Faces of HR

Being Warm and Demanding Makes a Good Leader and a Good Culture

Often, what makes leaders and workplace cultures great is that they are warm and demanding. The best organizations function when their leaders, HR team, internal brand, and culture all match their external brand. Getting that balance right, however, can be challenging. I recently discussed the issue with an expert with many years in the field of HR.leader

Meet John Reid-Dodick, Chief People Officer of AlphaSense, an artificial intelligence (AI) company that provides business insights.

How’d you get into HR?

I actually started life as a lawyer, originally with a law firm called Sullivan & Cromwell, and I then moved in-house to a client, which was Reuters. I moved there in 1995, and in 1997, I became general counsel of Reuters America. And then in February 2000, I was asked by the Chief Executive of Reuters America if I would move from leading the legal department to leading the HR function, with the goal of transforming and modernizing it. I agreed I’d do it for a year and then go back to being a lawyer, which I thought was my passion. But then I fell passionately in love with HR, and I’ve never fallen out of love since; it’s been a little over 20 years now that I’ve been in the profession.

A lot of law school and a lot of late nights to then just go over into HR, huh?

I joke that I was born and raised to be an HR person but didn’t know that until I became one. With the benefit of hindsight, I found I always oriented toward people things.

Even in law school—I was on the Law Review, and rather than writing a piece for publication or aspiring to one of the editing roles, I became what was called the Managing Editor, which involved organizing the work of the students putting out a monthly legal publication.

When I was at Sullivan & Cromwell, I got very involved in recruiting and helped organize the entertainment portion of the summer outing and the litigation section of the summer associates program, those sorts of things.

My first manager role was when I was leading about a 40-person legal department in Reuters America. I was more energized by the managing side of my role and the opportunity to grow the team than by the substantive legal work. We had the good fortune of growing fairly ambitiously at that point. We grew from 8 to 23 lawyers and also added a number of other professionals. I loved the recruiting process, and I think that’s what the Reuters America CEO saw in me when he proposed I move into HR.

And you said you never looked back. Have you found that your career has taken a sort of natural path?

That’s a hard question to answer. I don’t know if, for the past couple of decades, anyone’s career has taken a natural path. The best way to put it is that I probably moved to adjacent opportunities. In February 2000, I became Head of HR for Reuters America and did that for about a year. During the course of that, I led an HR transformation, which involved bringing in Deloitte and applying a very structured approach to doing the transformation.

And then the Reuters America CEO was announced as the new CEO for Reuters globally, and he put in a large-scale change program to reorient how the company ran itself—from regions to global customer segments. At that point, I had a year of doing structured change, so I was asked if I would lead what became known as the People and Capabilities track of that transformation. It was a short-term assignment based out of London; I commuted regularly to London for that.

Part of the change program was to globalize the various corporate functions. I helped with the organizational design of the HR function, and when that work was complete was asked to take on a global HR role reporting to our chief HR officer, and moved to London for that role.

Then, it just progressed from there. Part of it was the good fortune of being in the right place at the right time. But I was also fortunate—all of us should be so lucky—to be able to do work I was passionate about, such as leadership, culture change, transformation, learning, talent, etc. And the roles I had after that tended to flow from that passion.

I did a lot of work in large-scale culture change. Over the past 15 to 20 years, I’ve led the people and culture work streams in about six large-scale transformations, ranging from completely re-architecting Reuters after our stock dropped from 16 pounds to 96 pence in 2003 to the merger several years later of Reuters and Thomson Financial to helping modernize Dun & Bradstreet to helping scale and grow WeWork.

As someone in that position, you kind of have to roll with the punches. Why don’t we talk about a few of those punches. You mentioned WeWork. WeWork is very interesting and something I’ve been following kind of closely because of its exponential growth and then of course the … what would you call that? Cataclysmic detonation. I think one of the things that impresses me the most is that it survived it. Were you there during that time?

Yes, I was there for four years. I joined in January 2016, and my last day was February 1 of this year.

Oh really?

My time at WeWork was in two halves.

The first half, from January 2016 to January 2018, was as chief people officer, and we scaled aggressively during that time. We grew from 1,000 to 4,100 people, from $300 million in revenue to over a billion, and from 16 to 65 cities, that kind of thing. So it was a pretty big rush of growth at that point.

In January 2018, I took on a role I had proposed for myself that stepped out of the chief people officer role to orient externally around something we called the “cultureOS,” which stands for “culture operating system.”

For most of my 4 years at WeWork, I worked directly for our co-founder, Miguel McKelvey, who along with Adam Neumann created the company. Miguel was a terrific partner for me, a creative entrepreneur, and a leader I really enjoyed working with.

