What Makes a Great Leader?

When Ajay Banga took over as CEO of Mastercard, in 2010, he knew that disruption of the payments industry was imminent. But rather than compete for market share within the 15% of global payments that were already electronic, he decided to focus the company’s growth on the 85% that were still made by cash and check transactions. For him, the financial inclusion of individuals and small businesses that lacked access to the formal financial system became both a business imperative and a societal responsibility. It called for new mindsets and behaviors around talent, clients, the market, technology, and government. To innovate for an increasingly diverse customer base, Mastercard’s employees needed to grow and diversify their core while also building new businesses. But at the time, those employees ranked “innovation” 26th out of 27 factors important to the company’s future success. Something needed to change, both internally and in how the company collaborated with the customers, communities, and governments it wanted to serve. So Banga tasked one of his executives, Garry Lyons, with infusing Mastercard’s culture with innovation. With a significant incremental investment, and free rein to spend it as he saw fit, Lyons accepted the opportunity to be what Banga described as a “catalyst of change.” To create that change, Lyons developed Mastercard Labs, a global R&D network designed to show employees, customers, and stakeholders, in his words, the “art of the possible.” During Banga’s 10-year tenure Mastercard Labs was instrumental in accelerating the company’s transformation from a nonprofit association of banks to an independent global technology company in the payments sector. As a for-profit corporation, it saw its market cap grow by more than 360%. This story comes from a new business-case series that one of us (Linda) taught to a group of high-potential executives at Harvard Business School. Even though the class knew how the story would turn out, only three students out of 85 said they would have accepted Lyons’s position. By the end of the class discussion there were a few more recruits — but also an entire blackboard filled with all the formidable barriers to innovation that Lyons faced. Although the participants lamented the pressures of short-termism and organizational inertia arising from age and size, their most fundamental concerns were the emotional and intellectual challenges inherent in innovating at scale. What Great Leadership Means to HBR Readers Following are lightly edited responses to a survey that HBR editors shared with our LinkedIn group in July 2022. Active listening, a willingness to admit mistakes, and humility. — Jeya, Aotearoa, New Zealand A good leader must have inclusiveness in their DNA. — Anirban, Kolkata, India The leader gets their team in a car and gets to the strategic destination, with all team members helping reach it. — Joe, Branchburg, New Jersey, USA Vulnerability is the most underrated leadership competency. By sharing our mistakes and how we overcame them, our weaknesses and how we seek support, and our privileges in how our identities are seen and received by society, we can develop deeper bonds of trust on our teams. — Ashley, Charlotte, North Carolina, USA A good leader is a person with open-mindedness who is able to understand other people’s ideas and motivations. A good leader also has confidence, accountability, resilience, integrity, and a vision. — Seraphine, Nairobi, Kenya A good leader listens, displays empathy, and knows when to coach versus when to mentor versus when to simply support the choices an employee makes. — Dutch, Denver, Colorado, USA A leader walks with you and takes you to the goal. — Rakesh, Chennai, India Their reluctance to step into a challenging but necessary leadership role gave us pause. Their nervousness wasn’t unwarranted: In the 21st century, leadership has become harder as stakeholder expectations have increased, global execution has become more complex, digital transformation has become an imperative, and innovation is ever more critical to sustained success. But according to our research, the type of leadership the world needs today is what Banga and Lyons embody: a mixture of skills that spark innovation within an organization and across external organizations and ecosystems. In this article we will explain how various streams of research over the past decade led us toward this discovery. We will examine the characteristics of this new type of leadership — characteristics we describe using the terms architect, bridger, and catalyst, or ABCs — and why helping more individuals develop an innovative mindset and skill set is so crucial for the future of business and society. Leading Innovation: Collective Genius 1.0 For the past 20 years, in collaborations with young researchers and executives, Linda has been conducting longitudinal on-the-ground research on leaders at the cutting edge: those who have built organizations that can innovate not just once but routinely. In 2014 Linda, Greg Brandeau, Emily Truelove, and Kent Lineback shared initial research in their book Collective Genius, which explored the intersection between leadership and innovation. With hindsight, it’s clear that this book captured a paradigm shift in what makes for great leadership within organizations. The business world was moving into an era in which agility, innovation, and digital technology were key drivers of competitiveness. In this new world the job of leaders was no longer about getting others to follow them into the future; instead it was about inviting others to co-create the future with them — a process driven by teams composed of individuals with diverse expertise and experience who were willing and able to collaborate, experiment, and learn together. All the leaders in the book were visionaries who knew that innovation was rarely the result of an individual genius’s having an “aha” moment. Consequently