Leading Off: Look inward to move forward: A leadership journey

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ESSENTIALS FOR LEADERS AND THOSE THEY LEAD

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Brought to you by Alex Panas, global leader of industries, & Axel Karlsson, global leader of functional practices and growth platforms

Welcome to the latest edition of Leading Off. We hope you find our insights useful. Let us know what you think at Alex_Panas@McKinsey.com and Axel_Karlsson@McKinsey.com.

—Alex and Axel

“What changes are you going to make?” That’s typically the first question a new CEO will hear from their employees, investors, customers, or other stakeholders. To find the answer, the best leaders look inward. Effective leadership is not just about accomplishing a miles-long list of tasks—it’s also about embracing an ongoing process of becoming more self-aware by learning, listening, inspiring, and caring. This week, we look at why this “inside out” journey is so critical for leaders and their organizations.

AN IDEA

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Learning to lead

Psychological and emotional growth are key ingredients for leadership success—and the surest way to achieve that growth is to learn from others, according to McKinsey senior partners Dana Maor, Kurt Strovink, and Ramesh Srinivasan and senior partner emeritus Hans-Werner Kaas.

In their new book, The Journey of Leadership: How CEOs Learn to Lead from the Inside Out (Portfolio/Penguin Group, USA, September 2024), the authors explain how executives can benefit from seeking out multiple perspectives on their path to becoming more human-centered leaders.

The authors share the stories of a range of global leaders who have wrestled with complex, human-centered problems such as trust issues, imposter syndrome, and combative relationships with colleagues. In many of these cases, getting feedback from diverse advisory groups helped the executives gain more self-awareness, as well as insights they could use to hone their leadership styles. “It’s useful to have a group that includes spouses, people with whom you’re close, friends, and voices that are slightly more distant,” Srinivasan says in a recent Author Talks interview. “It gives you an ability to broaden a range of perspectives and then set your own course.”

A BIG NUMBER

18%

That’s the increase in EBITDA achieved by companies that took concrete actions to improve their organizational health, according to a McKinsey evaluation of 1,500 companies in 100 countries. Organizational health refers to how effectively leaders run their companies: how they make decisions, allocate resources, operate day-to-day, and guide their teams to deliver higher performance. Self-reflection is a big part of achieving organizational health. “Leaders should be asking themselves, ‘How do I run the place each and every day—in each and every meeting—in ways that are both healthy and conducive to creating high performance?’” say McKinsey senior partners Arne Gast and Brooke Weddle and their coauthors.

A SPOTLIGHT INTERVIEW

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Some people learn and grow from challenging life experiences, while others self-destruct. US Marine Corps veteran and Microsoft executive Nate Boaz believes people can develop the courage to get through their most trying times and thrive. “As a business executive, I now realize we all struggle with it. We are busy—all action and no reflection,” Boaz says in a recent Author Talks interview. “Instead, we should allow ourselves time to process and work through challenges and traumas healthily.” Boaz learned from his grandfathers—both World War II veterans—that effective leaders can balance courage and risk-taking with humility. “That’s what my grandfathers taught me in terms of how to live a good life and how to lead,” he says.

A QUOTE

“Just because I say I want to be ten pounds lighter and three inches taller doesn’t mean it’s going to happen.”

That’s former Ford CEO Mark Fields in The Journey of Leadership, discussing why leaders should develop a varied set of skills if they want to succeed as CEOs. The book’s authors note that successful leaders are versatile and able to turn their diverse experiences into meaningful outcomes. Fields agrees. “If you’re putting yourself in positions in your career to get these different experiences,” he says, “you’re going to learn how to be a utility infielder, and you will have that muscle memory that you’ll need when you have to pivot from growth to cost cutting.”

SMALL STEPS TO SUCCESS

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Microhabits can help leaders improve their well-being and performance. The Journey of Leadership lists more than 100 microhabits that leaders can consider, including keeping a journal, finding a hobby, prioritizing family meals, and limiting nighttime work. Such regular practices or rituals can provide long-term benefits. For example, McKinsey senior partner and The Journey of Leadership coauthor Dana Maor says her own work has been enhanced by her yoga practice. “I find that yoga is a very, very, very good school for leadership,” she says in a video interview. “First and foremost, you never finish learning.... And I do think that learning how to lead from the inside out starts with finding that centeredness and that quiet and using that as a place of birth for more growth.”

Lead by looking inside.

— Edited by Eric Quiñones, senior editor, New York

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