From Values to Action E-Book

Harry M. Jansen Kraemer

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 398

Veröffentlichungsjahr: 2025

Beschreibung

Discover transformative leadership principles and achieve exceptional results by leading with values

In From Values to Action, 2nd edition, Harry Kraemer, esteemed professor of management and strategy at Northwestern University's Kellogg School of Management, delves into the essence of values-based leadership. This compelling book—updated throughout in this second edition—presents practical insights drawn from Kraemer's own celebrated career as well as his interactions with values-based leaders across many organizations. It guides readers in the intricate journey of developing into values-based leaders who not only excel in driving results but also uphold integrity and ethics in how they lead themselves and others. The book provides a roadmap for individuals who aim to be the values-based leaders of the future, capable of navigating our increasingly complex and competitive world.

This updated edition of From Values to Action imparts valuable lessons from Kraemer's extensive executive experience and illustrates how values-based leadership can transform organizations and drive success. The book is packed with actionable strategies and insightful anecdotes relevant for aspiring and practicing leaders across various domains.

Inside the book:

• Learn how to develop self-reflection as a cornerstone for effective leadership
• Gain insights on the importance of a balanced perspective to support holistic decision-making
• Understand the importance of genuine humility and true self-confidence in empowering teams

From Values to Action is tailored for business leaders, executives, managers, and anyone committed to elevating their ability to influence and lead others. Kraemer's seasoned advice, readers will find themselves equipped to lead with conviction and make substantive differences in their organizations and society at large.

Leseprobe

Praise for From Values to Action

“Harry Kraemer is the ultimate practitioner and one of the true leading lights on what it means to be a values-based leader. Starting with his first book, From Values to Action, and continuing through his entire series on values-based leadership, Harry defines a world-class standard to which we can all aspire. His books provide a tour-de-force lesson in leadership grounded and guided by core values. Readers will find a code of leadership conduct that shapes actions every day of our lives—meaningful and inspiring!”

—Greg Case,CEO of Aon, plc

“In an environment of unprecedented skepticism and low opinions of business and leadership values in general, Harry Kraemer has hit the nail on the head. He effectively integrates leadership values and results with a road map to achieve both. Not surprising, Kraemer's class on values-based leadership has become one of the most popular at the Kellogg School of Management. This book is a must-read for current and aspiring leaders.”

—Mike Zafirovski,former CEO, Nortel, and former COO, Motorola

“A practical guide to leadership based on Kraemer's experiences as a highly respected and effective CEO.”

—Gregg Steinhafel,former chair, president, and CEO, Target Corp.

“From Values to Action speaks to the heart and soul of leadership. For all of his achievements as a business leader, Kraemer's true focus has remained his devotion to family, friends, and community, proving the point that personal and professional achievement are not mutually exclusive—indeed they are inextricably linked. A quick and captivating read that I will no doubt revisit for years to come.”

—Kelly J. Grier,senior adviser to Permira's global services team, and retired US Chair and Americas Managing Partner of Ernst & Young (EY)

“Kraemer's realistic and pragmatic approach, combined with his passion for values-based leadership, offers great insights. From Values to Action is especially valuable for young MBAs beginning their leadership journey. They will find in Harry Kraemer a generous, thoughtful guide.”

—Dipak Jain,President Emeritus China Europe International Business School, and former dean, INSEAD

“Through the dual lens of CEO and executive partner in private equity, Kraemer offers a compelling case that values-rooted executives are best equipped to thrive personally and deliver exceptional business results.”

—Robert W. Lane,retired chairman and CEO, Deere & Company

“Harry Kraemer is the ultimate practitioner and one of the true leading lights on what it means to be a values-based leader.”

—Greg Case, CEO of Aon, plc

FROM VALUES TO ACTION

SECOND EDITION

THE FOUR PRINCIPLES OF VALUE-BASED LEADERSHIP

HARRY M. JANSEN KRAEMER, JR.

Copyright © 2026 by Harry M. Jansen Kraemer Jr. All rights reserved.

