THEIR BREAKTHROUGH FORMULA Volume Volume

9

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Click Korn Ferry Briefings The Voice of Leadership

@KornFerryInstitute.com

Gary Burnison Chief Executive Officer

Michael Distefano Women CEOs Speak Chief Operating Officer, Asia Pacific Jonathan Dahl See the latest updates, including Editor-in-Chief

podcasts and TV news coverage, from Russell Pearlman Korn Ferry’s landmark study, “Women Managing Editor CEOs Speak.” A summary of the Nancy Wong Bryan coverage is at engage.kornferry.com/ Copy Editor womenceosspeak. Amy Roberts Copy Editor

Creative Directors Robert Ross Lose the Resume, Roland K Madrid Art & Production Land the Job Daniel Botero Mary Franz This year’s job market is strong—but how to find the right opportunities? Marketing & Circulation Manager Stacy Levyn Rozen In his just-released book, “Lose the Resume, Land the Job,” Korn Ferry Project Manager Tiffany Sledzianowski CEO Gary Burnison provides rare insights from his own (and the com- Digital Marketing Manager pany’s) years of hiring. See his weekly Edward McLaurin

columns at kornferryinstitute.com. Marketing Coordinator Naz Taghavi

Leadership News, Contributing Editors Every Week Lexie Barker David Berreby Korn Ferry’s experts reveal leadership Simon Constable lessons from the news each day, be it on Martin Coyne the latest Brexit talks or a major merger, Patricia Crisafulli William J. Holstein summarized in our “This Week in Lead- Karen Kane ership” email on Thursdays. Sign up at Doron Levin kornferryinstitute.com. Christopher O’Dea Glenn Rifkin P.J. O’Rourke Shannon Sims Meghan Walsh Peter Zheutlin

Contributing Illustrator Peter Horvath

Contributing Photographer Randall Cordero

2

Contents

Think About This: The division president warned her she would likely be fired if she took the tough job in Atlanta. “I went anyhow,” said the woman, a future CEO.

Cover Story Women CEOs: Their Breakthrough Formula In a landmark study, Korn Ferry researchers interviewed and assessed the top women chiefs. Is there a pattern to how they got there? 26 Auto Illustration by: Just Super/Getty Images; Portrait courtesy of Platon

4 Voices on... Features Starts on page 9

Risk Management New from Corporate chiefs are getting back to Down Under: taking some big risks—just as the 10 world may shift on them. American Toll Roads Hiring Crumbling US The surprising consequences of infrastructure treating job candidates badly are hurts many firms. forcing smart firms to update an 12 Could help come outdated system. from Australia? 36 Leadership Big media outlets have been publish- ing more commentary on leadership. 14 Should the C-suite listen? A World with History Industrialist George Pullman built a No Backup Plan town to keep his workers happy. 16 Digital systems and It ultimately enraged them. AI are taking over many functions before software The Global designers can make Economy them fail-safe. Why a seemingly small 3 percent pay raise can Is there time to cause major headaches for 18 fix this? organizations. 44

On the Board The three most pressing 20 issues for board directors. The Face of Leadership Forget facial Emotional recognition. Intelligence A world- In an age when technol- renowned ogy moves at such hyper photographer speeds, adaptability is 22 uses only a especially critical. camera to dive into the psyche of world leaders. Downtime: 52 Lessons in Taking It Easy

Auto Illustration by: Just Super/Getty Images; Portrait courtesy of Platon Starts on page 59

5 From the CEO

Gary Burnison

Chief Executive Officer, Korn Ferry

men when they take their first CEO job. Organiza- tions can identify potential future CEOs early and get them in profit-and-loss and operating roles. n Building expertise and credibility in STEM A Moment or finance/business early in their careers enables women to show results in measurable terms and get close to how the business makes money—two in Time keys to getting more promotions and roles that move a person closer to the CEO role. n lthough it may seem Women are driven by achieving business results and making a positive impact. Challenge is that we are more motivating for women, but so is purpose and mis- A sion. Organizations can frame roles in terms that divided than united energize women. n these days, there is a sincere Women’s leadership qualities—courage, desire among organizations to risk-taking, resilience, managing ambiguity, and collaboration—prepare them to be leaders in a be more inclusive overall. Hope- complex and uncertain future. ful and genuine, this desire Among the women who participated in the Korn Ferry-Rockefeller Foundation study was is changing the conversation former Western Union CEO Christina Gold, who within organizations today. today is a member of several boards, including Korn Ferry’s. Over dinner, Christina recounted Korn Ferry is committed to helping foster this to me her career path, which led to the top spot change. We joined with The Rockefeller Founda- at Western Union, where she nearly doubled the tion’s “100x25” campaign, which has a goal of revenue during her leadership tenure. Like many advancing 100 women to the top role in Fortune leaders in the Korn Ferry-Rockefeller Foundation 500 companies by 2025, to learn more about female study, Christina never thought about becoming leaders. Our joint report, “Women CEOs Speak,” a CEO early in her career. When she started out, produced some important takeaways for women there were few opportunities for women. Her first and organizations. Here are some highlights: job out of college was counting coupons for the n Women could be ready for the CEO role sooner. local grocery store—at a time when a man with On average, women are about four years older than a college degree could easily land a supervisory

6 Korn Ferry Briefings The Voice of Leadership

State Street Global Advisors installed “Fearless Girl” on International Women’s Day 2017 to spark a conversation about the power of women in leadership.

position. Her break came when she was hired by Avon Products as an inventory clerk in Canada. Christina went on to a series of firsts as a woman Sculpture by Kristen Visbal at Avon, from becoming its first female marketing planner to eventually becoming the first female presi- dent of its North America operations. But when Senior roles in human resources that can open the she first went into mar- door to the C-suite keting there, Christina and legal are valuable, but do not provide and the boardroom. told me, she was asked the kind of experience operating roles do As our discus- whether her husband that help open doors to the C-suite. sion turned to the would mind if she trav- headlines today eled. That question seems unfathomable today. about sexual harassment and misconduct, Christina But Christina took it in stride: “I never thought described how boards are asking tougher questions of what I faced as being obstacles. My solution was these days about whether incidents have occurred to work really hard, do a great job and keep pushing. at any level of their organization. It’s more than You have to deliver—there is no shortcut here.” Her knowing whether training and prevention programs advice for women who want to become leaders (com- exist; rather, boards want to know about their effec- pletely in line with the “Women CEOs Speak” report) tiveness. “This is a moment in time when things are is to pursue operating roles. As she put it, senior roles changing,” Christina said. “I don’t think it will ever in human resources and legal are valuable, but do be the same.” not provide the kind of experience running parts of Amen to that. Times, they are a-changin’—for a business and having profit-and-loss responsibility the better.

7 A NEW BOOK BY GARY BURNISON

PROVEN ADVICE FROM THE NEW YORK TIMES BEST-SELLING AUTHOR & CEO OF KORN FERRY

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NOW AVAILABLE WHEREVER BOOKS ARE SOLD Voices on…

“Risk-taking is perhaps the most difficult decision a leader will make.” The Rise of Risk page 10

Voices on... Risk Management Hiring Leadership page 10 page 12 page 14 Elizabeth Schaefer Sarah Lim Kevin Cashman Korn Ferry senior client partner, Korn Ferry managing director, Korn Ferry senior client partner Industrials practice leader of European Retail practice and leadership coach Voices on... Risk Management

The Rise of Risk

Corporate chiefs are getting back to taking some big risks—just as the world may shift on them.

By Russell Pearlman

t’s something that corporate But rarely has the decision to open corporate chiefs may dread at times and wallets ever been so hard. A revived global I embrace during others: risk. economy has many leaders feeling it’s the perfect They know full well that most time to be bold. But activists and stockholders businesses and markets don’t are chomping at the feet of boards and CEOs, grow without taking bold moves. After all, questioning higher costs. Is there any right move? where would Netflix be if it hadn’t poured bil- “Risk-taking is perhaps the most difficult deci- lions into the unorthodox step of making its sion a leader will make,” says Elizabeth Schaefer, own television shows and movies? Or Coach, if it senior client partner in Korn Ferry’s Industri- hadn’t expanded well beyond its ubiquitous style als practice. “It’s even more difficult in a good of leather bags? economy like this.” Illustration by: Katie Edwards/ Getty Images

10 Korn Ferry Briefings The Voice of Leadership

At the moment, many companies seem to be “I lay out my vision and let them rip it to shreds,” in a dice-rolling mood. The headlines say it all, he says. “The result is stronger decisions in real with multibillion-dollar mergers almost common, time.” Even hearing the same opinion from people global hiring up, and stock markets breaking all of different backgrounds helps. Simply adding sorts of records. Last year, capital spending at US social diversity to a group makes people believe firms rose 4 percent, after years of that differences of perspective might being flat (and the year before actu- exist among them, and that belief ally falling), while the country keeps makes people change their behavior, adding jobs. Clearly, it’s game on at says Katherine Phillips, a professor at one company after another. Columbia Business School. But should leaders be so Experts say leaders also shouldn’t confident—and, more importantly, let their own personal circumstances how best to make such a critical call? Increase in cloud their risk-taking decisions, Certainly, many analysts are US firms’ capital because their natural preferences may nervous about a number of economic spending in 2017. not be what’s best for the organization. developments across the globe that That may sound obvious, but there’s they feel will bring down all these a library’s worth of research showing cheery results. They believe any savvy CEO needs that CEOs are, well, human. Older CEOs invest less a very clear strategy and process for determining in research and development than younger CEOs risk—a playbook of sorts. and tend to make acquisitions that diversify the According to Christopher Metzler, CEO of the company’s business, rather than buying direct wellness consulting firm HFW, that playbook competitors, says Matthew Serfling, a professor at starts with a simple but often overlooked step: the University of Tennessee who has studied how looking inward. He suggests CEOs make sure age affects CEO decision-making. “Risk-taking to ask their own charges and C-suite members decreases as CEOs age,” he says. Other research for guidance, and invite dissent. Studies have shows how female leaders take fewer risks than shown, in fact, that hearing dissenting voices male counterparts, and that CEOs Illustration by: Katie Edwards/ Getty Images can provoke more thoughtful decision-making. who served in the military take fewer risks than those who didn’t. Finally, before the leader The Takeaway makes a move, he or she has With the global to ask whether the organiza- economy tion has the workforce to pull changing more rapidly, off the risk-taking endeavor. corporate Indeed, experts say getting the leaders need talent right within the organiza- better strategies tion is about as important as for deciding on the decision to take the risk in bold moves. the first place. A lack of a talent strategy has scuttled calculated risks in good and bad economic times. “It’s not just about filling open positions—a CEO must step back and determine specific talent requirements that need to be filled in order to execute business strategy,” says RJ Heckman, a vice chairman of Korn Ferry.

11 Voices on... Hiring

Hiring, the Nice Way

The surprising consequences of treating candidates badly is forcing firms to update an outdated system.

