Harvard’s Kaplan Says Vision Makes a Great Company: Interview
Robert Steven Kaplan has spent more than a quarter of a century pondering successful leadership, climbing through the ranks to become vice-chairman of the Goldman Sachs Group, Inc., and, since 2005, teaching management practice at Harvard Business School.
What he observed is that great leaders have vision and can articulate it; manage their time in accordance with their priorities; and give and get the right kind of feedback.
According to Kaplan, 54, asking the right questions is 90 percent of the struggle. His new book, “What to Ask the Person in the Mirror,” is a pragmatic guide to leadership.
We spoke at Bloomberg world headquarters in New York.
Lundborg: Why is articulating a vision so tough for CEOs?
Kaplan: It requires a lot of thought. Before you can do it, you have to decide what your competitive strengths are, and sometimes that can’t be answered in three minutes.
Plus the world is constantly changing, and often management hasn’t kept up.
Lundborg: Money is not enough?
Kaplan: We all want to make money, but the vision has to be aspirational. What makes a great firm is adherence to ideals.
From my experience, the secret sauce at Goldman was a fundamental belief that the client’s interests came first and an obsession with how to add value to clients.
I say this not having drunk the Kool-Aid.
Lundborg: You say that people who are in it for the dough rather than passion tend to get burned out. On Wall Street, can you tell the difference?
In the Client’s Shoes
Kaplan: Sure. I was on the client side, and I always used one simple test: Put yourself in the shoes of the client. Decide what you would do if you were the CEO. Are we giving them that advice? That’s it.
If what you’re focused on is making more money for the firm, then you need to find another line of work.
Lundborg: One can learn to be a great leader?
Kaplan: It’s not just about talent. Over-communicating, delegating, coaching, getting coached, asking questions, looking at things using a clean sheet of paper are some good strategies.
Lundborg: You say a CEO has to get feedback on his performance from his employees, yet many people think offering it to him requires a professional death wish.
Kaplan: The CEO needs to ask for it from subordinates. The onus is on the senior person in the powerful position.
Lundborg: I loved the guy who said that the best possible strategy is to read the CEO’s mind and then tell him what he thinks before he says it.
Coaching the CEO
Kaplan: Yes, but for coaching to be helpful the CEO has to ask a specific question: “Tell me one thing I can improve on.” The answer is almost always “Nothing,” but then you just have to pull it out of the person.
Lundborg: Was the financial crisis a failure of leadership?
Kaplan: Wall Street made a number of mistakes. The mix of trading had grown; there was a lack of regulation, too much leverage, varying degrees of risk management. But at the bottom was a belief that home prices wouldn’t decline.
The thing I regret is the cultural change on Wall Street, which has always been to serve the needs of clients. What’s hard to watch as an outsider now is that it’s not as clear that Wall Street has been playing that role.
Lundborg: How did you make the transition from Goldman to Harvard?
Kaplan: It was emotionally difficult. I’d been talking to Hank Paulson for some time about going -- I’d been at the firm 22 years. I was actively involved with a number of non-profits and felt there was still more I wanted to do in the world.
I happened to be at Harvard and I spoke with a few faculty members. Nitin Nohria, who’s now the dean, said, “Why don’t you come here on a leave of absence?”
I spent a year getting my nerve up, and then went to teach leadership.
Lundborg: You were not tempted by the government, like many of your colleagues?
Kaplan: Someday I probably will have a role in government - - I’d like to help the country. I work with a lot of governors and state treasurers right now, advising them.
But the Goldman background at the moment makes it a little harder for government officials to want you to join.
Lundborg: What do you say to those who call your advice “ivory tower baloney?”
Kaplan: That’s just cynicism -- they should meet me.
What I wrote is a road map to take all that passion, desire and nervous energy and channel it into constructive things you can do to make yourself a leader who can decide what you believe, find the courage to act on it and make a positive impact on the world.
It’s fun to be a leader.
(Zinta Lundborg is an editor for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are her own. This interview was adapted from a longer conversation.)
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