Transformational Leadership: How to Be a Catalyst for Change with Cynthia Carroll and Frances Frei
This week, Gautam Mukunda talks to two leaders who have extensive experience with transformational leadership. Tune in to hear the approach and takeaways each has from their time leading organizations through times of change.
Great leaders have the insight to see what the right thing to do is, the skill to do it, and the courage to do it even when it is hard. When those three things come together, the impact a great leader can have and the number of lives they can touch is vast.
In this episode, Host Gautam Mukunda speaks with two phenomenal leaders who have completely upended, transformed, and positively impacted the culture of their respective organizations. As CEO of Anglo American, Cynthia Carroll was the first female CEO of a major mining organization and in 2008, Forbes listed her as the fifth most powerful woman in the world. In 2017 Frances Frei served as Senior Vice President of Uber, and radically changed the toxic culture into one the employees could be proud of. She is currently a Professor of Technology and Operations Management at Harvard Business School.
I was relentlessly optimistic and rigorous about the future, and I think if you have a rigorous and optimistic way forward, coupled with honor and reverence for the past, I think that's what facilitates change, and maybe an insider or outsider helps but I think those two might be more important.Frances Frei
I think you need a catalyst for change, and that's what I aimed to do at Anglo American, through prioritizing safety as had never been done before.But it really woke everybody up that we were on a different path, and starting with the protection, the care and respect of each and every person who worked in our operations, or within our walls.Cynthia Carroll
Books Referenced on World Reimagined, Season 2 Episode 2:
Guest Information – Transformational Leadership: How to be a Catalyst for Change:
Cynthia Carroll has spent most of her career leading global businesses in the industrial sector. Cynthia began her career as an exploration geologist at Amoco Production Company in Denver, Colorado before joining Alcan Aluminum Corporation. She held various executive roles at the company including President of Bauxite, Alumina, and Specialty Chemicals, and Chief Executive
Officer of the Primary Metal Group, Alcan’s core business. From 2007 to 2013, Cynthia served as the Chief Executive Officer of Anglo American plc. At the time, Anglo American was one of the largest and most diversified mining companies in the world employing approximately 160,000 people with operations on six continents and a market capitalization of approximately $40 billion. Anglo American ranked in the top 20 companies on the London Stock Exchange’s FTSE 100 Index.
Cynthia sits on the boards of Hitachi Ltd, Baker Hughes, Pembina Pipeline, Glencore, American Securities, and Prince (an American Securities company). She previously chaired the boards of Anglo American Platinum Ltd, De Beers Société Anonyme, and Vedanta Resources Holdings Ltd. and has also served on the boards of BP, the International Council on Mining and Metals, the International Aluminum Institute, the American Aluminum Association, and the Sara Lee Corporation. She is a fellow of the Royal Academy of Engineers and a Fellow of the Institute of Materials, Minerals and Mining.
Cynthia holds a Bachelor's degree in Geology from Skidmore College, New York, a Master’s degree in Geology from the University of Kansas, and a Master’s in Business Administration (MBA) from Harvard University. She has also been awarded an Honorary Doctorate of Science from the University of Exeter, Honorary Doctorate of Laws from Skidmore College, and an Honorary Doctorate of Economics from the University of Limerick. In 2009, Forbes ranked her the fourth most powerful woman in the world. She is the only woman to have held a CEO position of a major mining company. Cynthia and her husband have four children ranging in age from 21 to 27.
Frances Frei is a Professor of Technology and Operations Management at Harvard Business School. Her research investigates how leaders create the conditions for organizations and individuals to thrive by designing for excellence in strategy, operations, and culture. She regularly advises senior executives embarking on large-scale change initiatives and organizational transformation, including embracing diversity and inclusion as a lever for improved performance.
A global thought leader on leadership and strategy, Frances is widely recognized for her dynamic teaching style and breakthrough courses optimized for rapid, lasting impact. She developed one of the most popular classes at HBS, which explores business models that reliably delight customers. She also led the design and launch of HBS’s innovative FIELD curriculum built around learning experiences that are experiential and immersive.
In 2017, Frances was tapped to be Uber’s first Senior Vice President of Leadership and Strategy with a mandate to help the company navigate its very public crisis in leadership and culture. Her firsthand experience in Silicon Valley gave her a new lens on the urgent topic of trust, and in May 2018, Frances delivered a widely-viewed TED talk on “How to build (and rebuild) trust.” This powerful framework delivers a crash course on stakeholder trust: how to build it, maintain it and restore it when lost.
