups could be overcome by
focusing their collective expertise in small, location-
specific teams, improved local film and special-
event marketing would produce millions in addi-
tional revenue. We observed several such teams
holding regular meetings in which they shared ways
they were learning to work effectively together and
things that still needed improvement. From these
discussions it became apparent that audiences var-
ied more from cinema to cinema than the home-
office marketers had realized. As they integrated
general managers' specialized knowledge about
their customers into a nimbler social media strategy,
the group's financial performance improved. The
managers and marketers stretched themselves to
pull together in a new way—and hit new revenue
targets. ArcLight's people were as likely to tell us
that those revenue targets were designed to stretch
people's capabilities as the other way around, illus-
trating the integrated nature of business and per-
sonal development at the company.

Taking the time for growth, when people first
hear stories like these, a common reaction is "I can't
believe the time they devote to the people processes,"
usually in a tone suggesting "This is crazy! How can
you do this and get anything done?" But Decurión
and Bridgewater are not just successful incubators of
employee development; they are successful by con-
ventional business benchmarks. Clearly they do get
things done, and very well.
The simple explanation is that these companies
look differently at how they spend time. Conven-
tional organizations may pride themselves on how ef-
ficiently they agree on solutions to problems. But do
they have so many "efficient" meetings because they
haven't identified the personal issues and group dy-
namics that underlie recurring versions of the same
problem? A senior investment analyst at Bridgewater
puts it this way: "[The company] calls you on your
'bad; but, much more than that, it basically takes the
position that you can do something about this, be-
come a better version of yourself, and when you do,
we will be a better company because of it."
THE COMMUHITY
If people must be vulnerable in order to grow, they
need a community that will make them feel safe.
Deliberately developmental organizations create
that community through virtues common to many
high-performance organizations—accountability,
transparency, and support. But, arguably, they take
them to a level that even the most progressive con-
ventional organizations might find uncomfortable.

Accountability. Bridgewater and Decurión are
not flat organizations. They have hierarchies. People
report to other people. Tough decisions are made.
Businesses are shuttered. People are let go. But rank
doesn't give top executives a free pass on the merit
of their ideas, nor does it exempt them from the dis-
agreement or friendly advice of those lower down or
from the requirement to keep growing and changing
to serve the needs of the business and themselves.
Senior leaders are governed by the same struc-
tures and practices that apply to other employees. At
Decurión they take part in check-ins, sharing their
own concerns and failures. At Bridgewater their per-
formance reviews are public, as are all other employ-
ees'. And every one of those reviews mentions areas
of needed improvement—if they didn't, that would
mean those leaders were in the wrong roles.
Thus Dalio explicitly states that he doesn't want
his employees to accept a word he says until they
have critically examined it for themselves. And
Christopher Forman, Decurion's president, has
helped create a voluntary 10-week course. The Prac-
tice of Self-Management, which many employees
have taken several times. The course is taught by
April 2014 Harvard Business Review 51
THE BrC IDEA MAKING BUSINESS PERSONAL HBR.ORG
Forman and other Decurión leaders, including the
head of the real estate company, who told us, "My
colleagues didn't feel I'd mastered the material, so

they asked me to teach it myself next time around.
A typical Decurión move, this caused me to under-
stand the ideas cind practices at a much deeper level
and to see how to apply them to the businesses."
Transparency. When, in 2008, Decurion's lead-
ers decided to reduce the size of the headquarters
staff by 65%, external experts advised them not to
tell the employees until the last possible moment, to
avoid damaging morale and to prevent the people
they wanted to retain from seeking other positions.
Instead, they announced their decision immediately.
They enlisted everyone in the transition pro-
cess, sugarcoated nothing, and shared the financial
details behind the decision. Forman explains, "We
chose to trust that people could hold this [informa-
tion]." No resignations followed. Why? "We created
a context in which everyone was able to contribute
and to grow," Forman says, "both those who wound
up staying with the company and those who left."
Trusting employees in this way enabled them to
reciprocate, to beheve that the downsizing was a
growth experience that would make them more
valuable to the organization—or to future employers.
At Bridgewater every meeting is recorded, and
unless proprietary client information was discussed,
all employees have access to every recording. All
offices are equipped with audio or video recording
technology. If an employee's bosses discuss his per-
formance and he wasn't invited to the meeting, the
tape is available to him. And he doesn't have to scour
every tape to find out if he was the subject of some
closed-door conversation. In fact, he's likely to be
given a heads-up so that he will review the tape.

Initially, Bridgewater's attorneys strenuously ad-
vised against this practice. But no longer. In three
lawsuits subsequent to its initiarion, all three rul-
ings favored Bridgewater precisely because the
company could produce the relevant tapes. "And if
the tapes show we did do something wrong," one se-
nior leader told us, "then we should receive a nega-
tive judgment."
Support. At both companies everyone from
entry-level worker to CEO has a "crew"—an ongoing
group that can be counted on to support his or her
growth, both professionally and personally. Certainly,
good teams in conventional companies also offer
moral support. People form bonds, trust one another,
and talk about personal things that relate to work and
to life beyond work. But these conversations are usu-
ally about coping with the potentially destabilizing
stresses of the job. In a deliberately developmental
organization, the crew is meant to be as much an in-
strument ofthat destabilization as a support of one's
growth through vulnerability. Decurión and Bridge-
water people, including industry leaders whose
prior work at other companies had been marked by
extraordinary success, mentioned again and again
that they felt "ill-equipped," "immobilized," "out on
a rope without a net," "beyond my competencies,"
"repeatedly ineffective with no guarantees I would
get it." And yet a team that tried to support someone
by reducing destabilization—resfor/ng equilibrium-
would be seen as doing him no service at all.
MANY FINE organizations that are not deliberately de-

velopmental and may have no interest in becoming
so are nonetheless able to create cultures that foster
a sense of family fellowship. They demonstrate that
a deep sense of human connectedness at work can
be unleashed in many ways. But a deliberately devel-
opmental organization may create a special kind of
community. Experiencing yourself as incomplete or
inadequate but still included, accepted, and valued—
and recognizing the very capable people around you
as also incomplete but likewise valuable—seems to
give rise to qualities of compassion and appreciation
that can benefit all relationships.
As psychologists, we have sometimes seen this
unusual kind of connection among the members of
a personal-learning program or a facilitated support
group. From such groups we can glimpse the possi-
bility of a new kind of community, as we take up the
interior work of our own growth. But these programs
are not meant to be permanent or to address the
work of the world. By their existence as vibrant, suc-
cessful companies. Decurión and Bridgewater ofFer a
form of proof that the quest for business excellence
and the search for personal realization need not be
mutually exclusive—and can, in fact, be essential to
each other. 0 HBR Reprint RI404B
Robert Kegan is the William and Miriam Meehan
Professor in Adult Learning and Professional
Development at the Harvard Graduate School of Education.
Lisa Lahey is a lecturer at HGSE and a cofounder of the
consultancy Minds at Work. Andy Fleming is the CEO of
Way to Grow, INC, LLC (of which all the authors are
members), the intellectual and practice home of the
Deliberately Developmental Organization. Matthew Miller

is a lecturer and the associate dean for academic affeirs
at HGSE.
Find the Coaching
in Criticism
The right ways to receive feedback
by Sheila Heen and Douglas Stone
Managing Yourself
Case study 113
Does an intense
corporate culture
attract talent or
drive it away?
synthesis 118

