Founders in Arms Podcast
Founders in Arms
Future of Politics and How Leaders are Chosen with Gautam Mukunda, Author of “Picking Presidents”
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Future of Politics and How Leaders are Chosen with Gautam Mukunda, Author of “Picking Presidents”

Immad and Raj explore how different forms of leadership impacts nations and businesses with political science expert and author Gautam Mukunda.

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Transcription of our conversation with Gautam Mukunda, Author of “Picking Presidents”

Immad Akhund:

Welcome to the Curiosity Podcast, where we go deep on a wide variety of technical topics with the smartest leaders in the world. I'm Immad Akhund, the Co-founder and CEO of Mercury.

Raj Suri:

And I'm Raj Suri. I'm the co-founder of Lima, Presto, and Lyft, and today we're talking to Gautam Makunda who has written several books and been an expert in leadership, innovation and political science. He was previously a lecturer at Harvard. He got a PhD at MIT in political science. He also is Jeopardy champion, so he's done a lot of very interesting things and he studied the topic of what makes a leader great and right for an organization. And today we're excited to talk to Gautam about his thoughts, not only about leadership in business, but also in politics. What are you interested to talk to Gautam about today?

Immad Akhund:

It's a big year for the US Presidential elections and Gautam's written a book on it. So I think just thinking through what makes a good president, how will the US do? It feels at least as a nonpolitical person, kind of a funny choice where you have two people that are maybe quite old and maybe not the ideal candidates, but we're forced to choose between them. So I think it'll be interesting to hear Gautam's view on all that.

Raj Suri:

And in just this concept of what makes a leader great, obviously very relevant to our world in Entrepreneur Land, as we often think about what leaders to put in the right places and how to run companies, I think it's very relevant. It'd be good to understand what kind of research Gautam has done and conclusions he's come to about this very difficult topic that obviously companies spent so much money on and so much heartburn about. 

Immad Akhund:

I've always thought about political leaders and business leaders as slightly different. So it's kind of interesting that he kind of looks at both of them and analyzes them from a similar lens.

Raj Suri:

Yeah, that's super interesting. If he could come up with a framework that could help us all, that'd be valuable. So with that, let's welcome Gautam to the Curiosity podcast.

Immad Akhund:

Welcome, Gautam. Thanks for joining us. 

Gautam Mukunda:

Thank you. It's a pleasure to be here with you today.

Immad Akhund:

I would love for you to go through quick introduction of your past exploits and how you got into being a political writer. 

Gautam Mukunda:

I quip fairly often that I have, my life's ambition is to have the world's most confusing resume and I'm most of the way there. So it takes a second. So after college, I was at McKinsey for a few years and then I went to do my PhD at MIT and my PhD was in political science with a focus in international relations and security studies, which was a little relevant, obviously things going on in the world today. But I did half my work on leadership, essentially trying to understand when leaders have a really big impact, not just in politics but in all kinds of organizations. And half my work on science technology and innovation issues, on everything from how militaries innovate to Bio Mountain to deep studies in biotechnology. And because of the work in biotech, I actually did my postdoc in biological engineering as sponsored by Berg, the Synthetic Biology Engineering Research Center, the National Science Foundation's big grant, to sort of indent the next generation of biotechnology.

Then I got recruited to join the Harvard Business School faculty by Clayton Christensen, who wrote The Innovator's Dilemma. And so Clay and I had been friends and collaborators and he'd been my mentor for a very long time. And he sort of said, I really think you should come join the faculty here. And when Clay Christensen says, I think you should be a Harvard professor, you generally say yes to that one. And so I ended up spending seven years on the Harvard faculty teaching leadership at Harvard, but also doing work on innovation with clay and on others. But I had never really wanted to be a tenured professor. That was just not a life goal for me that I love. I love being at HBS. I love the faculty there, amazing experience. But the idea of spending the rest of my life there was not something, or not the university, but not something I really wanted to do.

So I left, ended up spending the beginning, recruited to teach the leadership program and and teach the leadership program for the Schwarzman Scholarship in Beijing by Steve Schwarzman. So they pulled me into that. And so I spent quite a while in China in 2016 and 2017, which was an adventure as you can imagine. Came back, did a bunch of entrepreneurial work in the middle of all this, spent a fair amount of time advising the US Navy as a senior executive advisor to the chief of naval operations, wrote my first two books, small stuff like that. And then ended up doing a bunch of entrepreneurial work, working at a hedge fund, things like that. And now you can say I split my time between three ways. I would say three halves. So I spend half my time doing traditional academic work. I'm faculty at Gale and I still write, I do a fair amount of writing and research. I do half my time on media, so I host a television show for GBH, Greater Boston, I might do a lot of stuff like that, and half my time on what you call venture capital and entrepreneurship work, I'm a senior advisor for America's Frontier Fund. I advise a bunch of different startups and things like that and invest in them and things like that. And I sort of observed that that adds up to more than one and have decided not to question too closely.

Immad Akhund:

Yeah, I'd love to get it. I mean, there's so many things to talk about here. I'd love to dive into the topic of 2024, the presidential elections coming up. You wrote a book on picking presidents. Do you think it's a foregone conclusion who will be the president or do you think it's very much up in the air?

Gautam Mukunda:

No, no, it's absolutely not a foregone conclusion. It's very much up in the air. I think quite a few Americans find that a little disturbing. But it's definitely anybody who tells you they know for sure you should sort of stop taking them seriously, is the way I would put it. So lemme step back on that for a second. So my work on the presidency is actually not about telling you who's going to win. It's about telling you who should win. So what I'm trying to do is help you evaluate candidates for the presidency and sort of say, will this person do a good job if they get, is there an objective, nonpartisan, replicable way to evaluate presidential candidates and assess whether or not they will be able to succeed once they're in the White House? And the answer is there is, but you have to look at them in a particular way.

