Leading from the inside-out: Why CEOs must make time for self-reflection

This is the McKinsey Podcast where we help you make sense out of our world's toughest business challenges. Welcome to the show, I'm Lucia Raheli and I'm Roberta Fasara. The value of the human in the loop is not going to go away. So the challenge for leaders is they need to understand how this technology is impacting themselves, their teams, their business so that the institutions that they are leading can use technology and service of society and service of their customers in service of employees. That's McKinsey, senior partner, Ramish Shrinivasan, talking about the role of technology and humanity in today's organizations. He joins me and senior partner Hans Verner-Kas to discuss their new book on the inside-out journey of leadership. The book explains why leaders need to understand themselves first before they can lead others most effectively. Hans Verner-Ramish, welcome to the podcast. It's wonderful to be here with you. Thank you Roberta, pleasure to be with you today. So you and your co-authors just released a new book, The Journey of Leadership, how CEOs can learn to lead from the inside-out. But simply to start us off, what is inside-out leadership? Roberta, the world is changing rapidly, the geopolitics have become quite complex, technology is having a huge impact, and climate change is here to stay. In this context, we felt the world needs a new paradigm of leadership. We call it human-centric leadership, and our belief is that leaders need to really reflect on their purpose, who they are, how they show up in the world, and how they can inspire their teams, and inspire the institutions they're leading. Hans Verner, anything to add there? We think that human-centric leadership provides a permanent guidepost for leaders of all backgrounds and levels. And having a such a guidepost to which colleagues, external stakeholders, can really look up to displayed in your own behavior as a leader is central. The inside-out notion, Roberta, which you raised means that any change you may argue not surprisingly, starts with ourselves, need to have the ability to be self-aware of our words, of our behaviors and actions, and then reflect you, self-reflection, where our strength is, what also where our weaknesses are, you may call it development needs. And that requires to especially adopt human behaviors, from empathy and care, compassion, humility, vulnerability. But at times also, determination, confidence, resilience, and balancing these different behavioral sets really depends on the situation you're in as a leader. I had a question about the kind of the why this why now. And Ramesh, you answered it a little bit. The challenges for today's leaders here in 2024 are very different. But can you talk a little bit about what exactly has changed? Like I briefly mentioned, Roberta, the geopolitics in the world have become much more complicated today. I talked about technology, AI, Gen AI is also having a huge impact. And so amidst all these changes, leaders need to have a sense of who they are, what is their purpose, what motivates them, how do they show up in the world, what do they talk about, how do they understand their own team members, even more deeply, deeply as human beings, so that they can inspire their team members in the spirit of their own purpose. And use all of that to inspire organizations and institutions that they are part of. Hans Verner, you'd mentioned a few seconds ago that this inside-out approach, it's very personal, right, that the book prompts leaders to tap into some very personal areas to take a closer look at their vulnerabilities, perhaps their insecurities. And that can be scary, right? So I'm curious, how can the book help ease this process for CEOs and other leaders? There are actually stories of 24 former CEOs, slash active CEOs in the book. They are very personal. They are not just, we would call it, descriptions by the textbook. They reveal themselves much more about their insecurities, their struggles, but also how they have addressed them and how they have tried to overcome them. Nobody of those 24 CEOs, former CEOs would say that they have achieved or reached a destination point. But I think all of them would say they are on a real good trajectory to become more effective, more human-centric leaders. The second suggestion or consideration I would offer, we do have a step-by-step call-it-reinvention guide in the book that really helps with that approach to really transform and reinvent yourself. I want to dive into some of the chapters. The book is very helpfully divided into two parts, the psychological and emotional aspects of leading yourself and then the human side of leading others. Along the leading yourself or managing your self-chapters, which talk about things like humility, confidence, selflessness, vulnerability, resilience, and versatility, Ramesh, is there any one of those traits or a focus area that is more important or say harder to get right than the others? Frankly, we find all of them are quite important. The one that I wanted to start with is this balance between courage and curiosity. I'll share the example of Stephan Bansal and he shares this in the book where at the peak of the crisis and the pandemic, Stephan had to make a choice on setting a bold aspiration to develop and manufacture a vaccine, something that Moderna had never done before. He had the courage to set a bold vision and inspired his team. At the same time, he brought an incredible level of curiosity because he knew there were many things that they did not have capabilities for, an example being how to manufacture a vaccine and how to manufacture a billion doses of a vaccine and so that balance between courage and curiosity is one attribute I want to highlight. The other is the balance between confidence and humility, Lynn Elson-Hance, another inspiring leader and CEO. She brings out this balance between confidence and humility on the one hand. Sometimes had to be in rooms where she was the only woman and had to really bring a sense that she belonged here and herself as a leader, she brings amazing confidence. I've seen that in all my interactions with her and yet is extremely grounded and humble in the way she operates and the way she inspires her team. There's one more example which comes to my mind and that is with the former CEO of Ford Motor Company, Mark Fields. When he became CEO of Mazda Corporation which was part of the Ford Group of Enterprises in the year 2000, he was self-reflecting and said it might indeed be much better for the first six months or so to show humility so he went on a very deep mission of listening and humility and not pretending that he had all the answers even though he did have clear views and hypothesis on the answers and solutions for the company. But he engaged in that balance of showing confidence but also humility and also vulnerability because he did also clearly express that not all the answers are obvious to him and it will take co-creative team effort to develop them. One additional example I would offer is what we call deep learning or fearless learning Admiral Eric Olson, former head of U.S. Special Operations Commandant by himself and educated Navy SEAL. He talks about the notion