There are three modern business leaders that I have studied that:

  • Are great examples of being Mind 3.0 (i.e., highly vertically developed) leaders that…
  • Have actualized transformational change in the organizations they led.

These leaders are:

All three of these leaders took their organizations from deeply in the dumps to wildly successful.

  • Mulally took Ford from an annual loss of $12.7 billion to being one of the most respected brands in the world.
  • Catmull resuscitated Disney Animation from being stale to breaking box office records.
  • Nadella has led a 10x growth in market cap and stock price in the eight years he has been CEO.

As I have studied these three leaders, I have asked myself two primary questions:

  • What is it about them, as opposed to other leaders, that have allowed them to actualize transformational change in their organization?
  • What have they done that has been pivotal in the process of actualizing the transformational change?

In my last article, I answered the first question (see What Mind 3.0 Leaders Do to Actualize Transformational Change – Part 1).

In this article, I am going to start answering the second question. (I was writing the article and it got too long, so I broke it into two parts.)

What Do These Leaders Do to Actualize Transformational Change? – Part A

Of course, Mulally, Catmull, and Nadella did 1,000s of things that led to successful transformation. But, in my observation, there are four foundational things that they did, upon which all other actions and decisions rested upon. Stated differently, these four things became filters that they used to pass any decision making through.

Before I identify these four things, I want to make two observations, one that feels more like good news and the other that feels more like a challenge:

  1. These things are all replicable (which is the good news).
  2. The success of the implementation of these things hinges upon the leader’s vertical altitude (which is the challenge). The higher the leader’s vertical altitude the more they will be able to leverage the power of these things.

This week, I am covering the first two things. Next week, I’ll cover the last two.

1. Mind 3.0 leaders develop an inspirational, clear, and stakeholder-centric purpose

What I have observed is that:

  • Mind 1.0 leaders generally don’t develop a purpose, but their focus is on doing what is most easy or comfortable.
  • Whether Mind 2.0 leaders have a formalized purpose or not, their purpose is generally focused on hitting certain performance outcomes.
  • Mind 3.0 leaders invest in developing an inspirational, clear, and stakeholder-centric purpose.

lightbulb

Observe how the three leaders developed a purpose for their organization:

Mulally – Knowing the storied history of Ford, Mulally looked to Ford’s past for inspiration. He found an advertisement from 1925 that read:

Opening the Highways to all Mankind

An organization, to render any service so widely useful, must be large in scope as well as great in purpose. To conquer the high cost of motoring and to stabilize the factors of production—this is a great purpose.

For Mulally, this became Ford’s northstar: “Opening the highways to all mankind.” 1,000s of decisions were passed by this purpose: Does this allow us to better open the highways to all mankind?

In my personal communication with Alan, he told me that a big part of this purpose included: A focus on creating long-term value and profitable growth for all of Ford’s stakeholders (e.g., customers, dealers, employees, suppliers, community, etc.).

Catmull – In his book, Creativity Inc., Catmull states: “While there was much innovation that enabled our work, we had not let the technology overwhelm our real purpose: Making a great film.” Everything gets filtered through this purpose: Does this allow us or help us to make a great film? In support of this, he also states: “We realized that our purpose was not merely to build a studio that made hit films but to foster a creative culture that would continually ask questions.”

Nadella – After becoming CEO of Microsoft, already had an inkling of a renewed purpose of Microsoft. In his first email to the organization, he stated:

Qi Lu captured it well in a recent meeting when he said that Microsoft uniquely empowers people to “do more.” This doesn’t mean that we need to do more things, but that the work we do empowers the world to do more of what they care about — get stuff done, have fun, communicate and accomplish great things. This is the core of who we are, and driving this core value in all that we do — be it the cloud or device experiences — is why we are here.

Nadella then spent the next year listening to employees. He said it was the most important thing that he could do. All of this listening was in an effort to develop a clear purpose statement, which resulted in: “To empower every person and every organization on the planet to achieve more.”

And then, every decision the company made was filtered through this purpose: Does this help ___________________ achieve more?

2. Mind 3.0 Leaders Develop a Clear Set of Values & Lovingly Hold Their Leaders Accountable to Them

A purpose statement identifies what an organization does, with a “why” behind it. But, a clear set of values defines how they are going to do it.

path

For Mulally, he developed a working together culture grounded in a set of 11 values:

  1. People first…Love ‘em up
  2. Everyone is included
  3. Compelling vision, comprehensive strategy, and relentless implementation
  4. Clear performance goals
  5. One plan
  6. Facts and data
  7. Everyone knows the plan, the status, and areas that need special attention
  8. Propose a plan, positive, “find-a-way” attitude
  9. Respect, listen, help, and appreciate each other
  10. Emotional resilience – trust the process
  11. Have fun – enjoy the journey and each other

For Catmull, if you read Creativity, Inc., it is clear that Catmull instilled values that fuel creativity:

  • Honesty
  • Candor
  • Embracing failure
  • Remedy any psychological fears
  • Conflict is healthy
  • Change is our friend
  • Embrace randomness
  • Uncover what is unseen

For Nadella, one of his biggest priorities when taking over as CEO was the culture of Microsoft. In fact, he said that the “C” in CEO stands for “Curator of Culture.” To elevate Microsoft’s culture, Nadella invested in the development of growth mindsets. Specifically, he:

  • Put together a growth mindset team, focused on promoting the value of a growth mindset around the organization
  • Did a monthly webinar where he talked about the things that he had been learning
  • Encouraged employees to learn about a growth mindset
  • Had employee tags updated to include the saying: “From ‘know-it-all’ to ‘learn-it-all’”
  • Encouraged teams to ask, “Was this a growth or a fixed mindset meeting?” after every meeting.

Not only did these leaders use these values to help guide decision making, but they also were relentless in ensuring employees, particularly their executive teams, lived up to these values. They didn’t cut any slack for “top performers” because they were “top performers.” They were either “on board” with these values or they were making the decision to work elsewhere.

Summary

Thus far, I have identified two foundational things that Mind 3.0 leaders do to actualize transformational change:

  1. Develop a clear purpose
  2. Develop clear values

While these things seem pretty basic, Mind 1.0 and Mind 2.0 leaders rarely, if ever, prioritize these things.

But, they are replicable.

Although, without a Mind 3.0 leader, how they are executed will likely be different than what we saw with Mulally, Catmull, and Nadella. It is likely that in the execution of these things, a Mind 1.0 leader will focus on ease and comfort, and a Mind 2.0 leader will focus on performance outcomes. And, in so doing, their ability to be transformational will be limited.

Thus, these things are not boxes to be checked off. If leaders want to actualize transformation, they need to, in this order:

  1. Vertically develop
  2. Institute vertically developed practices like developing a clear purpose, developing clear values, and creating a psychologically safe environment for their leadership team.

If you want to learn more about vertical development and its importance for leaders, here are some resources: