Category Archives: Blog

Last Thursday We Lost a True Values-Based Leader

Wally in an undated photo (Kellogg School of Management)

When a true values-based leader passes away, it leaves an empty feeling for those fortunate to have had the opportunity to know them. That is what happened to me last Thursday night with the passing of Professor Walter Scott, better known to students, faculty, and almost everybody, as “Wally”.

As I have shared frequently in previous posts, when I stepped down as the CEO of Baxter International in 2004, I was very fortunate to receive a call from Dean Don Jacobs informing me that he wanted me to join the Northwestern Kellogg faculty. What I haven’t talked much about is that after Don cornered me with his infamous, “Harry, I think you told me you would do whatever I asked you to do?”, one of his first directives to me was: “Harry, get together with Wally Scott right away. I need you to develop future leaders the way Wally does.”

Wally was a remarkable person. He was always available to “show me the ropes” and help in any way possible. In our first meeting, he recommended I quickly read at least ten of the hundreds of leadership books in his office. He made sure I met everyone on the faculty that was involved with leadership development.

Wally was a great example of a values-based leader. His amazing career (see the obituary below) included leadership positions in banking, operations, government, education and not-for-profit enterprises. He was very humble about his accomplishments. It was not until I questioned him about some of the pictures in his office that he admitted that he was in the White House during the Nixon and Ford administrations and had a “front row seat” during the Watergate investigations.

Wally was also very self reflective. He was a strong Christian and believed that we all have an obligation to help those less fortunate. He was on many non-profit boards, including the One Acre Fund. He made sure I shared his enthusiasm and support for all of these organizations. When he met with students he would always ask them how they planned to make a positive impact in the world. We often discussed the fact that many people assume that someone else will handle all of the world’s problems, that infamous group of people called “those guys”. NO, he would say, “Harry, as folks fortunate to come to Kellogg, WE are ‘those guys’!!!”

When Wally “retired” several years ago (I am putting “retired” in quotes because although Wally may have officially retired, he never stopped working. He was at Kellogg advising students as recently as two weeks before he passed away), I asked him if he would like to share my office, and we became what he referred to as “roomies”. I was fortunate to be able to receive his advice and wisdom for several additional years.

I had the opportunity to visit Wally in the hospital two days before his passing. He knew he had terminal cancer and a short time to live. However, rather than be remorseful or scared, he had a big smile on his face and welcomed me into his hospital room by proclaiming, “Hi, roomie! I want you to know how incredibly blessed I am, Harry, with my amazing wife, Barbara, and my remarkable family. I thank God every day for how fortunate I am.” He then went right to business and wanted to know if I wanted to keep all of his leadership books in our shared office.” I told him, “Of course, roomie!!!”

I realize that going to my Kellogg office won’t ever be the same without Wally’s big smile and hearty, “Hi, roomie!!!” However, I am confident he is already smiling down on all of us.

 

Walter Dill Scott Obituary

Walter Dill Scott, age 86, died February 8, 2018 in Evanston, IL from lymphoma. He was at peace and surrounded by his adoring family.

He graduated from New Trier High School in 1949, attended Williams College, and graduated from Northwestern University in 1953. He received his MBA from Columbia University in 1958. After 3 years as an officer in the Navy, he began a long and successful career in business. He spent 15 years in investment banking in New York and Chicago, finally as a senior partner running the Chicago office for Lehman Brothers in the 60s and early 70s. Service was always a high priority, including 2 years as associate director of the United States Office of Management and Budget during the Nixon and Ford administrations. After leaving Washington, he worked as EVP/CFO at Pillsbury (now General Mills), CEO of IDS Financial Services (now Ameriprise) and Chairman/CEO of Grand Metropolitan USA (now Diageo).

In 1988, he joined the faculty of the Kellogg School of Management at Northwestern University, where he taught courses in leadership and nonprofit board governance and co-founded the Center for Executive Women. As he described it, he mostly hung out and advised students and student organizations. He loved initiating and introducing new programs and activities. Most of the time he felt he was the same age as the students. At Kellogg, he had an immense impact on the school and generations of students. He maintained strong and continuing relationships with many former students.
He served on 15 corporate boards and 25 nonprofit boards, to which he devoted considerable time and effort and which he found particularly rewarding. In 1987 he had a life changing experience while serving with a Kairos Prison Ministry team in a men’s prison in Raeford, Florida. He felt his life transformed and became a committed Christian.
He was blissfully married to the very special Barbara Stein Scott for 56 years. She enriched his life every day. Survivors include his wife Barbara, his three sons Tim (Linda) and David (Barb) of Minneapolis, and Gordon (Anne) of Northfield, Illinois, and eight adored grandchildren, who taught him lots.