By Chana Schoenberger

ob applications are responded and family to stop being a customer as well, says to within a day. Candidates to Sarah Lim, a managing director at Korn Ferry who be interviewed receive helpful heads the firm’s European Retail practice. J emails with directions and nearby Experts say the problem isn’t so much turn- coffees shops and landmarks. ing down candidates, it’s the typical “ghosting” The interviewer has snacks ready and knows the that has been endemic to the process. So the best candidate’s history. A rejection may come, but is firms are revamping the whole approach, with prompt and with a full explanation. speedy replies, better talent matching and more If this isn’t the kind of hiring process most thoughtful interviews. Johnson & Johnson created people would recognize, it’s because companies an online system that tells candidates how long across the globe are struggling with a deluge of it will take to move to the next phase and what applications while hoping to save on rehiring costs that next stage entails. The pharmaceutical giant with careful scrutinizing of candidates. But it also is looking at artificial intelligence, robotics, turns out that job applicants are not just getting virtual reality and other technologies to help angry with the system—they’re getting even. create “an exceptional, more diverse workforce,” According to a new Korn Ferry survey, three- says Sjoerd Gehring, J&J’s vice president of talent quarters of job candidates around the world say acquisition and employee experience. they likely would stop buying products or services Changes like these may not eliminate the sting from a company where they had a bad interview of being rejected for a job, but experts say they experience. Worse, nearly half would urge friends may keep candidates from becoming angry critics. Infographic by: Column Five Media

12 Korn Ferry Briefings The Voice of Leadership

JOB HIRING: A BROEN SYSTEM

NORTH AMERICA EUROPE LATIN AMERICA ASIA PACIFIC WORLDWIDE

CANDIDATES WHO...

86% 81% 82% 79% 79% 76% 75% 75% 72%

56% 51% 48% 47% 45% 36% 34% 30% 31% 25% 29%

...would not likely ...would likely turn ...would likely urge ...said recruiters remain a customer down a job oer if their friends and family did not paint an with a company they were treated to stop being customers accurate picture of after having a bad poorly during an after having a bad the hiring company interview experience. interview. interview experience. or the job role.

WHAT SOME COMPANIES ARE DOING ABOUT THE EXPERIENCE

WHAT AGGRAVATES 1. Researching the 2. Providing detailed CANDIDATES THE MOST candidate before directions to the oce, the interview. including nearby landmarks and cafes. 1. Not hearing back from the recruiter or hiring manager.

2. People being rude 3. Acting professionally 4. Introducing candidates to during the interview. (turn o phones and the culture and potential shut down computers). bosses and colleagues.

3. Not receiving enough information about the job. ?

4. Getting conflicting 5. Sending constructive 6. Encouraging candidates information about the feedback quickly, to contact the company job or the company. even to candidates even when there’s no who didn’t get the job. specific job to apply for.

Source: Korn Ferry survey, October 2017

13 Voices on... Leadership

How to Run a Company (According to the Media)

A number of big-name media outlets have been publishing more commentary on leadership. Should the C-suite listen?

By Meghan Walsh

t goes as far back as the ancient management positions in its “On Leadership” Greek philosophers, when Plato column. Fred Allen, who writes on this topic for I famously asked, “Who should Forbes, describes that title’s coverage as a pyra- rule?” (He contended leaders mid, with aspirational ought to be well-trained—and leadership content serv- insisted, naturally enough, they should be philos- ing as the foundation that ophers.) In more modern times, business-school builds to the C-suite. “It’s The Takeaway professors then built an entire industry on devel- a term that’s been growing Critiquing oping leaders for tomorrow. Now comes a new up,” Allen says. leaders is one breed of experts on this: the media. While no one seems thing; hands-on experience or With the topic something of an irresistible to think journalists have training to lead buzzword (and, yes, this magazine likes it), media deepened our understanding is another. outlets in growing numbers have been appointing of how leaders are culti- “leadership editors” and creating entire sections vated, to their credit, they on leadership. Not surprisingly, skeptics are have made the study of quickly questioning the trend, asking what these it more accessible to more newly minted “experts” can tell society about how people—even cable networks have designated to and who should rule. leadership reporters. And, when done well, the Apparently, in the media’s view, there’s media provides a framework for understanding. quite a bit to tell. Dive into one of the many “We’re looking for ways to connect the academic “leadership” tabs appearing on mainstream news research to the world we see around us,” says sites and you might come out with everything Lillian Cunningham, host of the Washington from “five easy tips to becoming your best Post’s Presidential podcast, which during the self” to a detailed look into Howard Schultz’s election famously took listeners, with journalist delicate transition of power at Starbucks. Fast as translator, through every executive term since Company’s section on leadership offers career George Washington, in a search to understand each advice, while the Washington Post focuses on commander-in-chief’s legacy. Illustration by: Stuart Kinlough/Getty Images

14 Illustration by: Stuart Kinlough/Getty Images tor Kathleen Davis. tor Kathleen edi Company senior Fast out points men, than different very be sometimes can leaders women from expect we what And says. Allen reaction,” and action all “It’s Trump. to Obama electing from went country the how consider ply rapidly—sim change expectations Meanwhile, steps.) five easy in economy global the conquer can’t You alert: (Spoiler either. much, help doesn’t medium the of cation oversimplifi MBAs. The have who ahandful take or topic—give the on training formal little have typically is no Abraham Lincoln without the Civil War, for War, for Civil the without is no Abraham Lincoln There disruption. some of result the from come or born with are people something are dencies Still, both editors and reporters reporters and editors both Still, To some degree, of course, leadership ten leadership course, of To degree, some - - Korn Ferry Briefings Google search results on on results search Google “corporate leadership” - - 15 The Voice of Leadership tion’s leadership section to beat. beat. to section tion’s leadership organiza media any for bar ahigh time. That’s over CEOs became even or ranks, senior in up wound have courses these from alumni of number asurprising leadership, in growth for roadmap a provided and weaknesses, and strengths their of on early aware Made results. promising some shown have studies case but mixed, be can Results training. leadership trying hands-on

number of aspiring chiefs are are chiefs aspiring of number agrowing so sharpened, be tainly coach. leadership longtime and partner client senior Ferry aKorn Cashman, Kevin says story,” life our in deep originate els mod leadership fundamental most our of “Many Electric. out General with Welch aJack even or example, But leadership skills can cer can skills leadership But - - - - Voices on... History

Pullman, Illinois, circa 1890

Employee Engagement: The 19th-Century Edition

Industrialist George Pullman built an entire town to keep his workers happy. It ultimately enraged them.

By Lauren Covello

t sounds like a worker’s paradise. and employer don’t always mesh. The most promi- Your employer builds a stunning nent example: Pullman, Illinois, a model town I headquarters and surrounds it built by George Pullman, the visionary industrial- with a grocery store, dry cleaner, ist whose luxury sleeper cars and first-class porter hair salon and parks. You can even service revolutionized long-distance travel. Built live right next door, in company-built apartments. in the early 1880s a few miles south of Chicago, Facebook is doing all that and more, building a the town of Pullman was designed with similarly new headquarters and what it calls a “village” in grand intentions. George Pullman’s hope was to Menlo Park, California, in an attempt to be a good create an aspirational environment for workers neighbor and keep its workforce enthusiastic and and their families, in part to avoid what he report- engaged. Other Silicon Valley firms are consider- edly described as the “loss of time and money ing following suit. consequent upon intemperance, labor strikes and But the company town concept has been tried dissatisfaction, which generally result from pov- before, and history shows that the roles of landlord erty and uncongenial home surroundings.”

16 Korn Ferry Briefings The Voice of Leadership

The town of Pullman was nothing like the punish anyone for complain- cramped, squalid company towns that existed at ing, but that he wouldn’t raise the time. It had well-manicured gardens, multiple wages or cut prices in town. The churches, a hotel, a theater, a bank, a restaurant next day, three men on the com- and a post office. The homes were well ventilated mittee were let go—Pullman and had indoor plumbing, and trash was removed claimed they were going to be regularly. In decidedly modern fashion, the streets fired anyway. ‘He had a were named after contemporary inventors, includ- On May 11, 1894, Pullman conscience, but ing Samuel Morse and John Ericsson. Everything workers went on strike; within at the end of the in the town was owned by the company. days, hundreds of thousands of day, when the At its peak, the town housed more than 14,000 railroad workers in other parts chance came people, all within walking distance to the factory. But of the country also walked out. to realize more instead of creating engaged employees, the town ulti- The nation’s train service was profit, he took it.’ mately enraged employees. Residents resented that derailed for two months. In an they couldn’t buy the homes they lived in and felt unprecedented move, President they were under constant watch by their employer. Grover Cleveland sent federal troops to break up the In 1893 a devastating recession swept the strike and get interstate commerce moving again. nation. Pullman laid off workers and slashed George Pullman died in 1897, and two years later wages of rank-and-file employees, but he refused the town of Pullman was annexed by Chicago. Histo- to lower prices in town. Rents alone were 25 per- rians consider the town’s downfall as an important cent higher in Pullman than in surrounding areas. event in the evolution of US labor rights. Experts “I think Pullman had a conscience, but at the also see it as a lesson in employee engagement gone end of the day, when the chance came to realize awry. Leaders can build towns and offer free food more profit, he took it,” says Raymond Hogler, and other incentives to engage employees, but work- management professor at Colorado State Univer- ers will anger fast if leaders aren’t ultimately open sity and author of “Employment Relations in the and honest with them. “For any leader, it’s tough to United States: Law, Policy and Practice.” balance your civic or social responsibility with that Pullman listened to grievances listed by a of the corporation,” says Michael Shymanski, presi- workers’ committee. He promised that he wouldn’t dent of the Historic Pullman Foundation.

Company Towns: Then & Now

17 The Global Economy

Simon Constable The Dark Side of Pay Raises

he word is out and it is surely much-needed news for workers Tat all levels: After a decade of barely keeping pace with infla- tion, experts say, wages are poised to rise significantly in the United States. That matches what countries in emerging markets have already seen, and is expected to help nudge paychecks in Europe up as well. But for companies, of course, there’s a bottom line and talent-jarring impact from any increase. The big question is how disruptive the Year of the Pay Raise will turn out to be.

As we know, the whole wage issue has been a somewhere else were pretty low. bit of a mystery. Unemployment has been falling But they do now. Job openings have picked steadily for years and now is at levels unseen up as companies are now investing more in since the dot-com bubble of 1999–2000. “We innovation and hiring. Salaries rose 2.5 percent have a global expansion; Europe is doing well, in 2017, and Karl says the bidding war for talent— and so are the US and UK in terms of employ- now mostly confined to computer programmers or ment growth,” says Kurt Karl, chief economist at other highly skilled specialists in small niches— Swiss Re in New York. But what hasn’t happened could well burst into the broader market. Cer- much is wage growth. Growth of private sector tainly, the raw numbers suggest this: In July hourly earnings hovered around 2 percent a year 2009—just after the financial crisis—there were in the five-year period through mid-2015. Most 2.2 million unfilled vacancies. By the end of employees didn’t have much incentive to switch 2017 there were around 6 million. In this market, jobs because the odds of them getting better pay many see a 3 percent annual hike in wages.

