Klaus Kleinfeld: How to Lead Fortune 500 Companies, Manage Energy, Inspire Teams
Today I want you to meet Klaus Kleinfeld, former CEO of two Fortune 500 companies, Siemens and Alcoa.
Klaus just published his book with Scribe, called Leading to Thrive. I read it, loved it, and felt the need to introduce you to him. Klaus shares the hard-won lessons he wants to leave the next generation of leaders.
Links to Platforms:
Here’s what we explored in the episode:
Watching the moon landing as a child from East Germany inspired Klaus’ lifelong belief in the strength of human innovation.
Shifting from time management to energy management.
Finding your purpose is like "focusing a laser" that channels diffuse energy to achieve extraordinary results.
From observing professional tennis players, Klaus learned how mental toughness and micro-recharges help maintain peak performance.
Controlled breathing is a simple but powerful tool to manage emotions and maintain focus during high-pressure moments.
Klaus helped transform and restore purpose to Siemens’ struggling angiography division with the most impactful team meeting you can imagine.
Aligning a team's work with a meaningful purpose motivates teams and improves long-term performance.
His book was born from a desire to share lessons with young leaders, his daughters, and others seeking balance and performance.
Creating memorable moments with his family helped Klaus maintain strong relationships despite a demanding career.
You can instill urgency and align teams by clearly communicating that a situation absolutely requires change.
If you’re considering writing or publishing a book, be like Klaus and come talk with my team at Scribe Media.
Scribe Media helps executives, entrepreneurs, and business leaders to write, edit, publish and market their books.
Scribe created a new category called "Professional Publishing" -- the best of both self-publishing and traditional publishing. With Professional Publishing, the author owns all rights and full creative freedom, so you can do anything with your book. You also keep 100% of your royalties.
You're getting the same level of professionalism as a traditional publisher—book design, interior design, and your own publishing imprint. All with maximum author freedom.
This is how I published The Almanack of Naval Ravikant and The Anthology of Balaji, and what I believe is the future of publishing.
If you’re considering publishing a book, take 20 minutes to meet with someone from Scribe to learn more about the publishing landscape. To get in touch with Scribe, click here or email me to get started.
Learn more about Klaus Kleinfeld:
Additional episodes if you enjoyed:
Paul Millerd: Profits in Publishing, Why Self-Publish, How Authors Make Big Money
Meeting Charlie Munger and Starting RE Costseg with David Senra and Mitchell Baldridge
Balaji Srinivasan’s Most Personal, In-Depth Interview on Transhumanism, Investing, and more
Episode Transcript:
Eric Jorgenson: Klaus, I want to start with a story that I know is maybe, probably a defining story for you, but something that really stuck out for me was your story about watching the moon landing when you were a really young boy. I thought that would be a great place to start this conversation. Will you tell me that story?
Klaus Kleinfeld: I'd be happy to tell you that story. As you've read the book, so you know that I have to frame it a little bit. I mean, my parents were refugees from East Germany, so they were the ones who fled. And my father died when I was 10, and my mother, in an increasing fashion, then went back to work, and in an increasing fashion, sent me back to our relatives to spend my vacation time there. And it so happened that this was also a vacation around the time when the moon landing happened, and obviously everybody was super excited about it. You have to know that in East Germany, it was forbidden to watch West TV, but most people had an antenna sitting somewhere that they could direct towards the West and still receive it in a bad, bad way. But the other problem was that timing was not made for the time zone in the northern European hemisphere, so it was late at night or early in the morning from what I recall, and we set our- I was with my aunt and uncle in a small town between Berlin and Hamburg, so we set our clock, woke up at the time when it was supposed to happen, and the first thing we did, we closed all the curtains before we switched the TV on and changed the antenna. And then the first thing, it was black and white TV. So, before you saw any image, you saw a lot of snow. And then slowly, something like an image appeared and it was Western TV. So, we stayed on and looked at it. And I still get chills as I'm thinking back on it, because it was amazing on the one hand because it showed what mankind is capable of doing, and outer space travel was amazing in general, and then stepping foot onto another planet was amazing. But I think it was more looking at this from a perspective of a split Germany. This was a moment that sent more to all of us. We were enthusiastic and said this is hope that maybe one day, we could all be reunited. And it actually told us the strength of the West, hopefully one day prevailing, and we all had tears in our eyes. And we're very, very excited, very excited after this.
Eric Jorgenson: How incredible to think back on seeing that as a 10 year old from inside a communist country, hiding the fact that you were watching the moon landing from secret police and now at the other end of an incredible career looking back at everything that you've done. I wonder, before we get into some of kind of the tactics, if you could just give us like a snapshot of where you are now? We've seen a look at the humble beginnings, but what's the top of the mountain?
Klaus Kleinfeld: So born and raised in Germany, studied in Germany, started in consulting, then went into the pharmaceutical industry in Switzerland, then started a 20 year career at Siemens, worked in all kinds of businesses there, had a great opportunity, ran Siemens USA as the largest region at one time and then became Siemens CEO, decided at a certain point in time to leave and go back to the US, and I became the CEO of Alcoa, did this for 10 years, and split Alcoa into Alcoa and Arconic. And after that, I really wanted to go on, and after having done so many years in public companies and being in this quarterly cycle, I thought I could do something very different, which I did. Then the call came from Saudi Arabia to look at a very exciting project, which is now called Neom. At that time, it didn't even have a name. I became the first CEO and built a team, found a new CEO, built a strategy and then moved on. So today my life basically falls into three big chapters. One is we formed a family company which is a cooperation with one of the dominant probiotics companies in the world called AllergoSan, the product is called Omnibiotic. It's a super great line of products of professional probiotics. We have that as a family company here for the US. And the second bucket is actively investing through my investment company K2 Elevation into typically tech companies. I'm very strongly interested in software as well as healthcare and robotics, automation. And then the third bucket is advisory, including, I mean, working for the Kingdom of Saudi Arabia on the Neom board also and doing some other things there, as well as working in the field of educating or helping CEOs and leaders all around the world, which is very exciting.
