Host Chris Linnane welcomes Harvard Business School Professor Joshua Margolis to The Parlor Room to discuss how to develop yourself as a leader and dive into the story of how the CEO of the world's largest denim jeans company inspired and engaged employees to implement change and drive performance.
Joshua Margolis, James Dinan and Elizabeth Miller Professor of Business Administration
Professor Margolis's HBS Online courses:
Chris Linnane:
The Parlor Room is an official podcast of Harvard Business School Online.
Joshua Margolis:
So the first mistake is thinking that you, as the leader, are an answer dispenser. No, you're not an answer dispenser. As a leader, you are the one who has to ensure that the organization can truly deliver, not your role is to answer every question and be the smartest person in the room. It's to unlock the potential.
Chris Linnane:
Welcome to The Parlor Room, where business concepts come to life. My name is Chris Linnane. I'm the creative director at Harvard Business School Online. Today I'm joined by HBS Professor Joshua Margolis. Professor Margolis and his colleague Tony Mayo teach two courses with HBS Online: Leadership Principles and Organizational Leadership. We cover a lot of ground. In this episode, we discuss a variety of leadership challenges and what it takes to be a good leader. He also puts me and the listener in the hot seat as the new CEO of the world's largest brand of denim jeans. I don't want to waste another minute. Let's get right into it. Welcome to The Parlor Room. The best place for us to start. What makes a good leader?
Joshua Margolis:
There's lots of ink spilled on what makes a good leader, and I think my entire discipline of organizational behavior has been looking for the Rosetta Stone of what makes for a great leader at Harvard Business School.
Our view of what makes a good leader is somebody who can draw on their own distinctive traits, their own distinctive qualities, and we all differ in our strengths, in the qualities that distinguish us, our signature qualities that we're able to draw on what differentiates us in order to do the common work of leadership, the work of leadership, which consists of all of the things I need to do to bring out the best in others.
So how do I find within myself the strengths that I can bring to a leadership role? How can I be self-aware and alert to my weaknesses, to my developmental agenda? How do I go to work on those and surround myself, complement myself with others who have strengths where I do not? And then how do we together, as a leadership team, work in order to bring out the best in those we're leading? In some ways. just being alert and aware about yourself, what you bring to the role.
Chris Linnane:
Your two courses that you teach at HBS Online, Leadership Principles and Organizational Leadership. Can you tell us a little bit about those courses?
Joshua Margolis:
Sure. So with Professor Tony Mayo, we designed two courses. Leadership Principles is what we want folks to take when they're rising to that first leadership role. When they're handed responsibility for a team or a unit or a functional area for the first time.
Organizational Leadership picks up from there. When you have to lead at scale and scope, when you're given extensive responsibility and you can no longer interact one-on-one with everybody who's turning to you for leadership.
Two strands that we think of in terms of the work of leadership. The first strand is "How do I make those around me as effective as possible?" Whether it's on my team, Leadership Principles, or in my business unit or organization, Organizational Leadership.
But then there's the second strand, which you'll see common across both courses. "What's the work I need to do on myself so that I enhance my ability to lead others? How do I learn about myself and how do I equip myself so that I can bring out the best in those I'm leading, whether it's on a team or in an entire organization?"
Chris Linnane:
Now, how do people do that work for themselves? How do they help develop themselves? What tools do they use?
Joshua Margolis:
So I love to tell this story about a remarkable leader whom we profile in Organizational Leadership. It brings home this idea of the journey that both the leader is on and the organization. Her name is Rakefet Russak-Aminoach. She was the CEO of Bank Leumi. She took over the bank and it had some significant challenges. It wasn't profitable and it was headed to real trouble because its expense ratios were too high and it ran the risk of becoming obsolete because she could see the future. She could see that digital was coming into banking, that there would be new competitors from the digital world. She had to put the organization on a journey, and she told the following story, which is when she would first go to branches, there would be reconnaissance of where's the CEO going to show up. And so if they heard she was coming to a branch, they would make everything look nice and fine, and they'd be ready to put their best staff member out there to meet her and show the great things.
And she would come in. She was a very direct, she is a very direct person. She would come in, she'd immediately smell it and she'd say, "No, I want to talk about the problems. I want to talk about the challenges. We can talk about the nice stuff anytime." So that was at kind of point one when she was first trying to understand the organization, figure out what the problems were and understand how to turn it around and make it more efficient and motivate the frontline employees, the frontline staff members in the bank. Fast forward to the end of the journey and she talks about two things. One, she talks about how she learned to listen and be more empathic. That to be able to really understand the challenges, you have to make sure that people feel you're ready to listen, that they feel that it's a safe environment in which they can surface the issues.