18 That may not sound huge, but it’s the big- Many young managers, for example, haven’t been gest since the financial crisis. It would also be through a hot market. It will be essential to act at a level when things can start getting diffi- pre-emptively by discussing future opportunities cult talent-wise, inside an organization. “Marginal for young leaders within the company and map- employees will leave for the very tiniest increases ping out a long-term career for them. That future in compensation, and the more talented employ- with the company will likely be appealing to those ees will be hotly pursued by competitors,” says committed employees who want to stay through Bob Bruner, dean emeritus of the Darden Graduate the ups and downs of the business cycle. School of Business Adminis- The whole recruiting effort tration at the University of may need to be revamped as Virginia. “This creates turmoil well. And even in a higher-pay and can threaten the culture of A 3 percent wage market, the smartest firms the company.” increase doesn’t sound still try to avoid overpaying, Indeed, the dilemma is a like much, but it can knowing that the market tough one: Organizations want for talent has a memory. to keep their committed, skilled create key difficulties Workers remember com- employees, but an economy inside organizations. panies that have a history with soaring wages can hurt of hiring tons of people even firms that have created and paying big wages only a culture of high employee engagement. Employ- to fire people en masse and eliminate hiring when ees start basing their tenure not on the company’s the economy turns south. The commitment level purpose or career-path potential, but on when they of those workers, even if they’re paid well, will can find another firm to pay them significantly likely be lower than of those who knew the organi- more. If a company isn’t careful, its strategically zation would stick by them in tighter times. crafted culture of employee engagement can be “CEOs often play a short game, like earnings reduced to just a series of job transactions. management,” says Bruner. “But they shoot them- According to Bruner, the first line of defense is selves in the feet because the employees want to to throw a lot more effort into company culture. play the long game.”

Constable is a former TV anchor for The Wall Street Journal and a fellow at the Johns Hopkins Institute for Applied Economics, Global Health and the Study of Business. 19 On the Board

Jane Edison Stevenson Beyond the Activists: Three Pressing Issues

t’s a question board directors ask all the time these days: “What Ishould we do about activists?” To some, it’s an overriding concern that activists will be arriving at any moment to tear apart their

1. RISK MANAGEMENT: companies. Directors want to know how they can Figure out what’s an opportunity defend their firms, and, if they’re being honest, and what’s a threat. their own board seats. There have been a handful of high-profile In today’s active global economy, the lines campaigns over the past few years at huge between competitive markets have never been firms, including GE and Procter & Gamble. But blurrier. Even defining which industry sector those mega-battles mask the fact that activism is involved can be hard to peg. For example, is fights just don’t affect that many firms. The Amazon a consumer or a technology company? Is stock research group FactSet tracks more than it a retailer? Or, since it owns and operates a large 4,000 companies worldwide, and only about 600 web-services business, is it a digital technology of them, or about 15 percent, were targets of player? This is just one example of many. With all major activism campaigns in 2017. At the same the crossover, it’s very difficult for board members time, activists most often target firms that are to assess whether market disruptions are accel- undergoing some sort of distress. If the firm is erators to the organization’s growth, or roadblocks earning competitive returns, activists usually that could endanger their business. look elsewhere. 2. TALENT ALIGNMENT: But just because activists leave a firm alone Close the gaps between strategy doesn’t mean that there aren’t a lot of key issues and talent. for its board to contend with. These change over time, and while there are several that may not be This is a huge topic because of the rapid pace in the spotlight at the moment, they are never- of strategic change and the evolving needs of theless critical. leadership as our society potentially moves from

20 an exchange of goods to a more thought-centric Today, the real questions are: What does the exchange. Boards really need to be able to see information say? What does it mean? And how do around hairpin turns and to fly at a high enough we use it? Whole businesses are changing. Today’s elevation to anticipate these change trajectories boards have to adapt, stepping up to a different appropriately. kind of leadership: anticipating what will create That means stepping up in a different way— value, how that impacts the organization, and not just by identifying problems but by anticipat- evaluating whether the right leadership is in place ing them. Said simply, it’s about awareness and to make those pivotal operating decisions on a courageous consideration of day-to-day basis. Boards of the impossible. Boards need the future will need to look to ask the right questions (not forward in a different way and just regulatory ones) that help It will take different think with a different level of elevate leadership’s view of the kinds of thinking expansiveness, involvement, road ahead. in the boardroom to and opportunity building. One way to think about it is In the end, it all comes through the lens of succession: effectively anticipate back to the link between Do you have the right board the right issues. business strategy, talent and to pick the next CEO? Do you succession, which all need have the right CEO in place to to be tightly aligned. Talent develop the right leaders? Are the leaders the ones in this equation starts with the board and goes who will define and cultivate the right workforce down to the lowest level of employees. It will take for the future? different kinds of thinking in the boardroom to effectively anticipate all of these issues. The need 3. INFORMATION OVERLOAD: for diversity in the boardroom will be paramount Everyone has information. Learn how to doing that effectively. Having the right mix of to connect the dots better. views and access will be important to achieving Access to information used to be a huge cost for the nimbleness in thinking and diversity of per- businesses. That has gone down enormously. spectives to make that happen.

Stevenson is vice chairman of the Korn Ferry’s Board & CEO Services practice.

21 Emotional Intelligence

Daniel Goleman Handling Curveballs From All Corners

n hindsight, the questions only become more nagging. Why Ididn’t Kodak jump into digital photography? Couldn’t BlackBerry, with such a hold on the corporate market, have adjusted better to the iPhone? And then there is Sears, probably the granddaddy of the never-saw-it-coming firms.

We call the missing skill set here adapt- remarkable ease, goes straight past “Go” to look ability. Companies (and the executives who run for solutions. them) continually need to balance exploring Here a particular neural circuit comes into new possibilities with exploiting what works. play, the brain’s superhighway between the pre- Adaptability takes many forms, from simple frontal cortex and the amygdala—the interaction flexibility in handling change and juggling between the executive center and the emotional multiple demands to coming up with innovative circuitry for rising to an emergency. To the approaches and openness to fresh ideas. You brain’s danger radar, any radical change looks stay focused on your goals, but adjust how you like a threat, and so this circuitry mobilizes us get there. into a state of readiness for action—and Certainly, corporate leaders have always sometimes overdoes the anger, panic or such needed to adapt—just ask the folks at some of that result. the companies that failed, or their competitors Cognitive neuroscience defines “resilience” as who put them out of business. But you can make the time it takes to recover from this emergency a good case that in an age when innovation and arousal to a state of calm and clarity. While we are technology move at such hyper speeds, this in high alert, our responses tend to be rigid; as we frame of mind is especially critical. We know and recover we can be more flexible in our thinking— probably admire the type: the leader who doesn’t even strategic. All of which is exactly what makes focus on the causes of a problem, but who, with a adaptability so critical in dealing with today’s

22 state of constant change. No leader, company or correlation between intelligence and leadership sector is immune. Largely paced by the drive of performance for leaders up to an IQ of around technological innovation, every aspect of busi- 120, there’s none at all for an IQ above 120—and ness faces disruption of one kind or another. actually a negative impact for a leader’s effec- C-suite strategies, of course, need to revolve tiveness for an IQ above 128. (An IQ of 100 is around managing and leveraging these changes. the average.) Researchers at the University of But what about upgrading the people who will Lausanne who conducted this study surmise the execute those strategies? Successful strategic super-high-IQ leaders may not know how to tune implementation, no matter the into how other people think particulars, depends in large about a given issue or challenge. part on how well the people who For example, they couch what execute them can adapt. The power of remarks they think are motivat- At a meeting of 100 CEOs from adaptability may ing in ways that people cannot legacy companies (17 sectors, explain a paradox understand, let alone find $2 trillion total) there was con- resonating. sensus that a huge opportunity between IQ and But whether executives lies in the next phase of product leadership. have a high IQ or not, other development, where the historic research finds that their adapt- expertise of these organizations ability links to better revenue will give them big advantages as they combine and sales growth, employee effectiveness and with tech. The one problem they face is not team performance. And it doesn’t stop there: in technology, the CEOs agreed, but in their My colleague Richard Boyatzis at Case Western people. They need a culture, as one report put Reserve’s Weatherhead School of Management it, that “can embrace and adapt to technological followed MBA graduates up to 19 years later and change.” And that culture needs leaders who can found adaptability predicts career success and thrive on change. satisfaction. Another not-so-small plus? This The power of adaptability may explain a adeptness at handling curve balls leads to a paradox about IQ and leadership: While there’s a satisfied life.

Goleman is author of the international best-seller “Emotional Intelligence.” See keystepmedia.com for his new series of primers, “Building Blocks of Emotional Intelligence.” 23 THE OFFICIAL TIMEPIECE OF MARTINI RACING

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BY MEGHAN WALSH

IN A LANDMARK STUDY, KORN FERRY RESEARCHERS INTERVIEWED AND ASSESSED THE TOP WOMEN CHIEFS. IS THERE A PATTERN TO HOW THEY GOT THERE?

27 THE PROBLEM Only 6 percent of Fortune 500 CEOs are women. Enough said. WHY WORRY? Studies show, aside from the obvious inequity, women-led companies out- perform their male-run competitors.

THE SOLUTION Companies must move past just talking, and make putting women in top jobs a key part of their strategies.

—the chairman, president and

CEO of Colorado-based global engi- neering and construction manage- ment firm CH2M Hill—begins to say she has never encountered overt gender discrimination during her career. Then she catches herself. There was the time construction workers placed “No Women” signs at a building site. And then there was the Wite-Out incident. Early in her engineering career, shortly out of college, Hinman sat down with a senior manager for an end-of-year performance review. When he told her to write down her career goals, Hinman answered honestly: She wanted to be a partner. The manager, who she believes was well intentioned, said there was no doubt she had the prowess. But this office was never going to have a female partner in her lifetime. So he passed a bottle of correction fluid across the desk and told the eager employee to write something that didn’t make her look naïve. While Hinman eventually did realize her youthful ambitions, that old boss wasn’t wrong. Unless a company intentionally fosters the development of its women employees, it’s nearly impossible that they will ascend to the corporate ladder’s highest rungs. As it stands, women represent roughly 6 percent of Fortune 500 CEOs—and that’s an all-time high. The daughter of Italian immigrants, who grew up next door to her grandparents and among romantic notions of the American Dream, Hinman started looking for a new job the next day following her review, and when she saw that man many years later, she said thank you. “I knew that he was right; I couldn’t make part- ner there, not at that company,” Hinman says.