Gautam Mukunda (00:01):
Doctors can be heroic, soldiers too. Can business leaders? After all, their job is just to make money. But what if you turn around a culture so toxic? It's a byword for discrimination. What if you step into an industry where someone dies every two days, and transform it?
Speaker 2 (00:23):
I think of it as trying to create a new world, the kind of world that we perhaps have always wanted to live in.
Speaker 3 (00:32):
Climate change is a systemic risk to the entire economy. You cannot diversify away from it.
Speaker 4 (00:38):
To intervene, when your country, your company, your family needs you to do so, that's leadership character.
Speaker 5 (00:49):
World Reimagined with Gautam Mukanda, a leadership podcast for a changing world. An original podcast from NASDAQ.
Speaker 6 (00:57):
Why do leaders fail?
Speaker 7 (00:58):
Unwillingness to learn, a fear of showing their vulnerability and a fear of being themselves, lack of authenticity.
Speaker 8 (01:05):
Character of a corporation is not the personality, character of corporation is the integrity and the morality of a company.
Speaker 9 (01:13):
So without truth and trust, there is no democracy.
Gautam Mukunda (01:24):
Most of the world's platinum is deep underground. To extract it, miners descend as much as three and a half miles and blast away sheer rock faces then lift the rubble to the surface to be refined. It is damp, hot and brutally difficult. What's more, it's dangerous. Conditions can change daily as blasting uncovers new geology or water shifts and erodes formerly stable structures. People can die, crushed by falling rock, or gigantic machinery. For centuries, miners were viewed like soldiers, death was part of the job. That was the culture Cynthia Carroll inherited when she took over as CEO of Anglo American, the third largest mining company in the world.
Cynthia Carroll (02:11):
When I arrived at the company, I spent the first three months out and about trying to meet as many people as I possibly could within Anglo American, the operators, the truck drivers, the technology experts, visiting open pit mines in Chile and deep underground and the Platinum mines in South Africa. And it was clear to me that we were a company that had grown up in South Africa, steeped in history, we had just over 160,000 employees, but everybody doing their own thing.
Cynthia Carroll (02:55):
From operation to operation, to business unit to business unit, we had outstanding assets and people, but an organization that was simply focused on just the day to day budget. And satisfied with being in the middle of the pack and had no external focus about what it meant to be great.
Gautam Mukunda (03:19):
Anglo American is a global company with its roots and largest operations in South Africa. Even post apartheid, its executives were almost entirely white while it's mine workers were virtually all black. And on average, in 2006, a South African mine worker was killed in an accident every 44 hours. There had been previous industry wide attempts to improve mine safety. In 2003, a summit of leading mining companies had promised to get their fatalities under control. But a check in several years later found that the industry was still far short of its goals.
Cynthia Carroll (03:54):
We were very slow moving because most of the decisions were taken by a few people at the top of the organization. And it was just seen that people were going to die in the mining industry, mining, it's dangerous. And it was inevitable that people were going to be hurt or we would have fatalities. And in the case of Anglo American, we were experiencing about 45 fatalities every year for the previous five years before I arrived. So it was a company that was just used to doing the same thing, day in day out with people applying the same mindset having grown up and their parents and even grandparents working in the company. So there was never ever a suggestion about being best in class.
Gautam Mukunda (04:52):
What are the early warning signs that most leaders miss? What are the warning signs that most people say, they just ignore that you would say oh no, this is a big problem, and we need to focus on this right now?
Cynthia Carroll (05:02):
First of all in terms of the safety performance, that was obviously a big warning sign to me. The fact that we were losing in 2006 46 people in the year. And in South Africa alone, 200 people lost their lives in the mining industry in 2006. And I would also say Gautam that, why did people accept these standards or this performance? And I think it's because it was just the norm. And there was no outstanding company in the sector that was unique, set themselves apart, whether operational performance, safety performance, whatever.
Cynthia Carroll (05:49):
So to your question, I mean, the safety performance for me was just unacceptable. And that, also, for me, is a key indicator of general business performance. It's a indicator of operational discipline, of focus, of teamwork. And as I got out into the operations, it was clear that it was a we versus they culture.
