How departing leaders can pass along their wisdom to employees – Hal Gregersen

Hal Gregersen, Executive Director of the MIT Leadership Center

Hal Gregersen, Executive Director of the MIT Leadership Center

From Harvard Business Review

Earlier this spring I had the chance to witness two of the “farewell talks” that Ed Catmull gave to the people of Pixar. Catmull, the company’s cofounder and long-time leader (and also president of Disney Animation Studios since the Disney acquisition of Pixar over a decade ago) had announced his retirement in late 2018. He chose to spend his last day on Pixar’s Emeryville campus not being celebrated by his colleagues but, instead, sharing thoughts about the challenges they would face in the years to come.

Each “farewell talk” was a separate, hour-long session with a different team in the company, but the content wasn’t tailored to specific departments. Catmull shared — over and over again — what he believed the whole company should be thinking about as it looks ahead.

Catmull has always been unusually reflective about the challenges of leading creative organizations, and generous in sharing the practices he finds effective. In his 2014 book Creativity, Inc. (which he’s now updating with new learnings), for example, he shares useful insights and learnings aimed at helping other leaders succeed. In his farewell talks, he showed the same level of thoughtfulness. He decided to:

Make the sessions inclusive. It’s not uncommon for departing CEOs to have transitional talks with their top teams. But how many consider it important to talk with every team in the company? Catmull talked to everyone, including hundreds of people who had never sat in meetings focused on high-level strategic issues — but whose efforts make Pixar films possible. As a result, his parting act was immensely unifying.

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Raising wages is the right thing to do, and doesn’t have to be bad for your bottom line – Zeynep Ton

MIT Sloan Adjunct Associate Professor Zeynep Ton

MIT Sloan Adjunct Associate Professor Zeynep Ton

From Harvard Business Review 

The “working poor” are a growing problem in America — one that is increasingly embarrassing to the corporate elite. Business leaders who are morally inclined to do the right thing should and can play a stronger role in solving this problem by raising wages to a level where their employees’ earnings cover the cost of living.

Jamie Dimon, CEO of JPMorgan Chase, was recently stumped in a U.S. House Financial Services Committee hearing when California Congresswoman Katie Porter asked him what advice he could give to a constituent — one of his own bank’s tellers, who makes $2,425 a month and lives with her daughter in a one-bedroom apartment with a $1,600 rent in Irvine. Food, utilities, childcare, and commuting cost about another $1,400, leaving her $567 short every month. Dimon had no good answer.

Yet Dimon is one of a number of corporate leaders — others include Warren Buffett, Ray Dalio, and Paul Tudor Jones — who have expressed public concern that the version of capitalism that has allowed them to be so successful is not sustainable for our society. The data are daunting. Between 1980 and 2014, while the pre-tax income doubled for the top 1% and tripled for the top 0.1%, there was little change for the bottom 50%. In 2017, more than 45 million Americans worked in occupations whose median wage was below $15 an hour. Although wages increases have finally been accelerating, 40% of Americans are living so close to the edge that they cannot absorb an unexpected $400 expense—not much, as car repairs or dental work go.

For business leaders operating in settings like that of JPMorgan Chase, where profit margins are high and low-wage employees are a small driver of overall costs, doing the right thing morally is not even that risky. Some wage increases would even pay themselves by increasing productivity and reducing turnover — employees would be more motivated, less distracted with life problems, and less eager to find a better job. For those leaders compelled by the same moral argument but operating in businesses with low profit margins and a high percentage of low-wage employees, doing the right thing morally is still possible. But it requires a lot more work.

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