We had developed, initially for our own use, this concept that culture is the output, and the critical thing is to focus systemically on the right inputs. We used to joke that the inputs are not Ping-Pong, foosball, or free lunch—those are “cultural confetti.” The inputs that truly shape culture are more profound—things like purpose, leadership, citizenship, space, connection, talent, agility, and platform. Those are the components that made up the cultureOS.

Essentially, you need to look at all of those things and bring design thinking and intent to how you activate those in support of the culture you need. As I mentioned, we had developed that framework to use internally, and it was featured as a case study that Professor Jeffrey Rayport taught at Harvard Business School in his class on scaling tech ventures.

During 2017 as our enterprise business started to really grow, we found that more and more large companies were interested in WeWork to use workplace as a lever to evolve their cultures. Often, the client’s CHRO was partnering with the head of real estate on this effort, and I found myself more and more being asked to join client meetings.

I mentioned earlier that I’d led the people and culture workstream in several large-scale change programs. Well, in every case I’d treated real estate as a way to shape culture and had partnered with the head of real estate in those efforts. And at Dun & Bradstreet, real estate reported directly to me.

Given the market opportunity, we formed a small team to use cultureOS thought leadership externally to help influence how companies think about culture and in particular the role that space can play in shaping culture. So for the last 2 years, I worked with some key clients in building really good relationships and helping to grow their revenue materially with WeWork.

I really like the idea of looking at culture as an export because then, that means you’re ideally aligning your employer brand with your culture, right?

It’s a really interesting question. The way we positioned the cultureOS with companies was to separate out two concepts: one is aspiring to be a great place to work, and the second is having a culture that helps drive your business strategy.

All companies should aspire to be great places to work. And there are lots of things they can do to achieve that, many of which fall under the concept of “employee experience.” But those things are not necessarily unique to those companies or directly tied to their strategy.

Culture should be a separate concept. It’s not enough just to say “We have a great culture.” What you want is to have the right culture for your business; so that your culture helps you achieve your business strategy. That’s why we use the phrase “culture operating system”—to position culture as something you “operate” in service of your business strategy.

I’ll use this example. One of WeWork’s enterprise clients was a global energy company. Its strategy was evolving fairly materially from a traditional oil and gas business to one that could address “the dual challenge”—meeting the increasing demand for energy in the world while also materially reducing carbon emissions. This required the company to get better and better at delivering traditional energy in ways that are much more energy-efficient while also creating lots of new alternative sources of energy.

The culture that had historically served its traditional oil and gas business really well was more hierarchical, safety-oriented, and control-oriented. And yet its new business strategy required increased innovation, more risk taking, less hierarchy, greater agility, those kinds of things. In effect, to be less traditional and more modern. They had a superb chief HR officer who was looking at various ways to evolve their culture. He created a role focused on workplace modernization, moved a senior leader into that role, and then engaged WeWork and the cultureOS team to partner with that person to develop a strategy to modernize their workplace as a way to support their broader efforts to modernize their culture.

I always encourage companies to think of culture as being directly connected to business strategy and then, in parallel with that, also trying to be a great place to work.

That’s a good answer. I always find it strange that there are leaders who say, “You really think we should have to make this a good place to work?” It’s just so crazy to me. Where we work, they’re pretty nice. But I’ve worked for some real pieces of work before, and I just don’t get it. It just doesn’t make sense from any perspective you look at it, any measurable metric, any personal beliefs—to treat your employees badly.

You don’t save money, you don’t get harder work, you don’t get more quality, and you don’t get innovation. You don’t get any of the things you want if you want your company to succeed.

It’s such a fascinating conversation. This is a very simplified view, but think about two basic dimensions: (1) product market fit and (2) what it’s like to work in your company.

If you’re a company that’s very fortunate to have superb product market fit, you can probably get away with being jerks. But I think that’s a near-term advantage, not a long-term advantage.

And likewise, it’s not enough just to treat your people great if you don’t have product market fit and you don’t have a business model that actually works.

However, companies that have product market fit and treat their employees really well and nurture the kind of place, as you said, that can innovate, experiment, take risks, and grow, what’ll happen is you’ll be able to keep evolving more over time and just become a better and better business.

I guess there are certain people who don’t have the perspective of understanding the results of their behavior. You would think that at some point, certain leaders might think, “I’m always having arguments with my managers,” or “I keep getting pushback, or “I keep having to fire people.” You’d think someone maybe would have an awareness at some point that “maybe I’m not that good at this part of it; maybe I should find someone who is. And that person can take care of the people part, and I’ll just be the numbers guy.” Have you navigated situations like this before?

I’ll answer your question first with a conceptual framework, and then more squarely with specific examples.

