The Intangibles of Leadership: The 10 Qualities of Superior Executive Performance

Introduction

Most people aren’t familiar with what a management psychologist does. Among other things, we help senior leaders make smart decisions about people. For example, before a company hires a senior executive, we are brought in to assess the top candidates and give a recommendation as to their fit with the company’s leadership needs. Given the company’s business strategy and operating culture, there are certain behavioral qualities that will make some people successful and others not. We help define and then assess these qualities. And once the successful candidate is chosen, we use that assessment information to help the person hit the ground running.

So, how do I assess people? I gather data from multiple sources, including psychometric testing and, sometimes, 360-degree feedback, but at the heart of my assessment is an in-depth biographically based interview that typically unfolds over three hours. My ultimate goal is to understand how the person ticks and what that means in terms of his or her ability to do the job at hand. Beyond understanding someone’s résumé, the goal is to understand that individual at a much deeper level.

In the three hours I have with them, something special happens. At some point early in the discussion, they realize this is going to be a very different conversation than they are typically used to having. We sometimes talk about their upbringing, their families, their experiences in school and in life, their early successes and failures, and the reasons behind certain life decisions they’ve made. We talk about their careers and their outlook on work, their views on leadership, and their thoughts about the future.

And, at some point, a kind of magic takes hold. As the conversation expands and deepens, these people recognize how events in their life have fit together. The ultimate purpose of our conversation aside, they nearly always come out of it, I like to believe, with newfound insights into themselves.

Afterwards, they often say things like, I haven’t thought about that story in years or I’ve told you things I never tell anyone. For me, of course, this is a great privilege. Doing what I do affords me a unique window into many extraordinary people. It is fascinating, exhilarating, and wonderfully humbling work.

During my first few years of assessing executives, I began to notice patterns. Certain characteristics showed up in those who were successful at getting the top jobs. Some of it was in their pedigree. Some of it was in their expertise. But most of it seemed to exist in the subtle distinctions they displayed. As a behavioral scientist, one of the first things I think about is the research. What did the research say about extraordinary leadership?

What I found was that there were some models of leadership that had been held out as reliable over time. They asserted that a handful of specific personality traits and attributes reliably predicted success in leadership. Still, these models left me wanting more. What did they really tell me?

Existing leadership models offer a basic set of competencies that all leaders should have, but they miss some critical points. First, I found, they said nothing about whether the candidate in front of me would be successful in a particular role at a particular organization.

Second, they were generally too junior in their description. The competencies that showed up in these models identified basic price-of-admission qualities that many people exhibit. But at the top rung of the ladder, leadership is highly nuanced. The dynamics at the top levels are complex, and what works in one organization may prove completely ineffective in another.

So, I set out to uncover patterns regarding the attributes that truly distinguish those who succeed at the top levels. I pored over research in psychology, philosophy, and literature and met with countless senior executives. I reviewed my assessment reports dating back nearly a decade and asked the opinions of colleagues at the top of their profession.

What I found was that extraordinary leaders possess certain interstitial characteristics—traits that fall between the lines of existing leadership models. Adjust your lens finely enough, and you will see, at the upper end of the leadership spectrum, certain subtle characteristics that emerge as fundamental to executive success. These characteristics are the Intangibles of Leadership.

This is not a self-help book. Nor is it a manual of what to do and what not to do. I am not so audacious as to impose my perception of how you should think, feel, or act in a leadership setting or anywhere else. It also isn’t meant to be an exhaustive list of leadership intangibles. Just as each human mind is unique, so is the context of each organization and the behaviors that are best suited to lead it. Leadership is complex, representing a continuous dance between contextual needs and leadership characteristics, and there is much still to be discovered.

This book is a practical atlas of the characteristics that most define extraordinary leaders and their underlying psychological mechanisms. It is a glimpse into the elite executive’s mind and heart. It is a reflection of my own experiences and insights as a management psychologist. It is a story of how some people reach the heights of leadership. It is also, therefore, intended to help guide your own thinking and behaviors so that you might adopt some of the practices of these great leaders. It is a mirror to be held up in front of you to help you think about how you approach leadership, hopefully to help you gain insights into yourself that can enable you to grow and develop. This is my great wish for this book and for you.

