#6 - Christian Casal - How to encourage your people to speak up

Nisha Pillai 00:00:06

Wherever we look, our world is facing a huge range of unprecedented challenges. So if you were leader right now, how do you navigate your way through this? How do you make decisions in the teeth of so much uncertainty? How are you going to reconnect your people and rebuild your team so that they're fit to face the future? And what does that even mean to be a leader in such an increasingly challenging world?

These and other questions I've been putting to top business leaders from across Europe, and I've had some surprisingly candid responses. So why don't you join me, Nisha Pillai, for the latest episode brought to you by Sherpany of The Agenda.

My guest today believes that seeking out dissent is a core attribute for leaders, especially when things don't go according to plan. Having the courage to listen when a team member brings bad news, for example, can make all the difference between success and failure. His name is Christian Casal, and for almost three decades he ran McKinsey in Switzerland. He's now reinvented himself as a tech entrepreneur and he invests in the Swiss high tech landscape. So let's meet Christian Casal.

Hello, Christian. I want to start Christian by asking you about something you said to me when we last spoke, which was that you think dissent is really important.

You feel passionately about that. But why? Why do you think it's so important?

Christian Casal 00:01:42

Well, I think in management, it really, it's absolutely essential because one has to understand that the roles that people play define a leader as somebody who is managing a process, managing a group of people, but he  or she can never know all the details.

So the people attending a meeting have a very important role to bring in their knowledge, expertise, analysis, etc., and if they have opposing opinions to the leader and have facts which the leader does not have, it's really important that they bring them up, otherwise the whole process falls apart and doesn't work.

So I think dissent is not something which is like a skill or something which could be valued, it's actually the reason why you are in a meeting. And I think that's so important and there's a tremendous amount of stories of big, big mistakes that can happen, and afterwards, you do an analysis and you find out people did not speak up. So I think that's why dissent is so essential in management.

Nisha Pillai 00:02:43

So give us one of those examples then Christian.

Christian Casal 00:02:46

I think one of the most famous and well researched one was the invasion of the Bay of Pigs, which maybe our younger audience members would not know, but when John F. Kennedy ordered an invasion of Cuba just prior to the Cuban crisis, he asked his cabinet and his cabinet said, yes, yes, yes, yes. So he said, OK, everybody is in favour. It's an unanimous decision. So let's go on.

And it was a total disaster. People died. It was one of the most embarrassing things that the US had done so far and years later, analysts went and talked to the people, and every single member of the cabinet said I was actually against it. I was opposed. I didn't think it would work.

But they did not speak up, and they did not speak up because there was sort of group think, they thought the president wanted it. It was actually not clear as well, you know, John F. Kennedy could not be interviewed.

But the, but the basic thing is the whole governance of this cabinet meeting fell apart because people did not speak up, and wanted to please or just wanted to be a good team member and did not play the role that they should have played.

Now, of course, we have to be realistic. There's a lot of noise in every organisation. Every manager is confronted with hundreds of emails a day. A lot of people are speaking up, but some of that information is, of course, of low value.

So it's not only dissent, it's also trying to basically find a way through all this white noise, and try to find out what exactly is important information. But I still make my plea to all managers or if you know something, you really have to speak up, otherwise you're not doing your job.

Nisha Pillai 00:04:17

The reason people don't speak up is that they're worried about the reception that they're going to have. No one wants to be the bearer of bad news.

Are you personally open to being challenged? How have you dealt with it when someone has come and said, sorry, that company we're advising, it doesn't stack up?

Christian Casal 00:04:34

I think it depends on a few things. First of all, the person that is giving your feedback. I think it was the first time you met the person you really had to listen to this person. I think over time you will listen much more to people who are consistent, who are very credible, who give you the important facts and don't confuse you with unimportant things.

And on the other side, you know, if people have a few times play their own agenda towards you, you will never listen to them when there's something going on where they really speak up, because this is, again, somebody driving his personal agenda, even though maybe in hindsight you should have listened to them.

So I think it also has a lot to do to to basically to work through these situations and be self aware what kind of information is coming out. I think the essence of listening to feedback is also to step back and take a break.

That's one technique I always suggest to people if there's too much feedback on something which is negative, you know, just take a day off for an afternoon or an hour or two, and then come back to the topic. And sometimes it changes.

Nisha Pillai 00:05:38

Have you taken a break from a situation where you are getting negative information? You couldn't take it on board, but then over time you accepted that the situation was different?

Christian Casal 00:05:49

Yes, I had a few situations. Well, one I never forget is when I had a very young team member who was constantly telling me that a bank we were consulting was actually in much worse shape than we thought the bank was, and that the analyst coverage indicated and we were sort of under the impression this young person doesn't know what he's talking about.

