Episode 1: How to Be a Better Leader with Former Baxter CEO Harry Kraemer

Podcast Transcription Stuart Paap: What makes the best leaders? How do you get genuine buy-in from your team? What’s the best way to stand up for what you believe in even when it’s hard? On today’s show, we’ll hear insights, ideas, and actionable advice from Harry Kraemer, former CEO of Baxter Healthcare, and now a professor at Northwestern’s Kellogg School of Management. We recently sat down and discussed leading with values, the power of communication, and a lot more. Welcome to Stand UP to Stand OUT, the podcast. I’m your host, Stuart Paap, and for the last decade plus, I’ve been working with innovators and leaders inspire others to take action. My goal with this podcast is to give you practical, tactical advice that you can use now. Whether you’re scaling a company, leading a new team, or advocating for meaningful change, this show is designed to help you make a positive impact with those who count. So let’s learn together and have some fun along the way. Let’s get to it. He’s the former Chairman and Chief Executive Officer of Baxter International, the multi-billion dollar global healthcare company where he worked for more than 20 years. The last six he was chairman and CEO. He’s also the author of multiple books, one I want to really dive into, From Values to Action: The Four Principles of Value-Based Leadership. Harry Kraemer: Stuart, it’s great to be with you. Stuart Paap: My first question is, I know you were a math and I believe econ major at Lawrence, and I want to know when you fell in love with math. Welcome to Stand UP to Stand OUT, the podcast. I’m your host, Stuart Paap, and for the last decade plus, I’ve been working with innovators and leaders inspire others to take action. My goal with this podcast is to give you practical, tactical advice that you can use now. Whether you’re scaling a company, leading a new team, or advocating for meaningful change, this show is designed to help you make a positive impact with those who count. So let’s learn together and have some fun along the way. Let’s get to it. He’s the former Chairman and Chief Executive Officer of Baxter International, the multi-billion dollar global healthcare company where he worked for more than 20 years. The last six he was chairman and CEO. He’s also the author of multiple books, one I want to really dive into, From Values to Action: The Four Principles of Value-Based Leadership. Harry Kraemer: Stuart, probably in the first or second grade. I just loved numbers. Numbers were something that I enjoyed. And I think as I got a little older, we all go through different transitions, but I think when I was in high school I really fell in love with it because I could take a math test and I knew if I was right, and there wasn’t a question if I was right. And then I’d write a 20-page history paper, best paper I ever wrote in my life, and I’d get a C minus. And so, boy, oh boy, I like the concreteness of math. I love the beauty of it. I love solving problems. I actually thought I was going to get a PhD in math and the reason I didn’t is its own little story, but I love math. Stuart Paap: So let’s talk about the juxtaposition of math and concrete numbers with a lot of the fuzzier questions that might occur in strategy and leadership. Hard Skills vs. Soft Skills Harry Kraemer: Yeah, Stuart, it is a big, big issue or a big challenge and a big opportunity. The way I talk about this with the Kellogg students is everything is a balance. So in my mind, yes, it’s important to know what I think we sometimes call the hard skills, the mathematics, the finance, the accounting, what’s the cost of capital. In your first couple of jobs, as you articulated, that’s a big piece of this. You’ve got a very clear role to play, you got a clear functional role to play, and that analytical ability to solve a problem. What people often don’t realize is very rapidly, for sure after 5, 6, 7 years, okay, yes, it’s nice to have those analytical skills, but it’s all those, I don’t like the word, but it’s all those soft skills. Can you lead people? Can you manage people? Can you prioritize? Can you motivate people? At the end of the day, this idea of, “Oh, I need to know all of this,” be replaced with “No, do I have the ability to attract the people that are going to make it happen?” Or another way to say it, Stuart, early in your career, the person who’s very bright and very analytical, wow, they can move up and they can do the work of two or three people. They’re remarkable. I used to say at Baxter when I first got there, “Boy, some of these people can do the work of three people. I can barely do the work of one person. However, I’m not sure many of these people can do the work of 30 or 40 people.” So the faster you realize that it really is all about the softer skills and the higher up you go, the more important they become, absolutely. Stuart Paap: Yeah. So I agree. I don’t like the word soft skills, but there’s a statement I stick with, which is, hard skills get you in the door, but soft skills get you promoted. But at the end of the day, whether it’s a biotech or a tech company or whatever it is, I believe that it’s a people business because it’s people working with other people to impact people. Even if you’re working with cloud computing, AI, it doesn’t matter, it’s still going to affect humans. So I completely agree. I want to read a passage from your first book, which is just a quick snippet here. You say, “Leadership is not about the leader, leadership is about the growth and positive change that a leader can bring about while working with others.” Now, my question to you is, can anyone be a leader at a company? Leadership and Influence Harry Kraemer: Leadership has everything to do with the ability to influence people, and the only way I know how to influence people is you have to be able to relate to people. So my entire model, Stuart, is three words: leadership, influence, relate. Practical way, if I can relate to you, really understand you, what motivates you, get you to realize, “Hey, Harry has no agenda here other than be helpful,” well then maybe I can influence you. If I can influence you, and I can lead you. So it almost sounds a little overly simplified what you said, but it’s all about people. It doesn’t matter what it is, it’s all about people. Stuart Paap: Leadership feels heavy at times. People feel like someone has to choose them to be a leader or I wasn’t anointed leader or who am I to lead? But then again, people are always leading, even self-driven solopreneurs, people who work in small entities, small startups. So whether it’s a large company or small, does it seem like leadership is a series of actions or is it something bigger than that? Harry Kraemer: I love your question, Stuart. The way I think about this is I can be anyone, and I’ll role play… I start out at Baxter. I’m a junior analyst. It’s my first week. Well, if I literally have some views on something, I’ve got some ideas on something, and you may be my boss or, Stuart, you may be my boss’s boss, but if you want to do something and make a decision, and I literally think, “You know what? Respectfully,” I’ll always be respectful, “there’s a better decision to be made,” I’m going to figure out a way to relate to you. And literally I’ll be very respectful, but, “Hey, Stuart, you’re the boss, you may want to go there, but I’m just thinking, are you aware of this, Stuart, are you aware of that? And given that, would this make any sense? By the way, Stuart, I’m here to be helpful. And I’m going to convince you beyond words I have absolutely no agenda here other than to be helpful, and then you start to say, “You know what? I’m going to listen to Harry. That makes sense. He can influence me.” And in my mind, that’s what leadership is all about. Some of the best leaders I’ve ever seen have absolutely nobody reporting to them. In fact, as a test for leaders, Stuart… And I look at my own career, it’s a little ironic I ended up becoming the CEO with 55,000 people because jobs I really liked the most was you’re in another department, you may be a peer of mine, you certainly don’t report to me, but my ability to convince you that this makes sense and we ought to do that always felt better to me than, “Well, you’re going to do it because you happen to report to me.” I think the faster people realize, every person can develop leadership skills without having to look at any organizational chart. Signaling Good Intention Stuart Paap: Right. Well, something in this role play that I was paying attention to is how much signaling you were doing, letting people know that I’m here to help, you said that a few times, what if, open questions, to really allow the other person to select themselves in to getting clear feedback instead of me saying in this bad role play, “Harry, I’ve done the work, now you listen to me.” At that point, you’re going to shut me out forever or, even worse, kick me out, which is the right thing. So how did you learn to signal that way? Whether it’s coming up or high school, college beyond, or even just at Baxter, how do you learn to signal that because not everyone has that ability, Harry? Harry Kraemer: Yeah, Stuart, just great, great, great focus to think about. Number one, I decided early on, and it sounds crazy to say this, but I’ve had no agenda other than to be helpful and try to do the right thing. That’s almost a values thing for me. And so I looked at it as, “Boy, the more I can understand people, the more I can relate to people.” The more I realize, no matter who I talk to, I can learn something from. So if I just meet you for the first time, I’m just really curious. As we started up before and we got on, “Hey, where are you from? Where’d you grow up? How do you look at things? What’s important to you?” And as I start to understand you, you can be very different. In high school I loved the idea that I would get together with some really strong, brilliant mathematical guys, but I was on the baseball team with guys I’d be helping with their algebra homework. I tried to relate to as many people as I could because I just found it very interesting how do you relate to people of different age, different gender, different race, different countries. I realized, “Wow, if you can cut through and really take the time to listen… ” It’s not about me. Really understand that the impact you can have on other people is huge. There are people at all different areas, all different responsibilities. And once people feel like they can relate to you, your ability to impact people is unbelievably huge. It’s amazing. Yeah, I get so excited about, Stuart. It’s amazing to me if you can take the time to relate to people that may be very, very different than you. There are people at all different areas, all different responsibilities. And once people feel like they can relate to you, your ability to impact people is unbelievably huge. It's amazing. Stuart Paap: Incredible. I love that. I mean, look, I’ll say this right up front, it’s clear to me why you’ve had so much success because you have that balance of warmth and credibility. You know the numbers, it’s clear you have all that, but you’re also a warm, affable, and energetic. You care about what we’re doing, and so it’s very clear to me how you’ve gotten where you’ve gotten. But you also are very humble about that. You mention a lot of luck and timing, and I do want to toggle between those two. But actually, I want to be a bit selfish here and talk about the four values. The four values that you talk about in your excellent book, and I recommend everyone pick it up, I just loved reading it, chock-full of stories, practical advice, and they are in order, self-reflection, balance and perspective, true self-confidence, double underline, that a Harryism, and then genuine humility. Now, I’m going to pitch it back to you and you’re going to tell me what I got wrong. Here’s how I interpret those four values in order, know yourself, seek to understand, do the work, stay grounded. All right, how did I do? Harry Kraemer: I think I got to give you an A. I’m a pretty tough grader at Kellogg, Stuart, but I actually will have to write that down because it takes me about an hour to go through those, and I thought, “That was perfect. That was absolutely perfect.” I mean that sincerely, it was perfect. The CEO as a Team Player Stuart Paap: Okay, all right, I really learned so much. Actually, I want you to share a story about Disney World with your kids. Now, at this point, just to set the scene, your children were young, you and your wife, Julie, took your kids to Florida. And while you were on your way back to the parking lot, one of your young children saw a Baxter truck in the parking lot at the hotel. I want to let you take it from there because I love this story. Harry Kraemer: We were at the hotel, and my young fellow, he couldn’t read very well, but he knew the word Baxter because he knew dad worked at Baxter. So he starts yelling out, “Dad’s truck. Dad’s truck.” And I thought, “Okay, here we go.” So we walked over to the truck, and there was a fellow that was unloading a lot of boxes because there was a patient that needed some medical supplies. And so, I said, “Oh, come on, Andrew, we’ll help this guy out.” So we start unloading the boxes. The guy was really warm, whatever. So we unload all the boxes, and the guy gets back in the truck and I said, “What’s your name?” And he told me his name. I can’t remember what it was, Jack, and he goes, “Well, what’s your