And so I am a political scientist by training. I'm happy to talk about whether we think people are going to, who's going to win or who's not and why and what might be the dynamics of that. But my books are about something a little bit different from that. I always want to make that clear. The backstory on that is my first book was a book called Indispensable When Leaders Really Matter. And so Indispensable came out in 2012. I would say it's really important to say that it came out in 2012. It was written well before that. So there's nothing about modern politics that I could possibly have had in mind when I was writing that book. If I could do that, I should be in Vegas making billions of dollars there. And so in that first book, what I was doing was drawing on the research I did for my PhD to try and propose a way of theory, a way of understanding when it is that individual leaders have a huge impact on the organization that they lead.

So when is it that it is really, really important that this person at this place, at this time was the person in charge and that made a big difference, either for better or for worse. I was trying to understand these high impact leaders. The answer I came to was that the leaders who make a difference are overwhelmingly often the ones who are what I call unfiltered. And what that means is they have not been fully evaluated by the internal systems of the organization, by the elites, by the bureaucracy. So because they haven't been evaluated, they can be very, very different from all the other people who might possibly have had the job. So there are lots of people who might become the CEO of Microsoft, and the organization probably knows a lot about most of them because they're internal candidates, but there might be someone they're considering at from the outside.

And because they're from the outside, the organization probably doesn't know nearly as much about them. And because it doesn't know as much about them, it might pick someone who's very, very different. And because they're different, they make individually distinctive choices, choices that no one else would make. And so we think about when you think about those sorts of decisions is they are very high variance in outcome. There's someone who does, they usually turn out either really, really well or really, really poorly, I say, is these people are, they might be successful, they might be disastrous, but they're never boring.

Immad Akhund:

And would you say they're net successful or net disastrous when you have these kind of unfiltered leaders?

Gautam Mukunda:

What I would say is it depends on the organization and the circumstance. In general, high functioning organizations, highly successful organizations are going to be pretty good at picking leaders. So if they're picking wild cards, the average will probably be sort of below the average of what they would do if they're picking highly filtered candidates. And so if you are Apple, right? So Steve Jobs is when he knows his health is in trouble and he's got to pick a successor, he's thinking, well, who should I pick to run Apple? Well, at this point, Apple is one of the most successful companies in the world. He actually doesn't look for another Steve Jobs. He looks for Tim Cook, right? An insider, his deputy, the person who he knows more about than probably any other business executive in the world because Apple doesn't need another Steve Jobs at this point in time.

What it needs is someone who can take what has already been constructed and execute on it beautifully, which Cook has done, and that's what they're looking for. So if you were Apple and you were trying to gamble in that sense, take someone from the outside, that would be a very low average bet. But if you were Apple when Steve Jobs was hired to be the CEOA company, all the point of bankruptcy, one that is staggering from failure to failure, well, pretty clearly your internal selection processes aren't working very well. First problem and second problem is the most likely outcome for your company is you go under, when Steve Jobs was hired, the most likely outcome for Apple was going to go bankrupt. And so your worst case scenario and your modal case scenario are the same scenario. And you cannot go worse than bankrupt, right?

Your losses are limited. That's it. There's a floor, but the ceiling is, you become what Apple is today. And so in that scenario, you do want to gamble, right? Your predicted outcomes actually get better if you take one of these unfiltered. And that's what happened for them. But I would say more often than not unfiltered leaders will fail because one of the most depressing truths about the universe is there are just more ways to fail than there are to succeed. If you take a course at random, the odds are it's not going to work right? If everyone in the world who is qualified for the job that you have tells you this is a bad idea and you do it anyways, you might be a genius, but the odds are not in your favor. A long time ago, I used to be in physics, and so if you spend time in physics, you will start to get emails from random people who have alternate theories of physics so that they have come up with in their basement that explains everything about the world. And if you are at all wise, you will completely ignore these emails. But a friend of mine would get a fair amount of amusement out of answering them, and the people would always, and he would say, these are the 15 reasons why you're wrong. And inevitably the response would become eventually like you laughed at Einstein, and he would say, that's true. We did laugh at Einstein, but we also laughed at Bozo the Clown. And the odds are, you are not Einstein.

So this is sort of why is the average not amazing? And so when I wrote this first book, I said that these unfiltered leaders who are outsiders, who the elites of the organization may not know a lot about or may be hostile to, who take over who do things that no one else would do, this is a very high variance outcome. And so as I'm wrapping up the book, my editor calls me and he's a wonderful, wonderful, and he says, if you're thinking about giving advice to boards of directors, this person will be great or awful, but I don't know, which is not very helpful. So what would you do to tell which side of the spectrum are they going to end up on? Now, the first and most important answer is luck. Luck really matters. When I am evaluating candidates for leadership, when I'm looking as invest and things like that, I'll often ask, one of my favorite candidates questions to ask is, okay, tell me what your greatest success was up until now, and then tell me how important luck was in it. And if they don't tell me luck was a big factor. I think of it as a big black mark because luck really mattered, because luck really matters. If you think all of your past successes are entirely a product of your own efforts and there was no favorable circumstances involved, you pretty profoundly lack.

Immad Akhund:

So it's mostly a signal of self-awareness, not that you want to hire more lucky people.

Gautam Mukunda:

No, I mean, almost luck by definition is not a replicable skill. It might be, I would like to hire more lucky people. Hyman Rickover, the father of the nuclear Navy, MATTMAN has created that for the United States. He used to say that luck is preferable to skill. He said, I will not hire you if you're not lucky. I would rather you were lucky than good. But I would actually say the definition of luck is that it is not a replicable thing. If you have some set of abilities that make you able to get these fortunate things happen to you more consistently than average, then that's not lucky. That's a skill. That's something we should be able to identify. And so luck matters, but what I said was, luck isn't the only thing that matters. So this is all, I want to emphasize this 2012. So luck is not the only thing that matters.