I sort of tried to slow him down a few times and then I said, OK, let's meet on a Saturday afternoon. We actually met and I said, look, you have two hours to try to convince me and actually, he did his homework. It was absolutely important that I listened to him and then we took that feedback, and went to the right bodies to show what kind of situation this person had found out.

And this is somebody below 30, no big banking experience, but just did some more homework than the others did. So I had a few wake up calls like that and in hindsight, of course, you feel bad, but at the same time, you learnt a very important lesson in life.

Nisha Pillai 00:06:43

But what about yourself? Have you had to deliver unwelcome news as a senior leader, as senior adviser, for instance, to banks and financial services companies after the financial crisis, which they were not prepared to listen to?

Christian Casal  00:07:00

Yes, absolutely, I mean, one of the frustrations of the 2008 financial crisis, was that the privilege, of course, of a consultant is we have a lot of time to look at the facts, and  we can really go very deep while the managers they have 20 meetings a day.

Second is, we come from another trajectory. We come from looking at the problem and analysing it, and these managers, we have to understand that they have built up an organisation. They have made a lot of profits.

And when exactly the essence of making these profits is falling apart, it's very difficult to convince somebody that the essence of the profit of his career or the essence of his work is actually flawed.

And though I admit that I believe we were not always successful, a lot of them did not listen to us, and it took some banks maybe over a year until they really fully stood on the brakes to slow down investing in these areas that all fell apart.

Nisha Pillai 00:07:57

So let's step back from this for a moment. How can we create institutions and leadership styles that promote truth telling the truth? Team members, however senior, feel safe to be able to speak their minds.

Christian Casal 00:08:15

It's a very good question, and it's probably something you have to think pretty hard how to do that. I have some practice. I think, first of all, there are meetings where you have to rush through an agenda with 30, 40 points. That's just the essence of work. And I think you have to take away that time, pressure or agenda terror of these 30 pointers, otherwise you could never have a good environment we could speak of.

I think a second practical step is that meetings cannot be too big. If you have 20, 30 people in a room, every leader is challenged just by keeping this herd of cats under control, and if you think that they, you want to have an environment, we can speak up. It's just naive straightforward.

I actually don't think beyond five, maybe six, seven people in a room will enable such an atmosphere. So it has to be small. The third thing I think that you have to pick the right people.

But then once you have that sort of no time pressure, not too big a group of people, and an atmosphere where you have people that you can trust and work together, then I think you can do that.

Nisha Pillai 00:09:19

We've been talking a lot about dissent and challenge. What about honesty? How important do you think honesty is as a core ingredient of leadership?

Christian Casal 00:09:30

Yeah, honesty is sort of something which, of course, is almost impossible to say, you're against honesty. That would be absurd. But I read something like one psychologist says, everybody lies one point six, five, five times a day. I don't know how we came up with that number.

Another psychologist says up to 200 times you lie a day. I know there are white lies there, blue lies, we all know about these things. I think the point is I would not put these, you know, so super high bars on a leader that are almost inhuman.

What I do think counts a lot is if you want to create a team of people that work very well together, it has to be an interpersonal level, has to be really perfect because people, your direct reports will really listen to what you do with them, what kind of feedback you give to them. Is this really honest or is it just praise for just being nice or is it honest praise or an honest critique? And I think that's what I would really focus on.

Second, I think the consistency element is sometimes underestimated. I think, of course, you have to be honest to create a large group of followers and you have to be a role model in your organisation. But you also have to be consistent over time with what you're doing.

Nisha Pillai 00:10:45

Honesty and authenticity is another area which is much valued in the area of leadership. It's difficult, though, isn't it, to be genuinely authentic in this age of social media and cancel culture, which we have to be so careful about how we express ourselves.

Christian Casal 00:11:05

I fully agree, and I actually see that sort of clearly a step back of progress that was made in the last 20, 30 years, in the last five years. I mean, I have colleagues that are managers now that say if they ever have a speech in front of 100 people plus, they read down from scripts.

They are there, just they cannot speak freely anymore, and tell their audience what they really think, because there could be somebody who's hypersensitive on one word or is triggering some kind of emotional reaction, which you know, as I respect that these people can have these reactions.

But the the flip side of the coin is that really that people are not authentic anymore and they come across, of course, almost like a little bit like robots, which are talking down from a PR written script, and I think  that's a big mistake.

So there again, I go back to getting into smaller meetings where you can really talk with the people to find out what their feelings are, what they're most of, what they're really trying to push, what not how they want to achieve certain goals.