28 As the demand for diversity grows louder by the day and brand equity becomes more relevant than ever, companies consent to the status quo at their own peril. And it isn’t only the media’s spotlight that they risk anymore. Diversity has become a big topic in business today, and in a series of bold moves, state pension funds and some of Wall Street’s biggest asset management names, including State Street Global Advisors and BlackRock, have started voting against company board director slates that are not diverse enough or not moving in that direction. Such actions come against a backdrop of a growing body of research that suggests women-led companies outperform their male-run competitors across the board. But calling for change in the corner office is a long way from creating actual change. In the space between the two, a variety of public and private initiatives have launched to try to instill results. Among the biggest is from the Rockefeller Foundation, whose “100x25” initiative aspires for female CEOs to lead 100 of the Fortune 500 firms by the year 2025. As part of that effort, Korn Ferry came onboard to draft a blueprint for how to build sustain- able pipelines of high-potential female candidates. The firm interviewed 57 women who were either currently or previously at the helm of the coun- try’s largest and most successful public and private companies, and put each through a science-based psychological assessment. “We didn’t want to just focus on why more women are not CEOs, we wanted to focus on their common success factors,” says Jane Stevenson, global leader for CEO Succession at Korn Ferry, who led the study. Or as J. Evelyn Orr, Korn Ferry Institute’s vice president and chief operating officer, puts it, “We wanted to learn from the women who made it, so we can increase the momentum of change.” Real change, of course, may take years. But most experts say research- driven understanding and deliverable metrics are essential for corporations to achieve gender equality. “Women will not rise naturally to the top,” says Irene Natividad, president of the Global Summit of Women, an annual gathering of women leaders from around the world. “It has to be part of the business strategy.” FIRST PERSON

JACQUE HINMAN ore than a half-century after women began entering the CEO, CH2M HILL workplace en masse, and despite the fact they now make up half of the talent pool, the pace of female advancement in corporate leader- ship is often described as glacial. Or paltry. Or inconsequential. “I knew he was right; M “At the rate we’re progressing, we’re not going to see meaning- I couldn’t make ful movement,” says Korn Ferry associate client partner Peggy Hazard, partner there, not at who works with organizations to achieve greater diversity. Along with the power imbalance come gaps in pay, implicit bias and, as we’ve been that company.” forced to reckon with recently, abuses of power like sexual harassment and assault. It’s disheartening to think it has taken us more than 75 years to go from Rosie the Riveter to 6 percent. The flood of women into historically male-dominated jobs during World War II was followed by a brief retreat to the status quo when men returned home from overseas, but rapid postwar

29 FIRST PERSON economic growth created new employment opportunities. The women’s labor force increased rapidly in the second half of the century, almost DEANNA doubling between 1950 and 2000. Amid the growth, President Kennedy passed the Equal Pay Act of 1963, and, in 1972, at a time when women were still largely relegated to service-based, “feminine” jobs, Katharine Graham MULLIGAN became the first female Fortune 500 CEO when she took over the Washing- CEO, GUARDIAN LIFE INSURANCE ton Post parent company. The first woman to lead a company in the Dow Jones didn’t show up until Carly Fiorina was appointed at Hewlett-Packard in 1999. Only eight years ago, Ursula Burns at Xerox became the first black “If you want to woman appointed CEO. It’s hard to pinpoint exactly how gender influences hiring and promo- grow and attain tion. Some argue that women choose human resources rather than finance better results, and family over career. Others point to implicit bias, overt discrimination and disadvantaged structures that drive women away. There is no denying, you have to be though, that men and women are hired into entry-level positions in similar willing to do things proportions, yet diversity begins to filter out by middle management. The siphon narrows until it’s almost exclusively white men who emerge at the differently.” top. “It’s a slow drip. Over time, women don’t get the types of key assign- ments, visibility, relationships or critical feedback—and that’s how you succeed,” Hazard says.

eanna Mulligan’s path to CEO can be traced back to the lunch-

room of her first professional job. Like Hinman, Mulligan—now the president and CEO of Guardian Life Insurance—made an astute observation followed by a difficult decision. She noticed that the Demployee cafeteria wasn’t only segregated by gender—huddled with the men were management promotions, sales mentors and future CFOs; among the women often waited a future in administration. Mulligan, who had recently graduated from the University of Nebraska, says the men didn’t welcome her but she sat with them anyway. “I remember thinking this is a very important decision,” she says. Many of the CEOs in the Korn Ferry study had similar stories: a time, usually early in their careers, when they came up against gender barriers of some sort. Instead of being detoured, though, they found a way through. On average, they were almost 51 years old when they first reached the corner office, taking a variety of career paths—some zigzagging between roles, departments and companies, and others passing through strategic check- points. Along with a majority having MBAs, about 40 percent started out with degrees in STEM, double those who had a background in arts and humanities or even business and finance. But what was most common among the women is they sought out challenge and found motivation in pur- pose. They took risks and learned to manage ambiguity. “I’ve always operated out of an inner drive rather than the drive to beat somebody or get somewhere,” says Denise Ramos, president and CEO of ITT Inc., who has been at the helm at the company since 2011, after more than

30 FIRST PERSON 20 years at ARCO and several other companies. “Who am I? What’s impor- tant to me? What can I offer?” In the case of Patti Poppe, who was appointed president and CEO of Michi- PATTI gan’s CMS Energy about two years ago, the winding road to the top included some 15 years at General Motors, where she says a mentor suggested she take essentially a demotion to a line job at a plant over an important staff role. POPPE “That changed everything,” says the Stanford MBA grad. “It gave me the CEO, CMS ENERGY operational experience essential for advancement.” She would wind up at CMS in 2010, where she says it helped that the company already had women in top roles, giving her the courage to think big for herself. “If you walk “If you walk around questioning that maybe you don’t belong, you will show up differently than someone who believes, ‘There is nothing I can’t do,’” says Poppe, who around has been known to scale 40-foot-tall utility structures in full gear. questioning Poppe, Ramos and Mulligan say they were ready for the corner office when the nod came. Still, in one of the study’s more surprising results, only 12 per- that maybe you cent of these women had early aspirations of leading a company. Two-thirds don’t belong, never even considered it a possibility until someone else brought it up. “We all internalize what a leader looks like; women need to see women in leader- you will show ship positions to imagine themselves in those roles,” Orr says. It isn’t surpris- up differently ing then that women-led companies also have more women in management overall. As any teacher will say, it’s the small moments of encouragement than someone that go the farthest in igniting long-term ambition, which is why it’s vital to who believes, design mentorship programs that encourage as much as prepare. As experts are quick to remind, for every one of the strong-willed women ‘There is nothing who has shattered a glass ceiling, there are countless other equally qualified I can’t do.’” prospects who cannot break free. Or who, while looking for opportunities to prove themselves, marched right off the “glass cliff.” A 21st-century term, the glass cliff illustrates how women often have to take risky assignments. And when they fail, it only reinforces stereotypes rather than lay bare the double bind women face. As one woman told researchers, “When I went down to Atlanta to run that market for the company, the president of the division said, ‘You are going to be fired within a year, because no one has been able to make Atlanta successful.’ I went anyhow.”

hese women who defied the odds, who’ve demonstrated their

strength of character and wit, collectively scored in the 99thper- centile when compared to Korn Ferry’s benchmark CEO assessment, which gauges typical traits and drivers. In their assessments, which Tmeasured such traits as “risk-taking” and “persistence,” they matched or exceeded Korn Ferry’s benchmark for CEOs in a remarkable 17 of those 20 traits. That means they are the best of the best, better than the men. They are unicorns. And if that is the standard women must meet, then change will remain glacial. Korn Ferry’s data shows that in the US it takes 30 percent longer to

31 57 FEMALE CEOS PARTICIPATED IN THE STUDY

FIRST PERSON 43 IN PUBLICLY 23 IN THE DENISE 38 ARE CURRENT CEOS TRADED COMPANIES FORTUNE 500 18 IN THE RAMOS FORTUNE 1000 CEO, ITT INC.

“I’ve always operated out of 19 ARE FORMER CEOS 12 IN PRIVATELY 16 IN OTHER an inner drive HELD COMPANIES COMPANIES rather than the drive to beat place a woman at the helm of a company than a man. Meanwhile, women are somebody or get already doing extra laps around the corporate track before even being con- somewhere... sidered, which makes them on average four years older than men when they receive their first top appointment. In the end, women have to work harder Who am I? and longer to get to the same place. What’s important One might point out that women make up 24 percent of the C-suite, so perhaps we’re farther along than the 6 percent suggests. However, studies to me? What can show 90 percent of new CEOs come directly from executive posts associated I offer?” with line responsibility, a role that the majority of women in the C-suite don’t hold. As Orr says, “Not all C-suite positions are created equal.” The unfortunate reality, despite signs of unrest, is that the vast majority of companies are not disrupting the everyday, homogenous flow in a way that will bring about significant change. It doesn’t matter how robust your pipeline is if it gets cut off before it can reach the top. And, at least in the case of Silicon Valley, media scrutiny and public admonishment haven’t been enough to overpower inertia. That’s where the argument that gender parity is good business may offer hope. “Companies have to understand that having diversity is to their benefit,” says Ramos. At ITT, Ramos says they go to great lengths to ensure diverse candidate pools, going beyond the usual recruiting sources. They’ve also built development pipelines for women and minorities and created a culture that values ethics as much as performance. When it comes down to it, she says, “companies need to value diverse perspectives, experiences and backgrounds and get out of their comfort zones when selecting future leaders.” For her part, Mulligan says she wakes up every morning at 4 a.m., two hours before she has to leave the house. In those unscheduled hours when her unbound mind has room to roam is often when she is able to find solu- tions to some of her biggest challenges. Indeed, under Mulligan, Guard- ian has claimed the highest earnings of its 157-year history, while winning a perfect score on the Human Rights Campaign’s Corporate Equality Index. “If you want to grow and attain better results, you have to be willing to do things differently,” Mulligan says.

32 WHEN WOMEN REALIZED THEY COULD BE CEO

IT ONLY BECAME SOMEONE TOLD CLEAR WHEN THEY THEM THEY COULD REACHED A HIGH ROLE 65% BE CEO 16%

THEY HAD WANTED THIS POSITION FOR 12% A LONG TIME

7% THEY NEVER ACTUALLY WANTED TO BE CEO

DIFFERENTIATING SKILLS FOR FUTURE CEOS

Female CEOs were more than twice as likely to have high scores on these six competencies than middle managers. These are the skills women need to develop on their way to senior executive roles, especially if they aspire to be CEO.

ENGAGES AND INSPIRES 2.64 X DEVELOPS TALENT 2.62 X

BUILDS EFFECTIVE TEAMS 2.62 X

DIRECTS WORK 2.41 X COURAGE 2.33 X

MANAGES AMBIGUITY 2.09 X THE FINDINGS 1 2 3 THESE WOMEN THEY WERE SPECIFIC CEOS WORKED DRIVEN BY TRAITS To provide a HARDER BOTH A SENSE SUSTAINED THE rare glimpse AND LONGER OF PURPOSE WOMEN’S into how female TO GET TO AND A DESIRE SUCCESS ON CEOs operate, THE TOP. TO ACHIEVE THE ROAD Korn Ferry BUSINESS TO CEO. spent four The women CEOs were an average RESULTS. months inter- Defining traits of four years older viewing and and competencies than their male More than two- that emerged time taking detailed counterparts, thirds of the and again in the and worked in a women said they assessments research included slightly greater were motivated courage, risk- of 57 women number of roles, by a sense of taking, resilience, CEOs—from 41 functions, purpose and their agility and man- companies and belief that their Fortune 1000 aging ambiguity. industries. company could companies have a positive and 16 large, impact on the privately held community, employees and companies. Six the world around key findings them. Nearly a quarter pointed emerged: to creating a posi- tive culture as one of their proudest accomplishments.

