Everything You Know About Leadership Is Wrong

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1:33There's no safe like SimpliSafe. From Entrepreneur Media, this is Problem Solvers, a show that solves entrepreneurs' toughest problems. I'm Jason Pfeiffer, Editor-in-Chief of Entrepreneur Magazine, and each week I take a problem that you're probably dealing with and get tactical solutions from people who have been there and solved that. So let's get solving. So I spent three years trying to figure out what actually matters when it comes to being an effective leader and having teams work. And basically everything we've been taught is kind of total BS. That is a very, very large statement that you are now going to have to back up.

2:11That I can back up with ease. That guy making very big statements. That is my friend, John Levy. I'm John Levy. I'm a behavioral scientist. And I spend most of my life convincing people to cook me dinner or wash my dishes and clean my floors. And how does that go for you? A lot of bad food and mediocrely clean floors, but I've had probably about 3 ,800 people do it. And I have been one of those people. That is how I know John. So what he's referencing here is something that he created called the influencers dinner, where he would have, indeed, people come over to his home, very impressive people from an extremely wide range of industries, all super accomplished.

2:50And then he would make them make bad food and clean his floors. And then he'd throw a party and it was super fun. But what I've really loved is watching John's career grow because he went from this interesting community builder before the word community was hot to this guy who just really understood how people think and how they work. And now he helps companies understand the same and he writes bestselling books. And he is about to tell us why everything that we know about building teams and leadership is totally wrong. So it depends on how geeky we want to be and how far back we want to go. So do you want the history or do we want just the concept?

3:30I'm a history nerd, so give me some history. So 1908, it's the second industrial revolution. Companies are growing huge. And there's this push that we need middle management, right? These people who like oversee other people and nobody's taking them seriously because they don't know how to assemble a car and they're managing a bunch of people who are assembling cars. So Harvard comes up with an idea. What if we had a certification for management or leadership the way that there's a medical degree or a law degree? And so what they did was they created what we know today as the MBA. Now, the view was, I'm going to put you on a conveyor belt the way I would put a Ford Model T and I will assemble you.

4:17And by the two years that you're through the conveyor belt, you'll be a certified manager, except for two major problems. One is like law and medicine. They're informational, right? Like you go learn about the body and then you understand how the body works to some degree. Right. Bodies are bodies are bodies. Yeah. Human beings are varying in their level of annoyingness. And that's a, that is an understatement, but yes, agree. And so, like, learning how to manage people doesn't work as simple as, like, here's a model for managing people, because everybody's an exception. And so, that's one big problem.

4:54You can't just certify that kind of behavior. It's experiential. Like, you have to get practice doing it, and some people really are better than others. The second issue is, this is so funny, they hired this guy, Dr. Elton Mayo. And Dr. Mayo, as they called him, led their research. except for mayo had faked his credentials and wasn't a doctor knew nothing about science huh great so the origins of harvard's research is less than ideal mayo came up with all these kind of experiments and claimed that he figured out how to make workers more productive by turning up lights and by timing them and all that and essentially later people make fun of him because all he discovered was that if you pay attention to people they work harder okay well what he also discovered is that if you fake your credentials, you can start working at Harvard.

5:41He made a fortune, by the way, in consulting and all that. He had a fantastic career. It just, none of his clients got anything. So here we are now, the legacy of those early mistakes? Yeah. So basically what we ended up with is this idea that there are these like essential skills to leadership, right? Some companies have lists of eight or six or 12. But if you look at all the MBA programs, they all say, we're going to create the leaders of the future. And they have these like essential skills or the consultancies. And then you actually look at these lists and you're like, wait a second, this doesn't make any sense.

6:20Elon Musk is not great at creating psychological safety. And yet we're told like, that's the most important thing for team effectiveness. Right? So he's also not humble. There are all these other factors. And at a certain point, you have to accept that all these things are nice to haves. They're not actually essential. So far, what I feel like you're telling me is that leadership is chaos. And I'm sure that's not where you're going to go to, but that might be what somebody's thinking, which is, if you're saying that the foundational understanding that we have of what makes a great leader is incorrect, in part because it is the legacy of absolutely made up nonsense research, but also just because people are too complex to be able to create some standardized way to lead them through every kind of organization.

7:07Then what on earth is a leader supposed to do, John Levy? So that's what we were trying to figure out. John's answer comes in the form of a new book that he wrote called Team Intelligence, How Brilliant Leaders Unlock Collective Genius. And today on Problem Solvers, he is going to walk us through the basic argument there. What is wrong about the way in which we lead people today? The fundamental premise, in fact, that we have, that we've built all of our ideas about leadership on top of. And what does it really mean to unlock collective genius today? What can we know that hasn't been known before or has been ignored before that can turn us all into better leaders?