So I think that's very important. But it's  something which right now is difficult. And it's not just in business, also at the universities and even with politicians. So that's something we have to live with.

And I hope that there will be a pendulum swinging back again where people can speak up again, and maybe occasionally do something which is not exactly perfectly formulated, but still still tell the people what they think.

Nisha Pillai 00:12:26

I'd like to move on now to an area of your working life, which we haven't touched on yet, and that is you as an investor. You've invested in, what, a dozen or so companies now since you left McKinsey.

What have you learnt in the process? What are the criteria you use to invest in this company or that? Is it to do with people, is it to do with the business model? How do you decide?

Christian Casal 00:12:49

Yes, I learnt a lot first of all, investing is not something you're skill that you're just born with. You have to do your homework and do mistakes, but you also have to look at the people and if I have meetings with leaders of start-ups or mid-sized companies and I see them not taking notes, I'm always surprised because I know they have like 20 other meetings a day. If they don't make notes, how can they remember everything?

And then I sort of say this person is what if he has a meeting with me, he would like to get something out of it, otherwise he would not meet me, then why does he not make notes? So that's sort of small things that I'm sure this is not super strategic, but it's sort of small markers of how somebody works.

Nisha Pillai 00:13:27

So looking back over the last four or five years, as you've been a tech investor, what do you think have been the mistakes that you have made, Christian?

Christian Casal 00:13:35

I think one mistake is probably I didn't spend enough time to really understand the potential of the leadership of the investment, leader or leadership team, that's always difficult. And sometimes you rush into an investment. That's something which I should have, in some investments, spent more time.

I think the other mistake was on exactly the value of the product services. I did not spend enough time to understand exactly what the value of these products services were for the customers of the company I was investing in. So that's maybe the two main mistakes.

Maybe a third one could be what I think I'm improving now, but acting faster. So if things don't go well, or if the environment changes and everybody's innocent, it's just a change of environment or the pandemic is a good example, move faster. Don't hang in there three months if it's already clear where we are.

Nisha Pillai 00:14:29

So I guess in a way, you're in a mentoring role for some of the leaders of the companies you're investing in. They're a younger generation to you in most in most cases. Do you think they need a different set of leadership tools than what you needed when you were their age?

Christian Casal 00:14:48

So I would answer no and yes, at the same time, first of all, leadership, and that's, I don't know, 60, 70 percent is the basics. It's setting clear objectives, giving clear mandates to your direct reports, monitoring what they're doing, you know, feedback and then corrective measures and setting out incentive systems which are consistent with what you want to achieve, looking at to do lists. And, you know, that's not super attractive sometimes, but it's super important to get the basics right now.

Now second, yes, absolutely. There's a change in the environment and leadership models have to adjust to that. We don't even have to talk about the technological environment or other things, but they also change the mindset of the people. You have to adjust to what the people want.

Purposefulness is now a very important point, environment is important, etc. And you have to, if you're a leader, you have to accept that and behave accordingly.

Nisha Pillai 00:15:49

The challenge is greater, isn't it, for young leaders today in a way, because they're not just having to satisfy on returns and profitability, but also these other softer expectations?

Christian Casal 00:16:04

I agree that it is different, I'm always a little careful over time to say it's now bigger because I think in the 70s we had a really difficult environment just to, you know, there was a government that intervened. There were capital controls, there was a Cold War, etc..

So I think every every generation has its own challenges and I think the challenges that we have now are real and we have to adjust to them. But I don't think that these challenges are much bigger. I mean, think about the people in 1930 or 1940 in Europe, what kind of challenges they had, the young generation.

Nisha Pillai 00:16:39

That's a very good point, Christian. Thank you for putting it in historical context. Our whole series is about leaders speaking about leadership. So I wanted to ask you, do you want to leave our listeners with one final thought?

Christian Casal 00:16:56

I think leadership there are talented leaders, and there are undoubtedly leaders, these are probably the top 10 percent and the bottom 10 percent. I would say 80 percent of all human beings can learn a lot in leadership, and my big point that I always make to young people is you have to work on it.

It's like, you know, learning sport is you have to train. You have to do the heavy lifting in the gym, but you also have to go and play games, and you will get a bloody nose. Sometimes they will do mistakes and people will be appalled at what you did and two weeks later, you shoot an important goal, and that's the same with leadership.

It's just something you can you have to train. You're not born with it. You have to try to get as much experience you can in many environments that you can train yourself. So that's my basic point of leadership.

Nisha Pillai 00:17:47

So that was a really stimulating conversation. Christian Casal, thank you so much for joining us on The Agenda.

Christian Casal 00:17:53

Thank you. Thank you very much.