For the full report, and videos and podcasts on it, see: engage.kornferry.com/womenceosspeak

34 4 5 6 THEY WERE DESPITE THE WOMEN MORE LIKELY EVIDENT SHARED TO ENGAGE POTENTIAL, STEM AND THE POWER OF THE WOMEN FINANCIAL TEAMS. GENERALLY BACKGROUNDS DIDN’T SET THAT SERVED Scoring sig- nificantly THEIR SIGHTS AS A higher than the ON BECOMING SPRINGBOARD. benchmark group on humility— CEO. indicative of a Early in their careers, nearly consistent lack of Two-thirds of 60 percent of self-promotion, the women said the women had an expressed they never real- demonstrable appreciation for ized they could expertise in others, and a become CEO until either STEM (40 tendency to share a boss or men- percent) or busi- the credit—the tor encouraged ness/finance/ women CEOs were them, and instead economics (19 more likely to focused on hitting percent)—all leverage others to business targets fields where achieve desired and seeking new they could prove results. challenges rather themselves with than on their precise, definable personal career outcomes, and advancement. that were also crucial to the success of their businesses.

35 NEW FROM DOWN UNDER:

American Toll Roads

A CRUMBLING US INFRASTRUCTURE HURTS MANY COMPANIES. COULD THE BEST ANSWER COME ALL THE WAY FROM AUSTRALIA?

BY CHRISTOPHER R. O’DEA

he Indiana Toll Road is a 157-mile stretch of asphalt crossing the not-particularly- pretty terrain of northern Indiana. The only real landmarks the road passes are giant steel mills—some still operating, some shut down—and no Tone would ever call a steel mill beautiful. But the toll road in some ways is a model of efficiency. It lets drivers traverse the Hoosier state, in barely two hours if traffic is good, much more quickly than other roadways. It’s a key artery to move goods from the West Coast to big markets on the East Coast. And with an $11 toll to run the road’s length in a car—and as much as $93 for a big truck—it raises

36 THE WHY THE PROBLEM WORRY? LESSON The US—like much of Old highways are Leadership can come the world—is facing an bad for safety and from some unlikely infrastructure crisis, can hinder economic places to help solve especially over its aging growth. seemingly intrac- roads and highways. table problems. considerable funds to help pay for road repairs and other main- tenance. The only wrinkle: Some of those funds are also used to help people 10,000 miles east of Indiana—Australian retirees. Even in a world where anyone can own anything anywhere, it’s still a little jarring that a stretch of highway through northern Indiana is owned, in part, by Australian pension plans. But this road, which has been Aussie-owned since 2015, is considered a prize among the many toll roads owned around the world, in part, by Australians. Private ownership of roads in the United States has a checkered history at best, but it may become one of the ways the country—along with many other nations worldwide—builds and replaces its infrastructure. Indeed, much of President Trump’s initial plan for revitalizing US roads involves private-public partnerships similar to the Indiana Toll Road. How well private Australian investors run a toll road in Indiana may forecast how transportation networks will be run in the US and beyond.

O MATTER WHO OWNS THE on the condition of US infrastructure, the roads, there’s broad consensus American Society of Civil Engineers (ASCE) that the United States needs said a total investment of $4.59 trillion would to spend more on them. Congestion cost US be needed to restore US infrastructure to an drivers alone nearly $300 billion in 2016, ac- adequate grade by 2025. Roads and transit sys- cording to INRIX, a Seattle-based technology tems account for the lion’s share of the funding company that compiles traffic data. Bad roads gap. In 2016, the ASCE says, the country faced Nnot only increase commuting times, but also a $1.1 trillion backlog of maintenance work play a role in decisions about where to build an needed on surface transportation assets by office or manufacturing facility. No leader wants 2025, and only 46 percent of that was funded. to place a factory along a road whose poor condi- The US isn’t alone; the world needs to spend tion creates shipping delays. “The real justifica- $34 trillion from now to 2040 to build and main- tion for improving transportation infrastructure tain healthy road networks, according to the is to make our economy more productive,” says Global Infrastructure Hub, an Australia-based Robert Poole, director of transportation policy nonprofit. at the Reason Foundation, a Los Angeles-based Toll roads might be an answer—but the con- think tank. “It’s the means to the end of faster cept isn’t welcomed in the US. Ironically, they and more reliable goods movement, better were actually among the best way to travel by matching of employer needs and employee vehicle until the 1950s—when the US Inter- skills, and shorter and less stressful commutes.” state System was built, providing a national The problem, of course, is how to fund those highway network without user fees. Americans costs. While engineers and federal officials have been unwilling to confront the true cost differ in their estimates of what it will cost to of road infrastructure for decades, says Tanya refurbish American roads, the tab for rebuilding Langman, director at Fitch Ratings, a firm that promises to be steep. In its new “Report Card” reviews debt deals that finance infrastructure.

38 “IT’S THE MEANS TO THE END OF FASTER AND MORE RELIABLE GOODS MOVEMENT... AND SHORTER AND LESS STRESSFUL COMMUTES.” Robert Poole DIRECTOR OF TRANSPORTATION POLICY AT THE REASON FOUNDATION

That’s created “unrealistic expectations about Investors. Australian interest in urban toll roads the real cost and the obligation of the public to stems from having a small population, about pay for it,” she adds, leaving the US facing “an 23 million, concentrated in a few state capital infrastructure investment cliff.” cities, rather than more evenly dispersed across All of which opens up the road for Aus- a land mass about the size of the lower 48 US tralia—whose pension funds are happy to help. states, Garcia says. In contrast to the heavy use “In Australia, infrastructure is front-page news of the US Interstate network, Australians fly be- all the time, a lot of funds are investing in it, and tween dense urban areas, resulting in relatively people are talking about it,” says Julio Garcia, infrequent travel on long-distance highways.

head of infrastructure for North America at IFM Toll roads have evolved to serve the major Artwork by: Fill in blanks

39 Briefings On Talent & Leadership 39 metro regions around Sydney, Melbourne and Brisbane, where the need for financing meant many main arteries were built as toll highways from the start. “People could see a new benefit in terms of a road they didn’t have before, but it did come with a user fee,” Garcia says.

UNIQUE ORGANIZATION, IFM IS owned by 28 Australian pension funds that formed a consortium more than 20 years ago to invest in infrastructure. Today, IFM Amanages about $58 billion on behalf of pension savers, with about $25 billion invested in 29 infrastructure assets across the world. While it’s based in Australia, IFM today also invests on behalf of North American and European pen- sion plans, and counts more than 75 US pension funds among its 175 institutional investors. All told, the Australian retirement system, called superannuation, now has more than $2 trillion in capital. Created in 1983 as the solution to national union negotiations, the system requires employers to contribute 9.5 percent of salary to a retirement account for workers over age 18 earning more than $450 per month. Contributions are directed to “super funds,” large pools of capital managed by professional investment teams. Because many workers won’t retire for decades and won’t need to tap their accounts, those investment teams are able to invest in illiquid assets with very long-term income streams. Toll roads fit the bill, and the ITR fits especially well. “We try to find assets that are critical to the economies and communities that they operate in,” Garcia says. The Indiana Toll Road is one of IFM’s prize assets—which is something of a turnaround for the venture, given that a prior consortium that was hit by the financial crisis filed for bankruptcy court protection. Under IFM, the road has benefited from heavy traffic by import- laden trucks from West Coast ports. “Anything going either to the Midwest or to East Coast

40 THE DEAL HAS ENABLED INDIANA TO CONVERT THE LONG-TERM ECONOMIC POTENTIAL OF A STRATEGICALLY LOCATED ROAD— WHICH HAD BEEN LOSING MONEY UNDER GOVERNMENT OPERATION— TO READY CASH FOR IMMEDIATE UPGRADES TO ROADS.

41 The Global Toll-Road Market While few toll roads in the US are privately run, they are prevalent in many other parts of the world.

PRICE TO COUNTRY TOLL ROAD NAME MILES TRAVERSE

$8 The only major toll road in cars Great Britain, built in 2003 ENGLAND M6 Toll 26 to relieve traffic congestion $15 in the Midlands region. trucks

Opened in 1964, the $68 Autosole (Sun Motorway) is cars the major road down Italy’s ITALY spine, connecting Milan, A1 469 Florence, Rome and Naples. $167 Italy has nearly 4,200 miles of toll roads; most are trucks privately run.

$10.70 Indiana ran this toll road Indiana cars itself until 2006, when it UNITED STATES traded 75 years of future toll Toll 157 revenues for a $3.6 bil­lion $93.10 up-front payment. Road trucks

± This network of nine $39 motorways forms a ring Sydney cars around Sydney and its suburbs. Instead of booths, AUSTRALIA Orbital 99 $99 ± fees are deducted from Network trucks drivers’ accounts.

Connecting Tokyo to Japan’s third-largest city, Nagoya, Tomei this road is so congested JAPAN $62 ± that another toll road, the Express- 215 New Tomei Expressway, way was built parallel to it.

Prices as of January 2018, converted to US dollars.

42 “TOLLING ISN’T THE RIGHT ANSWER FOR EVERY ROAD. BUT I THINK IT’S A SENSIBLE DIRECTION FOR THE COUNTRY.” Julio Garcia HEAD OF INFRASTRUCTURE FOR NORTH AMERICA AT IFM INVESTORS

cities, in all likelihood, is going to go out in a through. The company is piloting autonomous truck over the ITR,” says Garcia. and connected driving technologies to control In general, the concept of privatizing the vehicle position, speed and lane changes in Indiana Toll Road’s operation has proved to be heavy traffic, as well as technology that digi- a boon to Indiana’s aging roads. While the road tally connects cars to sensors embedded along opened as a free highway in 1956 (it’s techni- the motorway. cally a stretch of Interstate 90) the $3.8 billion The goal is to form rush-hour drivers into initial lease payment the state got for selling “platoons,” computer-guided groups moving operating rights in 2006 funded a statewide in sync like the Tour de France peloton, with transportation investment program, including vehicles just close enough together to allow deferred maintenance on the toll road. It also maximum speed for prevailing conditions. helped seed “Major Moves,” a $2.8 billion on- High-speed platoons can increase the capacity going highway construction program that has of a roadway by as much as 25 percent without paid for hundreds of road and bridge projects in compromising safety, the company says. In Indiana that had previously lacked funding. a novel take on board engagement, company The deal has enabled Indiana to convert the directors are literally going the extra mile to long-term economic potential of a strategically support Transurban’s tech initiatives—several located road—which had been losing money have served as passengers for connected- under government operation—to ready cash driving tests conducted on the express lanes for immediate upgrades to roads. But it’s not around Washington. just Indiana that has tapped the potential of Ultimately, experts say, the future of the privately operated toll roads. Motor along the toll roads will likely come from more public two major interstate arteries that feed into acceptance and more public funding. “It would Washington D.C. from Virginia and you’ll find be great if the Trump administration could adjacent tolled express lanes operated by yet offer some sort of incentives like the capital another Australian firm, Melbourne-based recycling we’ve done [in Australia] or through Transurban. The firm, which runs a fund for additional loans,” says Scott Charlton, CEO of Australian higher education and research Transurban. The Australian federal govern- professionals, says it specializes in building ment grants a 15 percent subsidy to states that and operating “smarter motorways” that use privatize infrastructure and reinvest the capital emerging digital technologies to smooth out the raised from private investors into additional bumps in daily commuting. infrastructure. Will the US take that route? Toll revenue there is already up, but the firm “Tolling isn’t the right answer for every road,” says its unique traffic management system is says IFM’s Garcia. “But I think it’s a sensible only going to boost the number of cars passing direction for the country.”