7:50That is what's coming up after the break. All right, we're back. I am talking with my friend, John Levy, author of the new book, Team Intelligence, How Brilliant Leaders Unlock Collective Genius. And just before the break, you heard John give the history of how we ended up in what he's arguing is just a completely incorrect path of thinking about leadership and how he then wanted to figure out what really truly drives people towards greatness. And so he's going to now pick up the conversation with how he started to figure that out. And the conclusion we came to when we were looking like, what's the universal defining factor of a leader was so dumb.

8:33It annoyed me. It was simply, they have followers. What does that mean? Like online followers? No, no. It's just kind of like one of these things that by definition, it's like, Jason, what makes you a parent? You have kids. It doesn't mean you're a good parent. It doesn't mean you're effective. It just is the definition of it. Now, when you look at or ask people why they follow, the most common answers we would get was the person has vision and the person has charisma. And I get why they say that because the most famous leaders are the ones that have vision and charisma, like, or one of those things, right?

9:14Sure. Dr. Martin Luther King and Elon Musk and Steve Jobs, they like vision or charisma, right? Or both. Or both. Exactly. Now the, the problem is though, that when you actually look at the broad collection of leaders in the world, that really doesn't fit the case. Most of them have won if they're lucky. And so when we really tried to figure out why people follow, because if you're going to have a company, you need your people to follow and go with that vision of whatever it is or the direction that you want to go, then we have to figure out what actually triggers it. And what we found was, frankly, I took a real breakthrough in thinking about this.

9:58And I'm going to paint a scenario. Most people, when they were in high school and it was Sunday night at 6 p.m., they were sitting at home, but they were anxious for the next day. Monday's coming and school. There's homework and there's the grind. Might be how people feel about their work right now. And then Friday at about 1 p.m., Even if they're sitting in class, they feel excited. Because they're anticipating the freedom to come. Exactly. And herein lies, I think, the answer. Human beings don't relate to the present. They mostly relate to the future they believe they have. The anticipation you've described.

10:42So if your future looks exciting, you're excited now. If your future looks terrible, you're upset now. Yeah. I would argue the reason we follow people is that when we interact with them or their media, we feel emotionally that there will be a new and better future. I want to emphasize a few things about this. This is not a logical thing. It's kind of like when people get married, it's like there's the person that looks good on resume and the person they actually marry are two very different people. Yeah. Yeah. Yeah. A resume doesn't cut it. The other weird thing is that you don't actually have to like the person.

11:24Meaning that I jokingly say, if you can hate your accountant, but you'll keep coming back to them because they provide a future where you save lots of money. The only requirement is that they make you feel something, that the future will be better. This is a very interesting observation that I've never heard applied to leadership, but I just want to add to it this thing that's been going on in my head as you've been telling me this is that I'm mapping it on top of other things that I have learned about how the human brain functions. One of which, for example, is this thing that I am absolutely obsessed with, which is a concept called fading affect bias.

12:06Are you familiar? Please. So fading affect bias is a fancy way of saying that the emotions associated with good memories last longer in our minds than the emotions associated with bad memories. For example, if you think back to a time in which something truly terrible happened, You, over time, have a harder time conjuring the feeling of that terribleness. It is much easier, however, for you to conjure the feeling of something really good that happened. And this is the reason, for example, that women are willing to have a second child, because they can remember that it was really, really hard, that the birth was really, really hard, but you can't really conjure the emotional experience of it.

13:01And the reason that we do this, according to this memory researcher who I had interviewed a long time ago, Philippe de Begrad, was because our human brains are primarily structured to help us move forward. And if we took a risk and that risk didn't work out, and then every time we considered taking a risk, we were able to conjure the emotional experience of that previous risk not working out, we would never take another risk. So our brains are essentially wiping away the emotional barrier for doing hard things, because we are structured not to retain what came before, because we don't. Our memories are actually quite bad.

13:43And what you are telling me is that core human function is also evident and can be accessed when we're thinking about leadership. That great leadership is also about helping people move forward. So I think what you're saying is, first of all, spot on, because I would never do another book if I remembered how hard it was. That's right. I wrote a book. That's as close as I'm going to get to childbirth.

14:13Now, here's what's really interesting. There are two actual points, I think. One is, when we try to figure out what causes us to actually have that emotional response, to feel that there's a new and better future. We found that it wasn't any one thing. It was that, Jason, you have one or two super skills that are so disproportionately strong that when people interact with them, they go, wow. With Jason in charge, I don't have to worry about that. If I just had his knowledge or his skills or his, if I sign up to his newsletter, which you should which everybody should uh your content is fantastic thank you the then my life will be better right right now the classic example i like to give is like elon musk a lot of people really dislike him but he thinks at scale and moves faster than anyone in our society those super skills mean that when he says stuff like i'm going to give the world internet by putting satellites in space, or I'm going to dig underground and eliminate traffic.