name?” “Harry.” “What do you do?” I said, “Oh, I work at Baxter.” And he goes, “Oh, that’s great, that’s super.” So he left and that was it. The next morning, one of the rules is we’re not supposed to do a lot of email, we’re on vacation, so what does that mean with all the kids? I’m locked in the bathroom with the light out at six in the morning sitting in the bathtub doing emails. And I’m going through an amazing number of emails. These emails basically are from a truck driver in Kansas City saying, “Hey, when are you coming to Kansas City to unload my truck?” I thought, “Wait a second. I got all these emails. What is this?” So I called up Kathy, who’s a wonderful, wonderful person, was my assistant for many, many years, and she was another great leader, she led me by the way, and I said, “Kathy, you’re not going to believe what’s happening.” I said, “I didn’t tell this guy anything. He would’ve no idea.” And she goes, “Well, Harry, there’s not a lot of Harrys.” And so she said, “This guy must have looked up and realized you were the CEO of the company, and he started to spread around to the other folks.” I look at it as, “Hey, we’re all in this together.” You talk about genuine humility. Every single person matters, Stuart. In fact, you’re catching me in a good time because I had my class last night, and what I always do with one of the classes, Stuart, we’ll have 70, 80 people, and I’ll say, “Well, how many of you want to be a leader?” Everybody raises their hand. “How many of you, people, actually think you relate well to people?” Everybody raise their hand. Said, “Now, don’t raise your hand this time. How many folks when you go into the building know the name of the first person at the desk? How many people when you go into the cafeteria know what their favorite sport team is? And if you happen to be there late at night, how many of you when they’re coming by with the cleaning crew do you take a couple of minutes and just empty out a couple trash baskets?” I, by the way, told the students last night, “I don’t do that to necessarily be helpful. When I do that,” to your point on genuine humility, “it reminds me when I do that that if it wasn’t for luck, timing, the team, mentors, and for some spiritual perspective, I could easily be part of the cleaning crew.” Never forget where you came from. I think I refer to it as remember the cube, because most of us as you know, Stuart, start either a cubicle, a bullpen, or maybe a car if you were a sales rep. I think that staying grounded is not only the right values thing to do, as you know, Stuart, it helps you relate to people and as a team, they’ll do anything for you. Stuart Paap: Yeah, yeah. Excellent. It’s all true. I want to talk about someone who joins a company. A lot of the people I have the privilege of working with are in these very fast-moving, fast-growing companies, incredibly bright, very driven and coming from a, let’s call it, individual contributor, where they’re hired for their intellectual prowess or their computing abilities, and all of that is great. And then what happens is someone will say, “You’re going to stand up a team” or “You’re going to lead this project,” and that turns one into the other. And sometimes they’ll say, “Where do I begin?” So in this scenario, if you imagine someone who’s been valued for their degrees and their abilities to get things done, which is amazing, and that is leadership, we know, but now who’s going to be doing that with a group that’s going to report to them, a team, how would you get started in that situation? Or what are some ideas that can get them started and on the fast track to connecting with that team? Harry Kraemer: When they come in, Stuart, we’ll play this out, they come in, now they’ve got a team that’s reporting to them now? Stuart Paap: Yeah, so- Harry Kraemer: Or they at the low level where they come in and they don’t have anybody… There’re two different cases here. Stuart Paap: Yeah. So thank you for that. I’d say that transitioning where they’re getting the nod that they’re now going to be leading a team and people are going to report to them. So this is at that inflection point, and they’re saying, I have a client going through this right now, “Where do I begin?” What New Leaders Must Do Harry Kraemer: Sure. All right, so let’s role play this one, Stuart. And then just keep jumping, interrupt me, make sure that I’m focused on what you’re… So I look at it, Stuart, as I come in and I’ve got a group of now 10 people reporting to me. I’m brand new, I’m just right there. The way I think about this and what I would strongly advise very early on, within the first couple days, is I would sit down with my team, let’s call it 10 folks, and I have this little process that I just call setting clear expectations. The reason I say that, Stuart, a lot of times you get in a job and you make an assumption, “Oh, well, these people now work for me. They’re going to do what I ask them to do, and they’re going to expect me to make the decision. Maybe I’m not supposed to challenge, Harry. How’s this all going to work?” I lay out and set a clear expectation. And that clear expectation isn’t a dictatorship, it’s “Hey, I think this may make sense, but what do you folks think?” The way I would literally do it, Stuart, is I get excited about this, I would literally say, “Okay, you know what? First of all, you’re one of them, Stuart. Hey, welcome to you and the other nine people. I’m honored to be in this role. And here’s the way I like to operate. I intend to rely on all of you. And by the way, if I’m the leader, I may make the final decision on some things, but I’m not going to make a decision, Stuart, without your input and if you particularly have some views on this. So always let me know what you think. “By the way, you’re going to have to get used to this, but one of the things I want to do is I may have a view, but if your view makes more sense, Stuart, I have absolutely no problem, zero problem changing my mind, because what I’ll try to convince you of very early on, Stuart, is I have absolutely no need to be right. I’m fanatically focused on trying to do the right thing. By the way, Stuart, since you guys are on my team, you don’t have to wonder, ‘Oh, that could be a sensitive topic. I don’t know if we can bring that up.’ Here’s the guiding principles in terms of setting expectations, Stuart, the only reason I know something that you don’t is because you don’t ask and I didn’t think of telling you because I thought you already knew. All right, we are going to be a phenomenal team. By the way, sometimes we may make a mistake, guess what we are? Because if we’re not making mistakes and we’re not failing, we’re probably not growing.” And so I would try to think through, Stuart, all the things ahead of time. I mean, I may even say, “I don’t know if this is going to happen, but when the 10 of us are in a room, Stuart, I really want to make sure that all 10 people get a chance to talk.” I’m sure this won’t happen, but if one person ends up deciding you’re going to spend most of the time talking, I may say, “You know what, Stuart? Maybe just calm down a little bit, let’s hear the other input.” So if you think about what mostly goes wrong on a team, Stuart, you can predict it ahead of time. So I try to lay out as many things as I can think about and basically say, “Hey, does this make sense? You folks want to do this differently?” Creating an environment where we are a team and we’re all working for a customer, we’re all working for a patient, you’re not working for me. Making Sure You Hear All Voices Equally Stuart Paap: So two follow-up questions to that excellent role play because I got that you have the right intention, right goals, right perspective. Got it. Now, how do you in this role play ensure that, A, you hear from all voices, and B, that the sequence in which you hear from all voices is somehow reflecting the true voice of the room? Because sometimes the loudest voice will dominate, and I hear this a lot, and someone else who has a point of view, who may have language concerns, cultural concerns, personality concerns doesn’t get a chance or feels not empowered to share. My question back to you in this leadership scenario, Harry, is, A, how do you ensure you hear all voices and hear, read, let’s say solicit all, and B, in a sequence that will optimize the performance of your team? Because in this scenario, my assumption is that you want optimal performance in whatever you’re doing. Harry Kraemer: Yeah. Stuart, your questions are really phenomenal. This one’s a great one, so I’ll tell you exactly what I’d do. When I would come in and I have these 10 folks, the first thing I would do is I would get their CV or their bio for the 10 people. I would literally rank them in terms of who appears, sounds like, based on their experience, maybe a little bit more shy or a little bit more introverted or whatever, versus somebody depending on the school they went to or whatever they’ve been taught to jump out and go for it. Stuart Paap: Yeah, I love that. And so, what I love about this process, Harry, is that you’re relying on multiple modalities to solicit the best feedback that will service the group. And so, reading, thinking about, even looking at spatial orientation, who’s sitting next to you versus away, all of these, I feel, tap into that emotional intelligence and really that leadership quotient of how do I get the best results and optimize the performance of this team with these assemblage of 10 people, 100, 1,000, and as the numbers get bigger. So excellent, very practical advice. I want to dive back a little bit. In the opening of your first book, you talk about values, and you talk about how your parents taught you the values. And so, I just want to talk about that word because I think it’s one of those words that we hear a lot, we say, “Absolutely,” and then when I go, “How do I explain them?” I pulled out my trustee synonym finder here, and I was looking up values and principles and standards. And so I thought I’d just ask you, what does that mean to you? What do values mean to you? Values vs. Preference Harry Kraemer: I got to tell you, Stuart, I love this conversation, I truly love it. The way I describe this in class, and then I’ll give you some specific examples, is first of all, you’re absolutely right. Many, many people either don’t know what it means or they get very confused. And sometimes I think it’s helpful to describe what something is not that it helps you. There’s a big difference, I think, between values and preferences. Let’s go back to that example of the 10 people. One of the expectations I may set up front is, “You know what? We’re going to be respectful of one another. We’re not going to use four letter words.” Now, if you do, I’m going to let you know I don’t like it and I don’t prefer it, but I’m not going to fire you.” It’s a preference. But the way I think about values is really two things. Number one, you’ll never compromise them, and number two, they’re not negotiable. Because if you’re willing to compromise or they’re negotiable, I’m not sure what it is, but I don’t think it’s a value. I actually step back in my first class, I asked students to literally think about what really matters in your life? What really drives you? What do you think the short time you’re on this earth really means? How do we want to treat people? How do you think about success versus significance? How do you think about what really matters? Let’s make sure that as a group, if something really does matter, and this is the way we’re going to operate, there are no exceptions to it. One of the things that I think is very helpful, I mean, we won’t get into specifics unless you’d like, my friend, but when you look at every day some of the craziness and the lack of values that go on in organizations, I think it’s because people didn’t set an expectation. They didn’t set an expectation. If you let people know upfront, “This is acceptable, and this isn’t,” and remind people, because based on the way people grew up, the way you and I grew up with our families or our grandparents could be very different than other people. I’ll give you a good example. One of the divisions that I had the opportunity to run, I found out I was going to move into this job, and the first week I was there, they said, “Oh, we didn’t tell you because you’re new to the division, but the sales meeting is next week. You should probably go because you’re the new president of division.” And I said, “Oh, okay, fine. Well, where is it?” And he said, “Well, it’s in Las Vegas.” Well, I thought to myself, “I can either make the assumption that this is all going to go really well,” you know where I’m heading with this one, “or I’m not going to make an assumption.” I got a conference call with 300 people and I said, “Hey, look, I’m looking forward to meeting everybody. No, I’m sure this won’t happen, I’m sure this won’t happen, but if any of the following things occur in Las Vegas in terms of overdrinking or sexual harassment or whatever, if they happen, you will not be here.” I’m sure that won’t happen because one of the things I look at is I feel really strongly in leadership influence related, I don’t want to surprise people. And if I have to have a discussion with you, Stuart, that says, “You know what, my friend? You’re leaving,” your reaction isn’t going to be, “Oh, I’m surprised.” Because when I think about feedback, I think about development, if you’re really good at this, the one thing you will not do is surprise people. I