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Planning.As important to space exploration as it is for lasting success.

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6 Power of Purpose

1 0 Activist InvestorsTake On the Board

IN THIS ISSUEFeatures

KO R N FE R RY B R I E F I N G S O N TALE NT & LE AD E RS H I P

I N R E V I E W

C E O L E T T E R

How a Group of Hackers, Geniuses and Geeks Created

the Digital Revolution

You Think You’re This, But You’re Probably That

7 0

I N N O V A T I O N S

Farming? John Deere Has an App for That

6 2

L E A D E R S H I P

Five to Watch

1 4

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P A R T I N G T H O U G H T S7 2

ON

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: “Lio

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OvercomingSelf-Delusion

Rosy Self-Deception May Be Our Default Mode

Filling in Your Blind SpotsThe Self-Aware Leader

The Icarus Syndrome

Ebola

Global Leadership

Meets the Wearable Revolution

Staying Ahead of the Virus in Africa

Six Expert Perspectives

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42

56

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Letitia A. Long, Ret. Director, National Geospatial-Intelligence Agency

“It doesn’t take long to run out of fingers and toes if you’re counting all the crises that are happening and that we monitor...”

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The lecture hall at a prestigious university was nearly full, and every eye was trained in my direction. When I invited ques-tions after my presentation on leadership, a young man in the back row called out, “What’s the one thing I need to know so I can get your

job one day?” Sitting with his arms folded, his baseball cap on backward, he grinned at me.

There is one important quality—the foundation on which all other leader-ship development becomes possible—the “secret ingre-dient” that answered the stu-dent’s question: self-awareness.

Most people can’t really see themselves, and so they assume they possess qualities that may not really be there. Perhaps they think they’re great com-municators, when in fact they often leave people scratching their heads. Or they unknow-ingly come across as arrogant or aloof. In other words, they think they’re this, but they’re probably that.

Many people aspire to leadership, but not everyone will (or should) become a leader. Some lack the critical skills. Others are technically competent, but ignore the softer side of inspiring and motivating others.

Too often, leaders fail to address their blind spots—those areas in need of development to make them better leaders. And the higher up they go, the bigger those blind spots can become, because most followers will only tell the leader what they think he or she wants to hear. It’s like climbing a pyramid: the track gets narrower as you reach the top. At the pinnacle, there is no one to your left or right—you’re all alone.

If you aspire to leadership, you must be open to and actively seek out feed-back and input from others. Otherwise, you’re going to become lost in a mirage of self-perception. The world around you will quickly become an optical illusion in which truth is distorted. If that’s the case, your myopic view should carry the warning: “Objects are closer than they appear.” What you think is only a distant possibility or a small impediment that can’t possibly impact you is actu-

B R I E F I N G S

You Think You’re This, But You’re Probably That

BY GA RY B U R N I S O N

Gary Burnison Chief Executive Officer

Michael DistefanoChief Marketing Officer

Joel KurtzmanEditor-In-Chief

Board of Advisors

Sergio AverbachCheryl BuxtonDennis Carey

Joe GriesedieckRobert Hallagan

Katie LaheyByrne Mulrooney

Indranil RoyJane Stevenson

Creative Directors

Robert Ross Roland K Madrid

Marketing and Circulation Manager

Stacy Levyn

Project Manager

Tiffany Sledzianowski

Web Comm. Specialist

Edward McLaurin

Contributing Editors

Chris BergonziDavid Berreby

Lawrence M. FisherVictoria Griffith

Dana LandisStephanie Mitchell

Christopher R. O’DeaP.J. O’RourkeGlenn Rifkin

Adrian Wooldridge

5T A L E N T + L E A D E R S H I P

ally gaining on you! Only by relying on the vision of others—especially their perception of you—can you gain a clear picture.

It’s a real danger when your distorted view substitutes for reality—especially because no one wants to give you the “bad news.” To illustrate this concept for the students, I shared one of my favorite business parables:

A new CEO was holding his first “town hall” meeting with employees, taking to the podium with a command-and-control style to show everybody that things were going to change. As the CEO spoke, he no-ticed a man in the corner who wasn’t paying attention. He wasn’t dressed like the rest of them. He wore jeans, a T-shirt and a baseball cap on backward. (I glanced at the student in the back row when I said that!)

Wanting to make an example of this man for his laxity, the CEO called him out and asked him how much he made a week. The guy shrugged and said about $400. The CEO reached in his pocket, pulled out about $1,000 in cash, and told the man he was fired. When the man took the money and left, the CEO noticed his sly grin. Other people were smiling, too, but no one said anything. After the meeting, the CEO called one of his senior vice presidents over. “I sure made an example of that guy.”

“Yeah, he was surprised,” the SVP replied. “By the way, that was Johnny, the pizza delivery guy who brought us lunch. He certainly appreciated the tip you gave him.”

Moral of the story: Leaders who lack self-aware-ness cannot see themselves accurately, let alone those around them.

As I explained to the students, those who aspire to become leaders have to start by looking within. Only with self-awareness will you know your strengths and admit to your weaknesses. Only by first knowing your-self can you let others see who you really are. When they see the real you, they can choose to follow you.

It’s a rare leader who truly motivates people and inspires them to the point that they become eager followers—getting up at 4:30 in the morning without an alarm clock just because they can’t wait for another day. This is the type of leader who can help others see what is possible for themselves and their organizations—and then turn that belief into reality.

After my lecture, several students stopped me with questions. The last was the student with the baseball cap, now in his hands instead of backward on his head. “Thanks for answering my question,”

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“Only with self-awareness will you know your strengths and admit to your weaknesses.”he said politely. “The way I asked it, though, I guess I was showing off.”

Here was a mouse, pretending to be a lion. But when the mouse goes out in the jungle, he’s going to see just how inadequate his self-perception is.

When we shook hands, I gave that student some parting advice: “To see tomorrow, you must perceive the reality of today. Similarly, to lead others you must, first, accurately see yourself. Then who knows—you just might become a leader after all.”

In this issue of Briefings we build on the above-mentioned theme of self-awareness. Adrian Wooldridge, the management editor of The Economist and a regular Briefings contributor, discusses self-knowledge and leadership going back to ancient times. Larry Fisher, also a frequent contributor to Briefings, writes about the way leadership styles differ around the world. Glenn Rifkin, our contributing editor, takes a look at how Teresa Amabile, a pro-fessor at the Harvard Business School, thinks about leadership, creativity and self-knowledge.

Self-knowledge is an important concept for anyone aspiring to lead or do something creative. We hope this issue of Briefings adds to your own store-house of insights.

6 B R I E F I N G S6 B R I E F I N G S

“ EVERY ASPECT of what we do is driven by a sense of purpose,” Indra Nooyi, chairman and CEO of PepsiCo, once told me.

Purpose is the “why” behind every great organization, the reason for its existence, far beyond making money or winning the game. Great leadership, too, must start with the “why.”

PepsiCo embraces purpose—its “why”—holistically; it is the basis of everything it does. From her earliest days as CEO, Nooyi has defined “Performance with Purpose” as her mission and operating strategy for the company. This includes a multipart approach that lays out country-specific performance targets and detailed goals to benefit society, the environment and the work force. From more efficient consumption of water and electricity to sustainable farming practices and expanding affordable nutritional products for lower-income consumers, Perfor-mance with Purpose touches every aspect of PepsiCo’s business.

As the PepsiCo example shows, purpose must be omnipresent—on the walls and in the halls—and cast a long shadow over the organization. Purpose becomes the bridge from what we’ve been to what we will be.

BY GA RY B U R N I S O N

“Purpose”The Anchor of the Organization

B R I E F I N G S

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“With a sense of purpose, team members become part of something bigger than

themselves. They know that what they do matters to someone else, and that they are contributing to the greater good of the organization and what it stands for.

The leader’s job is to make sure everyone at every level understands the purpose.”

ART BY HARRY MALT

T A L E N T + L E A D E R S H I P

OVER THE YEARS, however, I’ve seen leaders jump immedi-

ately to the “how” and forget all about the “why.” Obviously, leaders must set the goals and articulate the vision, as well as the strategy, which come to-gether in the “how.” Leaders also must know the “who”—the individuals who are the heart and soul (and eyes, ears, feet and hands) of the organization.

The real question, though, is “why?”—the answer to which articu-lates the purpose.

Purpose anchors the organization, giving workers a sense of “why” they are doing what they do. “Why” trans-forms self-interest to shared interest.

With a sense of purpose, team members become part of something

bigger than themselves. They know that what they do matters to someone else, and that they are contributing to the greater good of the organization and what it stands for. The leader’s job is to make sure everyone at every level understands the purpose.

Purpose is never about the leader, but it does start with the leader. No matter if you are the CEO of a global company or the head of the local PTA, as the leader you must embody the purpose of the organization. When people look at you, they need to see the purpose reflected in your eyes, words and actions. Purpose is no less than the basis of everything you do. It is the North Star, guiding you and everyone else in the organization.

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However, in an organization that lacks a strong sense of purpose, the absence is palpable:

“I feel like there is a lack of coordination here. We’re all off working on our own projects.”

“It’s hard to know how my success will be measured; the goal seems to change so frequently.”

“This organization lacks clear direc-tion, which leaves us in disconnected silos without a common goal.”

With purpose as the rallying cry, people move beyond their separate-ness and begin rowing in the same direction, toward the same finish line.

Ideas for Action...

Defining the “why” begins with setting a purpose. One effective way to start is with a team charter that crystallizes the organization’s purpose for those on the inside and on the outside. The best charters

B R I E F I N G S

Defining the Purpose

THE MORE staffers understand the “why,” the more closely

aligned they will be to the organiza-tion’s priorities. Close alignment with the mission, vision and goals is imperative for every organization, and especially large enterprises in which thousands of employees are making hundreds of decisions every day. The leader cannot possibly look over every shoulder. When employees have a strong sense of purpose, they are more likely to act in concert with the mis-sion and objectives of the organization.

Things to Listen for...

When purpose is in place within the organization, the echo is heard everywhere:

“I understand how the work I do fits into the bigger picture.”

“I know exactly why I am here and the role I play.”

“We don’t make widgets. We improve lives.”

“Effective leaders link what their followers value to the vision and purpose of the organization.

Then people are working for their most compelling

self-interests!”

than

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organization. Tangible and accessible, purpose changes how staff members work, interact with each other and serve customers. In short, the company’s purpose becomes everyone’s purpose—a smart,

scalable model for leadership. At the same time, leaders must

be specific about the goals and tactics that need to be carried out, and in what time frame. Without concrete directions and expecta-tions, purpose may never be fully actualized.

When truly effective, purpose becomes a living, breathing force within the organization—creating alignment, catalyzing change. As Nietzsche wrote, “He who has a why to live can bear with almost any how.” In a purpose-driven organiza-tion, leaders are truly skilled in making the why real.

9

I N M E MOR IAM

Senior Client Partner, Global Life Sciences Market, Korn Ferry

Ruchira Pathania

answer the questions: Who are we? Why are we here? What is our unique contribution? A charter may stand for many years, or it may be revised and touched up every quarter. Either way, it is a touchstone for employees to better understand the team’s focus and how it serves internal and external customers.

Purpose also establishes the organization’s place in the world with a well-defined and widely understood public image. How customers experience the company, its products and its brand are closely linked with how the organization defines and refines its purpose.

As leaders carry out the responsi-bility to communicate the purpose, they must first understand the audi-ence: who are they talking to and how do they fit in the bigger picture? Every member of the team, from

the newest entry-level employee to senior leaders, must see themselves in the context of the whole.

Leaders who know how to moti-vate their teams with purpose also understand that different partici-pants are moved and inspired by dif-ferent things. For example, some are energized by innovation; others feel strongly about social responsibility. Highly effective leaders link what their followers value to the vision and purpose of the organization. Then people are working for their most compelling self-interests!

Once defined and communicated, purpose cascades throughout the

T his issue of Briefings is dedicated to the memory of Ruchira Pathania—a devoted

wife, mother of two children, daughter, sister, colleague and Korn Ferry partner.

Ruchira was a beloved and cherished member of the Korn Ferry family who touched the lives of so many. She was determined, driven and very smart. She began her career as a Korn Ferry Associate in India before moving to Princeton, N.J., where she made her home as a Senior Client Partner in Global Life Sciences for the last 15 years.

As all of those who had the pleasure of knowing and working with Ruchira will attest she was a role model to her colleagues and a wonderful mentor and friend.

Gary Burnison is

CEO of Korn Ferry

and author of the

book “LEAD.”

LEADthebook.com

10 B R I E F I N G S

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ART BY NEIL PIETARI

T A L E N T + L E A D E R S H I P

ACTIVISTS, THOSE PESKY INVESTORS who buy a small stake with the goal of making big changes to a company, are no longer the short-term players gunning for a quick sale. Now that pensions

and large funds hold 70-plus percent of investments in the largest cor-porations, selling the company’s stock is no longer the operative way to correct poor performance or bad management.

BY K A R E N K A N E

Activist Investors Take On the Board

A new consensus is emerging that boards of directors are not only accountable to share-holders but must demonstrate their responsive-ness to them in meaningful ways. Shareholders, led by activists, are asserting themselves in helping to create more value for the enterprise.

“It’s important for directors to understand that many investors hold a stock for five or 10 years, or an indefinite period for index funds,” said Peter Michelsen, a partner in Camber-View Partners, a boutique firm that advises public companies and boards on contested and complex governance situations.

“These investors have to engage with my companies,” said Michelsen. “Fund investors such as pension funds want their managers to engage with the portfolio companies. They want funds to exercise voting rights, which they view to be valuable.”

Directors may underestimate the degree to which activists are collaborating with a com-pany’s investors, because activists are working on a number of issues for a number of their investments. Clearly, the activists have relationships with large holders, making it incumbent on companies to encourage direc-tors to develop relationships with investors.

With $100 billion in their war chests, activist investors have reshaped investor en-gagement and the role of the director.

No doubt the number of activist cam-paigns in 2014 will surpass the 220 in 2013. The success of activist campaigns has caused

institutional investors and more traditional long-only investors to moderate their ap-proach, working with directors who have been elected to represent shareholders.

“We may see some traditional investors adopt models similar to funds like Relational or ValueAct, with a less aggressive approach but still putting pressure on companies to consider strategic and governance changes,” said Michelsen. “There is a larger universe of investors who may be willing to engage behind the scenes to make changes because it’s no longer taboo.”

There’s no doubt that financial crises and market meltdowns have affected governance practices. A pattern has emerged: crisis fol-lowed by regulatory changes, followed by governance adjustments, followed by new crisis. While the Sarbanes-Oxley Act was thought to be the “big kahuna” of regula-tions for the new rules imposed on the audit committee, a shareholder advisory vote on executive compensation proved to be the real game-changer.

“‘Say-on-pay’ changed everything,” said Mark Borges of Compensia. The compen-sation consultant watched as the trend transformed investor practices. It turns out that once investors were asked to opine on executive pay, even as a nonbinding advisory vote, they decided to take up other issues with board members. The veil of the boardroom was lifted, and suddenly board

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directors were talking directly to shareholders about a host of other governance issues.

“Say-on-pay votes were a catalyst for engagement,” said Amy Borrus, deputy director of the Council of Institutional Investors, the nonprofit association of pension funds with combined assets that exceed $3 trillion. “Over the years, companies have sharpened their pay practices, and some of the worst practices were winnowed out.”

The rule changes were meant to empower shareholders, and activ-ists have been savvy about using new regulations to their advantage. Yet their biggest success has been engaging other shareholders to bring issues to the attention of the board.

“Very few investors can advocate alone successfully for change at a company,” said Michael Levin of TAI, The Activist Investor blog. “A small number have the cred-ibility to propose a strategy, director can-didate or balance sheet structure that manage-ment knows will resonate with other investors. So ValueAct can gain a board of directors seat at Microsoft seemingly only by its reputation, size of its investment and force of its arguments. Yet, don’t underestimate the extent to which even it needed to consult with other investors beforehand.

“Once you have engaged other investors, only then can you say with confidence to the board of di-rectors and management that many others support your view about strategy and tactic,” said Levin. “That’s a credible threat.”

Activist investing has become an accepted strategy as activists have become more sophisticated. “Activ-

ists do their homework,” Borrus said. “They have to target the right companies carefully, provide insightful perspective, and they present compelling arguments to other shareholders.”

Shareholders were very much on the minds of the more than 1,300 di-

rectors who gathered for the National Association of Corporate Directors’ Board Leadership Conference in Na-tional Harbor, Md., in October. The theme, “Beyond Borders,” empha-sized the challenge of globalization. “Equally important as expanding our thinking beyond geographical bor-

ders is the way the conference moved beyond our conventional thought patterns,” said Reatha Clark King, chairman of the N.A.C.D.

“Now we are venturing into a different and particularly chal-lenging future,” she said. Always the optimist, she spoke of boards of directors facing the future boldly, getting beyond old fears of complex information technology, big data and cybersecurity to embracing them “both as new sources of risk for companies and as trans-

forming tools that will enable us to solve problems.”

Few activists today see them-selves as short-term players. In fact, directors should embrace activists, said Andrew Shapiro, a portfolio manager at Lawndale Capital with $30 million under management.

“If an activist has an ownership interest—that’s really their only interest,” said Shapiro. “They want to maximize the value of their shares.

If a road to receiving $30 a share can be painted and it’s credible, no activist would favor the short-term sale of the company.”

Some critics say activism isn’t really about good or bad governance. Rather, the skeptics say, it means using the board for the interests of

a small group of gener-ally short-term inves-tors—that, in a sense, governance has been monetized for the benefit of minority activists.

Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Dela-ware, disagrees.

“Activists present to the company some really critical analysis of what you’re doing and what you’re thinking about,” said Elson. “The problem

isn’t activists but the questions they raise. If someone raises a question, you better have pretty good answer.”

Governance experts acknowl-edge that the activists of 2015 are far different from the days of “Bar-barians at the Gate.”

“We are seeing a much deeper analysis by activist investors,” said Michelsen. “Prior to the financial crisis, a material portion of activism focused on levering up or selling the company. Today, they’re asking, ‘Can I get a return by

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“Once you have engaged other investors, only then can you say with

confidence ... that many others support your view ... . That’s a credible threat.”