15:21People will sign up for that stuff because his super skills make you feel that there'll be a new and better future. It's not that he's some charismatic guy who has all of the essential skills of, as stated by Harvard, right? Now you said one thing that was interesting, which is talking about great leaders. This only, I think, defines what makes a leader, right? Like what gets the crew together for a heist. You could have a bunch of idiots following a moron, right? Like that's not a, it's not. Now, if we actually want to figure out what makes a team really smart, then there's a whole body of research that came around after September 11.

16:04So it turned out that the CIA knew about half of Al-Qaeda's plan and the FBI knew the other half, but they worked so poorly together that they didn't. Put it together. Yeah. And so a researcher by the name of Anita Williams-Wooley was hired to do a bunch of research on what makes teams smart. And it turns out that none of the traditional stuff actually predicts it. IQ doesn't predict it. Average IQ of the team or the smartest person. It's also not predicated on how much people like each other. Everybody's like, oh, you have to love your teammates. No, you don't. You just have to work together.

16:39There's so many people I work with that I would never want to hang out with. And that's okay. The single greatest predictor is really kind of funny. It was the number of women on the team. Huh? The number of women on the team is the single greatest predictor of the success of the team. Yeah. The intelligence, the ability to solve problems quickly. The ability to solve problems quickly with the resources they had. And it's not because they're women, it's because women index higher on emotional intelligence. And so what we actually discover is that when you're doing like a single person activity, pure talent reigns supreme.

17:20If you're, you know, a golfer or something like that, then it's just you up there. But when you go to a team situation where you have people who report to you or you're building a company or anything along those lines, then it actually has more to do with the dynamics between people because you've gone from shooting shots to mostly passing information or the ball. And so emotional intelligence allows us to see, oh, Jason has something to share, but he's staying quiet. Let's call on him. Or, oh, this isn't a good time to talk to Susie about this. She's having a tough day. Or it tells us when to push and when not to, or how to bring more trust or psychological safety into the organization.

18:07And that ends up being a really great predictor. Is there a way in which these two things that you were telling me are the same thing? I mean, I'm going back to this thing. I'm going back to this insight that that leadership is so much about helping people feel like their future is bright, that the thing that we are primarily doing when we work together, whether we are the leader or we are within the team or our responsibility is to craft the team, is to create the feeling of assurance that to be a part of this is to have a better future. So I think that there's a few things going on. The first is to understand that the reason that we feel that there'll be a new and better future with that leader is not necessarily because the leader is actively trying to do it.

19:00It has more to do with that person might have a collection of skills that are just so impressive that it causes you to feel it. And I think an example is Sam Bankman-Fried. not a charismatic dude no not a great future either yeah we didn't know that we didn't know that back then yeah but he whatever his super skills were he was able to make people feel that the future could be better he accomplished that in a very different way than political leaders do or jack welch or any of the And I think it's important when I bring this up is to realize that it's about leaning into your super skills and not necessarily expecting or trying to be perfectly well-rounded.

19:54And a lot of companies come in and say, we'll teach you how to pitch better. We'll teach you how to do... All these are great skills. They're really important, especially for entrepreneurs or if you're a salesperson. Understanding how to do that is fantastic. But it's not necessarily the reason that people will follow you. Now, as far as the team itself, here's one of the most interesting things that came out of it. One of the fastest ways to make a team dumber is have an overbearing leader.

20:25The leader who wants to be involved in absolutely everything. The leader who is trying to control every decision. Yes. The micromanager, right? And the reason is that researchers generally found that there's a fluidity of leadership throughout a project. So you might be in charge at your publication, right? And so at the beginning of a meeting, you might be speaking, saying, hey, this is the direction I want to take things. And then as people are working, they're reporting back and they're speaking more. They're sharing more and taking more control. Not because they're battling you, but just because then their expertise come in.

21:07That's when the layout person comes in or the editor or whatever it is. And trying to micromanage them will not go well. I mean, you just have to be really good at everything to micromanage. Yeah. Well, it also disempowers them. If the leader is involved in every decision, then everybody along the chain gets their incentive structure gets reorganized to just do whatever the leader wants to do, which means that they stop taking ownership over anything themselves. Yeah. It's the other thing that really kills intelligence is battles for power. So when we look at having very smart teams, the first thing we really need is alignment.