think making very clear what it is, why it is, how we’re going to operate, and constantly reinforce it I think makes all the difference in the world. But it starts with you, because until it’s very clear in your mind what your values are, very difficult to impose them on other people. Understanding a Company’s Culture Stuart Paap: Yeah, absolutely. I have a couple more topics I want to explore, but to go with this, you’re setting that from the top down and you’re saying, “This is my expectation of you.” Now, sometimes when people are joining companies, they’re happy to be there, they’re getting up to speed, they’re meeting the team. What I often hear is, “I want to have a wonderful, safe, happy, innovative environment here, but I’m unsure about how to go about building that. I’m unsure about what my company stands for. I’ve been to the town halls, I read the speaking points, I get every email.” How does somebody start to understand and deepen the values if they feel like they’re an individual contributor and they’re just getting to know this organization? How do they really get to the bottom of those values and really see them not just on the page, because there’s good writers, but in action, in practice? Harry Kraemer: Yeah. Stuart, super one, so let me give it to you in a couple different segments here. Again, I role play. Number one, before I come to your company, I’m going to check this out. And it isn’t what I see written someplace. I may talk to some people that are in the company, but the problem with that is even if there’s problems, if there really are problems, they’re going to tell me or I’m going to wonder why are you there. The best of all worlds that I always explain to students, Stuart, and this is a home run, is I find people that work for Stuart’s company that are no longer there. Is that because the values weren’t consistent? Or it was so fantastic, if I hadn’t spent five years with Stuart, there’s no way I would’ve moved on to being a vice president? Stuart Paap: Interesting. Harry Kraemer: You can learn a tremendous amount objectively from talking to other people. I do my homework, I now get in the company. Now, one of two things happen. Either it is consistent with my values and life is good. But let’s get serious now, I’m there and it’s not that good, there are problems. All right, well, two things. First, rather than, “Oh, well, those people up there aren’t living the values,” wait a minute, I’ve got,” in your example from before, “I’ve got 10 people. I’m going to start with the 10 people I have.” Yes, that may not be going on there, but it’s going to go on with me, and I’m going to be able to try to start that. However, what if the folks up there are making it to the point where I can’t live the values I want and the organization isn’t doing it above me? One option is I leave right away. Well, I don’t leave right away, my mind, because if I’m a value-based leader, maybe it’s because Stuart just doesn’t get it. Maybe Stuart didn’t grow up that way. Maybe Stuart was in an environment where you get 10 people in a room and you make fun of one of the people and yell and scream rather than taking that one person. So one, I check it out before I get there. Two, I do what I can do. Three, I try to change the behavior. And if I can’t, then I’ll go someplace else. Because if I stick around, how could it be values? How could it be values? Stuart Paap: That is excellent, extremely practical. I want to pivot to communication and ask you, chairman, CEO, you’ve played many roles, what is the value of clear, compelling, and concise communication in any organization, be it big or small? Harry Kraemer: I think the two most important words in my life as a leader are people and communication. The people word stands for, my friend, attracting, recruiting, hiring, developing, open feedback, the whole people thing. The second half is communication, making sure, Stuart, every single person in the organization knows what we’re doing, why we’re doing it, how they fit in. And very important, you don’t just tolerate them challenging, you require them to challenge because I said before, you’ve convinced them, you have no need to be right, you’re trying to do the right thing. And by the way, my friend, if you’re in a managerial or leadership role, for any of your listeners, I would say the combination of people and communication is probably 90% of your job. By the way, I get challenged a lot. So one CEO said to me, “Wait a minute, wait a minute, you said we could challenge. If you’re spending 90% of your time on people and communication, well, when do you get a lot of work done?” I always have to smile. “If,” the famous if, “I’ve got all the right people, not six out of 10, if I’ve got 10 out of 10, because that’s the environment I’ve created, and if everybody knows exactly what we need to do and why as a team, what else is there to do?” So I am a fanatic, Stuart, of this effective communication. I worry sometimes the word we’re living in now, “Oh, I’ll flip you a little text of it.” No, do you have open communication where you and I can challenge one another, talk to one another? It’s everything, the communication piece is… I can see a lot of bright people. You talked earlier today, you have some brilliant, brilliant people who literally have difficult communicating and they’re going to have a very difficult time leading people. I think the two most important words in my life as a leader are people and communication. Stuart Paap: One of my favorite passages of your book that just leapt into my brain, and it’s going to live there hopefully for the rest of my life, is the following: “As a leader striving to influence others positively, you must rely on your true self-confidence along with self-reflection and balance to guide you. If you do, you will be able to reflect on an issue and ask yourself, ‘If this were my company, what would I do?'” And here’s the killer line, Harry, “By the way, it is your company.” I saw that and I thought, “This is magic.” Can you unpack that for me and help me translate that for anyone who’s joining a company, starting a company, starting a team, you name it, wherever they are in their trajectory? What does that mean to you, and where did that come from? Harry Kraemer: I’m smiling, Stuart, because I do think about that every day, and I talk to students about it. You may join the company that has two people or 25,000 people. But if I join that company, okay, that’s my company now. And I care about the company, I care about making an impact, and I look at myself in that organization, wherever I happen to be, it’s all about can I be able to relate, influence, and lead. There’s three dimensions, right? I mean, the people who report to me, I’ll be leading them. The people that