43

BY DAVID BERREBY A World with No

Backup

PlanArtwork by: Fill in blanks 45 Briefings On Talent & Leadership THE PROBLEM WE KNOW FROM PAST FAILURES THAT COMPUTERS ARE FAR DIGITAL SYSTEMS FROM PERFECT—BUT WE REFUSE TO ACCEPT IT.

AND AI ARE WHY WORRY? AI SLIP-UPS CAN SERIOUSLY AFFECT BUSINESS AND FINANCE, TAKING OVER NOT TO MENTION LIVES.

THE SOLUTION MANY FUNCTIONS ENCOURAGE TECH LEADERS TO SHOW THE REST OF THEIR COMPANY THAT MORE INVESTMENT BEFORE SOFTWARE IN BACKUP PLANS IS NEEDED. DESIGNERS CAN MAKE THEM FAIL-SAFE. IS THERE TIME TO FIX THIS?

MERICAN AIRLINES EXECUTIVES (and hundreds of thousands of the car- rier’s passengers) got a serious scare late last November. As the Christmas Atravel season began, the airline found it had no pilots for 15,000 flights scheduled for the last two weeks of 2017. The problem was—as it often is nowadays—a software glitch. The airline’s algorithm for matching planes and flight crews should have granted time off in accordance with schedule needs and seniority. Instead, it gave time off to any pilot who had put in a request. There was no procedure in place to repair the breach. Fortunately, American was able to come up with a fairly low-tech solution to a modern-age problem: bring humans in to improvise a solution. The company offered pilots 150 percent of their normal pay to work unstaffed flights, and quickly negotiated other details of an emergency plan with the flight crews’ union. Another day, another glitch. It was a fairly typical digital hiccup, the sort of which we’re all getting accustomed around the developed world. In organiza- tions, such mishaps ground flights, shut down phone systems, mislead medical devices or crash autonomous vehicles. In private lives, the same phenomenon freezes video calls and creates those moments when

46 46 THE STATE OF CALIFORNIA, WHICH TRACKS AUTONOMOUS-CAR ACCIDENTS, HAS FOUND THAT THE VAST MAJORITY ARE CAUSED BY THE FACT THAT ROBOT CARS DRIVE LIKE, WELL, ROBOTS. you try to type “but maybe I’ll come” and find your ANY OF THESE SUR- instant message “corrected” to read “Bugs Mugabe prise failures don’t will cope.” end nearly as well as We shouldn’t be too quick to get used to these sur- the American Airlines prises. All these supposedly minor incidents add up to Mincident. On July 8, a major problem that is worsening with every new step 2015, trading on the New York Stock toward a completely digitalized society: More and more Exchange was suspended for four hours often, complex systems of software and hardware fail because a software update didn’t go as unexpectedly. And when they do, we discover there is expected. That very likely contributed no Plan B and no safety net. to a 1.7 percent drop in the S&P 500. The incidents are increasing as we further digitize Worse, in May that same year, an Airbus our lives and connect more of our tools into one infi- A400M Atlas military transport crashed nitely complicated web. As the science writer Fred near Seville, Spain, after computerized Guterl has noted, in 21st-century society, all important controllers slowed three of its four infrastructure is computer-controlled, waterways engines. The cause was a mistakenly as much as airports. Getting a barge down a river, he erased file, which caused the digital says, depends on “water-level monitoring, navigation, engine controllers to misread data signaling and locks—all of which are in some way from the engines. Four crew members under computer control. Even the rivers are digital.” were killed. Similarly, Asiana Airlines So are the people. As the game designer and Georgia blamed poor software that “led to Tech professor Ian Bogost points out, we are relent- the unexpected disabling of airspeed lessly turning all the familiar devices of home and protection without adequate warning work—the can opener, the toaster, the garden hose, the to the flight crew,” resulting in a Boeing overhead light—into computers. Today, for example, 777 crash near San Francisco in 2014. you can buy smartphone-enabled bike locks, faucets, Three people were killed. propane tanks, juicers and baby monitors. The market According to a review of FDA data by for these sorts of Internet of Things devices, all capable a group of thoracic surgeons, surgical of gathering and crunching data and of talking to each robot mishaps were involved in 144 other, is expected to reach more than $275 billion a deaths and 1,391 patient injuries from year by the end of the decade. 2000 to 2013. To be sure, as critics point “There’s not much work and play left that com- out, that’s an extremely low failure rate puters don’t handle,” Bogost wrote in The Atlantic. amid a total of 1.7 million surgeries, and “People don’t seek out computers in order to get things no one compared it with humans-only done; they do the things that let them use computers.” surgeries. But the study makes clear that Why else do you need a blender that reports to your no one should assume that robots will smartphone? always perform flawlessly. Indeed, it is a transformation that is easy and Nor can we apparently count on satisfying—so much so that most of us are on this road the US system for emergency calls to without giving it much thought. firefighters, police or medical help. Once Until, that is, something goes wrong. a string of locally run exchanges, pro- grammers years ago created a national 911 system that included a simple code telling the server to assign 40 million unique ID numbers. It reached that limit on April 10, 2014, leaving 11 million people in the entire state of Washington and parts of California, Florida, North and South Carolina, and Minnesota that night with no emergency-call service

48 MANY PEOPLE CONFUSE ARTIFICIAL INTELLIGENCE WITH THE HUMAN VERSION, BLINDING THEMSELVES TO TECHNOLOGY’S LIMITATIONS. Murphy’s Law,, In the \Digital Age

A world run by complex, interconnected digital systems is subject to sudden unexpected failures. Here are some examples:

INCIDENT CAUSE COST/CONSEQUENCE

Varied: some software errors, some Robot surgery errors (2000-2013) 144 deaths hardware malfunctions

11 million people in the US had no Long-ago decision to set maximum 911 outage (2014) emergency-call service for six hours. call count to 40 million More than 6,000 calls failed to go through.

Military transport crash in Digital file wiped clean of data Three dead Spain (2015)

Google self-driving car hits Software made wrong assumption Minor damage, no injuries municipal bus in Mountain about what bus driver would do View, California (2015)

NYSE outage (2015) Software update Dip in S&P 500

15,000 holiday-season flights in danger No pilots for 15,000 American Software glitch of cancellation; emergency negotiations Airlines flights (2017) with pilots’ union

for six hours. The callers who heard a busy signal or no smarter than a person, and often— a dead silence, according to an FCC report on the inci- because of limits on our ability to map dent, included “calls reportedly involving domestic and create intelligence—is quite a bit violence, assault, motor vehicle accidents, a heart dumber. Failing to remember this can attack, an overdose and an intruder breaking into a lead to overconfidence that a complex, residence.” (That particular caller, in Seattle, tried 37 algorithmically controlled system times before finally chasing away the attacker with cannot go wrong. her kitchen knife.) Such assumptions probably fostered To be sure, one reason our intelligent systems one of the first deadly failures of a high- stumble like this is due to our own overestimations tech software-controlled system. Over of technology. Many people confuse artificial intel- the course of a few months in 1985 and ligence with the human version, blinding themselves 1986, a radiation-therapy device called to technology’s limitations, argues the AI pioneer the Therac-25 overexposed six patients Alan Bundy, a professor of automated reasoning at the to its rays, leaving four dead and two University of Edinburgh in Scotland. “Any machine seriously injured. that can beat all humans at Go must surely be very Predecessor versions of the machine intelligent, so by analogy with other world-class Go had been operated by a human tech- players, it must be pretty smart in other ways too, nician; they’d also had mechanical mustn’t it?” he recently wrote in Communications of fail-safes that made it impossible for the Association for Computing Machinery. “No! Such the technician to exceed safe dosage misconceptions lead to false expectations that such levels. But the Therac 25 passed many AI systems will work correctly in areas outside their of those former human-operated tasks narrow expertise.” to the computer-controlled system. The fact is, Bundy said, even the most advanced And the design removed the hardware computing technology has been designed to master safety features, relying on the soft- a narrow range of functions. Outside of those, it is ware to detect and respond to trouble.

50 According to a report on the failure by and a rivet will bind steel pillars, but the zeroes and MIT professor Nancy G. Leveson, an ones of a program could be supplying recipes or plot- expert on software flaws, the Therac ting missile trajectories. At the level most coding is 25’s human operator sat at a computer done, there is no difference. terminal, reading lookalike messages This abstraction from the world it controls means that didn’t distinguish minor problems that code can be technically flawless and nonetheless from life-threatening anomalies. The go wrong—because its programmers didn’t anticipate machine reported “malfunction” all the the problem it tripped over, or how it would interact time, usually for very minor problems. with other software, or how people would use it. Operators became used to responding During last December’s massive fires in Los Angeles, to the messages by quickly resuming authorities were forced to warn drivers not to follow the treatment. directions from mapping apps. The reason: The apps, In this tragedy, of course, the digital designed to steer users to roads clear of traffic, were process did involve human beings, but sending drivers toward highways that were empty— in a way that made it impossible for only because they were engulfed in flames. “Software them to take meaningful action. In other failures are failures of understanding and of imagina- circumstances, people aren’t blinded by tion,” wrote author and programmer James Somers in a confidence in computers—they’re simply recent article in The Atlantic. blind. Many of the systems on which we To counter this, and offer more protection, most depend can’t be completely grasped by experts say the effects of complexity, speed and the human mind. abstraction must be ameliorated. Somers, for one, argues that programmers need to be encouraged to think about the real-world problems their algorithms are supposed to solve. LTIMATELY, IT ISN’T Another possible defense is to pay more attention to all overconfidence, or lack the shape of the human minds that must interact with of knowledge about what machines. For instance, a growing field of research in software does, that keeps us autonomous cars concentrates on how to make them Ufrom making our new tech able to deal with human beings. It’s an essential task fail-safe. Unlike mechanical systems of as the sector ramps up. The state of California, which the 20th-century industrial age, they tracks autonomous-car accidents, has found that the aren’t rooted in reality. Indeed, code vast majority are caused by the fact that robot cars doesn’t have any natural connection to drive, like, well, robots. Human drivers don’t expect the objects and processes it is control- other cars to halt completely at every stop sign or obey ling. A screwdriver will fit into a screw, every speed limit and traffic sign; failure to recognize this caused almost all 43 fender-benders involving self-driving cars in the state. One famous fatal accident involving a computerized driving system—the Florida crash that killed Joshua Brown as he drove in his Tesla—occurred after the human ignored warnings (to place his hands on the wheel) that a computer would have attended to. Most digital development doesn’t take place in such a realm of far-reaching principles. In the main, it is high-pressure, fast-paced work, in which the tempta- tion is usually to just solve the problem at hand with whatever is handy (including ready-made, “off the shelf” code or old legacy code that can be tweaked). Nonetheless, as the disconcerting failures without backup occur more and more often, the stakes are becoming clear. We need to pay more attention to the digital home we are making for ourselves. The Face of Leadership BY GLENN RIFKIN

PLATON photographs Prime Minister Tony Blair at the United Nations in 2009 for the series “PORTRAITS OF POWER.”

