With the world of work constantly evolving and the introduction of new technologies like AI, how can leaders prepare themselves to successfully lead their companies into the new frontier?

On the season finale of The Culture Kit, Haas School of Business professors and organizational culture experts Jenny Chatman and Sameer Srivastava are joined by a special guest. Laszlo Bock, one of the leading industry voices on people management, was the Senior Vice President of People Operations at Google, served as the CEO of Humu, and then co-founded Gretel AI. He’s also the author of The New York Times’ bestseller, Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead.

Jenny, Sameer, and Laszlo answer a question from Melissa Wernick, the Global Chief People Officer for Kraft Heinz, on what key skills leaders will need to be successful in the evolving workplace. They also announce the Berkeley Transformative CHRO Leadership Program that they just launched through Berkeley Executive Education.

Jenny & Sameer’s 3 Main Takeaways:

  1. The best leaders are diagnostic and deliberate. They look at things on a situation-by-situation basis and ask themselves: How can I add value here? And they plan for that.
  2. Cultivate a broad and flexible set of leadership styles. Situations are varied and vast, so have a broad and flexible leadership portfolio that you can draw from depending on what the circumstances are.
  3. The best leaders recognize that they’re never actually done learning. Leadership development is a lifelong pursuit, so keep working on it and be a student always (as we say at Haas).

Do you have a vexing question about work that you want Jenny and Sameer to answer? Submit your “Fixit Ticket!”

You can learn more about the podcast and the Berkeley Center for Workplace Culture and Innovation at www.haas.org/culture-kit.

*The Culture Kit with Jenny & Sameer is a production of Haas School of Business and is produced by University FM.*

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The Key Skills to Become a Successful Leader of Tomorrow

Publishing Date: Jun 11, 2024


[00:00:01] Sameer: From Berkeley Haas and the Berkeley Center for Workplace Culture and Innovation, this is The Culture Kit with Jenny and Sameer.

[00:00:09] Jenny: I’m Jenny Chatman.

[00:00:10] Sameer: And I’m Sameer Srivastava.

[00:00:13] Jenny: We’re professors at the Haas School of Business. On this podcast, we’ll answer your questions about workplace culture.

[00:00:20] Sameer: We’ll give you practical advice that you can put to work right away.

[00:00:24] Jenny: Join us to start building your culture toolkit.

[00:00:27] Jenny: Hi, Sameer!

[00:00:29] Sameer: Hey, Jenny!

[00:00:29] Jenny: Can you believe that we’re already recording our sixth episode? It’s our season finale of our first podcast season. And to celebrate, we’re doing something a little different. We have a fantastic guest.

[00:00:43] Sameer: That’s right, we now have five episodes of The Culture Kit under our belts. And so, we decided to try something new. So, let me, without further ado, welcome Laszlo Bock.

[00:00:55] Laszlo: Sameer, Jenny, thank you. It is great to be here with you.

[00:00:59] Jenny: I’m really looking forward to today’s conversation with Laszlo, who’s one of the leading industry voices on people management. During his time as senior vice president of people operations at Google, he and his team transformed the field, bringing academic rigor and innovation to people management at one of the most successful companies on the face of the planet.

[00:01:21] Laszlo: Well, it was, it was a team effort, but it was, it was fun to be the tip of the spear for that.

[00:01:26] Sameer: Laszlo then went on to co-found and serve as CEO of Humu, which was acquired in 2023, and then co-founded Gretel AI. He’s also the author of the New York Times bestseller Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead.

[00:01:43] Jenny: Laszlo is here to help us consider today’s question. So, let’s hear the question now.

[00:01:48] Melissa: This is Melissa Wernick, Kraft Heinz Global Chief People Officer. And the question that I have is, as you think about the future of work and the ways in which workplace cultures are evolving, what do you think are the key leadership skills that will be needed for success?

[00:02:06] Laszlo: Melissa is a dear friend, and I love that question. It is a big, big question. So, I’m delighted. We’re going to have a special six-hour episode. today.

[00:02:16] Jenny: Well, it’s big, for sure. And given how much change we’re going through, it’s probably also the question on a lot of people’s minds. But maybe, between the three of us, we can surface some important qualities. So, Laszlo, how would you start to answer this?

[00:02:33] Laszlo: Well, I think you can’t be an effective leader in the hybrid era without first establishing credibility. People need to trust you, and that means partnering with your clients, whether that’s the CEO or the managers you work with, but also establishing credibility with employees at large. So, let’s start with the basics. You actually have to have some expertise and financial acumen and understanding the business, understand some corporate finance, be able to speak their language in order to know what and when to share and to be comfortable with transparency.