What I said is what you should really, really be cautious about when you're looking at these kinds of candidates, these unfiltered ones, is you want to look at ones who project what I call false signals of capability. That is, things that on the relatively superficial inspection that you're able to give to an unfiltered candidate, things that make them look better than they actually are, so that you're sort of selecting for characteristics that might make someone actually be bad when you get them in power. And so the characteristics that I identified back then that I thought were really, really worrying, where if a candidate had any one of these four, you should just don't let them have the job. It's just not worth the risk. The first one was psychological and personality disorders, where the examples I used were narcissism and sociopathy.

The second was out of the mainstream and highly simplistic ideologies. The third was an extraordinarily risk prone or just straight up incompetent managerial approach. And the fourth was unearned advantages where the specific thing I had in mind was inherited wealth. And so those were the four. And then four years later, Donald Trump got elected and the Washington Post runs a column saying, this book reads, it was written with the time machine. I was sort of like, okay, that was kind of not the plan here. And my editor calls me and he says, guess what? I know what your second book should be about. I was like, yeah, pretty. That seems like a pretty fair guess. And so I ended up writing the second book, but specifically about the presidency, but the presidency's endlessly fascinating. You can talk about the presidency for forever. It is the most important job in the world and the hardest job in the world.

There are lots of superlatives about the presidency, and the crazy thing about the presidency is they're actually true. But the other reason I wrote it is that if you are interested in leadership, not just political leadership, but leadership of all kinds, the presidency is the greatest laboratory for understanding leadership that has ever been created. And the counterintuitive reason for that is because we know more about what happens inside the Oval Office, and we know more about the people who get to the Oval Office than we do for basically any other leadership position of significance in the world. I know way more about what happened in the decisions that George HW Bush made to fight the Gulf War way more. It's not even close, that I will ever know about why BHP Bulletin just made an offer to acquire or to acquire any of American.

That CEO suite is basically closed off. I'll never find out what happened there absent extraordinary circumstances. But if I want to know why George HW Bush did what he did, I can read, I can actually go to any university library and pull the foreign relations of the United States off the shelf and get the memos that every principal wrote, the minutes of every meeting, those are just all publicly available. And so that allows me to sort of study what happened in a way that I can't in other circumstances. And it doesn't mean that the presidency, just the qualities that make you a good leader and the presidency make you a good leader in other places. That's not true. That is definitely not true. The leadership is, to an extraordinary extent, context dependent. I always say that picking leaders is not a ranking problem. It's a matching problem. You don't have some absolute pool of people from best to worst. You just have people who are right for the situation that you are in and people who are wrong for the situation you are in. But that doesn't mean you can't learn. So yeah.

Immad Akhund:

You're describing all of these things. I don't feel like the American public or even the primary process in America really selects for leaders according to this kind of logical set of criteria. Do you think that's a broken part of the American system, or do you think it does work somehow?

Gautam Mukunda:

So I want to say it has historically worked more often than you would expect it to, right? Given the way the system is designed or not designed, I would say the system was not designed. The system just kind of happened. I do not think, as I said, presidents are not CEOs. The skills that go into picking one job are not the same as the skills that go into the other. But the system that companies, the process that companies use to pick their CEO and if you're a big successful company, is generally much more logically designed than the process that the United States uses to pick a president. But that being said to two caveats, the first one is that up until fairly recently, it was important to take into account the role of elites in the system. So there's a sort of classic book called the Party Decides that basically says that all of this stuff that we do with primaries and conventions, things like that, that's all just kind of set dressing.

That's all window dressing. What's actually happening behind the scenes is party elites are looking at the candidates and picking the person they want, and the party elites do actually know all these candidates. They know them very well. They spent years or even decades working with them. So that process has a lot more insight than we might expect, the sort of what we watch on the news to be The thing. What I would say there is when you looked into my first book and my second book, both of 'em, when I went through and looked at actually all the presidents of the United States, what you found as found was that sometimes it was true and sometimes it wasn't. About half the presence of the United States are very thoroughly filtered and evaluated by the system and by those elites. And so when they were elected, everyone knew exactly what they were getting.

It was not in question. The best example, there are many great examples of this, but one would be George HW Bush, who we already talked about in the Gulf War, who before he became president of the United States, this is the father, not the son. The older George Bush, before he became president of the United States, had been a member of Congress, chairman of the Republican National Committee, head of the CCIA and ambassador to China and vice president of the United States. Everybody knew who he was. Everybody knew that he knew how to do the job, and when he became president, that's what he was. He knew how to do the job at an extraordinary level of skill. But the flip side would be the other half the time the President, the United States has a tendency to pick people who are relative unknowns, who can be wildcards, and that can work out really, really well.

Abraham Lincoln was like that. Abraham Lincoln's total national political career before he became president of the United States was only two years in Congress. When you look at his biography when he ran for president, I mean, you would laugh, right? The idea that this guy should be president, it seems like a punchline. Bill Gienapp, the great Harvard historian of the Civil War said way back in 2000, when did he say this? Around about the year 2000 that the Republican party's decision to nominate Abraham Lincoln in 1860 was the moment a greatest crisis in American history was the single most irresponsible act by any major political party in any country's history. My guess is had he lived to see the 2016, he might revise that assessment, but when he said it tells you just, but obviously it worked out extraordinarily well. Abraham Lincoln was the greatest president of all time. And so you get those people you get on the other side. I would say this irrational and somewhat random event happens about half the time in the United States, and there is, by the way, no other major country where the head of government is an unfiltered leader about half the time. That is a complete artifact of the American system, and it has huge implications for the United States and for the rest of the world.

