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[MUSIC] So thank you all for being here. And now, I'm going to bring up Jeff Pfeffer. So while Jeff's walking up, actually, let me just ask, how many people took Jeff Pfeffer's Paths to Power class? Nice, okay, that's a lot. Jeff, you got a lot of fans here, I hope. >> [APPLAUSE] >> Have a seat. So let me introduce Jeff for those of you who, everyone knows Jeff, but let me introduce him for the people who might not know him. So Jeff is the Thomas D professor at the GSB. He's been on the GSB,
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should I say it or is that okay? >> Yeah, he's been with GSB faculty since 1979. Here's taught, I was trying to calculate it this morning, I think he's taught about 4,000 students in the MBA and MSx programs in the Paths to Power class. That was my calculation. And here's also got an online version that he teaches in our Stanford LEAD program. And I think he's probably doubled it online, is my guess. So he's taught a lot of people, he's had tremendous influence in
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his thinking about organizational behavior. And on Tuesday night, Jeff received the highest with the internal award. We give to faculty the Davis Award and we give Jeff the Davis Award. And one of his colleagues describe Jeff as being both an icon and an iconoclast, okay? Icon in the sense of he's a giant as a teacher and a thinker in organizational behavior. And iconoclast, well, you're going to see when we have this discussion, he thinks differently. And Jeff, thank you for doing this.
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>> Thank you, it's a pleasure to be with you. >> [APPLAUSE] >> And consistent with my Path to Power principles, you're my favorite thing. >> [LAUGH] >> Okay, we have some prepared questions, but I'm just going to dispense with them, and I- >> [LAUGH] >> Because I know it'll be more interesting just to chat. So actually, let's start with power. >> Sure. >> So one of the things that you often say is that people are uncomfortable with the concept of power, that's been one of your themes.
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Explain that. >> So actually in 1979, Rosabeth Moss Kanter, who taught and still teaches at Harvard Business School, wrote an article entitled Power of Failure in Management Circuits. And talked about the fact that in those days, and I think it's still true, you can talk about money, and you can talk about sex, and on certain TV channels, that's all they talk about. But the people aren't comfortable talking about power. She called power the organization's last dirty secrets, and
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I believe that that is still true. People would like to believe that the world is a just and fair place, that people get what they deserve, that everything works out at the end. What's the line from the Best Exotic Marigold Hotel? That everything works out in the end. If it's not worked out, it's not yet the end, there is something to that effect. So I think power does make people uncomfortable. I don't think power is the last dirty secret, I think it's the secret to success. If the business,
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as you know I say all the time, Stanford Business School's motto is change lives, change organizations, change the world. If change were going to happen without the exertion of power and influence, it would have happened already. If we are going to, in fact, change life, change organizations, and change the world, you're going to need power because things are the way they are for a reason. They're in some state of equilibrium. If you want to get them out of this, you want to get them into
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disequilibrium, you need influence.
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>> All right, you've written a couple of books about power, and the most recent one is the Seven Laws of Power. >> Seven rules. >> Seven Rules of Power, tell us what they are. >> Sure, so I've written actually, I think now four or five, depending upon your count, books about power. It goes back to 1981 when my first book was called Power, and I wrote Managing With Power and a bunch of others, and including my favorite, which was Leadership BS, which is why you need a book about power.
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But in any event, the seven rules of power are, and I think the first rule is the first rule for reason. The first rule of power is get out of your own way, that many people are inhibited. I think particularly for women, if you tell them they're ambitious, they would take that as an insult. It's often intended as an insult. I think we are reluctant, both men and women, to lean into our ambition. We are reluctant to do what it takes to be powerful. We are oftentimes overly concerned
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with being liked. My friend Gary Loveman, who ran Caesars for many years has this wonderful saying, which I have on video, if you want to be liked like a dog, a dog will love you unconditionally. Your job as a leader is not necessarily to win a popularity contest, but to do what needs to be done to make the organization successful and achieve your agenda. So I think the first rule is get out of your own way. Another way in which people get in their own way is that they live
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with some form of imposter syndrome. They believe they don't deserve the power that they have, or they describe themselves in self-deprecating ways. And my favorite story, a woman comes to see me, she's working at this company that has all the I's, and she has run a market research program, which has made the company a lot of money. But one of her peers has gone to their common boss and said, I want you to have to report to me, which is a smart move because that way I'll be able to take a credit
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for her work. And she said to the room, she says, what should I do? And I said, well, before want to do anything, I want to tell you in the ten minutes you've been here, I've heard many times that you're the only woman, that you're the youngest person in this group of peers and the boss. And you're the least senior in the company. I said, let me give you three other descriptors. You're the most analytically skilled. You're the only one who graduated from a prestigious business school.
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And you've run the project that's made the most money. And she sits up a little straighter, Taiwanese American woman. And I said six adjectives, you get to pick which three. You want to describe yourself in ways, I'm youngest, I'm least senior, ways that make you less deserving smartest prestigious business school, most deserving. Get out of your own way. That's rule one. Rule two, break the rules, break the rules.
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If I put this in the context of social change, it would be immediate. The Late Representative John Lewis said, get into trouble, get into good trouble. Nelson Mandela, the father of South Africa, was the father of South Africa while he was in jail. Martin Luther King's letter from a Birmingham Jail was written while he was in a Birmingham Jail. You're going to change things, the status quo isn't going to like that. You need to be willing to break the rules. In strategy, if I said to you today
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I'm going to go into business, I'm going to make a computer the runs of Microsoft Office and Microsoft systems and it's going to be black, what's my chances of success? Close to zero, because, of course, I'm doing what everybody else does. And strategy, we understand, That you redefine industries by breaking the rules of those industries. Southwest Airlines with their turnaround times, Whole Foods was selling food that people want to eat. So it's all around breaking rules.
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Rule three, you want to act and speak with power. Confidence is often confused with competence. But you want to act like you know what you're doing, you want to act and speak in a powerful fashion. And that's why my colleague and your friend Deborah Gruenfeld teaches a class called acting with power, it's all about great leaders are great actors. Andy Grove, the late Andy Grove of Intel, was quoted in giving a talk in the Silicon Valley of saying oftentimes at Intel I didn't know
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what I was doing, but you have to act like you do. Because if you show up, any startup founder would understand. If you show up and say I have no idea what we're doing, I know we've faced some setbacks, which by the way every organization does, I'm clueless. The customers are going to leave, the employees are going to leave, the investors are going to leave. So rule two is show up, and rule three is show up with power. >> Before you go to rule four. But I want to stop you before you
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go to rule four because already I think everyone can see why some of what you say is controversial. So we're here in Silicon Valley and, I'll just play devil's advocate for a minute.
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Some people would say looking at Silicon Valley we've had too many people who are adhering to the fake it till you make it and breaking the rules in building companies, how do you respond to that?
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>> It's interesting, on Thursday I think of this coming week, we're going to have a series, we're going to have three of my colleagues are going to talk about bank failures. Which is interesting, because bank failures are an example of a principle which I think is highly underrated, which is the self-fulfilling prophecy. I don't understand the failure of First Republic Bank, which for many years was by far one of the highest performing banks in the United States. ROA, ROS, RO anything, highest
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level of customer satisfaction, wonderful bank. Except through what Robert Merton, the sociologist who invented the self-fulfilling prophecy uses this example, which is bank runs. And I see imitative behavior all the time, I wrote a post about layoffs being imitative behavior. So there is a self-fulfilling prophecy, to the extent that I believe you are successful, we, everybody in this room, is a beneficiary of the self-fulfilling prophecy. Because we have convinced people,
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and I believe it's true, but we have convinced people that Stanford is the best business school. We get the best students and the best faculty. If you get the best students and the best faculty, you become the best business school. And what was once a whatever, a dream or a myth, becomes in fact reality. If you believe that First Republic is going to fail and you pull $100 billion of deposits in one quarter out of First Republic Bank, nobody can stand up to that and so First Republic fails.
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I by the way, to this day, am a customer of First Republic. And I dread Chase, because Chase has perfected the art of all large banks which is providing no customer service, but it turns out if you're a monopoly it doesn't matter. >> [LAUGH] >> So I'm a huge believer in the self-fulfilling prophecy. And so yes, it is the job of a, what is it, 70, 80, 90% of new ventures fail. If I say to you, John, I want you to come into my company. You're a smart guy, you have a PhD,
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you've been dean at Stanford, but if you decide to make a career change you want to work for me. [LAUGH] >> I'm ready, give me the pitch. >> By the way, 90% of new companies fail. I am a new company, therefore you have a 90% chance of failing, would you like to join me? I don't think you're going to join. Part of life is convincing people that the impossible is in fact possible. My dear friend who we gave the Arbuckle Award to some years ago, the famous Laura Esterman,
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Who's changing medicine, who's changing breast cancer, who's changing things in a profound way. She has been quoted, because she's on a video because I recorded her that particular day she came to my class, is convincing people that what they didn't think could happen can happen.
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That's how change occurs, it is easy. My friend Rudy Crew also comes to my class, New York Schools Chancellor, wonderful man. My job, he said, is to convince. Urban education in this country is a colossal, catastrophic failure, probably worse than in the city of San Francisco where they recalled most of the school board.
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My job is to convince people who have given up, given up on children of color, on immigrant children, that in fact these children can have the same education that we give to the children of privilege, and that they can achieve to the same level.
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Now, by the way, we haven't yet succeeded in doing that. And so to some extent Rudy Crew and Laura Esterman are telling people things that do not exist, but if you don't believe that they can exist you will never try. >> Mm-hm. >> We're only through rule three, but let's. [LAUGH] >> You want to go through the rest of the rules quickly, because I've got so many more questions. >> Sure, okay, this is wonderful, we're going to talk. >> We'll talk for hours, we'll be here till 9:00, it's great.
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>> [LAUGH] >> Rule four. So rule three is act and speak with power. Rule four is to build a strong personal brand. Just as Coca-Cola, and First Republic, and Chase, and everybody else, Southwest Airlines, has built a brand, you need to build a brand. You need to stand for something, you need to have a succinct way of describing what you do that integrates your life with what you're currently doing. As my friends from the private boys school that I went to many years ago will tell you, I was
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a troublemaker then, I still am, it's fine, that's my brand. [LAUGH] Rule five is network relentlessly. If management, slash, leadership is getting things done it's through other people, you need to know a lot of other people.
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So the more people you know, the more stuff you can get done, you want to network relentlessly.
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Rule six is use your power. When somebody makes you dean, or somebody makes you CEO, or somebody makes you president, or somebody makes you school superintendent, they have expectations that you're going to do something, use that power. Jim Collins talks about getting the right people on the bus. If you look at what Amir Rubin did first at Stanford Health Care, and now at One Medical which was bought by Amazon and Amir made $114 million, which makes him my closest, richest friend.
