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Follow The Timeless Wisdom Of “The Rule Of Three”

Schering-Plough's former CEO Fred Hassan explains how to harness a million years of human evolution to bring clarity and order to your planning.

Two thousand years ago, “I came, I saw, I conquered” came from Julius Caesar of Rome. Two hundred years ago, “Life, Liberty and the Pursuit of Happiness” came from the U.S. Declaration of Independence. Today, people in large parts of the world start an event, such as a race, with “Ready, Set, Go!”

Why? Because the human brain is wired to process information in patterns, and the smallest, most easily memorized and most easily repeated pattern is a pattern of three elements. This makes the “Rule-of-Threes” a component of the toolkit for most executives, especially CEOs.

In my present role as board member and chairman of two companies, as well as in past roles as chairman and/or CEO of six companies—one large, one small and two mid-size—I’ve used this Rule-of-Threes to help bring clarity and order, even as the world becomes increasingly complex and turbulent.

Here are a few practical examples in my toolkit: As a board member, when I hear a presentation on a strategic plan, I ask, “What are the three levers that will really move the needle? What are the three potential plan-busters? And, what contingency mitigators do we have in place?” In assess-ing priorities for the company, I ask, “What are the three priorities that really matter, and how do we communicate those?”

In companies where I am the chairman, we use the Rule of Threes to very clearly indicate the individual behaviors and team behaviors we are looking for from our people. The individual behaviors we value are: Passion, courage and tenacity.

People can contribute through their team behaviors to our high-performance culture by: being mindful, being likable and rooting for the person next door.

In looking for potential successors to C-level jobs, we look for IQ, EQ and values. We acknowledge that the “values” part is the hardest to assess. Being trustworthy is only part of “values.” Three special questions we ask in assessing “values” are: “Will he do the right thing, even if it comes at a personal sacrifice?” If nobody says “thank you” after she did the right thing, will it matter to her or not? After successful wins, will he continue to show humility, keep learning and keep building energy for future wins?

In looking for the best leaders, we look for the individuals who are liked, trusted and respected. It is very common to see leaders have two of the three—and those few who have all three are the leaders we truly value.

Also, in my present family company, Caret Group, we regularly present three goals to our employees and discuss them in forums— again and again.

They are sales, profit and culture, specifically, “Grow sales—strong double-digit; drive margins to strong double-digit by 2023; build a special high-performance culture.”

In selecting people for our field force and, for that matter, for any job, we look for will, skill and fit.

At Schering-Plough, after the $16 billion Organon acquisition in 2007, we laid out three clear objectives: Make the merger work; secure the topline, the bottom line and the R&D pipeline; save costs and invest wisely.

We repeated these goals again and again until we were able to get more than 80 percent of our 8,000 front-line managers to spontaneously repeat and emphasize these common global goals to their people. By repeating these three goals, we got our 50,000 people in 60 countries to make them their own big goals and to then to help the new-ly merged company move in the same direction.

Our merger turned accretive in the first quarter. Our R&D pipeline later produced a cancer breakthrough, Keytruda. Keytruda is now worth several tens of billions of dollars in value to Merck, which later acquired Schering-Plough.

CEOs can use this Rule-of-Threes to simplify, to prioritize and to communicate. Often, three big objectives can help CEOs create clarity and resonance when they communicate with their people.

As we transition into the Digital Age, there can be a tendency to declare old management principles obsolete. Some principles, however, are timeless. The human mind is wired to work naturally with the “Rule of Threes.”


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