Denis McDonough

Supported by Greenhaven Road Capital, finding value off the beaten path.

Ezra Klein asked, “how do you actually run a White House?” As chief of staff for President Obama, Denis McDonough knows. From the interview were four questions about leadership.

  1. What do you want in a leader?
  2. What does a leader need to know?
  3. What incentives matter?
  4. What about planning?

Ready?

1/ A good leader, says McDonough is three things.

  1. “I think you want a president to be well read and constantly updating on that.”
  2. “Disciplined.”
  3. “Open to arguments. You don’t want an ideologue in there. You want someone willing to learn new things.”

Obama, McDonough said, did these things. Karl Rove said similar things about George W. Bush. Both presidents were frequent readers. Obama, McDonough said, was “someone that’s constantly reading what’s coming to him but also going out and finding other stuff.”

Good leaders create a culture to argue well inMichael Mauboussin explains it this way, “A final dimension of learning is creating an environment where everyone in the organization feels they can voice their thoughts and opinions without the risk of being rebuffed, ignored, or humiliated.” In business, we see this in Jeff Bezos. In sports, we see it in Sam Hinkie and  Bill Belichick.

Good leaders also create a culture of learning. McDonough said he was inspired by Duke coach Mike Krzyzewski to put a sign on his desk that read “What and where am I learning today?” The idea came from hearing Krzyzewski talk about coaching the Olympic team. The main reason to coach that team, Krzyzewski said, was to learn more about the game of basketball.

2/  A good leader knows the other side. McDonough said:

“What the American public should expect is that he’s spending the kind of time to prepare for his decisions on issues commensurate with the impact it will have on the American people’s lives. If you run into a citizen on the street who is impacted by a decision you made, do you feel that you could argue to that person that ‘I know this impact on you has been significant but I spent a long time really thinking about it and considering the alternatives. I know it has impacted you in a negative way but the national interests have been advanced in the following way.’ Rather than saying, ‘My gut told me this was the best thing to do.'”

Good leaders have deep understandings of their own house, but also the neighbors, and the entire street. Grant Oliphant does this in his non-profit work. Ken Grossman used it to build a brewery. Wesley Gray used it on the battlefield. A deep understanding requires knowing your side, the other side, and the overall conditions.

3/ A good leader understands Incentives. McDonough said he was talking to a colleague who gets a lot of people that come to him for advice. These – mostly young – people want help deciding whether to remain public servants or go to the private sector. McDonough’s friend asks if they want to work for an office with a flag, or if they want to build the next Yelp.

Adventure may be an incentive. Tom Jermoluk, who worked with Jim Clark in the 1990’s said, “Jim was building the coolest stuff. You wanted to be around just to see what was going to happen next.”

Access and community can be incentives. Matthew Crawford wrote:

“The fringe benefit of a discount on parts, and the use of a lift after hours for his own car, is a big part of the compensation. Having the next crop of kids coming in and seeking his advice is no doubt another part; he rises in stature. Showing up at, say, the local dirt track oval on a Saturday night, with his shop’s posse in matching T-shirts, is another pleasure.”

Just simple job enjoyment can be an incentive. Grossman’s brewery ran on fumes during the early years and the employee compensation was middling. People stayed on, wrote Grossman, because they liked working there.

4/ A good leader plans – and then adapts. Plans don’t survive impact, but planning helps says McDonough, because “you trust each other and can make a (new) plan when the shit hits the fan.”

Andy Grove wrote to “plan the way a fire department plans: It cannot anticipate where the next fire will be, so it has to shape an energetic and efficient team that is capable of responding to the unanticipated as well as to any ordinary event.”

Thanks for reading,

Mike

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