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THE LEADER’S TRIPLE FOCUS

When he was just eleven years old Steve Tuttleman started reading the Wall Street Journal with his grandfather, a habit that some four decades later has been gravitating toward his tablet. Each day he checks over twenty websites, in addition to news and opinion feeds stripped by an RSS reader. Starting the moment he wakes up and then a half dozen times over the course of the day he checks breaking news, mainly on sites of the New York Times, the Wall Street Journal, and Google News. A web app organizes contents of the twenty-six magazines he currently subscribes to so that he can flag relevant articles to read later. Says Tuttleman, “If the piece is of high importance, or takes some study, or needs to be saved for reference, then I come back to it when I can devote myself.” Then there are the sector-specific publications, each tied to a particular business interest. National Restaurant News relates to a chain of Dunkin’ Donuts franchises he holds a stake in; Bowler’s Journal keeps him up to speed for managing Ebonite, a manufacturing company he owns that sells balls and the like for bowlers. The Journal of Practical Estate Planning, along with a half dozen similar publications, helps keep him abreast of what might be relevant to his role as a director of Hirtle Callaghan, which manages assets for philanthropies, universities, and high-net-worth individuals. And Private Equity Investor helps track conditions for the business he leads as president of Blue 9 Capital. “It’s a big scan, that’s for sure,” Tuttleman tells me. “Sometimes I feel it takes too much time. But I’m always making connections with what I read. It gives me a foundation for what I do.” When Tuttleman was approached in 2004 to invest in a retail chain called Five Below, he says, “They shared projections for a model store, and the numbers were right for costs and margins.” But Tuttleman went beyond the numbers, visiting one of the chain’s six stores, where he checked his inner signals against how others were reacting. “They offered an appealing selection of goods, one with a point of view. Their target customers are twelve to fifteen, and in the stores you mostly see moms with their kids. But mainly I saw people liked the store, and I liked the store.” Over the next several years Tuttleman put more money into Five Below. What had been a six-store chain in 2004 had grown to 250 by the end of 2012, and the company had gone through a successful IPO. The company went public in the wake of the Facebook IPO debacle, but it did well nonetheless. “People bring investment opportunities to me all the time,” says Tuttleman. “They give me a ‘book’ that details the numbers for a company that’s on the market. But I’ve got to weigh that in a broader context of what’s happening in society, the culture, and the economy. I’m always scanning for what’s happening in the broader world; you need a bigger field of view.” Way back in 1989 Tuttleman bought stock in Starbucks, Microsoft, Home Depot, and Wal-Mart. He still owns the same stocks. Why did he buy them? “I bought what I liked,” he explains. “I go by my gut.” When we make a decision like that, subcortical systems operate outside conscious awareness, gathering the decision rules that guide us and store our life wisdom—and deliver their opinion as a felt sense. That subtle stirring—This feels right—sets our direction even before we can put that decision into words. The most successful entrepreneurs gather data that might be relevant to a key decision far more widely—and from a larger variety of sources—than most people would think relevant. But they also realize that when facing a major decision, gut feelings are data, too. The subcortical circuits that know such gut truths before we have words for them include the amygdala and the insula. A scholarly review of gut intuitions concludes that using feelings as information is a “generally sensible judgmental strategy,” rather than a perennial source of error, as the hyperrational might argue.1 Tuning in to our feelings as a source of information taps into a vast amount of decision rules that the mind gathers unconsciously. Tuttleman’s tutorial for his gut sense very likely has roots in those early years going over the Wall Street Journal with his grandfather, who as a Russian immigrant had gotten a job in a grocery store and ended up buying the store, then buying the distributor who supplied the store. Selling that company, he became a stock market investor. Like his father and grandfather before him, says Tuttleman, “I always knew I would be an investor. Our dinner table conversation was always about business as I grew up. I’ve been in this business for almost thirty years, and always had a portfolio of companies. Every company has its own issues that I’m constantly dealing with. I’m still building that inner database.” The sweet spot for smart decisions, then, comes not just from being a domain expert, but also from having high self-awareness. If you know yourself as well as your business, then you can be