[00:03:04] Sameer: That makes a lot of sense to me, too, Laszlo. And I think, as we think about the kinds of knowledge that people need to marshal, we’re also starting to see some real shifts in what’s required. We’re moving into an era where it’s less about know-how and know-what, since that kind of factual information can be more readily accessed via AI, and more into a world where the currency that’s going to matter is know why, that is, what is strategically important for the organization, and know-who or whom, what relationships and networks really need to be developed and cultivated to bring that expertise to bear.

[00:03:40] Laszlo: Yeah, I couldn’t agree more. There was, there was a study recently done by the Boston Consulting Group on their own people, where they set up a bunch of teams internally and they gave them tasks and they gave AI tasks. And they actually did a series of studies and they ended up with two very different outcomes.

One was there’s a whole set of tasks where the AI is way better than human beings—so, things like generating lists of ideas, generating things that might work in a marketplace, analyzing basic data. And then on the other hand, there were a list of tasks where the AI was worse than human beings. And in fact, when human beings worked with AI, the results were still worse than human beings alone. For example, solving very complicated cases that required a lot of human interaction.

And so, lots, lots more data, exactly as you said, Sameer, coming to us through this channel that is AI, but there’s what, something what researchers call a jagged frontier, this, sort of, edge beyond which it’s going to be really hard for us to know whether the system’s right or wrong, and it’s hard for us to predict where that edge is, just as the Boston Consulting found.

[00:04:41] Sameer: Yeah, super interesting study. And what we’re finding in this explosion of research that’s happening in that vein is that that frontier is shifting and actually varies a lot by context, too. So, Laszlo, once leaders establish their knowledge, what role do you think transparency plays? How do leaders be clear with their employees about what’s known and what’s not known?

[00:05:03] Laszlo: Well, I think, for the last 10 years, a lot of, sort of, leadership types, and analysts have talked about the importance of being more transparent with your employees in terms of showing business results and having all hands meetings and including people in the conversation around how decisions are made in the company.

But what’s different now is leaders need to be just as transparent about what they know and what they don’t know. So, just like with these AI systems, there’s this frontier beyond which they’re not going to be reliable. There’s so much change and turmoil in the world today that leaders don’t have all the answers, and they’re not going to be able to have answers at hand in the way that 10 years ago, maybe, they couldn’t.

So, because of this constant change—pandemics, the growth of AI, employees trusting their companies less—leaders need to actually be able to admit, “Here’s what I know. Here’s what I don’t yet know. And here’s what I’m going to do to figure out that knowledge,” because otherwise employees will just get confused and feel uncertain and feel afraid and lose trust if you tell them you have certainty when, in fact, you as a leader don’t.

[00:06:03] Jenny: Great insight, Laszlo. I mean, it’s even more complex because, you know, the demographics of the workforce is changing rapidly. And so, I’m interested in hearing how you think leaders can set the tone, you know, and make sure that all diverse perspectives are encouraged and accounted for.

[00:06:21] Laszlo: Over the last 10 or 15 years, you’ve seen, sort of, a rush towards focusing on bringing all of yourself to work and being more inclusive at work. And then the last few years, the last year and a half, a real pullback from that, as corporate, sort of, said, you know, we want you to bring all of yourself to work. And employees did. And then a lot of employers said, “Oh, wait, actually, we don’t want all of yourself. We want, kind of, the interesting parts, the fun parts, but don’t bring your politics, don’t bring your religion.”

And so, the path to navigating that and setting the right tone actually starts as leaders having a clear sense of your own values. And when it comes to things like inclusion and changing demographics of the workforce, the fact of the matter is the workforce, certainly in the United States, but more generally globally, is going to become more diverse. It is becoming more diverse. People from more backgrounds are coming into the workforce, any way you slice the data. And so, the underlying issue is you need to understand your own values as a leader about where you stand on. Is this a good or bad thing? And by the way, it’s a very good thing.

And second is you have to actually decide what side of history you want to be on. Because the trend, certainly in this country, is towards more inclusion, towards more egalitarianism, towards more diversity. I mean, that was the whole notion of the melting pot we used to talk about.

And as a leader, you, kind of, have to decide, what side of history do I want to be on, the side that’s moving forward or the side that’s trying to drag society back? And you need to be honest with yourself because not everyone’s on that right side of history. And, you know, if you’re lying, your employees will feel that and they won’t trust you and they won’t want to work with you.

[00:07:56] Sameer: What you’re saying makes a lot of sense, Laszlo, but of course, we’re also seeing a lot of backlash towards efforts to promote DEI throughout the country and, more broadly, in the world. So, beyond being on the right side of history, what do you see as the business benefits of inclusion?