His intelligence, sense of humor, optimism, whimsy, and love of family, God and friends will be sorely missed by all. He was a mentor, strong influence and great example to many, many people.

In lieu of flowers or donations, he asked that he be remembered by his friends and family by their reaching out to someone in need for an hour, a day or a lifetime. If any also wish to make a financial contribution, please make it to the Mary Lou and John Scott Inner-City Education Fund (Account #5649) at Northwestern University Development Office, 2020 Ridge Road, Evanston, IL 60208-4307.

A memorial service is planned for Sunday, February 18 at 3:00pm at Winnetka Presbyterian Church, 1255 Willow Road, Winnetka, IL. A reception will follow.

Happy New Year 2018!

Since it wasn’t cold enough in Chicago, the “Kraemer Gang” (as usual) drove up to Minnesota to spend Christmas with all of our Jansen and Kraemer relatives — always a fantastic time!

Luckily, the day after Christmas, as the Minnesota temperature descended to negative 10 degrees (that doesn’t include wind chill), we all flew down to Sarasota — resulting in an 80-degree change in temperature!!!

As the sun sets on the Gulf on the last day of 2017, I want to wish everyone a happy and healthy 2018 from the entire Kraemer Gang!

 

Remember Thy Customer

As the former CEO of a multi-billion dollar company and a business school professor at Northwestern Kellogg, I definitely understand the concepts of efficiency and economies of scale. I also realize the benefit of leveraging operating expenses and improving the operating margin. Yup, that all makes sense. However, as two recent incidents reminded me yet again, too many businesses take this approach to an extreme, forgetting the most important requirement for a successful business: CUSTOMERS!!!!!!

The first incident occurred a few nights ago. I was driving home and stopped at my bank branch in my town of Wilmette to deposit a check in the ATM located in the bank’s parking lot. When I tried to deposit the check, the ATM pulled my check in, but for some reason the deposit wasn’t recorded. Realizing that nobody was around that late in the evening to help me, I decided not to worry about it and call the bank the following morning. Here’s where the “fun” started. When I called the number of my local branch where I had made the deposit, my call was answered by a fellow in Phoenix, Arizona. When I tried to explain that it made sense to speak to someone in my town of Wilmette so someone could simply go outside to check the machine, he informed me not to worry and that he could take care of it. When his first question was “Where is Wilmette?”, I began to realize this wasn’t going to be easy. After several more questions, I asked nicely to be transferred to my local branch. A fellow in my branch answered the phone and repeated all of the questions that the fellow in Phoenix had asked. I asked him if he could go out and check the machine. He responded that he couldn’t do that, and he would have to transfer me to the “operations department” where someone could immediately help me. Well, when the next guy answered the phone with, “Phil in operations, how can I help you?”, I thought I was beginning to get somewhere. I asked Phil if he could look out the window and see the ATM that had eaten my check. He responded by asking me which ATM I was referring to. When I once again explained that I was in Wilmette, he explained that he would be happy to help me, but that he (and the operations department) were in Columbus, Ohio! I remained very calm (that’s what happens when you have just returned from a three-day silent retreat 😉 ) and asked him how I could recover my check. He explained that he would email a form to me and “keep a close eye on my completed claim form.” Yes, efficiency and economy of scale are important, but are we forgetting about that other relatively important thing called a “CUSTOMER”???

Okay, one more example. I realize that with the prevalence of smartphones most people would never think of calling up an operator to ask for a phone number, but sometimes, I still do. I dialed the operator a few days ago to request the phone number of the movie theater in Wilmette (I should stop here and clarify for the younger folks out there that when you used to do this 20 years ago, the operator would not only give you the phone number, but he or she would even tell you what movies were playing). I was not so lucky. When I asked for the number of the movie theater in Wilmette, the operator asked me where Wilmette was located. When I told him it was in Illinois, he informed me there was no such town in Illinois. Okay then. I took a deep breath and spelled the name of my town. I thought that would clear things up. Not quite. The operator explained that there was no movie theater in Wilmette. I insisted that I was sure there was a movie theater in Wilmette since I had watched a movie there just three nights earlier. After several more minutes of investigating, he finally informed me that if there was indeed a movie theater in Wilmette, he did not have a phone number for it.

Well, just to bring closure for sanity’s sake, I did drive by the movie theater tonight to make sure it was still there (and I saw the ticket person speaking on the phone!!!). I also drove by the ATM that ate my check — not sure whether I will ever see it again. After all, I am only a CUSTOMER 😉

One final concluding thought: When I was at Baxter, even as a CFO and most certainly later as the CEO, I made it a point to know as many of our customers as possible. I would walk into HR and Legal meetings and ask them to name as many customers as they could. The point was to constantly remind ourselves that no matter what function or role we were in, ultimately we were only there because we had customers. Without customers, there was no Baxter. That’s a principle all businesses must embrace!