shrewder in interpreting the facts (while, hopefully, safeguarding against the inner distortions that can blur your lens).2 Otherwise we’re left with cold rationality as embodied, for instance, in decision trees (applications of what’s known as “expected utility theory”), where we weight and compute the pros and cons of all relevant factors. One problem: life rarely arranges itself so neatly. Another: our bottom-up mind harbors crucial information that our top-down brain can’t access directly, let alone put into that decision tree. What looks good on paper may not be so great in actuality: say, unregulated markets for subprime derivatives or invading Iraq. “The most successful leaders are constantly seeking out new information,” says Ruth Malloy, global director of Hay Group’s leadership and talent practice. “They want to understand the territory they operate in. They need to be alert to new trends, and to spot emerging patterns that might matter to them.” When we say a leader has “focus” we typically are referring to one-pointedness on business results, or on a particular strategy. But is such single-pointedness enough? What about the rest of the repertoire of attention? Tuttleman’s business choices integrate the numbers with inputs from a wide outer scan, attuning to his gut reactions, and reading how other people feel. There’s a strong case that leaders need the full range of inner, other, and outer focus to excel—and that a weakness in any one of them can throw a leader off balance. LEADERS WHO INSPIRE

Consider two leaders. Leader 1 works as a high-level executive in a construction engineering firm. During Arizona’s housing boom in the early 2000s (and well before the resulting crash), he switched jobs over and over, each time getting a higher-level position. His agility in climbing the corporate ladder, though, was not matched by his abilities as an inspiring leader. When asked to come up with a vision statement for his company to guide it into the future, he fumbled the task. “Being better than our competition” was the best he could do. Leader 2 directed a nonprofit corporation that offered health and social services to Hispanic communities in the Southwest. His vision statement flowed freely, and focused squarely on greater goals: “to create a good environment for this community, which has been nurturing our company all these years, to make it a profit-sharing endeavor . . . and to benefit from our products.” His vision was positive and embraced an expanded view of stakeholders. In the following weeks, employees who worked directly for each leader were asked in confidence to evaluate how inspiring they found their boss. Leader 1 had one of the lowest ratings among the fifty leaders evaluated; leader 2 was among the highest. More intriguingly, each leader had been assessed on a brain measure of “coherence,” the degree to which circuits within a region interconnect and coordinate their activity. The specific region was in the prefrontal area of the right side of the brain, in a zone active in integrating thought and emotion, as well as in understanding the thoughts and emotions of others. The inspiring leaders showed a high level of coherence in this key area for inner and other awareness, the dull leaders very little.3 Leaders who inspire can articulate shared values that resonate withthe group. These are the leaders people love to work with, who surface the vision that moves everyone. But to speak from the heart, to the heart, a leader must first know her values. That takes self-awareness. Inspiring leadership demands attuning both to an inner emotional reality and to that of those we seek to inspire. These are elements of emotional intelligence, which I’ve had to rethink a bit in light of our new understanding of focus. Attention gets talked about only indirectly in the emotional intelligence world: as “self-awareness,” which is the basis of self-management; and as “empathy,” the foundation for relationship effectiveness. Yet awareness of our self and of others, and its application in managing our inner world and our relationships, is the essence of emotional intelligence. Acts of attention are woven throughout the very fabric of emotional intelligence because at the level of brain architecture the dividing line between emotion and attention blurs. The neural circuits for attention and those for feelings overlap in many ways, sharing neural pathways or interacting. Because the brain interweaves its circuits for attention and for emotional intelligence, it turns out that some of this shared neural circuitry also sets these skills apart from the more academic variety, as measured by IQ.4 That means a leader can be very smart but not necessarily have the focusing skills that come with emotional intelligence. Take empathy. The common cold of leadership is poor listening. Here’s how one CEO candidly assessed his own trouble with this form of empathy: “My brain races too much, so even if I’ve listened to everything somebody said, unless you show that you’ve digested it, people don’t think they are being well heard. Sometimes