[00:08:13] Laszlo: So, the academic data and the, sort of, consulting data on inclusion is pretty mixed. Some studies have said it helps, some studies have said it hurts, a lot of them have said it’s neutral. And so, when I was at Google leading people operations, we actually asked this question, because my strong hypothesis was, more diverse teams are going to perform better.

So, we went out, we looked at teams across the entire company at Google, something called Project Aristotle, which you can look up. And it was a study trying to find out what drives performance.

And in the first pass, one of the hypotheses we tested was, diverse teams are more productive. And we actually found they were not. However, it didn’t make intuitive sense. So, when we went back and ran Project Aristotle a bit further, we actually found there were five things that drove team performance. And the underlying single most important thing to establish on a team is something called psychological safety. This is what Amy Edmondson has been writing about for a long time.

And the idea is, people need to be free to speak up and share their views and perspective without fear of reprisal. So, then I said, why don’t we go back and look at teams with high psychological safety and look at homogenous teams and heterogeneous teams, sort of, very similar teams and diverse teams? And what we found, then, was diverse teams outperformed homogenous teams by 20 to 30%.

And the key unlock there was, if you don’t have psychological safety, people are just going to tell you what they think you want to hear. They’re not going to bring the benefit of their experience to bear. And so, I think that’s, sort of, the way to, to interpret the data that’s in the marketplace. The studies that say, “Oh, diverse teams don’t perform as well, diversity is hard,” what they’re discounting, what they’re not controlling for, is you first need to create an environment where you can get the benefit of diversity. And once you have psychological safety, people speak up, bring their best ideas to work, and you actually innovate tremendously and are much, much more productive.

[00:10:04] Jenny: Well, that’s such an interesting study. I have a study that I did with a colleague, Jack Goncalo, where we found, particularly in the case of innovation, having that, you know, clarity around psychological safety matters a lot. And knowing the rules in terms of political correctness, which is the construct we studied, really, really matters for people’s willingness to take a risk on innovative ideas. That’s super interesting work, Laszlo.

So, you know, of course, change is a given. And so far, in terms of these key leadership skills for the future, we’ve talked about trust, we’ve talked about transparency, but I’m also thinking that inspiration plays a huge role, especially when you’re leading change and when teams may be dispersed or hybrid or remote or wherever.

Inspiring people to feel the awe of the collective. This is something that Dacher Keltner here at Berkeley in our psychology department talks about, the awe of the collective, which can, kind of, quiet the voice of self-interest and increase the chances that people can create something amazing together.

Laszlo, I’m sure you have some ideas of how to become a leader who inspires people.

[00:11:21] Laszlo: Well, yeah, and actually the work, the work you’ve all done at Berkeley has been phenomenal in this area because we’ve all, sort of, experienced that moment of awe in the context of nature, right? You see a beautiful sunrise. The articles that have been written about when people go to space and they come back is that they feel lonely in space and they’re awestruck by the planet Earth and all of unfolding humanity and the sense of connection they feel to that.

And nature is the best place to get those kinds of experiences. And your pioneering work has looked at, how do you then instill that at work, you know, where people spend most of their lives? And it made me reflect on, on something we saw at Google, which was, you know, Google has this amazing mission—organize the world’s information, make it universally accessible and useful.

And we found there was, sort of, selection bias that people would be drawn to the company because they thought this mission was amazing and they wanted to be part of it. But then you’ve got all these random businesses at Google that have nothing to do with that. And in fact, if you actually look at how Google makes their money, 90% of the revenue is ads, just people clicking on the internet and no different than magazines, newspapers, television.

There’s, there’s not that much inspiring or exciting, like, nobody mourned when classified ads and newspapers went away except for newspapers. But it’s not like people were like, “Oh, those ads, they made me feel so good. They inspired me.” But the very clever sleight of hand that Google did, which was also sincere, was we would draw connections to the individual human beings who were impacted by what we were doing. And ad supported it. Ads made it possible. For example, every salesperson knew, which was a company in Texas, called the Paul Bond Boot Company.

And it was a third-generation bootmaker in this little tiny town in Texas. And they were struggling. They were going to go out of business. The third generation was going to see the company fold. And then Google arrived. And suddenly, they could advertise to the world and run their ads everywhere. And they started getting orders. And the business exploded. And things were great. And this little business survived. And this man and his company and this legacy persisted. And that was super inspiring.