1

Wisdom

Knowledge is a process of piling up facts; wisdom lies in their simplif ication.

—Martin Fischer

The Wisdom of Giving: Part One

Frances had been born in a small town in Kentucky, Harrodsburg, to Bavarian immigrants, Leon and Rosetta. At the time of her birth, she had one sibling; not long afterwards, she had six. Frances learned early about the value of lending a hand.

The family soon moved to Cincinnati. While her father strove to earn money as a tailor, Frances and her siblings attended public school, where she was exposed to children who both looked quite a bit like she did and not at all like she did. Some of them celebrated the same holidays as her family; some celebrated different ones. They had delightfully varied ways of speaking, thinking, and behaving. It was a wonderful miscellany of humankind.

One of these students stood out from the others—Abraham Jacobs—her brother Benjamin’s friend. When the two boys headed west to seek their fortune, Frances was crestfallen, but understanding. One couldn’t sit around waiting for life to happen. In the area that would later become the frontier town of Denver, Abraham started a general store and operated a stagecoach that went to Santa Fe.

But he had felt the same stirrings as Frances. In 1863, after four years away, Abraham returned to Cincinnati and, in February, they were married. When Abraham and Frances moved to Central City, Colorado, a thriving mining town thirty miles west of Denver, she was amazed. Droves of people seemed to arrive daily, all descending on the west with the same unbridled hope. Nothing but opportunity seemed to lie before them.

At the same time, however, Frances saw the other side of that unchecked optimism—people whose dreams had not worked out, whose lives were not full of aspiration, and who fought a daily battle against desperation and despair. Troubled by what she saw, Frances began volunteering for social work. The ability to help the sick and needy, even slightly, gave her a feeling of worth. She had seen her own parents do so much with so little. Surely she could give of her time.

In 1872, Frances helped found the Hebrew Ladies’ Relief Society, and presided over it. The group provided help to those facing the problems of poverty, sickness, malnutrition, and unsanitary living conditions. It was something—but it wasn’t enough. The problems of humanity, Frances knew, were not confined to only one community. They affected everyone.

Often, we think of wisdom as something inborn, an attribute some people possess and others do not. We envision a sage sitting in the lotus posture atop a mountain, Confucius-like proverbs floating off his tongue one after the other, as though they had been implanted in his head at birth.

Some of us think of wisdom in a passive sense, something that occurs as a direct and automatic by-product of our experiencing life, so a young person is not able to achieve wisdom and someone old cannot be lacking in it.

Both of these conceptions of wisdom miss the mark. First, none of us is born wiser than someone else—even Confucius was naive in his youth. Second, wisdom isn’t passively obtained; it is the result of conscious reflection, evaluation, and decision. Perhaps you’re familiar with the colloquial definition of stupidity: doing the same thing as before and expecting a different result. Wisdom might broadly be considered as the opposite: acting in a different way based on a conscious examination of previous experience.

In other words, experience on its own does not equal wisdom. Experience is a necessary prerequisite to wisdom, but to assume that wisdom occurs as a natural consequence of experience is false—and, for someone who wishes to be a leader, dangerously limiting. I have seen many experienced leaders who think that their lengthy résumé predetermines their ability to be successful, that they have all the answers because they have been around the block a few times. However, as leadership coach Marshall Goldsmith aptly puts it in the title of his recent book, What Got You Here Won’t Get You There, previous experience is not a proxy for capability.

This kind of confused thinking happens often in the boardroom. CEOs are hired because they have been CEOs before, many times regardless of what industry or company they come from. Take the case of Starwood Hotels & Resorts, owners of the Sheraton, Westin, Le Meridien, and W hotel brands. In 2004, then chairman Barry Sternlicht tapped Steven Heyer to be CEO of the global hotel company. Heyer came directly from Coca-Cola, where he was president and COO at the time of his departure. Before coming to Starwood, Sternlicht publicly lauded Heyer as a marketer who has championed some of the world’s most valuable and global brands. Who could blame him? It was Coca-Cola, after all. As it turns out, the culture is very different at Coca-Cola than it is at Starwood, and the leadership style did not translate. What worked there did not work at Starwood.¹ Heyer, who in college was known as The Tank, had a direct, hard-nosed approach to leadership. Experienced as he was, things didn’t work out at Starwood and Heyer left.

