From mega-corporations to small startups, every organization has its own core values. Whether these values remain unspoken or are featured prominently in a campaign, they determine company culture, which can ultimately make or break your business. Unfortunately, for many organizations, core values are nothing more than a few nice-sounding words stuffed into an employee handbook that new hires read during their onboarding but never see or think about again.
When this happens, you might find the behaviors of your individual team members to be at odds with one another, and you’ll spend a tremendous amount of time trying to build buy-in for goals and strategies, which can be an enormous task. Perhaps you’re experiencing breakdowns in communication, or your operations are siloed, or maybe your team is just generally struggling to work together. This is a difficult situation to be in, but there’s no need to panic.
I’ve written before about how leaders need to do a certain amount of work themselves even if they’re going to hire a third party to lead their team in a workshop. Similarly, no one is going to be able to deliver a team that’s completely in sync with one another on a platter. Leaders need to put in the work if they want to develop and sustain values-based alignment within their organization. Let’s dig in.
What is Values-Based Alignment?
Defining “values-based alignment” is pretty simple. When your entire team understands and applies the organization’s core values as they collaborate with one another, you’ve achieved values-based alignment. Putting it into practice, however, is more complicated.
Before you can begin working toward values-based alignment, you first need to specify what your organization’s mission is and decide what values support that mission. Doing so will essentially clarify why these values exist in the first place, increasing the likelihood that your team will buy in and adopt these values as their own—at least while they’re on the clock. Some examples of core values include integrity, accountability, collaboration, and compassion. Carve out some time and explore what core values align with your business’s mission if you haven’t already.
While establishing your core values is an important step, you’ve still got a bit of work left to do to reach values-based alignment. As a leadership development consultant, I’ve found there are generally three actions leaders can take to help move the needle.
Focus on Consistent Application of Values
In my experience, most companies tend to fall into one of two categories: they’re either problem-focused or outcome-focused when they run into challenges. I find both of these perspectives to be lacking and instead encourage my clients to focus on the consistent application of values, not just problems or outcomes. How you get to a solution matters just as much as the solution itself. The how is where the purpose of having values becomes clearest.
For example, are you willing to pursue profitability by any means necessary? I once had a client who was forced to discuss this very issue. A high-value customer made a request that would violate an employee’s rights (the customer didn’t want an LGBT+ person working on their account). Believe it or not, it wasn’t a black-and-white decision, especially since there was a good chance that the employee might never find out why they were removed from the account. If my client accommodated their customer, they would’ve been meeting their profit value; however, they would’ve been sacrificing their inclusion value.
Notwithstanding the legal issues this presents, the leaders were split on how to prioritize profit relative to its other values. Now, as the organization considers layoffs and other belt-tightening measures in the face of a potential economic slowdown, how they prioritize profit will impact the manner in which they make hard choices, and the ramifications are broader than inclusion. Values aren’t just about DEI.
“How you get to a solution matters just as much as the solution itself. The how is where the purpose of having values becomes clearest. ”
Focus on addressing any contradictions between your values, your policy decisions, and your organization’s actions. Then, focus on clearly explaining the gap and how whatever solution/rationale you choose addresses it. Then, communicate this over and over (and over) again. Values-based alignment is about clarity and repetition so that people hear your values, understand them, and use them to guide their behavior.
Be Part of the Process
Just in case this isn’t abundantly clear: you’ll need to be a part of this entire process—from establishing core values to aligning those values with your organization’s goals to modeling those values every day. This is not something you can delegate. You can absolutely bring in support—either internal or external—but you will not be able to outsource this work completely.
Being part of the process might mean you uncover difficult truths about your organization or even yourself, and that’s OK. Part of discovering how to apply core values to your organization is holding up a mirror to any gaps or pain points, acknowledging them and then working toward a solution.
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Values-Based Alignment is a Journey
Not every problem will be solved overnight, nor should it. It will take time, effort, and collective participation to get everyone in sync. Even once you get there, the work still won’t be over because values-based alignment isn’t a destination; it’s something you’ll perpetually work toward, but don’t let that discourage you.