Why competence
trumps confidence
Life’s Work 124
education innovator
salman Khan on how
people learn best
Experience
Managing Your Professional Growth hbr.org
Il
lu
st
ra
tI
o
n
: r
o
m
ua
ld
o
F
au
ra

108 Harvard Business review January–february 2014
Feedback is crucial. That’s obvious:
It improves performance, develops
talent, aligns expectations, solves
problems, guides promotion and pay, and
boosts the bottom line.
But it’s equally obvious that in many
organizations, feedback doesn’t work.
A glance at the stats tells the story: Only
36% of managers complete appraisals
thoroughly and on time. In one recent
survey, 55% of employees said their most
recent performance review had been
unfair or inaccurate, and one in four said
they dread such evaluations more than
anything else in their working lives. When
senior HR executives were asked about
their biggest performance management
challenge, 63% cited managers’ inability
or unwillingness to have difficult feed-
back discussions. Coaching and mentor-
ing? Uneven at best.
Most companies try to address these
problems by training leaders to give
feedback more effectively and more
often. That’s fine as far as it goes; every-
one benefits when managers are better
communicators. But improving the skills
of the feedback giver won’t accomplish
much if the receiver isn’t able to absorb

what is said. It is the receiver who controls
whether feedback is let in or kept out,
who has to make sense of what he or she
is hearing, and who decides whether or
not to change. People need to stop treating
feedback only as something that must
be pushed and instead improve their
ability to pull.
For the past 20 years we’ve coached
executives on difficult conversations, and
we’ve found that almost everyone, from
new hires to C-suite veterans, struggles
with receiving feedback. A critical perfor-
mance review, a well-intended suggestion,
or an oblique comment that may or may
not even be feedback (“Well, your presen-
tation was certainly interesting”) can spark
an emotional reaction, inject tension into
the relationship, and bring communica-
tion to a halt. But there’s good news, too:
The skills needed to receive feedback well
are distinct and learnable. They include
being able to identify and manage the
emotions triggered by the feedback and
extract value from criticism even when
it’s poorly delivered.
Why Feedback Doesn’t Register
What makes receiving feedback so hard?
The process strikes at the tension between
two core human needs—the need to learn
and grow, and the need to be accepted
just the way you are. As a result, even a
seemingly benign suggestion can leave

you feeling angry, anxious, badly treated,
or profoundly threatened. A hedge such as
“Don’t take this personally” does nothing
to soften the blow.
Getting better at receiving feedback
starts with understanding and managing
those feelings. You might think there
are a thousand ways in which feedback
can push your buttons, but in fact there
are only three.
Truth triggers are set off by the content
of the feedback. When assessments or
advice seem off base, unhelpful, or sim-
ply untrue, you feel indignant, wronged,
and exasperated.
Relationship triggers are tripped
by the person providing the feedback.
Exchanges are often colored by what
you believe about the giver (He’s got no
credibility on this topic!) and how you feel
about your previous interactions (After all
I’ve done for you, I get this petty criti-
cism?). So you might reject coaching that
you would accept on its merits if it came
from someone else.
Identity triggers are all about your
relationship with yourself. Whether the
feedback is right or wrong, wise or witless,
it can be devastating if it causes your sense
of who you are to come undone. In such
moments you’ll struggle with feeling over-

whelmed, defensive, or off balance.
All these responses are natural and rea-
sonable; in some cases they are unavoid-
able. The solution isn’t to pretend you
don’t have them. It’s to recognize what’s
happening and learn how to derive benefit
from feedback even when it sets off one or
more of your triggers.
Six Steps to Becoming
a Better Receiver
Taking feedback well is a process of sort-
ing and filtering. You need to understand
the other person’s point of view, try on
ideas that may at first seem a poor fit, and
experiment with different ways of doing
things. You also need to discard or shelve
critiques that are genuinely misdirected
or are not helpful right away. But it’s
nearly impossible to do any of those
things from inside a triggered response.
Instead of ushering you into a nuanced
conversation that will help you learn,
your triggers prime you to reject, counter-
attack, or withdraw.
The six steps below will keep you from
throwing valuable feedback onto the
discard pile or—just as damaging—accept-
ing and acting on comments that you
would be better off disregarding. They are
presented as advice to the receiver. But, of
course, understanding the challenges of
receiving feedback helps the giver to be
more effective too.

1
Know your
tendencies
You’ve Been getting FeeDBack� all your life,
so there are no doubt patterns in how you
respond. Do you defend yourself on the
facts (“This is plain wrong”), argue about
the method of delivery (“You’re really do-
ing this by e-mail?”), or strike back (“You,
of all people?”)? Do you smile on the out-
side but seethe on the inside? Do you get
teary or filled with righteous indignation?
And what role does the passage of time
play? Do you tend to reject feedback in the
moment and then step back and consider
it over time? Do you accept it all imme-
diately but later decide it’s not valid? Do
you agree with it intellectually but have
trouble changing your behavior?
When Michael, an advertising execu-
tive, hears his boss make an offhand joke
hbr.org
January–February 2014 harvard business review 109
about his lack of professionalism, it hits
him like a sledgehammer. “I’m flooded
with shame,” he told us, “and all my
failings rush to mind, as if I’m Googling

‘things wrong with me’ and getting 1.2 mil-
lion hits, with sponsored ads from my
father and my ex. In this state it’s hard to
see the feedback at ‘actual size.’” But now
that Michael understands his standard op-
erating procedure, he’s able to make bet-
ter choices about where to go from there:
“I can reassure myself that I’m exaggerat-
ing, and usually after I sleep on it, I’m in a
better place to figure out whether there’s
something I can learn.”
2
Disentangle
the “what”
from the “who”
If the feedback Is on target and the
advice is wise, it shouldn’t matter who
delivers it. But it does. When a relation-
ship trigger is activated, entwining the
content of comments with your feelings
about the giver (or about how, when, or
where she delivered the comments),
learning is short-circuited. To keep that
from happening, you have to work to
separate the message from the messenger
and then consider both.
Janet, a chemist and a team leader at
a pharmaceutical company, received
glowing comments from her peers and
superiors during her 360-degree review
but was surprised by the negative feed-
back she got from her direct reports. She

