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Introduction: From Four Principles to Five Bests

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Over the past four years, since the publication of my previous book, From Values to Action: The Four Principles of Values-Based Leadership, I have spoken to more than 500 groups across the United States, Latin America, Europe, and Asia. With every audience – whether business, government, spiritual, or academic – I encountered a strong desire to learn more about values-based leadership, which is founded on four principles:

1. Self-Reflection: The ability to identify and reflect on what you stand for, what your values are, and what matters most.

2. Balance: The ability to see situations from multiple perspectives, including differing viewpoints, to gain a holistic understanding.

3. True Self-Confidence: Acceptance of yourself, recognizing your strengths and skill mastery, as well as your weaknesses, while focusing on continuous improvement.

4. Genuine Humility: Never forgetting who you are, appreciating the unique value of each person in the organization, and treating everyone with respect.

The more people grasped these principles, the more they wanted to know how, in practical terms, to apply them in their daily lives. From CEOs to first-time managers to students, people want to know what they need to do to make a difference in their organizations and beyond. They came to realize that leadership does not have anything to do with titles and organizational charts. Rather, it has everything to do with the ability to influence others by relating authentically to every individual with whom they come in contact.

People at every level and with any job title, from the newest team members to the CEO, can and should become values-based leaders. Whether someone is the CEO of a company that employs 100,000 people or an entry-level person who just graduated from college, values-based leadership begins with one's ability to understand one's self. Self-knowledge and self-awareness must come first, before someone is able to relate to and influence others in positive and meaningful ways.

For many, becoming more self-aware requires a significant change in mindset. To illustrate, I use the analogy of wanting to become healthier. When people read a compelling book or hear an expert speak on the importance of a healthy lifestyle, they set a goal for themselves to lose weight or start an exercise program. This instantly raises some very practical questions: Where do I start and what do I do? Does being healthy mean I have to exercise excessively or that I can never eat another chocolate bar for the rest of my life? What lasting changes do I need to adopt that will help me reach my goal of being healthier?

Similarly, when people commit to becoming values-based leaders, they want to know exactly what they can do to catalyze change, drive results, and make things happen. People want to understand what it means to lead and influence others, and to do the right thing as defined by their personal values, as well as the mission, vision, and values of their organization. They want to know where to start and what to do, knowing that this is not a fad or a quick fix (like a crash diet), but rather a fundamental change in philosophy, attitude, and behavior (like adopting a healthy lifestyle).

Fortunately, values-based leaders have an invaluable tool at the ready: self-reflection, which is the core principle of values-based leadership. Whenever I address a group, the questions I'm asked most frequently relate to self-reflection and, specifically, how to practice it. People from college students to CEOs want to become more self-reflective in their daily lives. They know intuitively that by gaining greater self-knowledge, they will be better able to lead themselves first, which will then enable them to be more effective in leading others.

As will be discussed further in this book, the benefits of self-reflection are realized through regular (ideally daily) practice, using questions such as: What did I say I would do today? What am I proud of, and not proud of? How did I lead others and follow others? If I had today to do over again, what would I change? If I am fortunate to have tomorrow, given what I've learned today, how will I act? Self-reflection may be practiced at the end of the day, or be incorporated into any personal time for introspection, such as taking a walk, going for a jog, or sitting quietly for 15 or 20 minutes. Having practiced self-reflection for all of my adult life, including as CEO of Baxter International, a global health-care company with 50,000 team members (I prefer this term over employees), I can attest to the positive results of engaging in this discipline.

Other commonly asked questions include: How do I develop a balanced perspective? How do I become truly self-confident? How can I gain true self-confidence without being perceived as arrogant or selfish? What does genuine humility really mean? If I am genuinely humble, will I run the risk of not being noticed or being passed over? Do I need both true self-confidence and genuine humility?

Because of these questions and more, I decided to write this book as a how-to on values-based leadership. In addition, many of my students at Northwestern University's Kellogg School of Management have asked me to take the values-based leadership journey to the next level. Since I always listen to my Kellogg students, there was really no alternative for me but to do so!