Forget facial recognition. PHOTO ON THIS PAGE: NICKOLAS RAPAZ A world-renowned photographer uses only a camera to dive into the psyche of world leaders.

52 Russian President VLADIMIR PUTIN, photographed by PLATON THE PROBLEM WHY WORRY? THE SOLUTION

The usual way of studying heads of Our misunderstanding of what drives Even in an age of facial state and CEOs often leaves many leadership can send government and recognition, perhaps the simple questions unanswered. companies in the wrong direction. lens offers unique clues.

is actually “boring” to him. “The camera is just a tool,” he says. “What is interesting to me is what’s happening in front of my camera.” To that end, Platon (pronounced peopleEven haven’t heard of him, they have ifundoubtedly Plah-ton) considers himself a storyteller, a speaker and seen his remarkable work. His portraits of world leaders an activist who brings a deep level of passion and com- in politics, business, sports and the arts are unmistak- mitment to the world’s trouble spots. In 2013, he founded able and iconic. They have graced hundreds of magazine The People’s Portfolio, a nonprofit foundation that aims covers, from Time to Wired to Vanity Fair, and the pages to create a visual language that breaks barriers, expands of countless other publications. Among his subjects: dignity and enlists the public’s support for human rights Donald Trump, Barack Obama, Bill Clinton, Muammar around the world. His photos are all about capturing a Gaddafi, Serena Williams, Bill Gates and Muhammad Ali. moment in time in which that particular truth speaks His name is Platon, and he is a world-class photogra- volumes, even within the fast-changing, dynamic, tech- pher who has been face-to-face with a remarkable lineup nological world in which we live. of world leadership and power. His striking portrait of Born Platon Antoniou in England to a British mother Russian president Vladimir Putin, which graced Time’s and a Greek architect father, Platon spent his childhood “Person of the Year” issue in 2007, offered an unblinking in the Greek islands before moving to the UK, and now and penetrating look into the cold blue eyes of the intimi- lives in the US. Trained as a graphic designer, Platon later dating but inscrutable Putin. It is a photograph worth picked up a camera and found his calling. Extremely well more than a thousand words. dyslexic, he struggled to read and eschewed technology “I’m one of the few people who got to be an inch and (he has never written or sent an email), and through the a half from Putin’s nose, and I could feel his cold breath lens, he found a method for telling the stories that drew on my hand as I focused the lens,” Platon says. “I got to him near. After working for British Vogue for several look into his eyes more than Bush ever did. I was really in years, he got a break when John F. Kennedy Jr. spotted there.” What he saw in Putin is the same refraction of the his work and invited him to New York to photograph light of leadership that he has encountered throughout for his new publication, George. With newfound access his career. He feels it is his job to try to humanize the to A-list celebrities and political and business leaders, power system by presenting an honest portrait, good or Platon’s career skyrocketed and his unique portraits bad, and finding the truth in that portrait. created insatiable demand. We spoke with him about his With his 50th birthday looming in 2018, Platon is in a efforts to illuminate the face of leadership. (Questions long process of taking stock. He claims that photography and answers have been edited.)

● SOMEBODY ONCE personality. My role is to always intellectuals for showing charm DESCRIBED YOU AS be authentic. If I’m true to the in dictatorial leaders. What they “CAPTURING THE ESSENCE moment I was living at the time, don’t understand is that my job is OF A WORLD LEADER IN A I’m going to give you that specific not to go in with a preconceived SINGLE FRAME.” THAT’S A moment. I’m committed to it. I will idea and paint a dictatorial, two- POWERFUL STATEMENT. die for it. It’s the truth as I felt it. dimensional cartoon. My role is DOES IT FEEL THAT WAY But it’s never all the truth. You always to be honest. And what TO YOU? can’t tell a complete truth in five- you find when you are a few inches There is no such thing as a hundredths of a second. away from someone’s nose is that complete truth. There are just true ● you experience things that no one moments. And depending on how STILL, YOUR PORTRAITS can write about from the comfort you catch somebody, depending HAVE OFTEN SPARKED of their armchair and laptop. It’s on the context of that experience, CONTROVERSY. complicated. If a world leader has you get a different side to their I’m often criticized by many great charm but has done terrible

54 Microsoft founder BILL GATES, photographed by PLATON things to humanity, I think it’s That is something called service. you unless you are going there an important thing for us to I humbly believe that if you are first. And I always go there first. know. Because we will always a great leader, you have to be It’s devastating, frightening for underestimate [such leaders] if we strong, you have to be charismatic me every time, even now. It’s not assume they are charmless. If they and inspirational, but you also a trick. It’s just wiping the slates are charming, they are capable of have to think of yourself as a clean of all facades from myself recruiting, of winning people over, servant of the people. That is and my subjects. of persuading people. a very complicated conflict to ● ● resolve. Because on one hand you IS THERE A PORTRAIT SO YOUR GOAL IS TO GET have strength and then you have THAT YOU CONSIDER YOUR TO THAT ESSENCE? submission. I would say there are MOST SUCCESSFUL? Absolutely. To strip away artifice. only a handful of world leaders in My picture of Bill Clinton was And that’s difficult to do because history who were ever able to take my first-ever president—and it everyone is media-trained right those two opposite poles, put them probably should have been my last. now. If you look at how our leaders together and drive positive change. It was certainly not like any other are presented to us around the ● official portrait of a US president. world, there’s this air of glamour IT’S ONE THING TO There was so much criticism. and perfection and control and PHOTOGRAPH A FAMOUS But it was about charisma. ease. I don’t see a connection PERSON BUT QUITE Clinton—everybody says it—had between that propaganda and ANOTHER TO CAPTURE THE more charisma than anyone on the reality. So I set about this ESSENCE OF THAT PERSON the planet. Of course, that same challenge to try and humanize the AS YOU SEEM TO DO OVER charisma got him into trouble. But power system. Whatever it is, I’m AND OVER. IS THERE A it also took him to greater heights. going to find it. Picasso always SECRET FORMULA? ● said, “If there’s something to feel, I am not blinded by authority. I’ve THESE DAYS, IT FEELS AS I’ll feel it.” I’d rather say if there’s never been dazzled by the light. I IF THERE IS A DEARTH OF something to find, I’ll find it. always thought it was a bit weird GREAT LEADERSHIP OUT IN ● that this person seems to think THE WORLD. HOW DO YOU YOU’VE CERTAINLY HAD A they are superior to everybody DEAL WITH THAT? UNIQUE PERSPECTIVE. else. I just never got that joke. So If I were to ask you who is the next Many people meet world I am able to just say, “Well, hold Martin Luther King Jr., the next leaders with a very stiff, formal on a minute, with great respect, I Gandhi, the next Mandela, who are handshake, but do they ever break know you are so-and-so but you the inspirational figures in society through that barrier and get in are still a person. You have the that teenagers would have posters their spirit, in their soul? I use a same weaknesses that I have. So of on their walls, I don’t think little apple box, not even a proper let’s just be authentic with each you or I would be able to come up chair, for them to sit on and I’m other, right?” So it’s up to them. with more than one or two. To me, guessing more world leaders have It’s like putting a spotlight on the I know the leaders are out there sat on that apple box than any truth. Some people find that very because I know them and work single chair in history. liberating and others feel very with them all the time. But their ● threatened by that. voices aren’t getting heard because HOW DO YOU DEFINE ● of the sea of white noise. We have LEADERSHIP? SO IT TAKES A BIT OF to amplify those voices. That’s I’ve seen power, authority, CHUTZPAH AND COURAGE. our responsibility as storytellers. intimidation, charisma, seduction. You have to be courageous. You My goal is to give a voice to But there’s a side of good can’t expect your opponent or the voiceless and an enhanced leadership that I often don’t see. collaborator to be honest with platform of leadership. •

Reading into Faces Eyebrows Head Mouth Chin The most expres- Tilting it up or It’s particularly Upturned, it Great photographers sive part of the face down indicates good at conveying conveys disap- try to reveal what’s can help convey either happiness or desire or revulsion. proval. Indeed, it’s behind a face. Here’s almost any emo- sadness. It’s one of But don’t just read so universal that what the best science tion. According the easiest expres- lips; a Princeton researchers call to an MIT study, sions other people University study an upturned chin, (and some educated eyebrows are more can identify. showed some combined with a guesswork) says important in facial mouth movements furrowed brow and about what each recognition than are easy to confuse. pressed lips, the feature conveys. the eyes. “not-face.” 56 Human rights activist DR. DENIS MUKWEGE, photographed by PLATON

Downtime

Lessons in Taking It Easy

Culinary Arts, for the C-Suite Crowd By Patricia Crisafulli

hef Sharon Oddson pushes her bicycle through C the front door of La Cucina del Garga, a trendy restaurant in Florence, Italy, just as her son and fellow chef Alessandro Gargani brings in crates of arugula and kale from the market. She fin- gers the intensely green leaves and inhales the herbal profumo. “The quality and variety of food in this region are unsurpassed,” says Oddson, a Canadian expat who has made Florence her home since the 1970s. Oddson is here, hours early at her restaurant not far from the Museo Leonardo da Vinci, to offer us some of the finer points of Tuscan cooking—and to tell us about

