Principles of leadership: an interview with Sarah McPhee
Principles of leadership: an interview with Sarah McPhee
We are grateful and proud that so many in our network are reaching out and sharing their experiences in these unprecedented times. It helps to share different perspectives on what it means to do business as usual, in unusual times. We recently interviewed Sarah McPhee, professional non-executive board director.
“We need a few more catastrophes. A few more eye-openers. I am happy to say I think we are on a better trajectory now than we have been in many years.”
On the topic of sustainability
Below follows a transcript of the interview
What attracted you into your highly successful and varied leadership roles?
One trait you have to have as a leader is optimism. I who grew up in a pretty dysfunctional home but despite that I remained a born optimist. In addition to this, and it may be uncomfortable for some to admit, but I wanted to lead. I could be a disruptive child in school but when given a role of responsibility I would calm down. That is one of my tips – if you have a difficult employee, promote them! This isn’t the same as being a controlling personality. I’m not a person that follows up on details, perhaps I do it too little actually. I don’t chase people for exact figures and I’m quite willing to delegate authority and responsibility to others, but I do like to be at the top where I can make decisions. This was the same for me playing as a child in a hockey team as it is in business. Most people appear to avoid this level of responsibility. As a leader it is important to recognise your own abilities but also understand that others that report to you may have many superior skills, better competencies, and more drive. You are there to give them priorities and help them understand the landscape.
You have seen leadership evolve over a long period of time. What has changed and what has stayed the same?
Over the past 10 years particularly, I have seen a slow but noticeable gender equality change. We are becoming less guided by the traditional male images of a leader, for example: the soccer team, the military and moving towards a broader view of what a leader is. I also think the best companies have realised that they have to give people lots of mandate and responsibility in order to get a lot back from them. In Sweden, one thing I noticed when I came over is that you were very technologically driven; there were facts out there and you could not violate those facts. The people that had those facts – the engineers, where the ones who would lead society. Today there is more understanding about the broad range of competencies that make a leader.
Empowerment vs strict hierarchies is a well-established model in Sweden but have you seen become more common in an international context?
I think definitely. I came to Sweden and studied at the Stockholm School of Economics. In my education in America I had never worked in a group that wasn’t in competition with other groups. Here we shared notes, in America we read them, then shredded them, in case the competing teams saw them and benefitted! Swedes are very good at collaborative leadership. But we still have a long way to go; we still build our organisations in boxes and we strive to reach those boxes. Companies that can break that mould and divide the organisation into smaller, accountable teams then keep moving people around, will see people take more responsibility as they feel in a more entrepreneurial albeit high-pressure environment. I believe that even the biggest companies on the Stock Exchange need to think about how to release the younger generation – they want more responsibility. The trick is to find out who the leaders are in that group, who are the ones that want to make changes.
When you look for talent in leaders – what are you trying to spot?
Optimism and will. Those that want to make a change, those that want to lead. I don’t think I have always used these two things as my criteria, it is wisdom acquired with age. There is a myth that these people will be risk-takers or go too fast. It is a possibility - but pair them with someone more analytical, above, below or at the same level and put on the brakes occasionally if you need to. But remember if the brakes are always on then you are not going anywhere. I can imagine that is particularly worth remembering if you are in an industrial company with lots of engineers or even a tech company, where there is a tendency to be very analytical, this is also true for Banking; but you’ve got to pick out those runners or you are just not going to be able to compete.
What about the awkward people, the obstinate? You mentioned that they should be the ones you promote?
Yes because generally they are anxious for the right reasons. Lots, not all, but lots appear difficult or complaining because they are anxious that their boss or their colleagues are not doing the right thing. Once you say “Ok lets do the things you want to do..” then they will blossom. They care about the company and that’s quite different from career people who often just care about themselves.
What have you found important when entering a new organisation as a leader?
Some good feedback is important. For me, I recall being told that I would make a great boss because I’m a good listener. I hadn’t thought of myself like that as I’m more used to being a good talker. I’ve been told that I make jokes at work and described as playful. That is not a traditionally male quality, and it was a side of me that I used to keep out of work hours. As I’ve grown older, I have made an effort to be more ‘me’ in my work and that includes that playful side. It was a competitive advantage – just being the person I am, I’m usually in a good mood and that is important as a boss!
You have worked in male dominated sectors like Finance and Tech? is this your recipe for women entering into that kind of business?
Its hard to be yourself when you are in a minority, and it’s the same for a man alone in a roomful of women, but most men like women – they have mother’s, sisters, partners. They might appear intimidating, I get it and I still sometimes feel this too, but they are more accepting than you think – particularly in today’s world. Just be yourself.
Has it changed over time?