Okay, NOW I Am Ready for the Holiday Season!

As many of you know (and as I have blogged in the past), I have been doing a three-day silent retreat up in Lake Elmo, MN (near St. Paul, MN) every year at the beginning of December for the past 30 years. This year it is Dec 7-10.  My father-in-law explained to me many years ago that this timing was perfect, and I gradually came to understand why.  It is because most folks are running around like crazy getting ready for Christmas and forgetting what the purpose of the holiday is really all about. Hopefully, it is more than bright lights and presents.

I arrived at the retreat this year somewhat tired — okay, maybe actually exhausted.  I did complete the grading of all of my Northwestern Kellogg MBA and EMBA classes and finished all of my board meetings, but I must admit, I have not been very self reflective the past several weeks.

However, three days and a whole lot of silent self reflection later, I am now completely ready to take on the world and all of its challenges. I took the time to ask myself (as I do every year) what I believe are the important questions:

It  helps me focus on what I can do to be a better spouse, father, sibling, colleague, leader and follower.  It helps me truly understand the difference between “activity” and “productivity”……yes, I can be active, but how productive am I being?  Do I really know if I am being productive, or do I convince myself I don’t have time to figure it out so I will just keep being active?

Statue of St. Ignatius of Loyola on the retreat house grounds

During the retreat I often take walks around the grounds of the retreat house. On these walks, I always make it a point to stop by my favorite spot where there is a statue of St. Ignatius of Loyola.  It is not the statue itself that invariably fires up my self reflection, but the quote from the gospel of Matthew: “What good does it for a man to gain the whole world and suffer the loss of his soul?” That is a great quote on which to self reflect:

–Have I focused too much on material possessions?
–Do I worry too much about what others think of me?
–Is it about success or significance?
–Is it about your resume or your legacy?

Yes, it really does get me to self reflect on what really matters…

Here’s wishing you and yours a wonderful holiday season!!!

86,400 Things I’m Grateful For and an Inspiring Thanksgiving Message

 

Thanksgiving is clearly a time for self reflection and giving thanks. A friend asked me what I was personally most thankful for, and here is the note I sent him:

“I took the time to SELF REFLECT on the question and realized I am truly thankful and grateful for 86,400 things — they are the number of seconds each of us have every day of our lives!!!! The key is to make the most of every set of 86,400 seconds we are given each day.”

I also received a Thanksgiving note from a special person, John Hamre, the CEO of CSIS (Center for Strategic and International Studies), which I have shared below. John does a wonderful job of summarizing the history of Thanksgiving and what it means to him (and many of us). I hope you find his message as inspiring as I have!

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Dear Friends,
Rather than sending out a Christmas/New Year’s card, this year I want to establish a new tradition for CSIS, and that is to send a greeting during Thanksgiving. Let me share a bit of background for you.

The American holiday of Thanksgiving traces back to President Abraham Lincoln. President Lincoln called for a national observance of Thanksgiving in 1863, during the height of the American Civil War. Thanksgiving today in America is an entirely nonreligious holiday. But for Abraham Lincoln, it had strong religious grounding. Lincoln spoke about the “gracious gifts of the Most High God,” and he delineated the gifts of freedom, liberty, opportunity, and prosperity.

I reflect on my world. This has been a dramatic and unsettling year. But it has reinforced my view that we have an unbelievable array of blessings. We live in a country that encourages free speech, honors personal liberty and freedom, enshrines rule of law, encourages individual enterprise, supports civil society, and promotes a common good.

I am surrounded by a small army of committed and energetic colleagues. They are motivated by a conviction that ideas matter in life; that good government is a benefit to all; that problems have a rational and constructive solution; and that hope is a powerful force that needs to be harnessed by pragmatism and knowledge.

And I am buoyed by a remarkable group of supporters—like you. I am lifted by their desire for a stronger and better world. I am raised by their creative ideas and drive to make progress in a world that needs change. I am inspired by their initiatives.

I am the most fortunate man in the world. I live in a world of possibilities, surrounded by people like you who have a commitment to make a better tomorrow.

I am thankful. Thanksgiving is my time of the year. It is the time I think of everyone—friends like you—who have made this a world I want to live in and improve.

So, at the outset of a holiday season, I write this letter of Thanksgiving. You are in my mind now and in the hearts of all of us at CSIS.

