At 30, Michael Rennie was diagnosed with advanced Hodgkin's lymphoma.
One day, Rennie was on the brink of becoming a partner at consulting firm, McKinsey, where he had worked for five years. The next, he was told he had 12 months to live.
That was 25 years ago. It was a moment that forever redefined Rennie's approach to life, work and leadership. Rennie is explaining how he helps companies create high performance cultures in his work as the managing partner of McKinsey and Company, Australia & New Zealand, and global leader of McKinsey's organisational behaviour practice.
His approach was born from his experience as a cancer survivor. "The cancer was pretty advanced," Rennie tells LeadingCompany. "I had a nine-pound [four kilo] tumour, and 20 tumours around my body."
Hodgkin's lymphoma is one of the most curable of cancers, but Rennie's doctors were not optimistic.
As he started medical treatments for his cancer, Rennie also looked around for help with the emotional distress of his position. "I went to visit [cancer survivor] Ian Gawler and did a program, a week-long retreat that was really about the mind and body aspects of disease; inner psychology, about taking charge of your own health. And, if you were going to die, learning to live to the fullest for the remaining years. I applied a number of techniques – visualisation, mediation, diet – and I had a profound healing. In three months, I was totally healed."
Rennie resumed his career in McKinsey a changed man. "I realised your mind can affect your body," he says. Among his meditations, Rennie visualised increasing his white blood cell count – which is decimated along with cancer cells by cancer treatments, leaving patients vulnerable to infection. He found his white blood cell count went above the average for a normal person, even after chemotherapy.
"There is now a lot of research saying your mind affects your body – the placebo affect being an obvious one," he says. "My own feeling is that it was a combination of that and the chemo. Do both, and it does make a difference. It did for me."
Theory and practice
Having seen the idea work in practice, Rennie set out on a journey to understand the theory, and to integrate his deeply personal approach to organisational performance with traditional approaches and measurements of change.
"Organisations don't change; people do," he says. "But what gets someone to shift? I suddenly started to realise the limits of the external model: changing incentives, telling a compelling story and hoping for change. I was looking into the whole world of psychology and self-awareness and our impact on others. I started to realise the issue is to make it personal."
Rennie starts by taking leaders into some familiar territory: "I ask people, 'how much time do you spend dealing with other people's egos?' and they will say 20% to 30%. We have research about how people do this – positioning things, managing territory, making it feel like it is someone else's idea – all this is ego management."
And then he introduces something unfamiliar. "So then we ask, 'How much time do people spend managing your ego?' and you get a blank. 'I am not a problem!' But we are all part of the problem. If you are going to shift, ego is the largest cost. They have to realise they are part of the problem."
Rennie tries to bring together the two worlds, working on both the external incentives and creating self-awareness and a desire to change for individual reasons.
Soft and hard
Rennie's approach does not challenge the idea of hard-nosed performance goals. "The best business leaders have an edge," he says. "The ability to be very clear about where they need to go, and they are very honest and authentic in interactions. This is the hard-nosed performance part of it."
The difference in Rennie's view is the approach to achieving the goal.
"You can do this in aggressive, ruthless way or an honest, authentic way, but you have to do it. People deserve to know early on, and leaders have to have the courage to deal with that."
Rennie says there is no need to be aggressive, and the best leaders are not. "I've seen leaders who are not injurious. You don't just tell people what to do: you bring them along, engage them, and get them to participate."
But the conversations must be had. "The danger is not talking to people early enough, so there is no chance for them to come back [to better performance]. People can feel hurt and may have to leave the company. But good leaders and good systems of leadership give good feedback early on about what is working and what is not."
The structure of feedback
Instituting formal processes of feedback – at least six-monthly – is a way getting leaders into the habit of having conversations with their reports.
Doing so will lead to informal feedback. "At McKinsey, we are very high-performance organisation. We all comment on each other all the time. People grow fast with timely informal feedback. That is a stage that very few are at. You get leaders, if you have that sort of culture."
Almost impossible goals
Leaders cannot escape having these difficult conversations by setting the bar low, says Rennie.
The opposite is true. "Ask people to think of a peak experience in their career, and what comes to mind is this thing they did that was an almost impossible goal, and that was meaningful. For some reason it mattered. Leaders need to set goals that are almost impossible for the people they lead. And they need to understand what is meaningful to them."
Meaning can be anything from earning a good living, to learning, to having a great experience with colleagues. Rennie advocates understanding Maslow's hierarchy of needs. "As a leader, you have to tap into those levels of meaning."
Four stories of meaning
Meaning is the most important part of motivating change, Rennie says. And he says leaders can achieve this by understanding, and ideally talking about, four "meaning" stories.
Typically, the leader will always talk about one meaning story – what this change or goal means for the company. "And while you are talking about that, your staff are having internal conversation about what it means for them because there are four stories, and only one of them is what is good for the company," says Rennie.
The four levels of meaning for individuals making change are:
What it means for the company: we will all be proud because company will be successful.
What it means for me: my pay, my status, my daily activities.
Job relationships: the colleagues I work with and the customers I interact with
Making a difference to the community and the world.
The last one is the barbecue-stopper, says Rennie, but inspiring leaders address them all. "If you listen to the speeches of really good leaders – and I am very conscious of this with the leaders I work with – they make sure they are linking into four levels of meaning.
"The listeners are already making this connection. They are thinking, sure it is good for company, but it is going to be harder for me and I am not sure about our customers. Or they will be thinking, I really like this, I can be really proud, this is a great thing we are doing."
Arriving at these levels of meaning involves self-awareness and considerable thought on the part of leaders, another reason for developing the "softer" reflective.
There are pragmatic outcomes for leaders who are aware of using both external and internal motivators to effect change, and McKinsey is an expert in measuring the results, says Rennie.
"You get a lot of energy, everyone moving in sync, and you get things done. You need the team, the feedback processes, the goals and planning and the alignment stuff," he says. "We have 500,000 people in our global database, and we have a long-term view of really drives performance. It is really about the balance of the hard, and the 'essential' soft."
Despite his years, post cancer, spent sitting around in group with men talking about feelings, Rennie takes a tough line on responding to people who actively undermine a shift to a high-performance culture. "I call them cultural terrorists; they are always there, and they are a problem."
They have to go, says Rennie. "They are very damaging, because people will see what they are doing and say, 'you can be an arsehole and it is fine'. If you really do want to create a culture you have to let them know that this matters."
Even people who are getting good results must go if they do not fit the culture, an approach perfected by Jack Welsh during his time as the CEO of GE. Rennie says: "He fired people getting good results but who did not fit in the culture. Then people took it seriously. You have to give these people feedback, and you have to act on it."