Obama in NY: ‘companies shouldn’t take political stances before fixing internal issues’

The former leader also spoke at length about cultivating business leadership and positioning organizations for success, even as they face growing pressure to engage in social and political debates. Here are five of the top takeaways for modern business leaders:

1. Stay laser-focused on mission

Obama launched into his thoughts on leadership with a note on the universality of leadership principles, saying that whether one is running a business, a basketball team or a nation, certain truths hold. One such truth, he suggested, is the need to set a clear mission and stay committed to that mission.

Remaining mission-oriented was always a priority for him during his run for the presidency and his time in office, he said. “I think we did that successfully in the [2008 presidential] campaign. And we did it successfully – although sometimes not as effectively communicated as I would have liked – during the presidency.”

Business leaders would do well to start here, he implied. “[Have] a vision about, ‘What’s the mission of the organization? Where are we going?’ That’s the job of the leader.”

2. Balance purpose with the bottom line

Under growing pressure from consumers, modern organizations increasingly feel the need to take public stances on controversial social and political issues.

In many ways, Obama pointed out, this pressure is “actually a return to what used to be.” He explained that large organizations in the 20th century were largely location-based; major automakers were in Detroit and publishers were in New York. These organizations held some responsibility to other members of their communities. “There was a recognition that if you are in charge of a big institution ... then you had some stakeholders beyond just your shareholders. I think that was a healthy thing. It meant that a CEO had to think, ‘How is this going to affect my city, how’s this gonna affect my workers? I might be going to church with people, so maybe I’m not smart to lay them off if we have a downturn.’”

Now, while communities have become more global and interconnected in nature thanks to digital connectivity and the forces of globalization, people still expect corporate leaders to care for and support the interests of the community at large. “A lot of younger workers are saying, ‘We’re still part of a community ... so we expect you to care about gender equity, we expect you to care about race relations, we expect you to care about climate change,’” the former president said.

He cautioned, however, against virtue signaling, and stressed the importance of walking the walk rather than simply talking the talk. “Sometimes, I think companies feel pressured to make gestures in part because they haven’t really taken care of these underlying measures internally,” he said. “It’s easier to post, out of your PR shop, some statement about Black Lives Matter than it is to examine your own hiring practices. Are you investing in a diverse workforce, and what has been done to promote people of color into management ranks? Sometimes these gestures become a shortcut. And if you have confidence that you are, in fact, doing the right thing in your company, that you’re paying attention to, ‘How does the way we do business align with the values we say we are about?,’ then you don’t have to comment [on the issue] because you have confidence that what you are doing each and every day is an expression of those values.”

But he stressed that businesses still have business to attend to; getting bogged down in getting values-based messaging right can’t come at the expense of fulfilling the company’s overarching goals. “I don’t believe that a company should simply be sort of a bulletin board or litmus test or a seminar about global issues – because you’ve got a mission.”

Instead, he said, if leaders build a mission-driven organization that prioritizes the values it claims to stand by, the rest will fall into place. “You shouldn’t have to examine what the role of your company is in the world, and in your country and in your community. Your values should align with the things that your employees feel are important. But that doesn’t contradict the notion that if you’re making widgets, you’ve still got to make widgets. I don’t think those things are necessarily contradictory.”

3. Prioritize diverse perspectives

Critical to the success of any organization, Obama said, is inviting differing voices and perspectives to the table.

“I was always a believer in having diversity on my team,” the former president said. “And I don’t simply mean racial or gender diversity – I mean just having people with lots of different points of view.”

Of course, tapping into these diverse perspectives isn’t always frictionless; sometimes it requires frameworks for better facilitation. “One of the things that I learned during my presidency was how important it was to be able to create a process in which you are constantly getting different points of view,” Obama said.

“I had to learn ... that sometimes even when you’re in the room, there may be barriers to a full exchange of ideas.” For instance, he said, “We had really powerful women in the White House. But about six months [into my presidency], it was brought to my attention that the men had a bad habit ... of talking over women, or a woman makes a suggestion that nobody notices, and then 10 minutes later, the guy says this exact same thing and somebody says, ‘Jim, that’s a great idea!’”

Correcting for these barriers, Obama said, means putting in work to create an equitable environment for all people. “Not only do you need different perspectives in the room, you also have to make sure that you’re constantly creating a culture in which their talents and gifts and skills are being lifted up and encouraged.”

4. Institute processes to stay on track

Once all the right pieces are in place, said Obama – an organization that has married mission and expert leadership with a culture of diversity and inclusivity – it’s time to get things moving. Putting solid processes in place is the oil that lubricates the whole machine, he said.

And this is especially true when dealing with tough decisions. “There’s an expression that some things roll downhill, [but] in the presidency, things roll uphill. If things were easy to solve, somebody else would have solved them,” Obama said. “I’ve often said that the decisions I had to make as president – whether it’s saving General Motors or making a decision to order a raid on where we think bin Laden is – typically were not 100% sure. I was constantly dealing with probabilities.”

Luckily, he found that a well-established process helped to mitigate risks and lead the group to the best possible outcomes. “I set up a process in which I knew I had excellent people, that they were all focused on mission – not ego – and that everybody was expected to engage aggressively with each other and challenge each other’s assumptions, but do it in a way that was focused on results,” Obama said. “And even if I couldn’t be sure that we had the right answer, I could be sure that we had ... the best process to arrive at the right answer. And we might have to live with things not working out, but I slept easy at night knowing nobody could have made a better decision than the group that I gathered together.”

5. Surround yourself with people who are smarter than you

Rarely does one leader have the breadth of expertise required to get every decision right on their own. As such, Obama argued, it’s crucial to secure experts from across the board who can come together to support leadership and flesh out robust strategies that solve a variety of problems.

“Surrounding yourself with great people, and not being afraid to have people who are smarter than you as part of your team,” is critical, he said.

He warned against thinking that “you’re the only authority or font of information,” instead encouraging leaders to embrace the intelligence and perspectives of others. “You will benefit from having excellence and people who can teach you things. That worked well for me. Setting a culture that insists on mutual respect and a sense of mission is more important than ego.”

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