Your business is constantly evolving and being in values-based alignment will position you to meet the growing needs and expectations of your employees, partnerships, and customer base. Not only that but navigating new challenges shouldn’t be nearly as daunting when your entire team is operating from the same playbook.
In the early days of the pandemic, empathy and empathetic leadership emerged as the premier topics of conversation in corporate America. As businesses shut their doors and employees began working from home, leaders understandably searched for answers to the big question: How do I keep my business operational while taking into account the unique and deeply personal challenges employees are facing?
As an organizational psychologist and empathy researcher, I was excited to see the term make its way into the mainstream workplace vocabulary, but there was still a learning curve as business leaders began to incorporate empathy into their organizations. In my work with executives across the country, I’ve encountered the same four myths about empathetic leadership that, if left unchecked, have the potential to seriously harm a business. Here are a few ways to mitigate that risk.
1. ‘Empathetic Leadership Results in a Lack of Leadership.’
This myth is probably the most damaging of the four we’ll cover because it can limit how much empathy a leader ultimately shows their team. Typically, those who hold this belief fundamentally misunderstand empathetic leadership. They assume that leading with empathy means there is no clear structure within an organization and that everyone is so busy talking about their feelings all the time that hardly any work gets done—but this couldn’t be further from the truth. In fact, a recent survey found the exact opposite: empathetic leadership is actually linked with higher levels of productivity.
A lack of leadership often goes hand-in-hand with a lack of accountability across a team—from the executive board to entry-level associates. So how do you solve this? Ironically enough, by empathizing with employees and taking on a holistic approach to problem-solving. When people know their needs will be met with compassion and understanding, they’re much more likely to ask clarifying questions or take ownership of their part in an unsuccessful venture. If you’re concerned about a lack of clear, strong leadership in your organization, start by incorporating more empathy, not less.
2. ‘We Have to Have Similar Experiences to Empathize.’
Many people assume, both inside and outside of the workplace, that we can’t empathize with others unless we’ve experienced similar circumstances ourselves. However, empathy is about understanding the emotional experience of a situation, not necessarily relating to the situation itself. In her 2018 book, Dare to Lead, Brené Brown summarizes it perfectly: “Empathy is not connecting to an experience. Empathy is connecting to the emotions that underpin the experience.” When confronted with a situation you think you can’t relate to, pause and ask yourself, “Have I ever experienced the emotion this situation is evoking for this other person?”
Let’s use conversations around DEI as a real-world example. These conversations can be polarizing, but they don’t need to be. When someone feels uncomfortable hearing about another person’s lived experience that’s different from their own, they might respond with, “Well that’s not my experience.” Responding this way can be hurtful to the individual, who will likely feel dismissed and unheard. This can translate to feeling largely unsupported by the organization itself, which could elicit a number of consequences such as disconnected teams and interpersonal conflicts.
I’ll say it again: Relatability doesn’t matter when it comes to empathizing. So let’s go back to our DEI example. Let’s assume during a company-wide training, someone is brave enough to share that they’ve been the target of microaggressions on several occasions since joining the organization. Even if you’ve never experienced microaggressions yourself, you can still understand why it would be traumatic for someone. Ask yourself: Have you ever felt belittled, condescended to or stereotyped based on certain aspects of your identity? If the answer is yes, then you can empathize.
“In my work with executives across the country, I’ve encountered the same four myths about empathetic leadership that, if left unchecked, have the potential to seriously harm a business.”
Considering empathy is a “soft skill,” it’s understandable why some might assume that we either feel empathy or we don’t, as if there’s nothing we can do to change our intrinsic emotional response. But like any skill, it’s possible to get better with practice.
But how exactly do you “practice” empathy? You ask questions until you understand. If one of your employees tells you about a problem that’s impacting them and/or their ability to carry out their duties, start by asking questions such as, “Can you tell me more about that?” or, “How does this make you feel?” or “Is there anything I can do to support you?” From there, you can begin working on a solution.
It’s important to train ourselves to open up when we’re in uncomfortable situations instead of shutting down. If we give ourselves time to ask difficult questions, we can improve our empathy skills one issue at a time. But don’t get me wrong—there will be some growing pains. You will probably never fully understand every single situation, but over time, as you connect with a variety of emotional experiences, you’ll find it gets easier and easier.