VIEWPOINT

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making operational improvements? Should we re-evaluate the company’s business portfolio, divest divisions or pursue a spinoff to generate value? Are there changes in management that are necessary to implement these changes?’ ”

Given the current environment, boards need to be armed with a dispas-sionate evaluation of their vulner-abilities. Poor financial returns are the prime reason activists get involved, but governance issues determine whether they will pursue a campaign.

The big question for directors be-comes: “Is the board as it’s presently structured willing or capable to take the steps to deliver the returns that an activist has identified?”

Whether it’s executive compen-sation, company strategy or even company structure, directors can take their message directly to share-holders. As directors have increased their direct engagement with shareholders, and as shareholders have developed teams focused on governance issues, the influence of proxy advisory firms has changed. “ISS and Glass Lewis now play an important, but not determinative, role in governance.” said Michelsen.

Board composition is the next focal point for governance-oriented investors, according to Michelsen. “Shareholders are looking critically at long-tenured directors,” he said.

It doesn’t mean that long-serving directors are not smart and well intentioned, but the world and business are changing rapidly. The data breaches at Target and Home Depot demonstrated that the boards needed expertise beyond retail. One illustration of a board refreshing its ranks is Wal-Mart’s appointment of the 30-year-old CEO of Instagram, Kevin Systrom, to its board. He joins Yahoo CEO Marissa Mayer, expanding the board’s technology expertise to better compete with Web rivals like Amazon.com.

Governance as Engagement

As more than 1,300 cor-porate directors gath-ered at the National

Association of Corporate Directors for its annual Board Leadership Conference, there were more than a few issues on the attendees’ minds. Not only was there a rich offering of impressive speakers and educational sessions, but also the opportunity for directors to meet with peers. It also marked the release of another Blue Ribbon Commission report, this one on strategy development.

N.A.C.D. previewed the report with a session fea-turing panelists Raymond V. Gilmartin, a Harvard Business School professor who co-chaired the commission with Frontier Communications CEO Maggie Wilderotter, former U.S. Commerce Secretary Barbara Hackman Franklin and Executive Consulting Group president William E. McCracken. Joann Lublin, the Wall Street Journal reporter who has covered governance for 23 years, served as moderator.

But even more radical than having a journalist moderator was the commis-sion’s recommendation that directors move from a role of reviewing and concurring with management on strategy to much greater engagement in strategy during the formula-tion process. “As directors we’re responsible for creating shareholder value but also, in my view, for the long-term survival of the firm,” said Gilmartin. “Failure of strategy is the reason companies fail.”

“Boards need to be in-

volved in strategy much ear-lier,” Franklin added. Boards need to understand and test the underlying assumptions, strategic alternatives and risks involved as well as de-termining how success will be measured. “Then, there needs to be an update on strategy at every meeting,” she said.

The panelists agreed that this approach will take some adjustment for some boards and management.

“If you’re just reading your board book, you’re not prepared,” said McCracken. “You have to look at the com-pany as activists do,” which means much more indepen-dent research and analysis. It prompted Lublin to ask if boards need their own re-search staff.

McCracken said that man-agement needs to become comfortable with the board asking for more information. At the same time there has to be a high level of trust between the board and man-agement. “Management has to feel that the board is not going to turn on you.”

McCracken knows whereof he speaks, having served as independent chairman of CA Technologies, later becoming CEO. Telling the directors that “it looks different from the other side,” he said boards have to ask probing questions and hold executive sessions before and after the board meeting.

“It sounds to me like you’re saying that the board used to admire the cake,” said Lublin. “Now this [commission] is saying, directors need to get in there and stir.” —K.K.

14 B R I E F I N G S

IS ONE OF THOSE RARE souls who drives us to ex-amine our expectations

of ourselves. If we witnessed terrible wrongs in our society, or even our office, would we find a way to speak up about it as boldly as she did at home in Pakistan? If gunmen came after us, would we keep talking?

Stories of people like Yousafzai usually come to us through history books. But here

she is, appearing on TV from her new home in Britain, this unusual Mozart of peace-making, a teenager in a chador, speaking of peace with the resolve of Mahatma Gandhi and the defiance of Winston Churchill.

Born in a nation where girls are lucky to get into any classroom, she had the advantage of being raised by a poet father who owned a chain of schools. Her voice caught the ear of a BBC Web site operator who encouraged

Malala Yousafzai

Too many times the leaders we’re asked to watch are great,

but they’re yesterday’s news. Who doesn’t think Winston Churchill or Steve Jobs or Abraham Lincoln was great? The five leaders presented below are different. They are young, they are doing tremendous things, and many people still have not heard of them. As a result, we want to introduce you to tomorrow’s A-Team of leaders. Why? Because they are among a small group of people who are actually changing the world.

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IP Five Leaders You Need to Watch

BY CHRIS HODENFIELD

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Ted Sarandos

IF “BINGE WATCHING” IS the latest national addic-tion, then the main pusher

is Netflix, the Internet provider who learned that on-demand video service means right now. Netflix rewrote the rulebook, and the surprise power cre-ating the new terms is Ted Sarandos, its chief content officer, who is now in charge of producing a lot of aston-ishing content. All of show business—especially rivals like HBO, Amazon.com and the networks—is studying Sarandos’s every move.

It isn’t like Sarandos was another M.B.A. waltzing into the office and falling into line. He’s a community-col-lege dropout from Phoenix who learned the ropes in Quentin Tarantino style—by being a clerk at a video store. He worked his way up to running a company that sold videos to Blockbuster, the rental giant. In that capacity he caught the eye of Netflix

CEO Reed Hastings. Since Sarandos joined Netflix in 2000, it grew from a company that mailed out DVDs to a million customers to a colossus that streams a billion hours of content every month to 38 million customers in 40 nations. It has been estimated that its customer base will triple in the next six years.

Blockbuster is gone, of course, in small part due to Netflix. And cinema multi-plex owners are nervous, as Sarandos goes about refig-uring the old movie distribu-tion models.

Although Sarandos by-passed business school on his way to success, it isn’t all seat-of-the-pants experi-mentation. Before commit-ting $100 million to their first in-house production, “House of Cards,” Netflix

could study the hard data gleaned from its customers’ habits. With this sort of gran-ular intelligence, who needs the Nielsen overnights? Netflix presently has nine original series in the works, and that’s only the start.

“One child, one teacher, one book and one pen can change the world.”

—MALALA YOUSAFZAI

her to write an anonymous blog about her experiences in a strife-torn country.

This was a dodgy assignment to have in Pakistan, where more than 50 journalists have been slain in the past 20 years, where the Taliban has destroyed dozens of girls’ schools and, indeed, where not even a re-spected past president like Benazir Bhutto could escape the assassin’s hands.

So the Taliban came for Yousafzai, and

somehow she escaped with her life. Winning the Nobel Peace Prize was huge, of course, but her influence, already enormous, will spread much further through her biog-raphy, “I Am Malala,” an international best seller. Although banned in most Pakistani schools, the book is one to rouse a million other classrooms around the world.

Yousafzai talks about running for office someday. Believe it.

ART BY DAVID JOHNSON

B R I E F I N G S16

THE NEXT TIME YOU’RE waiting in a slow line at the store, ponder this:

In the two minutes you stood there fuming, Alibaba.com might well have processed 2 million transactions.

Alibaba, the online Chi-nese marketplace that is now sweeping all before it, is the brainchild of Jack Ma, whose $30 billion worth makes him the richest man in China. With a service that connects consumers to dealers in sort of a combined Amazon/eBay fashion, he has found a way of providing the world’s biggest shopping mall to customers who may have little more than a need and a mobile phone. Even in Tibet, shoppers can order, as Ma claims, anything.

Ma found power not through any technical skills but rather his gift of gab. As a youth growing up 100

miles from Shanghai, he offered free guided tours to foreigners as a way of learning English. He became an English teacher. But when he first witnessed the Internet at age 33, he wanted to join the conversation.

After founding the Chinese Yellow Pages, he

created Alibaba, first as a business-to-business en-terprise. He sweet-talked the likes of Goldman Sachs, Yahoo and Japan’s SoftBank into investing heavily and allowing him to expand. Wall Street still likes him, as his recent record-setting $25 billion IPO proved.

Having built an enter-prise that seems to outstrip state-owned operations in usefulness, Ma now finds himself a person of great in-fluence. Naturally, the state would love a share of that extraordinary collection of data he has acquired, but he has so far succeed at keeping his distance.

“Always try to stay in love with the government,” he says, “but don’t marry them.”

Meanwhile, he now has the funds to be an extraordinarily welcome suitor as he goes a-courting around the world.

WHEN THE APOCALYPSE FINALLY happens, angel Gabriel will prob-ably not be announcing the day on a trumpet—surely the news will

come via Twitter. Doesn’t everything happen this way now? Whether it’s the president or the pope, a revolutionary in the streets of Cairo or just another drunk-dialer outside the bar, some-one’s just got to tweet the world.

Jack Dorsey could have retired on the fame he garnered for leading the Twitter team to a micro-blogging empire. Instead he started a new firm, Square, built around a tiny device that attaches to a smartphone and turns it into a credit-card reader. With two enormous hits on his record, and a vast fortune to go with them, he is being

Jack Ma

B R I E F I N G S16

shoppers can order, as MMaclaims, anything.

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Jack Dorseyk cygarnered for leadrblogging empireSquare, built arotot a smartphonerreader. With twoaand a vast fortun

Jack Dorsey

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17T A L E N T + L E A D E R S H I P

Five Leaders You Need to Watch

CANCER HAS A WAY of arousing two sets of fears. Beyond

the apprehensions over the disease itself, there is often a profound worry about the sometimes harrowing proce-dures used to detect and fight it. That is why the noninvasive diagnostics discovered by Sangeeta Bhatia have cap-tured the imagination of the scientific world.

As a child growing up in Boston, she was a compulsive tinkerer and is still driven, she says, by a desire to fix things: “I’m always thinking about how to solve problems by repurposing tools.”

With an M.B.A. mother and an engineer father, young Bhatia was often asked, like so many children of Indian immi-grants are, if she intended to be a doctor, an engineer or an

entrepreneur. She went for the trifecta. Now equipped with a medical degree from Harvard and engineering degrees from M.I.T., she has gone to work on what she calls “the fascinating machine” of the human body.

The engineer in her bor-rowed microfabrication technology from the world of semiconductors. Her team of technicians at M.I.T. learned how to inject nanoparticle-sized sensors into patients and retrieve of a wealth of informa-tion such as proteins signaling the presence of tumors or the body’s reaction to medicines.

In struggling nations where a colonoscopy, for instance, is improbable, relying on a paper-strip urine test for cancer will be a lifesaver.

Her insights are leading to brave new projects in tissue engineering class. One long-term goal is to build an implantable liver.

And that’s certainly not all to be expected from Bha-tia’s laboratories. Her team of students and researchers has been given instructions to spend 20 percent of their time working on their own projects. Like Bhatia, everyone has their own toolbox and their own ap-proach to the human machine.

Sangeeta Bhatia

hailed as one of today’s great innovators. Everyone wants to hear his next idea. Disney just added him to their board. And when Dorsey— a self-professed wanderer and dreamer—talks about leaving his San Francisco mansion for New York, where he’d like to become, you know, the mayor, people actually listen respectfully.

His mind for systems was sharpened during a St. Louis childhood when he obsessively tracked trains and emergency rescue teams. He became a deviser of new systems, and it is this aspect of Dorsey’s résumé that has raised him above your run-of-the-mill tech whiz. What will set his sights on next?

Let it be told: If Dorsey could figure out a sane way to get to the New York airport, they can hold off the Apocalypse for another day.

“Make every detail perfect,

and limit the number of details

to perfect.”—JACK DORSEY

eaddeers You NNeeeeddd tttooo WWWaaatttccchhh

Andd tthahahaahaah t’t’tt’t sssss cccererererttatatataininiinlylylyy nnnototottall to be eexpxpecected ffroorommmm BBBBBhhahhahaha---tia’s laboratories. HHerer tteaeammrr oofft d t d h h

18

T r a n s p a r e n c y A N D

I n t e l l i g e n c eA N I N T E R V I E W W I T H

L e t i t i a A . L o n gR E T I R E D D I R E C T O R ,

N AT I O N A L G E O S P AT I A L - I N T E L L I G E N C E A G E N C Y

LETITIA “TISH” LONG IS THE FIRST WOMAN TO HEAD a major American intelligence agency, the National Geospatial-Intelligence Agency. She began her career in 1982, after receiving an engineering degree from Virginia Tech. Her first job after school was as an engineer working for the Navy.

N.G.A. operates as both an intelligence service and a combat support agency, and its customers include war fighters, policy makers, intelligence professionals and first responders—both domestic and international. The group gathers information for mapping, locating and targeting locations for each of these obligations. For example, it was involved in rescue operations during the 2013 typhoon in the Philippines, and before that, in 2012, it was involved in the emergency response to Hurricane Sandy, which affected the Eastern Seaboard of the United States. Floods, fires, earthquakes, storms and wartime activities are all within N.G.A.’s purview. The agency even launched a publicly available Web site, the first of its kind for an intelligence agency, to provide unclassified and shareable geospatial intelligence for the interna-

INTERVIEW BY

BERNADINE KARUNARATNE

AND JOEL KURTZMAN

PHOTOGRAPHED BY KEVIN W. CLARK

“ I T D O E S N ’ T T A K E

L O N G T O R U N O U T O F

F I N G E R S A N D T O E S

I F Y O U ’ R E C O U N T I N G

A L L T H E C R I S E S T H A T

A R E H A P P E N I N G A N D

T H A T W E M O N I T O R O N

A D A I L Y B A S I S . ”

— L E T I T I A A . L O N G —

R E T I R E D D I R E C T O R ,

N AT I O N A L G E O S PAT I A L - I N T E L L I G E N C E A G E N C Y

20

tional response to the Ebola crisis in West Africa. On the military side, N.G.A. contributed location information to Operation Neptune’s Spear—the military operation in which Osama bin Laden was killed.

Under Tish Long’s leadership, N.G.A. entered a new era of transparency. It opened up and made accessible a great deal of its imaging, information, soft-ware and analytical capabilities to non-governmental and friendly foreign governmental institutions for use. One of Long’s initiatives is called the “Map of the World” platform. The platform links imagery, mapping, computer modeling and geospatial location surveying together to create a detailed atlas of the world that can locate areas with civilian and military applications for analysts. The Map of the World is akin to Google Maps on steroids.

Long spent more than 35 years working for the federal government. In 2010 she was appointed director of the N.G.A. by Defense Secretary Robert Gates. She retired from federal service in October 2014.

Immediately before she joined N.G.A. as its director, Long was deputy di-rector of the Defense Intelligence Agency, working under Lt. Gens. Mike Maples and Ron Burgess. Before that she was deputy undersecretary of defense for intelligence. Even after 35 years in government service, it’s clear that Long has not lost her passion for federal service and for helping plot the future of the U.S. intel-ligence agencies.

This edited interview with Director Long,

conducted by Bernadine Karunaratne, president of

Korn Ferry’s U.S. Government Consulting Services, and

Joel Kurtzman, editor-in-chief of Korn Ferry’s Briefings on

Talent & Leadership, took place in her office at N.G.A.’s

futuristic headquarters in Springfield, Va.

Q When you walked into your office at the National Geospatial-Intelligence Agency,

N.G.A., did you have a plan for changing it? In 2010, when Secretary of Defense Robert Gates offered me the opportunity, I was honored. But he did not give me a mandate for change. Neither did Director of National Intelligence James Clapper. They basically said, “You know what to do, go do it.” So, I came to the agency with that point of view. That said, I wanted to ensure that N.G.A. was postured for the future.

How did you set your agenda?In the past, I had been a customer for the kind of information the agency produces and collects, and I was getting a very good product and good support from N.G.A. So, I knew the organization from that perspective.

Did you also know how the organization functioned internally?To a certain extent, yes. I was the deputy director of the Defense Intelligence Agency, which meant we worked very closely with N.G.A. It was a great working relationship. As a result, I knew the agency was functioning well. I will say, we are a very young agency, and each director put their imprint on N.G.A. The first director, Jack Dantone, put it together. He established it. The second integrated it; that was Jim King. Jim Clapper was the third director and brought the two disciplines of imagery analysis and mapping together to form GEOINT, or geospatial intelligence. It was my immediate predecessor, Adm. Bob Murrett, who became director in 2006, who put the agency on a wartime footing.

Q / A Letitia A. Long

What was the first thing you did when you walked in the door?I spent the first 90 days talking to as many people as I could—employees from around the world and customers from the community. I also talked to the first-responder community.

You say “national security.” How do you define the national security community?I define it as policy makers, war fighters and first responders. What I heard consistently from talking to these people, employees and customers alike, were three things: “You—meaning N.G.A.—are really good. We love N.G.A. But can you please make it easier for us to get your information?”

They told me they wanted more of our information. They also said they valued our analytical assessments, our ability to get to the right issues, our analysis and the way we deliver and portray our information. But I also heard that it was difficult to find data; even our own people said that is a problem.

What do you mean by that?It’s a problem because we are in the midst of what I call the “geospatial revolution,” where imagery from space is becoming ubiquitous and available to nearly everyone for many uses, not only for national security purposes. It’s also a problem because our vision has been to put the power of GEOINT into the hands of our users to provide them with online, on-demand access to our information to make it easier to get at our information and to deepen our overall analytic expertise. We do these things to create new sources of value for our customers and to be prepared for a crisis.

It sounds like you are rethinking your strategy—something commercial companies do all the time but government agenciesdo rarely. How are you approaching this shift in strategy?We are like a large corporation. We have customers, and we have a bottom line—although we call it our top-line budget. Our budget is decreasing, and we

have to get everybody onboard with that. The fact is, we could not continue to do what we were doing in a brute-force way. We are unique in the intelligence community because we have commercial competition. For some needs, for example, Google Maps might be good enough.

So the first challenge was to change the organizational culture so everyone knows we needed to change. That was difficult when all of our customers—the four-stars (generals, admirals and so forth) and the Cabinet secretaries—are all saying, “We love you, give us more.” But at the same time, employees are saying, “Why do we have to change when everybody says we’re really good at what we do?”