Raj Suri:

Gautam is very interesting. I mean, one thing you kind of mentioned that the president, the most we know about the presidency is most we know about. I mean, Immad and I probably combined have been CEOs of companies for over 30 years. So we spent a lot of time in the CEO O suite, and we also spent a lot of time interviewing executives and talking to people who have been in CEO suites in other offices, I feel like it's fairly easy to understand what happens in a CEO suite, and there often are memos, and actually those memos are often published after the fact or after an acquisition happened and stuff like that. So there is an oral history as well as in many cases there is a written history, and often these times in litigation, a lot of the written history is published. So I'm actually kind of curious about your statement that the presidency is the best place to analyze for leadership. I actually think business is, there's just many more examples. So the sample size is a lot larger. I mean, going back to Abraham Lincoln, you have to go back way back in time versus all the companies that are being run by c-suites right now. So I'm curious if you have done a deep dive on business looking at some of this written and oral history to do some of this analysis as well.

Gautam Mukunda:

Oh, of course. So I was faculty at Harvard Business School for seven years. So that was basically what I did for seven years was diving into that, including stuff like being embedded with the CEO of Volkswagen for not continually, but often, and on for almost two years following the diesel mission scandal. So literally just following the Ts Muller around for extended stretches of time to see what he was doing. So you can get what I would say is fuel is what I learned in that is especially with the largest organizations, and I'm particularly interested in really big organizations and really big and powerful organizations, is the story that is publicly told. And the story that happened often has relatively little overlap, was the first one of those. And second is it's often hard to get what I say is both sides of that story. So when I was embedded in Volkswagen, I had a pretty good picture of what was happening in Volkswagen, only, some of which I can talk about because there were very strict rules about what was disclosable, what was not.

But I had very limited insight as to what was happening inside Tesla or Ford or anything like that. So that also becomes part of it. It's not that you can't get information about the business world, and I have done that and it's fascinating. And my favorite case study to talk about for leadership actually is a CEO case study. It's about Anglo-American, the giant South African mining company, and how it transformed its safety culture over the space of six years to take the number of fatal accidents it had every year in its minds from 44 down to about 10. So just an extraordinary story for crisis management. You get some fascinating stuff about say Bob Steele, when I wrote a case study about Bob Steele at Wachovia when during the financial crisis, I'll say it's the last untold story of the financial crisis, is how he took Wachovia and sold it to Wells Fargo in the middle of this.

And it is just a remarkable, I actually had to construct literally almost a minute by minute TikTok of what he was doing because things were happening so fast that you would literally have, the situation might change completely from 10:00 AM to 2:00 PM on the same day. You can get a lot of data for companies, but there is, first is there is a huge selection bias. Companies do not let you in if they are in general as a scholar, if they are not pretty happy about how things are going, they're not always right about whether they should be happy about how things are going. So when I was writing cases for HBS, one of the great challenges I would say is that the corporate communications team, the story they always wanted you to tell was that everything was perfect and then it got better. And that is not one, not a story. I'm interested in telling two, not a story that's terribly accurate, but it is a story that is very important for them. I just don't have those same constraints when I'm talking about political leaders. I mean, it's not just for purely intellectual reasons. I'm a political scientist by training the presidency is really, really important. Had Donald Trump not gotten elected? My second book would've been about corporate leaders, about presidents of the United States, but I do think that you can learn so much from this area that it is well worth spending the time.

Raj Suri:

Fair enough. I think another thing you mentioned was that the presidency is the most important job of the world. I actually feel like one of the lessons from Donald Trump's presidency is how little effect he actually could have given his desires for policy change and upending the system and all these things. He actually, if you look back on it, he had very little impact compared to what he wanted to do as a president. Whereas I think a CEO of a company would actually have way more impact coming in for four years and changing things around. As you mentioned, Steve Jobs in the first four years, he made dramatic impact at Apple, whereas Donald Trump made almost very little he actually could get done. You can't actually change the people around that easily. You can't change the system very easily. So in some ways, I question this notion of the presidency being the most important job of the world because it's really more about the system and then it's about any one person. Yes, the president could launch nuclear weapons, but is that really possible? Is that really going to happen

Gautam Mukunda:

First? How many CEOs have unrestricted control of 16,000 nuclear weapons, but -

Raj Suri:

They're not going to do anything with it, so it doesn't really matter.

Gautam Mukunda:

One, that is a very scary thing to say. The very fact that people believe, oh, they're definitely not going to do with it, means that they do not take -

Raj Suri:

No, definitely, but high likelihood, high probability - 

Gautam Mukunda:

Okay, so how high a probability are you willing to accept that gives you confidence about a decision that after all would involve the end of human civilization? So just how high a probability is enough that you're not going to think, you're not going to worry about it too much anymore.

Raj Suri:

I guess you could always be a little bit worried it has this tail risk, but it's it the same as like an asteroid hitting the earth or something like that. It's like, yes, you could worry about it, but you're not going to spend a lot of time thinking about it. Yeah, there's a lot of things that could end civilization, but it's not an imminent threat. Obviously, you should protect it when you choose a president, and that's an important thing. But again, the chances of it happening are so low, that it won't be in anyone's top 20 criteria. Generally when they're picking a president, it'll be way lower than that. Maybe you’re arguing it should be higher?

Gautam Mukunda:

So I'll just know, United, in the case of here, that even here it is sort of difficult to, let's think through the Donald Trump presidency for a second. He made many large claims about what he would do, which some of them, most of them didn't happen largely because it's pretty clear that he was just right. He was just saying things. He didn't actually have any intent or understanding to do those. So one is that is not typical for a president. In fact, political scientists track campaign, presidents’ campaign promises quite closely. It's actually shocking how high the percentage of campaign promises that get fulfilled are. It's very high. Candidates track this stuff very closely and they are very almost obsessive about trying to do it. But even in the case of Donald Trump, let's break that out a little bit, right? Let's say like, okay, yeah, he didn't have any sense of how to understand, manage the federal bureaucracy, didn't have any sense of how to manage that.