of fearless learning and he always says it is such an important ability to not fear that your assumptions were wrong on the contrary to actually be willing to change your assumptions if needed to abandon your assumptions. And he always says that not a single plan survives the first enemy context and in that context he always talks about how important it is when the terrain differs from the map. You have to follow the terrain which means make a new plan change the assumptions so that you have a higher probability of succeeding in your mission. Hans Verne, you mentioned a couple of things here that I wanted to pick at. This notion of self-awareness is critical, right, to being able to make this or to succeed with this inside out journey. But CEOs and leaders, military leaders, they have such a packed agenda, right? There's always so much going on. How do leaders find the time to break from the day-to-day patterns and actually practice themselves awareness and take the time to reflect or how hard or how easy is it, I guess, for them to do that? So first, it is hard, Roberta. It is very hard, not only hard, and I think we all experienced that in our own roles and professional journeys within McKinsey but also outside of McKinsey. And I would point to what we describe in the book as micro-practices. And as it relates to making time to be self-aware, I mean, obviously all of us, we have to, first of all, understand our situation very well, why it is so hard for us to do it. But there are practical things you can do. You might indeed say, when you wake up in the morning, the first hour, you're not touching any digital companion or digital device. Use the time to mentally go through your day and say, where do I put the hour or have I put it already, that hour on my calendar, where I'm indeed, if you wish, not at all, interacting with anybody else, you're just alone with your thoughts. And reflect on what you have done in the recent past, the last day, the recent week, what were the impact of your words and behaviors on others. And that is very important because self-aware means you have to understand the implications of your words and thoughts on others. That is a very fundamental leadership. The second step then is self-reflect, which gets in the exercise of developing behavior of practices to improve. So that's that sequence. In the book, one of the ideas, a media company X CEO talks about the notion of finding truth tellers in the organization. As you get senior, people often don't come and tell you the truth or give you specific suggestions for how you can evolve as a leader. So putting in place a culture where people feel safe and taking the time to go meet people, you know, the level below people at the front line who are meeting with your customers is actually critical to have a pulse of what is happening. And that can also be a great source for insight and subsequent self-reflection. Ramesh, you mentioned Genai as one of the bigger changes that artificial intelligence is one of the bigger changes that leaders are facing nowadays and sort of pointing to the importance of human-centered leadership. Can you, both of you, say a little bit more about this notion of leading alongside Genai and other technologies? I see technology having a massive impact on the world, yet in all our research and our work, we feel the value of the human in the loop is not going to go away. So the challenge for leaders is they need to understand how this technology is impacting themselves, their teams, their business and how the role of the leader and the human being is actually evolving. Handswanna talked about the value of empathy, deep listening, creativity, those dimensions we don't see going away. So the question for leaders is how do they hone in on some of these skills and how do they bring that to bear so that the institutions that they're leading can use technology and service of society and service of their customers in service of employees. Two things it will, in our view, not accomplish. It cannot develop the emotional human touch. And I think that the second point is in terms of Genai, it actually can be a helpful tool to all different leaders or also managers, but they need to understand where those most profound simply applications are and be very cognizant of it and not hype it or exaggerate that it is the solution to many of the leadership problems. It is not. Hans Werner, another change that we cover in the book is this notion of the imperial CEO, folks like Jack Welch and Leia Coco, the larger-than-life leader is essentially no more. When did that change and why did it change? On the one hand, the forces that work, whether it's in geopolitics and societal movements, and also environmental sustainability and technological spheres, have dramatically changed compared where we were in the years of the '80s, '90s. We think that that age of the imperial CEO has long passed. And all that comes back to what we said inside our leadership and displaying human-centric leadership. Only then you will invite stakeholders and colleagues to provide ideas in a proactive manner and really be engaged versus being quote-unquote used in a more common control type of environment as if they would be managerial subjects. If you're looking out a year, two years ahead, what impact do you hope this book will have in the business community? Our hope is both business leaders but also social impact leaders benefit from the ideas in the book and of course, leaders of all genders, of all kinds that we hope will benefit from what we have in the book. So that's really our first hope. We also want to add to the debate on leadership, to leadership as a knowledge and research topic in the world. We're hoping that this would be an additional contribution that we are making in the world. And then of course our hope is to use the book as a catalyst to engage with leaders and institutions on this topic to help them at an individual level, help their teams and help institutions in the world. Let me pick up on the third comment. The aspiration isn't that everybody who reads the book or even only a portion of the book, that he or she becomes more human-centric. Not only in personal life but certainly also in professional life in the different sectors. I think the second point is the process itself. We describe in the book the sequence of the chapters but also in the the Journey Never Ends chapter, the conclusion chapter. Every reader should indeed define for him or herself their own self-reflection and prevention process and methodology. And that can happen with confidence within your family circle, your spouse. It could be with one or two trusted individuals on your executive team or trusted individuals in your prod organization. It can happen with external coaches. But find your own what we would call self-reflection and self-reinvention forum. The book is called the Journey of Leadership. How CEOs can learn to lead from the inside out, Ramish Hans-Warner. Thank you so much for joining the podcast today. Thank you for having us. Thanks so much for listening to the McKinsey podcast. I'm Lucia Raheli. And I'm Roberta Fisaro. Find us on McKinsey.com. We'll have a transcript of this episode up shortly. 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