KEN FRAZIER’S LONG GAME

KEN FRAZIE R’S LONG GAME

His transformational leadership inside—and outside— of Merck & Co. offers one of the most compelling arguments yet for an increasingly influential style of doing business: patiently, and for the greater good. “The important thing about leadership,” says Frazier, “is to be anchored around principle.” BY DAN BIGMAN

Go into Ken Frazier’s office—his new office, a far smaller one since he took on the role of executive chairman following a decade in the CEO chair at Merck—and he’ll show you the photos. Six in all: his son, his wife, his daughter, one with him and former President Barack Obama, one with Warren Buffett and one with Pope Francis.

The Pope may seem an outlier, but Frazier, who turns 67 in December, says they actually had a lot to talk about when they met in 2017. The Pontiff is a chemist by background and used Merck reference books. He used the session to lobby Frazier. “He wanted to encourage Merck to do more for people in the world who were suffering,” says Frazier. “His comment was essentially: ‘The distinction between saints and sinners is less actionable because we’re all sinners.’ He said, ‘We have to think about the distinction between the rational and the irrational,’ which I thought was an interesting thing to hear from a Pope, right? And he sent me off on my way, saying, ‘Can you do more for our brothers and sisters who are suffering around the world?’”

That Papal “ask” encapsulates life as CEO of one of the world’s largest drugmakers. Yes, of course it’s about commerce, but, as anyone who’s ever had a sick parent, kid or

KEN FRAZIE R’S

spouse knows, it’s also about a whole lot more. Being a big pharma CEO requires nailing this balancing act—societal needs and shareholder needs—like few other jobs in business. And Frazier has handled it brilliantly, becoming perhaps the most influential example yet for a school of business leadership that sees corporations—and CEOs—as cornerstones of democratic capitalism, as stewards of society.

“Ken is a remarkable leader with the vision and determination to do what’s right for society while delivering long-term value for shareholders,” says Bank of America’s Brian Moynihan, our 2020 CEO of the Year, who was a member of the selection committee that named Frazier 2021 CEO of the Year. “His leadership at a time when society needed him most has been exemplary. “ Tamara L. Lundgren, CEO of Schnitzer Steel Industries, also on the committee, agrees. “He has been an inspired and inspiring leader—delivering excellent results, continually innovating and providing an impactful voice on critical issues that affect our country and the business community.”

During his decade leading Merck, Frazier resuscitated the company—arguably saved it—from drifting into expiring patents and increasingly lackluster results. Recruiting top talent like R&D chief Roger Perlmutter, whom he lured back to Merck in 2013 after 11 years at Amgen, he reinvigorated the product portfolio and fattened the development pipeline, ensuring that the storied company George Merck founded in 1891 remained competitive—and growing (Perlmutter retired in 2020). Under Frazier, Merck remained committed to R&D (against prevailing trends at first), developing vaccines for Ebola, pneumococcal disease and human papillomavirus while also continuing to the fight against HIV. And although the company missed on developing a vaccine for Covid-19, in late September Merck announced the first effective antiviral pill for the disease, which could offer a powerful new weapon in the global fight against the pandemic.