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4. ‘Empathy is Empathy—There’s Only One Type.’
This last myth is pretty easy to debunk considering the amount of research available on the three distinct types of empathy, but let’s dig into these distinctions and consider how each type of empathy can be useful in different professional situations.
The first type of empathy is cognitive empathy, or intellectually understanding what someone is going through but not experiencing those feelings yourself. Cognitive empathy is an excellent tool when you need to keep some emotional distance from a situation, such as when entering a negotiation. In these situations, you might hear someone say something like, “I understand you feel this way.” Granted, it’s not the warmest or fuzziest type of empathy but there’s definitely a time and place for it in your business.
The next is emotional empathy, sometimes known as parallel empathy, or when we sense and take on someone else’s emotions. Imagine for a moment that you’re a mentor to an up-and-comer in your field. You support them as they prepare to pitch a potential client, but ultimately, your mentee doesn’t close the deal. Afterward, your mentee is upset and a little embarrassed to have lost such a monumental opportunity, and although their loss doesn’t impact your business or career, you feel the same sadness and embarrassment your mentee is feeling. Emotional empathy can be an excellent tool when it comes to things like team building, but make sure you have firm boundaries in place or you might end up carrying every emotion as your own, which can leave you feeling exhausted and unproductive.
Finally, there’s compassionate empathy, also known as reactive empathy, which I consider to be the highest level of empathy. Compassionate empathy makes you want to spring into action and provide tangible solutions to the problem at hand. Of course, if you lack boundaries and start trying to solve everyone’s problems, this type of empathy could present some issues. But in most cases, this is the kind of empathy you should strive for in your organization.
When one of your team members is faced with an issue, you’ll want to go beyond simply acknowledging their experience (cognitive empathy) in order to embrace those emotions as your own (emotional empathy) and actually provide tangible support as best you can (compassionate empathy). Your organization will almost certainly be better for it.
More and more, senior leaders are enlisting experts from outside their organization to help them address the issues they’re facing, which can be an excellent approach for resolving the problems plaguing your company—the operative word here being “can.”
Bringing in a third party that specializes in the roadblocks you keep running into, or one who has spent years refining the type of workshop your team would benefit from, can bring new insights and fresh perspectives. But before you hand over the reins and take a seat in the audience, there are a few steps you can take to increase the odds that the workshop is a success and the lessons learned stick with your team for the long term.
The fact is: organizational development coaches aren’t fairy godmothers, no matter what anyone tells you, and in order for any workshop or program to be successful, there is some important work you’ll need to do before you even begin your search for a workshop facilitator. As a leadership development consultant, there are 3 tasks I recommend every leader should check off their to-do list before they schedule an organizational development workshop for their team.
Ask Yourself the Hard Questions
In my first meeting with every one of my clients, I ask them a question along the lines of, “Why can’t you fix the problem yourself?” This might seem kind of harsh, but hear me out. Most of the time this question takes them by surprise. It makes the client sit back and pause for a moment. Why do they need my help? Why can’t they solve this issue on their own?
Let me be clear: there are no wrong answers to this question. Anything from “I’m conflict-averse” to “I don’t feel equipped to lead this discussion” is a perfectly valid response, but having an answer to this question will give your facilitator a clearer understanding of why you’ve brought them in as well as the outcomes you expect them to produce.
Depending on the client’s answer to this question, we might discover that they are, in fact, in need of a facilitator to lead their team through the exercise—or we might discover that the client actually is capable of fixing the problem on their own and that they’re more in need of a consultant, someone to walk through their solution with an outsider’s point of view before the client takes it back to their team.
Answering this question honestly—to yourself first and only then to any development coach you may hire—will allow you to dig deeper into the issue, giving you the opportunity to actually solve the issue rather than simply smooth surface tension.
“The fact is: organizational development coaches aren’t fairy godmothers, no matter what anyone tells you, and in order for any workshop or program to be successful, there is some important work you’ll need to do before you even begin your search for a workshop facilitator.”
One of the primary issues I and others in my field run into is resistance from team members. Depending on what we’re solving for, some people might not think it’s much of an issue, while others might be actively contributing to the problem and are therefore unaware of the issue entirely. When the majority of the team thinks a workshop is a waste of time before we even begin, we’re not going to get very far.