A similar fallacy occurs with age. People assume that gray hair is a determinant of success. In the years following the dot-com boom, there was a flight to more experienced CEOs. A case in point is Yahoo!. In 2001, Yahoo! founder Jerry Yang brought in the fifty-eight-year-old former co-head of Warner Brothers, Terry Semel, gray hair and all, to take over the leadership of the online giant. At the time, it was hailed as a great move—an example of a smart decision by young entrepreneurs to let a more experienced CEO take over. The Yahoo! stock price surged, and for a short time great optimism prevailed.

Unfortunately, all of Semel’s rich experience did not bring material success to Yahoo!. When Semel finally left in 2007, the company was in a significantly worse financial position than it had been in when he got there. During the years that Semel was at the helm, its rival Google grew its share-holder value twenty-one times that of Yahoo!. Semel reportedly had the opportunity to buy Google for about $3 billion in 2002, but declined. He also could have bought YouTube or MySpace when the opportunities came up. Not such a great record for a guy whose total compensation over the last five years of his tenure at Yahoo! was reportedly $550 million.

Gray hair is a badge of honor; indeed, it is almost destined to show up on an executive bio. But leaders aren’t wise as a result of their experiences. They are wise because of their ability to utilize those experiences. The wise person reflects on their experience—the result is insight into past behaviors and outcomes. In turn, they achieve wisdom and—in the case of great leadership—apply it. This occurs independent of age.

Picture the kind of contraption you might see in a cartoon or Dr. Seuss book where something is shoved in at one end, and then, after the machine chugs, throbs, and whirrs for a while, something comes out of the other end a more refined version of the original. The contraption is our brain. What goes in is our experience. What comes out is wisdom.

WHAT IS IT?

Two disciplines, philosophy and psychology, have attempted to pin down a definition of wisdom for centuries. Our earliest philosophers tackled this dilemma with gusto. In fact, the very definition of the word philosophy dates back to the ancient Greek combination of philo (love) and sophia (wisdom). Hence, the word philosophy literally translates as love of wisdom. Plato described three types of wisdom:

1. sophia: found in those who are contemplative and who seek life’s truths;

2. phronesis: found in the kind of experienced, practical wisdom judges, lawyers, and statesmen tend to demonstrate; and

3. episteme: found in those who seek to understand the world through the lens of science.

Aristotle added the notion of theoretikes or theoretical knowledge of the truth. In his book, The Psychology of Aristotle, Daniel Robinson writes that, according to Aristotle, A wise individual knows more than the material, efficient, or formal causes behind events. This individual also knows the final cause, or that for the sake of which the other kinds of causes apply. Socrates said that wisdom consists of realizing one’s own ignorance, by knowing what one does not know.

Following the tradition of the ancient Greeks, much has been written about the philosophy of wisdom. Early Christian views described the importance of a life lived in pursuit of divine and absolute truth. A complementary way of describing wisdom is the pursuit of the knowledge necessary to lead a good life. Most religions espouse the virtue of seeking truth in some way. In the Old Testament, wisdom is characterized by a sense of justice and lawfulness, personified in the wise King Solomon. In Eastern philosophy, wisdom is famously embodied in two figures, Confucius and Buddha. Confucius said that wisdom can be achieved via three methods: reflection, imitation, and experience. He also said that the love of learning is akin to wisdom. Buddha said that wise people are blessed with good bodily conduct, verbal conduct, and mental conduct. A wise person, he taught, does actions that are unpleasant to do but give good results and doesn’t do actions that are pleasant to do but give bad results. If only Wall Street executives had paid more attention to Buddha in recent years.

In psychology, the attempt to define wisdom in a satisfactory way has led to two prevailing theories. Dr. Robert Sternberg, dean of arts and sciences at Tufts University, developed the first of these as a result of his own experience with intelligence quotient (IQ) tests. As a child, he performed terribly on these tests, scoring so poorly on one of them that he was sent back to fifth grade from sixth, until his score improved. In grade seven, Sternberg chose intelligence as his science project topic and he devised his first IQ test, selecting a more robust set of indicators than those contained in the traditional tests he was used to seeing.