There’s a book by Chip and Dan Heath, and they use this metaphor of the elephant and the rider, where the rider is the rational self and the elephant is the emotional self. So many business leaders are taught to focus on the rational—on numbers, plans, spreadsheets, data, etc. They think if they can do that well, they can persuade the rider to take the elephant somewhere. But if you can connect with people on a more human and emotional level—in effect engaging the elephant rather than the rider—then it doesn’t matter what the rider wants.

It’s the concept of connecting with people on a more authentically human level that underlies things like servant leadership, the inverted pyramid, vulnerable leadership, or similar leadership practices. Leaders who master the human dimension do an exceptional job of leading their team and their business units.

This was crystalized for me a few years ago in a context unrelated to business. I’m on the board of KIPP New Jersey, which is a network of charter schools in Newark, Camden, and now Miami. I was having a conversation with their senior leaders, and someone made the casual observation that “the best teachers are those who are warm and demanding.” And I remember pausing in the moment and thinking, “What a beautiful description of the best leaders: warm and demanding.”

I’ve had the good fortune of working with some exceptionally good leaders who have mastered the art of being both warm and demanding—people like Tom Glocer, who was the CEO of Reuters and then Thomson Reuters, and now, he’s the Lead Director of Morgan Stanley; Devin Wenig, who went on to be the CEO of eBay; Bob Carrigan, who was the CEO of Dun & Bradstreet and is now the CEO at Audible; and Miguel McKelvey at WeWork. And it’s part of the attraction of being at AlphaSense and working for our co-founder and CEO, Jack Kokko.

In developing leaders, I think it’s critical to help them understand the “the soft stuff is the hard stuff” and the importance of connecting with people at a more human level. In doing so, you’re sort of pushing uphill against probably decades of leadership 101 or what people learn in business schools, but I think we’re headed to a better place of leaders.

I think so, too. It takes a moment like what we’re going through right now to offer us all the opportunity for a little bit of introspection. Whether we’ll properly take advantage of that opportunity is another question because human behavior being what it is, in all likelihood, we’ll just go back to the way everything was as soon as this is all over. But maybe not.

I guess I wouldn’t do the job I do if I didn’t say that being human and caring and connected to others is more important than ever. But I fundamentally do think it’s more important than ever.

It’s interesting because if you reflect on the conversation we’ve been having, we’re talking about leadership and the critical role that being a good human plays in being a good leader. We’re talking about the connections between people and how they work. We’re talking about concepts that have been emerging over the past decade and are very much the future of work.

We’ve also been talking about culture. And that too is a way of thinking more deeply about the human dimension of business. Leading the cultureOS team at WeWork over the past 2 years, I saw firsthand how committed CEOs were to investing in their cultures. And those were large, global companies—that’s everything from the CEOs of Walmart, BP, Travelers, and a whole range of others. What I’ve seen is a real, serious, and thoughtful focus on culture – from the Board to the CEO to other senior leaders.

This is also translating into an increasingly important role for chief HR officers to play in helping other leaders elevate and activate a focus on culture. I was talking to a good friend of mine recently who is on the board of three global companies, all of which have over 100,000 employees. He was telling me that among the board directors who are in his network, they now have more conversations about how to hire the right CHRO than any other C-suite role.

I think this was building before COVID, and I believe COVID will somehow be an accelerator of that process.

Interesting.

I’m also really intrigued by what the current crisis ultimately means for what I would describe as cultures of acceleration.

Jack Welch in the 90s famously defined high-performing organizations as ones where the pace of change inside is faster than the pace of change outside. Then you fast-forward to 2016, and Thomas Friedman’s latest book called Thank You for Being Late. He talked about how we were entering what he referred to as the “supernova of acceleration” that results from three forces: technology change, market globalization, and climate change.

So if Jack Welch was speaking over 20 years ago on how you move faster inside than outside and the world we’re now in is so much quicker, how do organizations stay ahead of that? How do you move even more quickly?

I think part of the answer lies in a metaphor that Miguel McKelvey introduced me to at WeWork—the difference between “roundabouts” and “stoplights.” Urban planners can tell you that cities organized with roundabouts, sometimes called traffic circles, move traffic more efficiently than cities organized with stoplights. In effect, roundabouts work because drivers have a shared understanding that enables autonomous decision-making in a context that they’re experiencing in real-time. Stoplights are rules that tell drivers what to do and when to do it.

I think part of helping organizations thrive in an ever-accelerating world involves getting comfortable moving away from rules, hierarchy, command and control and instead creating and embracing more and more roundabout practices based on trust, autonomy, transparency, and shared purpose.

I’ll give you a couple of examples that illustrate what I mean by roundabout practices.