Of course, we’re really good today, but we have to position ourselves for the future. We have to take advantage of—but not compete with—industry. We need to leverage what they’re doing so we invest in the value added. We need to add it to our value proposition, which is our deep analytic expertise, our deep understanding of target sets, which commercial industry doesn’t necessarily have.

22

Q / A Letitia A. Long

How do you get the employees onboard? We put out a call for ideas. What should our online presence look like 10 years from now, for example? I was going to be happy if we got 10 teams to participate. It was all self-organizing. Our employees and industry partners could participate, as well as our allies—Canada, Australia, New Zealand and the United Kingdom—they all have a presence here. We had over 20 self-organized teams and over 500 folks involved. One of the teams was led by a person who had been here for three months, another team was led by somebody who had been here more than 30 years. Some of the teams were virtual—they never met in person until they came together to pitch their idea.

In an organization like this, are you able to celebrate the winners and publicize it, or do you have to keep it under wraps?We publicized it—we publicized the contest, we publicized the teams and their ideas, we used publications like our own internal magazine, The Pathfinder, and we highlighted appropriately online. There ended up being two winning teams and an honorary mention. We are still using some of those ideas from the contest we held almost four years ago now.

The boundary lines between government agencies and business have shifted over the last 20 years. How has N.G.A. adapted to those changes, attempting to be as transparent as possible? First of all, N.G.A., as we so often are doing, is leading the way. It’s a little easier for us, and I’ll tell you why. It’s a little easier for us because part of our mission is unclassified, so our support to first responders, the whole humanitarian assistance part of our mission, as well as our disaster recovery mission, are unclassified. In the past, we would work with FEMA—the Federal Emergency Management Agency—or the Coast Guard or the Secret Service, and when we provided a product our seal would not be on it. We would never acknowledge that some part of the work came from us.

But that’s different now. We put our seal on all our products now, because it’s important for the American public to know that their taxpayer dollars, and the amazing intelligence capabilities that they have been investing in to secure the nation, can also be used to protect them in the event of a hurricane, or a tornado, or a wildfire or an earthquake. We don’t take pictures over the United States unless we are asked to, and then only for a specific event. We have very strict laws and policy guidelines on how we do that and how we report it. So again, from a transparency perspective, we can talk about what we do, not how we do it, which is what we don’t want our adversaries to know.

How does that work in practice?For unclassified missions we use commercial satellites; the resolution is not as good as our government-built satellites, so you cannot discern as much detail from the imagery. If you want to know the damage from an earthquake or the damage from a hurricane, you can see that with pretty coarse-resolution imagery. So that’s really the difference.

You have a Twitter presence, and you use social media. That’s not how intelligence agencies used to function. Why have you embraced it?When I arrived, we had a Facebook page. I don’t believe we had a Twitter presence. Since then, both of those tools have taken off. The fact is, every day we’re hiring into the work force, which means we’re hiring folks who are used to this technology, who are used to the apps and this way of staying connected. So, it’s natural that we introduce it into the workplace. These are tools we can take advantage of. It’s another way to explain to the American public who we are and what we do. It’s a way to integrate us into the community.

“... IT’S IMPORTANT

FOR THE AMERICAN

PUBLIC TO KNOW

THAT THEIR TAXPAYER

DOLLARS, AND THE

AMAZING INTELLIGENCE

CAPABILITIES THAT THEY

HAVE BEEN INVESTING IN

TO SECURE THE NATION,

CAN ALSO BE USED TO

PROTECT THEM IN THE

EVENT OF A HURRICANE,

OR A TORNADO, OR

A WILDFIRE OR AN

EARTHQUAKE.”

23

And it’s a way to connect with talent, especially young talent?Absolutely! We hold a lot of virtual career fairs now. We do online interviews, so that is just a normal part of how we do business. We do have to be mindful that foreign intelligence services are looking at those Web sites and at our online presence, also. We also talk to our new employees about operational security and to think about how much they want to put on their personal profiles. On the upside, social media is another tool, and we have to take advantage of all of the tools out there. Members of foreign intelligence services are people, also; they’re also posting things, and from our perspective it’s the pictures and videos that can be very helpful in our business, that can tip us to activity we may not have seen otherwise.

Does your mandate include following the “Internet of Things,” or is it exclusively about space and visual mapping and the way we traditionally think of imagery?It’s the Internet of Things from the standpoint oftying it to a physical place in the world, so N.S.A. is going to map the Internet and CYBERCOM [Army Cyber Command] is going to map cyberspace from the defensive position, but you want to know where it actually is. You don’t want to know that it’s a server

somewhere in cyberspace or a router somewhere in cyberspace. Who does it really belong to and where is it, physically? That’s where N.G.A. comes in. We like to say our job is to put the bricks and mortar into the bits and bytes, because at the end of the day you need to know where things are, how they’re physically connected, who they belong to, who’s directing them. And, if you want to take it to the very top, you also want to understand the leaderships’ intentions.

Looking ahead, what’s your vision over the next 10 years or so?From a GEOINT perspective, and also from the broader intelligence community and our everyday lives, I see us living within the data, what we refer to as immersion. So if you look at intelligence on a continuum, we coordinated with one another, then we collaborated with one another, and right now we’re really focused on being integrated. I see the next phase as immersive.

And what does that mean, exactly?We talk about 3-D, and we’ve talked about 4-D for a long time because we have to add the time dimension—how things change over time. But I’m talking 5-D, where you’re immersed in the data. You’re a part of it. Think of gaming. With 3-D glasses you immerse yourself in the game, you create avatars. We do some of that today, and we’ve done some of it for a while. That’s how we’ve been helping pilots and Special Forces teams be ready for their missions, to give them that virtual fly-through. Now imagine our analysts in that same environment, where they are pulling different pieces of data together—GEOINT [geospatial intelligence], SIGINT [signals intelligence], HUMINT [human intelligence], MASINT [measurement and signature intelligence], open-source information—to pull together all information about an object and structure all of the data around an object. An object can be a person, a place, a thing or an activity—we are working to be able to gather everything that is associated with that particular object, to be able to tell the whole story.

So it’s like when you’re in grade school, you have maps and then, later, you have relief maps, which have mountains on them and you can actually feel the texture and you get more details?Yes. And in our case, it’s like walking on the relief map and seeing how the terrain changes, the population changes, seeing what structures are built over time. If there is a military base, what’s associated with it, what equipment is there, what’s the activity associated with it,

24

what’s the command and control, who’s the commander, where were they yesterday, how are they linked to all of the other commanders? If it’s a terrorist training site, who’s training there, how long have they been there, what are they training for? So all of us within the intelligence community are looking at these things—we need to ensure that we’re bringing all of that information together in real time, virtually, to enable decisions and actions to be made and to enable customer success.

Is the information you are referring to classified or a mix of classified and unclassified?We can make available some of that information in the unclassified realm, and people will add to it in ways we never thought about. We have some of our disaster recovery software out on an open social-networking site where software developers work. It’s called GitHub, and we were the first intelligence agency to put our software out there on its network. Local communities are downloading and adding to it to run their towns and their cities. I met with the mayor of Huntsville, Ala., about a month ago. We have a very strong partnership with them. He wants a smart city, where he knows where the potholes are, where the trash trucks are, where he needs to have more patrol cars, and he’s using our software as his baseline to do that. Why not? It is already developed, and we give it to him at no cost. That’s just one example. If you go way back in time, some of our early radar work analysis was the formation for mammographies, so I’m sure there are other examples of taking what we develop here and adapting it for other uses.

Are you saying that by opening up your information and software tools, users will make your products better and more useful?Yes. But keep in mind, we always have to make sure the software hasn’t been altered and that we fully understand the source code. By making our data accessible, I have presented a challenge to the rest of the intelligence community and to the Department of Defense to make their data available to us and to others.

You may have heard “every soldier is a sensor.” A solider on the battlefield has a camera and takes a picture; that’s great situational awareness. That’s better than we may have because it’s in the moment. How do I get that data back here immediately, take advantage of it, and then serve it back out to the entire network? And how do I know that it was our soldier who took the pictures? That means we have to ensure we have data integrity if we’re going to use it to make our analytic assessments and then to serve it back out to others.

What are some of the things you worry about, in terms of big gaps to plug? The first thing that I worry about is what we don’t know. We cannot see the entire earth all the time, nor do I think we will ever invest in the capability to be able to do so. So I worry about what we don’t know. Then, I’m very worried about the rise of terrorism—what’s going on right now in Syria and Iraq. Many folks thought the Arab Spring was going to be spring. Well, it’s been spring, but it’s also been summer, fall, winter and so on. I also worry about our ability to anticipate

where the next disaster, catastrophe or crisis is going to strike and about our readiness for that. At the end of the day, I worry about the speed, impact and number of things happening to our people from so many things happening at once. We call that the OPTEMPO, or operations tempo. It doesn’t take long to run out of fingers and toes if you’re counting all the crises that are happening and that we monitor on a daily basis. We’re watching the rest of the world and trying to anticipate where that next hot spot is going to be. It’s not a complete exaggeration to say it’s usually in a place a lot of people have never heard of. So, I worry that the “new normal” is a constant state of crisis, and I worry how that impacts our folks and their ability to keep up without getting burned out. That said, the intelligence community is made up of smart, resilient employees who are dedicated to doing their part to keep our country safe. It has been an absolute privilege for me to be a part of it.

“WE CANNOT SEE THE

ENTIRE EARTH ALL

THE TIME, NOR DO

I THINK WE WILL

EVER INVEST IN THE

CAPABILITY TO BE ABLE

TO DO SO. SO I WORRY

ABOUT WHAT WE

DON’T KNOW.”

25

Q / A Letitia A. Long

27

MEETS THESYNDROME

ICARUSTHE

HREE THOUSAND YEARS AGO, a young Greek entrepreneur named Icarus came up with an idea for a truly disruptive new tech-nology: a set of wings, fashioned out of bird feath-

ers and held together by wax, which could be worn on the human arm. Icarus hesitated before testing his new device: didn’t the Gods warn against human arrogance? But he quickly dismissed his doubts: didn’t the sages who gathered in the marketplaces every day warn about fear of failure? In a flush of excitement he decided to dis-pense with beta testing and go straight for a hard launch.

The exhilaration was incredible. Icarus flew ever higher into the bright-blue Aegean sky—and as he flew he thought about selling his new product in the marketplace and be-coming as rich as Croesus. The wings would surely disrupt

T CANNOT BE LONG BEFORE Elon Musk or some other tech bil-lionaire produces a set of wings. But until that happy day we

have plenty of other devices that are intended to give us Godlike powers. The last great wave of technological innovation was all about social interaction. The next wave will be all about self-enhancement: wearable devices that improve our powers of seeing and being.

The device that has attracted most attention so far is Google Glass: a combination of high-tech eyeglasses and head-mounted com-puters that allow their wearers to see a world of information floating in front of their eyes. But there are hundreds of other clever devices that are either already in the shops or about to be launched. These prod-ucts come in three main forms.

The first is “quantified self” prod-ucts that allow people to measure

(and therefore improve) everything that they do. Fitbit and Jawbone make wrist devices that track physical activity and sleep patterns. MC10 is developing a wearable patch that measures everything from blood pressure to heart rate. One subcat-egory of quantified-self products is medical devices that give people the power to monitor their health. MC10’s patch will be able to deliver medicine as well as decide whether you need it. Another subcategory is surveillance devices: Narrative makes a tiny camera, designed to be worn on a lapel, that automatically takes photos every 30 seconds so that you can blog your life.

The second area is enhancement technologies. In many ways Google Glass is the most basic of these. Prosthetic devices and exoskeletons allow the elderly or the handicapped to overcome their disabilities. Oscar Pistorius, a double amputee

since infancy, was able to run the 400 meters at the 2012 Summer Olympics in 45.44 seconds, thanks to artificial legs. Cyberdine, a Japanese company, produces an artificial limb ironically named HAL (for hybrid assistive limb) that can help disabled people learn to walk. Researchers at M.I.T. have produced exoskeletons that allow people, such as soldiers, firefighters and removal workers, to carry super-human loads.

The third product form is virtual-reality devices. Oculus Rift is one of a new generation of companies that are producing headsets that are far more user-friendly than anything we have seen before. Facebook bought the company in July 2014 for $2 billion. Leap Motion has developed a way of controlling your computer with a wave of the hand. Virtual-reality headsets will enable movie watchers or game players to enter video paradises. But they also have more practical applications. Executives will be able to get the feeling of attending meetings without the need to travel. Architects will be able to slip on headsets to see what their designs will look like in practice.

Sports clubs have already incorpo-rated wearable technology into ath-letic equipment in order to monitor the athletes’ performance and reduce the chances of injury. Premier League football players have sensors in their boots to monitor their movements and kicking styles. N.F.L. players have sensors in their helmets to detect concussion. Police officers are

old industries and create new ones in an instant. Sailboats and oxcarts would be put out of business! Argonauts would carry Greek products and culture to distant lands! Even the Gods would have to re-think their business models as men began to rule the skies as well as the land! But as he soared toward the sun things began to go wrong. The heat began to melt the wax. The feathers fluttered off into the air. And poor Icarus fell to earth. Sometimes failure is more than just a learning experience.

28

beginning to wear cameras that film everything they do, thanks to a spate of suspicious deaths of young black men in the United States. Luxury carmakers such as Infiniti, Mercedes-Benz and Volvo are equipping their cars with computerized steering systems that keep them centered in their lanes, computerized brakes that automatically slam on in an emer-gency and computerized parking systems that allow you to navigate even Britain’s tiny parking spaces.

These digital devices arrive pre-loaded to change the world thanks to a combination of four developments: the relentless improvement in the power of computing; the increasing speed of broadband access; the dramatic spread of sensors; and the birth of cloud computing. The com-bination of these four developments is giving us a new kind of world—a world that is hyperconnected and data saturated, a world in which the Internet of everyone is linked to an Internet of everything. Entrepre-neurs have produced clever devices such as virtual-reality headsets and pedometers before to little effect. But today these devices are being launched into a world where they can immediately plug themselves into a universe of information.

IKE THE SMARTPHONE revolution before it, the smart device revolution will do an enormous amount to

change the world for the better. Quantified-self devices can en-courage us to exercise more, making it easier not only to measure our per-formance but to compete with dis-tant friends. Smart glasses can help surgeons with their work. Exoskel-etons can give the disabled the gift

30

of mobility. But digital devices have always had their downsides. Most obviously, they produce negative side effects: just try talking to someone who is fiddling with an iPhone. More subtly, but in some ways more impor-tantly, these products seduce people into thinking that the solution to all their problems lies in technology. These downsides will grow as the devices become more powerful.

The hyperconnected world is also a hyperdistracting world: the Web has an extraordinary capacity to shrink our focus and scatter our attention. Rings and buzzes interrupt our thoughts. Screens suck away our time. Everybody is always half-present and half-absent—keeping half an eye on the phone as they talk, texting under the table at meetings. No wonder the National Safety Council said that phones were involved in a quarter of all American road accidents in 2012.

Digital devices will make distrac-tion far worse. A few years ago we had respite from electronic stimulation when we went for a walk or dropped into Starbucks. Now we are con-stantly tempted to check our mobile devices as we walk along and stand in line. But at least we can put them in our pockets. In a world where we are wearing, rather than merely carrying, our information-rich devices, the buzzing and twittering will be in our heads rather than in our pockets.

But distraction is a monster. It drowns thought. It kills creativity. It undermines performance. It creates the worst of all worlds—a world in which we are constantly stretching ourselves to the maximum but never performing to our full potential. We hop from project to project. We jump from stimulus to stimulus. We are always starting things but never finishing them, always present but never really there.

The glory of the Web—that it

puts the world’s information at our fingertips—is also its curse: informa-tion is so omnipresent that we don’t know what to do with it. Even suc-cessful people mistake information for knowledge. Less successful people are lost in what Linda Stone, a former Microsoft employee, calls a world of “continuous partial distraction.” The Information Overload Research Group estimates that information overload wastes 25 percent of infor-mation workers’ time and costs the U.S. economy $997 billion annually. The good people at IORG have not seen anything yet: digital devices will take data overload to entirely different levels. We will have data staring us in the face and draped over our clothes. We will have data in-forming our most casual interactions. It is one thing to be able to consult a comparison shopping site when you are sitting in front of your computer. It is quite another to have figures pop up on Google Glass when you reach for a bottle of milk in a corner shop.

The argument for putting up withthis intrusion into our lives is that digital devices empower us. But do they? In his book “The Glass Cage,” Nicholas Carr documents numerous ways in which the advance of tech-nology leads not to an engorgement of our powers but to their atrophy. Pilots become so dependent on auto-piloting technology that they lose the ability to respond in an emergency. Writers become so dependent on spelling- and grammar-checking tools that they lose the ability to proofread. Drivers become so depen-dent on G.P.S. devices that they forget how to read maps.

Obstacles are the grit in the human oyster: we can only become good writers if we spend years learning foreign languages and committing great literature to memory. Allow digital devices to remove that grit and you end up not with H.G. Wells’s “men

like gods” but with men like consumer zombies. Carr points out that policy makers are beginning to recognize that overdependence on technology can be fatal: in January 2013 the Federal Aviation Administration issued a warning to pilots to spend less time flying on autopilot and more time flying the planes manually. Even Google is beginning to worry about the world that it is creating. Vivek Haldar, a veteran software developer at the Internet giant, warns that sharp tools can produce dull minds.

HE SECOND GREEK myth that helps us to un-derstand the digital world is the myth of Narcissus.

The Internet is a huge system of “ad-vertisements for myself” (to borrow a phrase from Norman Mailer). Twitter users try to show how clever and au fait they are. Instagram users try to show how wonderful their life is. The arrival of enhancement technology will make this problem far worse. Digital narcissists will spend their lives measuring them-selves, tweaking their performance, enhancing their capabilities, all in pursuit of the perfect self.

Why does this matter? Surely, American economic success is built on self-improvement? One reason is that self-obsession traps people in little bubbles of self-affirmation. The Internet not only makes it easier to find information that confirms our prejudices (conservatives read Red State while liberals read The Huffington Post), it also suggests things that you might like—thereby narrowing your horizons and ruling out serendipity. Digital devices make human interaction more difficult; we are constantly fighting a losing battle to prove that we are more interesting than those digital devices.

TH E I C A R U S SY N D R O M E M E E T S T H E W E A R A B L E R E V O L U T I O N

The wearable revolution will amplify all this. A simple walk down the street used to provide a break from the electronic cacophony: we could focus on our surroundings rather than our screens and interact with our fellow human beings rather than their digital avatars. But wearable devices will mean that we take the electronic bubble with us. In 2013 Sergey Brin delivered an advertising pitch for Google Glass at a TED conference that inadvertently highlighted the device’s dangers: thanks to its ability to personalize information and track users, he argued, Google Glass will allow the

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company to automate the flow of information into people’s minds. “You’d just have information come to you as you needed it.” Tech industry heavyweight Marc Andreesen likes to say that “software eats everything.” With Google Glass and company, the danger is that software will eat what Adam Smith called “human sympathy”: the capacity to engage in a free-flowing exchange with our fellow human beings.

As well as autism, self-aborption can lead to existential angst; the more we give in to selfie-obsession, the more we lose our self-confidence. Søren Kierkegaard spoke of “the despair of infinite possibility.” The Web can be disorienting precisely because it makes so many things available to us. Sherry Turkle, director of M.I.T.’s Initiative on Technology

and Self, speaks of people being “alone together.” They crowd together but are locked into their own Internet- enabled universes. Psychiatrist Edward Hallowell refers to “con-nected isolation.” Tech columnist Andrew Keen’s phrase, “I update therefore I am,” is a good summary of people’s desperate attempt to prove that they matter in a world where everything is clickable and nothing really has significance.

The biggest problem with digital enhancement, however, lies not in the side effects but in what econo-mists might call the opportunity cost: they get people to look in

the wrong place for competitive advantages. Google’s Michael Jones agues that “people are about 20 I.Q. points smarter now” thanks to his company’s mapping tools and other online services. If so, the history of the past decade and a half is proof that very smart people can do very dumb things.

Think of the great business problems of the last few years—the implosion of Enron and WorldCom in 2001 and 2002 and the economic crisis of 2007 and 2008. These problems did not result from a lack of data or an insufficiency of brain-power. Enron and Lehman Brothers were two of the most brainy com-panies in the world. Jeff Skilling, the CEO of Enron, was the quintes-sential “smartest guy in the room,” a superstar at both Harvard Business

School and McKinsey. Lehman was stuffed full of digital geniuses from M.I.T. Their problems resulted from a lack of judgment. Better judgment would have told these business geniuses that houses of cards in-variably collapse. They would also have told them that, like jealousy, greed usually ends up mocking the flesh that it feeds upon. Think of the great existential problems that face us every day—the profusion of choices and the saturation of data. These problems cannot be solved by putting on Google glasses. Once again we need to make better deci-sions to distinguish significant data

from the dross—to know when to turn off and tune out. The smarter machines become at processing data, the more human beings will have to distinguish themselves by demon-strating better judgment—that is, the peculiar combination of qualities that come from human reason and human empathy.

Some clever businesspeople are beginning to realize that technology is not always the answer—and indeed may well be the problem. “Mindful-ness” is all the rage in some big corpo-rations, which have hired coaches to teach the mix of relaxation and medi-tation techniques. A growing number of books teach us how to unplug from the Web and focus on the task at hand. Daniel Goleman’s 2013 offering was called “Focus: The Hidden Driver of Excellence.” The subtitle of Edward

TH E I C A R U S SY N D R O M E M E E T S T H E W E A R A B L E R E V O L U T I O N

Hallowell’s “Driven to Distraction at Work” is “How to Focus and Be More Productive.” There is a fashion for “digital detoxes” and “technology Sabbaths.” A slow Web move-ment tries to provide us with the advantages of the Web without the disadvantages. Tim Armstrong, CEO of AOL, has introduced a policy of giving his employees 10 percent think time to combat the scourge of what he calls “nanothinking disease.”

But wise businesses need to go

further—and put ancient wisdom along with new technology at the heart of their business strategies. The best way to thrive in a hypercon-nected world is to forget about the latest device and release your inner philosopher—immerse yourself in the great books that have defined human civilization and meditate on the great questions that have echoed down the centuries. Immersing ourselves in great thinkers will help us to over-come our obsession with status sym-

bols. It is difficult to measure your worth in terms of how many toys you accumulate when you have immersed yourself in Plato. It will also help us to overcome the problem of distraction: it is difficult to measure your life in e-mails, tweets and LinkedIn con-nections when you have meditated on Wittgenstein. Icarus’s start-up would have been a lot more successful if he had been less infatuated with technology and more willing to listen to the ancient philosophers.

OVERCOMING

Many years ago, during my college years, I was succeeding beyond my wildest dreams at a paid summer internship. Still, there was a problem. Even as I was doing my best work, snow covered the streets and Santa Claus waved from store windows. My way of dealing with this was to avoid thinking about what it meant. I loved working at an adult job, so the previous September, I hadn’t gone back to college. My employers were pleased by my cheap and unexpectedly competent services, and kept me on. But toward the end of December, my boss finally announced that

Don’t Flatter Yourself

SELF-DELUSION

By David BerrebyIllustrations by Steven Tabbutt

my “summer” job was over. I greeted the new year as an unemployed college dropout.

No problem, I thought. I had a plan to get another great job, in only a few months. Before getting the job I’d just lost, I had applied to two summer internships and been accepted at both. Of course, I would apply again to the place I’d turned down the previous year. Of course, they would offer to hire me again. I would only have to do odd jobs through the rest of winter and spring, and then I’d be back doing what I loved. I didn’t hope this would happen. I didn’t consider it a possible scenario as I gamed out alternatives. This was simply what I knew had to happen. No other alternatives were conceivable, and I certainly didn’t conceive them.

I was, in short, delusional. But I was not unusual.

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AS A COUPLE OF HOURS IN ANY OFFICE WILL REVEAL, self-deception—overestimating one’s own powers and underestimating obstacles—is

a hallmark of adult life. Across North America, Europe and Asia, in places where cars are common, some 80 percent of people rate themselves as “above average” drivers. Similarly, research on energy conservation by the utility software firm Opower found that a majority of consumers in the Middle East, South America and Eastern Europe think they’re more environmentally concerned and better at conserving power than their neighbors are.

Self-delusion isn’t confined to one gender, social class or age group; in one recent U.S. survey, conducted by the MSNBC network and Elle.com, far more than 50 percent of a 26,000-person sample rated their own appearance as “above average.” The respondents’ ages ranged from 18 to 75. Then, too, most students think they’re well above the 50th percentile in smarts and skills; most professors think they are above-average teachers; most executives think their job performance is comfortably above the median.

Not everyone, however, is as extreme as the shareholder who, at one recent Tesla Motors annual meeting, asked if he, with no particular knowledge or qualifications, could have a seat on the board. But every day we all have moments when we fail to see ourselves as others see us.

These illusions don’t just make for embarrassing pratfalls in personal lives. Self-deception costs companies and other institutions serious money each year. As the economist Terrance Odean has written, some of the vola-tility in equity and other markets is caused by traders who wrongly assume they are sharp enough to beat the market. And every year, hundreds of lawsuits go to trial instead of settling because lawyers overestimate their abilities to win. Every organization loses hundreds if not thousands of hours every year to lack of self-awareness. Inaccurate self-assessment leads to targets that can’t be met, deadlines that can’t be honored, jobs sought and won that then aren’t done well. Why are we so inclined to this costly mistake? And how can we learn to see ourselves more clearly?

It should be a simple task. After all, few of us have any trouble seeing through the delusional self-assessments of others—the mousy numbers guy who wants to be consid-ered for the C-suite; the self-styled master of PowerPoint whose presentations are a mess; the awkward, clueless boss who gives advice to others because he is, in his own mind, a wonderful manager. Even as we assume that others don’t know us (because there is so much about ourselves that we never reveal), we assume that we do know others (because

with them, what you see is what you get). This curious asymmetry means that when people learn about one of the most famous psychological studies of self-decep-tion, their reaction is often to congratulate themselves for being smarter than the people in the experiment.

In that study, the psychologists David Dunning and Justin Kruger showed that people with little knowledge of a skill set were prone to think they were masters of it. People who actually know what they are doing were more humble, they found. This “Dunning-Kruger effect” is often invoked to assert that other people, who are stupid, don’t even know they are stupid. But, as Dunning told the journalist Chris Lee in 2012, the real lesson of the work “is that one should pause to worry about one’s own certainty, not the certainty of others.”

In other words, being able to spot others’ flawed self-assessments is no help with your own. The reason is built in to the insidious mechanism of self-aware-ness: You apply different standards to yourself than you do to others. Therefore, the tests of probability and evidence you impose on others’ beliefs aren’t mar-shaled to challenge your own views of yourself.

WHAT PREVENTS THIS FROM FEELING like a mistake is the abundance of extra infor-mation you think you have about yourself. As

Dunning has pointed out, other people’s words and actions (and their effects) are all you have to go on when you judge them. But when you look at yourself, you know—or think you know—so much more: the dreams no one else sees, the hopes you’ve guarded since childhood, the good intentions you never expressed. So someone else’s bad score on an aptitude test means she should change careers, because you trust the test. But your own bad score is easy to explain away: “The test can’t measure my determination.” Or “it’s known to be wrong now and then, and this is one of those times.”

Knowing so much about your hidden inner self, you can always find something to explain away your flaws and failures. In fact, even if you’ve just made up a new excuse, the mind will present it to you as if it were a deep-seated truth you’ve always known.

That is the irony of self-deception: The more knowl-edge you have (or think you have) about yourself, the easier it is to reject genuinely useful information in the form of bad scores, negative evaluations, angry scoldings and other corrective evidence. And so, as Dunning and

two other psychologists once wrote in the journal Psy-chological Science in the Public Interest, “people’s self-views hold only a tenuous to modest relationship with their actual behavior and performance.”

In fact, recent neuroscientific research suggests that rosy self-deception may be our “default” mode of get-ting through life. In a study to be published soon in the journal Neuropsychologia, the neuroscientist Tom F.D. Farrow and his colleagues mapped the brain regions most involved in self-deception, by combining MRI scanning with a procedure for eliciting self-deceptive thoughts. The researchers wanted to measure differences in brain activity when people present themselves well compared to when they put themselves in a bad light. And that led them to notice that people took quite a bit longer to com-pose responses that would make them look bad than they did for image-enhancing answers. That suggests that seeing one’s self in a bad light involves more mental effort. The implication, as the researchers put it, is that “faking good […] may be our most practiced ‘default’ mode.”

So it may well be entirely normal to be overly posi-tive about yourself and your prospects. In fact, as the

psychologists Lauren Alloy and Lyn Yvonne Abramson have found in their experiments, it is depressed people who have the most accurate view of themselves and their performance.

Why do the rest of us have to imagine that we’re exceptional? In his book “Seeing Red,” the British psychologist Nicholas Humphrey proposes that feeling unique and special is an old and powerful adaptation for animals. Self-preservation, he argues, comes more easily and urgently to a creature that feels it has a self worth preserving. Our ancestors weren’t the amphib-ians who thought “I’m just a garden-variety newt, like any other.” They were the ones who looked into their reflections and thought the prehistoric equivalent of “you’re special ’cause you’re you.”

If this is so, then the mind has deeply baked into its recesses a resistance to the news that it, its owner, and all that it cherishes are nothing special, with no particular talent and no great prospects for success. Specialness is part of being human, and anything that says we are not surprising or unique is unwelcome, and always has been. As one Amerindian warrior captured by his enemies in 19th-century South America told a missionary: “Now I see myself as a slave without being

Rosy self-deception may be our “default” mode of getting through life.

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painted and no feathers attached to my head, my arms, around my waist, as the important people of my country are decorated, then I want to be dead.” It may be that we can’t really live without the self-deceptive notion that we’re talented, important and bound for glory.

Perhaps, then, we shouldn’t even wish to be rid of self-deception—at least not completely. After all, it cannot be denied that an outsize sense of their own capacities has helped many successful people achieve goals that others said were impossible. Two decades ago, Samantha Power, now the United States ambassador to the United Nations, was an intern at the Carnegie Endowment for International Peace who wanted to go to the Balkans and report on the wars that attended the break-up of Yugoslavia. The trouble was, she had no particular experience as a war reporter, and she could not get the credentials she needed. Her office, though, was in the same building as the magazine Foreign Policy. So one night, Power “bor-rowed” some stationery from the magazine in order to request accreditation for reporting in Bosnia.

The ploy worked, and Power was soon reporting for major news outlets. Her career—which later in-cluded a Pulitzer-winning book on genocide and years of high-level public service—was launched. Had she been a realist about her qualifications and prospects in 1992, it might never have been.

You could argue that Power was, in addition to being talented, very lucky. But the benefits of self-deception are not limited to helping a few dreamers shoot for the stars. It seems that having a rosy take on one’s flaws can help people leading more ordinary lives. In a paper soon to be published in the Journal of Experimental Social Psychology, the psychologist Alexandra E. Wesnousky and her colleagues found that people perform better when they imagine that their negative traits have a good side. In their experiment, they took a bunch of students who had scored high for impulsiveness and split them into two groups. One read a supposedly scientific paper “showing” that impulsiveness is linked to creativity. The other read a paper “proving” that the two traits are not connected. Afterward, subjects in both groups were given an ob-ject and told they had three minutes to devise as many uses as possible for it.

The impulsive students who had just read that impulsiveness fosters creativity did noticeably better, coming up with more uses for the object than did the impulsive students who had read that creativity and impulsiveness are not linked. If you have a negative trait, then, believing that it has a “silver lining” will improve your performance.

So how can you tame your tendency to flatter yourself, without tipping too far into unmotivated gloom? It’s a hard balance to strike, but psychology can offer a few suggestions:

Try mindfulness. Mindfulness is often associated with meditation, but there is no need to twist into a lotus position to experience it. It is simply the state of paying attention to your own mind, observing it care-fully and without judgment. In the course of a day spent focusing outside the self on the tasks at hand, we seldom notice our own reactions or states. And when we do use gadgets to “quantify” ourselves, we measure physical states to see how well we conform to a goal. “Did I cut enough calo-ries, get enough sleep, run enough steps?” This approach encourages you to judge information about yourself as it comes in. This was a “good” run; that was a “bad” lunch.

Mindfulness involves a different kind of obser-vation. The goal is to foster and expand what the psychiatrist Dan Siegel calls “mindsight”—our ca-pacity to perceive our own minds, as well as those of other people. Mindsight, Siegel says, becomes evident when you take the trouble to say “I feel sad” rather than “I am sad.” The latter limits you to the feeling of the moment, as if “sad” were you and you were it. But thinking “I feel sad,” Siegel writes, “suggests the ability to recognize and acknowledge a feeling, without being consumed by it. The focusing skills that are part of mindsight make it possible to see what is inside, to accept it, and in the accepting to let it go, and finally, to transform it.”

Cultivating a nonjudgmental awareness of one’s self reduces the motivation for self-deception. If you no longer expect to condemn yourself for talking too much at a meeting, you can admit that you’re a chatterbox more easily. You might think that being less aggressive in your self-management would make you more inclined to fool yourself. But psychologists have found that the opposite is the case.

Replace introspection with retrospection. Since the future is inherently unknowable, a better way to compare selves in different times is to look backward. The writer and marketing executive Terri Trespicio proposes a “10-year test” as an aid to self-awareness. Unlike many mo-tivational approaches, hers isn’t about the future.

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Look back at who you were 10 years ago. That is a person you know, or knew. You can make a pretty good guess about how that person would see you today. So, would they be impressed? Feel sorry for you? Want to be you? Or avoid becoming you?

It’s a clever idea for promoting a more distanced view of the self. It uses one of the main sources of self-deception—the abundance of information we have (or think we have) about ourselves—and turns it into a lens for seeing more clearly. When we try to evaluate ourselves objectively, we can’t be sure we are correct (we can’t really step outside ourselves), and when we try to imagine how others see us, we are often wrong (because we don’t know other people well enough to be certain how we come across to them). The same problem occurs when we try to envision a future self—we may make a good guess, but that future self is an imaginary character, created out of our hopes and fears. That person has more in common with Batman than with the face in the mirror this morning. However, the person you were in the past was real, and you knew her or him intimately. That younger you’s reaction to you is probably easy to elicit and very likely to be accurate. And those reactions, be they negative or positive, will likely throw some of today’s self-deceptions into relief.

Don’t go it alone. Solitude worsens self-deception, because it removes the main source of corrections to our illusions. We are a social species, instinctively attentive to the way we appear to other people. When you have company, you’re constantly receiving information about how your words and actions strike other people—whether, for ex-ample, they’re laughing sincerely at your jokes or faking it; whether they’re impressed or repulsed by your management style; whether they find your goals for next year admirable or risible. Of course, many of us are skilled at defending our-selves against judgments we don’t like, but in the absence of companionship we don’t even need to expend that effort to preserve our self-flattery.

This is why throughout the history of civiliza-tion, communities form to teach valuable skills. As anyone can tell you, learning anything (from Rus-sian to guitar to accounting to hang-gliding) is far easier and faster when it involves at least one other person. Without a teacher or fellow-learner at hand, your impressions of yourself and your progress are never corrected. You mispronounce words in your new language and think you’re doing fine, and you avoid what’s hard in favor of what you find easy. For this reason, even innately solitary activities, like writing or religious medita-tion, are transmitted by teachers in communities.

A good safeguard against self-deception, then, is trusting a community of fellow practitioners. Not necessarily friends (who have an incentive not to offend you) and certainly not subordinates. But it can be an invaluable help to find a trusted col-league or two who will tell it to you straight.

As I’ve mentioned, self-delusion is not invariably harmful. Great things have been accomplished by people who refused to see themselves as others saw them. And achieving anything requires tuning out doubters and adversaries. Self-confidence and self-delusion are close cousins, and sometimes impossible to tell apart. And while it’s true that self-delusion can keep you from learning from a mistake, it’s also true that there might never have been a mistake to learn from without some earlier self-delusion to cause it. So while too much self-delusion is an obvious liability, having none whatsoever—being always ready to give up in the face of the odds—is a sure road to a life without much interest or accomplishment.

