Robert Steven Kaplan: An interview by Bob Morris

Posted on: June 25th, 2013 by bobmorris

Kaplan, RSRobert Steven Kaplan is the Martin Marshall Professor of Management Practice and Senior Associate Dean at Harvard Business School. He is also and co-chairman of Draper Richards Kaplan Foundation, a global venture philanthropy firm.

Prior to joining Harvard Business School in September 2005, Rob served as Vice Chairman of The Goldman Sachs Group, Inc. with oversight responsibility for the Investment Banking and Investment Management Divisions. He was also a member of the firm’s Management Committee and served as Co-Chairman of the firm’s Partnership Committee and Chairman of the Goldman Sachs Pine Street Leadership Program. During his career at the firm, he also served in various other capacities including Global Co-Head of the Investment Banking Division (1999 to 2002), Head of the Corporate Finance Department (1994 to 1999) and Head of Asia-Pacific Investment Banking (1990 to 1994). Rob became a partner in 1990.

Rob is the founding Co-Chair of the Harvard Neuro Discovery Center. He is also Co-Chairman of the Board of Project A.L.S., Co-Chairman of the Board of the TEAK Fellowship, Co-chair of the Executive Committee for Harvard University Office of Sustainability Greenhouse Gas Emission Implementation Planning, and is a member of the Boards of the Harvard Medical School, Harvard Management Company (served as Acting President and Chief Executive Officer, November 2007 to June 2008), the Ford Foundation, and the Jewish Theological Seminary. Previously, Rob was appointed by the Governor of Kansas as a member of the Kansas Healthcare Policy Authority Board (2006-2010) and also served as a member of the Investors Advisory Committee on Financial Markets of the Federal Reserve Bank of New York.

Rob is a member of the Board of the State Street Corporation, is a Senior Advisor to Indaba Capital Management, LLC, is an Advisory Director of Berkshire Partners LLC and is chairman of the Investment Advisory Committee of Google, Inc. Previously, he was a member of the Board of Bed, Bath and Beyond, Inc. (1994-2009). He also serves in an advisory capacity for a number of companies. Rob received an M.B.A. from Harvard in 1983 and a B.S. from the University of Kansas in 1979.

Prior to attending business school, Rob was a certified public accountant at Peat Marwick Mitchell & Co in Kansas City.

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Morris: Before discussing What You’re Really Meant To Do, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Kaplan: My parents. They taught me values and encouraged me to strive to do my best. They also encourage me to be myself and reach my own unique potential (even if it was a little offbeat at times)

Morris: The greatest impact on your professional development? How so?

Kaplan: I have been fortunate to have several great coaches in my professional career. Hank Paulson was one of them. He was blunt and direct with me and encouraged me to define my job broadly. He also encouraged me to speak up and disagree—–and basically act like an owner. He watched him model this behavior. At Harvard, Nitin Nohria as well as other professors have been great coaches. Nitin also was blunt and direct and encouraged me to find a teaching style that fit my personality. He has always been quick to point out where I might improve. Hank and Nitin each regularly sought my advice. Coaching each of them turned out to be great coaching for me — it allowed me to better understand what it was like to do their jobs — a fabulous learning experience for me.

Morris:
Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.

Kaplan: I loved my career at Goldman Sachs. I believed in business principle number 1: if the client succeeds, our own success will follow. This principle formed the basis for my career and my leadership style. After 22 years at the firm, I began to believe that there were other ways I could add value to society/others. That caused me to take a leave of absence in 2005 to teach leadership at Harvard. That was a transformative experience and I decided that I could add more value teaching/writing and coaching others much more extensively. Becoming partners in my venture philanthropy firm was an additional way to use what I was teaching at Harvard and apply it to building social enterprises—–so this is a natural extension of my business and professional career. All these activities have been focused on trying to add value to others. Along the way, I have learned that adding value to others is a sustainable way to do well professionally and feel good about what I was doing.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Kaplan: Education has been critical. First at Kansas and then at Harvard Business School. It helped me build the confidence that I could go out and do things in the world. It taught me to put myself in the shoes of a decision maker and figure out what I would do if I were in his/her shoes. This is why I am a big believer in education as a foundation for reaching your unique potential.