But what will likely be the biggest legacy of the Frazier era is the blockbuster cancer drug Keytruda. The basic research that led to Keytruda arrived at Merck in 2009 as part of the $41.1 billion takeover of Schering-Plough. It relies on humanized antibodies rather than chemotherapy to attack cancer cells. Seven years after being approved for a narrow range of targets, it is now one of the most successful cancer treatments ever, saving—and extending—hundreds of thousands of lives. Worldwide sales of Keytruda grew 30 percent to $14.4 billion in 2020 alone (the company’s total sales were I don’t think you $48 billion last year),making Merck one of the world’s leading players in cancer treatment can do anything and helping to usher in the age of immuno-oncology. Under Frazier, Merck’s stock price important if you’re more than doubled. Not bad for a lawyer-turned-CEO from not willing to take working-class Philadelphia. His father was a janitor with sparse formal education. Frazier a stand and be credits the school busing movement of the 1960s for giving him access to more rigorous criticized.” schools than those available in his neighborhood. After attending Penn State and Harvard Law, he spent his early career at Drinker Biddle & Reath in his hometown, where, in addition to corporate work, he overturned the sentence of a man falsely convicted of murder after he’d served 19 years on death row. He was lured to Merck, then a client, in 1992 by the company’s legendary CEO, P. Roy Vagelos (Chief Executive’s CEO of the Year in 1992). Later, as GC, Frazier defended the drugmaker against lawsuits alleging that its anti-inflammatory drug Vioxx caused strokes and heart attacks. Rather than immediately fold, Frazier opted to fight. The company eventually settled in 2007 for less than $5 billion, a small fraction of the $50 billion some predicted. The victory assured a future for Merck—and marked Frazier for the top job. After a variety of stretch assignments, he became CEO in January 2011, serving until this July. Along the way, he’s had his share of wellknown controversies. As lead director at Exxon, Frazier spent the early summer in a headline-grabbing proxy brawl with a tiny activist hedge fund, ostensibly over issues related to environmental sustainability. Exxon lost. In 2017, he famously quit President Donald

Trump’s American Manufacturing Council in the wake of Trump’s comments about the racial violence in Charlottesville, Virginia. In 2020, he took up the fight for voter rights following Trump’s defeat.

“Sometimes the issues call you,” he says of his decision after Charlottesville. “I didn’t feel like I woke up one morning and said, ‘I want to resign from the president’s manufacturing council and create a difficult situation with the President of the United States.’”

But in speaking out on the issues he believes in—from voter access to racial discrimination to criticizing his own industry over drug pricing—Frazier has shown himself to be unafraid to say and do what he thinks is right, even if it some find it divisive. “People are unhappy with you, you get criticized, but I don’t think you can do anything important if you’re not willing to take a stand and be criticized,” he says. “I just don’t think you can do anything important.”

That clear-eyed courage, coupled with principled leadership and long-term transformational success, led our CEO of the Year Selection Committee to name Frazier 2021 CEO of the Year. “Ken Frazier has delivered impressive results as CEO,” said Carmine Di Sibio, the CEO of EY and a member of the committee. “He’s done this by focusing on his people, his shareholders and his community. Ken is a true leader and trailblazer demonstrating the courage and generosity needed in our world today.” In April and August, Chief Executive sat down to talk with Frazier. The conversations were edited for length and clarity.

Let’s talk about leadership during times of disruption. What have you learned?

The important thing about leadership, and it’s particularly true during periods of uncertainty and disruption, is to be anchored around principle. If your leadership is stemming around a series of values and principles, no matter which way the wind blows, you feel like you have much more of a solid foundation for the decisions that you’re making. Our business is one of innovation. Our business model is one where we have to reinvent our company every 10 years because patents run out. And if we don’t figure out how to reinvent ourselves, we’re out of business.

So, disruption is fundamental to a scientific model. There will always be new science, new ways of doing things. What’s really changed in the last few years is the amount of disruption around us. The pandemic is a classic example. This company was doing extremely well and then the pandemic hit. It was disruptive to our business because 70 percent of our vaccines and medicines are dispensed through the health system. When the health system was operating at a fraction of its capacity, it affected our business because no one was going to take their child to get a Gardasil shot, right? People weren’t getting elective surgeries.

One of the most important things for us was to ensure the consistency of our supply of our medicines to patients both in clinical trials and in the actual world. On the reliability of our supply, there’s a measure called line-item fill rate, or the number of orders that are filled completely the first time, that went up after the pandemic. Even with people’s children being at home and everything else, our ability to meet patient demand post-pandemic or in the midst of the pandemic was greater. I can only attribute that to the values.