Which brings me back to the ridiculous, overly self-confident plan of my unemployed, college-dropout self.

It worked. I got the job that I

unreasonably expected to get. And, as I had decided I would, I transformed it from summer work into a full-time job. I kept it for a year until I finally woke up and went back to college.

Fortunately, on that second job I began to learn how and why I had been lucky, not right. And I came to appreciate the importance of not tuning out unwelcome feedback. Today, like many adults well along in life, I look back at my former self and shake my head at his mistaken notion of himself. But—again, like many adults—I have to acknowledge something else: without that earlier self ’s rose-colored glasses, I wouldn’t have climbed up to the place from which I now look down on him.

Like alcohol, marijuana, mad love and other mind-altering forces, self-delusion is often dangerous. You can’t achieve much if you make it your master. But the world’s leaders aren’t people who avoid self-delusion entirely. They’re those who use it sparingly, cautiously and with mindful detachment. Author S.E. Hinton, who decided she could write a novel while still in high school (and did, and then wrote many more) described this mindset well: “I lie to myself all the time,” she wrote. “But I never believe me.”

Like alcohol, marijuana, mad love and other mind-altering forces, self-delusion is often dangerous. You can’t achieve much if you make it your master.

While doing research for her book “The Progress Principle,” Harvard Business School professor Teresa Amabile enlisted 238 professionals from seven companies in three indus-tries to provide daily diaries of their work experiences. Each day for the duration of individual projects—between three and nine months—Amabile and her co-author, Steven Kramer, sent an e-mail containing a daily diary form for each participant to report on the activities and feelings from that day’s work—all of which required a high level of creative thinking—and rate their emotions and motivations.

One leader of an innovation team at a chemicals firm would regularly report his “excellent interactions” with his team mem-bers and how well the project was proceeding. “I stopped in and visited Jill as she was finalizing the results of the experiment and putting it together in a presenta-tion to the technical directors

(OVERCOME THE BLIN D SPOTS)

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L E A DE R

tomorrow,” he wrote. “We had a great conversation. I gave her some helpful suggestions; she was very grateful and excited about them.”

However, the response from Jill was entirely different. She said this team leader came in and wasted 45 minutes of pre-cious prep time, making picky suggestions that were not at all helpful. His micromanaging was a problem for the entire team, she wrote. Jill’s comments echoed others in the group. And a project that had begun with great excitement and anticipation was eventually aborted as the team became discouraged, because they all felt it was going nowhere with this leader. The leader’s lack of self-awareness illustrated the impact such a flaw can have on an organization.

“I believe that the fully self-aware leader is rare,” said Ama-bile, whose research is focused on creativity and motivation in the workplace. “It isn’t part of most leadership development pro-

grams and, beyond that, it is very hard to do. It relies on leaders not only being open to feedback from others—and I mean a lot of others who interact with them—but it also means knowing how to use the feedback and actively and regularly seek it. Those are all very difficult things to do.”

Though the words “know thyself” have resonated across the millennia, from ancient Greece and philosophers such as Socrates, it is a concept not tradi-tionally embraced in the business world. Most business leaders are likely to scoff at the notion of a deep dive into self-examination, dismissing it as a “soft skill” that is low on the list of leadership priorities. Successful high-level leaders, awash in self-confidence and acclaim, generally assume that, whatever their psycholog-ical makeup, the formula that got them to this level of achievement needn’t be tweaked. One can hardly imagine a Steve Jobs or a Larry Ellison paying much heed to a 360 review.

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In fact, the empirical leader of business folklore has increasingly become a relic of a past age, especially

in the stress-filled world of global commerce. When psychologist and best-selling author Daniel Goleman published his groundbreaking book “Emotional Intelli-gence” in 1995, he offered a survey of the qualities found in most successful people, qualities that transcended a high I.Q.

Writing in the Harvard Business Review in 2004, Goleman stated that the most effective leaders are alike in one crucial way: “They all have a high degree of what has come to be known as emotional intelligence. It’s not that I.Q. and technical skills are irrelevant. They do matter, but mainly as ‘threshold capabilities’; that is, they are the entry-level requirements for executive positions. But my research, along with other recent studies, clearly shows that emotional intelligence is the sine qua non of leadership. Without it, a person can have the best training in the world, an incisive, analytical mind and an endless supply of smart ideas, but he still won’t make a great leader.”

At the top of his list of characteristics at the core of emotional intelligence is self-awareness. According to Goleman, self-awareness means “having a deep understanding of one’s emotions, strengths, weaknesses, needs and drives. People with strong self-awareness are neither overtly critical nor unrealisti-cally hopeful. Rather, they are honest—with themselves and with others.” The keystone of self-awareness is “recognizing a feeling as it happens.” If we don’t understand our feelings from moment to moment, he suggested, we are unlikely to achieve the level of insight and self-understanding required for success.

In fact, the importance of self-awareness for prospective leaders is a widely held paradigm. The late leadership guru Warren Bennis wrote often about “au-thenticity” as a crucial tenet of successful leadership. “The process of becoming a leader is, if not identical, certainly similar to the process of becoming a fully inte-grated human being,” Bennis wrote. “It’s got to do with authenticity, it’s got to do with candor; it’s got to do with the fact that one cannot truly lead unless one is an expert in self-management. The essence of leaders is placed firmly in issues of character, on who we are, on self-awareness.”

Adds Anthony K. Tjan, writing in a 2012 Harvard Business Review article, “In my experience, there is one quality that trumps all, evident in virtually every great entrepreneur, manager and leader. That quality is self-awareness.” According to Tjan, CEO and founder of Cue Ball, a venture capital firm, and co-author of the 2012 best seller “Heart, Smarts, Guts and Luck,” “The best thing leaders can do to improve their effectiveness is become more aware of what motivates them and their decision making. Without self-awareness, you cannot understand your strengths and weakness, your ‘super powers’ versus your ‘kryp-tonite.’ It is self-awareness that allows the best business-builders to walk the tightrope of leadership: projecting conviction while simultaneously remaining humble enough to be open to new ideas and opposing opinions.”

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T H E SE L F-AWA R E L E A DE RO V E R C O M E T H E B L I N D S P O T S

“[Self-awareness] is very hard to do. It relies on leaders

not only being open to feedback

from others... but it also means knowing how to

use the feedback and actively and

regularly seek it.”— Teresa Amabile

HARVARD BUSINESS SCHOOL

Does Self-Awareness Have a Payback?

Y et given the success of so many leaders, such as Jobs, Mark Zuckerberg, Michael Eisner, Jack Welch and others whose personalities

tended toward the tyrannical, the question arises as to whether self-awareness is simply a potent but peripheral quality in a leader or whether it has an actual impact on the bottom line. In a 2013 study, David Zes and Dana Landis, research analysts at Korn Ferry, offered up a breakthrough finding. Searching through nearly 7,000 self-assessments from professionals at 486 publicly traded compa-nies, Zes and Landis identified what they called “blind spots” in the leadership characteristics of the respondents. These were revealed by a disparity between answers in two different parts of the test. Charting the frequency of such blind spots against the rate of return of the companies’ stock, the ana-lysts came up with an eye-opening conclusion:

Poor-performing companies’ employees had

20 percent more blind spots than those working

at financially strong companies.

Poor-performing companies’ employees were

79 percent more likely to have low overall

self-awareness than those at firms with robust

returns on revenue.

According to their report, Zes and Landis tracked the stock performance of companies over 30 months—from July 2010 through January 2013—and during that period “the companies with the greater percentage of self-aware employees consistently outperformed those with a lower percentage.”

The idea that self-awareness has significant upside for an organization’s bottom line puts a new light on an old assumption. “Addressing blind spots and increasing self-awareness have long been seen as posi-

Poor-performing companies’ employees were 79 percent more

likely to have low overall self-awareness

than those at firms with robust returns

on revenue. (Korn Ferry, 2013)

tives for individuals,” the authors wrote. “Now we have statistical findings that suggest benefits also exist at the macro level of an organization. Leaders with higher self-awareness not only have greater job satisfaction and commitment to their employer personally, but that effect also appears to trickle down to a manager’s direct reports. In the constant drive for competitive advan-tage, it turns out that helping employees to better un-derstand themselves and fostering a culture of healthy feedback could also help to improve an organization’s overall performance.”

But if the payoff is significant, finding leaders with that degree of self-awareness remains a daunting task. Stu Crandell, a Korn Ferry partner in Minnesota, has spent enough time seeking high-level leaders for top positions to understand the challenge.

“As leaders move up, particularly to the C-suite, they can live in their own bubble,” Crandell said. “They are often surrounded by people who are reluctant to give them feedback. You can lose touch with how others per-ceive you and start to believe the stories about yourself.”

For example, a recent CEO search for a company that manufactured ingredients for molecules used in various consumer products had zeroed in on the firm’s chief financial officer as the candidate most qualified to take over the top spot, Crandell recalled. This executive had the support of the outgoing CEO as well as the board of directors. But an assessment by Korn Ferry revealed a blind spot, a true lack of self-awareness and an inability to respond to feedback. As they connected the dots, “they realized it was a big mistake to move that person up,” Crandell said.

Indeed, studies tend to illuminate the troubling phenomenon that the more senior an executive becomes in an organization, the less self-aware that person tends to be.

According to Jeffrey Sonnenfeld, senior associate dean and professor at the Yale School of Management and author of “The Hero’s Farewell,” the higher a person moves up the corporate ladder, the more likely he or she is to “lose direct contact with others around them. Information is filtered so that even if that person wanted a reality check, they don’t have access to get that reality check. When she loses the common touch, the heroic leader is doomed.”

Who Is the Person?

W hen Vineet Nayar became CEO of HCL Technologies, an information technology giant based in Noida, India, he realized

that one of the structural flaws in traditional manage-ment systems was that “the leader holds too much power. That prevents the organization from becoming democratized and the energy of the employees from being released.”

As the $5-billion company’s CEO from 2007 to 2013, Nayar exhibited an unusual level of self-awareness that caused business pundits to take notice. When he spoke to Briefings magazine in 2010, he pointed out that many CEO’s claim that their employees are the company’s most important asset but few actually behave as if they truly believe it. In order to empower employees, “you must stop thinking of yourself as the only source of change,” Nayar said.

Nayar took the radical step of upending the traditional corporate pyramid and putting at the top the employees who create the company’s real value. Managers became responsible to the personnel at the front lines doing the real work and interacting with the customers.

Nayar went so far as to post his own 360 review online for all employees to read. He was comfortable enough to see the benefits of sharing the full person, rather than just the visible executive, with his people.

“Who is the person?” Nayar asked. “Is the person someone who walks into the company? In my own case, most of my life, the person who walked into the company was actually not me, at least not all of me. It was a very small percentage of me. I’m a father. I’m a sports enthusiast. I’m a social worker. I’m a son. I like movies. I like to read some crazy books. And also I understand technology. And HCL actually took only one part of me, which is the part that understands technology. They left the other seven elements out. So the more I thought about that, the better I understood that the more of those seven complements that we can bring inside the organization, the more beautiful the organization becomes.”

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47

For Anthony Mayo, director of the leadership initiative at the Harvard Business School’s executive education program, Nayar represented an unusually self-aware leader. “Nayar said, ‘I’m going to put my 360 out there, warts and all, and I’m going to allow employees to give me feedback,’” Mayo said. “A lot of people wouldn’t do that. A lot of people won’t even ask. In my career, I’ve seen where leaders have gotten feedback about their self-awareness and thrown it in the trash. They say, ‘I’m not even going to read this, because if I do, it will challenge my view of myself and that will allow me to stumble. And I don’t want that.’”

Under Nayar, HCL grew its revenues and market capitalization six-fold. Nayar wrote a book called “Em-ployees First, Customers Second” and earned plaudits from business publications for his innovative thinking.

“Unless you become uncomfortable with who you are, you will not stop being an ant,” Nayar said about many insular companies and incurious leaders. “You can be a fast ant, you can be a rich ant, but you’re still an ant and you’ll never be a butterfly.”

Radical though he might be, Nayar is hardly the only successful self-aware leader. Sonnenfeld, who runs high-level Yale CEO Summits each year with an impressive list of corporate leaders, has been intrigued by the likes of Anne Mulcahy, former CEO of Xerox, Jeffrey Bewkes, CEO of Time Warner Inc., and Mickey Drexler, CEO of J. Crew, when it comes to their intui-tive curiosity and openness to outside feedback.

“Drexler will come to my class and start taking notes, ask questions and openly talk about the failures in his own life,” Sonnenfeld said. Having studied leaders’ behavior for more than 30 years, Sonnenfeld said he has noticed that successful leaders tend to become more self-reflective later in life.

“It’s a life-stage issue rather than a cohort issue,” Sonnenfeld said. “When people are in their 20s and 30s and even 40s, they tend to be transaction-driven and are so busy chasing the urgent crisis of the day, trying to identify the new new thing, that they don’t really reflect much back on themselves … until the ladder falls or the scheme falls apart. Then they start to rethink the dreams and aspirations they had as children. They start to think about what their dreams need to be that are truly their own and not borrowed dreams from a parent or some

media imagery they assimilated earlier in life.” Writing in Psychology Today, Douglas LaBier, a

psychologist and director of the Center for Progressive Development in Washington, D.C., echoed the impor-tance of self-awareness in business.

“Self-reflection and its reward of self-awareness cannot be thought of as passive exercises, new-era meditation or soft science,” he wrote. “They’re abso-lutely essential. There is a reason why in rehabilitation programs the starting point is being aware enough to admit you have a problem. So too is the case in business leadership and personal development.”

Can Self-Awareness Be Taught?

W hy, one might ask, has leadership ignored the benefits of self-awareness? Is it simply that teaching self-awareness to prospec-

tive and seasoned executives is too hard? According to Amabile, the answer is simple. “It’s hard because it’s not part of leadership development,” she said. “It’s not part of leadership training in most M.B.A. programs. I’ve been at Harvard Business School for 20 years and until recently, we have not focused on it in any formal way.”

Amabile pointed out that her colleague Anthony Mayo has begun to focus on self-awareness in the school’s FIELD program, a leadership development course for all first-year M.B.A. students based, in part, on the U.S. military’s view of leadership. Harvard has also added a self-awareness component to its executive education program in recent years, but that tends to be rare in academic settings. “And it’s not highlighted in leadership training programs within companies either,” she said.

At Harvard, Mayo described a second-year M.B.A. course called Authentic Leadership Development that offers a focus on self-awareness training. Students are put into small teams and their interactions are recorded on video. They are asked to take on a leadership role, participate in a negotiation or simulate giving feedback to a peer or direct report. “They have to watch the video, and that tends to be one of the most powerful ways of

T H E SE L F-AWA R E L E A DE RO V E R C O M E T H E B L I N D S P O T S

48

building self-awareness,” Mayo said. “People often think they are more direct than they are, their eyes wander, and they are uncomfortable in conflict situations. In this way, they can really see how they are perceived.”

In places where self-awareness is taught, the results can be mixed. “It’s not always easy to teach it,” said Son-nenfeld, who pointed out that Yale has a required course for its M.B.A. students. “Obviously, the ones who need it the most embrace it the least.”

Self-aware or not, dynamic leaders tend to be unique. A future Howard Schultz or Sergey Brin cannot be duplicated or cut from a mold. Their individual story has as much influence on their ability to be self-reflective as any coaching might instill. In the world of business, the most admired leaders tend to be those who become heroes because they made a lot of money. “There isn’t necessarily anything about them as leaders of other people that we would want aspiring leaders to emulate,” Amabile said. “People can be-come very wealthy in business and have a lot of financial success for themselves and their companies without being particularly good leaders of other people.”

Indeed, the most effective leaders are not only self-reflective but deeply in tune with how they affect the people around them. Can a leader generate a sense of trust, affiliation and camaraderie in a team? Can a leader provide employees with sufficient encourage-ment when the work is especially difficult? “I believe that those behaviors depend strongly on a leader’s self-awareness,” Amabile said.

Despite the obstacles, Amabile is convinced that self-awareness can be taught, especially when a young execu-tive is becoming a leader. She offered three fundamental needs for increasing self-awareness:

The first is honest, consistent and frequent feedback on a leader’s strengths and weaknesses and the impact they are having on other people. A 360 review can help, but only if leaders have someone who can coach them to under-stand the results of the review. They must also be willing to accept the results, even if they differ dramatically from what these prospective leaders believe about themselves.

The second is ongoing coaching, which shows the individual the areas they need to improve and provides

support from a trusted colleague or mentor. The third is reflection. Individuals on this journey

must spend at least a little time every day—ideally toward the end of the day—reflecting on their work, their influence on other employees, their intentions and their emotions underlying their behavior. One way to accomplish this is to keep a daily journal to record these reflections in order to be able to look back over time to see how they’ve developed.

Finally, there is the issue of respect and acceptance. According to Daniel Goleman, despite the value of having self-aware employees in the workplace, his research indicated that senior executives “don’t often

give self-awareness the credit it deserves when they look for potential leaders. Many executives mistake candor about feelings for ‘wimpiness’ and fail to give due respect to employees who openly acknowledge their shortcom-ings. Such people are too readily dismissed as ‘not tough enough’ to lead others.”

This blood-and-guts attitude worked well for Gen. Patton decades ago but has begun to lose its luster in many organizations where candor is actually prized. In a global marketplace where tough choices must be made quickly and efficiently, mistakes can be avoided and better decisions can be reached when leaders know themselves and their organizations in a deeply incisive way.

Even the superstars should be forewarned. “Some-times these heroes may not have a lot of self-awareness,” said Crandell. “If you have the right vision, maybe you don’t need a whole lot of self-awareness. But once the external market changes, you have to change your vision or you’ll lead everyone into a ditch.” Without self-awareness, the “vision thing” can become cloudy very quickly.

“People can become very wealthy in business and have a lot of financial

success for themselves and their companies without being particularly

good leaders of other people.”—— TTerreresesa Amaabibilellele,, HHAHARARARRVAVARVARARRDDDDDD BUBUBUBUBBB SINSSINNNNESSSSESE S SCSCHOOHOOOOLLLL

ARE

CULTURAL

ADVANTAGES

REAL?