Morris: What do you know now about the business world that you wish you knew when you when to work full-time for the first time? Why?

Kaplan: There are multiple ways to solve a problem and add value. There are seldom right answers. So, you’ve got to use your abilities to diagnose a situation and use your best judgment on what to do and how to do it. You WILL make mistakes — when you do, admit them and go back and try to fix them. I don’t know is often the right answer.

Morris: Of all the films that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.

Kaplan: I like films about people who figured out what they believed and had the guts to act on it in a way that added value to others. So, there are lots of movies that have characters who did that. I’ll pick an odd one — Stranger Than Fiction because I really liked the movie — particularly the offbeat cookie maker. You’ll have to see the movie to see what I mean. The movie also reinforces that you can be the author of your own script.

Morris: From which non-business book have you learned the most valuable lessons about business? Please explain.

Kaplan: Biographies have been my favorites — particularly books by William Manchester regarding Churchill and MacArthur. I also love the book by John Wooden about leadership/basketball — business leaders can learn a tremendous amount about sticking with a fundamental business philosophy versus being obsessed with outcomes.

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-Tzu’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Kaplan: Leadership is a team sport — learning to work with others is a critical skill. This means articulating a clear vision, setting priorities, giving coaching, getting coaching and learning to seek advice from the team. All these activities

Morris: Next, from Voltaire: “Cherish those who seek the truth but beware of those who find it.”

Kaplan: As a leader, it is often better to ask the right questions (and listen) than to have all the answers.

Morris: And then, from Oscar Wilde: “Be yourself. Everyone else is taken.”

Kaplan: Authenticity is critical to leadership. That means trying to be yourself — this involves some self-disclosure, admitting what you don’t know and being willing to ask questions.

Morris: From Albert Einstein: “We cannot solve our problems with the same thinking we used when we created them.”

Kaplan: Business and leadership is about the future. What worked five years ago is unlikely to work tomorrow.

Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Kaplan: Vision and priorities should precede actions. Actions should be judged through the prism of how the firm adds value and the key competencies it seeks to build.

Morris: In Tom Davenport’s latest book, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?

Kaplan: Again, leadership is a team sport.

Morris: Here’s a brief excerpt from Paul Schoemaker’s latest book, Brilliant Mistakes: “The key question companies need to address is not ‘Should we make mistakes?’ but rather ‘Which mistakes should we make in order to test our deeply held assumptions?'” Your response?

Kaplan: I would put it another way, you WILL make mistakes. Do they come in an effort to achieve your vision? Do you learn from mistakes? Do you admit mistakes?

Morris: In your opinion, why do so many C-level executives seem to have such a difficult time delegating work to others?

Kaplan: If you’re the smartest person in the room, it can sometimes be hard to learn to delegate — the person to whom you’re delegating will do the task worse than you would — and it will annoy you!

One reason leaders don’t delegate is they haven’t been sufficiently clear with the team regarding their vision and key priorities — so that the team understands where the firm is going. If everyone is on the same page, it’s a lot easier to delegate effectively.

Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”

Here’s my question: How best to avoid or overcome such resistance?

Kaplan: Change efforts happen when a firm is out of alignment with achieving its vision. If the organization has broad buy-in on a clear vision, the need for change becomes much clearer. It also helps to over-communicate what you’re doing and why you’re doing it. Lastly, the leadership needs to spend as much time on “how” changes are being made and “what” changes are being made. Human beings are involved and there are winners and losers—–managers need to come up with a detailed plan of action for how changes will be made that takes into account that this will be traumatic for a number of people.

Morris: In recent years, there has been criticism, sometimes severe criticism of M.B.A. programs, even those offered by the most prestigious business schools. In your opinion, in which area is there the greatest need for immediate improvement? Any suggestions?

Kaplan: MBA education is changing and adapting. For example, at HBS, we have introduced FIELD which emphasizes more experienced based learning — in addition to our case method classes. We have also created an innovation lab which gives students the opportunity to work with others in the University on starting new ventures. New cases are constantly being written which improve our ability to discuss ethics, responsibility of leaders for externalities their businesses create, and sustainability. Cases must be more global. Business education must constantly be changing and being updated to improve the quality of the student experience. On line courses will be a key part of supplementing course offerings and providing opportunities for life-long learning. Like any industry, business schools must continue to think and re-think how they add value to students and create thought leadership.

Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any Advice?

Kaplan: Why do leaders fail? Isolation and inability to learn. They are afraid to express doubt, admit vulnerability or seek advice from subordinates. Leaders must actively work to seek feedback and a reality check. They must be open to asking questions and framing issues. As the world becomes more complex and global, the risk of isolation becomes greater. The need for leaders to be open to learning becomes greater. Great leaders will need to ask the right questions and balance inquiry with advocacy.

Morris: You identify seven “areas of focus.” On which do those who aspire to become a leader seem to have the greatest difficulty focusing? Why?

Kaplan: It really varies by leader. There are three main areas of focus: vision, priorities and alignment. It is critical to articulate a clear vision—how do we add value based on what key competences? Some leaders fail to be clear enough or fail to update the vision based on changes in their industry and in the world.

Vision must be translated into 3 or 4 top priorities. Many leaders have too many priorities or never actually translate vision into priorities. Why? It takes a lot of thought and requires the leader to make choices. Choices involve making trade off decisions—explicitly.

For some leaders, they are great at articulating a vision with priorities but they are lousy at implementation/alignment. This could be due to weak interpersonal skills and/or their own idiosyncrasies. In short, their
Leadership style may be holding them back. They may not truly understand themselves and they need coaching to recognize their weaknesses and blind spots. This is why I wrote the second book.

Morris: Now please shift your attention to What You’re Really Meant To Do. When and why did you decide to write it?

Kaplan: As I mentioned, the first book deals with vision, priorities and alignment. It encourages leaders to ask questions, reflect and seek advice. It reminds them that leadership isn’t about having all the answers.

There’s an additional step that leaders need to take; they’ve got to understand themselves. The first book gets you to a point but you have to understand yourself to fully exploit the techniques discussed.

Morris: Were there any head-snapping revelations while writing it? Please explain.

Kaplan: Every person I meet is struggling with how to understand themselves and reach their full potential. No one has it fully figured out. It is a life long struggle—-there isn’t a precise destination or arrival.

Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?

Kaplan: It is based on advice I’ve been giving for 20 years so that part was consistent. To help people with this struggle, I have to reveal my own struggles. So, the book may have been better therapy for me than I had originally envisioned.

Morris: Does one’s “unique potential” change significantly over a period of time? Please explain.

Kaplan: Absolutely. You’re changing, the world is changing, and your hopes and aspirations are regularly being updated. That’s why I say this is a life long struggle—for everybody.

Morris:: The meaning of the word “career” in 2013 is certainly quite different than it was when I began my first full-time job as an English teacher and football coach at the boarding school in New England. In your opinion, what does the word mean today?

Kaplan: Rather than the word career, I prefer to discuss how you make a positive I pact on the world. This could mean raising your children, professional activities, non-profit work, or various other actions you take that impact others. I have found that, at all ages, people want to be needed and play a role in impacting the world.

Morris: You suggest five “rules of the road” during a journey to fulfill one’s unique potential. Which of the five seems to be most difficult to follow?

Kaplan: Screening out peer pressure and conventional wisdom. It is so powerful, that most of us aren’t even aware of how much it is influencing our decisions.

Morris: How best to determine one’s [begin italics] current [end italics] strengths and weaknesses? Are there any especially important do’s and don’ts to keep in mind while doing so? Please explain.

Kaplan: Step one is to take ownership of figuring these out. It starts with writing them down but, to take ownership, you have got to seek feedback of those who directly observe you—this is scary and uncomfortable for many people. It’s no fun to hear negative feedback and most people don’t want to stick their necks out to give it to you. So, you have to ask.

This exercise is about awareness. Often, the right answer is NOT to I prove certain weaknesses—-it’s not realistic. Instead, sometimes, the better strategy is to focus on strengths and surround yourself with people who can complement your skills. However, you have to first do the analysis.
Morris: Why is it so important to recognize and understand one’s [begin italics] passions [end italics]?

Kaplan: Passion is the rocket fuel that helps you perform at your best. It helps you get through bad days, injustices, hardships and disappointments. It is hard to perform at a high level for a sustained period of time without passion for what you’re doing.

Morris: How and why can the process of formulating and then sharing a personal narrative help us to understand ourselves better? Please explain.

