LEADERSHIP IS NOT ABOUT BEING THE EXPERT – IT’S ABOUT CHANGING PEOPLE’S RELATIONSHIP TO THEIR CHALLENGES.
Often, we think of leadership as an opportunity for us to – finally! – deploy our expertise. That’s understandable: It’s usually our expertise that gets us promoted into an executive role, voted into office, or looked to for answers. Yet, expertise alone does not make for effective leadership. Many leaders fail because, while they know what needs to be done, they don’t actually get things done. Tim O’Brien of Harvard Kennedy School recently published a beautiful case study of a leader who resisted the temptation to deploy her expertise to steer people to a solution: Gina Raimondo, who mobilized the state of Rhode Island to pass groundbreaking pension reform. Her leadership is a model for all of us who aspire to become more effective leaders.
Gina Raimondo
(copyright: Shiho Fukada for the New York Times)
The context: In 2010, Gina Raimondo, a political newcomer, became Rhode Island’s General Treasurer. She faced a significant challenge with the state’s troubled pension system. State employees – teachers, civil servants, firefighters, and police, among others – paid monthly contributions into the pension fund and retirees received pensions. In 2011, the pension system was only 58% funded, with the state spending a growing portion of its budget to cover the fund’s $4.7 billion unfunded liability. Generous benefits contributed to the problem: Employees were allowed to retire early while collecting 80% of their average salary. Cost of living adjustments could boost benefits above 100% of retirees’ final average earnings. Rhode Island had been making modest reforms, such as raising the retirement age, since 2004, without addressing the underlying challenge: Its pension policies were making the state go broke. Keeping its current promises to retirees would require significant sacrifices from all Rhode Islanders, be it increased taxes or reduced state services for schools, libraries, roads, and public transportation.
Gina Raimondo was an expert in the field: She had worked as a venture capitalist covering health care investments. Yet rather than using her expertise to offer a solution, Raimondo chose to involve stakeholders in dialogue about the problem and the reforms needed. Raimondo began by adjusting the assumptions on the return the pension fund would generate, revealing the pension shortfall to be much larger than previously reported ($6.8 billion as opposed to $4.7 billion). She published these findings in a 2011 “Truth in Numbers” report to create urgency for reform. Raimondo then brought together major stakeholder groups from labor, business, government, and academia in a Pension Advisory Group. The Group met five times over the course of two months to engage in problem-solving. Each meeting took place in a public institution at risk of cuts. At the same time, Raimondo brought the challenge to the grassroots by conducting multiple town hall meetings over a four-month period. She would set a microphone in the front of the hall, inviting attendees to share their stories – including their fears and angers – in relation to the pension crisis. The concurrent bankruptcy of a Rhode Island city due to an unfunded pension liability offered a glimpse of the grim future the entire state would face if it did not act.
Raimondo’s efforts culminated in the Rhode Island Retirement Security Act (RIRSA), which included suspending cost-of-living adjustments until the fund was 80% funded, raising the retirement age, and implementing a hybrid pension plan. Despite opposition from labor unions, the legislation passed with significant support and was signed into law in November 2011.
The passage of RIRSA was a major political and policy achievement. Raimondo’s leadership is exemplary of leadership as we define it at KONU: Leadership is the activity of mobilizing people to make progress on a tough, adaptive challenge. Some of Raimondo’s leadership moves that stand out are:
Raising the heat and drawing attention to the challenge through the Truth In Numbers report
Involving stakeholders – both representatives of key constituent groups and ordinary citizens – in dialogue and problem solving, in the Pension Advisory Groups and townhall meetings
Building “holding environments” – spaces in which attendees could voice their turmoil and develop new relationships with each other and a new relationship to the challenge
Directing attention on the challenge, rather than on herself. Pension Advisory Group participants recalled that, beyond framing the issue, Raimondo was not very active in meetings, deferring to the group to debate pros and cons; at town hall meetings, Raimondo would set a microphone in the front of the room, inviting others to share their stories
Holding anger directed towards herself with grace rather than reacting defensively. Raimondo would acknowledge anger, name that she shared that anger, and redirect it towards the challenge.
Leadership is never easy: Raimondo faced political backlash for the reform, including a class action lawsuit and challenges from labor unions in her subsequent run for governor. Yet the reforms she implemented were crucial in averting the state’s pension crisis. Raimondo’s leadership success lies not in the expertise she provided – in fact, the reforms passed were not all that different from the ones that had been proposed just three years earlier by a special commission. Instead, Raimondo’s leadership is so exemplary because she was able to mobilize collective problem solving on the challenge at hand.
Further reading:
Learn more about Tim O’Brien’s teaching and research on leadership here
You can purchase Tim O’Brien’s full Rhode Island pension reform case study from the Harvard Kennedy School case program here for just $3.95
The Washington Post and New York Times have reported on Gina Raimondo’s leadership on pension reform
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