immediately concluded that the problem
was theirs: “I have high standards, and
some of them can’t handle that,” she
remembers thinking. “They aren’t used
to someone holding their feet to the fire.”
In this way, she changed the subject from
her management style to her subordinates’
competence, preventing her from learning
something important about the impact
she had on others.
Eventually the penny dropped, Janet
says. “I came to see that whether it was
their performance problem or my leader-
ship problem, those were not mutually
exclusive issues, and both were worth
solving.” She was able to disentangle the
issues and talk to her team about both.
Wisely, she began the conversation with
their feedback to her, asking, “What am
I doing that’s making things tough? What
would improve the situation?”
3
Sort toward
coaching
some feedback Is evaluatIve (“Your rat-
ing is a 4”); some is coaching (“Here’s how
you can improve”). Everyone needs both.
Evaluations tell you where you stand,
what to expect, and what is expected of
you. Coaching allows you to learn and im-
prove and helps you play at a higher level.
It’s not always easy to distinguish one

from the other. When a board member
phoned James to suggest that he start
the next quarter’s CFO presentation with
analyst predictions rather than internal
projections, was that intended as a helpful
suggestion, or was it a veiled criticism
of his usual approach? When in doubt,
people tend to assume the worst and
to put even well-intentioned coaching
into the evaluation bin. Feeling judged is
likely to set off your identity triggers, and
the resulting anxiety can drown out the
opportunity to learn. So whenever pos-
sible, sort toward coaching. Work to hear
feedback as potentially valuable advice
from a fresh perspective rather than as an
indictment of how you’ve done things in
the past. When James took that approach,
“the suggestion became less emotionally
loaded,” he says. “I decided to hear it as
simply an indication of how that board
member might more easily digest quar-
terly information.”
4
Unpack the
feedback
often It’s not ImmedIately clear whether
feedback is valid and useful. So before you
accept or reject it, do some analysis to bet-
ter understand it.
Here’s a hypothetical example. Kara,
who’s in sales, is told by Johann, an

experienced colleague, that she needs
to “be more assertive.” Her reaction might
be to reject his advice (“I think I’m pretty
assertive already”). Or she might acqui-
esce (“I really do need to step it up”). But
before she decides what to do, she needs
to understand what he really means. Does
he think she should speak up more often,
or just with greater conviction? Should she
smile more, or less? Have the confidence
to admit she doesn’t know something, or
the confidence to pretend she does?
When you set
aside snap
judgments and
explore where
feedback is
coming from and
where it’s going,
you enter into a
rich conversation.
eXPerIence
110 Harvard Business Review January–february 2014
Even the simple advice to “be more
assertive” comes from a complex set of
observations and judgments that Johann
has made while watching Kara in meetings
and with customers. Kara needs to dig into
the general suggestion and find out what
in particular prompted it. What did Johann

see her do or fail to do? What did he expect,
and what is he worried about? In other
words, where is the feedback coming from?
Kara also needs to know where the
feedback is going—exactly what Johann
wants her to do differently and why. After
a clarifying discussion, she might agree
that she is less assertive than others on
the sales floor but disagree with the idea
that she should change. If all her sales
heroes are quiet, humble, and deeply
curious about customers’ needs, Kara’s
view of what it means to be good at sales
might look and sound very different from
Johann’s Glengarry Glen Ross ideal.
When you set aside snap judgments
and take time to explore where feedback is
coming from and where it’s going, you can
enter into a rich, informative conversation
about perceived best practices—whether
you decide to take the advice or not.
5
Ask for just
one thing
Feedback is less likely� to set off your
emotional triggers if you request it and
direct it. So don’t wait until your annual
performance review. Find opportunities
to get bite-size pieces of coaching from
a variety of people throughout the year.
Don’t invite criticism with a big, unfo-
cused question like “Do you have any

feedback for me?” Make the process more
manageable by asking a colleague, a boss,
or a direct report, “What’s one thing you
see me doing (or failing to do) that holds
me back?” That person may name the first
behavior that comes to mind or the most
important one on his or her list. Either way,
you’ll get concrete information and can
tease out more specifics at your own pace.
Roberto, a fund manager at a financial
services firm, found his 360-degree review
process overwhelming and confusing.
“Eighteen pages of charts and graphs and
no ability to have follow-up conversations
to clarify the feedback was frustrating,” he
says, adding that it also left him feeling
awkward around his colleagues.
Now Roberto taps two or three people
each quarter to ask for one thing he might
work on. “They don’t offer the same
things, but over time I hear themes, and
that gives me a good sense of where my
growth edge lies,” he says. “And I have
really good conversations—with my boss,
with my team, even with peers where
there’s some friction in the relationship.
They’re happy to tell me one thing to
change, and often they’re right. It does
help us work more smoothly together.”
Research has shown that those who ex-
plicitly seek critical feedback (that is, who

are not just fishing for praise) tend to get
higher performance ratings. Why? Mainly,
we think, because someone who’s asking
for coaching is more likely to take what is
said to heart and genuinely improve. But
also because when you ask for feedback,
you not only find out how others see you,
you also influence how they see you. Solic-
iting constructive criticism communicates
humility, respect, passion for excellence,
and confidence, all in one go.
6
Engage in small
experiments
aFter y�ou’ve worked to solicit and
understand feedback, it may still be hard
to discern which bits of advice will help
you and which ones won’t. We suggest
designing small experiments to find out.
Even though you may doubt that a sugges-
tion will be useful, if the downside risk is
small and the upside potential is large, it’s
worth a try. James, the CFO we discussed
earlier, decided to take the board mem-
ber’s advice for the next presentation and
see what happened. Some directors were
pleased with the change, but the shift in
format prompted others to offer sugges-
tions of their own. Today James reverse-
engineers his presentations to meet board
members’ current top-of-mind concerns.
He sends out an e-mail a week beforehand
asking for any burning questions, and

either front-loads his talk with answers to
them or signals at the start that he will get
to them later on. “It’s a little more chal-
lenging to prepare for but actually much
easier to give,” he says. “I spend less time
fielding unexpected questions, which was
the hardest part of the job.”
That’s an example worth following.
When someone gives you advice, test it
out. If it works, great. If it doesn’t, you can
try again, tweak your approach, or decide
to end the experiment.
criticism is never easy to take. Even
when you know that it’s essential to
your development and you trust that the
person delivering it wants you to succeed,
it can activate psychological triggers.
You might feel misjudged, ill-used, and
sometimes threatened to your very core.
Your growth depends on your ability to
pull value from criticism in spite of your
natural responses and on your willingness
to seek out even more advice and coach-
ing from bosses, peers, and subordinates.
They may be good or bad at providing it,
or they may have little time for it—but
you are the most important factor in your
own development. If you’re determined
to learn from whatever feedback you get,
no one can stop you.
Hbr reprint R1401K

sheila Heen and douglas stone are
cofounders of Triad Consulting Group and
teach negotiation at Harvard Law School. They
are the coauthors of the forthcoming book
Thanks for the Feedback: The Science and Art of
Receiving Feedback Well (Viking/Penguin, 2014),
from which this article is adapted.
HbR.oRG
January–February 2014 Harvard business Review 111
V
• ' % .