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I have closer friends, I have richer friends, if you put the two together. >> [LAUGH] >> [LAUGH] If you put the two together then multiply the two, it's Amir. >> [CROSSTALK] >> And basically you look at Stanford Health Care, 70% of the people three levels down were different after about three years, you want the right people. Jim Collins, get the right people on the bus, you want to use your power You want to get things done. Nobody has put you in this job to do nothing, you need to use your
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power to make things happen. And Rule 7, which is probably the most controversial rule of all, people say to me, you've told me things to do. By the way, none of these things strike me as very controversial. I mean, getting out of your own way seems common sense. All this stuff seems pretty common sense. But in any event, it's got a social science ground as well. Rule 7 is that once you have power and wealth, people will forgive or forget how you got it. And that is, I think,
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also demonstrated every day. I began this chapter with the example of Lindsey Graham. Lindsey Graham was the ultimate never Trumper, and now he's got his lips firmly affixed to, well, we won't go there. [LAUGH] Donald Trump, many people did not like Donald Trump. Business people did not like Donald Trump. But the day Donald Trump became elected, and after it was clear that he wasn't going to quit or do something or whatever, that he was actually going to be not only a president, but
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a president who uses power, a lot of the business leaders changed their opinion of him. So Rule 7 is you need to be successful and once you're successful you'll have more friends than you want. >> [LAUGH] >> So, Jeff, I sometimes think of you as the, and this is actually a compliment. >> [LAUGH] No compliment begins with a statement that this is going to be a compliment. >> [LAUGH] >> I sometimes think of Jeff as the Henry Kissinger of organizational behavior, the real politic sort of
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view of organizational behavior. By the way, Jeff, if you are still teaching when you're 98 or 99 like Henry Kissinger, that'll be great. So we need to aim for that. Let me ask you about the class. So your syllabus starts by saying, this class is not for everyone. >> That's correct. >> Tell us what you mean by that. >> Well, so one year I was teaching, and there were some students that it turns out that about three of them were sitting together. And every class, because they were
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sitting kind of right in the middle and about the third row back, and every class they looked like they were having some very painful medical procedure done to them. >> [LAUGH] >> Pick your favorite one. And at the end of the class, it's also clear that they did not learn anything. So in order to get the benefit out of pass the power, which as you know has an enormous waiting list, in order to get the benefit out of pass the power you have to be open. And by the way,
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I think this is true for any class, I think this is true for economics. I mean, if I came into a class, in the microeconomics, or for that matter, macroeconomics, and said, I find the principles that you're teaching abhorrent. And therefore, I won't engage intellectually with the material- >> Who could possibly think that? >> I don't know, [LAUGH], you wouldn't learn anything. So you have to be open to the experience, you have to be open to learning. And if you are, many people have gotten
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enormous benefit out of the class. And if you're not, it's going to be a horrible experience. And it's an elective, you don't have to take it. Take something that's more to your liking whatever. So that's why I put that in. So to get people to understand, I mean, this class has been taught for a long time, I'm not likely to change. If you don't like me, you don't like the material, don't take it. It's not a problem. I'm not going to be personally offended. >> You've taught the class
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for a long time. And this group captures about half of that period, how have the students changed? >> Always for the better. >> [LAUGH] >> I could tell you how the class has changed. So some years ago, I had lunch with Carol Robin, and I said to her, how do I make this class better? And she said, you at the moment have a class in applied social science, you need a class that deals with what the students are actually most interested in, which is, of course, themselves.
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And so with the- >> Did you all catch that? >> [LAUGH] It's true, we're all interested in ourselves. And so I basically redid the entire class. I redid the cases, so that the cases, we no longer have Robert Moses, or Lyndon Johnson, or readings on Robert McNamara, all these other interesting people. We have readings on, again, we have cases on people who are like them, five to ten years out. Some of them from Harvard Business School, some from Stanford Business School. But people who they can,
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entrepreneurs, my friend, Jason Calacanis, the king of angel investing, people that they can kind of see and relate to. That's the first big change. And the second big change is I, with the school's generous support, which I thank Paul Oyer for every minute, and thank you for today, we have, coaching, executive coaching. Six executive coaches work with this class, who provide an extraordinary level of feedback on the eight self-reflective exercises that I give the students to do, which
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includes build a personal brand. Who do you need to network with? How are you going to meet them? What are the personal attributes that you need to change? How are you going to change them during the ten weeks? And it is amazing to me what you can accomplish in eight to ten weeks with an enormous level of feedback, and whatever. So the class has changed. And because I think the class has changed, I think the student experience has changed for the better, I hope. And so that's how I think things
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have changed. I think the other change in the student body, which I'm sure you've seen, is we live in a world of much more social consciousness than I think there was 20 or 30 years ago. Frankly because we live in a world that's a hell of a lot more dangerous than it was 20 or 30 years ago. 20 or 30 years ago, you did not have a land war in Europe. 20 or 30 years ago, you did not have, or if you had it, it was not as visible, mass shootings all the time, police doing what they do to people
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of color, etc. So 20 or 30 years ago you didn't have the prospect of Donald Trump being president again. So we live in a much more dangerous world and in a much more interesting and challenging world, including the change that you've described. Including artificial intelligence, where now, apparently, the father of artificial intelligence is worried that it's going to do all this harm and damage, whatever. So we live in a dangerous and interesting challenging world with the climate crisis,
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in school of environmental studies, all this stuff. And so I think the students reflect the world that we live in, in the sense that I think they have a much higher level of social awareness and social conscience. They also, I think, are more stressed, and I think that's true for the undergraduates at Stanford as well. >> So that actually picks up another topic which you've worked on, which I would love to get you to share with the group, which is the issues of health in the workplace, and
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particularly mental health. So that's been a big topic for you recently. >> Yes. >> Maybe share a little bit of the thinking you've done. because it's been, in a way, kind of an unusual topic for a business school professor to think about. >> I guess it's unusual. And everything I do, I think makes all perfect sense. So it's not [LAUGH] unusual for me. I wrote a book in 2018 called Dying for a Paycheck. Which actually had influence on the Surgeon General of the United
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States, it had influence on people actually all over the world. And it is the workplace, according to my colleague, Stefano Xenios and Joel Go, doctoral student in the school who helped me with the research, the workplace is the fifth leading cause of death in the United States, responsible for 120,000 excess deaths a year. And by the way, my friends in human resources when that book came out said your numbers are way off that they're much too low. The general consensus is that, and
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this is also, by the way, pre-COVID, where the stress has gone up. Stress is not healthy. If you go read the medical literature, you can find that stress is not healthy in two ways. Number one, it leads to unhealthy behaviors, which has been studied for decades, smoking, drinking, drug abuse, and overeating, etc. Anyway, stress is also unhealthy because they have now actually mapped in a variety of ways the effect of stress and depression on the central nervous system which
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regulates almost every chemical in your body, including hormones and then oxycontin, and cortisol, and all of these things. And so we know that stress is harmful, we know that depression is harmful, we know the workplace because of studies that Gallup has done everybody else has done, is a source of stress and depression. And so therefore, if you want to fix the escalating healthcare COC crisis around the world, you actually have to address the workplace. I also my favorite chapter in Dying
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for Workplaces chapter seven, which is why people stay in workplaces that they know are killing them. And one simple answer as a friend of mine said to me, Jeffery, finding another job is a job in and of itself. I am so exhausted mentally and physically that I can't get out.