There’s a concept that Amazon refers to as one-door and two-door decisions. A two-door decision is when you make a decision and go through the door, but you were wrong and can easily turn around and go back through the door. A two-door decision should be made at the level of information—whoever has the best information should be empowered to make the decisions. A one-door decision is one you’re stuck with once you make it. WeWork signing a 30-year lease—that’s a one-door decision. Those need to be made at the level of authority with a robust decision-making process.

But that’s an interesting practice to be able to delegate more and more decisions to the people best positioned to make them.

Another example relates to T&E approvals. I’ve heard of a company that stopped requiring managers to approve T&E reports. T&E reports are approved whenever they’re submitted, because the company was able to use AI-enabled auditing to actually detect where there were issues to look into. In addition to freeing up a lot more time, that nurtured greater trust between managers and the people who work for them.

I think it’s very valid and reminds me a lot of the development of AI and ants to a small degree, too. In the beginningI don’t know if you’re a science fiction guybut Isaac Asimov had these rules: three rules that would govern all robots not to destroy all people. I’m simplifying it, but basically, robots can’t hurt people; they must listen to people unless it would result in hurting someone, and they must protect themselves unless it means disobeying or hurting people.

There’s been endless discussion about this. The idea was that you give instructions to this machine, and it can do the things you want it to do. And then as experts started developing AI, they realized they were never going to be able to write a complete set of instructions that can govern all interactions in a human world. It was infinitely complex. The more instructions you give, the more you needed to give. So instead, they gave boundaries to AI and the ability for them to find their own instructions.

This has been seen in many fascinating ways. That’s kind of what’s happening in organizations. You can’t just have one guy say what everybody has to do. It just doesn’t work; there’s too much going on. And you’re talking about the change of pace. The rate of change is impossible at this point for people to keep up with in that way.

You really need people to find where they’re comfortable and make the decisions where they’re comfortable and see where they need to improve and not have to ask tons of permission to go make those improvements. Work together more like a hive than a hierarchy.

The key is to figure out how to do this at scale across large organizations. There was a point in Reuters when we engaged a leadership consulting firm in London founded by former members of the Royal Marines. They had adapted a military concept called “Mission Analysis” to corporate practices. Mission Analysis had emerged when traditional command and control proved unsuited to the speed and complexity of modern military conflicts. And it’s quite similar to what you were saying. A good mission analysis that a commander would share is very clear on the what, the why, the resources, and the constraints to enable as much latitude on the how as possible.

Yeah. I think people find it a lot more satisfying.

Yeah.

You’re involved, you’re working with teams, and you’re covering new ground. The only other important side of that, once you’ve created this framework for allowing people to succeed, is making them feel safe to fail.

Yeah. So powerful.

It’s very encouraging, and in an odd way, this COVID situation has really forced that down everybody’s throats. You have people working from home who have never worked from home. You have organizations struggling to survive, and it requires leaders to stop being so controlling because they really have to say, “What do you guys think? How are we going to do this?” They really need the help of their employees. And some people are situated to do that really well, and others will either learn or fail.

And of course, some have failed. I’m curious to see what lessons are learned from this really big challenge. I’m hoping it won’t be like every other time we’ve had a depression when everything stagnates afterward for a long time, as everyone’s so afraid something bad will happen again like what happened in 2008.

I’m hoping that because it’s a disease, it’s the kind of thing that is going to have an end date. There’s going to be a day when it’s pretty much not a big deal anymore; that void will just be filled again with employees and companies spending money and people going back to work and all that other stuff.

It’s such a fascinating policy question. You look at some countries like the Netherlands and France and the way they’re building fiscal policy by recognizing this as a disease and not as a systemic failure. Recognizing that there’s a finite period to the disease, what they’re trying to do is keep companies intact and keep their people paid and employed. A metaphor I’ve read is you’re almost trying to put the economy into an induced coma, after which businesses can restart and they’re functioning as they were before.

Conceptually, that makes a lot of sense to me.

I’ll give an example. A good friend of mine is Simon Kim, who runs a Michelin-starred fantastic restaurant in New York City called Cote, a Korean steakhouse. He’s got great leaders, great employees, people who have worked for him in different restaurants over the years; it’s an incredibly positive culture. He’s pivoting, like so many small business people, to doing delivery; creating kits that people can prepare at home; providing meals for healthcare workers and first responders. His goal is to try to sustain his team during the course of this crisis. It would be crazy to let a business like Cote fail during this crisis – to say to someone like Simon: close your restaurant; default on your rent; terminate all your employees; have your people collect unemployment insurance; and then somehow, 3 months, 6 months, or 9 months from now, go and build another restaurant. Why would he just not be able to pause that restaurant and then restart it?

And then you multiply that by many thousands of enterprises and see the scale of the challenge we’re facing.