Gautam Mukunda (06:20):
Cynthia Caroll's crusade to transform mining safety was launched on a fateful day in June 2007. I teach this case study all over the world, to every one from MBA students to CEOs. And every time, this is where I begin. She was flying back to Johannesburg from visiting Angles mines in Rustenburg, when she arrived, Ralph Havenstein, the chief executive of Anglo American Platinum was waiting for her on the helicopter. Let me start, Cynthia, I'll start with the same way I set up the case, right? You're in the helicopter, you've been the CEO for four and a half months or five months, and Havenstein pulls open your helicopter door and tells you there's been a fatality. How did that feel?
Cynthia Carroll (07:06):
Well, ironically, Gautam I had had a conversation that morning with him, just to say this does not feel right. And you show me examples of great performance and substantial improvement in this platinum organization. And we spent the day underground meeting with the operators and supervisors. And when he tapped me on the shoulder and said, "Cynthia, we've had yet another fatality." I looked at him and said, shut the mine down, we are out of control. I didn't think about it, Gautam, I didn't call anybody, I didn't get my phone and call the chairman of the board or contact the platinum board or consult with the executive team or have another conversation with the CEO. I simply said, we're shutting it down.
Cynthia Carroll (08:08):
And to that, he said, "Let's have a conversation. Let's debate." And I said no. There's no debating. It's very clear to me what we have to do. He came back to me the following day. I said give notification to all the employees. He came back and said it'll take seven days. It took seven weeks, we brought all 28,000 employees out of the ground. This has never been done before at the scale that we did it. But that was a turning point. And for me it was absolutely the right thing to do.
Frances Frei (08:49):
Gautam Mukunda (08:50):
We're joined in this conversation by Frances Frei, the UPS foundation professor of service management at Harvard Business School, and author of Unleashed: The Unapologetic Guide to Empowering Everyone Around You. Frances is no stranger to leading radical change. In 2017, she was called on to execute a cultural 180 at Uber after reports of its toxic culture became headline news, including pervasive sex discrimination and repeated scandals over unethical business practices. She's also led turnarounds at Riot Games, WeWork and Harvard Business School itself.
Frances Frei (09:25):
I can just feel it, every aspect of it and the reaction in the heart the clarity of your moral compass and the vision and that you said like you can see the way forward and it's going to take a bunch of steps that are counterintuitive to an organization that's 100 years old. It's beautiful. Sorry, Gautam, I got very [crosstalk 00:09:48].
Gautam Mukunda (09:48):
No please, I would say that Cynthia's case is the only one where I have a quantitative metric for how well I taught. I just have to look over the room and see what fraction of people are crying at the end of the class and I'm like, okay, that's how I know. And so I mean, I feel the same way. Frances's work focuses on building trust among employees and strengthening organizations by repairing their culture. She helps companies instill and reinforce values that create a stronger, more trusting, more empowered workplace. She's learned that values are critically important. But they're just the beginning.
Frances Frei (10:19):
One of the things that I think was a moment of truth and a real big learning for me, is that I thought that if you had great values and you stated them clearly enough and got people to believe in them, that that's what the goal was, and that the values would take care of things. And then I had the unique experience of seeing values be weaponized, that is the exact same words we were using for good. People were taking and personally using and corrupting them. And so then do you re educate people for the original intention of the value? Or do you let it go and re do the values? And I'll tell you what my experience there was. I thought, well, educate. I'm an educator.
Gautam Mukunda (11:03):
So Frances, can I pause you, can you give me an example of that?
Frances Frei (11:06):
One of my favorite from an organization is default to trust. So who's going to argue with default to trust, it's a beautiful one, if all of us default to trust, we'll have better interactions. But the way it got weaponized in an organization was that if I'm senior to you, and I didn't really want to continually hear you complain and question me, I would be like default to trust. Probably more likely, default to trust dude. I had weaponized this really lovely thing for my own purposes, or in another organization, there is this value of toe stepping. Which is if your ideas are not getting surfaced, you are welcome to step on the toes of your manager to go above them to surface them.
Frances Frei (11:51):
But it got internalized for expediency, if I have to step on anyone's toes, more likely people underneath me than above me to get something done, it was okay to have toe stepping. And my big learning was that I first thought we could reclaim the original words. And I will say, don't bother, because you're fighting against forces that have just, this thing has gone out in the ether. And so I think you have to come up with new language.
