| Leadership, irrationality, and more |
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June 22, 2018 |
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| Weekly need-to-know content |
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| Welcome to the Shortlist: new ideas on timely topics, plus a few insights into our people. Get it in your inbox every Friday. This week, scroll down to see what Scott Nyquist, senior partner and energy expert, is reading. |
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| Our first issue kicks off with a core topic: leadership. We all know leaders who make their people feel smart, special, and productive—like a core member of the team. Unfortunately, many of us have also experienced bosses whose self-absorption or nastiness drive people out the door—the jerks, as Stanford professor Bob Sutton might say. |
| But being a good boss isn’t as easy as you might think. As Sutton points out, people who move into more powerful positions can fall prey to traps that cause them to focus more on themselves than on others. And executives don’t just glide blithely into new roles: new research shows that 83 percent of global leaders say they felt unprepared for their new responsibilities, and only 32 percent felt their organization properly supported their transition. |
| So, what’s an aspiring leader to do? McKinsey has spent decades delving into leadership and organizations that run the gamut from dysfunctional to inspirational. The good news is that effective leaders aren’t necessarily born but developed. |
| The best bosses exhibit behaviors that can be learned and that make a big difference in helping them attract and keep top talent. And they don’t measure themselves by a uniform yardstick—like giving themselves only 100 days to get things right. They also follow the principle of staying close to their teams to advance key goals. That sounds easy but often isn’t in practice. |
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| OFF THE CHARTS |
| Bringing (solar) power to the people |
| About a billion people around the world have no access to electricity. Expanding the grid is part of the answer, but so are solar home systems, which are just starting to prove that they can serve homes that are too remote or whose energy consumption is too low to make a grid connection economical. |
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| INTERVIEW |
| Richard Thaler: Rising above the irrational |
| How do you drive bias and irrationality out of business decisions? “Write stuff down,” is the surprisingly simple advice that Professor Richard H. Thaler, the Nobel-prize-winning economist and author, recently gave in an interview with McKinsey. |
| Aligning your goals, expectations, and assumptions helps to overcome hindsight bias and show, for example, that an otherwise good decision made in 2005 that was undone by the financial crisis wasn’t stupid—just unlucky. Speaking of luck, Thaler had a memorable cameo in The Big Short, in which he explained the irrational euphoria that led to the 2008 financial crisis while playing blackjack with Selena Gomez. |
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| The same advice about luck applies to financial forecasts, Thaler says: even if you don’t share all your assumptions publicly, write down your high and low estimates, as well as your confidence limits. Over time, you’ll learn more even if you think the resulting equivocation makes you look like an idiot. (All this from the same guy who, when asked what he would do with the more than $1 million in Nobel prize money, quipped, “I will spend this as irrationally as possible.”) |
| Thaler also told us how the design of his home base, the University of Chicago Booth School of Business, nudges the school’s employees toward better health, how to encourage diversity of thought to debias the boss, and why artificial intelligence should play a bigger role in human resources. |
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| MORE ON MCKINSEY.COM |
| Preparing for the car of the future We spoke with two senior partners about how four developments—autonomous driving, connectivity, electrification, and ride-sharing—are paving the way for entirely new forms of mobility. |
| Chemicals in their element The chemical industry has substantially outperformed the world equity market over the past year and a half. That performance marks a return to form. |
| Integrating Europe’s refugees The flow of asylum seekers has subsided since its peak in 2015 and 2016, but the debate has not. Now governments face the even bigger challenge of integration, as they focus on helping those who stay build new lives and become productive members of society. |
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| Climate change is obviously top of mind for the energy industry. An Indispensable Truth: How Fusion Power Can Save the Planet by Francis Chen argues that hydrogen fusion is the answer. I know, I know: fusion is one of those technologies that has been just around the corner for ages. But Chen, who is both an outdoors enthusiast and a plasma physicist, makes a strong case that a non-scientist can (mostly) understand. |
| Difficult problems are hardly new, of course, and heroes can come from unexpected places. Take Ulysses S. Grant. After years of personal and professional failure, he led the Union armies to victory in the Civil War. The recent biography of Grant by Ron Chernow details what made Grant a great general, and a good man. |
| I believe in the power of human ingenuity to meet and solve problems. Walter Isaacson’s recent biography of Leonardo da Vinci does a wonderful job of explaining the greatest genius of the Renaissance—and perhaps of all time. |
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| BACKTALK |
| Have feedback or ideas? We want to hear from you. |
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