But actually a lot of things happened because of him that we should track through the most obvious being the complete mismanagement or the early stages of the pandemic. So that was catastrophic in its scale. A lot of Americans died who did not have to. If the United States government had handled that more capably and the United States government was capable of handling that more carefully. In 2018, Johns Hopkins did an assessment of all of the country governments in the world for their pandemic preparedness and their ability to handle a pandemic properly. The country that came in first that was most able to handle one was the United States. We clearly did not come in first in our performance during this crisis. If you were to look at foreign policy, the behaviors of the Trump administration actually had pretty profound consequences, fairly obvious. One, withdrawing from the Iran nuclear deal when Barack Obama was president, the United States way, he passed Iran deal, the nuclear deal was signed with Iran, and the Iranian nuclear program froze.

It did not progress for several years until President Trump withdrew from the deal. And that program now has progressed a great deal. Iranians are considerably closer to having a nuclear weapon, maybe even within a year if they choose to do what's called a breakout in the field. That's a hugely consequential decision that has a lot of implications, tax policy that we got. The tax policy that Donald Trump has, looks very, very different from that of other people as he boasted when he was at Mar-a-Lago to a bunch of his supporters. Any of these are enormous decisions, right? Decisions that if you're talking about tax policy involve trillions of dollars.

Raj Suri:

Sure. I mean, a generic Republican would've made the same sort of decisions around supreme court justice tax policy, maybe the Iran thing, we don't know, depending on what kind of Republican it was nominated. I mean, I'm seeing him as an outsider as this maverick. He didn't really change that much compared to what?

Gautam Mukunda:

It’s an interesting question. So I would say a generic Republican would've done a lot better in handling the pandemic, and a generic Republican would not have sort of aggressively tried to weaken NATO in exactly the same way, which had pretty large consequences for Ukraine if you were to ask them about it, right? In the last few years. So that I would say is there are ways now Trump was, and of course the biggest of these, we haven't even mentioned January 6th, right? A generic Republican, I'm highly confident would not have tried to do something like that. The consequences of that are going to last for a very long time, and we haven't really thought that. We don't know what they'll look like. But I'll say is the history of political systems is that once you have a violent attempt to overturn an election, it's not a great precedent, right? You're uncorking a genie there when you just don't know what's going to happen next. So I agree with you that Donald Trump's particular inability to manage any sort of a bureaucratic system was really striking and quite dramatic, and it limited his impact in ways that if he were to get reelected, it probably would not be true. But we can think of lots of other examples.

Immad Akhund:

What is your take on, I guess the other side, Biden, which is a very filtered candidate according to this definition of filtered, do you think? I guess, is that the right candidate that America needs right now?

Gautam Mukunda:

So what I'd say is Biden broke my graphs. So in the book, I have charts that look at each president of the United States, and I assign them in the second book, I assign 'em what's called a filtration score. So you could do quantitative analysis of the outcomes, and Biden's filtration score is about twice that of any other president in American history. So I'm not being metaphorical, I'm being literal. He broke my graphs. I had to redo all of them to account for him. The most striking thing about Joe Biden's career is political scientists do a thing where they chart what are the views of elected officials in Democratic party, and you can track it by their votes in the Senate, in the House. And Joe Biden was in the Senate for 36 years. So we have a lot of data on that. And over those 36 years, Joe Biden was the median Democrat basically every year.

So if you want the guy who would do what the Democratic Party's Center of Mass would do, that's Joe Biden for his entire career. Now, these theories, I think are very, very helpful, but there's a level of granularity in social science that theory does not get you right, because people have free will, and there's lots of variation within those two. So in the particular context of the Biden administration today, there are things that happen with the Biden administration that surprise me a lot. So for example, he got way more cooperation from Republicans in the Senate than I thought he would, shockingly more. And he promised that in the campaign, and I was like, yeah, it's great that he promised that it's a nice campaign promise. It was never actually going to happen. He was right. I was wrong. He actually did get it. Not total cooperation, but surprising amount.

The other big issue with Joe Biden, he'll talk about himself his age. So I have written about the implications of age for leaders of all kinds, not just political leaders, and past a certain point when you're getting to seventies and eighties, those implications are not good. They are very worrying. That's not to say that all people as they get older are not capable of pulling these leadership systems. That is not true. You can certainly think of exceptions. I had a dear friend and colleague who passed away at 104, and I got to tell you, when the guy was 96, he had more energy and he was mentally sharper than I am, so, okay. But that's exceptional. And generally this is not the sort of odds you want to play, right? Especially when you're dealing with someone who has control of nuclear weapons and giant armies and trillions of dollars of budgets. It's not an accident. That's the biggest concern everybody has about him. And going forward, that's a pretty reasonable thing to believe.

Immad Akhund:

So you were saying that he did a surprising amount of Republican cooperation, but the biggest concern is around his mental health?

Gautam Mukunda:

No, I didn't say around his mental, his age. So no, it's worth noting that's not the same thing. You can have supreme mental health going into your, as I said, I have plenty of colleagues who have written books in their nineties. Their mental health is fine. The biggest impact is decline in energy. And these are not jobs reward where there's a lot of tolerance for being low energy, both CEO of a major company or senior levels in the political system. These guys work really hard.

Immad Akhund:

Why do you think we ended up with two candidates that are very old? Is this kind of just a feature of American politics now or is this a one-off thing?

Gautam Mukunda:

No, I think it's just one-off. One of the hardest things about sort of looking at the presidency and using it as a filter, and why I would say you have to be pretty cautious about that is it is a small numbers problem. There are all these things about, oh, well, the people look at this, then they want the altered thing in the next election. I generally don't believe any of those things. You're basically flipping a coin every time, and it's easy to construct patterns from coin flips. The basic issue is Donald Trump is old because he is a unique phenomenon. There has never been anyone even remotely like him in American history. The closest parallels you would get would be George Wallace and Huey Long. That's what goes as well. Biden is really, really old because he had been vice president for eight years, and I would say the easiest way to put about this is when was the last time that a party's vice president who wanted the presidential nomination did not get it?