Eric Jorgenson: I am so glad that you're, on both a personal level and now at a very scaled level with this book, sort of giving back all the lessons that you've learned climbing to such great heights. More context setting, it seems you've been very private throughout your career, despite, or maybe that's part of being the CEO of public companies. What made you want to sort of embody your wisdom into this book and publish this at this moment in your life?
Klaus Kleinfeld: Well, first of all, when you run large organizations, you just don't have time. You just don't have time even to sit down. You are occupied, and then there's this brutal force of every quarter, boom, boom, boom. The clock resets, so literally, you can't even think of this. So, I used to be a complete fan of time management and only realized relatively late that it's not about managing time, it's about managing energy. And then the journey starts. It's always a question that puts you onto the journey, and then the journey starts, and what does that mean even? What does energy mean? Where does it come from? Okay, the first thing that comes to mind is, yes, you have to stay fit, sleep, drink, blah, blah, blah. That's very well understood, but then you say, what other energy sources are there? And then you realize, oh, it goes back to body, mind, and soul. What does that mean? And you go back to practices. And then the question comes, okay, once you get the energy, it burns off. And in the morning you start fresh, and then the evening you are tired. How does that cycle work? How do you use the dynamics of energy? How do you build resilience? And then one thing that I realized is this very odd concept of purpose. I've been struggling with this for a long, long time. And I wanted to get my hands around it because I realized it is so important, I somehow had sorted some of it out, but I didn't have enough of the time to look into the foundations and purposes, one of those concepts that has been around as a question as long as mankind exists almost. So, I wanted to dig into this myself, and I said, okay, well, let me write this down. And when I realized that, I said, but then there's also what I call this, this part that I just described, I call this the inner game. But I said the thing that most business books talk about has nothing to do with that. It only deals with what I call the outer game. It deals with how do you build a vision? How do you manage competitive advantages? How do you run large projects? How do you select the top team? How do you build the team? How do you manage your board? But I said there's a lot of learning around that too and how to become an effective leader. But in truth, the second part, the outer game has to be fueled by strength of the inner game. And so, in a way, if you don't know how to work to have energy, you will not have enough to focus on whatever you want. And then this aspect comes, okay, are we just made- this whole work-life balance discussion that I always felt uneasy about because, for me, it was always one. I mean, I never would have stayed in a job that I wouldn't have liked. And I mean, my thought was always, you love it, change it or leave it. And this whole generation of young startup leaders, who pushed themselves to the absolute limit, I've seen quite a number of people who broke down already in their mid-30s, literally physically broke down, physically broke down, and I thought, this is so sad that we allow this to happen, and that all of this together made me think, okay, Klaus, it's time now. I'm going to put it together. And I have to admit one other thought also was to memorialize it for my two daughters who are both in business and work very, very well. And I'm very proud of them, of what they do.
Eric Jorgenson: I love that. I think sometimes the best books come out of a very personal desire to teach just one person or just your children. It really brings out a sense of honesty and earnestness in authors that readers feel and love. So, I love this focus on energy rather than time. And you said that this was a relatively late epiphany for you, so I want to go back to that moment, like where did you learn this?
Klaus Kleinfeld: I was actually here in New York running Siemens USA at that time, and I always had the great pleasure that I worked with people who I really, really liked and had great respect for, and in most cases, I think it was mutual. So, one of these individuals came in late at night, peaked his face into my office, and the door was always open, and said, hey, Klaus, I have news for you. You've been wrong. And I said, wrong? I've been wrong on many things. And he said, well, you've always followed the wrong guidance. I know that you've been pushing us for time management, but in truth, it doesn't matter. It's managing energy. And at that time, I said, what the hell do you mean? And we sat down, and I obviously was ready to defend my position because I thought that this was so well thought through, and I realized very quickly that he was right. And I had to learn, and learn I did.
Eric Jorgenson: And what was the journey sort of unpacking- as you mentioned, there's sort of the first obvious notion, which is, oh, well, I need to take care of my body so that it's healthy. But I feel like you've gone so far in unpacking all the different sources of energy, and I imagine that was quite a journey.
Klaus Kleinfeld: Yeah, it continues. The journey continues because the journey is never over. I’m happy to talk about that. You always learn something. And I think what then happened is, after I was reflecting on it, actually I've noticed another phenomenon. I love playing tennis. I don't play it very well. I wish I could play it better, but I love it. I really love it. And I realized that when you looked at the tennis world, there was a time when there were great tennis players who just burned out. Agassi is one example. He just moved up, boom, burned out. And then somehow they came back. So, I started looking at what happened there, and I realized that there was a big movement in the whole professional athletes that they were realizing a lot of this is a mind game. A lot of this is not solved just with more physical practice, but you also have to look at the holistic self, and the optimization function, which I liked as a CEO or as a business leader, is performance. So, it was not this happiness or health or whatever. It was what I needed most and most leaders need. How do you get performance? How do you stay on top? How do you energize people at a time when you theoretically are very tired? How do you do that? So that got me onto this journey, and I looked into tennis and found this gentleman Jim Loehr who was one of the foundational people, who was at that time working at a volunteer tennis camp and wrote books like Mental Toughness for Tennis, and this was what started that journey. And I thought, wow, why is this not better understood, and that got me into this. And yeah, and then you learn the tricks of the trade and the question then is- Okay, one other thing is, I mean, I always thought there's a lot of fundamental misbeliefs when you start with time. I always somehow assumed that there's equidistance in the relaxation from how much time you use to exert it to how much time you need to recharge it, until I realized that's not the case. Actually, there are ways how you can recharge very, very quickly. Again, tennis was my learning there because what you see today, I mean, almost all professional tennis players use the time between the serve for a recharge routine. They have trained a recharge routine that allows them, the tennis association only allows 20 seconds between two serves, the maximum 20 seconds that they usually have some movement, squeeze the ball, throw it up, but always the same. And the moment they do that, I mean, a movie goes on in their head and it really resets them. And this is another thing that comes from neurolinguistic programming that I got into then and saw, wow, there are methods there that have been used also by special forces very, very effectively, because we know that mental rehearsal is almost as effective as physical rehearsal. So, if you have mental routines, you can recharge extremely quickly, extremely quickly, and get yourself back into a state without getting affected by whatever happened before that and then perform in that state. So that was all part of the journey.