 BUT while anecdotal evidence of differing leadership styles by country or culture abounds, there is a dearth of empirical

studies showing any correlation with better or worse performance. It is not apparent how or if different styles impact the bottom line.

Indeed, some prominent leadership scholars question whether these cultural differences matter at all in terms of managerial competency, and the late Warren Bennis, author of the iconic book “On Becoming a Leader,” never addressed the issue. (And the author of this article has never known a British executive to close an e-mail with “hugs,” as one Brazilian CEO always does—“abraços” in Portuguese.)

Globalization and the Internet confront us with an astonishing diversity of cultures, values and beliefs, all with an immediacy unimaginable to previous generations. Clearly, to be a successful leader in this milieu requires the cultivation of new competencies, like the ones recommended by the U.S. Department of Defense in a 2008 publication: willingness to engage, cognitive flexibility and openness, emotional regulation, tolerance of un-certainty, self-efficacy and ethnocultural empathy.

These are not the kinds of skills that can be acquired in a three-day off-site retreat, and some companies have gone to great lengths to instill these competencies in so-called high-potentials being groomed for future leadership roles. I.B.M., for example, created the Corporate Service Corps, mod-eled after the Peace Corps, which annually places selected employees in developing countries to work with nonprofits, small businesses and international aid organizations. A case study by Harvard Busi-ness School found that participants significantly increased their cultural adaptability and teaming skills, as well as employee satisfaction, and indicated that the experience made it more likely they would complete their careers at I.B.M.

At the same time, however, strong corporate cul-tures and the growing ubiquity of a business school education have led to the homogenization of cor-porate leadership style. In the author’s experience, Harvard M.B.A.’s tend to speak the same language the world over, albeit with different accents, and INSEAD graduates are not notably different either. The chief executive of a well-managed major busi-ness in Bangkok sounds a lot like his counterpart in Boston. Cultural difference is real, but it may be

 Remember “Theory Z”? Back when Japan Inc. appeared poised to drive a steamroller over American industry from Silicon Valley to Detroit and all points eastward, William Ouichi’s 1981 book of the same name attributed Japanese success to an indigenous managing style focused on a strong company philosophy, long-range staff development and consensus decision making.

You don’t hear much about Theory Z or the inexorable rise of Japa-nese companies these days, but the concept of cultural advantages

in leadership styles lives on, lately perhaps in the success of German manufacturers amid Europe’s prevailing malaise. Most major M.B.A. programs offer classes in cross-cultural management, and “global leadership,” an academic discipline born in the late 1990s, now has the full panoply of college courses, conferences and consultants.

SIX PERSPECTIVES ON GLOBAL LEADERSHIP

B Y L AW R E N C E M . F I S H E R

 BUT while anecdotal evidence of differing leadership styles by country or culture abounds, there is a dearth of empirical

studies showing any correlation with better or worse performance. It is not apparent how or if different styles impact the bottom line.

Indeed, some prominent leadership scholars question whether these cultural differences matter at all in terms of managerial competency, and the late Warren Bennis, author of the iconic book “On Becoming a Leader,” never addressed the issue. (And the author of this article has never known a British executive to close an e-mail with “hugs,” as one Brazilian CEO always does—“abraços” in Portuguese.)

Globalization and the Internet confront us with an astonishing diversity of cultures, values and beliefs, all with an immediacy unimaginable to previous generations. Clearly, to be a successful leader in this milieu requires the cultivation of new competencies, like the ones recommended by the U.S. Department of Defense in a 2008 publication: willingness to engage, cognitive flexibility and openness, emotional regulation, tolerance of un-certainty, self-efficacy and ethnocultural empathy.

These are not the kinds of skills that can be acquired in a three-day off-site retreat, and some companies have gone to great lengths to instill these competencies in so-called high-potentials being groomed for future leadership roles. I.B.M., for example, created the Corporate Service Corps, mod-eled after the Peace Corps, which annually places selected employees in developing countries to work with nonprofits, small businesses and international aid organizations. A case study by Harvard Busi-ness School found that participants significantly increased their cultural adaptability and teaming skills, as well as employee satisfaction, and indicated that the experience made it more likely they would complete their careers at I.B.M.

At the same time, however, strong corporate cul-tures and the growing ubiquity of a business school education have led to the homogenization of cor-porate leadership style. In the author’s experience, Harvard M.B.A.’s tend to speak the same language the world over, albeit with different accents, and INSEAD graduates are not notably different either. The chief executive of a well-managed major busi-ness in Bangkok sounds a lot like his counterpart in Boston. Cultural difference is real, but it may be

transcended by the emerging global standards for competence.

It turns out the best leaders are dif-ferent from the general population on a number of dimensions, while being similar to each other on those same dimensions. Good leaders tend to be more emotionally stable, and more com-petitive than average leaders. The best leaders tend to be more outgoing than average leaders. The best leaders also take time to keep themselves informed about the wider world. They are not only concerned with their jobs, they are also concerned with how those jobs will be evolving over time. The bottom line is, the best leaders tend to be qualitatively different than average leaders.

This is not to say difference among leaders are solely related to an individual’s personality. Americans, Australians, New Zealanders and Brits all come from strong cultures which add to their personalities. Because Americans tend to be more aggressive than natives of some other nations, their results in the workplace can reflect those differences. Studies have shown that the vast majority of business executives believe that global leadership compe-tency is important in today’s market—they just don’t know how to acquire it.

Typical is the report “Developing the Global Leader of Tomorrow,” produced by the Ashridge Business School as part of the European Academy of Busi-ness in Society’s Corporate Knowledge and Learning Program. The comprehensive survey of senior execu-tives regarding global leadership and cross-cultural management competen-cies found that 76 percent think it is important that their own organization develops these skills, but only 7 percent believe their organization is doing this very effectively.

To address the cross-cultural man-agement conundrum, Briefings reached out to six scholars, half in the field of global leadership, the others of a more traditional bent.

 Stanford professor Robert Sutton will probably always be best known for “The No-Asshole Rule,” his best-selling

and controversial book about the destructive effect of bad bosses and cantankerous co-workers. But in his most recent work, “Scaling Up Excellence,” written with Huggy Rao, he posits that attention to cultural differences can be the determining factor between those companies that successfully scale their businesses globally and those that fail.

Pointing to Ikea’s tre-mendous success in China compared to Home Depot’s stumble and eventual with-drawal from that market, Sutton suggests that it

comes down to knowing when to replicate best prac-tices, versus when to adapt them to different cultures and situations. He and Rao call this “Catholicism versus Buddhism,” not so much in a spiritual sense, but as a cultural dichotomy.

“Is it more like Catholi-cism, where the aim is to replicate preordained de-sign beliefs and practices?” Sutton asks. “Or is it more like Buddhism, where an underlying mindset guides why people do certain

things—but the specifics of what they do can vary wildly from person to person and place to place?”

While the different China outcomes for Ikea and Home

Depot were primarily driven by marketing

and merchandising practices, the same kind of dichotomy applies to leader-ship, Sutton said.

“There is plenty of evidence that dif-

ferent leadership styles are more appropriate in some cultures than others.”

Eastern cultures, from China to Singapore, tend to be more collectivist than those in the West, including the United States, Europe and Israel, Sutton said.

“One of the reasons that many American manage-ment techniques don’t translate into other cultures is if you are creating a world where you see everybody as a competitor and your job is to best them, and that’s what you get rewarded for; then as you move to the collectivist side, you will find that some middle range is best. You will be judged not just for good individual work, but for helping your co-workers succeed. You can be seen as a star by helping them do better work.”

But Sutton said it is often a mistake to attribute one company’s success, or one country’s growth, to differences in cultural styles, as did Theory Z. “Whenever somebody makes a lot of money doing something, they tend to get the attribution that most of what they’re doing is correct, but very often they make money despite what they’re doing.”

ROBERT I. SUTTON

BUDDHISM VS. CATHOLICISM

JOYCE OSLAND

RICHARD BOYATZIS

META LEADERSHIP

DIFFERENT, BUT SIMILAR

 You can hear an echo of the late, great co-median Rodney Dan-gerfield when Joyce Osland talks about the

relationship of her field and colleagues in global leadership to the scholars in traditional leadership studies, or at least his fa-mous two-word lament: “No respect.”

“The global leader-ship field barely com-municates with the local leadership field, and there’s good reason, if you think about it,” said Osland, executive director of the Global Leadership Advance-ment Center at Cali-fornia’s San Jose State University. “We sent off a paper, trying to come up with a typology of different kinds of global

leaders. We sent it to a mainstream journal, and it was turned down. It was very clear that the reviewers were only domestic leadership scholars. They don’t see it as anything different because they’re not aware; they’re not them-selves global.”

Global leadership may be a foremost concern of corporate executives, but in academe, it’s still an upstart discipline. “One of them apparently Googled ‘global leader-ship’ and said there are 10,000 things under ‘global leadership,’ and that’s just wrong,” said Osland. “There are really less than 50 empirical studies, not 10,000.”

What those 50 studies

have shown is that global leaders must be good generalists, no matter where they are based. “Global leadership is more of a meta-level leadership,” said Os-land. “Global leaders have followers from so many countries. They don’t have the luxury of learning how local leaders do things, which an expat does. Instead of having culture-specific knowledge, they tend to have culture-general knowledge. For ex-ample, I might not know specifically how one culture handles gifts, but I know that gift-giving has different meanings in dif-ferent cultures, so I better be on my toes.”

Asked to name an executive who embodies

effective global leader-ship, Osland doesn’t hesitate: Carlos Ghosn, the French-Lebanese-Brazilian businessman born in Porto Velho, Brazil, who is cur-rently the chairman and CEO of Paris-based Renault, chairman and CEO of Japan-based Nissan and chairman of Russian automobile manufacturer AvtoVAZ.

“One of the key things for global leaders is, they’re humble,” said Osland. “Carlos Ghosn is quite humble. But he’s also said there are times when other things trump culture.”

 With apologies to Tolstoy, all effective leaders are alike; each ineffective leader is ineffective

in his own way. Richard Boyatzis, a professor of organizational behavior at Case Western Re-serve University and a much-published author on leadership and emo-tional intelligence, said he finds that while cul-tural differences are real and often perpetuated by perceived stereo-types, among top per-formers he finds great similarities no matter

what country he is in.“Regarding business

cultural differences, on the whole, I think there are far fewer than people believe,” Boyatzis said. “When people look at cultural differences, they look at ‘what do most Americans act like, what do most Brazilians act like.’ But the problem is, in our research since 1970, we find that 70 to 80 percent of people in management aren’t adding value, at any given time. You could take them out of their job and the organiza-

tion would run more smoothly.” For that group of ineffective man-agers, the stereotypical notions like “this culture lacks initiative” or “that culture is aggressive” may be true, he said. “But if you look at the effective managers, their styles are the same all over the globe.”

One of Boyatzis’s early mentors was David McClelland, whose 1961 book “The Achieving Society” provided a basis for evaluating economic, historical and sociological theories that

explain the rise and fall of civilizations. Boyatzis believes McClelland would have little use for the notion that cultural differences underlie lead-ership ability. “If you look at what causes people to be effective, and you do the research in an inductive way, which is what I started on with McClelland way back when, you find there are tremendous cultural dif-ferences in style, but not in competency, not in en-docrine function, and not, when you actually study for it, in effectiveness.”

GLOBAL LEADERS MUST BE GOOD

GENERALISTS, NO MATTER WHERE THEY

ARE BASED.

53

 Most efforts to develop global leaders yield mixed results at best, but Mark

Mendenhall has an explanation: Most firms don’t understand what global leadership is and fail to invest adequate time in training. One obstacle, noted Men-denhall, who holds the J. Burton Frierson Chair of Excellence in Busi-ness Leadership at the University of Tennessee, Chattanooga, is that

there are as many defini-tions of “leadership” as there are people who have tried to define it. Adding the adjective “global” just complicates matters further.

“It’s a huge problem in large companies,” said Mendenhall. “They don’t have enough people with global competency. These are competency sets that have to do with working well and living well in globally complex situations. We can measure this in people.

We can assess people on these competen-cies, show them where they’re strong, where they’re weak. We can do coaching to address their weaknesses.”

There are similar sets of competencies in rela-tionship management.

Most companies do not assess new recruits for these competences, nor do they invest adequately in training potential leaders, said Mendenhall. The exceptions—including

IBM with its Corporate Service Corps, but also PricewaterhouseCoopers with Project Ulysses, and GlaxoSmithKline—have seen strong results from intensive immersive training.

“They improve big time,” he said. “Unless emotions are kindled and cognitive frameworks are challenged, we don’t tend to change. But when that happens, people don’t change their per-sonalities, they expand their competencies.”

MARK E. MENDENHALL

DEFINING LEADERSHIP, DEFINING GLOBAL

 Back in 1990, two psychologists, John Mayer and Peter Salovey, came up with a concept they

called “emotional intel-ligence,” which a New York Times science reporter named Daniel Goleman picked up on and turned into several best-selling books. P. Christopher Earley, dean of Purdue Univer-sity’s Krannert School of Management, believes a similar capacity, “cultural intelligence,” determines which individuals will make effective global leaders. And even as Goleman’s work led to countless classes in social and emotional learning, Earley suggests that cul-tural intelligence can be

taught and learned.“Cultural intelligence

is related to emotional intelligence, but it picks up where emotional intelligence leaves off,”

Earley wrote in the Harvard Busi-

ness Review. “A person with high emotional intelligence

grasps what makes us

human and at the same time what makes each of us different from one another. A person with high cultural intel-ligence can somehow tease out of a person’s or group’s behavior those features that would be true of all people and all groups, those peculiar to this person or this group, and those that

are neither universal nor idiosyncratic.”

Some elements of leadership are universal, like charisma or vision, but how they are ex-pressed tends to differ by culture, Earley said in an interview. An Australian leader’s charisma may be expressed in terms like: blunt, honest, extro-verted, larger than life or individualistic. But in a more collective environ-ment, like China, Vietnam or Singapore, “people respond to charisma, but that charisma tends to be expressed in looking out for how people relate,

modesty, being under-stated,” he said.

Leaders need fol-lowers, and cultural intelligence plays a role as well in leader and fol-lower relationships. “In some countries there is the expectation that the leader stands apart from the followers and is very distinctive,” said Earley. “In others, the leader that is most effective is very well integrated into the fabric of other individuals and essentially is a part of the team. If the indi-vidual is too distinctive, they are seen as not part of the social fabric.”

P. CHRISTOPHER EARLEY

CULTURAL INTELLIGENCE

54

 Count James O’Toole among the cross-cultural skeptics. O’Toole, a professor at the University of

Southern California’s Marshall School of Business, has written extensively on leadership, ethics, corporate culture and philosophy, but the concept that cultural differences confer any meaningful advantage in leadership style lands squarely on his “meh” list.

“Every business school talks about it; they feel that it’s politically incor-rect not to talk about it,” said O’Toole. “I really think the no-tion that you can say, ‘In France you lead in this way, and in America in that way,’ that’s ridiculous. You find a range in any country, and the notion that one is more effective is of the moment. What has really happened over the last 20 years is that with the globalization of business, almost all managers today have been to busi-ness school, have read the same literature. And the curriculum of busi-ness schools around the world is pretty much the same. There is a global management culture, and there are certain ways you’re going to behave in business, in any country.”

Indeed, O’Toole said the attention to cultural diversity in leadership styles may be counter-productive. “I’m trained

as a social anthropolo-gist, the study of cultures and behavior,” he said. “Historically, anthro-pologists divide into two schools. One stresses the differences between peoples, the other the similarities. There’s a little bit of truth to both of them. Cultures really are different, but there are basic human char-acteristics that are uni-versal. You can overdo the cultural differences, even though they are real. By stressing them,

you almost make the situation

worse. You turn it into ‘them versus us.’”

There can also be huge

differences in leadership

style within a single culture, O’Toole added. “In terms of style, people either mean ‘nurturing’ or ‘really directive.’ Within cultures, you get as varied a reaction to those styles as you do across cultures. Some people I know are not bothered by Jack Welch. I found his style of beating people up totally unacceptable. And we’re both Americans, both of Irish descent. Certainly [200 or 300] years ago, when cultures were isolated from each other, there were real differ-ences. In undeveloped countries, there are still ways that seem very strange to us. But once those cultures get ex-posed to Western media, the differences blur.”

JAMES O’TOOLE

AN INTERNATIONAL LEADERSHIP CULTURE

 SO was Dr. Ouichi wrong? Maybe not. The strong company culture, staff development and consensus-seeking he described are all

worthy values, and they probably did play a role in the astonishing success of Japanese companies at that time. The problem arises when you move from description to prescription, and the whole notion that a set of styles that work well in one place at one time are somehow universally applicable. The management world seems to un-derstand that now. At least no one has published a book suggesting that Silicon Valley executives should take up German leadership styles along with their ubiquitous Audis and BMW’s.

At the same time, there is a growing awareness that today’s global company—and any company that hopes to get to even the first round of venture capital had better have “global” somewhere in its business plan—requires a leader who is sensitive to and comfortable with cultural differences. One can only hope that the cross-cultural courses now offered by most M.B.A. programs provide more than a politically correct checklist of desired skills and topics to cover, to truly inoculate future leaders with the competencies they will need to succeed on a global scale: not only nonjudgmen-talness, inquisitiveness and cosmopolitanism, but also interpersonal engagement, emotional sensitivity and social flexibility. These skills truly do apply anywhere, at any time.

WHAT COMES AFTER

THEORY Z?

Ebola.

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HOW GOVERNMENT AND PRIVATE-SECTOR DETECTIVES ARE

The Back Story.

USING NEW TECHNOLOGY TO STAMP OUT EBOLA AT ITS SOURCE.

A high-stakes detective mission is taking shape in Western Africa, pitting some of the world’s most sophisticated genetic tech-nology against the Ebola virus.