you really don’t hear because you’re racing. And so, if you really want to get the best out of people, you have to really hear them and they have to feel like they’ve been really heard. So I’ve got to learn to slow down and improve in that dimension, both to make me better and to make the people around me better.”5 A London-based executive coach tells me, “When I give people their feedback from others, very often it says an executive does not listen attentively. When I coach them on getting better at paying attention to people I often hear an executive say, I can do this.” I point out, “You can, but the question is how often you do this.” We pay careful attention in moments that matter most to us. But amid the din and distraction of work life, poor listening has become epidemic. Still, attentive listening pays dividends. One CEO told me about a time when his company was locked in a struggle with a state agency over the purchase of a large tract of forest land. Rather than just leaving the matter to lawyers, the CEO made an appointment with the head of the agency. At the meeting, the agency head launched a tirade of complaints about the CEO’s company, and how the land needed to be conserved rather than developed. The CEO simply listened attentively for fifteen minutes. By then, he saw, his company’s needs and those of the agency could be made compatible. He proposed a compromise where the company would develop only a small portion of the tract, and put the rest into a conservation trust for perpetual protection. The meeting ended with the two shaking hands on a deal. BLINDED BY THE PRIZE

She was a partner at a huge law firm who drove her team crazy. She micromanaged, constantly second-guessing them, rewriting reports that didn’t meet her standards even though they were perfectly fine. She could always find something to criticize, but nothing to praise. Her steadfast focus on the negative demoralized her team—a star member quit and others were looking to move laterally in the firm. Those who, like that too critical lawyer, have this high-achieving, super-focused style are called “pacesetters,” meaning they like to lead by example, setting a fast pace they assume others will imitate. Pacesetters tend to rely on a “command and coerce” leadership strategy where they simply give orders and expect obedience. Leaders who display just the pacesetting or command style—or both—but not any others create a toxic climate, one that dispirits those they lead. Such leaders may get short-term results through personal heroics, like going out and getting a deal themselves, but do so at the expense of building their organizations. “Leadership Run Amok” was Harvard Business Review’s title for an article about the dark side of pacesetting, written by Scott Spreier and his colleagues at Hay Group. “They’re so focused on the prize,” Spreier told me, “they’re blinded to their impact on the people around them in the room.” Spreier’s article offered up that hard-driving law partner as a prime example of pacesetting at its worst. Such leaders don’t listen, let alone make decisions by consensus. They don’t spend time getting to know the people they work with day in and out, but relate to them in their one-dimensional roles. They don’t help people develop new strengths or refine their abilities, but simply dismiss their need to learn as a failing. They come off as arrogant and impatient. And they are spreading. One tracking study finds that the number of people in organizations of all kinds who are overachievers has been climbing steadily among those in leadership positions since the 1990s.6 That was a period when economic growth created an atmosphere where raise-the-bar-at-any-cost heroics were lionized. The downsides of this style—for example, lapses in ethics, cutting corners, and running roughshod over people—were too often winked at. Then came a series of flameouts and burst bubbles, from the collapse of Enron and the dot-com debacle on. This more sober business reality put a spotlight on the underside of pacesetters’ single-minded focus on fiscal results at the expense of other leadership basics. During the financial crisis of 2008 and onward, “many companies promoted strong, top-down leaders, who are good for handling emergencies,” Georg Vielmetter, a consultant in Berlin, told me. “But it changes the heart of the organization. Two years later those same leaders have created a climate where trust and loyalty evaporate.” The failure here is not in reaching the goal, but in connecting with people. The just-get-it-done mode runs roughshod over human concerns. Every organization needs people with a keen focus on goals that matter, the talent to continually learn how to do even better, and the ability to tune out distractions. Innovation, productivity, and growth depend on such high-performers. But only to a point. Ambitious revenue targets or growth goals are not the only gauge of an organization’s health—and if they are achieved at a cost to other basics, the long-term downsides, like losing star employees, can outweigh short-term successes as those