And she had to learn how to really pause, listen, and create relationships with people rather than just be kind of an outstanding task-doer. Rakefet had two different coaches and she even told, one of her coaches told the funny story of they would say to her, "Rakefet, you're on a rocket ship to the moon and you're leaving everybody else back on Earth. You got to come back to Earth and bring everybody with you on the rocket ship."
And they said that, initially, she would do this funny thing where she would say, "So Chris, my coach tells me that I really need to come back, put you in the rocket ship with me, and take you to the moon." And they would say, "No, no, no, no, no. You just need to actually build the relationship with Chris." And she did that remarkably, and by the time we were able to profile her, she would walk into a room and you would think it was like a rockstar walking into a stadium.
All eyes gravitated to her because she had this charisma, this ability to connect with people. She learned to develop herself, feedback from those around her, a coach to guide her at the end of her tenure as CEO, she knew it was time and that the organization, the company, Bank Leumi, was ready to move to its next leader because she would walk into a bank branch and folks would turn to her and say, "Come on, Rakefet, what's the next change? We can't wait for the next change."
So as opposed to the start of her term as CEO, where people wanted to pretend everything was nice and they were hesitant and fearful of leadership, and she had to learn to listen and to be empathic and to bring people with her. By the end, they have this appetite, they have this appetite for change, and she talks about the importance of people experiencing change as not a punishment change is the exciting future we're building together. So for me, that brings home this lesson that as you're helping the organization become more effective, greet the future, set itself up to thrive in new conditions, you also have to work on yourself. You have to do the work that will allow you to be that instrument that can take people with you so that they equip your organization to be ready for the future.
Chris Linnane:
All leaders have to just land somewhere and lead. So are there any lessons on how to do that?
Joshua Margolis:
So in Organizational Leadership, we have a module that's on taking charge. What do you do when you first step in? But in some ways, my favorite story, one I'd love to share with you and see your reaction to it as we walk through it, it's about Chip Bergh moving from an executive role at Procter & Gamble to the CEO's role at Levi Strauss & Company. So let me put you in his shoes.
So you're at an organization, global organization, Procter & Gamble. You've made your way up, the company ranks, you have a military background, and you're handed this job after a recruiting process that you're really excited about. Iconic brand, Levi Strauss & Company, they make the jeans that people the world over wear and you need to get your bearings and you want to get your bearings before you even start the job. So what would you do, Chris? If you're him, you're going to make that transition. You're getting set for it, but you haven't yet started. How would you get your bearings?
Chris Linnane:
So I'm the CEO of Levi Strauss. It's about time. I think I'd probably start by asking a lot of questions, finding out where challenges are, where opportunities are, and if the group as a whole understands how the outside perceives them.
Joshua Margolis:
You've got about three-quarters of the picture there. It's where do you start? So you've got to ask a lot of questions. You have to understand whether those inside the organization grasp how those outside the organization see them. But first you need to know how those outside the organization actually assess and understand what's going on inside.
So what Chip did is he just became voracious for data of all sorts. He spoke to industry analysts. He devoured all kinds of data and analyses of the clothing industry of denim. He learned as much as he possibly could before he even started the job from external sources, from external perspectives about the organization. And then he started to ask for internal reports. So he listened to the data and listened to people. So he's got that external perspective. And then he comes into the organization and he does exactly what you said. He starts to speak to people. It's almost as though there are two different categories, two different camps, and he's hearing two different messages. What would you imagine those two different messages are that the new CEO of Levi Strauss & Company is hearing?
Chris Linnane:
I would imagine one campus saying things are going really well, and one camp saying things need to change.
Joshua Margolis:
So exactly, with a little bit of a wrinkle, there are some folks who are raising questions who are a little worried, who aren't sure that Levi Strauss is what it could be. Small group, much larger group, he discovers thinks things are fine, and he starts to get concerned because that external portrait I talked about where he was asking questions of people outside the organization, devouring lots of data that the company had given him once he was hired as CEO, but before he started, a lot of the data that he gathered about the industry, he was starting to build this portrait that said, wow, this company isn't as healthy as it could be. This company is delivering below its ceiling of potential. And yet the larger majority of folks that he was speaking to inside the organization felt things were fine. And yet there's this smaller group that he's speaking to who kind of get it, who are trying to determine if the new CEO sees it as well. So you're now him, you've got that portrait that's building of, wow, our company could be so much more than it is, and yet I've got a set of people, largest set of people who think things are fine. So now I'm going to put you back in his shoes. You've got that dichotomy. What do you do if you're him? What's your next move? If you're Chip Bergh.