My first book, From Values to Action, stemmed directly from my values-based leadership classes at Kellogg, where I have taught for 10 years. In 2004, I stepped down from my role as chairman and CEO of Baxter International, where I had worked for 22 years, including the last six as CEO. At that time, I was asked by Don Jacobs, Dean Emeritus of Kellogg, to teach at the graduate school. I was surprised by his request, since I'm not an academic with a PhD, but he reminded me (half joking, half serious) of my promise that I would do anything for my graduate school alma mater. Of course, I said yes.

Being a former chief financial officer and having majored in finance at Kellogg, I first considered teaching finance classes. However, based on my 35 years of business experience, I realized I could add more value to the students by teaching leadership. Since then I have taught values-based leadership, which has become one of the most popular classes at Kellogg, because of the keen interest in the topic and a host of talented leaders who, as guest lecturers, share insights from their careers with my students.

One of those students, Samir Gokhale, audio taped all of my values-based leadership lectures and transcribed them in order to convince me to write my first book. His efforts jumpstarted my writing of From Values to Action and my speaking about values-based leadership, both of which have been beneficial to my teaching (a virtuous cycle, indeed). In my opinion, you can't truly understand a topic until you have listened intently to others' questions and explained concepts clearly.

Today, I am responding to the questions I receive as part of my speeches and presentations to audiences of every type and description. Over the past four years (and counting) of giving more than eight talks per month, I have met countless people who want to understand how to put the principles of values-based leadership into practice. They are CEOs and other C-level corporate officers, executive managers, middle managers, entry-level individuals, and students. My audiences have included multinational companies such as Google, Aon, McDonald's, Raytheon, AT&T, Target Corporation, Abbott Laboratories, CareerBuilder, and Hospira; universities, including Northwestern, University of Chicago, University of Notre Dame, University of California, University of Minnesota, and Lawrence University (my undergraduate alma mater); consulting and financial services firms, such as McKinsey & Co., Booz & Company, Accenture, JPMorgan Chase, Bank of Montreal, Ernst & Young, KPMG, Deloitte, Spencer Stuart, and Huron Consulting; smaller startup companies in industries such as software, manufacturing, hospitality, and health care; associations for chief financial officers, chief marketing officers, senior human resources officers, and chief information officers; spiritual leaders, including priests, ministers, and rabbis; and philanthropic and religious/spiritual institutions of all sizes. I also had the opportunity to deliver a TEDx talk on values-based leadership at the United Nations in New York City.

Conceptually, values-based leadership is founded on the four principles of self-reflection, balance, true self-confidence, and genuine humility. On a personal level, these principles become the basis of intentional actions and deep commitments that enable each person at every level of an organization to bring his or her best self to work. At an organizational level, these four principles, when applied, enable the creation of a values-based organization.

In these pages, I give both explanations and concrete examples, drawing from my own experiences, and my interactions with leaders at every level. I include interviews with 10 values-based leaders from diverse organizations, ranging from small to large, private to public, for-profit to not-for-profit, and domestic to global. This book lays out a pathway from understanding the four principles to putting them into practice in what I believe are five key areas that define what it means to be a values-based leader and build a world-class organization. They are:

1. Best Self: You actualize who you are meant to become with fuller self-knowledge and a deeper understanding that in order to positively influence and lead people, you first need to relate to them.

2. Best Team: All team members understand and appreciate what they're doing, why they're doing it, and how that fits with and fulfills the goals and objectives of the organization.

3. Best Partner: The organization and its vendors and suppliers forge a partnership in order to enhance the customer experience. Each party understands what the organization is trying to do and why, as it provides products and/or services.

4. Best Investment: Everyone in the organization focuses on generating a return for the owners (whether stockholders, debt holders, a foundation, or other stakeholders) through positive and meaningful actions that support the mission, vision, and values of the organization. As a best investment, an enterprise also commits to developing its greatest asset – the talented team members at every level of the organization. The “hard numbers” of best investment are also the proof points that values-based leadership truly does elevate performance over the long term.

5. Best Citizen: From the C-suite to the most junior levels of the organization, everyone is focused not only on success, but also significance, through social responsibility and making a difference in the world, beyond the organization and its people. Beyond philanthropy for charity's sake, best citizenship embraces a broader purpose in what we think of as social responsibility.

Each of these bests connects to the others in a holistic structure that elevates the organization, its people, and its purpose. This book mirrors the structure with five interconnected sections, building on the firm foundation of the four principles of values-based leadership.