It’s changed yes, but it’s hard for me to be super positive as I started 40 years ago thinking that there was a level playing field. There wasn’t and there still isn’t. I think movements such as Black Lives Matter and particularly Me Too have been really valuable in sensitising people in what they say, how the say it and to whom but I think that a woman still has a difficult journey in male dominated business. The pay gap, the lack of promotion and then after a career break for children she may start to suffer from her own lack of self-confidence. We still have a long way to go.
Is self-confidence something we can build up for minority groups?
We can teach women and minority group individuals how to speak and operate in a white male dominated business meeting but really we need to be teaching the white men how to behave instead. It’s not just about understanding unconscious bias it’s about understanding that people who don’t behave exactly in the ways we are programmed to expect are no less competent.
When you enter an organisation as a leader do you think a lot about the ‘Why’ of the organisation?
A great story is that of when I was chosen to lead the insurer SPP after it had just been bought by Storebrand, a Swedish asset management company. We had the lowest brand value of the entire financial sector in Sweden and we were just entering the financial crisis. A couple of us recognised that Storebrand was excellent at creating sustainable index funds even though the concept of sustainability was yet to take off but we introduced the whole notion of ESG and corporate responsibility into SPP pension and index fund offerings. It introduced a purpose for the staff and injected a massive boost of energy into them and the business. It took a few years, but we made significant gains in customer satisfaction. Everyone needs to know something more than the bottom line about why they are doing things.
I always think of the Hotdog stand. It might be ‘just selling’ hot dogs’ but it is also a vital social institution for hockey parents, day care parents and hungover millennials
How do you bring out the leadership potential in people?
Really, it’s by listening. I have this expression “obsessive individualised leadership” and it has to do with understanding the motives for everyone who reports to me. I shouldn’t have an opinion about those motives, but I try my best to make them happen. For example, if it’s important to someone that they pick up their kids from day care every day then that’s ok. Some will be driven by the sustainability ticket; others will care most about bonuses. Its these drivers that make people different and create diversity of thought around the meeting table. Unlocking the key to their motivations and helping to fulfil them creates loyalty and winning work ethic.
Now your leadership is through the board. How does this leadership differ in style to your operational roles?
It’s a change not to be hands-on in the business. It helps if you have a very delegating leadership style because you are just delegating quite a bit more. The toughest thing as Chair is to make sure you have the right CEO for the phase that you are in and just let them go. Remember that being a CEO can be a lonely job, and just having someone to talk to, a sounding board and to get some feedback is a key role you can play. You are there to manage extreme risk, whatever that might be) but its exciting to see whether you can push that CEO to think a little bit bigger go a little bit further. Its great to be in a position to challenge CEOs and their organisations and see whether they are thinking in the right direction or far enough ahead; but at the same time never taking it away from them – they have the burden of proof.
Until recently you sat on the board of Klarna? How did they get to be so successful and how different was your role there compared to more traditional financial service companies?
My experience at Klarna was about the most amazing change in everything. Every truth I held was turned upside down. Most of the employees have never been in a bank and never have worked anywhere else. The speed of the business was incredible – in fact this is a bit of a problem for me now as I know how fast things can be done. They sometimes go wrong, but mostly go right. Lack of hierarchy, releasing the entrepreneur in each individual I think Klarna do that pretty well even though with 3000 employees it’s not easy. Never taking a truth for a truth – always saying it could be the opposite way round. They are also sincerely dedicated to giving the consumer a better experience. The board was perhaps not unlike other VC owned companies, but I learned a lot about founders, VC, private equity and the importance of having a common view in a board. It shouldn’t be so common that you can’t challenge it, but if you are to move forward then you need a common strategy to sit at the base of all discussions.
You obviously have a lot of leadership experience, where do you seek your inspiration nowadays from all the information that is around us?
First of all, and it took me long time to understand this, it’s important to do something else. I draw, I paint, I ride horses, do a lot of exercise and yoga and I like to cook and see friends. Doing other things and going into other areas, opens up your mind. Particularly artistic pursuits whether its drawing or just looking at art in a museum, it’s a totally different world and it relaxes your mind. I read a lot, newspapers and journals, as you can tell from my portfolio I try to be in many different worlds and very different environments.
What are the similarities between all these different companies you have chosen to work with?
I like to use my technical skills, trading, banking and risk because that’s my background, but sustainability is also a thing for me. I’ve worked with Houdini for 5 years and they take sustainability into complete circularity. Its been important for me see just how far it is possible to take sustainability. I have a commitment to society and its important to me that businesses have a commitment to creating a better world not just a more profitable one.
Sarah McPhee, Non-executive director ACQ Bure, Bure Equity, Axel Johnson, Chair Houdini Sportswear, Chair Fourth AP Fund, SNS.
Honors & Awards: Leader of the Year, CEO of the Year, Chairperson of the Year. Awarded the Kings Medal for her significant contributions within Swedish industry.
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