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It's kind of depressing, anyway, I don't want to depress anybody today. >> [LAUGH] >> It's a happy weekend for, that's a- >> [LAUGH] >> But I would point out that the one thing, I mean, in that book I quoted the New York Times article, where I don't know if you know this, at that time at least the Palo Alto Medical Foundation had a van that went around to high tech workplaces. Because the engineers making dating apps, I guess thought that they were doing work too important to go
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and see the doctor. And in any event, the guy who ran the Palo Alto Van, Pam Foundation Van at that time, said, I've seen 30 year old engineers with 50 year old bodies. He said if you're a 30 year old engineer with a 50 year old body, you're not going to get that 30 year old body back. It is physically, physiologically impossible. So, basically, I've I recently written a LinkedIn post about this also, prevention is a hell of a lot more cost effective and a whole lot
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more effective than remediation. And this is true in health and it's true in mental health. That intervening early, I am doing a paper now believe it or not with the CEO of Mural health, they provide mental health benefits. And he shows that their programs prevent people from going from a state of mild crisis to deep crisis. And that's I think great because for both physical health, I mean, if you're pre-diabetic, it's better to not become diabetic. If you're pre-depression, it's
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better to not become depressed. Because once you are in a state of acute physical or behavioral ill health, it's very hard and much more expensive to reverse it. So this is kind of one of the current things I'm working on, I work on a few other things. >> If you all want to read something really excellent that Jeff wrote recently, he has an article in McKinsey Quarterly from a couple of years ago about, I think it's the first article out about workplace mental health and
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it's really a good read actually. It starts with the story of one of our alums and lecturers, a fellow named Lenny Mendonca. And it's really impactful. And the Vivek Murthy, who is the Surgeon General of the United States, by the way he's an MBA even though he's a Surgeon General, just not a Stanford MBA, unfortunately. He really picked up on that, what Jeff has done and now has been doing a lot of mental health stuff. Jeff, let me ask a question about, it'll be relevant for this audience.
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So in your class, the students spent a lot of time thinking about individually what will be their path to power. >> Correct. >> And I always tell you how much I enjoy when someone comes to visit me and says, let me tell you how things have worked out either in accordance or not in accordance with my plan and Jeff's class. Often it's in accordance, actually, which is great.
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So now you've got a group in front of you, they're one year out, or five years out, or ten years out, or 20 years out, what would you tell them about their path to power starting here? >> That's a great question. So I often will get comments sometimes from people I'm connected to on Linkedin or other people. And they say to me, I wish I had known this ten or 20 years ago, or 30 years ago. It's like too late for me or whatever and I tell them it's never too late. It is never too late.
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It is never too late to master the rules of power. It is never too late to start doing it. And so that would be my word of advice. You don't have to do it, it's nice if you started, in the womb or whenever some of these people that, when Ben Johnson that was I think a natural politician that it started early, but you don't have to start early, it is never too late. You all have, particularly, since everybody in this room is younger than me, then you all have a lot of
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your life left in front of you and you can always learn things. By the way, not just power things, but other things as well, that you can use. I suspect you would tell people that it's never too late to learn principles of economics, and my colleagues in finance will tell you it's never too late to learn the principles of finance and operations management etc. etc. Because you have time left in front of you in which you can take this learning and apply it to all the various aspects
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of your life, so that would be my, go learn it today. I think the bookstore is supposed to be selling copies, that bookstore typically has three copies of my book. So, they made them now stock more but I doubt it. Because, of course, Stanford Bookstore is no longer a bookstore if you haven't visited it recently. >> It's a great read, it's not too long, the new one, so you can get through it in a couple of evenings. Let's open it up for some questions and see what's on people's minds.
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So, feel free to ask Jeff anything. >> So Jeff, a lot of your work in a lot of the class is on individual power. And something that's been really interesting in the last year to two is the rise of unions and bringing back this idea of collective power. So, I'm curious because we also don't really do it in the business school curriculum either and so now you have this crop of business leaders that have zero idea on how to deal with collective power. So curious, one, for your take on
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what is kind of spurring the rise of collective power and two, advice on how leaders should think about this. >> Thank you, that's some interesting questions. So. There is a lot more publicity about the rise of unions than there is actually the rise of unions. I was notorious for when I taught the class here on human resources, which I used to do, which at one point was a core class actually, having a session on unions, which made me, I think, relatively unique.