Kaplan: You basically have three types of stories. There’s the facts—-without any narrative—-where were you born, parents, school degrees etc. Then there’s the success narrative we tell to explain those facts. This is an inspiring story of how you achieved, overcame obstacles, and got to where you are today. We all have a lot of practice with this story.

Then, there’s a third story. The failure narrative. This is a story you don’t usually tell but it is ever present in your head. It’s a story about shortcomings, self-doubt, and uncertainty. This is a story which we might not tell anyone—–but it is in our heads when we’re making a decision. Writing down this story is about self awareness and better understanding of why you do what you do.

Morris: What is “injustice”? How best to avoid or over come it?

Kaplan: We have all had injustice happen to us. It often shapes our failure narrative. For example, maybe you were fired and not you don’t trust colleagues as easily in the future. You may not overcome injustice but you need to be aware of how it affects you today. You can’t avoid injustice but that doesn’t mean you need to be a prisoner of it.

Morris: When is the “clock” in our heads more beneficial? When does it create the most serious problems? Please explain.

Kaplan: There is usually a clock in our heads regarding decisions we make and the course of our lives. Sometimes this clock is helpful in that it get us to move rather than put off key actions. Other times, it creates us false sense of urgency that can cause us to overreact, lost patience and make poor decisions. In raising this issue in my book, I want people to be aware of the clock in their heads and question whether that clock is helping or hindering the quality of each particular decision.

Morris: How do you define a “purpose”? Why is it important to serve one?

Kaplan: In my opinion, you have to have a vision for how you add value to others through your product or service. Why do you exist? All of us need a reason to get out of bed in the morning and enthusiastically approach each day. Some people say money is their purpose—–my reaction is that, if money is your purpose, you risk running out steam well before you make a lot of money. Money is an outcome that comes as a result of adding value for a sustained period of time. I encourage people and companies to search for and articulate the vision for why they are doing what they’re doing.

This vision must be realistic — it has to be based on clear distinctive competencies. Again, what would the world lose if you didn’t exist? A vision is very powerful because it gives you a basis to judge every action you take. Every action should be viewed through the prism of whether it furthers the vision.

Morris: Jim Collins has much of value to say about how a good company can become great. In your opinion, how can a good [begin italics] person [end italics] become great?

Kaplan: Great companies create an environment in which employees act like owners. They do this through clear communication, articulation of clear vision and priorities, coaching and openness to debate/discussion. I would argue that this type of environment helps people to be at their best — and helps the company to be at its best.

Morris: What are the drivers of a healthy, mutually beneficial relationship?

Kaplan: Mutual understanding, trust and respect.

Morris: To what extent (if any) do they differ from the drivers of a healthy, mutually beneficial [begin italics] business [end italics] relationship?

Kaplan: You don’t have to like someone to have a good relationship with them. Personal relationships are often based on affection — professional relationships can have affection but they must have mutual understanding, trust and respect.

Morris: For many (most?) people, it is difficult to find their “right path” and even more difficult to remain on it. Threats and perils as well as self-doubts occur but so do opportunities that, if pursued, alter the course of the path. Rick Warren has much of value to say about the purpose-driven life and Clay Christensen asks himself as well as others, “How will you measure your life?”

Here’s my question for you: Of all that you have learned during your own journey of self-understanding thus far, what is the single lesson that you consider most valuable?

Kaplan: You never do arrive at a destination. You have to work at it and take ownership of the process. What resonates at age 25 is likely to change by age 35 and 45. The process never ends. Realizing this has been a big breakthrough for me.

Morris: For more than 25 years, it has been my great pleasure as well as privilege to work closely with the owner/CEOs of hundreds of small companies, those with $20-million or less in annual sales. In your opinion, of all the material you provide in What You’re Really Meant To Do, which do you think will be of greatest value to leaders in small companies? Please explain.

Kaplan: Reaching your potential is a disciplined process. Like losing weight or getting in shape — there is no final destination and it requires you to dust off atrophied muscles. You have to work at it. If you do, I think you will dramatically improve your leadership.

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Rob cordially invites you to check out the resources at these websites:

His HBS faculty page

His Amazon page

His YouTube videos link

His BIG THINK link

His Twitter link

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