And so, I think what’s happened is we have so much coming at us from a technology perspective and so much pressure to be more productive that it’s become harder for companies and individuals to find that meaning in their work, that inspiration, Jenny, that you were talking about. And the best way to do it is to find the human beings who are actually impacted by the work you do, the very end of whatever activity is being done, you know, the passenger whose luggage is recovered or who’s reunited with family they haven’t seen for a long time, or the grocery store checkout clerk who rushes out and hands that bag of groceries to some, you know, elderly person who forgot it and makes that connection. Those little moments are really inspiring, that telling those stories is more important now than it’s ever been.

[00:14:19] Sameer: Yeah, it totally makes sense to me, Laszlo. My wife works in the biotechnology sector, and one of the things that her firms have always done over the years is to have an all-hands meeting at which they bring together patients who have benefited from the therapies and treatments that the firms have launched. And that’s a way to help everyone in the organization connect to the mission of the organization in a really powerful way.

So, Laszlo, we’ve talked about inspiration and awe and connection through stories and meaning. I want to take us to another big word that comes up in discussions of leadership, and that’s “courage.” And it’s a word that I think often gets misinterpreted. So, what’s your take on courage?

[00:14:59] Laszlo: I think these days, I think one of the most significant ways to demonstrate courage is to pause and reflect and think about human beings. I was just saying how we, managers, executives, feel so much pressure to be more productive and hit their quarterly goals and drive results and things like that. Number one.

Number two, you add to it all this new technology and things that people can try out, like, “Okay, we’re going to go hybrid. We’re going to use AI. We’re going to use all these different technologies and things and insights to power our business. Let’s adopt things and try them as quickly as possible.” And I think there’s a unique moment to be courageous in pausing and thinking about the human beings involved in work. As soon as, you know, last year, within the last year, people started rolling out AI-powered chatbots. And we’ve always, we’ve had these for years and years when you go online and a little chat window pops up. But they’re much, much better now.

And there was a company, and I won’t say the name correctly, but Dukaan or Dukaan. And they turned around and fired 90% of their customer support staff and replaced them with machines. And what’s crazy to me about that is, first of all, you lose so much knowledge and intimacy and humanity when you cut the human beings out of it, number one. Number two, what a terrible short-sighted way to tell the world that you as an employer are not going to take care of people. So, good luck hiring people in the future. Number three, the productivity gains they were hoping for didn’t actually materialize. So, it was an error. They ended up having to hire people back.

And so, I think the courage that’s required today in the face of AI and in the face of this hype cycle around technology that gets faster and faster is to really pause in the face of these seemingly miraculous use cases and, and really focus on what’s real and what’s not. And again, I draw on academia a lot for inspiration. At universities like yours, you have a hypothesis, you test it, you see how things play out. At Google, you know, we had this thing called Project Oxygen around manager quality. And it was a two-year-long study.

I think leaders need to be more courageous rather than focusing on, “What’s going to get me promoted this cycle?” And really focus on what is true and real by testing it and taking a moment to pause and thinking about the human impact of what they’re doing.

[00:17:17] Sameer: Totally makes sense. And Jenny, Laszlo’s comments on pausing and the importance of pausing really resonates with one of the core themes that we’ve been trying to instill in the Berkeley Center for Workplace Culture and Innovation that you and I have been co leading for several years now. And that is the theme of experimentation, of really trying to run carefully designed experiments to learn what works and what doesn’t work. Do you want to say a few words about the experimental mindset?

[00:17:45] Jenny: Yeah. Well, I think the whole idea of going into experiments goes back to your first comment, Laszlo, about the courage to be wrong, right? Experiments can help you really determine what will work. I’m talking about using A/B tests, not just for the obvious things like website functionality or customer preferences, but really, across a broad range of organizational policies and practices. And the experimental methodology requires that you have the discipline to really gather information from the people that you’re impacting. So, I think for example of Lyft, the ride share company, and they’ve gone through a really interesting set of experiments to figure out what the best hybrid work approach would be for the company.

And of course, Lyft’s business strategy is all about connecting people. So, something I didn’t know is that, in contrast to Uber that’s launched as a black car service, Lyft really started as a long-distance carpool service. And so, the vision there is about people connecting, you know, in a car. So, the company, really, has a view that people connect better in person at work, too.

But employees were telling them, through the pandemic and even after the pandemic, that they really needed some flexibility. And so, Lyft conducted a set of experiments, and they’ve landed on a current hybrid work approach. It’s what they’re doing now. They know it may not be what they do forever, but their current approach is that employees need to come in three days a week. There are two common days. Employees get unlimited PTO. And employees can opt for four weeks of remote work per year. But really, you know, the rest of the time, people are pretty office-oriented. They’re even refocusing on hiring people who live closer to offices and, particularly, the San Francisco office and who really intend to be in the office regularly.