Eric Jorgenson: That's incredible. That I feel like it goes to, I think you outlined a few different sources of energy, physical, mental certainly you addressed there.
Klaus Kleinfeld: Emotional, physical, emotional, mental, and spiritual. Exactly. Yeah. You can chop it up in different ways, but that's the way I chopped it up.
Eric Jorgenson: I want to ask if there's- the tennis example is such a good one in noticing the asymmetry between how quickly you can charge up. So how did you, maybe really tactically, how do you adopt that into your practice, into your leadership ability? I mean, are you in a meeting like running a 10 second meditation when somebody pisses you off?
Klaus Kleinfeld: I have not found anybody yet who says that they run a meditation other than probably in Japan where they close their eyes sometimes for hours in conversation that you don't know what exactly they are doing, whether they are sleeping away, whether they are listening very carefully, or whether they are doing a mental routine. But normally in a Western-style conversation, you are supposed to have your eyes open and be attentive. So, not a meditation, but I mean, one of the other things that I realized, that all of these things have actually one thing in common, and the one thing that they have in common is breathing. Breathing is so foundational for the physical as well as the mental and emotional stillness, or attention level. And that is something that I took on relatively early because I had actually learned it already at university but didn't translate it. I had learned autogenous training at that time, which I liked a lot, which is kind of an old method of the 1910s of self-hypnosis as a relaxation strategy. But that takes time, and you can't do it in a meeting. But when you see what you can do with just controlling your breathing and letting a breath go in, go out, and just doing it, and nobody actually notices that, you can take charge, you can take control of your own emotions relatively easily, be focused again. And I have been using that for, I would say, I mean, decades now, decades.
Eric Jorgenson: Yeah. And being able to, I imagine, even in some of these incredible rooms that you're in with some of the other most powerful and most experienced leaders of either your company or countries, if you're able to maintain that command of your body and your mind and just not let panic rise, not let emotions drive decisions, having that deep keel in that moment must have been a source of advantage or success like many times over, I would think. Has that been your experience?
Klaus Kleinfeld: I sure do. I sure do. And the least that it does is it allows you to not be drawn into emotions that somebody else wants to impose on you. So, you are- in the end, I always say, that's one of the big ahas that many people take away, that they don't realize that you are fully in control of your own emotions. Because I mean they say, oh, this person pissed me off, made me angry. And in truth of the matter, the trigger, it's a trigger that somebody throws at you, but you also can have the capability to not take the trigger, to just say, fine, that's your problem, not mine. You can continue to try to drag me on here, but I'm not following your lead. I'm following my own guidance. So, you don't have control over me. That's actually easier done with a little practice. That's easier done than one would think.
Eric Jorgenson: How do you practice that?
Klaus Kleinfeld: You just have to get into many situations when you are challenged. But yeah, I don't know. I didn't practice it in front of a mirror or anything like that. No, I practiced it every day, and fortunately or unfortunately, I had enough situations, more than enough situations, many, many more than enough situations.
Eric Jorgenson: So, let's talk a little bit about the spiritual energy. I think that one is maybe the least obvious to people and gets back a little bit to what you mentioned earlier as something that we all wrestle with as purpose. Is the spiritual energy associated with the purpose that's motivating the work that you're choosing to do?
Klaus Kleinfeld: Yes and no. Let's start with a simple one like purpose, simpler one like purpose. Purpose is a very, I always thought it's a very opaque concept, and now having had the time to dig into it, what I call the ride through space and time because I started, I mean, with all the ancient religions and then went through what the philosophers, the major philosophers said and looked into more recent views. And what I concluded is, number one, there is no one purpose. There are some philosophies that basically say yes, you should, you should as an individual follow this. Yeah, I mean, if you believe in that, then you should. But it's not that you must, so you have a choice. And the question is do you only have one purpose, or do you have multiple purposes? I think most people probably don't just have one purpose, they have multiple purposes because you also have multiple hats, multiple roles. You are potentially a father, you might be the son or the daughter of someone – you might not be, you are. So, they might still be alive, your parents, you might have to take care of your parents. You might run a company, you might work for something else, and those things you might have different things that you want to achieve and that you get excited by. And also, it changes over time because you go through different phases in life, you reach some of those purposes. But the most important thing is about having a purpose because some people, because they feel it's so complicated, I can't commit to one, they don't realize you can change it. If you are not happy with it, you can change it tomorrow, today, now, if you're not happy with it. But what purpose does is something amazing. It is like what is happening with light when it's concentrated through a laser. Light by itself, now we have a light coming in here from the side from the sun setting in New York, so it's diffused, as you can see. But if it were a laser, it would basically bring the building down. And that's what purpose does to energy. If the energy is diffused, yes, it's great to have it, you can attach it to anything, but if you have a purpose, if you say this is what I want to do, then the energy gets concentrated and literally goes through walls and you get motivated, it drives you, it gives you more energy. So that's on the purpose side. On the spiritual energy, spiritual energy is one source of energy. Spiritual energy is this one thing that almost nobody talks about in business. And I get it because it's a personal decision. At the same time, when you talk about energy as a driver of performance, it is important to raise it because it is the source that potentially, if you have a belief in a greater being that could be with you all the time, all the time. And I mean, I'm a strong believer, and I describe in the book what led me to this. And for me, I mean, I very strongly believe in the creator. You can attach all kinds of names to it, whatever you believe in there. In the end, it's the same. But for me, it's like a radio station. I always say it's a 24/7 radio station that's always on. And whenever you want to listen into it and you need it to recharge, it's there, you tune in. And the cool thing about this radio station, it has a dial-in function. It has a 1-800 number, and you can talk to it. And in a way, you get the feeling it talks back, and for those who have had dark times, real dark times, you know what I'm talking about. And for the others, I hope you will not need it. But when you need it, if you need it, it is a great source to have. It's a great source to have, and to not have it will deprive you of something. That's my belief. And again, and the other question is, well, what if? What if there's no creator? I say, well, I don't know. But then the question is, would I be worse off or better off if I wouldn't believe? And the answer that I give myself is I'm better off believing in it. Okay, and one day I might find there is none, so what's the big deal? I have definitely not lost on this. And I always tell the story, I think it was one of the Nobel Laureates who had, I think, a ski house, and above the door was a horseshoe. And one of the colleagues visits him and comes in and says, hey, what is this? You have a horseshoe hanging over your door. Do you really believe in superstition? And he says, no, obviously not, but I hear it also helps if you don't. So, that's obviously a scientific way to approach this.