The Sternberg Test of Mental Abilities (STOMA) not only became a scientifically valid, reliable test, but the same test devised in Sternberg’s grade seven science class is still used today. Dr. Sternberg went on to study at Yale and Stanford and, ultimately, he became one of the foremost psychological minds of the last century.

Sternberg’s main assertion is that typical IQ tests measure a limited set of intelligence-related factors and there are qualities indicating intelligence that reach beyond those tests. He was interested, in particular, in creativity and practical intelligence—what we might think of as street smarts. In one series of studies, he asked subjects to think of wise people and write down as many words as possible to describe them. He then took these words, wrote each of them on separate cards, and asked another set of people to sort the cards into as many or as few piles as they wished on the basis of which behaviors are likely to be found together in a person.

After having conducted this exercise with several of his subjects, Sternberg devised three dimensions of wisdom:

1. Reasoning well and taking in advice from others;

2. Being perceptive and having good judgment; and

3. Using experience to understand and interpret information and then offering solutions accordingly.

He summarized his findings this way:

The wise individual is perceived to have much the same analytical reasoning ability that is found in the intelligent individual. But the wise person has a certain sagacity not necessarily found in the intelligent person: He or she listens to others, knows how to weigh advice, and can deal with a variety of different kinds of people. In seeking as much information as possible for decision making, the wise individual reads between the lines as well as makes use of the obviously available information. The wise individual is especially able to make clear, sensible, and fair judgments and in doing so, takes a long-term as well as a short-term view of the consequences of the judgments made. The wise individual is perceived to profit from the experience of others, and to learn from others’ mistakes, as well as from his or her own. This individual is not afraid to change his or her mind as experience dictates, and the solutions that are offered to complex problems tend to be the right ones.²

The second major psychological theory of wisdom comes from a group of scientists at the Max Planck Institute for Human Development in Berlin, Germany. Paul Baltes, Ursula Staudinger, and their colleagues defined wisdom pragmatically, suggesting that it occurs when an individual has deep insight into, and judgment regarding, the ways of life and can offer advice accordingly.³ They concluded that wisdom is the combination of intellect, personality, context, and expertise—the Berlin Wisdom Paradigm, as it is popularly known.

In this study, the researchers asked their students to nominate people they know as being wise. They then asked those wise people and others of similar ages to think out loud about difficult life dilemmas. For example, Sometimes when people think about their lives, they realize that they have not achieved what they had once planned to achieve. What should they do and consider in such a situation? Baltes and Staudinger evaluated the responses based on five criteria:

1. deep knowledge of facts;

2. experience;

3. understanding events in their context;

4. knowing right from wrong; and

5. managing uncertainty.

The results weren’t surprising: People who are thought of as wise make better decisions and perform better on the dilemmas than those who aren’t.

So wisdom, it would seem, begins with basic intellect, but it also involves the ability to synthesize information and be analytical while remaining tied to reality. Of course, there’s also the importance of performing conscious reflection on past experiences, in addition to an awareness of the key learnings that have emerged from those experiences. Wisdom also includes the ability to use that information to inform future decisions—and the willingness to apply these learnings across a variety of contexts and situations. Wisdom is like a marriage: You have to work at it. And when you do, the effort can lead to tremendous results.

Wisdom for the Ages

When you hear the highlights of John Rowe’s career—a senior chief executive in the electric utility industry, co-chair of the National Commission on Energy Policy, named the best electric utilities CEO in America two years running, chairman of the Nuclear Energy Institute, former chair of the Chicago History Museum, honorary doctorates from seven different universities—you’re bound to be impressed.

My colleague Hank Tufts, a twenty-eight-year RHR veteran, has known and worked with John for twenty-five years. Hank describes John as a gifted individual who is not only smart in the traditional sense, but wise with deep perspectives. When the three of us met in John’s office overlooking Chicago’s downtown, I was immediately struck by the museum-like collection of what appeared to be Egyptian artifacts. I was clearly in the presence of a history buff. As we sat and discussed John’s philosophy of leadership, I learned that, beyond his sheer love of learning and curiosity about the past, John looks to history for lessons about the future. His particular brand of wisdom reaches far back, enabling him to see forward.

