A study conducted at the global media company unveiled the "And factor", which defines leadership qualities in the organisation.
As a leading media conglomerate for over 30 years and with over 15,000 employees in 192 locations, one might expect to find a deeply entrenched leadership ideology at Bloomberg LP.
But, Chairman Peter T. Grauer reveals, it was only in recent years that the company put serious thought into the issue of leadership. Grauer himself, who has sat on the board since 1996, admits that he, for the longest time, did not believe leadership was critical to a business’s success.
Yet, today, he spends much of his time at work “mentoring talent and working with colleagues to make them better at what they do”. The company, co-founded in 1982 by former Mayor of New York, Michael Bloomberg, has pioneered the "And factor", a unique leadership concept that defines the traits of the organisation’s top executives.
Grauer spoke on this at a recent talk organised by Singapore Management University’s Wee Kim Wee Centre and Lee Kong Chian School of Business.
Recounting how the "And factor" came about, he says, “While pockets of our company have given thought to leadership here and there, to be honest, throughout our history, it’s never been much of a priority. I’m sure it was a victim of our success: as long as we keep growing our revenue and client base, it’s easy to ignore things like leadership training.”
Birth of the "And factor"
Things changed a few years ago when Bloomberg decided it was time to develop its own study of leadership.
“Because this was Bloomberg, we didn’t want to do it the same way everyone else did,” Grauer says. “And what’s more uniquely Bloomberg than cold, hard scientific data.”
Based on employees’ reviews, the company “started measuring subjective qualities that were used to describe our objectively highest performing manager around the world”.
Grauer adds, “What we heard were things pretty much what you hear in any company, like clarity of vision and direction, concise and clear communication, a drive for results and high standards. We dug deeper, and what we discovered next was: the more highly praised a manager was, the more frequently he or she was described with what we call conjunction comments such as ‘but also’, ‘on the flip side’ or ‘at the same time’ to string together two seemingly contradictory attributes.
“Instead of being described as the big-picture thinker, our best managers are described as big picture thinkers and detail oriented. Rather than just giving clear direction, they give clear direction and encourage new ideas. And instead of just being dedicated and loyal to Bloomberg, they are described as loyal to our company and putting the customer first.”
The "And factor" was thus born and six "ands" were identified as the defining characteristics of Bloomberg’s leadership. So, Bloomberg’s best leaders:
- Are demanding and straight-talking, and they do this with humanity, compassion and with a sense of humour;
- Give strong, clear direction and remain open to challenge and new ideas from others;
- Are involved in work side by side with their team and instil trust and encourage learning and development;
- Deliver exceptional customer service and put Bloomberg’s interests first and are dedicated to the company;
- Work hard and are accessible, responsive and approachable; and
- Move and execute quickly and are future focused, visionary and strategic.
As for Grauer, from thinking that leadership “was very natural and couldn’t be learned”, he now keeps a “pretty long” and non-exhaustive list of leadership traits`, of which there are three he firmly believes in.
Value relationships, be humble, take time to reflect
The first is intimacy. He notes, “When I look back at my career, so many of the opportunities I’ve had have come from a personal relationship with someone who’s willing to trust me to take on a challenge a little out of my league, to push myself to be better than I realise I could be.”
After his first big break at Citibank, he moved on to investment firm Donaldson, Lufkin & Jenrette (DLJ), where he eventually became a managing partner. The firm was acquired by Credit Suisse in 2000.
But it was his daughter’s love for horseback riding that put him on the Bloomberg track. One day in October 1989, he drove six-year-old Victoria to a New York ranch, where she befriended two other girls who turned out to be Bloomberg’s daughters, Emma and Georgina. Victoria and Georgina, who were the same age, started riding and competing together. Their fathers, too, became close friends.
In 1996, when they were at a horse show, Bloomberg invited Grauer to serve on his board. And in late 2001, as he prepared to run for mayor, he tasked his friend to take over as CEO. Grauer joined Bloomberg full-time as President and CEO a few months later.
Grauer says, “I think (of the concept of intimacy and relationships) as defining points in my career… But I think this is not merely networking (but) real and genuine relationships built on substance and forged over years.”
A leader should be humble too. Grauer recalls: “When I began my career at Citibank, I had more than my share of swagger. I often thought I was the smartest guy in the room; I never was.”
One episode in 1984, when he was with DLJ, fed him a huge slice of humble pie. Outsmarted by the other party, he lost a large and potentially lucrative deal.
“It forced me to reflect a great deal on myself and the way I conducted myself and certainly to think about things with a greater sense of humility. Instead of licking my wounds, I took a hard look at my skills and realised that while I had my strengths, there were plenty of areas where I was not all that good. Since then, I’ve never been too proud to ask for help–it’s made me much more effective in every role I’ve ever had.”
At Bloomberg, Grauer reveals, this streak of humility is termed "constructive paranoia". “It means constantly looking over your shoulder, assuming there’s someone smarter coming along to take you on. We expect our employees to never think they’re as good as they are.”
When Grauer met Bloomberg recently, the latter cited Facebook’s buyout of WhatsApp as an example of constructive paranoia. Grauer says, “‘Five years old, 55 employees, US$19 billion of value. Where is the WhatsApp that’s going to disrupt what we do every day at Bloomberg?’ That’s the kind of constructive paranoia: never taking anything for granted, always looking over your shoulder. Because of today’s technology and its ubiquity around the world, we just have to be on our toes all the time.”
Last year, Bloomberg faced a crisis: its journalists reportedly had access to customers’ sensitive data, and confidential client messages that were exchanged over its terminals were accidentally posted online by the company.
Grauer says, “We went through a massive and cathartic process. It was a bucket of cold water thrown over the senior leadership team. Every once in a while, there are these defining moments.”
Leaders should also reflect frequently. Grauer relates how Microsoft founder Bill Gates, armed with only articles he wanted to read, would regularly travel to his cabin in the woods and spend time reflecting on his business.
Grauer says he, too, finds time to be alone with his thoughts. “I encourage the people I mentor to do the same. I think this process should begin as early in one’s career as possible.”
Three defining moments as a leader
In 2005, about four years after Bloomberg gave up his CEO position, Grauer came up with a new leadership plan he believed “was going to put the company on stronger footing going forward”.
“We were setting records all the time but we weren’t doing as well as we could have done because we didn’t have the right leadership in place,” he explains. He would have quit if Bloomberg had not gotten behind him. Thankfully for him, the latter did.
After implementing his new plan, Bloomberg saw its best overall performance from 2005 to 2008, which Grauer attributes partially to “putting the right people in the right places”.
In 2006, he underwent his first succession planning exercise for Bloomberg. “I looked at the top 75 jobs and came up with a plan for each of them, with the exception of three jobs – my job, the chief financial officer and one of our founders who basically runs all of our financial products,” he says.
When he realised no one could step up as CEO, Grauer asked Bloomberg in 2007 if he could hire one of his deputy mayors, Daniel L. Doctoroff, whom he had known since 1989. As Bloomberg was starting his second term, he turned down the request. But a year later, Grauer got his wish when Doctoroff left the mayor’s office and joined Bloomberg. In July 2011, Grauer promoted him to CEO.
“You have no idea the courage that is required to make that kind of decision,” says Grauer, who believes Doctoroff is smarter than him.
Another defining moment came when he took a trip to Japan, where Bloomberg had around 600 employees, soon after the devastating earthquake and tsunami in March 2011. Stressing the importance of intimacy, Grauer says: “I literally went to every desk and shook hands with every employee and said, ‘We are here for the long term, we’re never going to let you down and we’re going to get through this together’.”