Gautam Mukunda (12:18):
Fighting entrenched patterns can be harder than mining platinum. Every organization, even a young one like Uber has a culture, and almost any successful organization will have a highly resilient one. But culture is strengthened with time. So think about how much tougher that challenge becomes at a place like Anglo American, which has been around for over a century. Cynthia was the first outsider, first female, and first non South African CEO of Anglo American.
Gautam Mukunda (12:46):
In the entire history of South Africa, no company had ever voluntarily shut down a mine for safety reasons. After just five months on the job, she did with the largest platinum mine in the world. She was told that miners dying was just how things worked, that she didn't get it, that she get used to it. But maybe thanks to her outsider's perspective, she was the only one who could see what had to be done.
Cynthia Carroll (13:14):
The managers didn't have conversations, open dialogues with the operators. The operators were told what to do and they did it and they didn't complain. That was very evident to me from day one. So it was that, it was also the underlying operating performance where the group's add on the cost curve. It was talking to the executives, my own executive team, when I said to them, this has got to change, I'm not going to lead a company that's killing people. And the reaction was, this is part of the industry. This is just the aspect of the industry that you have to accept. We're making some progress. And you're never going to see people joined up in our generation, in our lifetime. And I said, that's not going to work for me.
Frances Frei (14:14):
So look at that. I mean, Cynthia, it's just a mesmerizing tale of what one person who offering their lens into the organization and inviting other people to look through your glasses. Because once you say that, what am I going to do? Stand on the other side? No, actually, I think it's okay. But without your lens, I can imagine it going on for decades more. So it does require somebody interrupting the cycle because I think Gautam that you know well, our mixture of our problems are too big and slow progress is okay. Those are the two things that can be really insidious in an organization.
Frances Frei (14:59):
And so if you bring in some can do spirit of audacity and humility, saying, which mountain are we climbing and when you frame it as safety, it's such a noble purpose. No one's going to rest until you get to the top of that mountain. It's not too big and slow progress is not okay. I think it's beautiful.
Cynthia Carroll (15:18):
You're absolutely right, Frances, I think that's why the board wanted to bring in someone from the outside to have a different perspective, a different experience and different aspirations for the company. And they knew that the performance was not good. They did tell me that things were improving. But as I said early on as I went out and about, it was clear to me that safety was not the top priority, production was, operating profits were, you don't stop mines because it is the heavy fixed cost. And so no matter what, you just kept them going. And that was the mindset across the industry.
Gautam Mukunda (16:07):
When they think about changing an organization, people often assume it's a large lumbering task that has to be accomplished slowly for fear of making a mistake, like maneuvering ship through the Suez Canal. But asking for radical change without a sense of urgency is impossible. Rosabeth Kanter, a legendary Harvard Business School professor who teaches on leadership for change, talks about how cultural change efforts often begin with a bold stroke, a large dramatic gesture that shatters an organization's calcified status quo.
Frances Frei (16:40):
I think meaningful change of culture only happens quickly. And that might sound counterintuitive. But the Long march to culture change, really risks people seeing it as a high priority, and then a low priority when something else is more important. And that you need momentum and not to send mixed messages. So my experience of cultural change is that it happens quickly, and then you put fertilizer on it for life. But I have rarely seen a successful, slow cultural change. And one of the reasons I think most culture change efforts fail is that people are just gearing up for a slow, long roll. And I think it's exactly the wrong way to go about it.
Cynthia Carroll (17:22):
I would completely agree with Frances, I think you need a catalyst for change. And that's what I aim to do at Anglo American through prioritizing safety as had never been done before. But it really woke everybody up that we were on a different path. And starting with the protection, the care and respect of each and every person who worked in our operations or within our walls.
Gautam Mukunda (17:58):
Conditions in a mind shift constantly, culture doesn't. Rock, in other words, changes more easily than people do. If it's going to happen, a leader has to make change his or her top priority. My first book showed that bringing in a leader from the outside is risky. But sometimes only an outsider can make really big changes. So you were both outsiders to the companies that you changed. And I find that particularly striking because being an outsider both gives you the advantage point that others don't have that you've both remarked on.
Gautam Mukunda (18:30):
But also because, I mean, my own experience on all the research tells me that it's just really hard. How did you both use the advantages of being an outsider, but also deal with the problems that that entail?