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ISBN: 9781394328093 (cloth)ISBN: 9781394328109 (ePub)ISBN: 9781394328123 (ePDF)

Cover Design: Paul McCarthy

To my parents, Harry and Patricia Kraemer—who taught me the values

To my wife, Julie Jansen Kraemer—who by her example encourages me to live the values

To my children, Suzie, Andrew, Shannon, Diane, and Daniel—who inspire me to teach the values

And to Bill Jansen (1957–2008), my brother-in-law and special friend, whose love of life, people, and adventure I will never forget

INTRODUCTION: DOING THE RIGHT THING

Nearly fifteen years ago, at the encouragement of my students at Northwestern University's Kellogg School of Management, I wrote the first edition of this book. At the time, as I gathered my thoughts for the introduction, I wanted to start with one statement that would capture the essence of what it means to be a values-based leader. It seemed obvious: do the right thing. Little did I know how much importance that one phrase would take on in the years to come.

Today, as I write the introduction to the second edition of From Values to Action, the world is in even greater need of values-based leadership—and leaders who are willing to do the right thing, instead of pursuing their own self-interest. I am of the firm belief, and I'm certainly not alone in this view, that having values is neither old-fashioned nor counterproductive. Taking the time to self-reflect, gaining deeper insight into what you stand for and what matters most to you, is not somehow contrary to profitability and performance or entrepreneurship and innovation. Rather, values-based leadership elevates everyone involved—you as an individual, your team, your organization, your community, and even the world around you.

Values-based leadership is a philosophy I adopted long ago when I joined Baxter International, a global healthcare company. As a new hire fresh out of Kellogg where I received my MBA, I started out working in a cubicle. Back then, I did not know if I would ever be promoted out of “the cube.” It didn't matter, I told myself, remembering the values instilled by my parents and my outlook on life. No matter where my career eventually took me, I would be the best possible team member I could be. With the awareness that we're on this earth for only a very short period of time, I wanted to make a difference with my life—by treating others with respect and not focusing on my own needs and desires ahead of the goals of my team or the organization.

Throughout my years at Baxter, a $12 billion company listed on the New York Stock Exchange, I was promoted to division president, then chief financial officer (CFO), president, and CEO and chair. With each position, my commitment to values-based leadership did not change—in fact, it strengthened. With the help of amazing team members and colleagues, I continually focused on what mattered most and doing the right thing.

Doing the right thing means making choices and decisions that are aligned with your values. When a crisis arises, the values-based leader does not agonize over what to do, but rather focuses on doing the right thing. Choices become clearer to see and decisions easier to make. This requires more than just a grasp of the situation or the players involved. You must know who you are and the values for which you stand.

Leadership is a journey with many twists and turns. For me, one of the most unexpected developments in my career was in 2004 when, at age forty-nine, I left Baxter where I had worked for twenty-three years and served the last six as chair and CEO. Counting my time as CFO, I had spent more than a decade in Baxter's senior leadership.

Closing that chapter in my life opened another one that led to a deeper exploration of leadership and, ultimately, my series of books on values-based leadership. This next phase began when I was contacted by the late Don Jacobs, dean emeritus of Kellogg, to tell me it was time to start teaching. The opportunity to positively influence students who would become the next generation of leaders intrigued me—and with Dean Jacobs asking me, there was no way my answer could be anything but yes.

Today—twenty years later—I am fortunate to teach more than 600 students each year in classes in the MBA and executive MBA programs at Kellogg. This includes students and executives at campuses in Chicago and Evanston, Illinois, as well as in Kellogg programs in Miami (serving South America) and in Hong Kong (serving Asia). I can honestly say that teaching values-based leadership to students and executives has made the concept of leadership even clearer to me.

I teach from firsthand knowledge—the same experiences that I draw from in this book. My understanding of leadership has also been profoundly affected by my service on many boards of public, private, and nonprofit organizations. Today I am an active board member for five public and private companies. I am a long-time board member of Northwestern University and Endeavor Health, which includes the hospital where my five children and my first grandchild were born. In the past, I was also a member and a past chair of the board of trustees of Lawrence University in Appleton, Wisconsin, my undergraduate alma mater.

Through these various experiences, I have grown to appreciate that all of us can exhibit leadership. No matter if you are just starting your career or you are a seasoned executive, how you think and act can positively influence the culture of the organization in both direct and subtle ways. The way you treat team members, collaborate with peers, and interact with colleagues, customers, and shareholders are all reflections of your values.

INFLUENCING OTHERS AT EVERY LEVEL

As I define it, leadership is the ability to influence others. Values-based leadership is the next level. By word, action, and example, values-based leaders seek to inspire and motivate, using their influence to pursue what matters most.

