It’s midnight and the house is quiet. Harry Kraemer Jr. is sitting in his study, reflecting on the day’s events — good, bad, indifferent—and filling a journal with his observations.

He’s done this most evenings for years, even back when his five children were all still at home here in Wilmette, Illinois; even when he was chairman and CEO of Baxter International, then a $9 billion global healthcare firm with more than 50,000 employees in 100 countries. He works it in now despite busy days as an executive partner at Madison Dearborn, the Chicago-based private equity firm he joined in 2005, after 23 years with Baxter. The notebook is part of a disciplined routine and values-based leadership model that Kraemer extols in his books, blog, and at the Kellogg School of Management, his alma mater

Leadership, according to Kraemer, requires true self-confidence, which he defines as a willingness to accept one’s weaknesses as well as strengths, while committing to constant improvement. It also demands genuine humility; the ability to balance multiple perspectives; and daily reflection.

“We’re moving so fast these days that it is easy confuse activity with productivity,” says Kraemer, a devoted family man and Northwestern University Life Trustee. “You have to turn off the noise and figure out first, ‘What are my values? What do I stand for? What really matters?’”

So he writes and reflects even though he’s been a lifelong “numbers guy,” with an early aptitude for mathematics, a talent with which he processed childhood. He funneled grade school civics class through arithmetic to memorize every US president from Washington to L.B.J. with unerring accuracy. He crunched baseball statistics to calculate Bob Gibson’s earned run average and Willie Mays’ batting average and slugging percentage down to the inning.

“Baseball was the only sport I really got into,” says Kraemer, “because it’s all statistics! You become incredibly facile with mathematics. Now, if only I’d been as good at playing the game as I was at analyzing it,” he says with a laugh.

He embraced history as a kid, too, thanks to his maternal grandfather, Farrell Grehan, who taught the subject for nearly 40 years in Queens on Long Island in New York and whose house — even the kitchen — was filled with books. But math was Kraemer’s first love and would eventually lead him into economics and finance. In 1977, he earned his undergraduate degree from Lawrence University in Appleton, Wisconsin, where he met his wife, Julie, to whom he’s been married for 37 years. (For their first date, on Halloween in 1976, Kraemer dressed as Jimmy Carter, wearing a jean jacket with peanuts sewn on; Julie went as Rosalynn Carter.) He earned an MBA from Kellogg in 1979, which enabled him to move into senior roles where he learned the importance of “knowing oneself” to be able to help others and shape institutions.

That perpetual quest for insight, night after night, leads him to his notebook, even after long days. Maybe especially after long days, when examining decision-making’s nuances and half-hidden motivations can yield a little wisdom for tomorrow. There’s a satisfaction in making an honest effort, whether or not you’re tired. That’s something his grandfather taught him decades ago while taking long walks in New York or Scranton, Pennsylvania. Grandfather Grehan would settle a youthful grumble and instill respect for the determined attempt with a retort that’s become a refrain for Kraemer: “That’s why they call it work, chief!

“Leadership has nothing to do with titles and organizational charts,” says Kraemer. “It has everything to do with influencing people and relating to them.”

He provides an example from his career. Early in his Baxter tenure while in the acquisitions department, Kraemer was calculating the valuation of a company that Baxter was considering buying. He couldn’t get the value above $50 million, which meant there was no financial justification to pay more than that. His own boss praised his analysis, even while admitting that “those guys” are going to make the deal — for $100 million. “It’s done, Harry. Leave it alone.”

This went against Kraemer’s logic. Making matters worse, Kraemer couldn’t get his boss to reveal who “those guys” were. Fueled by his conviction that the company was about to throw away $50 million, Kraemer decided to take matters into his own hands and “accidentally” bump into the CEO, Vernon Loucks Jr., the next day.

“Everyone knew Mr.Loucks went into the cafeteria about seven a.m. to grab a grapefruit,” Kraemer remembers. “So I’m hanging around the grapefruit about a quarter-to-seven the next morning, waiting to casually introduce myself to the head of the company, a guy I’d never spoken with before.”

Loucks arrives right on time, scrutinizes the produce and affably greets the junior employee who just happens to be hunting for the same breakfast. He asks Kraemer what department he’s with, what project he’s working on. Before long, Kraemer convinces Loucks to review the numbers that “those guys” greenlighted. The deal gets quashed. “As I’m leaving his office later that day, he stops me and says, ‘Harry, any time someone tells you to do something and they don’t give you a really good reason, push back until they make the right decision.’ I said, thanks, because I was starting to think that you were one of ‘those guys.’ He looked at me and asked: ‘Who are those guys?’”

Today, Kraemer seems driven by kind of focused urgency. That’s because he wants to get this right, make an enduring contribution. And the clock is ticking. At 62, he hopes to teach for another 20 years. He’s got the passion for it, but each day is a gift and this realization is never far from his mind.