One of the things I’m most proud of is that from the time I became CEO, 25 days into the

Under Frazier, Merck’s share price has more than doubled, thanks to a reinvigorated pipeline— and the blockbuster success of cancerfighter Keytruda.

job, I withdrew the long-term guidance that was out there. There were three years left in the long-term guidance. So, 25 days into the job, I called my board up and said, “This guidance requires rather substantial, and, I thought, indiscriminate cuts in the R&D budget. And once I do that, I cannot stand up and say, ‘Merck is about science.’” There was a period of time in this industry, I would say from the early 2010s, where you saw companies following an approach to the business where they reduced I knew I was here to serve a higher their research budgets. I have now grown my research budget to be the second-highest in the industry. I tried purpose. This company to show that through consistent capital is more than a vehicle allocation, that those are the kinds of things that we’re going to focus on as for the creation of an organization. Putting your money shareholder wealth.” where your mouth is as it relates to scientific investment. [George Merck, the former] CEO of Merck, was on the cover of Time magazine in 1952 because he made a speech at the Medical College of Virginia, where he said medicine is for the people, not for the profits. The more we’ve remembered that, the more profits followed. Now I tell my kids that being on the cover of Time in 1952 was like being on every social media page at one time, for a whole week. Merck was a pretty obscure company, but Time thought the idea was important enough to put on the cover. Every Merck employee knows that. At the end of the day, they’re interested in whether or not those values are being clearly reflected in the decisions and actions that I take as Merck’s CEO.

Can you talk about sticking to your knitting in a time when investors want short-term results? How do you keep that commitment when you’re facing that kind of pressure?

It helps to come up in a company where you’re preceded by people like Roy Vagelos, who would say to me, for example, “There are only two metrics that the CEO of Merck really is judged by: one is how many people you help and the second is how much help you give those people.” If you apprenticed with the kind of people who’ve always put those values first, you know that that’s what your job is.

It’s not easy in a sense that we all want to be liked and respected, and you don’t want to read analyst reports saying that you’re a bad CEO. On the other hand, it was never ultimately hard because I knew I was here to serve a higher purpose, that the company was here for a higher purpose. This company is more than a vehicle for the creation of shareholder wealth. That’s not fundamentally what it is. It is fundamentally a vehicle for improving and sustaining health around the world. And when we do that effectively, we create a more than fair return for our shareholders, but you have to understand what’s the driver and what’s the lagging indicator here.

This whole shareholder TSR thing is a real problem because it’s not a year-in-and-yearout reliable way of measuring your company. How many important new drugs you bring over decades is a reliable way of measuring how well your company is functioning. Sometimes the street will be irrationally in favor of your company, and sometimes it’s not.

So how do you actually translate that to your long-term strategy at Merck?

For the CEO of a company like Merck, the most important thing is the general direction of the company. We’re going to be an R&D company. We’ll never cut back on R&D. With R&D, you have to understand this is a very different industry when it comes to allocating capital. More than 90 percent of things we actually think are good-enough ideas to invest in turn out to not be good ideas. They either don’t work or they don’t work better than what’s already on the market. So, we’ll fail more than 90 percent of the time. Our strategy comes down to focusing on the science.

Then the second thing is ensuring that we have the scientific talent that can have the right kinds of insights to make the right choices as to which to move forward. The CEO of Merck can’t really drive the most important strategic decisions that happen inside the company. My job is to create an environment where I say science is what we’re all about. It’s what we invest in. It’s what we value. And we’ll hire the best scientists and create an environment where they can do what they’re going to do. Many of our best scientists have worked 40 years, and

BEYOND BLOCKBUSTER

The incredible clinical success of Merck’s cancer-fighter Keytruda could make it the bestselling drug in history by the middle of the decade, dwarfing the rest of the world’s top-selling pharmaceuticals.

CAGR 2020-26 (%) WW Product Sales ($m)

30,000

25,000 2020 2026

So, along comes Covid. You’re one of the world’s great vaccine companies. You decide not to move forward with your vaccine. Can you take us through making that decision?

WW sales ($m) 20,000

15,000

10,000

5,000

0

nothing [they developed] has worked.