I express this as a leadership formula that you'll see in this book: Leadership, Influence, Relate. As this simple expression shows, your ability as a values-based leader to influence others is the direct result of your relatability. When others know who you are and what you stand for, they will be more likely to trust and follow you.

Values-based leadership is crucial at this time when employee engagement has fallen to decade-lows. Among the reasons for the decline: fewer people feel that someone at work cares for them as a person. Values-based leadership goes right to the heart of this issue, by helping leaders become more relatable to others. The foundation of that relatability is our values and what matters most to us. When leaders are guided by their values in ways that are visible to others, people will notice. They will move out of disengagement and disillusionment.

In so many areas of our world today, the moral compass of leaders is being questioned. Breaches of ethics, betrayal of public trust, and violations of fiduciary responsibility—not to mention greater polarity in the political climate—illustrate the need for a strong commitment to fundamental principles of leadership.

Confidence in leaders has waned and needs to be restored. The 2025 Edelman Trust Barometer found that 61% of people around the world reported having a “moderate or high sense of grievance”—defined as the belief that government and business make their lives harder and that wealthy people benefit unfairly from the system. In addition, Edelman reported an “unprecedented decline for global employer trust”—meaning fewer people believe that their employers are committed to doing the right thing.1 If that's not an outcry for values-based leadership, I don't know what is.

THE FOUR PRINCIPLES OF VALUES-BASED LEADERSHIP

After more than forty-five years in business and having had the opportunity to serve in many leadership roles, I believe that the path to becoming a values-based leader begins with my four principles of values-based leadership. These principles are self-reflection, a balanced perspective, true self-confidence, and genuine humility.

The principles are interconnected, each building on and contributing to the others. Together, they form a solid foundation for values-based leadership. As a lifelong discipline, these principles will challenge you and bring you back to what matters most.

In Part One of this book, we will explore each of the four principles, starting with the first and most important: self-reflection. If you are willing to look within yourself through regular self-reflection and strive for greater self-awareness, you will make significant progress toward reaching your full potential. Here's a simple way to think about the connection between self-reflection and leadership: If you are not self-reflective, how can you truly know yourself? If you do not know yourself, how can you lead yourself? And if you cannot lead yourself, how can you possibly lead others?

In addition, being self-aware helps us move beyond the confines of our job description to view the issues of the world as something we can help address. It's not up to someone else—a.k.a. “those guys” (a gender-neutral term)—with the resources to make a difference. It's up to all of us to do what we can, in our own way. Or, as I like to joke with students and executives, we are those guys! Each of us can help make the world a better place within our sphere of influence, no matter how great or small.

The second principle of a balanced perspective speaks to the importance of understanding all sides of an issue and multiple viewpoints. Leaders who pursue balance realize that their perspective is just that: theirs. By purposefully seeking input from others, especially those who have opposing opinions, you gain a global perspective that enables you to make choices that align with your priorities. When you take the time to reflect and look at issues and situations holistically, the world becomes much simpler and the plan of action more obvious.

With the third principle of true self-confidence, people recognize what they know and what they don't know. You don't need to put on a façade that suggests to the world that you have mastered everything. Nor do you wilt at the first sign of a challenge, believing that you are not good enough or strong enough to face it. True self-confidence helps you appreciate your strengths, talents, and accomplishments, while also acknowledging the areas in which you need development. Truly self-confident leaders have a deep awareness of what they bring to the table, and develop a team with complementary strengths, particularly in areas where they have weaknesses.

The fourth principle of values-based leadership, genuine humility, keeps us grounded. No matter how high you rise, you never forget where you started. Or, as I like to say, even if you're in the executive suite, “remember the cube!” Genuine humility helps you recognize that you are no better or worse than anyone else, that you ought to respect everyone and not treat anyone differently just because of a job title. When you embrace genuine humility, your leadership thrives. Your team members are willing to work with you to accomplish the mission and will respect your decisions because they know you value their contributions, no matter their roles.

My four principles of values-based leadership are as important early in your career as they are later on. As you embrace these principles, you influence others, even when they do not report to you. Then, as you grow in your career, it will be that much easier for you because you will have honed your leadership skills. People will follow you, not because you are the boss, but because they trust you and what you stand for. You know how to influence and relate, inspire and motivate, while helping to develop their values-based leadership.