they adopted an inclusive definition of leadership and did all they could to democratize innovation. They believed that everybody had a “slice of genius” — their talents and passions — that could be unleashed and leveraged to develop innovative solutions to stakeholders’ pain points and ambitions. They successfully managed the paradoxes of innovation: supporting bottom-up creativity, initiative, and improvisation while establishing structures, performance metrics, and guardrails to minimize outsize risk-taking and keep people aligned. They also removed barriers to innovative problem-solving and built what we called “community cultures,” in which members were bound by a common purpose, shared values, and mutual rules of engagement that served as the foundation for co-creation. Instead of being at the front of the stage, showing others the way, these leaders learned to set the stage and create an environment in which others were willing and able to do the hard work of innovation. That required emotional resilience, courage, and patience to amplify diversity of thought and navigate potential conflict, experiment and iterate a path forward with many false starts and missteps along the way, and hold options open so that even opposing ideas could be integrated in creative and useful ways. Scaling Genius: Collective Genius 2.0 After the publication of Collective Genius, Linda continued to explore questions surrounding co-creation. She joined with Emily, Jason, and Karl to conduct qualitative longitudinal studies of leaders in 18 countries and 21 industries whose ambition was to transform their organizations into innovation engines. Linda and Emily also partnered with Sunand Menon and Ann Le Cam to conduct executive roundtables in three dozen countries and survey more than 1,500 executives in some 90 countries about key leadership challenges and opportunities in the digital world. When these two research streams were brought together, what stood out the most was how successful leaders were able to build not only innovative organizations but also networks and ecosystems that could co-create across organizational boundaries. These people mastered what we have come to describe as “scaling genius” (the working title of our upcoming book). In doing so they took on three interconnected functions: architect, bridger, and catalyst. Leader as architect. Scaling genius requires leaders to create the culture and capabilities that will encourage everyone within an organization — from frontline workers to senior executives — to be willing and able to innovate. That was the key leadership task explored in Collective Genius. What is different now is that the stakes are higher: Innovation matters more, and digital tools and data are key enablers of co-creation. In our new research, we describe how architects use five levers to design, build, and evolve their organizational architectures to support innovation over time: leadership style, talent, structure, operating model, and tools. With these levers they remove barriers that limit creativity and build the mindsets and behaviors required for co-creation. Take, for example, Rakesh Suri, the former CEO of Cleveland Clinic Abu Dhabi — a pioneer in robotic cardiac surgery and a leader we identified as embracing the tenets of leading for innovation. Cleveland Clinic had been at the forefront of medical innovation since its founding; scaling up to include Abu Dhabi was a bold initiative to expand access to quality health care across the globe. From the moment Suri took over as CEO, he and his executive team worked closely with the CEO of Cleveland Clinic, Tom Mihaljevic, and colleagues in the United States and with Waleed Al Mokarrab Al Muhairi, the chairman of Cleveland Clinic Abu Dhabi’s board, who represents the investment company Mubadala (Cleveland Clinic Abu Dhabi’s joint owner). Together they strove to create a health care organization in which every caregiver (their term for anyone who works in the hospital) had the mindset and the digital tools required to be an agile, innovative problem solver in behalf of patients, fellow caregivers, and the community. Watch Linda A. Hill explain the ABCs of leading innovation. When we spoke to Suri in March 2020, he was confronting his toughest leadership challenge yet: managing the hospital from home while he was in travel-related quarantine for the required 14 days. While he was physically absent, his colleagues continued to transform the hospital’s operating model as Covid-19 began to take lives, overwhelm health care systems, and shut down economies across the globe. At first Suri thought his immediate challenge was to take charge and steer the ship remotely. But he soon came to understand that his job was to “hyperempower” his people. Maintaining close contact with Al Muhairi and Mihaljevic, he and his executive team doubled down in their efforts to enhance caregivers’ capacity for teamwork, ingenuity, compassion, and resilience by protecting their mental and physical well-being. While ensuring that the hospital had the necessary cash flow to continue operating, they provided sleeping rooms, meditation rooms, nutritious food, online workouts, and new levels of stress relief, including apps and on-site grief counseling, for caregivers. During this time Suri spoke openly about his fears and sent reassuring messages to all of Cleveland Clinic Abu Dhabi’s caregivers and stakeholders. Others at the hospital followed his lead. Suri told us, “Our caregivers responded. They said, ‘Thank you for showing your humanity.’” When his quarantine ended, Suri was humbled by the caregivers’ accomplishments. Within weeks the group had managed to get a full-fledged telehealth operation up and running, performing 1,500 virtual consultations a day, and the emergency department had scaled up from 200 to 1,000 visits a day. Suri notes that leaders’ efforts had enabled caregivers to be “contemplative and creative, rather than