The product development cycle is extremely long in this business. We say 12 to 15 years to develop a product, but that doesn’t count all the early years of scientific inquiry that lead to this, right? So, at my level, the question is, how much of our capital will we allocate to new scientific discovery? One of the things I’m most proud of is building three new discovery hubs in the last few years, in south San Francisco, Cambridge, Massachusetts, and London. The strategy is to invest in those kinds of opportunities for us to look at cutting-edge science and to hire the right people.

If you’d asked me when I was the new CEO, “Couldn’t Merck possibly be the leader in cancer?” I might have had no way of knowing that. But deep in the bowels of the company those two guys [were] working on immuno-oncology. And then we bring in Roger Perlmutter who happens to be a person who spent a lot of his life in oncology and is an immunologist by training. He recognizes the asset. He comes to me and he says, “This is worth putting all our resources behind because this is a once-in-a-generation product.”

As the CEO of Merck—I just want to be clear—my level of strategy is to enable good science. That is the strategy. And then you have to trust that that science is going to turn into things that are going to make a difference in the world. It’s talent, and it’s placing bets and celebrating the importance of doing good science.

That was very hard psychologically for this company. First of all, Merck was one of the early investors in mRNA technology, and we had a very large investment in Moderna. When Covid came along, this company had Keytruda Opdivo Eliquis Dupixent Bikatrvy Imbruvica Darzalex Ozempic Tagrisso Rinvoq deep experience with repliSOURCE: EVALUATE PHARMA, MAY 2021 cating virus-vector vaccines. SOURCE: EVALUATE PHARMA, MAY 2021 We have been successful most recently in a compressed timeframe in Ebola with that approach. Most companies try to see how the things they understood might be applicable to this. Our goal, when we set out, was to develop a vaccine. It was a high goal: We wanted a single-dose vaccine. We wanted long-term durability. You probably see that we need booster after booster after booster—which is better than not having a vaccine—but our goal was not to have that situation and to have a vaccine that was broadly protective, because when you challenge viruses, they tend to mutate. At the very beginning, we took advantage of platforms that had been useful for us in the past, one that worked in Ebola, another that works in the measles context. And the question was, could we develop a vaccine that had the characteristics that I just talked about? The vaccines did not produce the level of immunogenicity that we had hoped for. But again, that goes back to what I said: You do good science, and it doesn’t promise to pay off. While all of us would want to have seen Merck be a leader in vaccine development, those vaccines didn’t work. So now the question was, how do we contribute? We decided to help J&J manufacture their vaccine. By the way, we’re continuing to do some work in the vaccine area, and we’re developing an antiviral, which I think the world now sees it will need because while these vaccines are important vaccines, they’re not going to be distributed all over the world because of the cold chain. Just think about in

the U.S. how few people are really going to take three doses of the vaccine.

How do you lead people through this?

It was a disappointment but a leader needs to help people keep their heads high because our business is fundamentally about failure. This just happens to be a very visible failure, but fundamentally, it is what our business is ultimately about. So, when talking to our colleagues, it’s maybe not celebrating I don’t believe in the failure, but reminding them that that’s the business that we’re in, and top-down management. that while we were unsuccessful in this I actually believe we situation, that doesn’t change our commitment to actually develop something should invert the really important. In other words, you pyramid because the can’t hang your head. CEO is the farthest This is a great thing to be CEO of the Year, but I’d trade it in a New York person from the minute for a vaccine. At the same customer.” time, I’m pleased that Moderna, Pfizer, BioNTech and J&J were successful.

Take us into your executive leadership team. How do you pick people? How do you know how to deploy them? How do you run and lead your team and therefore cascade down the kinds of important issues we’re talking about here?

One of the things that I’ve stressed from the time that I became a CEO is that I don’t believe in top-down management. I believe we should invert the pyramid because the CEO is the farthest person from the customer, the farthest person from the research bench, the farthest person from the manufacturing interface. I’ve tried to be very clear to my direct reports and their direct reports that the old-fashioned hierarchy that was corporate management is not at all appropriate for the kind of fast-changing, volatile world in which we operate.