“We’re in this life for such a short time, the blink of an eye,” says Kraemer, with such conviction that the fact settles in the bones as if for the first time. “What are you called to do?”

He sounds like the Catholic priest he once thought he might be, at age 13, talking about that vocation with his Uncle Francis, his dad’s brother, who was a priest. Francis convinced his nephew to consider ministering to a flock outside the church — maybe in the business world. Plenty of room there for franchise opportunities, they decided. Plenty of folks who could benefit from someone who emphasized how values, how the Golden Rule, could animate the commercial world to better purposes.

“You know, Harry,” his uncle suggested, “you could impact a tremendous number of people that I can’t even reach.”

What’s the basic purpose of being a value-based leader?

Value-based leaders help their teams understand and navigate what I call getting from the roots to the trees to the forest — to move through the micro to the macro levels of a situation. The best leaders tend to have the capacity to keep things simple and apply common sense, which is not common. That’s not to say that you never get into the weeds. The problem, though, for some people, is they dive down to the bottom of the pool and they never come back up. The ability to go down and then come up again is huge. I also think it’s important to start cultivating your leadership skills long before you have anyone report to you. Leadership has nothing to do with titles and organizational charts. It has everything to do with influencing people and relating to them.

You focus on four principles that guide values-based leadership. What are these?

I encourage my Kellogg students to cultivate self-reflection, balance, true self-confidence, and genuine humility. Reflection is the most important because it helps you determine your values and purpose and what really matters. Balance lets you benefit from different perspectives to gain holistic understanding. True self-confidence is more than a collection of great skills, though that’s also important. This confidence lets you accept yourself as you are — strengths and weaknesses — while being determined to keep improving. Genuine humility keeps your feet on the ground and reminds you where you come from. It helps you sincerely value and respect others. If you can get better on these four principles, you can lead anything.

How do you define success?

I immediately think not about conventional success, but about significance. You and I are passing through this world for the blink of an eye. What difference can you make? What are your values? What’s your purpose? What are you called to do? Rather than getting preachy about it, I really think that, by living as an example to others, we can have an enormous positive impact on people.

Who were your early mentors who inspired you?

I was fortunate to have a very close family. I’m the oldest of five children and I still talk to my siblings every couple days. One of the things my parents really emphasized is that we all get along. We’d all go to the movies together — even when I was a junior or senior in high school. Family was always very important, and to me this is the hallmark of what matters and why I’ve always tried to cultivate these values with my own children. 

We’re all living such fast-paced lives. Are we really taking the time to understand what one another are doing or thinking about? My dad, when we were growing up, would go around the dinner table and ask, “Hey, Harry, what did you do today? Hey Paul, Hey Steve, Hey, Marilyn, Hey, Tommy: what did you do today?” And everyone would share their life and experiences. That made such an impact on me.

I remember this vignette from second or third grade. I’m walking home with my buddies and we go into a 7-Eleven. A couple of the guys are stealing penny candy, back when you could get candy for a penny. I didn’t take any. And it wasn’t just that I was trying to be a good guy. I literally remember thinking to myself, “If I do this, how would I explain this to my dad at dinner tonight?” The idea that I wouldn’t tell him never occurred to me! [laughs] Because that’s what we did. Julie and I have done that with our kids, too.

You almost chose a different path, not business or education, but the priesthood.

When I was a child, they would pray at Mass for vocations to the priesthood. “There’s a shortage of priests, so we need to pray that more people join the priesthood.” One Friday night at dinner, I got real serious and asked to talk to my dad’s brother, Uncle Francis, who was a Catholic priest and who often joined us for dinner. We went into another room. “Father Francis, I just got to tell you: I think I want to be a priest.” He says that’s wonderful that you received a calling to do this! I listened to him and then said, “Father Francis, let me make sure you understand something: I don’t think I have a calling. In fact, I’m a little disturbed by this whole thing. I’d like to get married. I’d like to have kids.” So he looks at me and says, then why are we having this discussion? “Here’s the reality,’ I told him, and maybe this came from my practical or math side. “We absolutely need more priests. Somebody’s got to do it. And quite honestly, Father Francis, knowing my friends, if any of them becomes a priest, we’re going to have a real problem, so somebody’s got to step up.”

What stopped you from becoming a priest?

Uncle Francis told me that one of his frustrations was that the people he could impact were the ones already coming to church — not that they didn’t need help too. But he often wondered how he might impact the people who don’t come to church. He convinced me that a career in business, for example, could allow me to share my values — to live my values — in ways that might help others. I tried to do that throughout my career, at Baxter and now. If today I was teaching finance or accounting, I probably would have done it for only a couple years.