Chris Linnane:
I'm glad if I'm Chip Bergh because if it was me, I'd say I'm over my head hire Chip Bergh. So boy, I'm not quite sure what I would do at that point. I guess I would just try to learn more about the people that think we have more capability and what it is that they think we can do better.
Joshua Margolis:
So you could learn from those folks who feel, "Wow, there's room for us to get better. We're underperforming. We've we're the sleeping giant that could realize the potential."
Inside Levi Strauss, he did a remarkable thing. He decided to be a truth-teller. He shared with the entire company the unvarnished reality that he saw as an outsider coming in of how the company could do so much better, how it could regain its historic legacy as a leader, as an innovator, as the brand of clothing that connects with the future generation, with the younger generation that captures the vibe of the future. He did this remarkable thing, which is instead of just playing to the people who spoke the same language as him, he wanted to expose everyone to that unvarnished reality. But you've now exposed everyone to the unvarnished reality. He's also built a relationship and starts to find the people just as you said, who see the world the way he does, who see the potential, the unrealized potential at Levi Strauss & Company.
So he's got that group of folks that he's starting to at different levels of the organization in different functions and different business units, and he's also exposing everyone at the company to the reality, to the data about how Levi Strauss & Company is underperforming. Alright, so everybody now is at that moment of, "Oh, look what we're up against. And this guy is telling it as it is." Now you're him. I'm going to put you back in his shoes.
Chris Linnane:
Oh boy.
Joshua Margolis:
Okay. Everybody sees it in living color, what the world around Levi Strauss looks like, how they haven't been delivering the way they could or the way they should. Now you're him. What do you do next?
Chris Linnane:
Boy, I guess I would try to inspire people to reach for the highest goal now that they know where they are and what they could get. Try to inspire people to get there.
Joshua Margolis:
And I'm going to pick up on your response inspiration. And one of the things we do in Organizational Leadership is we flesh out "How do you inspire?" It's not just standing up and giving a passionate speech. You have to be methodical in how you mobilize your people with logic and facts, with emotion, with a sense of purpose.
So what Chip Bergh does is he can't just leave people facing that unvarnished reality where they have that gulp moment of, "Wow, we're not as good as we thought we were. We really got to get going." And you can't just stand up there and say, "And we're headed to the mountains." He did this remarkable thing, which is he built what they call the blueprint. The blueprint was one sheet of paper on which they explained the strategy, where they were going to play, how they were going to differentiate themselves, literally a piece of paper that looked like a blueprint. It was apt given that they make blue jeans. It was the blueprint and this was the agenda for action. So it wasn't just this fleeting cotton candy-like inspirational speech. It was a program for what we are going to do to regain the mantle of Levi Strauss's historic leadership in the industry. And what I want to bring out for folks is in order to get the rest of our framework, you're going to have to take the course.
Chris Linnane:
Oh, that's a genuine cliffhanger. I've had a dream Joshua that someday I'd be on a podcast. I had a cliffhanger. So I just want to thank you for doing that for me.
Joshua Margolis:
There you go.
Chris Linnane:
Joshua, are you ready for some questions?
Joshua Margolis:
I'm ready.
Chris Linnane:
Okay. Our first one. What are some of the biggest leadership mistakes you often see? How can leaders avoid making those mistakes?
Joshua Margolis:
I'm going to point to two in particular. The first is especially when people are new to a leadership role, and I intentionally say new to a leadership role because it happens at each successive elevation in someone's career, not just when they first are handed a leadership role, they feel eyes upon them and they feel they have to have the answer to everything. And that's a mistake because there's no way you're going to have the answer to everything and you have to bring people with you. You have to build the team, you have to build the organization that can collectively become a whole that's greater than the sum of the parts.
So the first mistake is thinking that you as the leader are an answer dispenser. No, you're not an answer dispenser. As a leader, you are the one who has to ensure that the organization can truly deliver results, truly deliver getting better and better truly deliver in building new capabilities, truly deliver in enabling everyone to learn and grow, not your role is to answer every question and be the smartest person in the room.