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Unions are largely disappeared from all business school curricula, mostly because students would ask me why did they need to know about unions? And I would tell them that they weren't always going to work just in the United States and that there were other countries. Such as Germany, which has co-determination Singapore which actually has a reasonably strong union movement, whatever. So yes, there's a lot of publicity about the unions that have organized at Amazon and Starbucks
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that they've tried to organize.
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But the percentage of people in unions has continued unfortunately to decline. And in a moment of course, things that give my poor dean heartburn, Stanford, as you know, is facing a union organizing campaign. And I would urge you to follow Stanford's response and watch what they do. >> [LAUGH] >> And watch what they do. When the clerical workers tried to organize a union many decades ago, Stanford hired Littler, Mendelson, and which is known as a union-busting firm. The graduate students are now
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thinking about unionizing at Stanford. And the graduate students have asked the administration to recognize the union without an election, you can picture what the response would be. And we will see what Stanford does, my forecast is It will not be nice. >> [LAUGH] >> Because one of the things that we have whether there is a.
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Kruger and Dunning wrote this wonderful, fabulous article called Unskilled and Unaware of It. Most people believe that they are, and certainly most leaders believe that they are smart. And they've gotten to where they are because they're smart and that therefore they know better than everybody else. And I can guarantee you, and this is not a shocking statement, that the people who run Stanford University believe that they know better for what's good for the graduate students
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than the graduate students do. And that would be true for all of you, that if I asked you to prescribe for me, or for John, or for anybody in this room, what they should do, you would immediately respond to that because you're smart, talented people. And so we're going to be smart, talented people, we're going to tell the graduate students what we think they need, which is, by the way, not a union. So watch carefully, watch the Stanford Daily, it's interesting. I get a daily Stanford Daily feed,
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it's great. >> [LAUGH] >> So that's a long way of saying that collective power I think is important, but it is hard to organize. By the way, the decline in unions has occurred worldwide, not just in the United States, because we've diffused our ideas around the world and so now we've got this interesting issue. But the wonderful thing about my job and being who I am, is that the most interesting human beings in the world reach out to me.
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I am personal friends with the former head of the Service Employees International Union. The woman who organized with her partner the recall of the San Francisco School Board reached out to me over last Christmas. When there was the shooting in the Marjory Parkland schools, one of the student leaders reached out and said you know about power, tell me what to do. I said on the day a politician loses their election because they did not support reasonable gun regulations things will change, and
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until then nothing will change, not the moving speeches or anything else. And so we need collective power, we need the hard work. >> Let me, just to add a couple of things to build on what you said, Jeff. One is, if you read the media, you hear a lot about how everybody on a campus thinks the same way, that there's this sort of homogeneity that has crept into university thinking. Let me just tell you that among the GSB faculty that is definitely not the case. >> [LAUGH] >> Similarly with
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willing to speak up. And just two more things I'll just add. That I actually do encourage you to follow the unionization issue. It's quite interesting that many years ago, at many public universities the graduate students unionized as employees. And it never happened at private institutions because the National Labor Relations Board had not decided whether grad students were employees or students under the National Labor Relations Act. And about two years ago when
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the Biden administration came in they changed the rules and made it clear that they would recognize unions at private institutions. And pretty much all of our peer institutions, the grad students have unionized. At Stanford, it's not necessarily MBA professional students, not necessarily MBA students, it's people who do work for the university as research assistants and TAs. But there is a drive now to unionize at Stanford and they're likely to have an election this quarter actually, and
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that will be an uncertain change. It's too new a phenomenon to see sort of what that would bring, but that is an ongoing thing right now at Stanford so it's an interesting thing to keep an eye on. By the way, on unions, it is true that we do not have a class on unions. But we at least did have a big event on unions earlier this year as part of the Corporations and Society Initiative, and it was quite a robust discussion. And what we're talking about, particularly for
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manufacturing comes back to the US. And depending on where it locates, it's entirely possible that there will be a significant comeback of unions and that'll be an important thing to cover in an HR class and in economics classes. So actually it is a very interesting issue. >> That's a great question. >> All right, who's got the next question? >> Professor Pfeffer, your comments resonate with me as much now as they did ten years ago. But I want to repeat a question,
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the first question that I asked you in your class, because it's been ten years and I'm still trying to reconcile it. I think in today's world, kindness is often mistaken for weakness. Is there a place in our world for leaders who want to act with power but choose to not be toxic, choose to be kind, or are they not reconcilable?
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>> Some of my favorite leaders, I think, combine both.
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First of all, a lot depends upon how you define toxic and how you define kindness.
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So let me begin with an example that will seem far field.
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Some years ago, one of my alums from the class of 2005, who lives in San Francisco, said, I live in an expensive house, which is two blocks from a playground that I will not permit my children to go to.
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Do you have any ideas? And I said, I have no ideas, but I know somebody who runs Project Open Hand. Project Open Hand began it's feeding gay men dying of AIDS in the 1980s, but has since it expanded, to feed homeless people on the streets. And they got a contract from the state to feed them, actually, and basically all the major cities in California. I said, this is a man used to be an investment banker, and you'll see where the story's going to manage. Used to be an investment banker,
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decided he had made enough money and wanted to do something more socially conscious and came out and is now running Project Open Hand. And I said, I can introduce you to him. You have a dinner, and he will tell you about homelessness and the crisis on the streets of San Francisco, which basically, by the way, are killing the city.
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So he came and he said, I know what he said. He said, the city of San Francisco believes that it is kind to let people live and die on the street. This is a very devout Catholic man, he said, I as a devout Catholic believe that the people on the street are children of God. And if they cannot care for themselves, the most compassionate thing to do is to care for them, even if they do not want the care.