VALUES IN ACTION

Values-based leadership sets the standard for the rest of the organization so that it, too, focuses on what matters most. In a values-based organization, people at every level come together for a higher purpose. Expectations for everything from ethical behavior to performance objectives are clearly communicated. Values define the culture of the organization, setting the tone for every interaction. No matter how productive or financially healthy a company is, without clearly defined values it will have difficulty fostering alignment to tackle problems, surmount challenges, and generate creativity. When values are lacking, companies also run a higher risk of ethical breaches because boundaries regarding what is and is not acceptable are not clearly defined.

In Part Two, I present the foundational elements—what I call the “bricks” of building a values-based organization: leading with values, leadership development and talent management, setting a clear direction for the organization, effective communication, motivation and team engagement, and execution and implementation.

In Part Three, I bring it all together to show how to lead a values-based organization. I will discuss how to lead with courage during change, controversy, and crisis, which you should not only prepare for but also expect to arise on a regular basis. I'll also explore why leaders must shift their focus from success to significance. Rather than being concerned about only themselves and their organizations, values-based leaders seek to make a positive impact on the world.

BEGIN YOUR LEADERSHIP JOURNEY

My hope is that this book will help leaders at all levels who are feeling the strain of worry, fear, anxiety, pressure, and stress. Burdened with heavy responsibilities, they burn out, their performance suffers—and so, too, can their personal lives. As you'll read later in this book, when I was at Baxter I dealt with numerous crises, yet was able to avoid unnecessary worry by following the four principles of values-based leadership. Even when things did not turn out as planned, I had the peace of mind of knowing that my team and I had done everything we could. Most important, we had done the right thing.

My four principles of values-based leadership are not solely for CEOs, managers, or leaders who have people reporting to them. These principles apply to anyone who wants to become a values-based leader. Whether you manage 10,000 people, 10 people, 1 person, or you are a single contributor, you are on a leadership journey. You can make a difference and have a positive impact on others—and that's what true leadership is all about.

One final note, from time to time I come across people who stand out as examples of values-based leadership in action. For me, one such person is Andrew Youn, a 2006 Kellogg graduate, who co-founded One Acre Fund (www.oneacrefund.org), a nonprofit organization that helps farmers in Africa “grow their own way out of hunger.” One Acre Fund started with 40 farm families. Within four years, it grew to serve nearly 30,000 farm families, including more than 100,000 children. Today, One Acre Fund supports more than 5 million farm families in Kenya, Rwanda, Burundi, Malawi, Uganda, Ethiopia, Zambia, Tanzania, and Nigeria, with a goal of expanding to 10 million families by 2035.

The enduring vision of One Acre Fund is providing a model for self-sustainability for farmers and their families. That is why my proceeds from all my books, in addition to speaker fees and honorariums for the more than 1,600 talks (and counting) I've given to companies and organizations around the world, are donated to One Acre Fund. I'm committed to supporting the One Acre Fund team as they continue to make a difference through values-based leadership.

I am honored to be on this leadership journey with you. My hope is that this book will inspire current leaders and the next generation. More than ever, the world needs leaders who are values-based and hold true to their values to make a difference in their lives, their organizations, and the world—leaders who do the right thing.

NOTE

1

.  2025 Edelman Trust Barometer. Retrieved from:

https://www.edelman.com/trust/2025/trust-barometer

PART ONETHE FOUR PRINCIPLES

CHAPTER 1SELF-REFLECTION

Self-reflection is the first and foundational principle of values-based leadership. It holds the key to identifying what you stand for, what your values are, and what matters most. Self-reflection allows you to gain clarity on issues, both personal and professional, because you take the time to think more deeply about them. Through self-reflection, you are able to step back and filter out the noise and distractions. The more self-reflective you are, the easier it is to make choices that are in line with your values, with awareness of the full impact of your decisions.

As I explain to my students on the first day of my values-based leadership classes each quarter at Northwestern University's Kellogg School of Management, you cannot lead other people until you can first lead yourself. By asking ourselves three questions, we can gain an appreciation for the importance of self-reflection:

If I am not self-reflective, is it possible to know myself?

If I don't know myself, is it possible to lead myself?

If I can't lead myself, is it possible to lead others?

Self-reflection has been my lifelong practice. Engaging in self-reflection on a regular and ongoing basis has made a huge difference in my life as a business leader, an active board member, a university professor, a husband, a father of five children, and grandfather of one child. What could otherwise be a complicated existence is much more straightforward and easier to navigate because of my daily practice of self-reflection.

