Q. What are the most important leadership lessons you’ve learned?

A. One occurred when I was a division president of another company. I was sent in to turn the division around after four years of underperformance.  It was a declining business.  And when I got there, I completely misdiagnosed the problem.  I said: “Look.  We’re missing our forecast every month.  What’s wrong?”  I brought in a consulting firm, and we looked at what was wrong.  And the answer was that we had a bad sales and operations planning process, where salespeople, marketing people and operations people were supposed to come together and plan out the next 18 months and then forecast off of that.  So I said: “O.K.  We’re going to fix this.  We’re going to have the consulting team come in and help us make that a better, more robust process, with more analytics.”

And it turned out it wasn’t at all about analytics.  Because once we did that, and we put that new process in place, we still continued to miss forecasts.  So I thought, “Something’s really wrong here.”  I brought in a behavioral psychologist, and I said: “Look, either I’m misdiagnosing the problem or something’s fundamentally wrong in this organization.  Come and help me figure it out.”  She came in with her team and about four weeks later came back and said: “This isn’t about skills or about process.  You have a fundamental behavioral issue in the organization.  People aren’t telling the truth. So at all levels of the organization, they’ll come together, and they’ll say, ‘Here’s our forecast for the month.’  And they won’t believe it.  They know they’re not going to hit it when they’re saying it.” The thing she taught me — and this sounds obvious — is that behavior is a function of consequence.  We had to change the behavior in the organization so that people felt safe to bring bad news. And I looked in the mirror, and I realized I was part of the problem.  I didn’t want to hear the bad news, either. So I had to change how I behaved, and start to thank people for bringing me bad news.

Q. That doesn’t mean letting them off the hook, though. 

A. Right. It’s more a chance to say: “Hey, thank you for bringing me that news.  Because you know what?  There are nine months left in the year.  Now we have time to do something about it.  Let’s roll up our sleeves, and let’s figure out how we’re going to make it.”  It was a total shift from where we had been previously.  So after that experience, I always ask all of my people, and I always think to myself: “Are we really fixing the root cause of this problem, if there’s any problem?  Or are we fixing the symptoms?”

Q. What else?

A. An important leadership lesson came in my early years.  When I was at Stanford, I was a swimmer, and I was a captain in my senior year. The first thing I learned when I was captain is that you have a lot of people on a team who have different agendas, different objectives. We had to get everyone aligned around a common goal, and the one we set for ourselves was to break into the top five at the N.C.A.A.’s.  In my freshman year, we were No. 20 in the U.S. By our senior year, we ended up third.

Q. And how do you apply that lesson in your current job?

A. When I first became C.E.O. of Novartis, I said: We have 120,000 people. That’s a lot of people to try to align. The first thing I have to do is to have people understand where I’m going to take the company. And it has to be crystal clear. And not only does it have to be crystal clear, but everybody in the organization has to understand it, they have to have line of sight to that goal, and they have to understand how what they’re doing is going to help us move into the future.

Q. How did you learn the importance of that?

A. Throughout my career, all my performance reviews had one thing in common, whether the results were good or the results were bad. They all said that I have the ability to look at very complex situations and make them simple. And I personally believe that if you can’t hold something in your head, then you’re not going to be able to internalize it and act on it. At Novartis, our business is very complicated. But you have to distill the strategy down to its essence for how we’re going to win, and what we’re really going to go after, so that people can hold it in their heads — so that the guy on the plant floor, who’s actually making the medicine, understands the three priorities that we have as a company.

Q. How has your leadership and management style evolved?

Article source: http://feeds.nytimes.com/click.phdo?i=4d1652f110ea2b28e55ebe60114b33c3