In my experience, the most effective solution is to ask the team what their perspective on the problem is before the workshop even begins. How does the issue impact their ability to do their job? What potential solutions do they see? When people feel involved in the problem-solving process, they’re much more likely to engage in implementing the solution.
As with most instances of resistance, what I encounter from a given team member is typically rooted in fear of the unknown. When we don’t know what to expect, people may be understandably anxious, and that anxiety might in turn manifest as resistance. Sidestep this problem entirely by addressing any potential fears head-on.
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Go With Your Gut
In an ideal world, you’ll have built professional relationships with consultants and coaches before you have a need for them and should be able to pull in others you already know and trust when you’re faced with an issue. But if that isn’t the case, and you’re researching and interviewing facilitators for the first time, I strongly recommend following your instincts and only hiring someone you like and respect. Even if someone is considered “the best,” if you aren’t able to connect with them, it’s better you go your separate ways. Otherwise, you’ll question every suggestion they make, their solutions won’t stick and your team won’t benefit from the workshop.
That said, be aware of affinity bias. It’s common to find comfort in those we share commonalities with but comfort doesn’t usually produce unique solutions. And if the person you decide to hire isn’t able to bring unique solutions, then what are you paying them for? At the end of the day, your own intuition is usually your best resource: trust your instincts and hire the person you trust implicitly.
You’ve Got This
Dealing with breakdowns in communication or addressing how to cultivate an intentional culture can be sensitive topics and therefore produce a lot of anxiety, for both you and your team, but you don’t have to address them alone. Finding the right consultant or coach to lead your organizational development workshop can produce incredible results—but only if you do your share of the work first.
It can be tempting to keep doing the things that we know we do well, even if it means neglecting the responsibilities we know we should be tending to instead. There’s comfort in playing to our strengths and, let’s be honest, it’s fun to be good at something. When we practice our skills in woodworking, knitting or the local pickleball league, we gain relaxation, satisfaction and fulfillment. We enjoy ourselves, level up and feel rewarded. But when it comes to work, this tendency gets trickier.
Rarely does an executive-level job need us to keep doing the specific technical thing—the accounting, sales management, finance, lawyering or whatever else—that we did with excellence for most of our careers. What the business needs from us instead is to shift our focus to the inspiration and persuasion parts of leadership, despite any discomfort we may harbor in that realm.
Executive leaders can be deeply resistant to taking their hands off the operational wheel. I see it regularly in my executive coaching practice with C-level leaders. Out of a desire to bring our best, we immerse ourselves in the day-to-day, tackling challenges, sounding off on routine matters and dispensing wisdom. We go particularly deep in areas in which we believe we’re the resident expert. What we fail to realize is that when we do all of that, in effect, we are telling others what to do. We shrink our teams’ accountability for results. We create the conditions in which our business fails to get the most out of its human capital.
Stepping Into Your Executive Role
When I worked in the C-suite, I couldn’t resist dispensing wisdom in the one area that happened to be my legacy career domain. I could see that I annoyed my direct report who led that area, yet I thought I was doing my job. When I finally shut up and got out of their way, they did things more strategically, creatively and effectively than I could have imagined.
“Well, being an expert is the very definition of my role,” you might respond. “Of course, my business needs me to use what I know!”
Yes, but not in the way that you think. In their book, What Happens Now? Reinvent Yourself as a Leader Before Your Business Outruns You, John Hillen and Mark Nevins argue that when C-suite leaders stick with what they know technically, their focus is inevitably trained on “problems of complexity,” the tactical, operational and organizational challenges of the business. They stay in the thick of things, calling the shots. This almost inevitably means they’re doing other peoples’ jobs while doing too little of that which only they, as executives, can do (i.e., make sense of the future, iron out alignment wrinkles and cultivate other leaders).
Meanwhile, wiser, more skillful executive leaders, despite whatever level of technical competency they possess, focus their energy on “problems of sophistication,” those challenges that exist in the interpersonal and political realms. Companies that achieve and sustain competitive advantage are led by executives who place most of their focus here. In the words of Eleanor Roosevelt, “A good leader inspires people to have confidence in the leader. A great leader inspires people to have confidence in themselves.”