The race is on to crack the code of a pathogen that has proven to be one of the most lethal diseases facing hu-mans since it emerged from the banks of the Ebola River in the continent’s central jungle in 1976. In 2014, the U.S. Agency for International Development (U.S.A.I.D.) funded a public-private partnership to provide genetic se-quencers from San Diego–based Illumina Inc. to clinics in Western Africa established by Dr. Pardis Sabeti of the Broad Institute of Harvard and M.I.T. in Cambridge, Mass. The Broad Institute is one of the leading genomic research centers in the world, and Illumina de-signs and manufactures some of the world’s fastest and most advanced

gene-sequencing machines. The aim is to give researchers the edge in tracking this deadly and rapidly mutating virus.

The Iranian-born Sabeti is a com-putational biologist, using advanced mathematics and massive computing power to read the genetic “instruc-tion manuals” that determine how viruses adapt over time as they move through a human population. She has developed tools to determine how long gene mutations have been present in a population, which provides clues about how the disease is adapting to host organisms—and how humans develop defenses against the virus. Sabeti and her team believe Ebola may have been circulating in humans for longer than is commonly believed, and that studying the genetic structure of Ebola virus samples from infected people will help develop diagnostic tests and treatments.

“Genomic surveillance—that is, tracking how a virus is moving and changing in real time—is

critically important,” said Sabeti. The stakes couldn’t be higher. The World Health Organization announced on Dec. 29, 2014, that Ebola continued to spread, with nearly 400 new cases reported in just four days. All told, W.H.O. reported that Ebola had infected 20,081 people and killed 7,842 by year-end, with Sierra Leone sup-planting Liberia as the country hardest hit by the virus.

The Broad Institute–Illumina partnership will create an early warning system that “changes our ability to pick up mutations,” said Dennis Carroll, director of the U.S.A.I.D. Avian Influenza and Other Emerging Threats Unit. “What they are going to do, we see as critical.” The agency is providing financial support to the partnership, which will build on Broad’s existing network in Africa. “They have a history of working in the region, and that

meant we could do this quickly,” Carroll said.Time is tight. This Ebola outbreak is testing the limit

of researchers’ best efforts to stay ahead of the spreading pathogen. Using Illumina’s top-end sequencers at the Broad Institute, Sabeti and her team studied genetic samples of the virus obtained from 78 individuals infected early in the outbreak—and found that the virus is changing two to three times as rapidly as in previous outbreaks, compounding the chances that it could be-come more virulent or more easily transmissible. The re-sults were published in the journal Science in September 2014, and Sabeti released the genetic dataset for use by all researchers. Sabeti’s team concluded that the rate of mutations “suggests that continued progression of this epidemic could afford an opportunity for viral adapta-tion, underscoring the need for rapid containment.”

The ability to conduct genomic surveillance will bol-

By Christopher R. O’Dea

58

ster medical personnel struggling to contain the virus. “The sheer magnitude is unprecedented,” said Carroll. “We’d never witnessed this kind of human-to-human transmission dynamic before at this scale.” Because previous Ebola outbreaks in Central Africa were mostly confined to isolated rural communities, “this is a virus that’s never been introduced to a population of more than a few hundred,” he said. “That’s very different than controlling something that’s entered a population that’s highly mobile and urbanized.”

Sabeti’s West African network is eager to deploy the new genetic defenses against Ebola. “We’re excited to soon get the MiSeq on the ground,” said Christian Happi, a professor at Redeemer’s University in Nigeria, referring to Illumina’s state-of-the-art desktop gene sequencer. Sequencing and patient-monitoring facilities will be cre-ated first in Liberia, Nigeria, Senegal and Sierra Leone,

and then in other West African countries. Those centers will serve as hubs for the deployment of mobile laborato-ries to remote districts, extending the front line against the virus in an effort to detect infections earlier. The sequencers will “produce genomic information critical in the global response,” he said. Happi’s lab, which played a key role in early Ebola diagnosis, is also set to sequence the 20 confirmed and suspected cases from the Nigerian outbreak of the disease that was declared over in Oc-tober 2014.

Like any perpetrator, Ebola has a modus operandi, controlled by its DNA. Sequencing allows investigators to read the virus’s “instruction manual” by determining the unique order of the four building blocks of genetic matter—adenine, guanine, cytosine and thymine—encoded within its DNA molecules. There are several sequencing methods, but Illumina’s technology allows

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The race is on to crack the code of a pathogen that has proven to be one of the most lethal diseases facing humans since it emerged from the banks of the Ebola River in the continent’s central jungle in 1976.

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A mother and child in a closed primary school now used as an Ebola isolation ward in Liberia.

researchers to unlock the code faster than other tech-niques operate—and the faster researchers can “read” the virus’s instruction set, the faster they can take steps to counteract its effects. Illumina sequencers paint DNA molecules mounted on a slide with a solution in which each of the building blocks is labeled with a different color. The building blocks attach themselves to sites on the DNA molecule where a camera records the fluorescent sequence, revealing the genetic instruc-tions. Illumina’s method provides researchers with enormous capacity by separating the color-coding and

image capture into two steps, allowing the machine to process more samples in a given time period.

While the MiSeq sequencers being sent to Africa don’t need to be cleared by the U.S. Food and Drug Adminis-tration, which regulates devices like gene sequencers, the F.D.A. gives the technology high marks. “We think that it is a well-controlled, great instrument to be sending to Africa,” said Alberto Gutierrez, director of the F.D.A.’s Office of In Vitro Diagnostics and Radiological Health. In late 2013, the F.D.A. issued a novel approval for a clinical test for cystic fibrosis to be performed on MiSeqs manufactured under tight rules for the U.S. market. “We have seen data in terms of the analytical performance of

the MiSeq, and we actually think that instrument has very good controls,” Gutierrez said. As for the research team in the new partnership, he added, “We’ve worked with the Broad group, so I’m sure that what is being done there is scientifically very sound.”

Sabeti has been training medical and scientific colleagues in Nigeria, Senegal and Sierra Leone to use sequencing technologies for several years. Through sup-port from the National Institutes of Health and the World Bank, 11 researchers from Nigeria and Senegal completed an advanced training program in genomics at the Broad

Institute in 2014, which included the use of Illumina tech-nology. African medical personnel will now be equipped “to provide real-time information about the circulation and mutation of Ebola virus strains,” Sabeti said.

The partnership against Ebola highlights the poten-tial for genetic technology to give medical personnel a powerful weapon against diseases. F.D.A. Commis-sioner Margaret Hamburg believes genetic medicine has a bright future. “Genomics and next-generation sequencing are very important components of what is already happening and what will happen in the future,” she said in an online interview with Eric Topol, chief academic officer at Scripps Health and editor-

Illumina sequencers paint DNA molecules mounted on a slide with a solution in which each of the building blocks is labeled with

a different color. The building blocks attach themselves to sites on the DNA molecule where a camera records the fluorescent

sequence, revealing the genetic instructions.

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Illumina Sequencer

in-chief of Medscape, an online health site. “We sup-port the notion of consumers and their health care providers having access to this kind of information,” she said, “but we feel strongly—whether it is a genetic test or any other kind of a diagnostic test—that the test be accurate and reliable.”

With U.S. government agencies backing genetic tech-nology at home—and funding training and deployment of the tools against Ebola—it’s only a matter of time before gene-based medicine becomes prevalent in U.S. medical practice. Working effectively with regulators will be essen-tial for companies to succeed in genomic medicine—and competition is also ratcheting up to a new scientific level.

Illumina has set up its own gene-tech incubator with Yuri Milner, a Russian billionaire and technology investor. One of the aims of the incubator is to turn

smartphones into what Illumina’s chief technology officer Mostafa Ronaghi calls “molecular stethoscopes.” Ronaghi told a conference in Brussels that the company is exploring electrical and optical technology that would allow a silicon chip to read genetic information and transmit the data for diagnosis. Although technical hurdles remain, he’s confident smartphone genomics will fundamentally alter health care. “We will not need a primary doctor in the future,” Ronaghi said. Consumers will be able to get tested at home or in a clinic, then go directly to a specialist. “I believe it will happen in five to seven years,” he said.

While it may be some time before smartphones replace primary care doctors in the U.S., one thing is clear—genetic medicine is here to stay. In a comment in the Journal of the American Medical Association, Patricia Zettler of the Center for Law and the Biosciences at Stanford University summarized the state of play: “The era of widespread, clinical use of DNA sequencing rap-idly approaches,” she said.

In Western Africa, said former U.S.A.I.D. Admin-istrator Rajiv Shah, it’s already here. “By partnering with experts from the Broad Institute and Illumina, we can give health workers the tools they need to win the fight against Ebola.”

The partnership against Ebola highlights the potential for genetic technology to give medical personnel

a powerful weapon against diseases.

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Dr. Pardis Sabeti of the Broad Institute of Harvard and M.I.T. in Cambridge, Mass., is a computational biologist using massive computing power to reveal how viruses like Ebola adapt as they move through the human population.

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ONE OF THE BEST PLACES to see how technology innovation can drive global growth is probably where you’d least expect to see software transforming a business: on the farm. A digital revolu-

tion is changing agriculture, enabling farmers to carry out the biblical injunction “as you sow, so shall you reap,” with iPads running farming apps that make it possible to plant, plow and harvest with the accuracy of a space mission and the convenience of an Android device or iPhone.

BY C H R I S TO P H E R O ’ D E A

Farming? We Have an App for That

John Deere: Lessons From 177 Years of Innovation

It’s called “precision agriculture,” and in the vanguard of the movement is one of the oldest, most stable industrial companies in the world—Deere Inc. Founded by an enterprising metalworker in Illinois when the Midwestern state was still covered with tall native grasses, Deere is using the tools and techniques of Silicon Valley to transform farming.

Today’s farmers manage vast holdings of land as collections of individual parcels. With soil com-position and moisture data mapped to the square inch, farmers can deliver just enough of the right seed, fertilizer, pesticides and water in just the right place and at just the right time to maximize production from their land and equipment.

Seeing this, Deere staked its future not only on building tractors and combines, but on creating tools to manage farming systems that integrate equipment and information. With a global research and development network focused on improving the farming experience, Deere’s approach to making farm equipment has more in common with Apple’s approach to listening to music than with a traditional manufacturer’s way of developing products. Its suite of apps for tilling, spraying and baling crops—JDLink—can be found in the iTunes App Store along with Mobile Farm Manager,

which pulls up complex agronomic data as easily as iTunes pulls up a favorite song or helps you create a Genius playlist.

Though Wall Street sometimes struggles to assess and value innovation, Apple showed that spending hefty sums on innovation and high valuations can go hand in hand. A steady stream of pioneering products showed the world the immense value that can be created by transforming companies from mere manu-facturers of things into creative organizations that change the way work is done.

This was the approach Deere took when it first went into business in 1837 producing steel-bladed plows designed especially for the huge scale and unique soil of the American Midwest. Since that time, Deere focused on keeping the company drama-free and stable—it has had only nine CEO’s since its founding. It also created one of the few global brands not based on a consumer product or technology, but on innovating across two of the most important and essential economic sectors—food and agriculture. World demand for food is “largely unaffected by periodic swings in the economy,” said Deere CEO Samuel Allen. “Global trends based on population growth and rising living standards remain intact.”

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Get a Tattoo

Deere’s headquarters on a 1,400-acre campus in Mo-line, Ill., designed by famed

modernist architect Eero Saarinen, is a long way from San Jose, Calif. Even so, what’s going on inside the building would seem familiar to many who work in Silicon Valley. The building itself is an aggressive paean to growth, which for many years was defined as a never-ending series of new, high-quality products, met enthusiasti-cally in the marketplace, producing good returns for investors and employees. The other measure of how the company was doing was how it competed against its chief rival, Interna-tional Harvester, for decades the sector’s biggest player. Then, something happened. With 2013 revenue just shy of $38 billion, Deere overtook IH to become No. 1 against a new IH, which was formed from a merger in 2013 between Italy’s Fiat S.p.A., an industrial and agricultural products manufacturer, and CNH Global N.V., a diversified

Dutch industrial firm. In 2013, CNH Industrial had revenue of €25.9 bil-lion, about $32 billion.

Businesses grow when they trans-late innovation into performance, said Barry Jaruzelski, senior vice president and global leader of the engineered products and services

practice at Strategy&, a consulting firm now part of Pricewaterhouse-Coopers. Innovation leaders have “the ability to use directly generated understanding of end-users to solve unarticulated customer needs, in tandem with strong cross-functional linkages that go beyond manufac-turing efficiency to ensure excellent after-market service,” he said.

It turns out the company’s strategic goals laid out in the 1950s remain the building blocks for its success today. Deere posted return on invested capital (ROIC) at a rate higher than 20 percent during the past 10 years, compared to the com-pany’s cost of capital that analysts

estimate at just over 9 percent.Allen said the company gener-

ates growth by “creating product and service solutions that solve real problems and create value for our customers and our company.” A robust global expansion strategy and a bushel of recent innovation awards for Deere and its new prod-ucts confirm the company’s ability to convert new ideas into business results. Investors are taking notice.

“Deere’s stable, highly competent leadership is one reason why

the company has been able to consistently develop

innovations,” according to Turner Investments, which holds Deere stock in mutual funds and institu-tional accounts that it manages.

Long a brand powerhouse in the American Farm

Belt, Deere’s green machines today com-

mand global acclaim. For example, Deere has

become the best-loved agricultural machinery

in Ukraine, the breadbasket for Eastern Europe and much

of Russia, and it surpassed iconic brands such as Harley-Davidson,

Chevrolet and Jack Daniels in global brand-power rankings. An online comment about a recent story in the Wisconsin State Journal reminded competitors what they’re facing when they try to woo a Deere customer: “Get a John Deere tattoo. Then we’ll talk.”

“Go get a John Deere tattoo, then we’ll talk…”

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A Global Growth Workshop

Tractors and combines are major investments—ac-counting for as much as half

of the total cost of crop produc-tion—and Deere relies on “the com-petitive strength of enterprise-wide innovation” to develop and deliver machinery and control systems that improve productivity, said Allen. Deere engineers strike deals with research scientists and creative pro-ducers around the world if it will lead to products and services that help farmers.

Deere today runs five Global Technology In-novation Centers, up from a single North American R&D center six years ago. The commitment reflects the impetus to find the best ideas and materials, a custom that dates to John Deere’s practice of ordering steel made to his specifica-tions. Deere began what is now a 14-year collaboration with the Fraunhofer Insti-tute for Factory Operation and Automation in Magde-burg, Germany, when it was working with new simulation technology, said Thomas Schulze, head of the institute’s Competence Center for Simulation. The institute is one of the research centers in Germany’s Fraunhofer-Gesellschaft, a national system for academic-business col-laboration in applied science and en-gineering. Deere has several projects under way with the institute, said Schulze, including harnessing vir-tual reality tools to improve training effectiveness. “The most important work is for quality improvement that

leads to high customer satisfaction,” Schulze said.

Deere’s Iowa-based baling unit, for example, recently unveiled new tech-nologies developed in conjunction with Tama Plastic Industry, a part-nership between two Israeli kibbutzes that leads the market in agricultural packaging and crop protection. To reduce cotton harvesting time, Tama developed packaging material that al-lows Deere’s cotton picker to bale the cotton without stopping the picker.

During 2013, Deere rolled out another innovation developed with Tama technology—B-Wrap, a material that keeps moisture out of round hay bales while allowing water vapor to escape through microscopic pores. B-Wrap was designed to preserve hay so well that farmers don’t need to store it in a barn. That will reduce storage costs and spoilage, and could even lead to happier cows—Deere said hay protected by B-Wrap “looked and smelled like the day it was baled, even after spending a winter outside.”

Deere’s overseas operations have

spawned some of the company’s most progressive innovations. In the 1990s, for example, Deere’s unit in Finland invented a “walking harvester” that allowed loggers to move over soft, sloping or uneven ground in forests. The spider-like device helped pave the way for environmentally friendly machines, and a prototype sits in the Deere Pavilion in Moline. A control and stability system distributed weight and support equally to the harvester’s feet according to terrain

readings from sensors in each leg; a system based on the prototype is now used in all Deere forest equipment, while the latest versions of the control system and hydraulics help Deere’s agri-cultural harvesters cause less stress on farmland.

Asian rice farming pres-ents an entirely different set of challenges. Deere has been adapting its know-how to rice cultivation for more than 100 years, and today produces its rice-farming lineup in Ningbo, China. The suc-cessor to a rice binder Deere built in the 1920s, today’s R40 small-track combine utilizes a special separator for paddy rice harvesting, an innovation that can also

be used for wheat and other small grains. The Ningbo plant is part of Deere’s increasing presence in China, which includes plans for new plants to produce construction equipment, engines and large farm machinery. The expansion illustrates how Deere integrates product development with market opportunity—China’s agri-cultural mechanization has increased to 52 percent from 42 percent in 2007, and the government plans to reach a 60 percent mechanization level in five years, primarily through increased machinery use in rice paddy farming.

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RICE PADDY FARMING.

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The ability to combine detailed field data with improved machinery management is good news for a growing world and Deere share-holders. “We expect continued mechanization increases that should help to boost yields and alleviate supply issues,” wrote Morningstar analyst Adam Fleck in 2012. One of Deere’s most far-reaching in-novations is FarmSight, a software platform introduced in 2012 that encompasses databases of soil, seed and other information about a farm, delivered to Deere customers through Mobile Farm Manager apps available from the Apple Store. Farmers in the field access informa-tion through a Web portal to make better decisions about every farming operation—tilling, seeding, har-vesting, soil management, watering and fertilization. Intelligent seeding systems, for example, adjust depth and seed type during planting and establish a record for each row.

Addressing farm ROI, Deere’s pro-prietary JDLink fleet optimization network lets farmers know “which machines are earning or idling.” Consistent with its mobile strategy, last summer Deere unveiled iPhone, iPad and Android apps for accessing JDLink’s fleet database. Illustrating Deere’s deep-rooted commitment to innovation, both JDLink and Farm-

Sight use the company’s own GPS system; competitors use third-party GPS tools that can be harder to inte-grate into a holistic system. Investors think those in-house capabilities give Deere an edge. “Proprietary products and services,” according to Turner Investments, “could generate double-digit earnings growth over the next several years in the precision agriculture segments.”