^
* * v ; - , . , . <«
FROM
PURPOSE
TO IMPACT
Figure out your passion
and put it to work.
BY NICK CRAIG AND SCOTT SNOOK
May 2014 Harvard Business Review 105
FROM PURPOSE TO IMPACT
The two most important days in your life are the day
you are born and the day you find out why.
— Mark Twain
Over the past five years, there's been an explosion of in-
terest in purpose-driven leadership. Academics argue
persuasively that an executive's most important role is
to be a steward of the organization's purpose. Business
experts make the case that purpose is a key to excep-
tional performance, while psychologists describe it as
the pathway to greater well-being.
Doctors have even found that people with purpose in
their lives are less prone to disease. Purpose is increas-
ingly being touted as the key to navigating the complex,

volatñe, ambiguous world we face today, where strategy
is ever changing and few decisions are obviously right
or wrong.
Despite this growing understanding, however, a big
challenge remains. In our work training thousands of
managers at organizations from GE to the Girl Scouts,
and teaching an equal number of executives and stu-
dents at Harvard Business School, we've found that
fewer than 20% of leaders have a strong sense of their
own individual purpose. Even fewer can distill their
purpose into a concrete statement. They may be able
to clearly articulate their organization's mission: Think
of Google's "To organize the world's information and
make it universally accessible and useful," or Charles
Schwab's "A relentless ally for the individual investor."
But when asked to describe their own purpose, they
typically fall back on something generic and nebulous:
"Help others excel." "Ensure success." "Empower my
people." Just as problematic, hardly any of them have a
clear plan for translating purpose into action. As a result,
they limit their aspirations and often fail to achieve their
most ambitious professional and personal goals.
Our purpose is to change that—to help executives
find and define their leadership purpose and put it to
use. Building on the seminal work of our colleague Bill
George, our programs initially covered a wide range
of topics related to authentic leadership, but in recent
years purpose bas emerged as the cornerstone of our
teaching and coaching. Executives tell us it is the key to
accelerating their growth and deepening their impact,
in both their professional and personal lives. Indeed,
we believe that the process of articulating your purpose
and finding the courage to live it—what we call purpose

to impact—is the single most important developmental
task you can undertake as a leader.
Consider Dolf van den Brink, the president and CEO
of Heineken USA. Working with us, he identified a de-
cidedly unique purpose statement—"To be the wuxia
106 Harvard Business Review May 2014
master who saves the kingdom"—which reñects his
love of Chinese kung fu movies, the inspiration he
takes from the wise, skillful warriors in them, and
the realization that he, too, revels in high-risk situ-
ations that compel him to take acrion. With that im-
petus, he was able to create a plan for reviving a chal-
lenged legacy business during extremely difficult
economic conditions. We've also watched a retail
operations chief call on his newly clarified purpose—
"Compelled to make things better, whomever, wher-
ever, however"—to make the "hard, cage-rattling
changes" needed to beat back a global competitor.
And we've seen a factory director in Egypt use his
HBR.ORG
THE PROBLEM
Purpose is increasingly seen as the key
to navigating the complex world we face
today, where strategy is ever changing

and few decisions are obviously right or
wrong. At the same time, few leaders have
a strong sense of their own leadership
purpose or a clear plan for translating it
into action. As a result, they often fail to
achieve their most ambitious professional
and personal goals.
THE SOLUTION
The first step toward uncovering your
leadership purpose is to mine your life
story for major themes that reveal your
lifelong passions and values. Next, craft
a concise purpose statement that leaves
you emboldened and energized. Finally,
develop a purpose-to-impact plan.
Effective plans:
. Use language that is uniquely
meaningful to you

Focus on big-picture aspirations and
then set shorter-term goals, working
backward with increasing specificity
Emphasize the strengths you bring to
the table
Take a holistic view of work and family
purpose—"Create families that excel"—to persuade
employees that they should honor the 2012 protest
movement not by joining the marches but by main-
taining their loyalties to one another and keeping
their shared operation running.
We've seen similar results outside the corporate
world. Kathi Snook (Scott's wife) is a retired army
colonel who'd been struggling to reengage in work
after several years as a stay-at-home mom. But after
nailing her purpose statement—"To be the gentle,
behind-the-scenes, kick-in-the-ass reason for suc-
cess," something she'd done throughout her military
career and with her kids—she decided to run for a
hotly contested school committee seat, and won.
And we've implemented this thinking across
organizations. Unilever is a company that is com-
mitted to purpose-driven leadership, and Jonathan
Donner, the head of global learning there, has been
a key partner in refining our approach. Working
with his company and several other organizations,
we've helped more than 1,000 leaders through the
purpose-to-impact process and have begun to track

and review their progress over the past two to three
years. Many have seen dramatic results, ranging
from two-step promotions to sustained improve-
ment in business results. Most important, the vast
majority tell us they've developed a new ability to
thrive in even the most challenging times.
In this article, we share our step-by-step frame-
work to start you down the same path. We'll explain
how to identify your purpose and then develop an
impact plan to achieve concrete results.
WHAT IS PURPOSE?
Most of us go to our graves with our music still
inside us, unployed.
— Oliver Wendell Holmes
Your leadership purpose is who you are and what
makes you distinctive. Whether you're an entrepre-
neur at a start-up or the CEO of a Fortune 500 com-
pany, a call center rep or a software developer, your
purpose is your brand, what you're driven to achieve,
the magic that makes you tick. It's not what you do,
it's how you do your job and why—the strengths and
passions you bring to the table no matter where
you're seated. Although you may express your pur-
pose in different ways in different contexts, it's what
everyone close to you recognizes as uniquely you
and would miss most if you were gone.
When Kathi shared her purpose statement with
her family and friends, the response was instanta-
neous and overwhelming: "Yes! That's you—all busi-

ness, all the time!" In every role and every context—
as captain of the army gymnastics team, as a math
teacher at West Point, informally with her family and
friends—she had always led from behind, a gentle
but forceful catalyst for others' success. Through
this new lens, she was able to see herself—and her
future—more clearly. When Dolf van den Brink re-
vealed his newly articulated purpose to his wife, she
easily recognized the "wuxia master" who had led
his employees through the turmoil of serious fight-
ing and unrest in the Congo and was now ready to
attack the challenges at Heineken USA head-on.
At its core, your leadership purpose springs from
your identity, the essence of who you are. Purpose
is not a list of the education, experience, and skills
you've gathered in your life. We'll use ourselves as
examples: The fact that Scott is a retired army colo-
nel with an MBA and a PhD is not his purpose. His
purpose is "to help others live more 'meaning-full'
lives." Purpose is also not a professional title, lim-
ited to your current job or organization. Nick's pur-
pose is not "To lead the Authentic Leadership Insti-
tute." That's his job. His purpose is "To wake you up
and have you find that you are home." He has been
doing just that since he was a teenager, and if you
sit next to him on the shuttle from Boston to New
York, he'll wake you up (figuratively), too. He simply
can't help himself