Let me explain. While John’s business card says Chairman and CEO of Exelon Corporation—the biggest electrical utility in the United States, operating the largest fleet of nuclear power plants in the nation—it might as well say Chief Historian. While he is well known as a visionary with a rare talent for seeing the future, John looks to the past for his inspiration. A voracious reader and historical scholar, he has endowed several university history chairs, primarily focused on Byzantine and Greek history.

As a result, he is often able to see the future in a clearer way than others, allowing him to create positive change. He studies the characters that have walked across the human stage at various times and in different places as well as the events that have shaped the course of world history. He spoke to us about Churchill and Ghandi, Lincoln and Washington, devoting as much attention to their shortcomings as he did to their strengths.

It’s not just about how much John knows about the past; it’s also about how he uses that knowledge to integrate data. Affectionately known as the dean of the utility industry, John possesses what I call informed instincts. He is able to see the trends and the larger picture. He was a strong and early advocate for cap and trade, clean air and clean energy—for example, recognizing the social responsibility of sustainability. This is characteristic of the wisdom he displays. When faced with disparate data points, he sees how they fit together. It is because of his ability to understand the landscape from a deep and wide perspective that he is able to make astute, at times out of the box, decisions and judgments.

Despite his immense intellect, John does not operate as though he has all the answers. Perhaps the best demonstration of his wisdom is his appreciation for the knowledge and insights others can bring to the table. As a leader, he enables those around him to leverage their own minds, artfully surrounding himself with an eclectic group of people rather than only those similar to him.

Wisdom comes from being wrong, he remarked. From being open to people and available to advice and differences of opinion. John’s only requirement is that people demand excellence of themselves, in whatever form that might take. He appreciates sharp intellect, but also gives superior instincts their due. He deeply respects academic talent, but is equally respectful of the perspectives, the humility, and the smarts honed by tested experience and even failure. As you might imagine, it’s important to do your homework if you report to John, but he’s happy to hear your ideas, contemplate your advice, and use your input—as long as there is thought behind it.

Hank had initially described John to me as having a magnificent mind in the broadest sense. It’s easy to see why.

HOW DO YOU KNOW IT WHEN YOU SEE IT?

Think back to the last time you needed advice about something important. Perhaps you were at a major crossroads in your career and wanted guidance on which path to choose. Maybe you were trying different ways to inspire your team to action, none of which were proving successful. Maybe it was something personal—a marital issue, a physical problem, or a poor decision with potentially large ramifications.

Who did you turn to? Your spouse, perhaps? Maybe it was your mom or dad; your rabbi, priest, or imam; your corporate mentor; your doctor, lawyer, or accountant; your psychologist; Jim Morrison’s ghost; or perhaps, that guy at Starbucks who seems like he’d have good insight into people.

Whoever it was, you probably sought their counsel because you think of them as someone who possesses a certain amount of insight and discernment. Though wisdom is an elusive attribute, we seem to instinctively associate it with certain traits or mannerisms. Put another way, different individuals in your life probably serve various unconscious needs for you. There’s a certain colleague you go to whenever you want to bounce business ideas off of someone. For relationship guidance, there’s one particular friend you always call. When it comes to money or practical matters, you speed-dial someone else. And when you feel the need for general life advice, you find there’s another person altogether who seems best suited to the task.

Why that particular person? Are they the smartest person you know? Not necessarily. The oldest? Maybe, maybe not. Is it a certain look, a way of speaking? The fact that they own a copy of the Tao Te Ching? Unlikely. More likely, they demonstrate a number of the following behaviors.

They are advice-worthy

To be wise, you must have experience. You may be young or old, but you must have experienced a wide variety of life events that have changed you in some way. As Robert Sternberg knew, wisdom is not merely raw intellectual horsepower—it is the combination of that component plus experience and personal characteristics. Those of you who are parents know this to be true. You know the experience of developing wisdom. When you became a parent, you became wiser (though not necessarily smarter).

In my experience, we typically think of our parents as wise. Indeed, I think of both my parents as being among the wisest people I know. If I think of all of the values that I have and the