are my peers, you and I are at the same level, well, I’ll figure out a way to interact with you to maybe help you in any way I can, and you can help me in any way you can. And then the people above us, where the leading up comes in, is that if you are up there, and even if you’re the CEO of the company, I feel the obligation not to make you happy but to help you make the right decisions. And I will be unbelievably respectful, as I mentioned before. And the sense of it is my company, I felt that way even when I was 16. I worked at a toy store flipping the shelves, I would go around and say, “Hey, this is my store. I’m going to make sure these shelves are in perfect condition. And anybody who comes in there is a customer of ours.” I think I was making back then, back in the dark days, I think I was making $1,65 an hour. Okay, that’s what I was making it, it’s great in Pennsylvania, right? But boy, oh boy, I took it very seriously, and I view every job that way. Stuart Paap: Yeah, absolutely. I love that. One of the things you talk about in the value of communication is helping people understand why they’re doing something. I see this all the time where people say, “look, I will jump over a fence here, but I need to know why or why we’re not doing that.” So how does one start to embrace the explaining why in a way that is satisfying to give people context about the value of their work? Because I do think once you’re connected to the reason why you’re doing it you start to feel empowered and inspired to go further. So help me understand how you encourage people to communicate the why behind decisions. Harry Kraemer: Yeah, so this is actually really key, Stuart, and in fact, your listeners can maybe do this while we’re having this discussion. I literally tell people, Stuart, to take a piece of paper and literally draw a series of vertical parallel lines on a piece of paper. I look at it and say, “Those vertical parallel lines, that’s really any organization. Because any organization you are on in a function, you’re in a division, or you’re in a geography.” I think what happens is that everybody is in that little silo and, therefore, well, why is that? Why is that? There’s three things that I encourage people to do, Stuart, this turns out to be my favorite chart, that has an enormous impact on what you’re saying. When I was in finance as a junior guy on that vertical parallel fence, I could have just said, “Okay, my role is I’m a finance guy working for the company. I want to be a good finance guy working for the company.” But then it occurred to me, “Wait a minute, no, I don’t want to be a good finance guy working for the company, I want to be a business leader in the organization who, among other things, knows a lot about finance.” Those are two very different people. What I decided to do was three things that I’d encourage people to think about, Stuart. Early on, I decided I would get to know one or two people in every one of those vertical parallel lines. Stuart, you’re in marketing, this guy’s in operations, and I would get to know a few of those people. So instead of me thinking this way now, I’m broadening the way I’m looking at things, number one. Number two, in any organization, as you know, Stuart, the very senior people, the CEO and the CFO, they usually have to talk to this group of people called shareholders. And nowadays, you can get on the web, you can listen to the hour call. Well, back in the dark ages, Stuart, I used to get those little cassette tapes. I would sit in my cubicle, I would listen to the question the guy from Goldman Sachs would be asking the CEO. I’d shut the recorder off and say, “If I was the CEO or the CFO, how would I answer that question?” Never thinking I’d be on those jobs. And then I’d listen to the answer. If the answer had to do with a joint venture in Germany, I could call somebody in Munich and say, “Hey, I heard the CEO talking about this, what does that mean?” And then the third piece, I thought, “I’m in finance, I’m in that role, but I don’t have to have lunch with finance people every day.” I’d go into the cafeteria, and I think I use this example in one of the books, where I’d sit down with three people, “Well, you guys are engineers, what do you do?” “Well, we’re going to build an intravenous fluid drug delivery plant in Shanghai.” “Well, I was a math major. If you need any help, I could actually do a little modeling.” Three weeks later I got a call from my boss, Stuart, they send me to Singapore for three weeks. I’m learning manufacturing, doing business with Asia. And what happens, Stuart, is rather than being on one of these vertical parallel lines, you become one of the very, very few people who draws a circle around the whole piece. And now you understand exactly why. I’m in finance, we got to save money. Why is Stuart spending more money in marketing? Oh, we’re launching a new product. We’re now going to get into Europe. And so you now start to look at it is my company. It’s not my functional area, it’s my company. And when somebody says, by the way, we get this a lot, Stuart, “Well, why are we doing that?” or somebody will say, “Well, I don’t understand why,” I always tease people, when somebody says I don’t understand, Stuart, think about it, usually they don’t want to understand. They’re letting you know they disagree with you. So when anybody says to me, this happened in a board meeting the other day, “Well, Harry, I don’t understand it.” Stuart, Stuart, would you like to understand? Because if you’d like to understand, I’m happy to explain it to you, and then you can decide whether you agree or disagree. So in my mind, the best way to get people to think about the why is being able to put in the context of what are we trying to do over how does this all fit together? Stuart Paap: Yeah. There’s incredibly valuable advice there, but a couple of things I got from that was, first, inverting your title. So not saying, “I’m an expert in this who happens to work here,” you say, “I’m business minded who happens to have this expertise.” So that’s the first inversion. Second is looking at the vertical line and thinking, “What’s happening horizontally?” And third, approaching them with a very open mindset, “What are you working on? Can I be of service?” instead of, “Why are you doing that?” and challenging. So all of these are incredibly valuable that I think that transformation, Harry, I’m not sure where you learned that, or if this is instinctive, or you had good mentors or probably a combination of things, but to really fire your own expert, keep that person as part of who you are, but really adopting that more both vertical and horizontal mindset with an open mandate to learn and be of service is what I’m gleaning from that. Harry Kraemer: Well said, well