It's to unlock the potential in everyone, unlock the potential in the organization. Second mistake, believing that the operating system inside me that got me to this point of success in my career is exactly the same operating system that will serve me well as I go from here to the next elevation. So the mistake is that I hang on too long to the formula that got me here and that I don't trust myself to learn a new approach for scaling the next height. The mistake we want to avoid is forgetting that we can learn. And when we're fearful that maybe we won't be able to learn, maybe we won't be able to succeed again, that we need to have all the right answers. We have this death grip on what got us to this point, and therefore we block ourselves off from learning. We block ourselves off from relying on others to help us learn and grow and from bringing their own talents to the situation, to the challenges we face.
So we have to be open, we have to be vulnerable, we have to be willing to learn. And that often means that we're not going to be as great at doing the new things as we have been on all of the practices that contributed to our success to this point. But what actually contributes to leader success, this is the related third mistake, is not necessarily your prowess at doing task A, B, and C. It's your prowess at learning how to do task A, B, and C, and now you're at another stage. You'll be able to build that kind of mastery and learn task D, E, and F as you move forward. So those are the mistakes thinking you've got to be the answer dispenser, thinking that what got me to this point will get me to the next point. And thinking that you are not capable of changing your stripes, you're not capable of learning new things. Those are the three mistakes I'd caution people to be alert to.
Chris Linnane:
How is the concept of leadership changed over recent years? What new skills and approaches are most critical for leaders today?
Joshua Margolis:
I've noticed over the course of my career, a quiet but significant shift in how people think about leadership. I characterize this as the shift from outside in leadership to inside out leadership.
So, not that long ago, maybe just five years ago, for sure, 10 years ago, the conventional thinking was what is most important is outside in leadership. You've got to understand the industry. You've then got to formulate your strategy for navigating in that industry. And then the luxury goods are building your capability to work with others, building your capability to manage yourself. That's outside in leadership.
What's changed is that's been totally flipped on its head now. The approach is inside out leadership. I've got to work on myself. I've got to understand myself, my strengths, my weaknesses. I've got to have the capacity to monitor my own internal weather, the thoughts and emotions that are rushing through me so I can manage myself. And then in only then will anyone work with me, will anyone follow me as a leader? And now the world is so complex, the world moves so quickly that it takes a collaborative group to understand that world, to devise the strategy and to pursue it. So we've moved from outside in leadership to inside out leadership, master yourself, understand yourself so you can use yourself effectively as a leader to build relationships, to build collaboration. And through that collaboration, you together can figure out the complexity, devise the path forward, and deliver on it.
Chris Linnane:
Next question, what common traits did you find among low-profile but highly successful executives?
Joshua Margolis:
I'd like to point to two qualities, two traits in particular, and they really go hand in hand. Even though it sounds like an odd mix: humility and daring. Humility to understand that you're imperfect, you're going to make mistakes, humility to understand that you don't have every answer, you don't have every solution, you don't have every strength that will be needed to take the team or the business unit or the organization where it needs to go. The humility, therefore to bring others on board to really appreciate the pieces of the puzzle that everyone else brings. You need that humility so that people experience the humility they feel needed and they feel like you appreciate and value what they bring to this collective endeavor.
But it has to go hand in hand with daring, and I intentionally use the word daring, not bold. For me, what daring captures is somebody who's willing to take a risk where there isn't certainty that all is going to work out, but they also don't leave it to chance. Daring means I see that there's a possibility this won't go right. I understand there are risks involved, but "I've got a plan, I've got an approach, and I am willing to follow that approach to bring people with me." That's the daring that's involved, that people follow that kind of daring. If they also experience you as having the humility that invites them into that exciting path, that exciting path of daring that you're taking them on.
Chris Linnane:
Thank you for doing this with us, Joshua. I really appreciate it. Thank you. And since you did two courses, I think you probably are obligated to come back a second time.
Joshua Margolis:
Hey, anytime with you guys.
Chris Linnane:
If you'd like to learn more about Professor Margolis or either of his HBS Online courses—Leadership Principles or Organizational Leadership—please visit us at theparlorroompodcast.com. And remember to follow us on LinkedIn, Facebook X, Instagram, and TikTok.
My name is Chris Linnane. Thank you for listening. If you're enjoying The Parlor Room, please share the show with your friends and subscribe, rate, and review it wherever you get your podcasts. Thank you.
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