And I think that answer is sometime in the 1920s, if you have been vice president of the United States and you want to be president, there is an enormous leg up in the process. You are really starting in a headstart. And he had been vice president, he wanted to be president. And so a big turnout that has a big part of it as well. But if you look at on the Democratic party side, so one of my really close friends is a Republican former governor. And so he and I were actually texting about this yesterday where we both came out with the lists of Democrats who could plausibly be president of the United States if Joe Biden was not running. And it's not a short list. There are a lot of people in the Democratic Party you could look at and be like, maybe you wouldn't vote for them. Maybe you don't think they're great, but you wouldn't be. It's not implausible that Gretchen Whitmer or Jared Polis or Gavin Newsom or Corey Booker or Mitch Landrieu or Bashear from Kentucky, there's just a long list of names of all of whom with people who are very, very young and who look like they are a presidential timber. So I think there's a little bit of just random chance on this one.

Raj Suri:

You think, by the way, on your trivia question about when was the last vice president who wanted to be president and didn't get nominated, would Mike Pence count as that? I mean, he tried to run this year and didn't

Gautam Mukunda:

Get so. No, you're right. So you are in fact, exactly right. Well, the complication with Mike Pets is he was running against his own preta, which I tend to think kind of doesn't count. Yeah,

Raj Suri:

I love trivia. So I want to see if I can get that, as

Gautam Mukunda:

Do I. Yeah, I was even on Jeopardy, so -

Raj Suri:

Right. I’ve got to watch your episodes. I'm a Jeopardy fan for sure. But one question I had, okay, so you study about what kind of leader does any kind of organization need at any given time, given where the country is today, if you had to design the ideal leader, or what would the characteristics of that leader be?

Gautam Mukunda:

So you said, given the United States where the United States is today…?

Raj Suri:

Where we are in this moment, we're not in a crisis where obviously we're post pandemic, but there is a lot of geopolitical strife and the economy is doing okay. It's doing pretty well, actually. So we would love to hear.

Gautam Mukunda:

Yeah. So certainly there are concerns about the American economy. What I would say is it has rebounded better from the pandemic than anyone else's, which is, that's a pretty good bar to hit. Dean Simonton is a great California psychologist who's probably the foremost scholar of human performance, the person who studies the psychology of what it takes to succeed in leadership roles. And he's not just political role, he's sort of across the board. He's looked at everything from generals to artists over the course of his career. And what he found was that the single most important individual level predictor of success, so the individual characteristic that predicted success was a trait he called intellectual brilliance. And so that is not iq. It's related to IQ, but it is not the same thing. He says, yeah, you need a lot of horsepower, however you define that, but you also, he said it includes characteristics like openness to new ideas, broadness of taste, or someone who's written books or spoken multiple languages or has different, and what he finds is that across domains from politics to politics to business, to the military, that is the single strongest predictor of individual level, individual level predictor of leadership success.

So I would start with that. That's really important. And when you think about why that is, if you were thinking about the presidency, the presidency is a long time, right? It's either four or eight years. Whatever particular sets of skills we need you to have today to deal with, the problems of today might be very, very different from the ones you need three years from now. And so what intellectual brilliance gives you is a very broad toolkit, the ability to kind of adapt and grow. So you might not be perfectly adapted to any environment, but you can adapt well to almost any environment. My own personal biases, I would layer onto that is the, I mean, the country needs to take the temperature down a little bit. I'm a political scientist by training. I like politics, but I actually think things are generally better off when you do not feel like it is really, really important to find out what happened in politics today.

The system is working pretty well. If you find out if it's important, then once a week, if you don't know what's happening once a day, that means that things are going there. So I would be great to have someone, and this I think was actually something that was a big part of Biden's appeal in 2020, was he made you feel like this was someone who could take the temperature down some. And that may not be possible in the context of Donald Trump, but it's important. The third one characteristic that I would, and this might be in many ways, the hardest to find, is if you were to ask me what is the biggest problem the United States has today, what I would say is the biggest problem that goes, that you could thread together almost all of our other problems is that institution after institution, whether it's companies, nonprofits, universities, governments, you name it, they are serving the interests of the elites who run the organization and not the purpose for which the institution was created.

So my personal hotty horse at the moment is Boeing, right? So Boeing is an iconic American company. It is America's largest exporter. Some years, depending on how Google's doing that year, it is the most important manufacturing company in the United States because it pushes the technological frontier forward To a remarkable extent, the last four CEOs of Boeing have been paid tens or even hundreds of millions of dollars over the course of their time at Boeing. And what they have combined to do is fly that country company into the ground, both in terms of business performance where it has obviously been catastrophic, but also where that is not a metaphor, but literal, where 354 people were killed in absolutely needless accidents on the 737 max eight because of just astonishingly bad decisions that were mandated by Boeing corporate, by the CEOs of Boeing who don't actually seem to have had any interest in actually building airplanes. And I don't mean that metaphorically, Boeing's headquarters used to be in Seattle. It was moved to Chicago by the CEO of Boeing who declared this was the quote that he did not want to be distracted from his job by the details of building planes, which makes me wonder what he thought Boeing did.

And so I think a leader, not just in the presidency, but across American society, we think we need lots of leaders who are willing to do two things. One is they need to think of themselves as custodians, as stewards, not just as CEOs. And the thing about being a steward is you are serving as a leader for a larger purpose. You are not here to maximize your own welfare. You are here to maximize the welfare of the institution and of everyone around you, you think of the institution, something you will hand off to someone else. I think we need more leaders who think of themselves as stewards, who are willing to leave money on the table if it's better for the collective and not just for themselves. We need fewer Jack Welchs, in other words, and more, Alan Mulally, who was the great CEO of Ford.

Immad Akhund:

I think there's some sort of rule that says bureaucracies will over time serve the bureaucracy rather than the purpose of the bureaucracy. I guess, is there a way around this? Because I mean, actually it goes back to your filtered versus unfiltered, like the filtered individual, especially an organization that's been around for a long time will try to serve the bureaucracy more than maybe the unfiltered individual.