Cynthia Carroll (18:40):
I got a lot of resistance. And a lot of people shaking their heads, I think they were, some people put their hands up and said, "I'm leaving." Others, we said, you're never going to get with the program, you're not going to be on board, so time to move on. We had people outside who were shaking their heads and questioning my judgment. And so I had to build a team around the world who believed and who would drive and who shared the same conviction and determination to get to a totally different place.
Cynthia Carroll (19:20):
And so that's what we did. We populated the organization, from Australia to Chile to Brazil to Colombia to South Africa to Botswana, around the world with people who were believers, and they were of the mindset that it could be done. But it was hard to build up that momentum. And in fact, in the platinum business alone, where are we had about 85,000 employees, including contractors and where the bulk of the fatalities were happening, I said to the acting CEO At the time, what's it going to take to get the supervisors on board? And he said, "Cynthia, you're going to have to get rid of fire about 90% of them." And I said, if that's what we have to do, that's what we have to do. We've got to shift this whole structure and this mindset.
Frances Frei (20:20):
In my experience, we haven't had to shift the people, but it wasn't 180,000. And it wasn't 100 years that most people, you could sand enough to get the believing out, they really were good people that had just gotten into the habit of inexperience. And so, in my experience, I'm not sure if it's inside or outside helps or not. But I do think I know two of the key components, which is we have to honor the past, or everyone that was here in the past is going to try to slow you down and hold you back.
Frances Frei (20:55):
So we have to honor the past as much as anyone. So part of I would imagine Cynthia's going around the whole organization was, so she has a reverence for every single nook and cranny of the organization. And I think that's really important. And then I think the other part and I'd be curious to hear Cynthia's thought, but I am an optimist. I was relentlessly optimistic and rigorous about the future. And I think if you have a rigorous and optimistic way forward, coupled with honor and reverence for the past, I think that's what facilitates change, and maybe an insider or outsider helps, but I think those two might be more important.
Cynthia Carroll (21:37):
Frances, I couldn't agree more with you. Being optimistic about the potential of the organization, I could see it, I could feel it, I had a vision for the organization that we could be great. And we could stand out in the entire industry. And we could set the pace for the rest of the industry starting with safety. But that took discipline. And it did take a lot of rigorous standards and training and conversations around the world. As you say in every nook and cranny, we reached out and we tried to engage people and make sure that they understood.
Gautam Mukunda (22:18):
Leaders have a role in crafting a company's values, but not the only role, and usually not even a preeminent one. Values are like an organization's DNA. They need to spring from every cell, from every person. Cynthia thought that was so important that when she shut down Rustenburg, she said it could not be reopened until Anglo American had gotten input from every single one of the 30,000 people who worked there. The change that they needed to make it Anglo American was so large that she had to replace much of its upper ranks. At Uber, Frances had a very different problem.
Frances Frei (22:55):
Here's what I would say, if it can be done in an organization of 180,000 people, sometimes I hear leaders say, "Oh, it's expedient for me to just say what the values are going to be, because I don't have time to talk to the whole organization. I would just like everyone to think do."
Cynthia Carroll (23:14):
Frances, it's a very good point. No, I was not going to impose a bunch of values and say, this is it, these are my values, and everybody's got to share them. We had a lot of discussion and debate and involvement across the group about what they should be. And we defined those and then rolled them out. And it really did change the way people related to one another and their behaviors. It was the standard.
Frances Frei (23:45):
So when I was at Uber, I went there after having met with 1500 of the 13,000 people and interacted with them. And so I was convinced it was good people caught up in a culture that wasn't setting them up for success. And no, there were 13,000 people, we separated from 20 and completely turned around the culture, which is my experience of culture. It's rarely like when people are like, "Oh, it's a lot of bad apples and things."
Frances Frei (24:13):
I mean, people thought Uber was as toxic a culture as there was in 20 people. And then a complete emphasis, much like Cynthia said, on the protection, care and respect of all of the individuals. And I think what's implicit in what she's saying is that it's not about the leader, it's about the individuals and their dignity and setting them up for success. What an awesome thing to work around was safety.
Frances Frei (24:38):
And what we were working around was the dignity of every employee, the dignity of the riders, the dignity of the drivers. And when you do that and you send no mixed messages, it can't help but happen fast. But imagine if you send a mixed message? Imagine if you said safety is important today, but not tomorrow? You would inject cynicism into the organization that you may never be able to change.