Eric Jorgenson: Yeah, I think it's a similar approach with the spirituality, the physical health, the mental health, whereas whether you start with focusing on trying to optimize performance, or whether you start with what is best for your personal health, you sort of end up in the same place when you look through the lens of energy. And I'm curious to sort of go back to this epiphany and as you managed and learned all these new ways to build up and regenerate your own energy, how did you see that manifest itself in your performance? Was there sort of an inflection point in your life?
Klaus Kleinfeld: I mean, I wouldn't call it one step function, but as so many times in life, it's not the answers but the questions you ask that drive your life. And with this reframing on going away from time management, time management does all this question of 15 minutes meeting, bam, bam, bam, bam. Now you say, okay, we still manage the calendar. But before I go into a meeting, I have to manage myself and my energy. So I go into the meeting, I know what I want, I am energized, because as a leader, in the end, you have to energize others. If you go in there and you are burned out, you are in a bad mood, you can't expect to get the best performance of yourself and of the team. Impossible, impossible really. So this is the reframing. And then the moment you look at it, you suddenly realize, okay, I got very angry in this meeting, and the team basically tells me, Klaus, why did you get this angry? We also thought it was crap, and we got it already with your first remark. You wouldn't have had to waste another 20 minutes on going after this and killing a dead horse already 15 times after this. So because- and why did I do that? I didn't do that consciously. I was getting so mad with the situation that I had to get myself over it and to then learn, hey, you know what, don't even start to get mad. You realize the situation is bad. You point it out. You say, I expect this and this and this and this to happen going forward. In the end, you are the leader, and if you feel that the issue is not fixable by that team, you have to make a change with that team. Or if you feel like the team has to get a little bit better guidance, you guide the team. What's the thing here? So, there's no point of getting emotionally charged. If you feel they are not getting it by your simple message, yeah, you may have to dial it up, dial it up once, but then calm down again and say, look, and now let's move on to the next one. So it has, I think, very strongly influenced my behavior and certainly made my life much better.
Eric Jorgenson: How often do you see- you're in very unique rooms with very unique people, heads of state, other Fortune 500 CEOs, executive leaders from a wide variety of- how often do you see that group really have like a strong command over the things that you're talking about? I'm struck by sort of the difference between you being in these very rarefied rooms and still feeling like this book really needed to be written because what you were seeing still sort of shocked you.
Klaus Kleinfeld: Well, I mean, when you're together with a group of likes, it's a very different dynamic. So, I can't- you rarely see CEOs, other CEOs then in their own environment, how they deal with that. But the one thing I can tell you, and this was a motivation for me to write it, is listening, dealing with CEOs, and trying to guide them along and seeing what they are struggling with. And one of the issues is not just in the business world but also in life, because we didn't even talk about that. I mean, one of the things is, I mean, if you have no energy left for your family, then what? And a lot of people basically think, oh, I'm now in the CEO role. I mean, by the way, the tenure in CEO roles has gone substantially down over the last years. So that's the other dichotomy. I mean, when you look at professional sports, it goes up. I mean, the Roger Federer, Rafael Nadal, Novak Djokovic, all of these folks are retiring at a much later age that would have been impossible 10 years ago. Whereas you see on the CEO side, if they stay in the role for three years, it's already long, which also wasn't the case before. Then very often when you look at what happens to them afterwards, they struggle. They struggle in how do they define themselves. And when you then look at some who are in it for longer, I mean, it's not rare that you hear divorce, that they don't talk to their children anymore and stuff like that. So, they're struggling with how do I balance this? And I recently had an experience which was quite fascinating. I was talking to a very, very successful young CEO of a publicly traded company and super, super, a real superman. And at the end of that session, I said, well, let me ask you a question. How happy are you on a scale from zero to ten, ten being the best? And he started, and he said, in business, I am... I said, no, no, no, no, stop. I want to know how happy are you in life. And he goes again, in business... well, sorry, I mean, no, I see one person, you are one person sitting in front of me, you lead one life, one day it starts, one day it's over. I'm asking you how happy are you in your life? And then we continued to talk. In the evening, we sit and have dinner together, and a friend of his is also there, and he says, hey, just... the friend says, how was the day? And he said, well, it was very good, very challenging. And the friend says, well, challenging, tell me more. And he said, well, Klaus challenged me today. And okay, I mean, so the friend says, how did Klaus challenge you? He said, he forced me to realize that I can't distinguish between my happiness in business and in life, that it has to be one thing, and I am one. And I thought- and we all laughed about this because it is something that needs no pointing out; we all know this. So, at the same time, our industrial mindset has been almost brainwashed so much that we feel forced that we distinguish between the business world and the personal world until one day life takes over and it ends it. And then the distinction disappears. So that's why I think it's really important that people understand how to manage your energy and also how you use it then to have a fulfilled, a successful and fulfilled life for long, and success and performance in business and a great performance in life, and these things go together in my view.
Eric Jorgenson: Yeah, I think that's an important part of probably the context for this whole conversation that I should have added earlier, like not only have you achieved these wonderful things in the professional world, but also married, kids, a successful family life and physical health, despite a really heavy burden on the work side of things. And in the conversations I've had with friends about you and your book and your message, that's the thing that people are most curious about. So how do you balance those things? How do you manage your energy for life and work and family?
