How To Grow Successful Leaders

The best leaders grant authority and then try to minimize mistakes by creating a modicum of control and by keeping people from straying too far from the company’s goals and values. On a day-to-day basis, that’s a hard act to pull off. The best CEOs use different metrics for monitoring and enforcing that balance between control and autonomy. The challenge here is to create an environment that provides both psychological safety and accountability. This is another polarity that leaders must master. On the one hand, a safe environment can’t come at the cost of accountability. This can lead to a culture of complacency where tough conversations are avoided and highly motivated people become demoralized. On the other hand, a safe environment can’t be sacrificed on the altar of accountability. This can lead to a fear-based culture.

One leader who balanced a safe environment with accountability is Frank D’Souza, the former CEO and cofounder of the global technology services firm Cognizant and cofounder and managing partner of Recognize, a technology investment platform. Cognizant helps corporations modernize technology, reimagine processes and transform experiences so they can stay at the forefront of our fast-changing world. D’Souza became CEO of Cognizant in 2007 and grew the then $1.4 billion per year revenue company more than tenfold; when he stepped down in 2019, the company was bringing in over $16 billion per year. Cognizant appeared on Fortune magazine’s “100 Fastest-Growing Companies” list for 11 consecutive years. He attributes much of his success to a system that he says helps build strong, purpose-driven and independent leaders who consistently operate at peak performance.

When D’Souza took over as CEO, he faced a problem that many business leaders would love to have: His company was on a rapid growth trajectory. Yet he knew that if he didn’t attain a certain size and scale, his IT firm was going to get stuck in the middle of the pack with a market position that was too big to be as nimble as a small company but not big enough to compete in the major leagues. Growing Cognizant to scale was of the essence. His core constraint, however, was not capital— it was leadership. D’Souza believed he needed to grow leaders at least 20 percent faster than the growth rate of the company; if Cognizant was growing by 50 percent annually, he would need to develop 70 percent more leaders than he had the year before.

D’Souza recognized that the growth he was striving for would require him to take significant risks and make bold decisions that would prove make-or-break moments for his tenure as CEO. “My philosophy is we rent these jobs; we don’t own them,” he says. “We’re in these jobs for a very short period of time, so every day you’ve got to earn the right to be in that chair, and if you’re not earning the right to be in that chair then you shouldn’t be in that chair, and if there’s somebody better than you, you should step down. My stewardship of the company and my fiduciary obligation to all my shareholders and my other stakeholders is to maximize the value of the company, not to do what’s best for Frank.”

To the challenge of growing high-quality leaders so rapidly, D’Souza applied an engineering mindset. First, when hiring, he searched for people who were both highly capable and intrinsically motivated. “As a young CEO,” he recalls, “I had this deep-seated fear that I didn’t know enough to do the job, so I found and surrounded myself with extraordinarily qualified people who were smarter than I was. That was the only way that I could learn and grow. But capability was not enough; I also wanted people who took initiative and navigated novel and complex situations without my direct involvement. I had read a lot about intrinsic motivation by researchers and writers like Edward Deci, Daniel Pink and Jim Collins. Intrinsically motivated people want autonomy, they want a sense of mastery and they want to feel purpose. Developing intrinsically motivated leaders who were highly capable became the core of our leadership development approach.”

To help his leaders succeed, D’Souza created an environment in which Cognizant managers were encouraged to pursue autonomy, mastery and purpose, and then he stepped aside to let them do what they needed to support the company’s objectives. “It was a culture of high psychological safety,” he says, “where people felt comfortable working on their own and doing their own thing.” He gave them the freedom to hone their skills and become the best in their class at what they did.

Next, he combined deep empowerment with a rigorous performance management process so that he could identify where leaders were doing well, in addition to where they were falling short. The idea was that D’Souza could maintain their sense of autonomy, but, when necessary, intervene and try to help them grow. “Our core philosophy was that we wanted to serve a small number of clients and we wanted to serve them very deeply,” he says. “Everybody says that, but we tried very hard to live up to that ideal in everything we did. That meant that we had to keep decision making very close to the client. We couldn’t be top-down and bureaucratic. Issues couldn’t come all the way up to headquarters every time a decision had to be made.”

To keep his leaders close to Cognizant’s customers, D’Souza made sure they had the resources they needed. He also created tools to monitor their performance. He installed a leadership dashboard consisting of four basic metrics meant to keep his leaders on track: revenue, profitability, employee satisfaction and customer satisfaction. D’Souza viewed these metrics as guardrails that would keep his intrinsically motivated leaders on track and in line with the company’s goals and values. Success at Cognizant meant balancing all four metrics. Making your numbers wasn’t enough if your customers were unhappy. Yet happy customers were not enough if your employees were miserable, which probably meant you were burning your teams out. “In the early days, when we had to hire leaders from the outside, many of them prioritized some subset of these metrics,” says D’Souza. “Some new hires who had come from highly competitive, scorched-earth companies where they learned to deliver the numbers at all costs. Unsurprisingly, they had trouble bringing their teams along and satisfying our customers. By tracking all four metrics, we could intervene and help them change their behavior.”

D’Souza also looked for symbolic ways to spread the message that success at Cognizant was about more than making the numbers. In order to highlight the importance of customer satisfaction, he would stage gatherings with three thousand or more employees to celebrate and award those who did the most for their clients. Every year, he would also invite a group of eight to 10 of Cognizant’s top customers to attend a strategy session with the board of directors and share what it was like working with Cognizant—both the good and the bad. “The ritual of having customers show up at the board,” says D’Souza, “sent a powerful message throughout the organization that the board took seriously how we treated our customers.” Through newsletters and blogs, Cognizant would send to the entire organization summaries of what the customers told the board. The message was, yes, you had to deliver your financial targets, but you couldn’t do it at the expense of the customer. “The customer,” says D’Souza, “became our true north.”

This approach to building leaders did more than just make Cognizant a major player in its industry and a financial success. The impact and success of D’Souza’s methods were seen beyond the walls of his company. Since his departure from Cognizant, at least fourteen of his top executives have moved on to become CEOs at other companies.

Excerpted from The Journey of Leadership: How CEOs Learn to Lead from the Inside Out by Dana Maor, Hans-Werner Kaas, Kurt Strovink, and Ramesh Srinivasan, in agreement with Portfolio, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. Copyright © McKinsey & Company, 2024.