Gautam Mukunda (25:01):
Frances is bringing out a key point here. The absolutely indispensable ingredient in any attempt to change culture is consistency. You cannot have any mixed messages at all. As soon as you confuse the signal you're sending, it becomes easy for people to dismiss your change effort as just another marketing ploy. Think about it. How often have you heard pious sentiments issued by CEO? How often do you believe them? Probably not too often. And that makes sense. Talk is cheap.
Gautam Mukunda (25:37):
And all too often, their words aren't consistent anyways, and their actions don't match up to their words. But if you dismiss everything you hear as a lie, how will you recognize the truth when you hear it? Skepticism, questioning everything you hear, that's important. But cynicism is dangerous. And the constant temptation, because cynicism is easy. Just don't believe in anything. And you don't have to do anything hard or risky or even anything more than the bare minimum. Cynthia, dealing with an organization where many people resisted her changes, had to make sure that no one could ever doubt her commitment to safety at Anglo American. So she closed the mine, costing her company 10s of millions of dollars. Frances, dealing with a much smaller organization where her changes were welcomed, not fought, had a very different approach.
Frances Frei (26:33):
So what's amazing about what Cynthia said is that the organization went from average and fine, and needed someone else to shine a bright light on excellent. And I would say that the contrast for Uber is that when I got there, the organization was embarrassed. So many things had happened in there. There were change catalysts that were very negative. And so when one of the reasons that I started wearing a t-shirt every day that said Uber is that I was super proud to be there.
Frances Frei (27:03):
But most of the employees were embarrassed enough that they wouldn't tell an Uber driver, for example, that they worked at Uber, and they stopped wearing Uber paraphernalia, which had been all over the city streets before that. They even stopped going to social gatherings because they just didn't want the burden of the organization. It was exactly the opposite of how I felt.
Frances Frei (27:26):
And so I said, I'm going to wear an Uber t-shirt until everyone feels proud again to be associated with this organization that has a path that it's learned from and it's going to be better tomorrow than it is today. And we improve that such a startling rate is certainty, nobody's embarrassed to work there. And that took less than a year to do it. So I like very much the contrast of average to excellent, and embarrassed to excellent. And I think there's like really cool contrasting lessons there.
Gautam Mukunda (27:57):
When these cultural changes start to stick, though, everyone can feel the difference. Frances saw it fast.
Frances Frei (28:03):
I would say that a lot of what we did at Uber, there were demographic tendencies associated with who was thriving. And so we addressed it, we addressed it head on. And there were individual contributors that were having really bad times with their managers, because managers thought that feedback was supposed to be critical and awful, as opposed to reframing it to feedback is supposed to be improvement oriented and the person giving the feedback is the one who's accountable, not the person receiving the feedback, the people receiving the feedback would not offer a lead to win, you just had to give them the secret memo to do it.
Frances Frei (28:40):
So I found it was an organization filled with great employees that really wanted to do the right thing. And were just received like a breath of fresh air licensed to do it. So whereas Cynthia was met with resistance from maybe the majority of the workforce, I experienced almost no resistance from the majority of the workforce, I'll tell you the places where I did experience it. And some of it got corrected in the first June that I was there.
Frances Frei (29:06):
But there were some people that were political in the sense that they were putting their self interest ahead of the self interest of others. And I honestly, and this is where I'm a naive academic, I had never experienced it before. I genuinely couldn't believe that it was occurring. And those were moments of truth of what do you do, then. And what I've learned is you have to take even swifter action than your instinct is.
Gautam Mukunda (29:34):
Frances, it must have felt hugely liberating.
Frances Frei (29:38):
Yes, it's exactly the right word. It's exactly the right word for everyone. I mean, I think everyone involved, if you find someone who was at Uber back then, I think of it as a very positive experience. And I think it was deeply liberating. And maybe the only part that they were afraid of is will performance somehow go down if we take away this tough edged exterior? And of course, you can have high standards and deep devotion to people's success. It needn't be one or the other. But there were people who feared that if we somehow started being devoted to the development of others, we would lower our standards. But it was, I think, universally, deeply liberating. I think it's exactly the right word.
Gautam Mukunda (30:21):
Platinum is one of the rarest metals on the planet. 80% of it comes from South Africa, where it's found deep underground encased in solid rock. Its scarcity and the work needed to mine it are enough to make it highly valuable. Plus, it's pretty. That's why we use it in jewelry. But platinum has much more important uses than rings. It is the crucial component in catalytic converters.