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This is a long way of saying that what is kindness depends upon a frame of reference. Is it time to let people live, defecate, die on the street? Or would you do what this guy really wants the city of San Francisco to do? Which is to take people who clearly are not able to care for themselves and involuntarily, let me emphasize that word. Involuntarily put them in single room occupancy houses, or in other kinds of housing, assign to them a caregiver. Ensure that they get their
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medicine, ensure that they get their food, ensure that they do not wind up at $100,000 a day at San Francisco General Hospital.
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Kindness is an interesting word. Is it kind for me? I was on the board of a company, and we were going to fire somebody. And my CEO said, is this a kind thing to do? I said it depends. Do you believe this person knows that they are failing in their job? And he looked at me, and he said, yes. I said is it kind to keep someone in a job where they are on a daily basis reminded of their inadequacies? I don't necessarily think so, I joke in my class of one of the reasons I don't play for
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the National Basketball Association is I would not want to be reminded on a daily basis of how incompetent I am. >> [LAUGH] >> It is not kind, so kindness, this is an interesting concept. Is it kind? So it's an interesting issue around trade-offs. There is a thing that we teach in our ethics class about the streetcar thing, and would you kill one person to save the lives of hundreds? By the way, this is not a hypothetical question. Almost every new drug and every new medical procedure begins
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at a high level of ineffectiveness. If you look at the history of heart bypass operations, which is by the way why I'm sitting here today, because I was bypassed at the age of 47, the original mortality rate for heart bypass was 25, 30%. And it is now like less than 1%, so as we learn new things, things don't always work. Air travel used to be whatever, should we have prevented air travel because some people died as we evolved the safety protocols, and etc? So the question you asked,
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I'm sure this is not the answer that you wanted. >> [LAUGH] >> But the question that you ask has profound implications, because you need to define the terms with an enormous level of specificity and to think about the various aspects of trade-offs. One of the trade-offs that I think many of my students face, which goes back to somebody that you have not yet mentioned, but I thought you were going to Machiavelli. Machiavelli said, the first responsibility of a leader is to keep your job.
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Because on the day that you are no longer a leader of your organization, your ability to change lives, change organizations, and change the world disappears. So that then gives him this long answer to an interesting, but very profound question. If in order to keep your job as a leader, you have to behave in ways that you are not comfortable with or that cause harm to various other people, whatever, life is complicated. If life were simple, to quote my friend Gary Loveman of
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Caesars, if life was simple, you could hire stupid people. You would not need an advanced education at Stanford, you would not need the fabulous classes that we teach. If life was simple, but because life isn't simple, you have to think. I think deeply and profoundly about the terms, about the trade-offs, about the fact that the economists are right, there's no free lunch.
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>> I do give people a lot to think about there and I'm sure everyone is doing who's got the next question. My gosh, we've got a lot of hands up. All right, bring someone the microphone. [LAUGH] >> Thank you for that talk, I didn't have a chance to take your class, didn't get in, I have- >> It's okay, it's never too late. >> [LAUGH] >> There's an online version. >> There's an online version, [LAUGH] it's never too late. >> [LAUGH] >> Yeah, so I'm happy to catch up today,
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ten years after graduation. I have this scientific question, can you measure power? How much power does a person have? Is there a way to do it? And if it is, can you measure the delta for the students who took your class? >> [LAUGH] >> Those who didn't, and see is there a difference? >> [APPLAUSE] >> So the answer to the first question is yes. And then the answer to the second question is, I don't do it, but there is a man named Gerald Ferris, F-E-R-R-I-S. Who teaches at Florida State
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University, who has developed instruments to do all of this and has done a lot of research. And there are studies not any of them done by me, but there are studies done by other people. That have asked questions such as does training and the ideas of networks, and the idea of structural holes and brokerage actually improve career outcomes? That was the study done by Ron Burt. BYT, he's used to teach at University of Chicago, I think he's now at Bocconi. But he has a website that I highly
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recommend you go to because he gives away his tools for network analysis and is very interesting guy. There have been other studies done by Gerald Farris and his colleagues on whether or not. You have whether or not the degree of political skill affects career success some of that research is actually summarized in seven roles. So there are studies and yes you can measure it. >> Right, let's go to the next one, who's got next question? Great. >> Hi, really enjoying the conversation.
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I did have the pleasure of taking your class 20 years ago. I'm really glad that I did. At the same time, experiences over the last two decades, I guess I've worked with colleagues who have been quite Machiavellian, to use the word, and almost have a pathological pursuit of their own personal power. And experienced how that can impact upon trust and collaboration within an organization. And I'm just wondering, have there been any studies in terms of the link between individuals
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pursuing their own personal power and how that might impact upon trust and collaboration and support long-term shareholder value? And how do you balance the trade-offs in that situation? Do you become Machiavellian as well, or do you try to change the culture of an organization to be more collaboratively? >> All right, so that's a long and complex question. I'll try to give a relatively simple and shorter answer. Number one, with my dear colleague Charles O'Reilly,
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we have done a bunch of research on why Machiavellians. Everybody hates them, though they are narcissists, and we hate narcissists, and we hate Machiavellians, and we hate psychopaths. But they actually succeed, [LAUGH] and they succeed for some reasonable reasons, but in any event, so we've done some research on that, which if you're interested, send me an email and I'll send you some of those studies. But your question, I will use as an excuse to talk about. [LAUGH] >> [LAUGH] >> Which is
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what I do. [LAUGH] Yeah, because your question embedded within your question, I think, and if it's not you should correct me, which I'm sure you will, is this issue of the trade-off between the individual and the collective.