In Section One, we begin with the individual and becoming your best self as you practice self-reflection to identify your values and commit to act in accordance with them. In this section, we also look at how self-reflection is a valuable tool for developing a balanced perspective, making decisions aligned with one's values, and focusing on what is most important. Two additional components of being your best self are achieving true self-confidence and genuine humility, which are extremely complementary. Working in tandem, these two principles allow you to acknowledge what you know and what you don't, and to value each person with whom you interact.

In Section Two, we broaden our scope from the individual to the collective, with the best team. In the values-based organization, every team member is able to link what he or she does to the overall goals and objectives of the organization. They know that what they do truly matters, and so they commit to doing their best. Developing a best team will be examined in two different contexts: first, turning around a dysfunctional environment and, second, in a fast-paced startup where roles and responsibilities are demanding and fluid.

In Section Three, we widen our perspective outside the organization to become a best partner with suppliers and vendors in order to enhance the customer experience and create value for all. An organization that is a best partner moves beyond financial transactions with customers, and focuses on making customer satisfaction a priority. Within the organization, every department and team – including those that are removed from direct customer interface – are able to link what they do with creating a meaningful customer experience.

Section Four examines what it means to be a best investment, with returns that are measured in more than monetary terms. Being a best investment applies to all organizations – large and small, public and private, corporations and nonprofits – with accountability to stakeholders who want to see evidence that organizational values are being put into action in pursuit of a meaningful return. This section will address the steward leader, who uses self-reflection to examine how team members are motivated and rewarded. In addition, discussion will address team members who need to know if their organization fits their values – and what they can do about it.

The book culminates in Section Five with becoming a best citizen. Part of the mission of both the values-based leader and the values-based organization is to set a standard as a best citizen, making a difference in the local community and in the world. This section will address social responsibility to further the priorities and initiatives that are truly meaningful to the organization and its team members. When an organization is a best citizen, it also encourages people to be their best selves, while developing best teams and best partners, and becoming a best investment – the ultimate win/win. It is a powerful legacy that is both highly personal and yet extends beyond the efforts or ego of any one person.


The need and desire to become the best through values-based leadership have never been stronger or more critical. Organizations today – large or small, public or private – are confronted with ethical issues, which may result from changes in regulations or uncertainty around where the legal, moral, and ethnical boundaries lie. Large, global organizations face the challenges of operating within a varied tapestry of multiple markets, regions, and countries with unique legal systems and regulations. Even smaller organizations focused on a single market or region must navigate a competitive landscape marked by gray areas that are open to interpretation. Within these complexities, and given the serious consequences of making an error in judgment, values-based leadership is the only way to operate. When a problem arises, it is crucial that individuals at all levels of the organization adopt a values-based leadership approach. That means they are committed to doing the right thing at all times – and doing the best they can do.

Values-based leadership is more than just a defensive playbook for how to respond when a dilemma, problem, or crisis arises. It is a way of thinking, acting, and operating at every level of the organization. We cannot merely look at the world and complain about a lack of leadership in general or values-based leadership in particular. We must be change agents within our organizations, communities, and society at large. The values we embrace must be visible to others by our actions, decisions, and how we interact with and treat others. As I have seen in my own life and career, and in those of many others I have worked with, individuals and organizations can be both financially successful and also a force for good.

One of those examples is Andrew Youn, co-founder of One Acre Fund. After graduating from Kellogg with an MBA, Andrew decided to devote himself and his hard-earned knowledge to addressing the problem of hunger in East Africa. By teaching and promoting best practices in agriculture, One Acre Fund has improved the health and raised the hopes of more than 200,000 farm families, touching more than one million people in Kenya and Rwanda, as well as Burundi and Tanzania. Its goal is to positively impact more than 20 million children by 2025. To salute and support Andrew in his commitment to be his best, I will donate my proceeds from this book (as I do with From Values to Action) to One Acre Fund (www.oneacrefund.org).

Guided by self-reflection, informed by a balance of perspectives, and defined by both true self-confidence and genuine humility, values-based leaders at every level make a difference in their organizations. Their values become the basis of their actions and interactions, as they become their best selves. This starts the movement forward in a deliberate process, from best self to best team, best partner, best investment, and best citizen. It is both revolutionary and evolutionary – and it starts with anyone who desires to become a values-based leader.

Becoming the Best

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