Thank you,
John J. Hamre

The Center for Strategic and International Studies (CSIS) is a bipartisan, nonprofit organization founded in 1962 and headquartered in Washington, D.C. It seeks to advance global security and prosperity by providing strategic insights and policy solutions to decisionmakers.

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Happy Thanksgiving, everyone!

 

Why Do Companies Make So Many Bad Decisions?

I had the opportunity to spend this past weekend at the Kellogg Miami campus in Coral Gables teaching my class “Executive Perspectives in Leadership” to EMBA 107, a great group of executives who will graduate this December. I really enjoyed spending time with them.

Harry and EMBA 107

One of the topics we discussed was “Why do companies make so many bad decisions?” I find it to be an interesting question on which to reflect.

The immediate response to the question is usually, “Well, the boss simply made a mistake. It just happens because people are human.” However, I don’t think that is the real answer. Why? Well, when the boss was about to make a bad decision, what happened to all of the people on his team? Did they all make the same mistake? Did no one on the team realize this was not the right decision? Was this simply a case of classic “group think”? I don’t think so.

I always tell students and executives that I have very few answers, but MANY opinions. So here’s my opinion:

I think there are two reasons that cause so many companies to make bad decisions. The first reason is a result of how the boss articulates what he wants to do. When the boss says, “Here’s what I want to do”, does he make it clear that is what he wants to do ONLY if is the right decision and makes sense? Does everyone on the team know that the boss wants to be challenged? My experience is that the boss often does not make it clear he wants to be challenged, and in fact, sometimes he truly doesn’t want to be challenged.

But I believe this is only half of the problem. Now let’s look at the second reason companies make bad decisions:

How do the people working for the boss define their jobs? If they define their jobs as “making the boss happy”, no wonder mistakes are made! And let’s not forget the frequent comment made by someone on the team, “Well, it doesn’t seem to make sense, but the boss must know more than we do.”

My experience is the boss often does not know more than his team. In fact, usually the people closest to the action know a lot more. In order to significantly reduce (there is no way to eliminate) the number of bad decisions, two things must happen:

1) the boss needs to make clear that he only wants to make a decision if it makes sense, and he expects his team to challenge him if they don’t think it is the correct decision. He needs to make clear he is not trying to be right and have his way, but rather, he wants to do the right thing with the help of the team.

2) Everyone on the team must understand that their job is not to make the boss happy, but rather to respectfully challenge the boss if they think he is making the wrong decision.

You may be thinking that this should be common sense, and it is…but never forget Mark Twain’s quote: “Common sense ain’t so common!”

Dean Jacobs

I am rarely at a loss for words, but I am this morning, so I will make this short. Dean Don Jacobs passed away yesterday morning. He was my teacher, my mentor, my colleague, and my friend. I first met him when I arrived at Northwestern Kellogg as a student in the Fall of 1977, and I immediately knew that this was a truly amazing leader. His love for the school, the faculty, the students, and the alumni was absolutely contagious. It was clear his focus was to make Kellogg one of the best business schools in the world, and everyone who knew him was convinced it was going to happen under his leadership.

Dean Jacobs and I stayed in touch after I graduated from Kellogg, and I cherished his frequent calls and sage advice during my years at Baxter. He also called often to let me know when he needed me to be a guest speaker or join a Kellogg panel. Once when I told him that if it weren’t for his mentoring and my Kellogg education I never would have been the CEO of Baxter, he responded, “I will never let you forget that.” 😉 True to his word, when he heard I was leaving Baxter in 2005, he immediately called me and said, “I am glad you are leaving Baxter. I now want you to teach.” When I protested, “I run companies, you don’t expect me to have a syllabus and grade papers, do you?” he retorted, “I think you told me that you would do whatever I asked you to do?” When I told him that I didn’t think I could teach finance (my area of academic study and early career) and compete with the brilliant Kellogg finance faculty, he asked me what I wanted to teach instead. Clearly, the idea of not teaching was not an option! 😉  I shared that I would like to focus on leadership, values, and ethics, to which he quickly responded that it was a great idea and instructed me to put a syllabus together right away and get started the very next quarter! The last 12 years of teaching at Kellogg have been the best years of my life, and I hope, God willing, to continue teaching for the next 20 years…and I owe it all to Dean Jacobs.

As one of my colleagues mentioned yesterday, “there is a hole in the universe today.”  Dean Jacobs was clearly a “force of nature.”

Following is  a “Poets & Quants” article that came out yesterday afternoon in tribute to Dean Jacobs. Do check it out: https://poetsandquants.com/2017/10/31/a-tribute-to-kelloggs-legendary-don-jacobs/

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