Purpose is definitely not some jargon-filled catch-all
("Empower my team to achieve exceptional business re-
sults while delighting our customers"). It should be spe-
cific and personal, resonating with you and you alone.
It doesn't have to be aspirational or cause-based ("Save
the whales" or "Feed the hungry"). And it's not what
you think it should be. It's who you can't help being. In
fact, it might not necessarily be all that flattering ("Be
the thorn in people's side that keeps them moving!").
HOW DO YOU FIND IT?
To be nobody but yourself in a world which is doing
its best, night and day, to make you everybody else,
nieans to figtxt the hardest battle which any human
being can fight; and never stop fighting.
— E.E. Cummings
Finding your leadership purpose is not easy. If it were,
we'd all know exactly why we're here and be living that
purpose every minute of every day. As E.E. Cummings
suggests, we are constantly bombarded by powerful
messages (from parents, bosses, management gurus, ad-
vertisers, celebrities) about what we should be (smarter,
stronger, richer) and about how to lead (empower oth-
ers, lead from behind, be authentic, distribute power).
To figure out who you are in such a world, let alone "be
nobody but yourself/' is indeed hard work. However, our
experience shows that when you have a clear sense of
who you are, everything else follows naturally.
Some people will come to the purpose-to-impact
journey with a natural bent toward introspection and re-
flection. Others will find the experience uncomfortable
and anxiety-provoking. A few will just roll their eyes.
We've worked with leaders of all stripes and can attest

that even the most skeptical discover personal and pro-
fessional value in the experience. At one multinational
corporation, we worked with a senior lav̂ ryer who char-
acterized himself as "the least likely person to ever find
this stuff useful." Yet he became such a supporter that he
required all his people to do the program. "I have never
read a self-help book, and I don't plan to," he told his
staff. "But if you want to become ¿in exceptional leader,
you have to know your leadership purpose." The key to
engaging both the dreamers and the skeptics is to buüd
a process that has room to express individuality but cilso
offers step-by-step practical guidance.
The first task is to mine your life story for common
threads and major themes. The point is to identify
your core, lifelong strengths, values, and passions—
those pursuits that energize you and bring you joy. We
use a variety of prompts but have found three to be
most effective:
• What did you especially love doing when you
were a child, hefore the world told you what you
should or shouldn't like or do? Describe a moment
and how it made you feel.
• Tell us about two of your most challenging life
experiences. How have they shaped you?
• What do you enjoy doing in your life now that
helps you sing your song?
We strongly recommend grapphng with these
questions in a small group of a few peers, because
we've found that it's almost impossible for people
to identify their leadership purpose by themselves.

io8 Harvard Business Review May 2014
HBR.ORG
You can't get a clear picture of yourself without
trusted colleagues or friends to act as mirrors.
After this reflective work, take a shot at crafting a
clear, concise, and declarative statement of purpose:
"My leadership purpose is ." The words in your
purpose statement must be yours. They must cap-
ture your essence. And they must call you to action.
To give you an idea of how the process works,
consider the experiences of a few executives. When
we asked one manager about her childhood passions,
she told us about growing up in rural Scotland and
delighting in "discovery" missions. One day, she and
a friend set out determined to find frogs and spent
the whole day going from pond to pond, turning
over every stone. Just before dark, she discovered a
single frog and was triumphant. The purpose state-
ment she later crafted—"Always find the frogs!"—is
perfect for her current role as the senior VP of R&D
for her company.
Another executive used two "crucible" life ex-
periences to craft her purpose. The first was per-
sonal: Years before, as a divorced young mother of
two, she found herself homeless and begging on the
street, but she used her wits to get back on her feet.
The second was professional: During the economic

crisis of 2008, she had to oversee her company's
retrenchment from Asia and was tasked with clos-
ing the ñagship operation in the region. Despite the
near hopeless job environment, she was able to help
every one of her employees find another job before
letting them go. After discussing these stories with
her group, she shifted her purpose statement from
"Continually and consistently develop and facilitate
the growth and development of myself and others
leading to great performance" to "With tenacity, cre-
ate brilliance."
Dolf came to his "wuxia master" statement af-
ter exploring not only his film preferences but also
his extraordinary crucible experience in the Congo,
when militants were threatening the brewery he
managed and he had to order it barricaded to protect
his employees and prevent looting. The Egyptian
factory director focused on family as his purpose
because his stories revealed that familial love and
support had been the key to facing every challenge
in his life, while the retail operations chief used
"Compelled to improve" after realizing that his great-
est achievements had always come when he pushed
himself and others out of their comfort zones.
As you review your stories, you will see a unify-
ing thread, just as these executives did. Pull it, and
PURPOSE STATEMENTS
FROM BAD...
Lead new markets

department to achieve
exceptional business
results
Be a driver in the
infrastructure business
that allows each person
to achieve their needed
outcomes while also
mastering the new
drivers of our business
as I balance my family
and work demands
Continually and
consistently develop and
facilitate the growth and
development of myself
and others leading to
great performance

TO GOOD
Eliminate "chaos"
Bring water and power
to the 2 billion people
who do not have it
With tenacity, create
brilliance
you'll uncover your purpose. (The exhibit "Purpose
Statements: From Bad to Good" offers sampling of
purpose statements.)
HOW DO YOU PUT YOUR PURPOSE
INTO ACTION?
This is the true joy in life, the being used for a
purpose recognized by yourself as a mighty one.
— George Berreará Shaw
Clarifying your purpose as a leader is critical, but
writing the statement is not enough. You must also
envision the impact you'll have on your world as a
result of living your purpose. Your actions—not your
words—are what really matter. Of course, it's vir-
tually impossible for any of us to fully live into our
purpose 100% of the time. But with work and careful
planning, we can do it more often, more consciously,
wholeheartedly, and effectively.

