What leadership values are essential in today’s workplace? How does Brand Mission and Corporate Social Responsibility impact loyalty? And how are the predominant group of employees—millennials—showing up as leaders?

To understand these pressing questions, I spoke with former Baxter leader Harry M. Jansen Kraemer, Jr., an executive partner with Madison Dearborn Partners, a private equity firm based in Chicago, Illinois and a Clinical Professor of Strategy at Northwestern University’s Kellogg School of Management.

Q&A With Harry Kraemer

At Waterhouse Brands, we specialize in helping healthcare and biotech companies articulate and activate the impact they want to create through brand mission, focusing on a company’s narrative, culture, brand experience and involvement.

You had a long career at Baxter Travenol (now Baxter International) and ultimately became the CEO and Chairman. Baxter is a mission-driven company, and you saw firsthand how making a difference changed the nature of work. How do you instill being a mission-focused organization wherever you work?

The great thing about working in the healthcare industry is being able to make a difference, to be part of something that has a mission. That’s what drew me to Baxter early on. It all comes down to leadership. The real question is: how do you become a values-based leader? Values are a lot different than preferences. I may have a preference for something, but a value is non-negotiable—something I’m not willing to compromise on. Being a values-based leader doesn’t start with a focus on communication and motivation. It starts with the basics. To me, there are four principles to values-based leadership:

• Self-Reflection, to really know myself, what I stand for and what difference I want to make and to reflect on my actions daily;
• Balance, which mean taking the time to understand multiple perspectives, especially those different than our own;
• True Self-Confidence, which means admitting what I know and don’t know; and
• Genuine Humility, which means letting every single member of the group know that they matter, and that the team’s success comes before personal glory.

If I can live by those four principles, I am becoming my best self. It also requires turning off the noise and separating activity from productivity. It requires asking those big questions: What are my values? What’s my purpose? What do I stand for? What difference do I want to make? If I’m going to be a leader in an organization, what’s our mission, what are we trying to do? Is it about us as a company—or is it about making a difference?

Are you seeing a shift in the way younger leaders and employees are responding? How important is the mission of the company to younger people compared to older generations?

Generally speaking, for my generation, when we went to work, the view was that the first thing we’ve got to do is to do well ourselves. After I’ve done well, I have a responsibility to make a difference in my community, my church, my neighborhood, and the world. If the company I’m working for doesn’t match my values, I’ll put up with it—because I’ve got to have a job and I can’t move around very much. As soon as I’ve done well, I’ll make up for the fact that I’ve been working for a company that I don’t have much respect for. Younger people in today’s “new world” are not waiting for anything. The view is that I’m not going to wait because I may not be around later and life is only going to get more complicated. I’ll be married, have kids, have responsibilities. If I don’t make being socially responsible and being a best citizen a part of my life now, I don’t think it’s going to happen later. The other piece is that the loyalty to a company is gone. The average person is at a company 2.5 years today. And if that company isn’t socially responsible or living the values, they’re going to leave because they have infinite options. They’re more mobile. They want to make a difference much, much earlier—and therefore companies better get their acts together in terms of mission and culture and what they stand for, or people aren’t going to work there.

We are seeing this play out with millennials who are on track to become the largest percentage of the workforce in just a few years. We know they want to work for companies that pay more than lip-service to their mission. Like it or not, biotech and pharm companies are still being looked at for charging too much for their drugs; they’ve got reputation issues. While it’s clear that life science companies are doing things that matter, it feels to us that they need to go beyond Corporate Social Responsibility to make a meaningful, sustainable difference.

Are you seeing a trend toward that happening? Are you seeing younger entrepreneurs starting companies with that as part of their mindset?

Yes, and here’s the the way I teach this now. I am never going to walk away from the fact that as a leader of a publicly-traded company, I do have a responsibility—a legal one, even—to generate value for the shareholder. I can’t deny that. But let’s take a step back and be self-reflective and thoughtful. How do I generate a return for shareholders? First, I need to become a leader, be self-reflective and be a “best self.” Next, I need to develop a “best team.” But if I am not being socially responsible, doing the right thing and giving people a day off twice a year to work for Habit for Humanity or another cause—if I am not demonstrating as a company that I am truly working to be a “best citizen”—I’m never going to attract the team I need to be successful in the first place.

“The average person is at a company 2.5 years today. And if that company isn’t socially responsible or living the values, they’re going to leave because they have infinite options…companies better get their acts together in terms of mission and culture and what they stand for, or people aren’t going to work there.”

Absolutely. How do you balance having a strong mission and being known as a ‘best citizen’ with the demands of creating shareholder value?

If being a “best citizen” enables me to develop a phenomenal relationship with my team members, reduce turnover, attract customers, and have people feel really good about what they are doing day to day, I’m going to generate shareholder value no matter what. But it is a balance. If you do things from a shareholder value perspective that are either illegal or immoral or questionable—you won’t be around very long and people are not going to respect your company. By the same token, if I focus too much on being a “best citizen” and doing wonderful things that are not economically viable for shareholders, I won’t be in business very long either. It’s about balancing the needs of all the stakeholders in a way that keeps the business viable for the long term.

Does the younger generation react differently to values-based leadership concepts? Do you see a distinct difference between how they show up as leaders?

I think they do react differently because they want to make a difference now. They don’t want to wait. They are very values-driven. But let’s take a balanced view and look at the down side. It’s generational. With social media, constant texting, emailing and twittering and everything else, the problem young leaders have is staying focused. Clearly, they are very active, but I question how productive some of them are. Are you trying to do so many things that you have no idea how productive you are?

What advice do you have for leaders regarding how much time and effort they give to the practice of managing culture?

Every job I was ever in, I spent my time on one of two things: people and communication. When I say the word “people,” it encompasses attracting, recruiting, hiring, training, developing, giving honest feedback, and retention. “Communication” means that every single person in the company understands what we are doing, why we are doing it, and how what they are doing fits in with what everyone else is trying to do. They must have the courage to speak up and they are required to challenge, because as a leader you have convinced them that you are trying to do the right thing. I shock senior leaders when I say that people and communications took 90% of my time in any job I was ever in. And I’ve got to tell you that I’ve had very senior people say to me, if you are spending 90% of your time on people and communication, when do you find time to get the work done? I smile and say, if I have all the right people, and everyone knows exactly what they need to do, what else is there for me to do?

You are so right. Once people feel connected and have context around why their work matters it will motivate and inspire the action that you want them to take. It comes down to a focus on people and communication.

Thank you so much for sharing your leadership wisdom!