costs lead to later failures. When we’re fixated on a goal, whatever is relevant to that point of focus gets priority. Focus is not just selecting the right thing, but also saying no to the wrong ones. But focus goes too far when it says no to the right things, too. Single-pointed fixation on a goal morphs into overachievement when the category of “distractions” expands to include other people’s valid concerns, their smart ideas, and their crucial information. Not to mention their morale, loyalty, and motivation. The roots of this research go back to Harvard professor David McClelland’s studies of how a healthy drive to achieve fuels entrepreneurship. But from the start he noted some high-achieving leaders “are so fixated on finding a shortcut to the goal that they may not be too particular about the means they use to reach it.”7 “Two years ago I got some sobering performance feedback,” confides the CEO of a global office real estate firm. “I was great on business expertise, but lacking when it came to inspirational leadership and empathy. I had thought I was fine, so at first I denied it. Then I reflected and realized I often was empathetic but shut down the moment people were not doing their job well. I get very cool, even mean. “I realized my biggest fear is of failure. That’s what’s driving me. So when someone on my team disappoints me, that fear kicks in.” When fear hijacks him that CEO falls back on pacesetting. “If you don’t have self-awareness when you get hooked by the drive to achieve a goal,” says Scott Spreier, who coaches senior leaders, “that’s when you lose empathy and go on autopilot.” The antidote: realizing the need to listen, motivate, influence, cooperate—an interpersonal skill set that pacesetting leaders are typically not familiar with using. “At their worst, pacesetters lack empathy,” George Kohlrieser, a leadership maven at IMD, a Swiss business school, told me. Kohlrieser teaches leaders from around the world to become “secure base” leaders, whose emotionally supportive and empathic style encourages the people they lead to work at their best.8 “We’re all pacesetters here,” the CEO of one of the world’s largest financial firms admits a bit ruefully. But having a pack of pacesetters need not be damaging to morale: it can work if everyone there has been selected for a high level of talent and drive to succeed—that is, pacesetting. But as one financial analyst described a bank where a pacesetting culture led to brash treatment of its customers, “I wouldn’t put my money there—but I’d recommend buying the stock.” MANAGING YOUR IMPACT

In the spring of 2010, in the first weeks after the disastrous BP oil spill in the Gulf of Mexico, as countless sea animals and birds were dying and residents of the Gulf were decrying the catastrophe, BP executives were a textbook example of how not to manage a crisis. The height of their folly came when BP CEO Tony Hayward infamously declared, “There’s no one who wants this thing over more than I do. I’d like my life back.” Rather than showing the least concern for the spill’s victims, he seemed annoyed by the inconvenience. He went on to claim the disaster was not BP’s fault, blamed its subcontractors, and took no responsibility.9 Widely circulated photos showed him at the peak of the crisis blithely sailing on a yacht, taking a vacation. As a BP media relations exec put it, “The only time Tony Hayward opened his mouth was to change feet. He didn’t understand the animal that is the media. He didn’t understand the public’s perception.”10 Signe Spencer, coauthor of one of the first books on workplace competence, tells me there is a recently identified capability seen in some high-level leaders—called “managing your impact on others”—by skillful leveraging of their visibility and role to have a positive impact.11 Tony Hayward, blind to his impact on others, let alone to public perception of his company, set off a firestorm of antagonism, including front-page articles demanding to know why he hadn’t been fired yet, and even President Obama declaring he would have fired him. Hayward’s exit from BP was announced the following month. The disaster has since cost BP up to $40 billion in liabilities, saw four executives charged with negligence, and led to the U.S. government forbidding BP further business—including new oil leases in the Gulf—because of “lack of business integrity.” Tony Hayward offers a textbook case of the costs of a leader with deficits in focus. “To anticipate how people will react, you have to read people’s reactions to you,” says Spencer. “That takes self-awareness and empathy in a self-reinforcing cycle. You become more aware of how you’re coming across to other people.” With high self-awareness, she adds, you can more readily develop good self-management. “If you manage yourself better, you will influence better,” Spencer says. Hayward during the oil spill crisis seems to have failed in each of these areas—and flunked managing his impact. This triple focus demands attention juggling, and leaders who fail at that do so to their own and their organization’s detriment.