“Ask your team how you can provide strategic guidance and direction while keeping agency and decision rights firmly in their court. And then hold yourself accountable for what they ask you to do.”
Ask your direct reports if you provide them with the type of executive leadership that they need. It could be that you’re showing up for them exactly as they want, clearing brush when they ask but otherwise giving them space. Good for you! Or you might learn that you’re smothering them, particularly in the areas you specialized in. Be humble. Ask your team how you can provide strategic guidance and direction while keeping agency and decision rights firmly in their court. And then hold yourself accountable for what they ask you to do.
Ask yourself: Are you more hands-on in functional areas that you have experience in? Are you more socially at ease with coworkers who share your career background? Do you have the nagging sense that your teams wait for you to tell them what to do rather than assert themselves or take positive initiative? All are clues that you’ve inadvertently trained your team that your expertise matters more than their contributions. You can say all the right things about valuing your team’s perspective, but the reality is they have figured out that their opinions rarely shape your decisions.
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Moving Forward
So, step back. Let go of the idea that what is needed from you is more of your domain expertise. Your more lasting impact will come from convincingly, even passionately, unlocking what is possible within others. In practice, that means less telling your fellow leaders what you would do in their shoes. Instead, ask them what they would do on consequential matters, be genuinely interested in what they come up with and let them run with their own solutions without shaping them into your own. Try it for a month. You might be surprised at what you learn.
The ego has gotten a bad rap as of late, especially when it comes to business. You’ve probably heard a boss or a manager say some variation of the phrase “check your ego at the door,” and there are some who have even gone so far as to say that “ego is the enemy of good leadership.” These days, empathy has taken center stage, and with good reason. As organizations are still reeling from the effects of the Great Reshuffle and many workers call for their employers to be more human, empathy is having a moment.
As an organizational psychologist and empathy researcher, I don’t disagree with the heart of these arguments. It should be every leader’s worst nightmare to be described as an “egomaniac” who is unable or uninterested in hearing constructive feedback. But does that mean ego has no place in your business? Based on the years I’ve spent designing and developing leadership programs for global brands, I would argue that some ego is necessary to be the best leader you can be and run a successful business. Let me explain.
What Is the ‘Ego’ Anyway?
In the simplest terms, “ego” means “I” or “the self.” When we say someone “has a big ego,” we mean that they think too highly of themselves, or they’re too focused on themselves and not enough on those around them. But the ego isn’t necessarily a villain.
I often tell my clients to think of the ego like a bouncer at a club. If the ego had a job description its No. 1 responsibility would be to protect us from pain and embarrassment, which is a good thing, but it’s also the source of the ego’s bad reputation. Important leadership traits like self-awareness and being open to constructive criticism can be uncomfortable, painful and embarrassing. In these scenarios, it’s important that you’re able to recognize your ego and tell it to take lunch so you can actually absorb this feedback and grow as an individual and as a business leader.
But let’s consider an example of how our egos work to protect us can ultimately be a good thing. Take Jennifer Lopez’s recent documentary, Halftime. In the film, JLo discusses the onslaught of criticism she’s faced throughout her career, about her looks, her voice, her personality and so much more. Had she internalized all that feedback and given all of it the same weight, she wouldn’t be the actor, singer or performer she is today. Thanks to the ego, JLo was able to cut through the noise and apply the feedback that could actually help her grow—and ignore the rest.
The ego helps us draw those necessary boundaries so that we don’t take on every opinion or emotion as if they were our own, which can be a good thing. Your ego encourages you to trust yourself, your experiences and your instincts, even when others disagree. Your ego ensures that the empathy you show others is balanced with compassion for yourself because you’re worthy of care and respect, too. The ego isn’t empathy’s archnemesis, it’s empathy’s powerful sidekick.
“Finding the balance between empathy and ego is the key to exceptional leadership.”
Finding the balance between empathy and ego is the key to exceptional leadership. It can’t be all ego all the time, just like it can’t be all empathy all the time. Striking the right balance will look different for each leader, each organization and each situation, but let’s consider an example of what this balance looks like in action.