I say it this way: If I could do one thing at Merck, and one thing only, it would be to convince smart people that they already know the answer and that they don’t have to turn to senior management to learn the answer.

Keytruda is a great example of that. When I had a chance to meet the two young scientists who began working on Keytruda, they wanted me to know that their boss didn’t believe in immuno-oncology. So they continued to work without telling their boss. Even when the boss kept saying, “Stop, stop, stop,” they said no.

I said, “What encouraged you to work on this, despite the fact that your boss didn’t want you to work on it?” And they said, “Because our boss is really a portfolio manager, not a real scientist. We understood the science here. So, we knew we were onto something.”

I like to repeat stories like that. I say to people, imagine that those two young scientists had accepted the culture of many corporations, which is: You don’t piss off your boss. Imagine how many cancer patients would not have been helped, would not have been cured.

When you’re assessing people, what’s your process? How do you find people? What do you look for?

The scientists tend to like cognitive leaders. The salespeople tend to like more emotion-based, more inspirational people. As a CEO, you have to lead both. You have to lead from a cognitive standpoint, you have to lead from an emotional or inspirational standpoint. You also have to lead from a moral standpoint. You can’t negotiate on integrity.

The second thing is, obviously, they have to manifest the grasp of their area, right? The leader in our research organization has to be a world-class scientist, right? It is non-negotiable, right? Because everybody in that organization wants to know that their leader is a world-class scientist.

Then the third thing they have to manifest is their own concern for people because, at the end of the day, this job is less about managing workflows and more about leading people and developing people. You get the stretch opportunities, those kinds of things.

The other thing we haven’t talked about is the importance of diversity and inclusion, creating an inclusive environment where all people can be successful and contribute.

How do you do that? How do you find people and bring them into the culture, because not everybody is going to be a fit right off the street, right?

Well, I have a problem with cultures where the fit is narrow. What you want is an environment where lots of different people

When Merck’s Covid vaccine hopes failed to pan out, Frazier decided to bolster Johnson & Johnson’s production instead. who come from different backgrounds and have different personalities can contribute. I understand the “fit” word, but I always react negatively to it because the worst thing that you can do is have a narrow culture and groupthink inside your company. Those are enemies of innovation.

What it comes down to is choosing your leaders carefully and watching how those leaders lead. The culture is the leaders. You can say: “I want a culture of inclusion,” but if you pick leaders who don’t value inclusion, those are just words on a piece of paper. You can say: “I believe in empowerment,” but if you pick leaders who keep all the power and make all the decisions, then saying you value empowerment doesn’t matter. The culture is the behavior in the mindset of your leaders.

You became an increasingly public figure when it came to issues around racial equality in the U.S. Can you share why you decided to get involved?

It wasn’t easy to [resign from the President’s manufacturing council]. But again, it comes down to your principles. For me, in that one instance, it was a question of, do you really take a stand for your principles?

And with George Floyd, when you’re a Black CEO and the business community is asking the question of what we should be doing in order to create more opportunity for people who have been excluded, it was my obligation to speak out to people and help them understand the opportunity that business has to close the gaps that exist in our society, the incomes, the gaps, the racial injustices in our society. I’m a big believer that business has that role and can adopt that role.

I don’t want to be too autobiographical, but I feel extremely fortunate to be an African-American born in the inner city at the time I was. Both John Locke and Warren Buffett talk about what they call the random lottery of birth. My younger sister and I, the eighth and ninth of my father’s children, came along at a time when social engineers decided to take a few Black kids out of the so-called ghetto and put them on buses and give them educations. There’s no question in my mind that I was given opportunities not made available for everybody in society. In Hamilton,”there’s the comment about “being in the room where it happens.” Being one of three or four African-Americans who happens to have a place in that room, I do feel a responsibility to speak for the people who are marginalized in our society.

Sure, my job always was to run this company well, to make my margins, to compete for customers, to drive profit, to drive growth. But it’s also the case that if this company is going to be successful—or any company is going to be successful—it’s got to be successful in the context of a society that is successful.