Gautam Mukunda (30:44):
The air you breathe is much, much cleaner because of platinum Anglo Americans miners pull from deep underground. Platinum is the catalyst which converts pollution to clean air. Just like right leadership, the new attitudes and ideas Cynthia and Frances introduced into their respective organizations, or an attempt to transmute a bad culture into a good one. And like platinum, that leadership is very difficult to produce.
Gautam Mukunda (31:14):
Almost everyone in both organizations when they realized what you were doing, felt liberated. One of these values wanted to work in a place. Cynthia, if I could quote you, I think your chief of staff he said, "I wanted to work in a company we could be proud of." Which is exactly what Frances said too. Why is it so hard to do? Why is it so hard to change this culture?
Frances Frei (31:32):
You're given an off ramp every minute of every day. Because it's a progress, and those off ramps are super tempting.
Cynthia Carroll (31:45):
It's hard work Gautam. It takes changing behaviors, changing long standing, mindsets, legacy, and changing a lot of people as well. So you have to pound the pavement, you have to keep reminding people, you have to keep communicating, you have to keep monitoring progress and engaging. And in the case of Anglo American, as you're aware, it was clear to me that by working internally, entirely, just by trying to move the platinum group made up of about 85,000 people, the supervisors and managers and executives, we couldn't do it alone. It wasn't enough for the reasons that you're suggesting.
Cynthia Carroll (32:41):
It was so embedded in the way people operated and the way they thought. And so I could see that, in the case of lower Rustenburg, this mine complex that we shut down for seven weeks, I could see that the performance was improving. And actually, our safety performance was improving in the platinum business, across South Africa, and around the world. But I didn't think as I got out into the operations and met with people, I didn't think that it was fundamentally different, that people weren't really acting differently, but that they were paralyzed to act.
Cynthia Carroll (33:24):
And so I thought about who has got a vested interest in this as we do, as I do? And so I reached out to the presidents of the labor unions, and sat with them and said, would you join up as partners to us on this journey of zero harm, of protecting everybody in our operations? And I think they accepted with a lot of skepticism, because I'd never done this before. And then I approached the minister of mines, and she said, "Are you crazy? Why would you want to expose the company and the practices and the standards and the industry and put Anglo American in the spotlight?"
Cynthia Carroll (34:19):
And I said, that's exactly what we want to do. We want to showcase what we've done and what we need to do together. So collectively, we held a summit about nine months, eight months after we had shut down the major mine complex in South Africa. And we brought everybody together and we declared collectively, this is our aim. This is our ambition. We invited anybody in the mining industry to join us.
Cynthia Carroll (34:53):
And that was a turning point. And we became partners and we had the same interest in protecting everybody, and we built trust, we collaborated first on safety, but then we were able to broaden the conversation out to other parts of our business, other considerations where they also had an interest. And as a result, we were able to do things that we had never been able to do before in consolidating some of our operations, streamlining, increasing productivity, and with results to the bottom line.
Gautam Mukunda (35:37):
This is one of the most innovative things I've ever heard of a CEO doing. Cynthia knew that she would face resistance inside the organization that she needed to overcome. How did she handle it? She went to outside stakeholders, the sort of people who many CEOs would view as the enemy. That's even more true in South Africa. With its long history of sometimes violent confrontations between mining companies and their workers. She asked those erstwhile adversaries to put more scrutiny on her company than they normally would. She did something no other CEO had ever done.
Gautam Mukunda (36:09):
And that didn't just put pressure on people opposed to change within the organization, she built trust with people outside of it, too. I interviewed Frans Baleni, the head of South Africa's largest mining union to get his perspective. He told me that when Caroll first became CEO, he had hated Anglo American because of its long history of exploiting black workers under apartheid. Now, he said, because of her, he would appear in ads for the company if they asked.
Frances Frei (36:35):
When Cynthia was speaking, trust is at the foundation of every turnaround I've been involved with, and as has creating or uncovering a culture of operational excellence. And the beautiful thing about Cynthia orienting everyone towards safety is you can't have safety without just impeccable operational excellence, I imagine. If you make things safer, you must be making them more in control and capable, and so that it's both noble, and business performance is incredible, am I right about that Cynthia?
Cynthia Carroll (37:13):
Absolutely Frances, they go hand in hand. I've never been in an operations with outstanding operating results without outstanding safety results.