Purpose-to-impact plans differ from traditional
development plans in several important ways: They
start with a statement of leadership purpose rather
than of a business or career goal. They take a holistic
view of professional and personal life rather than ig-
nore the fact that you have a family or outside inter-
PURPOSE-TO-
IMPACT PLANNING
TRADITIONAL
DEVELOPMENT
PLANNING
Ises meaningful, purpose-
infused language
Is focused on strengths to
realize career aspirations
Elicits a statement of
leadership purpose that
explains how you will lead
Sets incremental goals
related to living your

leadership purpose
Focuses on the future,
working backward
I
I s unique to you; addresses
who you are as a leader
Takes a holistic view of work
and family
Uses standard business
language
Is focused on weaknesses
to address performance
States a business- or career-
driven goal
Measures success using
metrics tied to the firm's
mission and goals
Focuses on the present,
working forward

Is generic; addresses
the job or role
Ignores goals and
responsibilities
outside the office
ests and commitments. They incorporate meaning-
ful, purpose-infused language to create a document
that speaks to you, not just to any person in your job
or role. They force you to envision long-term oppor-
tunities for living your purpose (three to five years
out) and then help you to work backward from there
(two years out, one year, six months, three months,
30 days) to set specific goals for achieving them.
When executives approach development in this
purpose-driven way, their aspirarions—for instance,
Kathi's decision to get involved in the school board,
or the Egyptian factory director's ambition to run
manufacturing and logistics across the Middle East-
are stoked. Leaders also become more energized in
their current roles. Dolf's impact plan inspired him
to tackle his role at Heineken USA with four mottos
for his team: "Be brave," "Decide and do," "Hunt as
a pack," and "Take it personally." When Unilever ex-
ecurive Jostein Solheim created a development plan
around his purpose—"To be part of a global move-
ment that makes changing the world seem fun and
achievable" —he realized he wanted to stay on as CEO
of the Ben & Jerry's business rather than moving up
the corporate ladder.

Let's now look at a hypothetical purpose-to-
impact plan (representing a composite of several
people with whom we've worked) for an in-depth
view of the process. "Richard" arrived at his purpose
only after being prodded into talking about his life-
long passion for sailing; suddenly, he'd found a set
of experiences and language that could redefine how
he saw his job in procurement,
Richard's development plan leads with the PUR-
POSE STATEMENT he Crafted: "To harness all the ele-
ments to win the race." This is followed by AN EXPLA-
NATION of why that's his purpose: Research shows
that understanding what motivates us dramatically
increases our ability to achieve big goals.
Next, Richard addresses his THREE- TO FIVE-YEAR
GOALS using the language of his purpose statement.
We find that this is a good time frame to target first;
several years is long enough that even the most dis-
illusioned managers could imagine they'd actually
be living into their purpose by then. But it's not so
distant that it creates complacency. A goal might be
to land a top job—in Richard's case, a global procure-
ment role—but the focus should be on how you will
do it, what kind of leader you'll be.
Then he considers TWO-YEAR GOALS. This is a time
frame in which the grand future and current reality
begin to merge. What new responsibilities will you
take on? What do you have to do to set yourself up
for the longer term? Remember to address your per-
sonal life, too, because you should be more fully liv-

ing into your purpose everywhere. Richard's goals
explicitly reference his family, or "shore team,"
The fifth step—setting ONE-YEAR GOALS—is of-
ten the most challenging. Many people ask, "What
if most of what I am doing today isn't aligned in
any way with my leadership purpose? How do I get
from here to there?" We've found two ways to ad-
dress this problem. First, think about whether you
can rewrite the narrative on parts of your work, or
change the way you do some tasks, so that they be-
come an expression of your purpose. For example,
the phrase "seaworthy boat" helps Richard see the
meaning in managing a basic procurement process.
Second, consider whether you can add an activ-
ity that is 100% aligned with your purpose. We've
found that most people can manage to devote 5%
to 10% of their time to something that energizes
no Harvard Business Review May 2014
HBR.ORG
A PurDose-to-IrriDact Plan
them and helps others see their strengths. Take
Richard's decision to contribute to the global stra-
tegic procurement efFort: It's not part of his "day
job," but it gets him involved in a more purpose-
driven project.
Now we get to the nitty-gritty. What are the CRITI-
CAL NEXT STEPS that you must take in the coming six

months, three months, and 30 days to accomplish
the one-year goals you've set out? The importance
of small wins is well documented in almost every
management discipline from change initiatives to
innovation. In detailing your next steps, don't write
down all the requirements of your job. List the activi-
ties or results that are most critical given your newly
clarified leadership purpose and ambitions. You'll
probably notice that a number of your tasks seem
much less urgent than they did before, while others
you had pushed to the side take priority.
Finally, we look at the KEY RELATIONSHIPS needed
to turn your plan into reality. Identify two or three
people who can help you live more fully into your
leadership purpose. For Richard, it is Sarah, the HR
manager who will help him assemble his crew, and
his wife, Jill, the manager of his "shore team."
Executives tell us that their individual purpose-
to-impact plans help them stay true to their short-
and long-term goals, inspiring courage, commit-
ment, and focus. When they're frustrated or flagging,
they pull out the plans to remind themselves what
they want to accomplish and how they'll succeed.
After creating his plan, the retail operations chief
facing global competition said he's no longer "shy-
ing away from things that are too hard." Dolf van den
Brink said: "I'm much clearer on where I really can
contribute and where not. I have full clarity on the
kind of roles I aspire to and can make explicit choices
along the way."
WHAT CREATES tbe greatest leaders and companies?
Each of them operates from a slightly different set
of assumptions about the world, their industry, what

can or can't be done. That individual perspective al-
lows them to create great value and have significant
impact. They all operate with a unique leadership
purpose. To be a truly effective leader, you must do
the same. Clarify your purpose, and put it to work. Ü
HBR Reprint R1405H
HNick Craig is the president of the Authentic Leader-
ship Institute. Scott Snook is the MBA Class of 1958
Senior Lecturer of Business Administration at Harvard
Business School.
This sample plan shows how "Richard" uses his unique
leadership
purpose to envision big-picture aspirations and then work back-
ward to set more-specific goals.
1 CREATE PURPOSE STATEMENT
To harness all the elements to win the race
2 WRITE EXPLANATION
I love to sail. In my teens and 20s, I raced high-performance
three-man
skiffs and almost made it to the Olympics. Now sailing is my
hobby and
passion—a challenge that requires discipline, balance, and
coordination.
You never know what the wind will do next, and in the end, you
win the race

only by relying on your team's combined capabilities, intuition,
and flow. It's
all about how you read the elements.
3 SET THREE- TO FIVE-YEAR GOALS
Be known for training the best crews
and winning the big races: Take on a
global procurement role and use the
opportunity to push my organization
ahead of competitors
HOW WILL I DO IT?
• Make everyone feel they're part of
the same team
• Navigate unpredictable conditions
by seeing wind shears before every-
one else
• Keep calm when we lose individual
races; learn and prepare for the
next ones

Celebrate my shore team: Make sure
the family has one thing we do that
binds us
4 SET TWO-YEAR GOALS
Win the gold: Implement a new
procurement model, redefining
our relationship with suppliers and
generating i o % cost savings for the
company
Tackle next-level racing challenge:
Move into a European role with
broader responsibilities
HOW WILL I DO IT?
• Anticipate and then face the tough
challenges
• Insist on innovative yet rigorous and
pragmatic solutions
• Assemble and train the winning

crew
Develop my shore team: Teach the
boys to sail
5 SET ONE-YEAR GOALS
Target the gold: Begin to develop new
procurement process
Win the short race: Deliver Sympix
project ahead of expectations
Build a seaworthy boat: Keep TFLS
process within cost and cash forecast
HOW WILL I DO IT?
• Accelerate team reconfiguration
• Get buy-in from management for
new procurement approach
Invest in my shore team: Take a two-
week vacation, no e-mail
6 MAP OUT CRITICAL NEXT STEPS
Assemble the crew: Finalize key hires