We live in an interdependent and interconnected world. If patients can’t afford medicines, if people can’t find their way into the middle class, how can our companies thrive when the people around us are not thriving? If we’re not able to develop people in this country to do the jobs that we have— and there are about 10 million vacant jobs in the U.S.—how can we hire people? We’ve got a lot of people for whom there’s no access to the middle class.

So, for me, as a Black CEO, it was important for me to speak to the disparities and opportunity that exist in this country. Fundamentally, what makes the U.S. different from other countries is the role of business—that is to say, the private sector, talent, its resources, its infrastructure—to help reinvent our society.

How does the OneTen coalition, the project that you and former IBM CEO Ginni Rometty have been working on, fit in with what you’re talking about?

We have more than 50 companies in OneTen now, and we’ve evaluated our job

requisitions, and 80 percent or 90 percent of the jobs require a four-year degree. Almost 80 percent of African-Americans do not have a four-year degree. So, the question becomes—particularly in the context of 10 million jobs that are not filled—what would the world be like if we based opportunity on skills, not on credentials? What we’ve done is we’ve got 56 leading companies to agree to look at their own internal hiring criteria and to really ask whether or not a job requires a four-year degree.

My son is a great kid. We spent $300,000 sending him to college. He has a degree in political science. Now he’s in New York selling luxury real estate. So, what does he have to do? He goes to a big Manhattan real estate firm. He’s an apprentice. He has to get a real estate license. He has to trade on a set of skills. And it’s not relevant at all that he has this four-year degree in political science from Lehigh University.

What we want to be able to do through OneTen is to create a pathway or access from the inner city or from rural America to the middle class. To me, this whole issue of having more people in the middle class—all of our companies are going to benefit from that.

My dad had a third-grade education. He was a janitor, but he had dignity. Like I sometimes say—and I hope this doesn’t sound corny—I followed my father into the bathroom early in the morning, so I could catch the school bus and go across Philadelphia to, frankly, White schools, which were rigorous. One of my enduring childhood memories was the smell of my father’s shaving cream. That gave me a perspective of what it meant to be a person who actually could hold his head up high. Too many Americans can’t do that. They don’t know where their next meal is coming from. They have housing insecurity, and I think business can do a lot to align society’s needs with our own needs.

In some ways, it feels like business is the only place that hasn’t been fraying the way the rest of it has been fraying.

I’ve often said when I spoke on this issue that if you look at this country, we tend to live in enclaves of people who are like us. Unfortunately, our public schools are more segregated now than they’ve, frankly, ever been. We go to church, synagogue and mosque with people who are like us. We consume media, social media and other media [the same way]. If you’re not in the armed forces, the workplace is the last place in America where you can’t choose who you associate with, who’s on your team. And it seems to me that if we want to lead to the kind of pluralistic society that we aspire to be, CEOs have that role.

This country is so different from other countries. Many places in this world you’re either born permanently in a class that is privileged or permanently in a class that is disadvantaged. This country doesn’t have that. And a large part of the gateway between poverty and the middle class is business.

I just want to believe that business can solve those societal problems. If we lift our eyes up beyond the immediate balance sheet, we have an opportunity to make a difference.

Are you optimistic? I mean, it’s easy not to be optimistic these days.

I am optimistic. Because I believe all of us have agency. As long as we believe in what this country stands for, we can make a difference. And this country has seen good times and bad times. Most Americans believe in the fundamental values of this country. I think that, right now, coming to the role of CEO, when all the opinion surveys show that the public doesn’t trust government, it doesn’t trust religious institutions, business actually has one of the highest reputations in our country, and we are able to solve problems pragmatically. It’s all about CEOs deciding that they are going to lead their companies in a way that not only creates a fair return for their shareholders but creates a fair return for our society. Those two things are not inconsistent. CE