Now, they didn’t start there; instead, they tried something like five different arrangements before landing on this one. And they tracked every time how employees were responding. And right now, employees are very positive about this approach.

So, Laszlo, I know that Humu, the company that you founded, really emphasized an experimental mindset. Can you tell us more about that?

[00:20:17] Laszlo: Yeah. Well, and I love hearing stories about other organizations that have this experimental mindset. And Lyft tried five different ways of doing something before settling on the correct one. I think it’s too easy as human beings to, sort of, come up with an idea and anchor on it, and then drive that forward. And then our cognitive dissonance forces us afterwards to say, “Well, you know, that was a good idea or the best we could have done,” when the reality is you should test a lot of things.

And that was one of the founding ideas behind Humu, which was acquired last year. But we were an HR tech company. And the idea was we used nudges, so small interventions, usually just sent by email, to give people, sort of, micro-coaching and little bits of advice. But it was geared to, what behavioral change would have the highest marginal benefit for them and their team? And so, we would nudge an individual, a team member, and a manager all at once.

So, going back to the inclusion case, if you want to drive more inclusion or innovation, we might nudge somebody to speak up early in a meeting in the first 10 minutes, because it’s easier to get on the board early in a meeting. We’d nudge a peer to ask someone who’s been quiet what they think. And we’d suggest to a manager, maybe they just ask questions, don’t give answers, or hold back until the end of the meeting. And by nudging multiple people, you have a higher chance of behavioral change.

But the way we arrived there was ferocious experimentation. One of my co-founders, Dr. Jessie Wisdom, who was with me at Google before that Carnegie Mellon, and now leads people analytics for Adobe and is brilliant, we had a deployment at Fidelity. They bought the product in their call centers, and she led the analytics around that. And so, we ran an experiment to determine, you know, what actually drives performance in a call center. And it was a great environment because the jobs were highly structured. There were tons of performance metrics. But it’s also one where it’s hard to change human behavior. And again, this goes back to the Dukaan example about, like, “Oh, let’s throw out the human beings, replace them with a machine.”

We surveyed everyone, well, surveyed the population, and then tried a bunch of nudges. And what we found was that the nudges that had the biggest impact related to meaning and autonomy, some meaning inspiration like we’ve been talking about. And so, we would… you couldn’t actually change the job. Like, you couldn’t tell people, “We’re going to reduce your queue.” You couldn’t tell people, “We’re going to give you more time off.” We couldn’t tell people, “You’re going to physically sit with other people.” Like, highly, highly structured environment. But just by nudging people about, “Did you have a good customer interaction today? Or, did you have one this week?” That would be a first nudge around trying to find meaning.

And then the second nudge would be about, “If you did, share that story with people around you.” And then we would nudge managers, “Ask your people about these and tell these stories.” And by testing these different nudges and encouraging people to focus on the parts that were meaningful, we found that, actually, productivity went up by 8% across the entire organization, which, on the one hand, doesn’t sound like a lot, but on the other hand, this was just from sending emails.

And it was the difference between an average performer and a 92nd percentile performer. So, imagine, I mean everyone at Fidelity performs well in general, but this is like taking an entire class of C-performers and suddenly they’re A-performers, just by sending some emails.

But we only arrived at that by, in advance of that, testing thousands of nudge tracks and building an entire model around, you know, how human psychology works in the workplace. So, it was essential to our success to do these things, which eventually led to, to the acquisition, which was, which was, kind of, a fun thing.

[00:23:56] Sameer: So, Laszlo, I love that phrase, “ferocious experimentation.” And I think that’s a really nice way of describing what you did. But what you did also required some significant change in the organization. The experimental mindset and building those capabilities doesn’t just happen. It often requires getting people to change their behavior.

And so, I want to take us to the topic of influencing, especially when we don’t have formal authority to just tell people to do something. So, I teach a course at Berkeley Haas called Power in Politics and Organizations. And a lot of the course is really about trying to understand and map the sources of power in an organization to harness those sources.

And we talk in the course about three main sources of power, the personal sources of power that come from a person’s skills and expertise and the reputation they build; positional sources of power, including formal, semi-formal roles they might play and the informal roles they might play; and relational, which comes a lot from one’s networks of relationships and the interpersonal alliances they might have.

So, from your experience as an industry leader, Laszlo, what have you seen as the most effective approaches to being influential, particularly when someone doesn’t have formal authority?

[00:25:12] Laszlo: Well, it’s funny because I, sort of, lived in this world and thought a lot about it, because one of the things I realized once I became a head of HR, which was really, it was my second HR job, was that there was very little formal authority in that job. Because everyone in the company had opinions on what we were doing, particularly at a bottoms-up culture like Google, every executive had opinions. And so, there were vanishingly few things where I could say, “Do X or Y.” In fact, we, you know, we changed benefits reimbursement on some, you know, what they call Tier 4 pharmaceuticals. And these are, sort of, you know, rare, expensive things. And we changed it from the co-pay from 10 to 40 a month. I didn’t think anybody would care.

Employees revolted because there was a population that depended on a particular Tier 4. And even though these people made a quarter million dollars a year on average. They’re like, “This is, this is obscene. I’m going to be paying an extra $300 a year.” They were furious. So, I never had the insight that you had to structure it as thoughtfully as personal, positional, and relational.

To circle back to your question, my lived experience is that, on the personal side, the most important thing is building a reputation as being backed by data and science. In the people field, because everyone has opinions, everyone’s going to say, “Well, here’s what I think. Here’s what I’ve seen. I’ve read this book. What do you think?” And, you know, in the people profession, there’s not, like, a body of knowledge, like, lawyers can draw on and say, “Oh, this is, this is what the court has said.” Everyone’s got their opinion. And so, I worked really hard with our people analytics team to base everything on data and science and reason from that, sort of, fact-based reality.

So, that’s a huge source of power, starting from the data. The second is, really, alliance building. And I think that probably falls under your relational category. And it’s not politicking. It’s not, like, you know, Real Housewives of Orange County alliance building and backstabbing. It’s actually finding common cause with people. Again, going back to what we talked about, where are your values the same? Where do you believe in the same things? And so, it’s not a transactional thing. It’s, are we on this journey together? And from there, you know, that’s how you lay the foundation for culture.

But I, I will say, I know Jenny is actually the expert on leading through culture, like, on this planet, given her work. And I know, Sameer, you shared with me just this week that some of this goes back to her dissertation work when she was, she was just a student, sort of, exploring this building some of the best tools to assess culture and leadership. So, I’m going to stop talking. I’d love to hear Jenny’s perspective on what comes to mind in answer to this question about, how do you influence without formal authority? What, what actually works in the real world?

[00:27:55] Jenny: Oh, thanks, Laszlo. Those are very kind words. But my favorite thing that you said was not about me, it was about the science. And I think you’re preaching to the choir here with Sameer and me. We totally believe in using data, using evidence.

So, in terms of culture and culture change, let me offer three, hopefully, quick examples that I’ve taken a look at pretty recently. One is Maersk, which is the large, old Danish shipping company, one of the largest shipping companies in the world. And believe it or not, up until about 2015, at terminals all over the world, Maersk was still using, sort of, paper transactions, paper-and-pencil transactions. And obviously, they needed to go through a digital transformation to, kind of, upgrade what they were doing for, you know, any number of obvious reasons.

So, they hired within, really, about a year or two, 4,000 high-tech people when there had been literally zero there before. And if you think about the Maersk culture, the before version, it was about as far away from a high-tech culture as you can imagine. So, the Maersk CEO, encouraged by the CHRO, Ulf Hahnemann, who I’ve just written a case about, decided that they would try to make changes in what they called iconic practices based on Herminia Ibarra’s work, to signal to people that they were serious about changing the culture. This is a way of, kind of, jump-starting cultural change.

And so, one of the things that they did was they dropped their long-standing dress code. And so, you could think, well, dress code, like, what does it matter what you’re wearing when you’re working? But in fact, it was a real symbolic move to, to indicate to people that the old culture and the, kind of, stiffness and formality that existed there was really going to give way to this new, you know, more modern, more tech-informed kind of culture.

And, you know, Søren Skou was pretty uncomfortable with this. He, he actually was willing to take off his tie, but he still wore a jacket to work. But he really encouraged the company as a whole to relax this long-standing dress code. And it really helped, along with a number of other changes, to kind of jumpstart cultural change and, and really allowing theirs to reap some benefits very quickly in terms of NPS scores and, and financial gains.

A second example, just really quick here, is Kaiser. And you notice I’m picking firms that are probably not usually thought of as those that are, like, first, first movers, innovators, whatever. But Kaiser, the healthcare organization that’s out here on the West Coast and they have some East Coast, Mid-Atlantic centers, it was the first major healthcare organization to implement electronic recording.

And the, the impetus of the story is so interesting. There was a pediatrician in their Santa Rosa office, their Santa Rosa Hospital, who was experimenting with his Mac, kind of, back in the day. And for his own, sort of, personal use, he sort of, built a program that allowed him to track his patients electronically.

