Two Ears, One Mouth: Reynolds American CEO Susan Ivey

11.3.2010 General, News Release, School News

Susan Ivey said that every Wake Forest Schools of Business student who came to hear her speak at the Worrell Professional Center on Oct. 21 would find themselves in leadership roles throughout their careers.

“And what do great leaders do? They train other leaders,” said Ivey, while promising to debunk several myths about leadership she herself had learned in her 30 years in the corporate world.

Ivey recently announced that she is stepping down as chief executive and president of Reynolds American in February. In her talk, “Two Ears, One Mouth: The Art of Communication at Every Level in an Organization,” she decided to take the opportunity to deliver a little “CEO dirt.”

Listening is Communicating

Ivey began by saying leaders should trust others, solicit their input, and listen to their ideas. She called good leaders “continual learners.”

“The most common wisdom is that 80 percent of good communicating is good listening,” said Ivey. “Now my mom used to tell me, you were given two ears and one mouth for a reason, and don’t forget that ratio because when you are talking you are not learning.”

Ivey confided that one of the little known secrets of the C-suite is that the higher you climb, the less you really know about what is going on day-to-day. She said that is why it is important to rely on others to give their perspectives on ways to approach issues. Ivey said that sometimes ineffective leaders search for the right answer, but because there is always more than one, they should be listening to ideas and then sorting through them to arrive at the best answer.

Inspiring Others

Ivey said that as the “boss” in an organization, you can ask anything of your employees and they will likely deliver. But if you share your vision, people will deliver much more.

“A good leader is inspirational. They make people believe and want to believe. They clearly paint a vision for what needs to be done to make the organization a success,” said Ivey.

She used the example that if you ask for a report on sales data, you will probably get a report on sales data. But if you share with an employee that you need the sales report to land a client who might potentially change the company, you will get the sales data, but you will also get a comparative report of the cost structure to your competitors, and other key facts that could make the sale.

“After 30 years in the corporate world it never really ceases to amaze me how people rise to the occasion. How they add creativity. How they add value to any idea if they share your vision,” said Ivey.

Learning to Lead

Ivey refuted the myth that the boss is always the leader, and the leader is always the boss.

“In a healthy organization, there may actually be hundreds of leaders even if there are only a handful of bosses,” said Ivey.

She said effective managers thrive when they value human capital and invest in developing their people.

“In today’s very flat organizational designs, people need to learn how to lead whether or not they have the authority to lead others. Because leadership is a lot less about rank, it’s much more about attitude, aptitude and influence,” said Ivey.

She also pointed out that not all bosses are leaders, and that in her experience of observing various management styles, she learned that knowing what mistakes not to make in leadership is just as valuable as learning from effective leaders.

Leadership vs. Power

This led Ivey to her next point – about the relationship between leadership and power. She used the analogy of salt and pepper. Though they complement each other well, they are not the same.

She compared salt to leadership: salt being one of the most common substances on earth, as is leadership – since everyone has the potential. Salt also needs to be extracted out of something, as does leadership. But salt can also hurt when rubbed into a wound, just as leadership can if misused.

She compared pepper to power saying that either can add heat, and that only the right amount should be used.

Ivey said that leaders can apply their power as a way to motivate their employees.

“My secret CEO decoder ring has the answer very clearly. Sincere gratitude and praise for a job well done, coming from a leader who somebody respects, pays an ROI that, as MasterCard would say, is priceless.”

Stretching Boundaries

Ivey’s last bit of advice was to take a chance that you might fail in order to free yourself to truly succeed.

“It’s important to stretch beyond your own boundaries, because if you don’t give yourself a chance, why should anybody else?”

Ivey pulled up stakes from her “home” and moved overseas for her career, a decision that was tough, but she says, only took an hour to decide. She said that she never wanted to regret not taking a chance. As a result of overcoming this fear of the unknown, she had an amazing experience and in nine years traveled to approximately 50 different countries. Ivey said this experience helped her to value diversity and other cultures and called it one of her biggest gifts.

Ryan Gregory (MA ’11) asked Ivey if she had any experience with having to change the views of others who may not be as open to diversity.

“There will always be people who do not have as much experience with diversity, but it’s important to have conversations about why diversity is important,” said Ivey. “It’s not about race or sex, it’s about perspective, and recognizing the more perspectives at the table, the better off you’ll be.”

In addition to her role as chairwoman, president & chief executive officer of Reynolds American Inc., Ivey is president of RAI Services Company. She is ranked No. 22 in Fortune magazine’s 2010 listing of the 50 Most Powerful Women in Business and is No. 75 in Forbes magazine’s 2010 World’s Most Powerful Women. She was president and chief executive officer of Brown & Williamson Tobacco Corporation, a subsidiary of British American Tobacco that was the third-largest manufacturer and marketer of cigarettes in the United States prior to the merger of its U.S. operations with Reynolds Tobacco Company in July 2004.

Leading out Loud is a Wake Forest University Schools of Business lecture series created to educate and inspire business students through exposure to industry leaders shaping today’s business world. This series is made possible by the generous support of the Broyhill Family Foundation of Lenoir, NC.

Leading Out Loud: Susan Ivey, CEO of Reynolds American from WFU Schools of Business on Vimeo.

Wake Forest Audience Q & A with Susan Ivey from WFU Schools of Business on Vimeo.