In May 2020, Airbnb made the difficult decision to lay off a significant portion of its workforce as the company struggled in the early days of the pandemic. Ego is inherent in any decision to cut ties with workers: You, the leader, are making a decision to move the company forward, despite the negative impact that decision may have on the livelihood of many colleagues.
But rather than make the announcement over a Zoom call and wash his hands of it (all ego), Airbnb’s CEO Brian Chesky wrote an open letter that clearly walked employees through the decision-making process before he outlined the generous severance package each employee will receive (ego and empathy). Chesky and the Airbnb team had to make a tough call, but by balancing that call with empathy, I would bet that Airbnb was able to maintain positive relationships with those employees—and potentially gained some loyal customers in the process.
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Empathy Is a Superpower
In order to achieve your goals, both for your business and your career, you’ll have to strike the right balance of empathy and ego. Don’t think so highly of yourself that you can never be wrong. But don’t become so invested in other people’s emotions that you compromise your values and lose your purpose.
I truly believe that empathy is a superpower. Being able to tap into how others are feeling, consider other points of view and give them weight aren’t the skills of an average leader. But if you allow empathy to overpower you at every turn, you’ll quickly find you aren’t the one running your business anymore. Empathy is a superpower, but don’t let it become your kryptonite.
Nintendo DS. Wii. Nintendo Switch. Each of these legendary systems revolutionized the gaming industry at the time of its release. Integral to their success was former Nintendo of America COO and president Reggie Fils-Aimé who recently ended his 15-year tenure with the iconic brand. In his recently published memoir, Disrupting the Game, Fils-Aimé shares stories, insights and lessons from his life and career that every executive should devour if they aspire to lead a global brand with a cherished role in the lives of its consumers.
In a conversation with Senior Executive Media, Fils-Aimé discussed disrupting industries, having the courage to make difficult business decisions and the importance of measuring organizational health. Read on for edited excerpts from our exclusive interview.
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Senior Executive Media:Your book, in part, focuses on disruption. While you were at Nintendo, what were the forces that changed the video game industry? What factors made disrupting a priority?
Reggie Fils-Aimé: So the video game industry in the early 2000s was very different than the video game industry of today. At that time, only about one out of every three people played video games here in the United States, and the number was even lower once you got out of Japan and the United States. Nintendo believed that the industry needed to do something completely different in order to grow, in order to attract people who did not traditionally play video games. Between 2000 and 2003, the industry was just doing the same remakes of the same old franchises.
We saw a need for new and innovative games, and we focused on unmet consumer needs. I’ll give you an example. We launched a product called the Wii U, which in fairness, was not successful in the marketplace because the messaging for it was complicated. But we heard from consumers that a key aspect of the system was highly desirable – the aspect where they could play their video games on a big screen and then take that with them elsewhere in the household and continue playing when someone else wanted to watch something on that beautiful big-screen TV.
The problem with the Wii U was that if you got more than 30 feet away from the console, the connection would be lost. But we identified that key insight and used that to develop our next system, what became the Nintendo Switch, which right now is the best-selling system in the industry, and is now Nintendo’s best-selling home console in its history.
“As a senior leader in an organization, you need to spend a significant amount of your time measuring the health of the organization and taking action based on what the data is telling you.”
Senior Executive Media: Disruption is hard. Tell us about a big challenge you’ve encountered – and how you responded.
Reggie Fils-Aimé: Well, you know, in my business past, I’ve had many failures out in the marketplace. And the fact is, sometimes they can’t be fully turned around, and the example I’ll use is outside of my Nintendo experience. It’s back when I was in the restaurant industry, working for Pizza Hut.
So this was in the early 1990s. Similar to what we’re going into [in 2022], there were recessionary pressures in the marketplace. The brand Little Caesars was doing exceptionally well because their proposition was a lot of food for a low price. Didn’t matter how tasty the food was, they were meeting a key consumer need at the time. Pizza Hut saw this as a key business threat, and we developed our own value pizza offering called Bigfoot Pizza. Its proposition was a rectangular two-foot by one-foot pizza sold at a similar price point to Little Caesars – plus, we offered delivery, which Little Caesars did not do.