Customer- Focused, Open to Ideas

When John Deere revolu-tionized 19th-century American agriculture

with a single new tool, he was doing what successful innovators always do—addressing customers’ needs. Innovative companies typically have hefty R&D budgets, but money

is not the key ingredient. “If spending de-termined R&D success, Silicon Valley would never have happened,” said Jaruzelski. By itself, he added, “technology does not equate to innovation—using tech-nology to meet users’ needs

is innovation.” In its eighth Global Innovation 1000 study, Strategy& found it’s the early innings that count when designing new products and services. The most successful innovators systematically followed a disciplined process to generate ideas and used rigorous criteria to decide which ideas to develop commercially.

But Wall Street struggles to re-ward innovators. According to Chris Malloy, a professor at Harvard Busi-ness School, investors don’t reward the stocks of firms that have proven they’re effective at R&D, even though a company’s R&D spending record can predict its success at innovation. “Innovation is one of the more-opaque activities companies under-take,” said Malloy, “yet it can have a huge impact on a firm’s overall value.” Although the market ulti-mately realizes that R&D spending turns into stronger sales—as much as 78 basis points per month—it can take as long as a year for good news about an innovation to be fully reflected in the innovator’s share price. “It looks like investors initially ignore easily accessible data on R&D success,” said Malloy.

Malloy and his team analyzed U.S. corporate R&D effectiveness by reviewing R&D spending relative to sales revenue, new patents, patent citations and new product launches. Bottom line: Companies that dem-onstrated both large R&D budgets and a history of converting innova-tion into revenue were likely to con-tinue that performance. But in the short term, investors didn’t reward those companies with share price premiums over those of companies that spent the same percentage of sales on R&D but showed a poor record of converting that spending to new products and sales.

Investors may be right to be skeptical about the value of innova-tion. According to Strategy&, most companies themselves don’t believe they’re very good at it—only 43 percent believe they were highly ef-fective at generating new ideas, and just 36 percent believe they excelled at converting ideas to growth. Those are the two activities most critical for innovation success, and a mere 25 percent believe their companies are highly effective at both stages. But

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FarmSightDeere’s

FarmSight is a software platform that encompasses databases of

soil, seed and other

information about a farm, delivered to

customers on their iPads, iPhones and other mobile

devices.

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Deere’s unit in Finland invented a “walking harvester”... The spider-like device

helped pave the way for environmentally friendly machines, and a prototype sits

in the Deere Pavilion in Moline, Ill.

in the long run it pays to get innova-tion right, Strategy& says—most of the survey respondents who said their companies were highly effec-tive at both generating ideas and converting them to products also re-ported that they outperformed their peers in terms of revenue growth, market cap growth and EBITDA as a percentage of revenue.

Brand-Loyal Farmers

Whatever doubts plague Wall Street and Cor-porate America about

conducting and valuing innovation, Deere’s R&D prowess has translated into one of the top brand franchises

in the world. Deere has marched steadily up the ranks of the 100 Best Global Brands list compiled by Interbrand, one of the world’s leading brand-value consultancies, since debuting at No. 97 in 2010. Now standing at 79, the company has made farming hip, leapfrogging iconic brands in part by turning its dealerships into multimedia retail

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stores selling Deere accessories, clothing and toy tractors alongside the real thing.

That rank wouldn’t surprise some of the most brand-loyal con-sumers in the world—Midwestern tractor owners. The Wisconsin State Journal cited a survey of 2,000 Midwest farmers by Farm Equipment magazine, which found that 65 per-cent of farmers said they were loyal to a brand when buying tractors, field equipment or combines. Deere leaves its competitors in the dust, with 67 percent of farmers citing John Deere as their primary brand, compared to 17 percent for Case IH and just 9 percent for New Holland.

These days Deere is topping the charts in new markets such as Ukraine. John Deere himself would recognize Ukraine’s potential as a market for farming technology—it’s

endowed with the same rich, black soil that was clogging American plows when the Vermont blacksmith arrived in Illinois. Arable land covers 71 percent of Ukraine’s area, and most of that terrain is covered with “cher-nozem”—the Russian moniker for one of the most fertile soils in the world.

Chernozem is the humus-rich layer left when glacial lakes dried up, depositing pulverized minerals that created black soil zones in three places on earth—the North Amer-ican plains, Argentina’s pampas and the grassy Eurasian steppe that stretches from Hungary to Mon-golia. Situated on that seemingly endless plain, Ukraine accounts for about 25 percent of the world’s chernozem surface area, according to Dragon Capital, a Kiev-based in-vestment bank active in the region’s thriving agribusiness sector.

Ukraine’s farmers strive to main-tain the fertility and quality of that land. “We tend to appropriately use every square meter of black soil we have,” said Mykola Guta, general di-rector of Mriya Agro Holding. Guta is one of five members of the founding family that controls 80 percent of the Frankfurt-listed company.

For Ukrainian farmers, that means driving a Deere. Ukrainians rival their Badger State colleagues when it comes brand loyalty. According to the Ukrai-nian Agribusiness Club’s “AgroBrand” ranking, Deere is “the undisputed leader in brand recognition” among agricultural machinery makers. With 55 percent of survey respondents favoring the green machines from Moline, Deere easily surpassed Germany’s Claas, which garnered 23 percent of the votes.

Deere anchors the 1,700-unit

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CROP PRODUCTION has long been a global industry, but today the stakes are far higher than the economics of

tractor and combine sales and servicing. While agriculture has been thriving on innovation in information technology, crop genetics and energy efficiency, it has also become a strategic issue.

The key strategic risk is China’s need to ensure food supplies for a massive population with rising expectations. Chinese food policy is shaping up to be the defining agricultural story of the early 21st century. And China’s effort to meet its need brings it face to face with Deere’s global expansion.

As important as Ukraine is to Deere as a source of customers, it’s far more important to China as a source of grains for its hungry, growing, urban population. According to a Voice of America report, “China wants to lock down a portion of the bounty flowing from the black soils of this farming nation the size of France.”

Ukraine’s black earth represents a source of domestic tranquility to China’s leadership, and China is willing to secure urban peace with multibillion-dollar credit lines to Ukrainian agribusiness operators. UkrLandFarming, or ULF, Ukraine’s largest agribusiness operator

fleet Mriya used to implement preci-sion farming methods as it expanded from 50 hectares of land under cultivation in 1992 to nearly 300,000 today. Of the 250 new machines Mriya added in the past few years, 136 were Deere products, including 20 of Deere’s most advanced new S680 combines. To nurture such relationships with customer-service lessons learned at home, Deere in the past two years has added new dealers, bringing the total to eight distributors in Ukraine, and recently opened a major parts warehouse to ensure speedy delivery to customers.

While some analysts note the upside for farm machinery stocks is limited by moderating demand for equipment in Deere’s primary North American and European markets, global population growth and the potential to raise yields in the world’s

new breadbasket bode well for leaders in the precision agriculture sector. “Technology is and will con-tinue to be the No. 1 driver behind our ability to meet the demands of a growing population in a way that stewards resources,” said Paul Rea, vice president, U.S. crop operations for chemical company BASF.

Linked to the Land

John Deere’s steel plow enabled farmers to till some of the richest soil in the world, in the

process transforming the American prairie into the world’s breadbasket. He also had the confidence to build a new kind of enterprise—moving his factory to a Mississippi River town

to gain access to transportation, and ordering his own steel to make plows at a time when it was unheard of to build a product before having orders in hand.

Today’s Deere reflects the founder’s enterprising spirit. Deere impacts the global food chain from tillage to storage, perhaps more completely than any other company involved in agriculture. Its engineers harness the latest developments in material sci-ence, seed research, telematics, mobile communications, robotics and automation for a singular purpose—to help farmers grow more food while conserving water and energy, and most importantly, preserving the soil. “The land is my livelihood,” said one grower who participated in the BASF survey. “If I ruin it, I am out of business.”

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Strategic Agriculture

with more than half a million hectares of farm-land under cultivation, negotiated $4 billion in credit from three Chinese agencies in 2012. The first goal is to export corn to China. As the first country outside the Americas to do so, Ukraine will join the global agriculture elite, barely 20 years after its government held Deere tractors as leverage to collect loans from farmers struggling to cope with Soviet collectivization.

Already a leading exporter of grain, Ukraine shipped out 18.5 million tons of grain in 2013 and hopes to more than double that amount to 40 million tons by 2020. China looms large in those

plans. In late 2013 a Chinese company reportedly arranged to buy or lease 5 percent of Ukraine’s land area—about the size of Massachusetts—to grow grains for China for 50 years. The deal came after Ukraine lifted a law barring foreigners from buying Ukrainian. As part of the deal, China’s export-import bank has given Ukraine a $3 billion loan for agricultural development. But the deal may be in jeopardy from the tensions between Ukraine and Russia, and some reports have said China is demanding the return of the loan pro-ceeds because Ukraine has not supplied enough grain under the agreement. Stay tuned.

A John Deere combine harvesting grain in a field near the town of Kalush, Western Ukraine.

70 B R I E F I N G S

How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution

R E V I E W BY G L E N N R I F K I N

IN R

EV

IEW

The Innovators

FOR ANYONE UNDER the age of 35, the digital revolution has been less a trans-formation than a way of life. Earliest mem-ories often include video games, a keyboard,

a mouse, a computer screen or a digital gaming de-vice. This PlayStation Generation didn’t have to cross the chasm from the days when an electric typewriter was the latest in word processing technology to an era when a tiny handheld device had more computing power than the Apollo spacecraft that went to the moon. They experienced the Internet less as an epiphany than as an assumption. Apple and Google and Facebook and Netflix happened, just as they should have. If you never experienced what came before, what now exists in the digital universe might seem downright mundane.

Walter Isaacson, for one, believes that these whippersnappers ought to know where this digital cornucopia came from. His latest chronicle, “The Innovators: How a Group of Hackers, Geniuses and Geeks Created the Digital Revolution,” comes on the heels of his blockbuster best-selling biography of Steve Jobs.

In this new book, Isaacson takes on the entire his-tory of computing and the emergence of the Internet. Apparently, Isaacson was immersed in this project when a terminally ill Jobs recruited him to write his bi-ography. It was an auspicious interruption for Isaacson: The Jobs biography has sold millions of copies and paved the way for this ambitious follow-up.

Ambitious may be an understatement. In this nearly 500-page effort, Isaacson takes us all the way back to Ada Lovelace, the daughter of Lord Byron, who envisioned a remarkable computing machine in the early part of the 19th century. Fueled by her dual passion for poetry and math, Lovelace embodied the

spiritual soul of the “poetical science” that Isaacson attributes to the best of those whose genius brought us to our current place. In his exhaustive research, Isaacson was “struck by how the truest creativity of the digital age came from those who were able to connect the arts and sciences. They believed that beauty mattered.”

Certainly Jobs, a visionary with a passion for de-sign and functionality, was a practitioner of the po-

etical science. But there was more than a century of inspired thinking and innovation between the early musings of Charles Babbage and his Analytical Engine and the origins of Apple Computer and the advent of the Internet. And though it is a fascinating journey, populated by an intriguing bucket brigade of innovators and excep-tional pioneers who handed off one critical layer of invention and design to the next in line, Isaacson’s book is a bit of a slog. Encyclopedic in scope, it is at times a tedious read. And though the book was a best seller before it left Isaacson’s laptop, it isn’t clear that there’s an audience, in the digital era he writes about, with the attention span to get through it. With

aggregators and bloggers and tweeters downsizing every message to a few measly words or 140 characters, the scope of Isaacson’s tome may make it one of those worthy books that is purchased but left on the bedside table unread.

That said, some works are important and laudable because of what they attempt to do, and Isaacson was not intimidated by the scale of his endeavor. This linear work need not be read from front to back. It can be taken in smaller pieces, conveniently broken into key eras such as The Computer, Software, Program-ming, The Internet and so on. For those fascinated by the journey that brought us this world-changing

71

“The main lesson to draw from the birth

of computers is that innovation

is usually a group effort…”

popping out of the head of a lone individual in a basement or garret or garage.”

Isaacson is diligent in presenting most of the relevant contributions. It wasn’t enough to build a massive, room-sized computer. The revolution would have ended there if not for visionaries like M.I.T.’s Vannevar Bush, who promoted the union of govern-ment, military and private funding as a catalyst for bringing computing to a society-changing inflection point. He puts a spotlight on a cast of breakthrough thinkers like William Shockley, who created the transistor, and Robert Noyce and Gordon Moore, the fathers of the microchip. He writes elegantly about J.C.R. Lickliter, the pioneer of many of the key concepts that led to the creation of the Internet. And he takes particular delight in tripping back to the Silicon Valley’s Wild West—the Homebrew Computer

Club days of the birth of personal computing, where luminaries and freaks like Stewart Brand, Steve Woz-niak, Doug Engelbart and Jobs turned geekdom into late 20th-century cool.

Strangely, Isaacson pays no attention to the contributions of Ken Olsen, the paternalistic founder of Digital Equip-ment Corporation, the company that created the minicomputer era of the 1960s, 1970s and 1980s and was a crucial bridge from the world of multimillion-dollar mainframes to the personal computer. Olsen created a matrix

organization inside of Digital that allowed brilliant young engineers to build noteworthy machines such as the PDP and VAX series of computers. Many of these creative thinkers left Digital to start important new companies or join fast-growing startups, and Olsen’s influence was felt deeply around the computer universe.

Nonetheless, the takeaway for Isaacson is clear: “The digital age may seem revolutionary, but it was based on expanding the ideas handed down from pre-vious generations,” he writes. “The collaboration was not merely among contemporaries, but also between generations. The best innovators were those who un-derstood the trajectory of technological change and took the baton from innovators who preceded them.”

It is a story without an ending. The evolution continues at such a pace that new chapters are being written daily. Not everyone is fascinated by history, particularly the history of technology. But given the impact technology has had on every aspect of our lives, it is a history worth reading about.

authors.simonandschuster.com/Walter-Isaacson

digital universe, this book is a must read. Isaacson is, at heart, a storyteller, and he frames each of his protago-nists within the context of their own lives and eras.

For those of us old enough to have experienced firsthand the personal computer revolution and the emergence of high-speed broadband, Wi-Fi and the Internet, many of these stories are familiar enough to feel less like history and more like a rehash of current events. How many more times must we read about the precocious genius of Bill Gates or the innovative arrogance of Steve Jobs? Isaacson offers some useful anecdotes but little in the way of new insight here.

But where the book is the strongest is his explora-tion of the earliest days of computing, when the insatiable curiosity and brilliance of people like Alan Turing, John Mauchly, Presper Eckert, Grace Hopper, John von Neumann and Howard Aiken set the stage for a wondrous world to come.

In a clever story arc, Isaacson sets out to identify the “inventor” of the computer, a task complicated by so many contributions, large egos and intricate relationships that cloud the landscape. For example, he writes about the genius of von Neumann, the Hungarian-born mathematics mastermind who mentored Turing at Princeton and became a consultant to the breakthrough ENIAC computer being built in the 1940s at the Univer-sity of Pennsylvania.

Von Neumann was a daunting presence who understood the discipline and focus required to further the value of computer programming, a still-underdeveloped but essential piece of the computing evolution. Quoting science historian George Dyson, Isaacson expresses the importance of von Neumann’s contributions.

“The stored-program computer, as conceived by Alan Turing and delivered by John von Neumann, broke the distinction between numbers that mean things and numbers that do things,” Dyson wrote. “Our universe would never be the same.”

Isaacson makes a case for each of these visionary thinkers, but he refuses to place a victor’s wreath on any single head.

“The main lesson to draw from the birth of com-puters is that innovation is usually a group effort, involving collaboration between visionaries and engineers, and that creativity comes from drawing on many sources,” he writes. “Only in storybooks do inventions come like a thunderbolt, or a lightbulb

T A L E N T + L E A D E R S H I P

72

Who Says We’re Losing Our Edge?

At the same time, engineers at a start-up outside of Boston developed a way to send electricity from a generator or power source to a device like a computer or TV, without using wires. They were able to beam elec-tricity through the atmosphere.

And, when the International Space Sta-tion needed a replacement part, rather than send that part into space inside a capsule and hand-deliver it to the crew of the ISS, the team on the ground beamed some software to the station. Astronauts on the station received the signal and created the badly needed part on a 3-D printer.

I could go on. I mention these developments for two

reasons. First, they’re interesting, in a nerdy sort of way. But second, and much more importantly, they show that all this talk about how—insert the name of your country here—has lost its creative juices, is simply wrong. People are just as creative now as they ever were. Perhaps they’re more creative.

Put aside all those small groups that are

downright evil or simply destructive. There are plenty of people wasting their and others’ lives doing useless, painful, hurtful things. But aside from a few groups of lunatics scattered around the planet, people, for the most part, are either eager to create or are appreciative of what’s new.

And yet, nearly every exciting new develop-ment is accompanied by jeers from nattering spectators who argue the development was wasteful, wrongheaded, useless or flawed. Why should India, an emerging nation, squander money by sending probes to Mars? Shouldn’t it focus on feeding its population? And what business does the United States have leading the fight against Ebola, in places so far from us, when so many here are living on food stamps?

While it’s true that everybody has to eat, it’s also true that the future is what we make of it.

If a country like India thinks it can shape the future by figuring out a thrifty way to send explorers into space and on to other planets, why not applaud? That’s valuable. Doing that will change the world and inspire more great endeavors.

For reasons we don’t quite understand, humans invent things, while the animals and plants with which we share this planet prefer to let things lie. The fact is, we know which caves were inhabited by early humans because those were the caverns with the painted walls and all the garbage on the floors. Instead of being content to inherit the future, our ances-tors defined themselves, from earliest times, by creating their own futures.

When someone moans “we lost our creative edge,” it’s important to remind them that they are repeating a baseless comment. Human beings are just as creative as ever. The problem isn’t that we’ve stopped doing new things. It’s that when new things arrive—step-counting wristbands or implants that stop an epileptic seizure—those naysayers are looking in the wrong direction.

“The problem isn’t that

we’ve stopped

doing new things.”

PA

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ING

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BY J O E L K U RT ZM A N

Joel Kurtzman is author of the new book “Unleashing the Second American Century.”

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