Klaus Kleinfeld: Well, I mean, you just have to try to have as much as possible and then make a decision on how best to use it. And I think that, I mean, one of the things also is, again, to the point that I said earlier, that it doesn't have to be equidistant. I mean, I was all the time traveling. I was gone a lot when my children grew up. But as you correctly said, I have a great relationship with them, and it was not a function of me having been around that much. It was more a function of what I did at the times when I was with them. So, it required a certain discipline that, for instance, when I was there, that I took the cell phone away and listened to them and had conversations with them. We had a practice, I had a practice that I created what I called special moments that are memorable, that we did something good. And don't think of it like glorious things. It could well be, I mean, when the kids were younger, we lived close to a place that had a nice basketball court just around the corner. And just to take the basketball and go out and play a little round with them and just be out in the open or go for a long walk and have a conversation with them. And when they realize you are there for them, you are interested in them, you have a dialogue, I think that's the most important thing. Creating these special moments worked well for me.
Eric Jorgenson: Are there any other micro habits that come to mind for you that are frequent?
Klaus Kleinfeld: Yeah, I mean, I work out religiously every morning, religiously every morning. And my office knows that, that wherever I am, I need to get a workout in. And the workout is, again, a wide variety. I have the shortest thing that I can do is my seven minute workout, so a classical old routine from the military, so that you basically use a major part of the muscle, the biggest muscle groups in seven minutes. Nobody can tell me that you don't have time for seven minutes. And so, seven minutes, boom, gets you back.
Eric Jorgenson: I love how many times in the book I had the feeling that they were such specific and tactical things. You literally list out the movements and the timeline of the seven minute workout, and you're like, this is so fundamental. It is just such a good- over and over again, I sort of felt through the book and through your experience in this conversation, just you absolutely have to nail the fundamentals. And it's an ongoing journey to find the ones that work for you and keep them implemented.
Klaus Kleinfeld: But we've also- I mean, I think people get the impression now that the book is only about the inner game because that's what we mostly talked about. The book is also about the outer game, these things that are typically business books. So it has both of these things. But you're right, I mean, my idea was always to say I want to write it as it is. There are some, quite a number of parts in there where I think that people will probably read it twice and say, what he has been writing there? Because it's probably not the most popular way to say it, but I'm not in the popularity contest, I'm in the contest of describing the world as it is and at least sharing my view on how to deal with it, and some of it is not pleasant. And I wanted it to be as practical as possible because I realized that when I got into real senior leadership positions, that a lot of the things that came as challenges I was not aware of. And I don't think that anybody had been prepared. And I see this again and again and again, and particularly when you get to the CEO level, where it's really true, I mean, it is lonely at the top. It can also be highly rewarding. And those two things come together.
Eric Jorgenson: That was a fantastic transition; you beat me to it. Let's talk about the outer game and let's talk about some of, with that teaser, what do you think are maybe the most controversial or unpopular surprising things that you laid out here?
Klaus Kleinfeld: I think that it starts with a fundamental about what is leadership, and I don't know how often when you ask what's leadership all about, very rarely do you see a definition, and as a good German, you always look for a good definition of things. So, for me the best thing is, I mean, to make people do what you want them to do at the time you want them to do it. So, this is free of any value. So, it means that leaders who have that capability can use it, misuse it for bad things, and history has shown this, or you can use it for a lot of good things. So that's that. And then the second question is what gives leaders these types of capabilities? And the truth is, I mean, it has a lot to do with energy, there we come back, and also with power. What type of power do people have? And power can come from multiple sources. It can be the power of persuasion. It can also be a formal power. And that I think people even at business schools rarely talk about. And some of my friends would say the education there comes closer to educating tree huggers than true leaders. I wouldn't go that far, but in some cases, you feel that there is a misconception of people who are coming out of that school. Another fundamental point is what I've seen again and again and again, people think that they get promoted into a role, they have a bigger office, their name is on the door, and they have a role, and they think now they are a leader. Oh man, I mean, if only you knew, because leadership is not assigned, it gets assumed. So, I've seen again and again and again that people have been put into leadership functions, but in truth of the matter, they have not been performing as a leader. And I've also seen the opposite where people did not have the formal role and basically took on this mantle of leadership and led and became the de facto leader and did some great things, and history is full of examples for both. But those are things that I think should be understood by anybody who's in that kind of business field.
Eric Jorgenson: I think those are fantastic. And I agree, there's not, aside from maybe one or two books or authors specifically, it feels uncouth almost to talk about power directly.
Klaus Kleinfeld: I agree. I agree.
Eric Jorgenson: Is that the thing that you sort of alluded to as maybe an epiphany that you or something that you observed as you rose through the ranks or became senior leadership?
Klaus Kleinfeld: No, I mean, funny enough, it came to me at a young age, really, really funny. Yes, I was together with friends. I was very young at that time. I think I was probably 14, 15 years old, and I grew up in a not very rich neighborhood in the north of Germany, and we always played together, and we were running a little business by collecting some flowers in the wetlands and trying to sell them, and we were probably about ten people or so. One time, there was a situation where we weren't quite sure what that meant for us, and everybody was looking at everybody else, and the eyes were all going on me, and they said, well, Klaus, you have to take the lead here. And neither was I the oldest nor the longest tenured or the strongest or whatever. And I thought, what the hell is happening here? What has happened here? And we did it, and I mean, we were really nicely successful in this endeavor. So that got me thinking, what happened? And in a way, I think what had happened before is that there had been situations before where even without a discussion, with much less at stake, I had taken the leadership and just, I mean, did something that in the end had the teams, this works well, this works well. And I've seen this throughout my career again and again and again and again.
Eric Jorgenson: Has it changed how you conduct yourself at work?
Klaus Kleinfeld: I have always lived along that principle, and as those who have worked with me know, one of my mantras has always been, it's easier to ask for forgiveness than for permission, particularly when you are in large organizations. But I put a but to it, and I said, but if at doubt whether you are putting a hole under the waterline, you have to involve your seniors. You have to involve your seniors. So, I expect from you to have the smarts to try stuff out and be entrepreneurial. Sometimes, don't wait for the last approval to come and go do it. But I expect from you, because you're going to be responsible that this is a smart decision. That if in doubt that it is not a smart decision, that you seek the advice, because I don't want a culture of people shooting from the hip because that's very often, in a very male dominant environment, that's considered great leadership, the fast decisions. Let's do it fast. I don't want to hear anything. We're going to do it. Let's do it. You know what? I mean, it’s better be sure that we prepared it well, and I'm not saying that we have to have a hundred percent solution. I'm all for fast decisions, but fast and smart, not fast because of fast. Fast and smart is the thing.