Now, you know, that could have easily stayed contained within the Santa Rosa, you know, pediatrics department, or even, you know, this one physician using it. But because Kaiser has a whole set of ways for different parts of the organization to connect, they really had channels for launching this as a real initiative that spread very quickly throughout the organization, as soon as people saw that it would work.

They have something called the chief-of-chiefs meeting where all the chiefs of departments get together, the heads of each of their medical centers get together on a regular basis, the departments within a particular medical center get, get together. So, there are all these channels for adopting new technology relatively quickly.

And then, the final example I would give is, is Mars, Inc., which had a challenge because they’re a, a big, you know, old family-run company that is… they’re huge. They have, you know, well over 100,000 employees. And yet, they were being, kind of, killed in the marketplace by smaller, scrappier competitors who were coming in quickly with new products and new, new ways of getting them into the market.

So, the top 200 leaders at Mars agreed that one of their problems, we actually did a formal culture assessment there, one of the problems was that they were being overly collaborative and it was really slowing them down. And so, to figure out what they meant by overly collaborative, it really was about feeling the pressure to invite everyone into various decisions as a sign of respect, right? “I respect you, so I’m going to bring you into this decision.”

Well, the top leaders decided that that was really not a good strategy for being fast and nimble. And so, they redefined what they meant by respect, and the new version of respect really meant, “I’m not going to include you in the decisions that are not central to your part of the organization. And we’re going to, you know, just move with a smaller group of decision-makers and make those decisions more quickly.”

So, the organization then did a lot of the things that you’re describing at Humu. They worked together to implement how they would share stories about successes of good market strategies. They developed many cases. They spread those throughout the organization. But there were far fewer meetings that allowed them to simply move quicker.

So, these are, sort of, three examples of how to get in there and make the change happen.

[00:34:02] Sameer: So, those are three great examples, Jenny. And as we think about the world we’re all entering now, a world that’s going to be dominated by these AI tools that are becoming increasingly widespread, I think another important facet of leading through culture is developing a culture that really values and emphasizes data and critical thinking.

So, this often involves helping everyone in the organization, not just those in technical roles, get really comfortable with data analysis and, also, the use of AI-based tools as a co-pilot for decision-making across the range of decisions that get made in the organization.

An example that comes to mind for me is that of Vodafone, which, very early on in its digital transformation, made a choice to have every executive, regardless of function, whether they were in human resources or operations or marketing, every executive had to learn to design a chatbot. And it was a very symbolic move that emphasized that we’re entering a new world where everybody has to have these kinds of tools.

And if we think about what’s happening right now with misinformation and hallucinations that happen through AI-generated tools, helping everyone develop some critical thinking ability to really assess the quality of evidence that they’re engaging with is going to be critical for any effort to lead through culture.

[00:35:28] Laszlo: Well, so, we, we’ve actually covered a lot of ground today, if I think back to Melissa from Kraft Heinz’s initial question about leadership, I want to make sure I get the benefit of your answers to the question. You’ve been looking at this for decades. So, Jenny, how would you sum up, in answer to Melissa’s question, the three most important leadership skills?

[00:35:49] Jenny: Well, thanks, Laszlo. You know, Sameer and I really want to thank you for being here. And this has been a wide-ranging conversation because you are such a big thinker. So, we really appreciate getting the benefit of your vast experience—vast and interesting experience. And in fact, you know, that’s the issue. What, what are the most important leadership skills? Are there three, you know, can we consolidate it? And in fact, our field, the field of management, has, kind of, thrashed around with this question for decades. And there’ve been long lists and there’ve been short lists. And it’s very difficult to say what exactly those key leadership attributes are. Should you be charismatic, you know? Should you be structured? Should you be an extrovert? Should you be an introvert?

I don’t think we can answer the question at that level of specificity, but I think we can say three things about the best leaders that are, kind of, meta attributes.

The first is that the best leaders are really diagnostic and deliberate. What does that mean? It means they look at situations and ask themselves on a situation-by-situation basis, how can I add value here? And they plan for that. They actually anticipate what they think they can contribute, and they anticipate what people’s likely reactions will be, which is key.

So, right away, if you’re going to ask yourself the question, how can I be a contributor on a situation-by-situation basis, the second attribute is that you need to cultivate a broad and flexible set of leadership styles, right, because situations are quite varied and vast. And if you want to be useful across a wide range of situations, you’re going to have to have a broad and flexible leadership portfolio that you can draw from, depending on what the circumstances are.