59 Downtime

a rather curious trend in the Great Foodie Move- From Silicon Valley ment. Certainly, the movement, spurred by one to Tuscany, time-pressed cooking show after another at outlets such as the Food Network, has attracted more than its share of executives are discovering longtime devotees. Joining them now are also high- a host of reasons to join level executives, a group whose idea of gastronomy is typically a succulent meal cooked by someone cooking boot camps. else. In small but growing numbers, they’re show- ing up at one-day programs and weekend boot camps taught by some of the world’s best chefs. Oddson herself has taught groups from the Young Presidents’ Organization how to prepare four-course meals. According to her, virtually every one of her dishes can be prepared pretty quickly, in less than 10 minutes (not a bad sell- ing point to the busy C-suite/would-be-chef crowd). “Sauces can be made in less than five min- utes with fewer than five ingredients,” she says. However long the recipes take, many newbies come determined to learn firsthand how to whip up showstopping meals. But there is a practical aspect of all these classes, too: Knowing ingredients and how to combine them provides more options for those who want to eat healthier while traveling or those who have dietary needs. For example, one can reduce salt and fat by substituting creamy salad dressing with splashes of olive oil and balsamic vinegar, or by squeezing a lemon wedge to enhance flavors instead of reaching for the salt shaker. In its purest form, the culinary art was once the purview of only professionally trained, high- hatted chefs. Today, even Le Cordon Bleu in Paris offers a smorgasbord of programs, from a two-day workshop on “The Art of Making Sauces and Jus” to a three-hour demonstration of “The Art of Cooking Like a Chef.” Halfway around the world, Executive Chef What I know to be true... “Sauces can be made in less than five minutes Events teaches cooking to executives at a who’s with fewer than five ingredients.” who of technology firms—Google, Facebook, —Sharon Oddson, chef and instructor of executives/aspiring chefs, Yelp—as well as pharmaceutical and energy com- at La Cucina del Garga panies in Silicon Valley, Southern California and Dallas. And business is booming. Chef teams will

60 Korn Ferry Briefings The Voice of Leadership

go anywhere to put on cooking programs for corpo- rate off-sites, which companies in multiple indus- tries use for team building. “Collaborative-cooking classes bring people together,” says Charles Gall, event producer for Executive Chef Events. “Cook- ing is more accessible to people than it used to be.” And it isn’t just entertaining; cooking teaches business and life skills such as patience and precision. “When people come together to cook, they learn things such as adding ingredients at the right time and time management,” Gall adds. Then, there is the ultimate payoff: Seeing—and tasting—what you’ve cooked is a tangible and tasty way to express and experience creatively. For her part, Oddson says some of her students quickly join the ranks of home chefs who enjoy cooking for family and friends. But there will still always be others who prefer sipping to simmering—the “culinary Peeping Toms,” as she describes them with a wry smile. They don’t really cook, but love In the kitchen with Executive Chef Events, professionals learn watching artful prep and savoring cooking—and team building. the results.

WORLD-CLASS COOKING SCHOOLS LE CORDON BLEU (Paris) Famed cooking school (where Julia Child studied) offers short courses and workshops in the culinary arts and wines.

CULINARY INSTITUTE OF AMERICA (New York, California, Texas) Full-fledged culinary college offers boot camps on cooking, baking and tips from professional chefs.

LANGLOIS CULINARY CROSSROADS (New Orleans) With full immersion in the style of Louisiana cooking, it offers culinary entertainment and private cooking classes.

MIETTE CULINARY STUDIO (New York) Small classes focus on seasonal produce and farmers-market specialties.

61 Downtime

WorkingMore executives are turning Apps to apps for help with everything from scanning docs to meditating.

By Adam Penenberg

ven before Elizabeth Dukes rolls out of bed, she pulls up an app. In fact, the co-founder and chief marketing officer of Ethe software firm iOFFICE subsists on a steady diet of apps—more than a dozen a day. They help her wake up in the morning, control the air conditioner in her Houston home, and even provide daily Bible verses. (“It frames my focus,” she says.) At work, the apps keep on coming, helping with tasks from project management to organizing conference rooms. “With this thing in my pocket,” she says, referring to her mobile phone, “I have everything I need to run the company.” The mobile app market has certainly come a long way since the iPhone first came out a decade ago. Today, Google Play alone lists 2.8 million apps, while Apple’s App Store boasts 2.2 million. Though many of them are just for fun, the future appears Todoist to be in apps for the “deskless” workforce, says This app makes it easy to manage the most venture capitalist Kevin Spain, a general partner at time-intensive, complex projects as well as Emergence Capital. People who aren’t tied to their remember to pick up a carton of milk on the way home. You can also flag tasks based on desks during their workdays represent 80 percent of “priority level,” so you can check off the 17 the world—including people in construction, manu- most important tasks you need to accomplish facturing, retail, law enforcement and healthcare. for the day. “About a quarter of a trillion dollars a year is spent on software for information workers, and that’s only 20 percent of world’s workforce,” Spain says. But, for those who have desks or not, the options just keep on getting more handy. Here are five top ones.

62 Korn Ferry Briefings The Voice of Leadership

ALICE For the overcharged executive on the road, what could be better than toting a concierge service in your pocket? At least, that’s the conceit of ALICE (it stands for A Life-Improving Customer Experience). A hotel guest downloads the app upon check-in and can use it to arrange for a constantly updated list of services or amenities: pre-order room service or have the valet bring the car around—you name it.

Prompster Say goodbye to cue cards, flash cards, paper notes and scripts with this app. Simply mount an iPad or iPhone on a tripod and the app functions as a Headspace Co-created by a Brit formally mobile teleprompter that lets you trained as a Tibetan Buddhist practice and deliver speeches—plus it monk, Headspace teaches the keeps track of time. basics of breathing and visual- ization associated with secular meditation. It provides a full set of guided meditations in the ColorNote form of audio sessions designed Akin to Post-it Notes, this app lets users to lead you on a journey of create notes and lists in different colors contemplation. and stick them to their home screens. They can set reminders, check off items as they’re completed, protect notes with a password and sync to the cloud or archive. And, unlike paper notes, there’s a search function for easy recall.

63 Downtime

UberAir’s concept taxi/aircraft

Traffic’s

TollWorldwide, the morning commute has never been worse. Our global guide to hot spots— and possible solutions.

By Renee Morad

elf-driving cars certainly offer plenty of cool while someone not so cool honks behind us. dreamy potential, particularly when it And, yes, it’s all gotten worse, with traffic spiking comes to traffic. With roadways becom- 10 percent around the world since 2015, according Sing more efficient, we’ll be scanning our to traffic navigation company TomTom. smartphones or watching videos while cars that We know the cause is generally the global sync up to each other zip through downtown Lon- economy’s own success. “On one hand, many cit- don. At least, that is the vision. ies are seeing job growth, population growth and In the meantime, there is the very unpleasant a boost in the economy,” says Nick Cohn, senior reality of sitting and stewing in highway jams traffic expert at TomTom. “On the flip side, it’s and city traffic for hours, trying our best to stay almost impossible to see these benefits without

64 Korn Ferry Briefings The Voice of Leadership

Worldwide, traffic congestion is up 10 percent since 2015.

as 18 percent at some notoriously also experiencing an increase in traffic.” But who bad intersections. has the strongest bragging rights to the worst commute in the world? (Hint: Drivers in that city waste almost 10 full days a year traffic.) And what Stockholm To deal with congestion, the Scandinavian city are some of the worst cities doing about it? Here’s introduced a toll for drivers who enter the city an overview that might be handy for executives center—with higher prices for rush hour. Traffic who plan to visit or move to any of these cities. dropped 20 percent.

Mexico City Often called the world’s worst, with the average driver wasting 59 minutes a day in traffic. “The city has been growing a lot, primarily in outer areas that don’t have public transportation options,” says TomTom’s Cohn.

Bangkok Drivers in Thailand’s capital log an average of 64 minutes a day during their commutes. “More people are buying cars, and the infrastructure’s not there to support them,” Cohn says.

New York Great mass transit doesn’t solve everything: New Los Angeles Recently chosen as a future test bed for UberAir’s Yorkers spend an average of 16 percent of their futuristic flying taxis, but that’s years away. For travel time during weekdays in traffic, says INRIX. now, prepare to sit in traffic: Trips that should take An effort to introduce Stockholm-style tolls never 60 minutes based on posted speed limits take, on got off the ground. average, 87 minutes because of congestion.

San Jose With commuters spending roughly 32 percent of Boston Though it has the second worst overall congestion their travel time in traffic, the city implemented rate in the US, according to global traffic analyst connected traffic lights and is developing INRIX, it is on a fast track to improvement. It now uses self-contained “urban villages” to encourage data from traffic apps to reduce congestion as much public transportation and cycling.

65 / 1900 Avenue of the Stars, Suite 2600 Suite AvenueStars, 1900 the / of Briefings

Endgame copies:Additional

By Jonathan Dahl VP, Chief Content Officer, Korn Ferry

[email protected] Los Angeles, CA 90067 CA Angeles, Los

Circulation Customer Service: +1 (310) 556-8502 (310) +1 Service:CustomerCirculation Reprints: Advertising:

Winners and Losers 226-6336 Tiffany(310) Sledzianowski+1

So where do companies come in on all this? 556-8502 (310) Levyn+1 Stacy hatever direction I’d argue the thoughtful firms should be keep- it’s heading, it’s ing a close eye on the Bitcoin movement—for W the sake of their employees. As my colleague, almost a joke how senior principal Mark Royal, so well explains, crazy Bitcoin has become: the end of corporate pension plans in favor of 401(k)-funded retirement means “we’ve moved Up $10 Billion in 12 Hours… from companies taking direct ownership of financial well-being, to a model where they are

Down 25 Percent in One Day. asking employees to control it.”

And then there was this one But handing over control doesn’t have from Forbes: Why Bitcoin Is to mean ignoring Worth $0, $20,000, $200,000, it. Indeed, some companies may soon Or $∞. want to invest in

educating workers inks, in a sustainable and environmentally responsible manner. Produced utilizing solar power, recycled paper and soy-based PRINTED IN THE U.S.A With such bouncing around, I can’t tell you about digital cur- where this cryptocurrency will be when you’re rency. Royal, a spe- reading this. But one thing is certain, in most cialist in employee corporate offices, all but a very small and likely motivation and very young and savvy group of workers will engagement, says understand how it all works. Most of us will turnover can clearly be affected by financial . remain pretty clueless. windfalls—and debacles. Go back to the hous- And for good reason. Only a year ago, a fairly ing crisis last decade as one classic example: sizable number of great minds on Wall Street How many workers might not have suffered so dismissed it as penny candy or worse. (In a much personally, and performed better at the famous line he now says he regrets, JP Morgan’s office, had they had little more financial ed? Jamie Dimon once called Bitcoin a fraud.) Now comes a different kind of potential Today? Goldman Sachs, in a report entitled bubble—smaller in scale but already a lot more “Bitcoin as Money,” predicts it could be viable volatile. Certainly, this head-spinning cur- currency, at least in emerging markets. And rency will likely produce a lot of winners and a KornFerry Copyright2018, © ISSN yet, most big brokerage houses were still block- lot of losers among those bold enough to try it. 1 949 ing clients from trading digital money, saying it No company can stop that—they can just help - 8365 wasn’t a suitable investment. Go figure. level the field of knowledge.

66 THE Built 1731, TALENT Established 1851 CLOCK IS TICKING

The countdown to major global talent shortages has begun. As early as 2020, knowledge-intensive industries will struggle to find the 21st-century skills on which their future depends. By 2030, the challenge will be so big that not even artificial intelligence or automation will be capable of bridging the widening gap. While some markets are building their skills pipelines, many are not. What does this mean for your organization, market and sector? The future of work is human. Find out more at kornferry.com/futureofwork A luxurious experience in the heart of Mayfair

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