Eric Jorgenson: One of the other, I don't know if this falls into your, if you think it's going to be contentious or not, but I thought it was so refreshing how you addressed change in the book. And I'm curious, if you don't mind, I'll read a little excerpt because I'm sure that there's a story behind this, and I want to hear the story or set of things that created this opinion for you. So how to create change. In simple terms, create a burning platform. To make people act, you need to create a credible set of arguments as to why the only option is change. In my experience, don't just talk about what you want from them. Talk about the outside world that's requiring these changes to be made in the first place so we can all win together.
Klaus Kleinfeld: Yeah, so what's the question?
Eric Jorgenson: I think, I'm curious what the experiences are that drove that opinion and whether specifically you create a burning platform even where one might not actually exist?
Klaus Kleinfeld: Well, the latter I would probably only do very carefully. But in most cases, in most cases, there's enough areas where a burning platform exists. I mean, what drove me there is my experience at Siemens from an early time on, where Siemens had I think when I started, 130 plus different businesses, and quite a number of those were not in the best of shape, so they always had a good set of businesses that were struggling. And I had the pleasure, really, to get to know a lot of them and work in them. And what I was surprised by is that as an outsider, that I was, I looked at it and I thought, well, this needs to change. There's no way this can stay this way. But when I came to see the people who were in the business for a long time, I was surprised that they did not share this. And that led me to one other conclusion and one other mantra of mine, which is if intelligent people look at the same facts, they seem to come to the same conclusion. So, the first thing I realized, very often people who are in the business have a very inward looking tendency, so they are not knowledgeable of what is happening on the competitive side or what's happening on the customer front. And they somehow assume that life is constant, and they have not realized that there is, for instance, a technological shift, a technological shift that literally attacks the whole industry and will move the whole industry into basically non-existence if one doesn't have a quick answer or an answer to this. So, the first thing I would say when I say burning platform, I mean that let's give people these facts. Let them know that in the end you have to have, I mean, what creates good businesses? Good businesses are created only if you have sustainable competitive advantages. So, then the question is, okay, you have the word advantage and competitive. Competitive means it's relative to who else they can choose. So, you have to look at your competition. And advantage is not defined by you, it's defined by your customer. And there are only two advantages. I mean, one advantage is you offer something cheaper to your customer or you offer something to your customer that increases the performance of the customer. So, it's actually, I mean, in terms of conceptually, it's relatively simple, but it's fascinating how rarely people go through this motion, and very often when people are in certain functions, they don't have access to this data. And then if you have leadership that is not open enough because they are somehow drowning in their own success, that's a classical one. You have a division that's been going very well, and then they basically say, oh, we are great, we are heroes, wonderful. And they are not looking. They are not looking. And while they are thinking they are the greatest, somebody else comes around the corner and just beats the crap out of them, and then they wake up way too late. I've seen that. I've seen that more than once. Or people who just don't have the skill set. When you see, for instance, that a business that's very strongly hardware driven gets replaced by software. These are two very different worlds, and they very rarely communicate with each other. And suddenly, people realize, my God, I mean, I always thought that you need this hardware, but in reality, this is going to be completely wiped out. We don't need specialized hardware. A normal computer can do it. I mean, the best example of this is this little piece here. If you think about, I once did, while working at Alcoa, I once, at a management meeting, I put all the devices onto the stage that this little thing has replaced. Unbelievable. Unbelievable. The number of devices from typesetters to dictaphones, the amount of that stuff, your record players, photographs, so this is huge, lexica, all of this gone. Gone. Just think about it. My dream when I was little, it was always that I have an Encyclopæda Britannica. I always thought one day, I will be able to afford it. Hell no, what do I need a lexica-? I now have Chat GPT. I have Chat GPT that's even better because it gets updated every second, so amazing. So, this is mainly- and then once you communicate that, you have to make clear to people, hey, look, I mean, there's no way we can stay where we are. And very often, you don't know how you're going to get to something else. So, in a way, I think the first thing is you have to make them understand not changing is not an option. And we will then, we first have to change. We first have to say the past will not be our future and lock it down and say, this is it. We have to now go into whatever else we can get, get our motion on and move, move into a different direction.
Eric Jorgenson: You alluded to something there that I think you were exceptionally good at. There's a few of these stories in the book of not just speaking about a vision or a customer problem, but demonstrating it the way you did with showing all the devices that the iPhone replaced. There was one that I highlighted like three pages straight when you were telling this story, and I would love to have you share it again here. When you took over this downtrodden division at Siemens that had this really sort of ugly view of itself and its work and it just didn't see, it didn't have purpose like at the organizational level and it had a bad track record of leadership, and that was a fantastic display of leadership. I would love to have you share what you did.