reactive, problem solvers.” He adds, “People had stepped up, responded, and collaborated in a bigger way than I had ever seen before in my leadership career. What was even more phenomenal was that they were more empowered.” Leader as bridger. It’s already challenging enough for a leader to encourage innovation across functions or geographies or business units within an organization; it’s even more challenging to encourage employees to work closely with people outside the organization. But that’s exactly what a bridger must do: systematically gain access to talent and tools that cannot be found within the walls of a single department, division, or company. In many cases this is attempted by building separate innovation labs, incubators, and accelerators to enable diverse parties to co-create. To do that effectively, the bridger must establish social connections — a sense of mutual trust, mutual influence, and mutual commitment — across organizations, sectors, industries, and geographies. Nicole M. Jones did just that as the head of Delta’s new innovation center — dubbed The Hangar. Through three months of benchmarking, Jones learned that many existing corporate innovation labs and accelerators “chase shiny objects” from the world of high tech but fail to scale up their impact in the core business. Part of the challenge, she observed, was translating and integrating internal and external talent and capabilities. We’ve had similar findings in our research. Often innovation labs fail because the role of bridger is neglected: Too many leaders focus on contracts and intellectual property and fail to weave the social fabric required for collaboration, experimentation, and learning with diverse others. Using her background — a combination of customer experience, tech, and business strategy — Jones established the culture, strategy, and methodology for Delta’s innovation center and built a team of design thinkers, technologists, and strategists to bridge Delta’s core business, Atlanta’s academic communities, and various startups around the United States. One project involved collaborating with a startup, a government agency, and an array of cross-functional stakeholders inside Delta to create a biometric boarding pass that would streamline the end-to-end customer journey through the airport. As the bridgers, Jones and her team acquired the right partners, aligned them around shared intentions, and integrated their capabilities into a coherent solution. Within 90 days they had a pilot up and running, and in less than a year Delta had deployed the solution to all its Sky Clubs. That was just the first of many innovative solutions that Jones and her team helped scale up — and they represented only some of the innovation efforts at the company. In January 2020 Delta was featured at an unexpected venue for a legacy airline — the annual Consumer Electronics Show, a convention dedicated to leading-edge consumer technology innovation — and walked away with eight innovation awards. Just a few months later, with the onset of the pandemic, Delta went from using fingerprints to facial biometrics in Atlanta’s international terminal to provide contactless (and more sanitary) boarding experiences for travelers and gate agents. Leader as catalyst. Scaling genius often requires individuals and groups in an organization’s broader ecosystem to co-create independent of the organization. To move ideas to impact faster, the catalyst’s job is to encourage and accelerate those multiparty collaborations. As Mastercard progressed in its digital transformation and began developing digital payment solutions for customers, it realized that some financial institutions did not have the capabilities in-house to deploy those solutions. The company proceeded to catalyze co-creation by connecting legacy organizations in its ecosystem to fintechs that could help them see new opportunities and develop new capabilities. With its ability to “stitch partnerships and ecosystems together,” as Mastercard’s chief administrative officer, Tim Murphy, put it, the company transitioned from a gatekeeper at the heart of commerce to a collaborative facilitator of commerce and economic opportunity. Catalysts proactively manage the web of interdependencies in which an organization is enmeshed. They map those interdependencies and energize and activate key players, recognizing that to enable the organization to fulfill its purpose, they must empower other organizations to work differently. In many cases these others are “unusual suspects” — companies, governments, or individuals outside the industry or sector, over which the catalyst has little direct control. If leaders can’t identify and work with these unusual suspects, their organizations’ innovation efforts may be stymied. For example, in 2016 Akira Fukabori and Kevin Kajitani, aeronautical engineers at Japan’s All Nippon Airways (ANA), began to wonder why, in a world of accelerating globalization and digital connectivity, people living in remote villages or impoverished urban areas could not access high-quality education or health care. With only 6% of the world’s population flying annually, they contended that the airline industry was failing to address the fundamental challenges of mobility. The two devised a bold, futuristic solution: an “avatar service platform” — a global infrastructure of general-purpose avatar robots that individuals could rent and eventually embody with their five senses to remotely perform tasks in distant physical environments (for example, surgery, defusing a bomb, visiting elderly grandparents, attending classes, or traveling on vacation). Fukabori and Kajitani understood all too well the number and variety of actors they were dependent on to fulfill their ambition. Robotics and telecommunications technology, for instance, were far from where they needed to be to make avatar-enabled mobility a reality. Still, they embraced the complexity and scale of the task, did some