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Yes, I thought [INAUDIBLE]. because you preface the question, Machiavellians are pursuing their own individual self-interest as if that was somehow bad though. Self-interest is the basis of almost all microeconomics, but in any event, how does that work against the welfare of the whole? And that's a question I get asked all the time and I urge you to read the newspaper or with your version of the news if you don't actually read a physical newspaper. Every day, companies have taken
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people by the tens and 20s or 1000s and laid them off. And when I wrote the book Preceding this Power, my friend, Joe Podolny, when those days ran Apple University called me down after. He was a teacher here, then he went to Harvard and then he was dean at Yale, and he calls me, and actually worked for your father. >> He did, my father hired him. >> Yep, and so Joe calls me down to Apple University and he says, I don't like your book and I said, well, that's okay.
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[LAUGH] I said what don't you like about it? Everybody has their own particular. He said your book is all about the individual. It's not about the welfare of the collective. And I said, Joel, you're part of the Human Resources operation at Apple. He said yes. I said many, many years ago when I was a young single man, I dated a woman who worked in Apple Human Resources. And Apple was one of the first companies that pioneered the organizational handbook that said we do not owe you a job for life.
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We owe you an interesting job that gets you ready for your next job. The jobs for life are gone, that employment security is gone, that we are not your mother, your father, or even your aunt, or uncle, or brother, that we basically are your employer. And this is a transaction. Work for money. And we owe you nothing. And Joel looked at me and he said, that's still what we say. And it's still, by the way, what every labor lawyer that I know will tell you. You live in this, we are in this
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moment in this country which practices at-will employment. You ought to go out and do a little comparative study and see how many other countries practice at-will employment. Essentially zero. Employment at will means you'll be fired for cause or for no cause, for no cause at all. We can lay you off by the zillions. We don't have the same protections that they have in Europe. We can argue whether that's good or bad, but it's a fact. Given the fact that I have now
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hired you into an organization and many organizations including by the way Apple. And including probably Stanford though not for faculty, you probably have you sign a thing that acknowledges that you're employed at will and that we can fire you for no cause at all. So the company has hired you and telling you we owe you nothing.
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You owe them nothing. Companies that lay people off by the tens of 1000s without any consideration for the fact that there are studies that demonstrate when you lose your job involuntarily, your risk of a heart attack goes up 40%.
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I could talk about the other health risks also, we don't need to. Take care of yourself. If you wait for your company to take care of you, you may be waiting for a long time. And if you don't believe me, go look up all the websites where people are complaining about Meta, now about Google.
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The companies that have laid people off. Oftentimes not letting them say goodbye to their colleagues.
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Yes, I have a pretty tough and not necessarily popular view of who you owe things to. You owe things to your friends and your family and to yourself. And to companies and there are a few and I can name them and if you want I'll put you in touch with their CEOs who will treat you like a human being when you go to work for them but there are a lot that don't, and you owe them nothing >> All right, who's next? >> [APPLAUSE] >> Hi, Professor Pfeffer, Katie Hayes, Class of 2018.
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I also didn't get into your class. >> [LAUGH] >> But my question- >> Nobody got into my class. That's why you're all here today. I love it. [LAUGH] >> Well, I have my daughter here today, so I wanted to ask about generational power. If you're born into an opportunity, whether it's a big family business or even just privilege and you get to skip some of the steps in getting power, what makes someone successful when they're handed that versus unsuccessful? >> Yeah, that's it.
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Great question a couple years ago in the middle of COVID, I was taken out to lunch by a bunch of people of privilege. And some of them weren't in my class and I said why aren't you in my class? And they said we don't need to be because we're going to succeed anyway. >> [LAUGH] >> [LAUGH] And what I have found recently is that I am now being approached much more so than some years ago by people running programs on DEI, diversity, equity, and inclusion. And they say, for
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underrepresented minorities or for people who start out with strikes against them because of their gender, or their race, or their ethnicity, or their accent, or their socioeconomic status, or for whatever reason, they actually need to know the rules way better. If you've a dear friend whose mother's maiden name was Rockefeller who said he was born into the privileged sperm club or something that because you know we're basically,
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He didn't have to do much except to get born in order to succeed. You don't probably though he took the class and did very well on it. But you probably don't need all the read seven rules and do all this stuff. Because you'll succeed anyway. It's the people and I've noticed that the percentage of women and the percentage of minorities in my class has actually gone up over the year. Probably because of the change in the proportion of the school, but probably because they figured out
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on the very, very first day I have an African American woman in finance speak and on the very last day of an African American woman, and finance speak. And for those who don't know, statistics of the $70 trillion of investable assets around the world, less than 2% are managed by women or people of color. And so these people have succeeded. They're both women and people of color. And so, they've had to succeed against all odds and they come in and the first day to talk about why
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she took the class and what she uses from the class? And on the last day a different woman comes in to talk about how to take the class forward.
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>> Who's next? All right. >> Jeff, press professor. Great to be back Dave Spencer classico three. I actually tried to take his class twice, but they wouldn't let me. >> [LAUGH] >> Anyway, my question is I recall about while I was here, it was about 21 years ago and you wrote a story that made the cover of Businessweek Shows you how [INAUDIBLE] ourselves Business Week, questioning the value of an MBA and the opportunity cost and the financial cost, that there might be better ways to
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spend your two years. And so joys of tenure, right? [LAUGH] In any case, I'm just wondering how your views, if any, have evolved on that thesis >> Well, yes I did write that article which got me into all kinds of trouble but I write >> [LAUGH] >> But if I'm not getting into trouble I don't think I'm doing my job but in any event yes, the title the articles the and the business schools less success than meets the eye. And the and, what I question, which by the way I think actually
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is still open to question, is not the value of attending a business school, but the value of the education that is provided. So, one of the big controversies in the GSB at the moment, is the issue of the academic level of academic engagement I think. So rule five of the seven rules, the power to network relentlessly. Should you go to the business school and meet talented, brilliant wealthy well-born ambitious, successful people who are going to go out and change life, change
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organizations and change the world? Absolutely absolutely. And there's enormous value from doing so. Should you go to business school as a way of building your personal brand? Absolutely. One of the phenomena that I'm sure you have encountered, I had a student come up to me one day and said, I applied for these jobs, some jobs, and then I got admitted to Stanford. And lo and behold, there was a letter in my mailbox. I hadn't even started the goddamn program. And there was a letter we use that
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mailboxes, do we still, we may still I don't know, now with everything, who knows, but in any event, in those days there were these little mail slots and this is within the old building were very old building. And this woman said to me, she said, all I did was get admitted, and the same companies that were turning me down or writing me sight unseen, and saying, would you apply for a job?