Gautam Mukunda:

Yeah. So there are two ways. So two things. One is we need to reorient. So bureaucracy will serve the interest of the bureaucracy, but you can shift the incentives of the bureaucracy in ways that make it productive. So in Boeing's case, we should probably pay senior managers at Boeing based on operational and not financial performance. If you made that shift, it would make a big difference. More broadly, when I'm teaching MBAs every year, I will jump up and down on some poor victim who tells me that American companies have a fiduciary responsibility to maximize shareholder returns. So you will hear this set all the time. This is a truism of the business world. It is, as a matter of just simple black letter law, not true. It is not true. This is not a contested point of law. It is very clear. There's a wonderful book called The Myth of Shareholder Value by a professor at the University of Michigan Law School who lays this out and just, it is not ambiguous.

Boards have a responsibility to set out and say, we need, this is your job, right? And your job is about a lot more than maximizing today's shareholder price. There's a really good book by my friend Warren Valdmanis called Accountable that lays out this argument very, very clearly about what it is that boards can and should do, and that would be better. And I mean, the most striking thing about this is it's not just better for employees and customers over the long run. It is also better for shareholders. Boeing's shareholders would be a lot better off if Boeing's CEOs had cared less about the day-to-Day share price and more about making great airplanes.

Immad Akhund:

So maybe we can, at least in the corporate world, try to change this incentive to be focused more on long-term and customer value rather than short-term shareholder value

Gautam Mukunda:

Very much. And just that it's not just about doing this for yourself. Leaders have an obligation to speak up for others too. So it would be great to have more leaders who didn't just say, I'm going to do this, but who sort of challenged their peers in the presidency, who challenged institutional elites across the United States, that we are going to reform the system and change it in such a way that this kind of behavior is no longer rewarded. And you can talk about lots of changes in tax policy and regulatory policy and law that would do that, but the US had a system that delivered those kinds of results incredibly well for the average American for a very long time, and then we got rid of it. One could ask whether that was a good idea?

Immad Akhund:

What did we change?

Gautam Mukunda:

The most important one is we deregulated the financial sector. So there's a lot of literature I've contributed to it on a process called financialization where essentially you should think of the financial sector is the tail, the tail of the dog? I always tell people, value doesn't get created by playing games with spreadsheets. Value gets created by people who invent things and build things or dig things out of the ground, or educate people or heal people. There are lots of ways to create value, but spreadsheets really not an optimal one of 'em. But what happened post the deregulation of the financial sector starting in the 1980s, but continuing through the 1990s was the financial tail of the American economy started wagging the dog. And we all know this is true. So there's for example, a survey of American management that's done every few years, which found that I think almost half of CFOs would kill an NPV positive project in order to make their quarterly numbers. So in order to make your numbers this quarter, you will hurt the company long term. That's profoundly counterproductive. If you were to ask me the single change we made, that was most important. That's one. That is the one. So step back for a second.

Immad Akhund:

I was just going to say there's a few founder CEOs that have done a good job of not doing that, right. Jeff Bezos famously would always focus on the long-term, and I heard Reed Hasting from Netflix talk recently, and he was like, Hey, we always talk about the long-term and we never focus on the next quarter. But you were saying something.

Gautam Mukunda:

No, yeah. I always cite Bezos's first annual letter to shareholders, which Amazon actually reprints. It's an annual report every year sending this message that this is not ambiguous. If you want to invest with someone who is focused on the short-term reserves, you should invest with someone else. That is not what we do here. You could say that this is on the particular thing in the financial sector. What we know is that right now everybody knows that people in finance make more than people in other sectors of the economy. But that doesn't have to be true. Between the 1930s and the 1980s and the 1970s, the income premium for working in finance was essentially zero because we had regulated the system in such a way to make that. And so Peter Drucker, the greatest management thinker of all time, I'll say that there's nothing any of us have ever come up with that Peter Drucker didn't do first and better.

And so he wrote in the 1950s and sixties, he said that there was this great quote that today he says, the distinguished graduate of Harvard Business School would be ashamed to go to work on Wall Street, says they want to go to the place like General Motors or Ford or Boeing, or today you would say Google or Facebook or Microsoft, where, and the reason he was saying this is not because there was some social stigma to doing that, but I think is because that's where the best people went. Right? It is. Like if you were going to these other places, you were saying you weren't good enough to go to a real company. Right? 

Immad Akhund:

I agree with your general point, but I would say at least on public perception since the great financial crisis, I would say it shifted. When I went to college, everyone wanted to go work at investment bank, whereas I feel like it has shifted away from investment banks and more towards startups and things like that.

Gautam Mukunda:

I think the public perception has shifted, but what I say is public perception will, as the financial crisis fades into the background, follow the money. So if we want to actually make that something that actually shifts the American economy back into a more healthy balance, that needs to be followed up with policy changes.

Raj Suri:

Well, this has been great, Gautam. Really appreciate the time and the insights.

Gautam Mukunda:

Well, thank you. It's a pleasure speaking with both of you.

Immad Akhund:

Yeah, this is super interesting. Thanks for taking the time. Wow, that was an interesting conversation. Raj, you don't mind having any president with the buttons to fire those nuclear weapons or whatever?

Raj Suri:

Maybe there's some presidents I would worry about more, but I think it's a bit of fear mongering, honestly, that certain parties are guilty of it obviously worked very well. In 1964, there was a super conservative presidential candidate like Barry Goldwater, who was really, that was the height of the nuclear rivalry with the Soviet Union. And this guy was like, I want to be aggressive. And I think he lost by the biggest landslide in history or something.

Immad Akhund:

Wait, what did he say? He said he was going to fire the nukes?

Raj Suri:

Yeah. It was basically a very hostile type of approach to the Soviet Union and the Democrats. Basically at the time, they ran a campaign ad, this very famous campaign ad, which basically showed a nuclear bomb going off. It showed a girl playing under a tree or something, and then she's just having a good day and then a nuclear bomb goes off. And that campaign ad is famous because it killed his campaign and the biggest landslide in history, but that was a different time. I feel like that was, nuclear weapons were still new then, so there was still a fear. But many years later, the chance of nuclear war is much, much less, I think, than even was then. So I think it's a bit of fear mongering. I think there's a lot of lessons from business, and I can see a challenge that someone like Gautam would have in getting into a C-suite.