21:47You need everybody going in the same direction. It turns out that at most companies, 60 % of employees don't know what the company mission is. Of the remaining 40%, 60 % of them don't care. and when we're talking about company mission we're talking not about um you know uh i'm a razor company and i make razors that is pretty evident but rather the the sort of broader philosophical mission of the company yeah so like i'll give you an example microsoft made software but their mission back in the day was to get a pc on the desk of every person they finished that mission and now their mission is because every like you know there's billions of computers in the world.

22:30Now their mission is to help every organization and person in the world do more. Now, because of that, when people at their cloud services company or their Microsoft Office or any of the other hundreds of products that they release are working, they're really clear what they're actually creating. It gives them a direction to go, a North Star. And most companies, if people actually don't know what their organizational North Star is. But like, if I'm at Microsoft Office, and I'm like, Oh, I want to do this feature, you can really quickly ask yourself, does this help my customer or organizations do more?

23:10And if the answer is no, then that shouldn't be a feature that you're making. Okay. But that the reason that they don't know, isn't because they are not engaged, it is because the leader and the company is not doing a good enough job of one communicating it, but then also, two, infusing it into everything that they do. Oh, yeah. You should either be at the point where every person can recite it, or they make fun of you for not shutting up about it. It's like, yes, Jason, we get it. Right. You know what the model is. All right, let's move on. Yeah, that's the point where you've done the right job, because then it's so infused in the culture that it's become a meme.

23:47And why is this important? You know, it sounds obvious, but what is the actual answer? So the reason is that for any of us to actually make decisions, we need to know what we're trying to accomplish. And when an organization gets together, if people are heading in different directions because they don't know what the actual goal is, then there's going to be either wasted work or work that actually undoes other people's work. And so getting alignment is the most critical first step. Now, there's something that really is important to point out here. When I say alignment, I mean, everybody needs to know what the company goal is.

24:26Every team needs to know how their work fits into the company. Every employee needs to know how they fit into the team. And the last step that nobody actually ever does is that we need to align our personal goals with our work goals. So if you're a manager or a leader, then I'd say, Jason, what is it that you're looking to accomplish? Oh, you want to save up for a new house or say whatever it is, right? Yeah. And so let's say you want to buy a house. I'd say, here's what I want you to think about. If we're able to hit our company goals for the next two years, the stock that you have vesting will be enough for a down payment.

25:04So I need you to give it your all for the next while, because it'll be the difference between you getting that dream house that you want or not, right? That's a very classic way of communication, which is benefits-oriented instead of solutions-oriented, right? Maybe benefits-oriented just to understand the thing that people want that is the outcome of the thing that they're doing or getting. And that is often not the way in which brands or leaders communicate. we end up talking about the thing that we're selling or the thing that we're asking people to do. Like, let's make this reorg a success.

25:42Who the hell cares? But if this reorg is a success and we sell more product and the stock goes up, then you get the down payment on your house. Very well said. You should have a podcast. Yeah, you know, I'm thinking about it. So this is really interesting. And, you know, John, So loop us back to the beginning here. We started with this great history lesson about the groundwork that was laid for understanding and training leaders and how, you know, a hundred and change years later, we're still living with that and we're growing it. How much work do you think is really required here to untangle the bad lessons of leadership and implement the good ones?

26:32The problem is that there are two full industries built around selling you the antiquated product. One is consultancies that come in and sell you leadership training, and the other is higher education. and yeah you just picked some big to big targets uh there's research out of actually harvard of all places so at harvard kennedy school researcher was looking at what is actually spent on employee education and it turns out that about somewhere let's say between 450 and 500 billion dollars a year is spent on employee education. Now, a lot of that's really important. Like if you don't know how to use a hazmat suit and that's part of your job, it'll save your life to know, right?

27:23So like you want to learn that. I would suggest learning that. Yeah. Yes. Now about 50 billion is spent on leadership training and there's no evidence any of it produces a result of making them better leaders. And when you look at MBA programs, the promise is that they're going to create the leaders of the future. And study after study examining the performance of MBA graduates found that there is no improvement in their leadership or even their workability at the one, three, five, and seven year mark. That was just one study by BCG. And in fact, they underperformed versus the people that just stayed in the workforce longer.

28:00So yeah, will you gain a lot from an MBA? Probably a lot of contacts. You might learn a lot of math skills so you can model stuff. that's fantastic but the question is how do we move forward and the answer is that we kind of just have to call a spade a spade if you actually do want to be a more effective leader then there's certain things that matter a lot more than what they're teaching and uh and frankly i think that we've put too much on our leaders especially like after the pandemic you'll notice that it used to be that the leader had to like set an example and manage the team and manage budgets.