said, absolutely. Being able to put things into context. Here’s another expression, Stuart, you’ve probably heard. Somebody will say, “Well, what kind of guy is that? What kind of guy is Mary?” And they’ll say, “Oh, really, really great. The problem with Mary is she gets a little bit lost in the trees. She doesn’t see the forest,” heard that expression? Stuart Paap: Right. Harry Kraemer: I work with some people, Stuart, who don’t even get to the trees, they’re in the root system. And one of the things I ask everybody to think about is, “How do you get from the roots to the trees to the forest? How do you put this whole thing into context?” Your ability to do that and put it together, in my mind, helps with why, it helps you get ownership, and you feel part of it because you understand why is the company doing this, why are we not doing that. The ability, from your communication question before, is that we’re open to anything. That’s why I said, “Hey Stuart, the only reason you don’t know something in this company is that you didn’t ask and I didn’t think of telling you because I thought you already knew.” Stuart Paap: Yeah. A lot of times clients I work with will say, “Our group would like to have a bigger seat at the table of leadership because we believe that this function should be more a part of strategic planning and all of that.” What I’m gleaning here is that’s great and everyone has something to contribute, but first seek to understand what’s happening and why, and really bringing that open mindset. And then from that vantage point, you can start to craft a value proposition to be of service to that group. Harry Kraemer: Yeah. In fact, Stuart, I’ll give you a real good example of exactly what you’re talking about. I had a group of very senior financial people in New York a couple of weeks ago, they’re all senior financial people, and they said, “Well, I don’t think we have as much of a seat at the table, an influence that we’d like to have.” I said, “All right, well, the question is, you can use any function in this question. Do you want to be a really good finance person working for the company, or do you want to be a leader who, among other things, knows a lot about finance?” One of the guys said, “Can you give me an example?” Tell me if this makes any sense, this is a crazy example I gave. All right, we’re going to pretend we’re going to break for lunch. When we break for lunch, Stuart, we’re going to go into one or two rooms. You can either go into door A where we’re going to discuss what will lease accounting look like in the year 2030, very exciting group. If you go into door B, the entire lunch, Stuart, is going to be how do we triple the market capitalization of the company? How do we take the market capitalization of this company from a billion to 3 billion? Now, first group in the first room, super good accountants, good people. In the second group, as you well know, if you’re going to triple the market capitalization of this company, you better know a little bit about sales, marketing, manufacturing, R&D, slide chain, international, and 10 other things I didn’t mention, and you happen to be someone with finance knowledge. I can look at the people in the room like, “Well, no, that’s what those guys do.” Well, of course, one of the lines I love to use is, we are those guys, okay? The sooner you realize you are one of those guys, men or women, by the way, makes an enormous thing as opposed to, “Oh, I’m down here someplace. What are you talking about? You enter the company, you own the company. It is your company. You’ll be respectful, but get rolling. Stuart Paap: Yeah, I love it. Not to oversimplify it, Harry, but it’s a mindset shift. It’s really putting yourself, “Hey, you chose me to be on this team, join this company, and now I’m here, and I’m going to shake off the titles or whatever it is. That’s all helpful in some small ways, but really we’re here to make a difference and make an impact.” I only have a few minutes left here, and there’s so many ways I could have gone here. I feel like I just scratched the surface and could, honestly, talk to you for a few more hours. But what I’d like to do- Harry Kraemer: I sincerely enjoy it, so the bottom line is we’ll definitely do this again sometime. I love doing it. Stuart Paap: I’d be honored. I’d be honored to have you talk more because there’s so many ways to go here. But I guess I’m trying to think of a pithy final question that I had written down. For me, the goal here, the goal of all knowledge… I’ll tell you quickly, in university I was taking a philosophy course. And I loved it. We were studying Kierkegaard and all the different philosophers, and I loved it. I remember, I went up to my professor at the time and I said, “This leap of faith, how do you do this in your life?” And he shrugged his shoulders, “I don’t know, write a paper.” I found that so profoundly unsatisfying, Harry, that I dedicated my life to… We have to apply and practice something because without putting things into practice it’s all… These books are useless if I don’t try to do something with them. You should have a dogeared copy of something, apply it, it’s not a pretty ornament. And part of the reason I like physical books, by the way, is the title is sometimes a reminder of what I learned from it. But here’s my question to you. I meet incredibly optimistic, excited, hardworking, very technically proficient people who are committed to making a difference in an organization. It could be their own startup. They could be joining a multi-billion dollar biotech. But I know, and I have the privilege of working with people who want to make a difference. If you were to leave them or say one thing that you would hope that they keep with them throughout their career as a touchstone, no pressure, what would you share with this group of people who are looking to change the world for the better? Harry Kraemer: Yeah, wonderful, Stuart. I think about this all the time, and I lead my classes with this in the first question. I happen to believe, Stuart, the most important thing, and I share your love of philosophy, I think it all starts with taking the time to be a little self-reflective. Everybody who listens to this, they’re busy, “Oh my goodness, I don’t know if I’ve got an hour to listen to this.” Everybody is so busy, it’s busy, busy. And I think when we’re busy we confuse activity and productivity. I highly encourage, Stuart, anybody who really wants to be a leader is you take a small amount of time, you don’t have a lot, you get off by yourself, you turn off the noise, you turn off all the apparatus, you turn these things off, and you ask yourself a series of questions. “What are my values? What is my purpose? No kidding around, what really matters? Is it just