Through self-reflection, I have also become a more effective leader in my career, including as a former chair and CEO of Baxter International, a $12 billion global healthcare company, and as an executive partner in a private equity firm, where I serve on the boards of several of the portfolio companies. Likewise, whether you are a leader of a team, a department, or a Fortune 500 company, or simply an individual who is trying to manage yourself, self-reflection helps you make choices that are better aligned with your values. You are able to discern whether what you're doing is really what needs to be done.

As you become more self-reflective, you take the time to think through your choices and decisions. As we'll discuss in this chapter, when situations arise, you will be surprised less frequently. Even when you do face an unexpected outcome, self-reflection can help you understand what happened, gaining insights that will be useful in the future. Most important, within a world of constant change, where it is sometimes difficult to distinguish between activity and productivity, I find it extremely helpful to remove myself from the noise and distractions of day-to-day life and focus on what matters most.

THE SELF-REFLECTION CONNECTION

The more you self-reflect, the better you know yourself: your strengths, weaknesses, abilities, and areas to be developed. Being self-aware, you know what you stand for, your values, and what you will never compromise. With this clarity, you are able to connect and communicate with others more effectively. Grounded in self-knowledge, your leadership becomes even more authentic.

All too often, when people aspire to leadership, they want to emulate someone else's style. Although we can all learn from the example of others, your leadership must come from your core. You cannot determine the kind of leader you are without first figuring out who you are. Your leadership needs to be rooted in the real world and reflective of your views, life experiences, and professional path. I believe self-reflection is so important that I make it the primary focus in my leadership classes at Kellogg. It's also a key topic in more than 1,600 talks and speeches I've given on values-based leadership to organizations and companies of all types and sizes. My goal is to give the hundreds of students I teach each year, as well as leadership teams and executives who listen to my presentations, a tool that I believe will make a significant difference in the choices they make, both professionally and personally.

Having heard this preamble about self-reflection, hopefully your reaction is, “I'm in—tell me how to get started!” But even in my classes, where self-reflection is a weekly assignment, some students push back. In fact, based on what you've read thus far, your reaction might be to say, “As interesting as this sounds, I just don't have the time.” Some people believe that self-reflection involves a huge amount of time and work. To them I say, it only takes 15 minutes a day, and the benefits can be felt almost immediately.

Let's step back for a moment. I would guess that most people reading this book have at least two to three times the number of things they'd like to do than they'll ever be able to get done. I don't mean to be disheartening, but when we think about career, personal life, family, faith or spirituality and mindfulness, health and exercise, sleep, and having some fun … it's a tall order. How can we make time for everything?

Some people conclude that the only way to do this is to just keep going faster and faster—multitasking and juggling multiple devices at a time. This might sound good and even reasonable until you ask yourself: Are you confusing activity and productivity? Trying to do everything—and multiple things at once—will no doubt make you very active. But are you really productive? You may be moving so fast that you can't even tell the difference. Just 15 minutes a day of self-reflection can give you enormous insights to help you discern what is really a priority, what can be delayed, and what is not necessary at all.

By taking a short amount of time, turning off the phones and other devices, and getting some place quiet, we can spend time with our thoughts. For example, questions that I often ask myself in daily self-reflection are:

What did I say I was going to do today? What did I do?

What am I proud of? What am I not proud of?

How did I lead people? How did I follow people?

If I lived today over again, what would I have done differently?

If I have tomorrow—knowing full well that, sooner or later, I won't have tomorrow—based on what I know today, how will I operate differently tomorrow?

Although self-reflection is the cornerstone of my leadership, it did not come naturally to me. In fact, for people who know me well there is a certain irony when I say that my leadership philosophy starts with self-reflection. I was a mathematics and economics major at Lawrence University in Appleton, Wisconsin, followed by finance and accounting at Kellogg where I received my MBA, and then my CPA. I was always a quantitative, numbers-oriented person. Even though I had used self-reflection on a personal level, if someone had said to me that one of the keys to becoming a better leader was to practice self-reflection, I probably would have questioned their judgment.