Chart the course: Lay the groundwork
for Sympix and TFLS projects
HOW WILL I DO IT?
SIX MONTHS:
• Finalize succession plans
• Set out Sympix timeline
THREE MONTHS:
• Land a world-class replacement
for Jim
• Schedule "action windows"
to focus with no e-mail
30 DAYS:
• Bring Alex in Shanghai on board
• Agree on TFLS metrics
• Conduct one-day Sympix offsite
Reconnect with my shore team: Be
more present with Jill and the boys
7 EXAMINE KEY RELATIONSHIPS

Sarah, HR manager
Jill, manager of my "shore team"
May 2014 Harvard Business Review i n
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may 2006 115
f you want to know why so many organizations sink
into chaos, look no further than their leaders’ mouths.
Leadership, at any level, certainly isn’t easy – but unclear,

vague, roller-coaster pronouncements make many top
managers’ jobs infinitely more difficult than they need to be.
Leaders frequently espouse dozens of cliché-infused decla-
rations such as “Let’s focus on the key priorities this quarter,”
I
LEADERS
MUST MANAGE
THE FIVE MESSAGES
by John Hamm
All too often, leaders fail to explain what they mean
when they talk about organizational structure,
financial results, their own jobs, time management,
and corporate culture. Left unclear, these concepts
can throw a firm into turmoil–but when given proper
focus, they confer extraordinary leverage.
The Five Messages Leaders Must Manage
“Customers come first,” or “We need a full-court press in
engineering this month.” Over and over again, they pre-

sent grand, overarching – yet fuzzy – notions of where
they think the company is going. Too often, they assume
everyone shares the same definitions of broad terms like
vision, loyalty, accountability, customer relationships,
teamwork, focus, priority, culture, frugality, decision
making, results, and so on, virtually ad infinitum.
Even the most senior managers nod in polite agree-
ment when the CEO uses inflated terms like these, but
the executives may feel somewhat discomfited, wonder-
ing whether they’ve truly understood. Rather than asking
for clarification – a request they fear would make them
look stupid–they pass on vague marching orders to their
own troops, all of whom develop their own interpreta-
tions of what their bosses mean. In the absence of clear
communication that satisfies the urgent desire to know
what the boss is really thinking, people imagine all kinds
of motives. The result is often sloppy behavior and mis-
alignment that can cost a company dearly. Precious time

is wasted, rumors abound, talented people lose their
focus, big projects fail.
By contrast, think of the way a high-reliability team –
say, an emergency room staff or a SWAT team – works.
Every member has a precise understanding of what
things mean. Surgeons and nurses speak the same med-
ical language. SWAT teams know exactly what weapons
to use, and when and how and under what conditions to
use them. In these professions, there is absolutely no
room for sloppy communication. If team members don’t
speak to each other with precision, people die. People
don’t die in corporations, but without clear definitions
and directions from the top, they work ineffectively and
at cross-purposes.
For the past five years, I’ve worked with hundreds of
CEOs as a leadership coach, a board member, a venture
capital investor, and a strategy consultant. I’ve also been
a president and CEO myself (my company, Whistle Com-

munications, was acquired by IBM in 1999). The compa-
nies whose CEOs I’ve worked with – typically technology
firms – range in size from about 100 to several thousand
people. In observing CEOs, I’ve come to the conclusion
that the real job of leadership is to inspire the organiza-
tion to take responsibility for creating a better future.
I believe effective communication is a leader’s single most
critical management tool for making this happen. When
leaders take the time to explain what they mean, both
explicitly (by carefully defining their visions, intentions,
and directions) and implicitly (through their behavior),
they assert much-needed influence over the vague but
powerful notions that otherwise run away with employ-
ees’ imaginations. By clarifying amorphous terms and
commanding and managing the corporate vocabulary,
leaders effectively align precious employee energy and
commitment within their organizations.
In researching this topic, I have discovered that many

leaders don’t take the time to define specifically what
they mean when they use generalized terms or clichés.
They don’t want to feel that they are talking down to peo-
ple by providing what seems like unnecessary detail or
context. Leaders simply assume that the exact meaning
of their words is obvious; they’re surprised to learn not
only that their message has been unclear but that their
teams crave definitions so they aren’t forced to guess what
the boss has in mind.
If we accept that the leader’s job, at its core, is to inspire
and support the organization’s collective responsibility
to create a better future for the company, then what are
the keys to effectiveness? What tools do leaders need at
hand for this mission? What mental models must they
have? I like to think of good leaders as comparable to
skilled locomotive drivers. The train is controlled by a set
of switches and levers. When the driver pulls one lever,
the train goes forward; when he pulls another, it stops,

and so on. When an organization is well aligned, all the
managerial levers are easily and neatly moved. They func-
tion smoothly so that driver, passengers, and train grace-
fully move forward as one.
In my experience, five such topics control the train: or-
ganizational structure and hierarchy, financial results,
the leader’s sense of his or her job, time management,
and corporate culture. Messages on these subjects wield
extraordinary influence within the firm. When leaders
take it for granted that everyone in the organization
shares their assumptions or knows their mental models
regarding the five subject areas, they lose their grip on
the managerial levers and soon have the proverbial run-
away train on their hands. But properly defined, dissem-
inated, and controlled, the five topics afford the leader
opportunities for organizational alignment, increased
accountability, and substantially better performance.
Before examining each one, I’d like to address a few

possible objections head-on. First, why do these five par-
ticular topics matter so much – why would defining cor-
porate culture be a higher priority than, say, defining
customer relationships? Certainly, other terms carry a
premium in some organizations, but I’ve found that
these five are excellent places to start and are highly rep-
resentative of the kind of difficulties that exist for leaders
as they speak to their teams day to day. The topics not
only present the sharpest examples of the dangers of
imprecise communication, but, when mastered, they also
produce the greatest leadership leverage.
I am hardly suggesting that in defining the five concepts
precisely, leaders should become dictators or blowhards.
116 harvard business review
John Hamm ([email protected]) is a general partner at
VSP Capital in San Francisco and the author of “Why Entre-
preneurs Don’t Scale” (HBR December 2002). He led a CEO
“boot camp” in the Bay Area for four years.

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On the contrary, I am suggesting that when a leader de-
fines what he or she really means and sets a clear direc-
tion according to that definition, relationships and feed-
back improve, action is more efficient and on-strategy,
and improved performance follows.