success? Is it significance? For the blink of an eye I’m on this earth, what difference do I really want to be? What kind of a leader do I want to be? What kind example do I want to set for others?” And finding the time to do that on a daily basis, at my recommendation, I take 15 minutes of a day and we can do it beginning of the day, end of the day, “Why am I doing? What am I doing? What am I searching for? What’s the goal? What’s the end result of all of this?” People often say to me, “Well, geez, Harry, why do you start everything in terms of leadership, the questions you’re asking? Why do you always start with self-reflection?” I give that little three-part answer, Stuart, three parts. Number one, if I’m not self-reflective, is it possible for me to know myself? I don’t think so. Part two, if I don’t know myself, is it possible for me to lead myself. I don’t think so. If I can’t lead myself, how could I possibly lead others? And so it all starts, and you said it earlier, it’s your ability to be self-aware enough, “Why am I doing this? Why is this my company? Why am I in this job? Why am I in this relationship?” I think when people say, “Harry, it sounds great, but I don’t have the time,” I question, “Is it we don’t have the time, or is this something we really don’t want to do?” Because this could get sensitive, Stuart, right? There could be a pretty big difference between what you say is important and what you’re actually doing. If I could leave people with this thought of what really matters to you and well aware of you, of yourself will have an enormous impact on your ability to lead two people, 20 people, or 55,000 people at Baxter. Stuart Paap: Wow, that was beautiful. Beautifully said. To that point, that self-reflection, it was a message I got from your books over and over, the 168, the Values-Based Leadership, from Values to Action, was just taking that time because it’s your fundamental one, you start with it. People always want to skip through and get the hack, but Harry, you keep going back to that. What I get from that, an exercise I sometimes do, and I did this yesterday with an entrepreneur coming out of Harvard, she has a PhD in Computer Science, but I asked her, I said, “You’ve raised funds, you’ve built a team, you’re making progress on the product, it’s all great. But if we strip it all away and you have to start from scratch tomorrow, you’re in a tent in the woods and you’re going, ‘Starting over,’ what are you committed to?” I asked myself that. I mean, I’m lucky, I have a lovely family and I have a nice home, and it’s great to have all these creature comforts, but if I was in the tent in the woods or just out in the… what would I be committed to? What’s the thing that you can’t take away from me? I think that to me, that only comes from reflection. I love that you get people to tune that inner compass and say, “Let’s get what’s important to you so that you can go make a difference for others.” Harry Kraemer: Absolutely, Stuart. I mean, you’ve got it, you’ve got it, you understand it. And to get people to think about that in different ways. Here’s another thought, Stuart. Often we say, “Oh, this is important to me. I’m going to do that later. I’m going to do that a year from now. I’m going to do it five years now.” The little bizarre question I asked folks, it sounds morbid, but I don’t mean it that way, is I say this to somebody, “Okay, if a doctor came into the room right now while I’m talking to you and said, ‘Hey Harry, I just want to let you know you’ve got three days left. You’ve got three days left. You can go running someplace, some [inaudible 00:48:17], but you got three days left,’ how would you react?” And I’ll honestly tell you, Stuart, if that happened to me right now, I wouldn’t do anything differently because the one thing I know in this crazy world, I know I only have three days left at some point. And since you don’t know when it is, why would you interact with people, why would you live life, why would you do anything differently than if it was your last three days? If as a result of this conversation we’re having today I said something that, “Well, maybe I hurt his feelings,” you’ll hear from me within an hour or two, because I may not be here tomorrow. I’m an incredibly optimistic person, but what matters in your life and what really do you really want to be as a leader and share with other people? Stuart Paap: That’s wonderful. Well, Harry, this has been just an absolutely thrilling conversation. I’m inspired, I’m energized. Where should people go to learn more about you, your work, your books, everything that you’re doing? What’s the best place for people to find more about you, Harry? Harry Kraemer: Yeah, you know what? Probably the easiest to is by Kellogg students actually set up a website, as you know, it’s just harrykraemer.org, and Kraemer has two Es in it, harrykraemer.org. My students put up, as you know, some of the videos from class. There’s a lot of articles. My students actually when they set it up, I said, “Oh, what do I owe you for setting this up?” and they said, “Oh, you need to start doing a blog post.” And of course, at my age I said, “What’s a blog post?” They said, “No, no, we’ll take care of it. You send us an email on a particular aspect.” And people can follow it. By the way, I respond, Stuart, to every email. So if somebody sends me an email on that harrykraemer.org, I respond to everyone. It’s been a pleasure, Stuart, and we got to do it again sometime. Stuart Paap: Yeah, I would love to. It’s just a total honor. To that, you responded directly to this inquiry and it was just so gracious. Immediately, I told my wife and I said, “Hey, we’ve got Harry, and I know it’s going to be great,” because I know who you are and what you stood for, just having not even met you. So I thank you for your contribution and you continued. It’s just been an honor to speak with you, Harry, so I wish you the best. Have a wonderful weekend, and we’ll be in touch soon. Harry Kraemer: Take good care, Stuart. It was wonderful. Stuart Paap: All right, thanks again, Harry. Thanks for listening to the Stand UP to stand OUT, the podcasts. If you’re enjoying the show, I urge you to check out influencedna.co and find the podcast page where you can find show notes, links to the guests, extra resources, and a whole lot more. Also, you can subscribe on YouTube, Spotify, Apple Podcast, and make sure to sign up for our mailing list. If you have questions about the show or comments about how we can improve it, drop us a line, I will read every single message. That’s [email protected]. If you like what you heard, I’d say leave us a five star review, and if you hated what you heard, leave us a six star review. Either way, we’re not stopping. See you on the next show.