Then one day I had an epiphany. I had always believed in multitasking, and at first, I felt pretty good because I could get a lot done. What I soon realized was that the more I accomplished, the more there was to do. I was never done; instead I was just exhausted. Was more really better? Was faster the ideal? These same questions apply as much to my life today as they did back then. Thankfully, I have learned the value of slowing down and reflecting on what is happening in the moment. I realize that instead of moving faster, it makes far more sense to focus on what is most important.

If it still sounds like a burden on your time, I'd like you to consider another possibility. Is the problem that you don't have the time, or is it that you don't want to engage in self-reflection because introspection can become very sensitive, very quickly. Maybe you don't want to look too closely at where you experience disconnects in your life—the conflict between what you say is important and where you really spend your time.

So, yes, this could be emotionally challenging. But think of it this way: to be a leader is to be willing to be challenged, because that's what leadership is all about.

SELF-REFLECTION AND LEADERSHIP

Since our goal in this book is to become values-based leaders, let's take a look at how self-reflection enhances your leadership. A significant benefit is helping you become more aware of the decisions you make, as well as the likely outcomes and implications of them. I refer to this as making your decisions explicitly rather than implicitly. With an explicit decision, you understand that you are not making one decision by itself in a vacuum. An explicit decision takes into account all the factors that are affected by or have an influence on the decision. There are causes, contributing factors, previous decisions, and direct and indirect outcomes to consider.

By being explicit, the process becomes transparent. In contrast, implicit decision-making takes only a narrow focus without much regard for the big picture—an approach that can lead to surprises, often unpleasant ones. Making an explicit decision requires you to be self-reflective, ensuring that you stay consistent with who you are, your goals, your values, and your priorities. Therefore, the likelihood of being dealt an unexpected disappointment is far less when you are introspective. Your decision can even be a bit out of the box and still have a high probability of producing the expected results, as long as you spend some time in reflection and discernment.

Such was the case at Baxter when we decided to promote an unconventional candidate into a very important position. Baxter's senior vice president of human resources, Mike Tucker, and I sat down to discuss the creation of a talent management process for the entire company, which would be led by one person. Rather than make a quick decision to put someone from HR in that job, we looked at the position holistically. We determined that the ideal candidate would have a good understanding of the total company, with exposure to different divisions, functions, and geographic locations. When we looked at the position with that perspective, someone immediately came to mind: Karen May, who had a background in finance and auditing and was a CPA. She had the company knowledge, the people skills, and a deep understanding of various functions. On the surface, the decision to promote Karen to the job was not obvious; after all, she had no specific HR experience. However, by stepping back and reflecting on the type of person who would be best suited for the job, we could see that Karen was a perfect fit.

She was so successful that two years later Mike told me she was qualified to take over his position as senior vice president of HR for the entire company. Karen went on to become an executive vice president for Kraft, a $50 billion global firm. Were we surprised? Truthfully, no. Self-reflection increased our chances of making a decision that turned out as we had expected. Had we not been introspective and merely followed the usual hiring route, we never would have offered Karen the job, and would have missed out on the contribution she made to talent management at Baxter and later at Kraft.

Karen, too, had to engage in self-reflection to determine whether she wanted to pursue this opportunity in HR at Baxter and, if so, for what reason. In a conversation I had with Karen in which she recalled her thinking at the time, Karen explained that when Mike and I approached her about the talent management position, it prompted her to reflect on her inventory of skills. As she explained it, “Was I really a CPA and accountant, because if that was who I was, why would they want me to do this job? But as I reflected on my personal inventory of skills, it raised the question, ‘What would I do to bring value to the table?’”

Her conclusion was that the new job provided another lens through which to gain perspective on her career and how she could contribute her knowledge, talent, and experience in new ways—all priorities of hers. “I saw this as something different … as an opportunity to grow in a much different and more rapid way than if I did something that I was more comfortable with,” Karen added.

Looking back, Karen also found it enlightening to reflect on what did not come to mind at the time. “I did not think about ‘What are people going to say?’ or ‘What about my career?’” she recalled. “It never occurred to me to think that way about a job opportunity, which others would probably have seen as a huge risk. I didn't see it as a risk. I saw it as an opportunity to grow.”