CHIEF EXECUTIVE OF THE YEAR 2021 SELECTION COMMITTEE

ADAM ARON

President and Chief Executive, AMC Entertainment

DAN GLASER

President and Chief Executive, Marsh & McLennan

FRED HASSAN

Former Chairman, Bausch & Lomb; Partner, Warburg Pincus

NEAL KEATING

President and Chief Executive, Kaman

TAMARA LUNDGREN

President and Chief Executive, Schnitzer Steel Industries

BRIAN MOYNIHAN

Chairman and Chief Executive, Bank of America 2020 CEO of the Year

ROBERT NARDELLI

Chief Executive, XLR-8

THOMAS J. QUINLAN III

Chairman, President and Chief Executive, LSC Communications

JEFFREY SONNENFELD

President and Chief Executive, The Chief Executive Leadership Institute, Yale School of Management

CARMINE DI SIBIO

Global Chairman & CEO, EY

JOHNNY C. TAYLOR, JR.

President and CEO, Society for Human Resource Management

Exclusive Adviser to the Selection Committee

TED BILILIES, PH.D.

Chief Talent Officer, Managing Director, AlixPartners

LEADING IN LEADERSHIP DEVELOPMENT

IT’S OFTEN SAID THAT THE TOUGHEST test of leadership is managing through a crisis. Founded on the concept of translating military leadership principles to educate executives in the private and public sectors, Thayer Leadership has been readying corporate leaders to ace that challenge since its inception a little over a decade ago.

Then came March of 2020, when Thayer faced its own leadership litmus test. First, Covid-19 derailed a business model largely dependent on gathering corporate groups for a blend of custom in-person applied academic and experiential sessions set against the iconic backdrop of The Historic Thayer Hotel, located on the grounds of the U.S. Military Academy at West Point. Second, the company’s executive director and one of Thayer’s founding partners, Karen Kuhla McClone, Ph.D., who designed its curriculum and ran its programs, was sidelined by a cardiac arrest.

To have your business revenue drop to nearly nothing and a top leader suddenly out of commission was the kind of one-two punch that could have proved devastating to any business. For Thayer, however, it became something else entirely—a crucible and a testament to the level of resiliency that strong leadership development practices can provide.

“Karen built this organization, and she trained everyone on our leadership team,” says Dan Rice, president of Thayer Leadership, a West Point graduate, combat veteran and author of West Point Leadership: Profiles of Courage. “When she was suddenly out for several months during a time that our whole company had to pivot, the junior leaders stepped up to continue her vision. It was a classic example of strong development, everybody West Point who has been part of Thayer’s faculty since its inception. Hannah, who was recently recognized by PLOS Biology for being among the top 1 percent of the most impactful researchers globally, worked with Kuhla McClone to design a model and assessment derived from the U.S. Army that aims to help companies develop and assess exemplary leadership across six dimensions:

MISSION-FIRST FOCUS: Focuses on achieving goals, capable of planning, organizing, resourcing, tasking, setting goals and objectives, and tracking execution.

PEOPLE-ALWAYS APPROACH: Assesses decisions in light of the human element—not only the toll on individuals of what is being asked of them, but also the effect on their growth and on building the culture of the organization and inspiring and engaging followers.

THRIVES IN VUCA: Demonstrates resiliency and adaptability, is able to persevere and overcome resistance and setbacks.

LEADER OF CHARACTER: Adheres to core set of values—integrity, honor, loyalty, courage—that guide actions.

“There’s nothing quite like participating in a meaningful in-person leadership program, and there’s no better place to do it than the hallowed grounds of West Point.” —Karen Kuhla McClone, Ph.D., Executive Director

responded incredibly well because she had trained them incredibly well.”

Now recovered and back at Thayer, Kuhla McClone shares that view. “When these adverse events hit, our team members were able to carry on and to reimagine the organization to serve our clients during the pandemic by pivoting to digital learning programs,” she says. “It was a demonstration that we practice what we’ve preached in terms of preparing leaders to navigate in a VUCA—Volatile, Uncertain, Complex and Ambiguous—environment.”