If people know everything that he's going to learn is going to be published, people may not maybe be reticent to share it with him, but you and I have been part of a lot of conversations and meetings, and we've been in this chair, so I think we understand what goes on. So I think it's interesting to hear what maybe an academic might think of the leadership journey versus having experienced it ourselves. There was a couple insights that I thought were interesting. One was the unfiltered and filtered, which I'd love to get your take on, Immad. And then the second thing was this concept of intellectual brilliance was being key for a leader. It's not something I've thought about before when hiring someone, for example, I wouldn't hire an executive only based on that, but seemed like he thought it was very important for the role. Yeah.

Immad Akhund:

Well, let's talk about the brilliance part first. It wasn't clear to me how you would test for intellectual brilliance. He was like, Hey, it's not just intellectual horsepower and IQ, which obviously we know how to test for to some extent. How do you test for introduction?

Raj Suri:

Is it open to new ideas?

Immad Akhund:

Yeah, but how do you test for that?

Raj Suri:

So maybe it's like you challenge someone in an interview, maybe you get into this little debate and then you see they're accepting part of it or not. Maybe I can see part of that. You also talked about speaking multiple languages, which was kind of like a non-sequitur. To me. It was like, okay, so I have to check how many languages they speak. Maybe that shows openness, openness in new cultures, new. I don't know.

Immad Akhund:

Yeah. One thing we test for at Mercury, which is maybe part of this is when someone is very curious about some random non-work related topic. If they've gone very deep in, I dunno, some sport or some hobby, and they can talk about that at length, I think that's generally, it's more about curiosity, I would say, than intellectual brilliance. But maybe that's a little bit of part of that. I think it's easier to test for curiosity than brilliance. I thought the unfiltered, filtered part was pretty interesting. I'm not sure where I come on one side, I like the idea as an entrepreneur, I like unfiltered people and I feel like you want to have that new blood and all that kind of stuff. But at the same time, at Mercury, actually, I really liked the idea of having people that have been part of the organization that grow within it, that have opportunity to scale their career. So there's always a little bit of a contradiction there. And maybe that just speaks to what Gautam's overall point was that sometimes you do one unfiltered and sometimes you do unfiltered.

Raj Suri:

Yeah, yeah. I think in the political circles, they call it establishment or non-establishment candidates or anti-establishment candidates. Even. That's I think, a very common framework in the political world to describe people is someone coming in from nowhere versus someone came up through the system. I think in the business world is like people who've grown with your company promote from within and hire from outside. I've always thought that you want a balance of both. You always need to do a bit of promotion from within, but you also need to hire from outside. Otherwise your organization becomes too siloed and you're missing a lot of best practices that come from outside. So I feel like maybe for the country, I wonder if that's the same. You often get the filtered candidate, but you also do sometimes the unfiltered just to mix things up and never be too, if it's too filtered all the time, it becomes like a monarchy or something. It becomes almost like…

Immad Akhund:

Well, the funny thing in the UK, and I don’t know if it's like that in Canada as well, in the UK, there's a MP that becomes the Prime Minister, and it's not like you don't really select the Prime Minister. You select your local mp and then the party picks the Prime Minister. So it is, and this kind of got himself, almost no other country has this kind of idea, this ability for an unfiltered president to become the kind of leader of a country. When I first moved to the US, I thought it was a bug. I was in the system that, Hey, so you can have this random person become the president, but it's also a feature, which is kind of interesting.

Raj Suri:

Yeah, yeah. I would argue it's a feature. I mean, obviously you could have a demagogue, right? I would argue Trump is, you could become president. But one way I disagree with him is I think there's, Trump is actually, it's evidence that the system works well, and there's a lot of, we have this checks and balances system with the courts and Congress, and I think there's overemphasis and too much media attention on the presidency. And there's, whereas actually I think Trump proves the system works pretty well. You can have a Maverick president, but you can't get much done if everyone's not aligned with it, if the courts are not aligned with it, and if the Congress is not aligned with it.

Immad Akhund:

There's two aspects to it, actually. It's like number one, the checks and balances, where if you don't have alignment from the three pillars of the system, it doesn't work. I think the second thing is actually the federal government and the presidency just doesn't have that much power day-to-day, like your state or your city. That really affects things. And actually the geopolitics and the foreign side of things, that's where the president matters a lot. And given that we are entering a fairly geopolitically turbulent time, maybe the president does matter quite a bit in that context. But yeah, day-to-day life, most of the time the problem in San Francisco is caused by San Francisco, not the President of the US.

Raj Suri:

But you wouldn't tell that from the media attention because a lot of media attention is on always the presidential election. There's not that much, especially now where's happened to our media? It's become centralized in a few major brands. So I think the landscape has changed. I think before everyone used to read their local papers more. Maybe they paid less attention to the national papers, but now it's a lot more attention on the national media outlets, this cable news networks and stuff like that. Whereas the local stuff is almost, that died completely.

Immad Akhund:

And the internet sucks at local stuff because you go on Twitter or wherever, and everyone's talking about the big things that all in the same local town as you or even the state.

Raj Suri:

Maybe we've got to fix this, start the company, fix this problem.

Immad Akhund:

So many problems to fix.

Raj Suri:

So many problems to fix. But this one could have a big impact. It could change politics, it could change how people live. 

Immad Akhund:

There's a company called Nextdoor that maybe could have done it, but they focused a little bit too much on local crime and stuff like that, which didn't work out.

Raj Suri:

Yeah, that was a great hope, right?

Immad Akhund:

Yeah, for sure. Okay, cool. Well, I hope everyone enjoyed that podcast and see you all soon.

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