Organizational Structure
and Hierarchy
The organizational chart, because it represents
individual power or influence, is an emotion-
ally charged framework even during a com-
pany’s most stable times. But when the corpo-
rate structure is changing, the org chart can
truly become fearsome, particularly in companies where,
because of the political culture, employees worry about
risk to their personal status.
If a CEO fails to take definitional control of a reorgani-
zation, with its prospect of job losses, boss changes, and
new modes of working, the whole com-
pany can grind to a halt. Consider what
happened when one well-known former
CEO allowed the default assumptions sur-
rounding the term “reorganization” to
take hold. A few years ago, Carly Fiorina
decided that Hewlett-Packard needed a

top-to-bottom reshuffling. She had a fixed
idea that reorganizations must be man-
aged with extreme care, and she implicitly
communicated her belief by the cautious
way she floated her ideas with senior man-
agers. She worried that a reshuffling plan
would open a Pandora’s box of political
sensitivities, especially among middle man-
agers. For this reason, everyone assumed
that “reorganization” was cause for fear
and trembling.
For two months prior to Fiorina’s official
announcement, work slowed or stopped as
employees, not knowing precisely what
to expect or fear, shifted their focus to the
upcoming changes. Managers, jostling for
power and position, got lost in political
battles. Motivation plummeted. Contrac-

tors were put off, since no one knew who
would be managing which divisions after
the reorganization. When the new organi-
zational structure was finally communi-
cated, still more time passed unproduc-
tively as employees settled into their new
positions. A total of 12 weeks – a full quar-
ter – were effectively lost. If you multiply
that time by employee salaries, and factor
in the inevitable lapses in customer service
and product innovation during the pe-
riod, you can conservatively estimate the damage to the
company.
It may be unreasonable to blame Fiorina for failing to
realize that she was communicating her trepidation, or
to fault her for not divining the consequences of talking
about her reorganization ideas months ahead of time.
After all, leaders cannot be held to perfection in execu-

tion. But they can be held to a standard when communi-
cating a vision and its rationale. If Fiorina had laid out
the master plan behind the reorganization more clearly,
made her decisions more quickly, and communicated
more explicitly, the troops at HP would have gained a bet-
ter understanding of the process, the reasons for the ex-
tended time frame, and their future places within the
company.
A leader who quickly takes charge of the communication
around a reorganization can prevent the discourse from
engendering fear. The most productive way for a leader to
think about organizational structure is as a flexible map
may 2006 117
1MESSAGE
of accountability for action and, thus, results–a guideline
whose purpose is to define goals and optimize resources,

not to oust or devalue employees. When a reorganiza-
tion is presented as such, it loses its reputation as a
proxy for personal power shifts, whether real or
imagined.
The CEO of a 150-employee software com-
pany shows how a leader can prevent polit-
ical fears from taking hold by keeping
communications brief and to the point.
Rather than viewing the org chart as a
source of anxiety, and communicating
that attitude to the company, the CEO
chose to see it as simply a temporary
structure for optimizing resources. When
a new strategy or direction was called
for, he enlisted people as active agents
of change, so they wouldn’t be left to
wonder whether they were to become
victims. For example, the CEO realized at

one point that he needed to realign inter-
nal resources because a close competitor
was gaining an advantage. He called an all-
hands meeting for a Monday morning.“Team,”
he said, “we’re in a war for market share. I get
paid to win it, and so do you. But right now I don’t
think we’re properly configured to win the particular
battle we’re fighting, so I’m changing the structure of
resources so that we can execute more effectively. Most
of you will continue to do the jobs you’re doing now,
but you may have a different supervisor.” After showing
everyone the new organization chart, he looked at his
watch. “It’s 10:45 now,” he said. “You have until noon to
be annoyed, should that be your reaction. At noon, pizza
will be served. At one o’clock, we go to work in our new
positions.”
The CEO later explained what he did: “We had a com-
petitor who was showing us a better way to win the busi-

ness. We were both like captains of firefighting teams. We
each had seven people and a full set of buckets and hoses.
My team had five guys armed with buckets and two with
hoses. His team had three guys with buckets and four
with hoses. We just weren’t organized to compete and
win. I wasn’t trying to shift power; I was just trying to op-
timize our resources. I wasn’t willing to let this change be
viewed as a political event. I wanted it to be seen as a busi-
ness necessity to remain competitive.”
Obviously, it’s one thing to shift personnel in a 150-
person company and quite another to do so in a giant cor-
poration like HP. But I would argue that the value of
clear, honest, explicit communication rises exponentially
with the size of the organization. In fact, a large company
can be reshuffled much more quickly when the CEO de-
liberately decides not to inflate the political balloon and
won’t tolerate others doing so.
84 GREAT THINGS

To get an idea of what can happen when a CEO manages
time constraints by setting reasonable expectations,
imagine that you have seven direct reports, each of whom
commits to completing no more than three important,
very doable initiatives each quarter. If these reports and
their teams meet their goals, four quarters will yield 84
significant accomplishments. If your company were able
to do anywhere near 84 significant things in a single year,
the results would no doubt be astonishing. The real
enemy to accomplishing 84 great things is the temptation
to work on the 85th objective and beyond before, or at the
expense of, the higher-priority goals. To keep people on
track, a leader must communicate objectives very clearly
and demand that action flow to the real priorities first.
118 harvard business review
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A
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YA
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K
Having gathered the data and made her decision, Fio-
rina was under no obligation to provide previews of com-
ing attractions. Within 48 hours of the announcement,
she might have held a companywide meeting, complete
with a Webcast, to explain why the change was necessary.
To keep people’s minds off who was headed down and
who was headed up, she could have asked everyone in-
volved in the changes to identify and submit, in short
order, explicit goals for the next 60 days. She thus would

have communicated that the organization chart has noth-
ing to do with politics and everything to do with organi-
zational effectiveness.
Financial Results
“Results” is another powerful concept that,
left unmanaged, poses a risk to a company’s
long-term health. When a top executive tells
employees they need to “focus on our prom-
ised results,” senior managers often interpret
that as meaning “Do whatever it takes to meet investors’
expectations.” By losing sight of the connection between
employee behavior and results, and failing to take advan-
tage of learning opportunities, leaders miss out on build-
ing long-term value for their firms.
One CEO I knew truly believed that the only purpose
of his job was to make aggressive predictions and prom-
ises about quarterly results and then achieve the numbers
by any means possible. By the ninth week of every quar-

ter, when projections fell short, he put enormous pres-
sure on his sales professionals and finance people. His im-
plicit message was: “These are the results I need; I don’t
care how you get it done.”He fully expected the company
to thrive.
Quite the opposite occurred. Because the CEO defined
“results” so narrowly and failed to properly motivate or
compensate his selling team, the sales force had no com-
punction about stuffing the sales channel. Though the
company never met with any punitive action, its poor
practices forced recalculations of results and exposed it to
huge write-downs. Revenues stalled at $10 million a quar-
ter, and the company was eventually acquired at a dis-
count to its annual revenues.
In the long term, consistently positive results spring
from intelligent strategy and an incessant focus on qual-
ity of execution. Think of a golf pro like Tiger Woods,
whose best bet for winning major championships is to

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