preliminary mapping of the partners they would need, and got to work. They catalyzed “a movement,” to use their term — without positioning themselves at the center of the emerging ecosystem. How? Here’s one example. Early on, the two sought out industry leaders who had been working on various aspects of tele-operable hand technology — a critical bottleneck in the avatar robotics industry. In 2018 Fukabori and Kajitani obtained the necessary funding from ANA to activate a collaboration across three leading startups, which self-organized, ran joint experiments, and came up with an innovative solution. In June 2019, after less than a year of partnership, the companies debuted the first-ever bimanual tele-operable hand system at the Amazon Mars event. Jeff Bezos himself demonstrated it, fueling public interest in this relatively new technology. In addition to catalyzing technological progress, Fukabori and Kajitani worked to generate demand for avatar services. Among other things, they worked closely with local governments in Japan that were grappling with an aging population and eager to use avatar robots to compensate for workforce shortages. By 2020 Fukabori and Kajitani had built a global avatar ecosystem of 800-plus technologists, startups, corporations, nonprofits, and governments. Given their progress, ANA’s board agreed that they could better increase their impact as a separate startup, avatarin. Although they feared that the pandemic would kill their business, lockdowns created widespread demand for avatar services. Fukabori and Kajitani’s catalyst mindset enabled them to grow avatarin much faster than anticipated, and as a result, they fulfilled what they saw as a humanitarian need. Learning to Let Go of Formal Authority More and more leaders will find themselves having to perform the functions of the architect, the bridger, and the catalyst. Undergirding all three is a view of leadership that differs from that of the past. When people first become managers, most believe that their power derives from their position in the hierarchy. Yet they soon discover that their direct reports, especially the most talented, don’t follow orders. And although they may think that compliance is what they want, commitment is what they need. If people aren’t committed, they won’t take the initiative or the risks required to execute or engage in even incremental innovation. Today these realities increasingly constrain even the most experienced senior executives. In leading innovation, formal authority is a very limited source of power, because innovation is a voluntary act. Command-and-control — even as the big boss — doesn’t work; leaders must invite people to innovate and give them the space to do so. So how can leaders get their organizations to become agile, innovative powerhouses, able to move from idea to impact at scale? They must be prepared to transform themselves. That means getting comfortable exercising influence well beyond their formal authority. It also means collaborating, experimenting, and learning with unusual suspects inside and outside their organizations. We can no longer afford leaders who avoid situations in which there are “too many cooks in the kitchen.” As one executive in our research put it, you can never have too many cooks in today’s competitive environment: The job of a leader is to “get many top chefs to cook a delicious meal together that others will want to pay for.” That’s a daunting challenge for most, as the classroom discussion about Mastercard Labs revealed. It’s tough to build something new when there is so much pressure to focus on more-immediate goals — delivering products, services, and experiences to customers and profitability to shareholders. And it’s easy to give up on the more challenging roles that scaling genius requires. As the head of R&D for one global consumer-goods company observed, people came to the company with an ambition to be both value creators and game changers — wanting to work on “shoulds” and “coulds.” But they quickly learned that working on “coulds” can be a career killer. People didn’t want positions that required influence without formal authority, working with diverse groups, and the missteps and failures that come with trying to do something that has never been done before. But agile leadership characteristics are becoming a prerequisite for building competitive businesses, and those who hope to lead must be able to perform the three key roles we have described. As we reflect on the challenges that business and the world are facing, it’s clear that we desperately need people with these mindsets and skills. Linda began her work on leading innovation more than 20 years ago, just before the start of a new century. Ironically, that same year she attended a prescient talk about when, not if, we would confront new pandemics. The speaker called for more leadership and investment in public health and vaccine development. In other words, he stressed the importance of public-private partnerships and scientific innovation that only scaling up collective genius can provide. As it turns out, Michael Ku, one of the leaders we have been studying for six years, a consummate architect, bridger, and catalyst, heads the global clinical supply-chain team for Pfizer. By helping to complete the Covid-19 vaccine trials in well under a year, he and his team contributed to making the impossible possible and saved millions of lives. Our leadership challenge today is an existential one. When faced with crises, we humans tend to default to our muscle memory. But how we have led in the past will not take us where we aspire to be. The time has come to embrace a new kind of leader who is prepared to take on the promise of innovative problem-solving — who is willing and able to unleash the abundant talents and passions all around us and leverage them to create a better world.

What Makes a Great Leader?

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