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So branding, yes. That working, yes. Beyond that, we can have an interesting discussion. [LAUGH] Yes, there is. Yes, there is a wonderful content being delivered whether or not anybody is losing using a god knows. But are learning it, who knows? But there is definitely there is definitely value from the brand I would tell you there's a value from the brand of being associated with the Bohemian Grove. There's a value of the brand I have a friend of mine, former student. Went to work for
1:00:30
Tesla in purchasing, which is a big job at Tesla because Tesla buys a lot of stuff. And he's going back, I told him, I said, you should go back to Brazil, he's a Brazilian. He's now going back to Brazil to be head of HR for Petrobras. I said, how was your experience at Tesla? He said, it's as bad as you hear- >> [LAUGH] >> If not worse. He said, however, I would have never gotten the senior executive job at Petrobras if I had not worked for Tesla. So, many people take jobs,
1:01:05
no longer go to business school for the resume building qualities, for the signal that it sends to our late ladies still alive. Our colleague Mike Spence who won the Nobel Prize talks about signaling value. My friend who I quote, probably in the business school article, Roger Martin, who was dean at the Toronto school, said to me that it was co founder along with Michael Porter, that consulting for a monitor said if you give me a choice of hiring people from the Harvard Business School
1:01:35
admission list versus the Harvard Business School Graduation list, I might pick the admission list. But Stanford Business School does, and I think you would not deny this, a fabulous job of selecting fantastically talented brilliant people. So >> [LAUGH] >> Given the fact that we've done that, of course coming here, it now signals to people that you were selected by the most selective business school in the world. It's fabulous. >> [LAUGH] >> By the way, there's some of our incoming
1:02:18
students say and people who think about business schools have actually have a misconception about aspects of business school, which you all could help us with. In fact, when you talk to prospective students, which is that they come arrive at the school thinking that there is an either or question about are you here to meet people or are you here to win something. And the truth is, that there are some either questions that those things in life are complimentary. >> Correct.
1:02:50
>> The value of knowing people is much higher if you actually know something. Because the people- >> [LAUGH] [APPLAUSE] >> That's exactly it. And by the way, the value of having a strong personal brand is much higher if you know something, because when you are visible, you better perform. >> [LAUGH] 100%. So these things are complementary and it's actually important to communicate that to the students coming into the school. So if you talk to our prospective students, tell them that.
1:03:23
We want them to come into the right mindset. All right, we've got one more question and then we're going to wrap it up. Okay, who's got the last question? Okay, it's going to be lightning round, so go ahead. Last one in the back. >> Hi, Naomi Allen. I'm a CEO of a pediatric mental health company, and I'm almost 50, and one of my observations is a lot of the early 20-year-old and 30-year-old employees in my company are looking for very different expressions of power than what I was trained in.
1:03:48
And so, can you just talk about, are you seeing a generational shift around once you have power the way you express that specifically I think they're looking for a lot more leading into their development and a lot more servant leadership.
1:04:04
I am a huge fan.
1:04:07
So, many people think I'm schizophrenic, which I may be. Because I've written books on human resource management, including Competitive Advantage Through People and The Human Equation, Building Profits by Putting People First. And then I teach a class on power and maybe I am schizophrenic, but I don't think so. I think there is a thing to do if you want your organization to be successful, which is consistent with the human resource books that I've written. And then I think there's a thing to
1:04:41
do if you want to actually rise up. And I believe this is still true for the current generation because I look at startups that have been founded by relatively young people. And I do not see them operating in any differently than you or I would've seen in our generation. I see founders getting thrown out, I see struggles, I see all the things that you would've seen or that I would've seen. So yes, I think there's a lot of aspiration because of all the things I've talked about in
1:05:21
dying for a paycheck. I mean, we have not created the world's healthiest workplaces. And by the way, nor are they in India or China, where the level of stress and depression is actually even higher. So yes, they I think they would like to live a different life.
1:05:38
But whether or not they will actualize and actually behave differently is a very open question.
1:05:48
I can tell you, years ago and Moses Niamh wrote a book called The End of Power. And then my friend Henry Thomas who now runs Rockefeller Center, we should actually go to New York and go to Lincoln Center because you can get us tickets to anything but in any event you. Henry Thomas wrote a book along with a colleague called new power. And new power talks about the democratization of power, which is kind of what you're alluding to. And of course, all you need to do
1:06:16
is go to the Heritage Foundation or any place that actually measures democratization. Democratization is on retreat, all around the world. Power is more centralized. So I think it is important to keep separate people's aspirations and wishes from their behavior, number one, and from what is actually going on, number two. So it is possible that the new people will lead differently, which would be wonderful. It's not a bet I would make, but who knows? Anything is possible.
1:06:53
>> So Jeff, we sometimes say at the GSB that the value of great faculty is that they challenge people and they change the way they think.
1:07:03
And so, Jeff that's delivered today, so thank you so much for doing that and, >> [APPLAUSE] [MUSIC]
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