Klaus Kleinfeld: Yeah, so your description of the team there is not correct. It was a great team. It was a great team, but they had been beaten down by the circumstances, and I’ll get to this. So, this was when I was asked to take over the angiography and x-ray division at Siemens Medical, the headquarters at a small town close to Nuremberg in the north of Bavaria called Forsheim. And the nice thing about this location is you have manufacturing, R&D, marketing all in one place, so everybody is there. That's nice. And they were co-located with the computer tomography folks, the same building, we used shared facilities. And what had happened is this place, angiography and x-ray, was the birthplace of Siemens Medical, with Mr. Rundgen inventing the x-ray beam and Siemens giving him all the devices for this. So, this was history that has changed all of us and continues to change, to benefit all of us. And they have been hugely successful over years, and then somehow, these new modalities had come on, computer tomography, then magnetic resonance imaging, ultrasound imaging, all of these new things had come along, and they did 3D images, very cool. And what happened is these folks somehow were pushed into, oh, these are the old guys, they were becoming unprofitable. They had gone through a number of revolvements and didn't get to profitability. I didn't know them very well, but one thing I did before when Siemens leadership wanted me to take on, I said, well, what I'd like to do is, because I don't know the field well enough, I'd like to go to some customers and spend time with customers. And they say, oh, this is good. And I said, I don't mean to just go there for a few hours. I really want to spend time, kind of like being a doctor or a nurse, being in a hospital, seeing how the equipment is used. And they said, okay, we'll arrange that. And they picked out two hospitals. One was in Munich, Ludwig Maximilians University Hospital, and the other one was the Cleveland Clinic. So, I spent about a week at every place wearing the white coat of one of the doctors who was out that day, and being there the whole day and seeing what's happening. And I realized that the doctors who were using our equipment were extremely excited because at that time a new thing had come around which is called minimally invasive treatment, so image guided treatment where you can basically put an image, a guide wire into your body and then go through the bloodstream and go to wherever you want to go, being the heart, being the brain, being at other places, and you do it all through image guidance, so that you know where the guide wire is, and then you do your procedure there. So that was amazing. So, you suddenly had a modality that could not only diagnose but could also treat people. And that was the issue before, some of our equipment was able to diagnose certain things, but then what do you do with the diagnosis if you have no treatment? In this case, we suddenly had something where you could treat and change it, and minimally invasive without having to put the person under. It was amazing. So, I came back being completely excited and then started my job. And I will never forget, I get into a meeting of the senior leaders, and I come into the room, and they knew me, but from another role that I had. But one of the people who I was very friendly with, in a flippant way, but I think telling what he really felt, he was yelling out when I came in, hey, here comes the new guy who's going to run all the rusty nuts and bolts business. And that was basically how the team was treated. The rusty nuts and bolts business, everybody's looking down on them. Whoever was good tried to upgrade and go to either the computer tomography or the MRI folks. So that's how they felt. So, the team felt really beaten down. So, I was thinking how do I get my excitement into them. So, we had a thing, I had established a thing called basically an all-hands meeting that I did once a month in the canteen after lunchtime. So, I called the university hospital in Munich and said, do you have a patient who was treated with our equipment, who I could invite to come over and tell the story. And it took a week, then they said, hey, here's this young woman, blah, blah, blah, she'd be happy to come over, you can talk to her. I talked to her. She came. I didn't tell anybody. So, at the end of the session, I said, well, I invited this young lady, and I want you to listen to her story. She goes on stage. I hadn't told anybody else, and they were thinking, what the hell is this? This young woman comes on, and she's talking about herself, that she's a swimmer, that she went to school, was a swimmer, and then all of a sudden, had this issue with blood clots, blah, blah, blah. And then got diagnosed with this, had to stop, and then was treated with the minimal invasive procedure so that the blood clots wouldn't get further in her body and would get caught. And obviously, this was done with our equipment. So, you could hear a pin drop, I mean, when she told the story. And what happens in the medical industry, because it's highly regulated, you have to, for every step, you have to document who has been working on this. So, I also knew which equipment was used for her diagnosis and treatment. And I'd given her before the names of the people who had worked on that. So, at the end of this, she pulls this out and says, I've come here to get to know these people who basically saved my life. And she read the names out and asked them to come on stage. And this is the northern part of Bavaria. These are people who have seen a lot and they are strong, so are not easily emotionally moved, but I've seen people being very moved. And they asked me, hey, Klaus, can we show her around? I said, yeah, go ahead. That night, I'm sitting back in my office and the head of the labor union sticks his head in, doors open as always, and he comes over and shakes my hand and says, Klaus, thank you for what you did today, you gave us our soul back. And that was the point of, they had really forgotten how great they were in doing the things that they could do. And from then, I mean, the turnaround was almost inevitable. I mean, it's not correct. There were a lot of other people then who did a lot of things, but the spirit, the spirit was changed because people understood we are doing something that no other modality can do, and we are literally saving lives. And whenever they had a bad day, they were thinking of this young woman who they changed with their own hands. And it was fantastic. It was also, I mean, something that I still today am very, very happy about. And today it's a super, super, again, super, super successful division doing outstanding things that help us all every day.
Eric Jorgenson: That's such an incredible story. And I think I took that as so motivating to just raise my bar of like what it means to really communicate an idea thoroughly to the point where it inspires action in people and changes how they think about themselves and their work. And I thought that story really eloquently tied together the outer game and the success that you've had as a leader in business and really motivating a whole group of people with the emotional and spiritual energy of infusing purpose and meaning in what they do that we covered as such an integral part of driving the energy.
Klaus Kleinfeld: And sometimes people would say, hey, this was easy because it was a medical field, but we did something similar in Alcoa. We invited an astronaut to talk about what was going through his head the last moments of the countdown and thinking of, I mean, there's only this little much of aluminum that separates you inside of the capsules from the uninhabitable space, and when you know how much dedication to quality has to be there, because even a grain inconsistency can make this thing blow up. So, I think you just have to think hard, how can you instill a purpose back into people, so that they see this is worth. My test is the breakfast test, the Sunday morning breakfast test. What do you say when your children ask you, Daddy, we haven't seen you all week, no evening of the week, what happened? And if you say, oh, I've been doing this and this and this, or if you say, hey, I've just made sure that our next mission to Mars is going to be absolutely spectacular.
Eric Jorgenson: Yeah. And I imagine that's a big part of what infuses, what bridges that work-life balance, of not feeling like both are trying to tear each other apart, but infuse them together, make them inspire each other and reinforce each other. I know we're getting close to time here, but I just have a few closing questions I want to end with. How do you approach balancing stakeholders? On the work context, you have shareholders, you have employees, you have vendors, you have customers, and there's often trade-offs between those. And in the same way, family, community, husband, father, son.