Frances Frei (37:27):
You can get every single stakeholder on board with the call to safety, I think easier than with a generic call to operational excellence. Or honestly, in the case for new organizations I enrolled with or with the generic call to scale.
Cynthia Carroll (37:46):
That's exactly right.
Gautam Mukunda (37:48):
Cynthia's unwavering commitment to safety worked from 44 deaths in 2006, fatalities dropped to 13 in 2012. Perhaps even more importantly, her focus on safety put pressure on the rest of the industry to keep up. By the time she stepped down six years later, even people who worked for Anglo Americans competitors talked about mine safety as before Cynthia and after Cynthia.
Gautam Mukunda (38:11):
Each of you have had these sort of extraordinary careers where you've met many of the most interesting people in the world. And I'll just ask, is there one particular person you've met over the course of those careers? This was the most impressive person I met. And why did you feel that way about them?
Cynthia Carroll (38:24):
I would say Gautam, there have been so many people throughout my life I've encountered who have had such tremendous impact on me as role models, or just people who've supported me along the way, who've influenced me. And one particular person was an executive at Alcan, early in my career, his name is Ian [Rugeroni 00:38:48]. He had so much charisma and energy and creativity and vision.
Cynthia Carroll (38:54):
And he told me in my early 30s, he said you need to run a business. And so he put me in charge of a standalone business that was, I could generously say, modestly profitable, we had all sorts of problems, whether with customers or quality issues or labor or lawsuits or whatever it was, we had it. And we turned it entirely around this business. And it was the best experience I had in my career to really get launched. I should also mention that I spent time with Nelson Mandela in South Africa when I was running Anglo, and we had the conversations about the culture and about Anglo and about the industry and really changing the way people look after one another and applying care and respect.
Gautam Mukunda (39:50):
So Frances, I fear to ask you to go after Nelson Mandela.
Frances Frei (39:56):
But I will try. For me it's pretty clear, it's Bozoma Saint John, was a woman who showed upon the doorstep of Uber the same week I did, didn't know her, didn't know of her before I got there, but we got there for the same reason, which is we saw that if we could turn around Uber which was pretty famously not doing well on all dimensions, it gave license for everyone else who had only a subset of their challenges, it gave license for everyone else to try it because it would be possible.
Frances Frei (40:35):
So she's currently the Chief Marketing Officer at Netflix. She's the most authentic person I've ever met and she does it without apology, even though at every step of her life, people have suggested she torn down her fashion or torn down her hair, or torn down her stilettos or torn down... I mean, every aspect. And she is just without apology authentic. And also takes all of her intelligence and insight and is so clearly on the planet to help others. You said this earlier, where to liberate others from being in a bar, trying to help others be unapologetically authentic.
Gautam Mukunda (41:23):
This show has a singular purpose, to help you become a great leader, not a good leader, a great leader. Great leaders have the insight to see what the right thing to do is, the skill to do it, and the courage to do it even when it's hard. And when those three things come together, the impact a great leader can have, the number of lives she can touch is boundless.
Gautam Mukunda (41:47):
Have you taken an Uber in the last few years? If you have, Frances Frei has touched your life. And if you worked there, she's changed your experience enormously. When I was writing case study on Cynthia, I went down into a mine at Rustenberg, to use a steam drill there and get a better understanding of what life was like for the miners. By coincidence, it was her last days as CEO. The active part of the mine there is only about three feet high, so you spend your time on your hands and knees a mile underground. It's hard to imagine until you have done it.
Gautam Mukunda (42:22):
When I came up, I went with the mine's head of safety to speak to some of the miners. We found two, a man and a woman, and that was another one of Cynthia's reforms, opening up South Africa's most important industry to women who spoke enough English that we could communicate. We asked them if there was anything they wanted to say to Cynthia. They came right up to me as close as they could and then one said, "You have to tell her how much she means to us. You have to tell her that she changed our lives."
Gautam Mukunda (42:52):
Because of Cynthia Caroll, hundreds of thousands, maybe even millions, of people who work in the mines have lives that are immeasurably better. They work in places where they are better paid, where they are treated with more dignity and more respect, and hundreds of them perhaps even thousands of them are still alive. That's what great leadership can do. If she could do that, what can you do?
Speaker 13 (43:18):
The World Reimagined with Gautam Mukunda, a leadership podcast for a changing world. An original podcast from NASDAQ. Visit the World Reimagined at nasdaq.com/worldreimaginedpodcast.