LEVERAGING A LEGACY

Recruited from GE’s legendary Crotonville corporate university in 2010, Kuhla McClone spent the past 11 years developing and refining curriculum around military leadership practices applicable to corporations. “She helped us extract the best practices from the military and all of our personal leadership experience that best apply to business into a framework that became the basis of the Thayer leadership model,” says Sean Hannah, Ph.D. (Colonel, Ret.), a former instructor at LEADER OF COMMITMENT: Demonstrates dedication to achieving objectives.

LEADER OF COMPETENCE: Possesses necessary knowledge, judgment and skills, and is able to leverage the competencies of those around them.

Karen Kuhla McClone, Ph.D.

private sector has resonated with CEOs. Over 400 companies and 100,000 leaders in diverse industries globally have participated in Thayer’s customized executive education programs, attracted by both the robust curriculum and an impressive faculty roster of CEOs and former military officers, many of whom had led in battle. “When someone like Lieutenant General Frank Kearney, who has led in some of the toughest situations ever, is standing in front of you talking about leading in crisis, it’s very powerful,” says Hannah.

A PERFECT PIVOT

When Covid-19 hit, companies needed leadership-in-crisis counsel more than ever—and Thayer, which already had invested heavily in digital delivery, starting in 2014, was able to move quickly to respond. “It was amazing how effectively we were able to pivot to digital and blended programs,” says Brigadier General (Ret.) Maureen LeBoeuf, Ed.D., a Thayer faculty member who pivoted to delivering

Brigadier General (Ret.) Rebecca Halstead Brigadier General (Ret.) Maureen LeBoeuf, Ed.D.

keynotes and conducting educational sessions virtually in April of 2020. “After one of our virtual sessions, I remember saying, ‘I feel like I’m back at West Point.’ We were really connecting with participants, and it had the same feel.”

While Thayer has been able to resume in-person programs, the company plans to continue to offer online and virtual components, adds LeBoeuf, who cites benefits to employing a hybrid approach. “In education, there’s something we call ‘soak time,’ which is having the opportunity to let what you learned soak in, to test it and then come back and talk through what worked and what didn’t,” she says. “Spreading learning out with a mix of in-person and virtual sessions could give concepts and techniques more stickiness.”

Incorporating digital components to leadership programs also broadens their reach, adds Brigadier General (Ret.) Rebecca Halstead, who is also a legacy faculty member and has served as a senior advisor on both in-person and digital programs for Thayer. “It’s not always possible, due to cost or space constraints, to bring an entire team for in-person training,” she explains. “When companies bring their top leaders to West Point, they often leave asking, ‘how do we get this out to the rest of our people?’ The digital components makes that possible.”

While agreeing that digital programs may help entice executives hesitant to take time away from the office for a multiday program, Kuhla McClone still sees in-person programs as the gold standard. “There’s nothing quite like participating in a meaningful in-person leadership program,” she says. “And there’s no better place to do it than the hallowed grounds of West Point, where the Army has created leaders for over 200 years.”

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Developing Women Leaders

At a time when many companies are looking to overcome divisiveness, the idea of gender-specific executive education sessions might seem counterintuitive. Yet, women-only programs like Women Leading from the Front Lines can be highly effective at helping women executives understand and address the underlying challenges and personal barriers that may be keeping them from achieving excellence.

The programs were a personal passion for Thayer’s Karen Kuhla McClone, who felt that women executives would appreciate the opportunity to learn about the leadership experiences of faculty members like Brigadier General (Ret.) Rebecca Halstead, the first female graduate of West Point to be promoted to General Officer, and Brigadier General (Ret.) Maureen LeBoeuf, Ed.D., the first woman in West Point’s 200-plus year history to chair a department.

“They ended up being one of the most well-received programs we’ve done,” says Kuhla McClone, who says participants prize the opportunity to share experiences with others who may have similar backgrounds, which they might not be comfortable discussing in a mixed-gender course. “Leading is leading, and the courses cover similar content as our other programs. The real difference is when women are together, they can be their authentic selves. That’s very powerful.”