Explicit decisions also help you with your relationships with other people, helping you determine how your choices and actions affect others. Nowhere has this skill been more critical for me than in balancing my personal and professional life. Looking back to when my children were younger, I can recall times when my youngest son, Daniel, asked me to go on a bike ride with him. Normally, nothing would make me happier. But on one particular day, I was about to leave for Kellogg to teach. I had to say no to Daniel, which was disappointing for him, but it was the right decision. The next day, Daniel asked me if I could color a picture with him. Unfortunately, I was about to head out the door to give a speech, so I could not give him that time and attention. Two days later, a Saturday, I was going to the gym. I couldn't wait to work out. Daniel stopped me before I left and asked if I would watch one of his Disney DVDs with him. Before I said yes or no, I realized that I was not making one decision in that moment. I was actually making the third of three decisions in a row: the first two resulted in my saying no to him about a bike ride and coloring a picture. How could I believe that my children are very important to me if I continuously put other priorities in front of them? With that understanding, I put my gym bag down and went to watch Mickey Mouse.

Whether you are trying to set priorities about time spent with your children or with your team members, self-reflection helps you pause and look at things holistically. Has a member of your team asked to speak with you on several different occasions, but you were always too busy with something else? If you don't make time to speak with this person and to live up to your stated value of having an open-door policy with your team, what are the chances that this valued team member will seek opportunity elsewhere? Through self-reflection, you can see that certain decisions are not just one-off incidents but part of a pattern. Therefore, if making time for your team members, spending quality time with your family, or whatever you have identified as a priority is important to you, then saying no to someone or something three times (or more) in a row is a pattern you should avoid. Something must be wrong, and you may have confused your values and priorities—or you may have not set your priorities well to begin with. Self-reflection also plays a critical role in that process.

SETTING PRIORITIES

One of the biggest benefits of self-reflection is in identifying what comes first and what comes last. Too often when people or teams engage in setting priorities, they identify multiple things—maybe even 10 or 20—that are “the” top priority. Sorry, but it really doesn't work that way. If you prioritize 100 things, then there is only one first priority, one second-place priority, and so forth. Moreover, if something is number 1 on the list, then that means other items must be relegated to places from number 2 to 100. This isn't easy, but unless you prioritize in this fashion, you're only fooling yourself. You will be rushing around trying to accomplish 50 first-, second-, and third-place “priorities,” instead of committing your time, attention, and resources to what matters most.

This approach to prioritizing may take some getting used to. For example, at Baxter, we would identify the top 100 projects, listing them from 1 to 100. Initially, when managers found out that their projects ranked 20 or 25, their reactions ranged from shock to disappointment. Rather than realizing that these projects ranked in the top 20% or 25% of the company's priorities, which was indeed a good thing, they reacted on the basis of the more common view at most firms, where five or ten things are ranked number one, and a similar number are rated second, third, and so on, With that skewed scale, of course being number 20 or 25 would seem like the bottom of the barrel! Once my team at Baxter understood that this was really a top 100 ranking, the perspective began to shift. They knew all 100 projects would get some attention, with the highest-ranking receiving the most. In time, projects could either move up significantly or be dropped.

As a leader, when you engage in true prioritization, you confront a harsh reality, one that nobody, particularly the overachievers and perfectionists among us, likes to admit: we can't do everything. If you create your own list of 100 things you'd like to do, you may be able to do only the first 17. Knowing that, you must make sure that the top 17 on your list really ought to be there, and that they are ranked in order of what is most important to you. Once you have established your priorities, then making decisions based on what matters most becomes fairly easy. You do not have to agonize about what is most important because through self-reflection you have already established what comes first, second, third, and so forth.

Similarly, by being a self-reflective leader, you can determine where the organization excels, just as you can assess your own strengths. Unless you, as a leader, are willing to take a step back to reflect, it will be very hard to make these distinctions consistently. I used to tell my Baxter teammates that I had good news and bad news. The bad news was that of all the things we were involved in, we were probably really good at only two or three of them. The good news, however, was that many companies were not good at any of them. By knowing what we were really good at, we were able to put our focus and our energies on those areas that reflected our strengths and core competencies.

Once you have determined what your organization can do well, then it is time to prioritize accordingly. For example, a company that operates in 40 countries can state that its strength is its global nature. But not all the countries in which it operates are equal when it comes to size or the importance of its market. Similarly, a company's strength may be its multiple product lines, but every line is not equal; some rate higher than others in importance. Without an honest assessment, leaders and their companies run the risk of trying to make everything a priority—which, as I've stated previously, is impossible.

When you are in the middle of setting these priorities, however, you can't get your brain around the task unless you step back and ask the key questions: What is most important? What should we be doing?