Klaus Kleinfeld: Yeah, so let's start with the business discussion on that. That's one of the- that's an almost as equally painful one than work-life balance because that's the discussion about the Chicago School of Thought, it was basically saying business is all about business and portraying this as though it is a contradiction to the stakeholder concept, stakeholder versus shareholder concept. In my view, in reality, it basically merges, because in the end, how does a company make sustainable profit? You have to have a great product, you have to have great people to make it, you ideally want to have customers that are very, very happy about it and pay you well for it, and you have to have a community that wants you, otherwise they put in legislation and make your life miserable. So, you have to have suppliers that want to work with you. So how on earth do you think you can be sustainably competitive if you are not managing all of these relationships? It's an illusion. So you have to follow that, and almost all good business leaders do. Yes, I understand that sometimes you see that this has gone too far, and that’s another debate. So, I think in the end, to be successful, you have to manage multiple stakeholders. And the focus that you would address is different from time to time. I mean, you have some situations where you deal with supply chain shortages, and you have to spend a lot of time on this. You have situations where you have really mad customers because you didn't deliver a product that was ready yet, so you have to deal with that. You have legislation, which is kind of crazy potentially coming down on you, where you have to educate the politicians. So, this is like, I always thought of it like juggling a number of balls and just trying to make sure that none of it drops. You don't have to be the juggler alone. That's why you have to have a good team who juggles with you and where you can pass the ball on to somebody else and say you take care of it now and just don't drop it. Move it on. We didn't talk about top team. That's a really, really important thing because, yes, it's important to be a good leader, but the most important part of the leader is to get good talent and to bring them together to work as a team. That is the most important thing for a long-time success.
Eric Jorgenson: What do you look for when you are building kind of a team that reports to you?
Klaus Kleinfeld: Well, I mean, I first look at, I believe in the T-shaped leadership model, so to say. I usually look at, I think of a skill profile like general skills like communication skills, language skills, and that's kind of the horizontal one. Then I look at the legs. I mean, where have they ever shown in their life that they did something that was drilling deep holes and getting into subject matters? And I want to see that because to be successful in leadership, you have to have the skills and the lack of fear to sometimes dive very deep and dive deeper and deeper and to get to the bottom of the truth. So, if you just have what you see sometimes delivered from MBA schools, just have the general management stuff and not the depth, you are ill-prepared for leadership situations. So, I've always looked at that, and it's really interesting how much differences you see. I look at excellence. And then the other thing that I look at is the capability to work together in teams. So, I always distinguish like, I mean, in my birthplace, soccer is the big thing, and I continue to love soccer. And you can see it in soccer, and you can see it in all group sports. You have a team of stars, and you have a star team. And the team of stars is not necessarily the one that wins the cup. It's typically the star team. And what is the difference? The difference is that even the top players have the capability that they look at the field, and if they see somebody has a better position than them, they pass the ball, and boom, it goes into the goal. That's the star team, and not just a team of stars. And so having great people, but also having people who can work very well together, that's the magic there.
Eric Jorgenson: Love that answer. That's fantastic. I have not heard someone refer to the bottom of the truth before, but I love that as a little idiom. I have to get to the bottom of the truth.
Klaus Kleinfeld: What I mean with that, that has probably more depth than you think it has because as a CEO, very often I've seen that they make a presentation for you, and you don't understand this. You ask questions. I lead with questions because I'm not the expert in many of the fields, but I can become the expert relatively quickly. So, I ask questions. I get an answer. I don't understand that. I ask another question. I still don't understand it. And I ask another question. And then people often who didn't know me or don't know me say, oh Klaus, this is complicated. Wow, that's one of the red buttons you better not push. So, because then I'd say, well, look, I mean, I have all the time in the world, and I would like to understand this complication, but you know what, we don't have the time. I said, I have all the time. And by the way, I just want to let you know that it is your role to explain it to me because I am your boss. And I have seen, if you are really an expert in something, you can simplify and explain it in such a way that almost everybody understands it. So, I'd like to hear from you what is really going on there, what is really going on there. And you wouldn't believe how often you see that it's the individual who hasn't understood it. And one other thing that I usually measure in leaders, I measure in leaders how they can look around the corner. I don't want to have somebody explaining to me why certain things went wrong. I want somebody to explain to me what could go wrong and what actions you are prepared to take and how you could use opportunities. Somebody who knows the business very well understands how to do that. And that's what true excellence looks like.
Eric Jorgenson: Love it. I've been taking copious notes. I wish your book was longer. You've got so much, so much wisdom to share, Klaus. So I think my closing question here, and then I want to have you direct people to the book and anywhere else online, but what is the piece of advice that you have repeated to your daughters most often?
Klaus Kleinfeld: Well, you know the relationship between father and children is not as such that you constantly are giving advice. I think what I have learned, I think I have learned through parenting is it’s not about what you say, it’s more about what you do. And there are times when you think they are not listening, but I can tell you they are watching. And they can very well, like in true leadership roles, they can very well distinguish whether what you say is really what you do, whether you put your word where your mouth is or whether you talk a good game and in truth you are not. You're dealing with it in a different way, your credibility. And I think that's more important for them. I mean, they've seen me in many, many situations, many, many situations, not all of them were very pleasant. And I think they’ve watched and my impression is they took a lot of good things away, and I'm very happy with them.
Eric Jorgenson: Thank you. Thank you for sharing that. Thank you for taking the time to do this interview and thank you for writing this book. I think you've accrued an incredible amount of wisdom, and I appreciate you sharing it in such a straightforward German no bullshit way so that we can learn from it and those of us trying to build great companies and become great leaders can pick these pieces up and run with them. Where would you direct people who want to see more from you or learn more about you, follow you online?
Klaus Kleinfeld: Yeah, well, I mean, are you going to put a website link or something in there? So, the book is called Leading to Thrive: Mastering Strategies to Successfully Lead a Sustainable Business and Life. So I would encourage you to take a look and read it. There's a website where you can find it and you can find the book on almost all places, Amazon being one of those. And it's only available in English, but available in all kinds of shapes and forms.
Eric Jorgenson: Thank you. Thank you so much, Klaus. It's a book I'll be revisiting often and gifting to others, and appreciate you again for taking the harrowing writing journey and sharing what you've learned.
Klaus Kleinfeld: Pleasure. Thank you very much, Eric, for this interview. Thank you.