And in fact, when I work with leaders in my consulting work and in executive programs, one of the, the biggest challenges is for leaders to broaden their leadership portfolio, their leadership style portfolio. Most people rely on a few set of leadership styles that come to them pretty easily, but that limits the contributions you can make across a wider set of attributes.

So, that leads to our third attribute, which is, the best leaders recognize that they’re never actually there. It means that they’re thinking about leadership development as a lifelong pursuit. They need to keep working on it. They need to be students always. To coin a phrase that we use a lot here at the Haas School, that really, those leaders who have the view that there’s always more to learn, that there’s always a, a way to think about things more deliberately, more effectively. And there’s always room to be a little bit more flexible and to push out your leadership styles. Those leaders who have that orientation really do very, very well.

[00:38:54] Sameer: So, let me pick up on the third theme that Jenny just talked about, the defining leader principle that we have here at Berkeley Haas of students always and use that as the basis to make an exciting announcement, which is that we are about to launch the Berkeley Executive Education Chief Human Resource Officer Academy, featuring Laszlo Bock. And it’s been very exciting to collaborate with Laszlo in co-designing and developing this new program and which really builds on a vision that Laszlo has had about what such an academy could look like. So, Laszlo, tell us a little bit more about your vision for this program.

[00:39:34] Laszlo: Thank you. And I can’t tell you how excited I am to be partnering with the two of you and with Berkeley. I think there aren’t enough transformational heads of HR. The job’s gotten difficult. Things change more quickly than ever. But it’s… and there’s a lot of heads of HR who are great, who do good work, and who are, who ably serve their teams and the CEOs in the companies.

But there’s a very short list of people who truly transform their companies. My favorite current example is my friend, Kathleen Hogan at Microsoft, who has partnered with Satya Nadella to completely transform, not just the culture of Microsoft, but the business and how they’re thought of in the world. And, you know, she’s, sort of, an unsung hero there, but if I can sing her praises, she has absolutely transformed that place.

[00:40:26] Sameer: We actually talked about Kathleen and Satya in our last podcast episode.

[00:40:30] Laszlo: Oh, I didn’t know that. That’s great. She… and she’ll actually be joining us for the first night of, of this program. But the idea was we need more people like Kathleen. And so, there’s a handful of elements, which I think, as you rise as an HR leader, you, you don’t get a lot of exposure to, that we’re going to address.

One is analytical skills, which includes understanding how to grapple with AI, as well as people analytics. The second is, really, elite consulting, quality problem-solving and structuring skills, which includes things like, you know, employee voice is a real challenge at a lot of companies. How do we harness that for the good?

The third is there’s always a few specific HR topics which people need, like exec comp. Nobody’s got enough exec comp when they take that job. And we’re actually also going to ask the students, the executives who take this program, to tell us what are hot topics for them, and we’ll custom-build content.

And the final thing is mentorship across companies. Too often, you don’t get that in your career. And it’s so, so valuable. So, the goal is to, to train the next generation of transformative HR leaders and to make sure there’s more than just one or two per generation. I want dozens or hundreds of transformative people in this field making work better for everyone, everywhere.

And I’m excited to do it and couldn’t imagine better partners, Jenny, than you, and Sameer, than you, and the other remarkable faculty we’re bringing in on this.

[00:41:53] Jenny: It’s so exciting, Laszlo. We can’t wait to launch in October. If anyone’s interested in the program, you could go to the Berkeley Executive Education website and look for the CHRO Academy, featuring Laszlo Bock. So, take a look. It’s going to be fantastic.

And well, guys, that’s a wrap for our first season of the Culture Kit. We’re going to be releasing some special episodes of the podcast over the summer. These are going to feature our interviews with thought leaders, including bestselling author, Michael Lewis and Stripe CEO, Patrick Collison, as well as our CultureXchange events. These are super interesting events that we’ve hosted from the Berkeley Center for Workplace Culture and Innovation.

Thanks so much for joining us and stay tuned.

[00:42:39] Jenny: Thanks for listening to The Culture Kit with Jenny and Sameer. Do you have a question about work that you want us to answer? Go to haas.org/culture-kit to submit your fix-it ticket today.

[00:42:52] Sameer: The Culture Kit Podcast is a production of the Berkeley Center for Workplace Culture and Innovation at the Haas School of Business, and it’s produced by University FM. If you enjoyed the show, be sure to hit that Subscribe button, leave us a review, and share this episode online, so others who have workplace culture questions can find us, too.

[00:43:12] Jenny: I’m Jenny.

[00:43:13] Sameer: And I’m Sameer.

[00:43:14] Jenny: We’ll be back soon with more tools to help fix your work culture challenges.

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