This became a billion-dollar business, highly successful. I was in charge of testing and then rolling out this initiative. But the issue was that because we were using inferior ingredients—the cheese was not the same cheese that was used on the base pizza product, the dough was different—the consumer was noticing this difference [and began] associating it not just with Bigfoot Pizza, but with the entire brand.
In this case, there was no solution to the problem, meaning we couldn’t make the Bigfoot Pizza better because that would drive more cost that would make the entire proposition unprofitable and untenable. So I had to make the difficult decision to recommend that we shut down this business—that we shut down a billion-dollar business. When innovation is working in the marketplace, but there are other factors that make it untenable, as a leader, you need to make the hard decision, the hard recommendations, to shut a business down or pivot to other initiatives in order for the overall business to be successful for the long term.
Senior Executive Media: You deliver a lot of leadership lessons from Nintendo in your most recent book. Can you share one or two of the really big ones and how you learned them?
Reggie Fils-Aimé: One of the big leadership qualities that I would highlight is that leaders have to make those big, tough decisions because, in well-run organizations, easier decisions are made lower in the organization. So it’s those biggest, toughest decisions that come to the leaders. And so you need to have courage in your decision-making. You need to thoroughly think through the issues and the options, and then you need to make the tough call.
I mentioned how Nintendo was on this path: We needed to bring gaming to a mass market audience. We did that initially with a product called the Nintendo DS, but then we did it again with a product called the Wii. You might recall this product, it used a one-handed controller that had gyroscopic capabilities. So you can play a tennis game by swinging your hand as if you were swinging a racket. Or you could play a baseball game as if you were holding a bat and trying to hit that home run. And there was one key piece of software that really brought the system to life. It was a piece of software called Wii Sports.
During its development phase, when myself and all of the developers in Japan were working on this product, we knew its potential. My push was to include Wii Sports as part of the overall proposition for Wii hardware – meaning that when you bought the hardware, Wii Sports would be included in that box as a piece of playable software. This was a very controversial decision because the software could be sold for $50 per unit, generating significant profit. And so my recommendation would be foregoing significant revenue and profit. But in return, we would have a unifying experience for consumers who bought the hardware, having this wonderful collection of games to play.
In the end, the decision was made to include Wii Sports all through the Americas, which I was responsible for, as well as for Europe. In the Japan home market, it was sold as standalone software, which provided a wonderful A/B test. And in the Americas and in Europe, we saw consumers playing Wii Sports in retirement homes, we saw consumers playing Wii Sports on cruise ships, we saw consumers playing Wii Sports in bars – it was a shared communal experience. That really didn’t happen in the Japan market. And my market, in particular, had the best overall results for Wii during its lifetime. So that was the decision and again an example of the principle of courage and decision-making.
Reggie Fils-Aimé: I don’t know that executives don’t think to measure this but measuring it is hard. And that is measuring the health of your organization. [In order to measure it, you’ll need to] dissect all of the elements of your culture and then use the data to make decisions on how you want to shape your culture. I’ll give you an example.
When I joined Nintendo, we really didn’t measure our culture. We had standard HR metrics, you know – transitions, terminations, things of that nature. But we weren’t measuring the culture. As I became the president and chief operating officer… what we focused on were behaviors—behaviors around team building, behaviors around taking initiative, [behaviors around] communication, behaviors of developing the organization. And we ended up identifying about eight key behaviors that were important to our culture. As a senior leader in an organization, you need to spend a significant amount of your time measuring the health of the organization and taking action based on what the data is telling you.
Senior Executive Media: That can be a real challenge. What was your approach to measuring these behaviors?
Reggie Fils-Aimé: We did an annual survey, and we were fortunate – we literally had over 95% participation in our organization, which is a huge number. We not only measured against ourselves, our past performance, but we measured ourselves against other high-performing organizations. But the other thing that I personally did was I met with individuals and teams. That was probably 80% of my personal schedule, meaning I made it a priority to spend time with my staff, the key teams and the top leaders within my organization. I made it a personal priority, not only to check in on the projects but to check in on the people, to make sure that, individually and as a group, the culture and the health of the organization were high. So it’s a combination of hard data, as well as softer data and insights, to have a sense of how your organization is doing.
