Webcast transcript:
Willy Walker: Thank you Susan and welcome everyone to another Walker Webcast. I love seeing the thousands of people who have joined us live to listen and watch today's discussion, but I will say I replayed last week's Walker Webcast with George Hincapie on our podcast Driven by Insight over this past weekend and it was really fun listening to that conversation again via the podcast. If any of you haven't listened to Driven by Insight all our old Walker Webcasts are archived there and I would strongly recommend downloading and listening to those discussions, while you're out on a walk, going to the gym, or driving your car.
Week before last, I had a great discussion with John Fish, CEO of Suffolk about how he has created such an amazing corporation at Suffolk and then also how John has given back so incredibly and consistently to his community and to our country. John sent me a paperweight this week to say thanks for coming on the webcast and on the paperweight is engraved “winning isn't normal”. And while that statement is true it’s what exceptional organizations do, which is a perfect segue to my guest today.
Some of you may have seen the Walker Webcast in July, where Greg Carvel, Head Hockey Coach at the University of Massachusetts spoke about how he is taking UMass hockey from worst to first and won the NCAA division one men's hockey championship this last spring. In Coach Carvel’s talk he talks about Legacy and how important the book was to how he is formulated and created such an exceptional winning culture at UMass. Greg gave me a copy of the book Legacy as a thank you for coming out to speak at our summer conference. I promptly read the book, loved the book, and reached out to James Kerr to ask him to come on the Walker Webcast and I am absolutely thrilled that James is here today to talk about his book with us.
Let me do a quick intro of James and then I’ll jump into my questions on Legacy. James is the author of the international bestseller Legacy which analyzes the unique culture of the world's most successful sporting team, the New Zealand All Blacks. The Daily Telegraph called Legacy the “modern version of Vince Lombardi’s guide to coaching” and went on to say, “for those searching for genuine keys to team culture, it is manna from heaven.” Kerr believes winning teams employ the same basic ideas: a relentless focus on excellence, a commitment to collective cause, individual autonomy, candid communication, underpinned by a culture in which leaders create leaders. Kerr has advised US and UK special forces, Formula One teams, America’s Cup crews, Premier League football managers, Olympic performance directors, as well as corporations, ranging from Google to PayPal, McKinsey to Dyson, HSBC to Roche, and Red Bull to Unilever.
So, James first welcome, and thank you so much for joining me I read in your notes on the book that George Plimpton’s book Paper Lion started you down the path to researching and writing Legacy. What was it about George Plimpton’s trip out to practice and participate with the Detroit Lions back in the early 60s that made you want to write this book?
James Kerr: Slightly dates me. I think an ordinary person in an extraordinary environment, you know going into an environment of excellence and just that difference, I guess, between his kind of puny academic or intellectual kind of approach to life and going into the real world and what he grappled with and I remember being very young, and I think it was possibly the Alan Alda film telly movie about it that, that kind of fascinated me about that kind of exposure, that inside workings of a team. I was fascinated by that dynamic and have been ever since.
Willy Walker: So, in those acknowledgments at the end of the book as well, you thank a number of the members of the All Blacks several who are stars amongst stars of All Blacks and in it, as you thank them you say, “thank you for leaving the jersey in a better place.” Can you explain what you're saying, by thanking them for leaving the Jersey in a better place?
James Kerr: Sure, that that phrase is a saying I heard around the All-Black camp, within the All Blacks environment quite often and really refers to that idea of legacy. That idea of leaving the Jersey in a better place. Of adding to the legacy. Of representing all those who have come before us and our lineage and all those who will come after and I think one of the primary duties and I think the most personal purposes within that environment is that idea of in your time with a team, what are you going to do with it? How you gonna enhance the legacy, enhance the reputation, do your part with your time and the team? I think it's a wonderful and very powerful metaphor, if you like, or concept within the All Blacks clearly, but within any small team and, in many ways you know within life, I guess, that the we have a fleeting moment here on earth, where you have a chance to fulfill our promise and our purpose to kind of share our gifts with the world. I think it's a fantastic question to ask of ourselves. What are we going to do with our time here in this particular team? What will our legacy be and how will it leave our metaphorical jersey in a in a better place? So that's really the guiding principle, I think, behind the book and I think one of the guiding principles behind most strangely enough high performing teams in one form or another. That idea that what are we going to do today together that's going to move things forward.
Willy Walker: So, when we think about sports teams or driving for an F1 team that sense of leaving the jersey, or the car in a better place than when you got it, it's not easy and it's very difficult but there's something material there. If you're wearing number five for the All Blacks or for the New York Giants you put on that Jersey on, you know, Sundays and you wear it and then at some point, you know you're going to move on from that team or from that career and do something else. In the corporate world we don't walk in every day and put on a jersey. We all work for different corporations, there isn't that physical embodiment of sort of the team we're playing on. Have you seen corporations or organizations that don't have a jersey? Military clearly has the same thing that sports teams do you put on the jersey you put on the uniform; but have you seen corporation’s kind of try and use that imagery that sense of leaving the jersey in a different place that has been unique to sort of replicating that sense of ownership of that jersey, for a period of time?
James Kerr: Yeah listen, and I think it's a really good question and I think you clearly an elite sports team representing something you know, with its kind of its shirt, its jersey, it's what type of doing things is a unique environment in many ways. I think underneath that there are some transferable principles that we can start to apply to the to the world of business. I think, the key transferable principle, I think, really is in that area of meaning. What does it mean? We all work in teams in one form or another. Stan McChrystal in his great book Team of Teams, you know really breaks it down in terms of a really appropriate response to the atomization of the world, if you like, and WhatsApp and emails and social distancing and so on and so forth, is that really, we've sort of gone from the sort of monolithic idea of what a corporation is, or a company is, down to maybe a more intimate point of view of who are we in this room together now and what are we going to do. And I think so you're right in the sense that there isn't the actual jersey, but I think often there’s sort of a metaphorical jersey, to leave in a better place. You know what is this group going to do together now? How can we take the story forward? How can we nail this project? How can we know these numbers? How can we create something that is significant to us that we can play a path in, and that gives us meaning in our work and a sense of sort of direction and so on? I think it does struggle sometimes when you get into the large corporate purpose statements that mean everything to everybody and nothing to nobody if that makes sense. That there can be a generic kind of sense of well yeah, we're out there, you know it's mung beans and moon beans and it doesn't really connect on a human level. So, I think one of the challenges and I think probably one of the great challenges at the moment, given sort of social distancing and working from home and so on and so forth is how do you create that meaning? How do you get that real sense that we're in this together and that we're working on something significant and meaningful and measurable, I guess, together? Because purpose, I think, really in human life, I think it can be one of those killer questions where the eyes glaze over. You know, what's your purpose? And you go, I don't know, being a good Dad, you know, be a good mom you know, whatever it is, but actually we get real meaning out of serving a purpose that's bigger than ourselves. It's one of the things we get out of work, and we get out of teams is that ability to be part of something that's bigger than ourselves and play significant part. So, I think, from a leadership point of view, however, large your organization is, if you can think on that sort of cellular team level and think well, how do we engage that personal sense of meaning, with a sort of public purpose if you like. It becomes if not the answer a very good question to start asking in terms of engagement, in terms of direction, in terms of alignment.
Willy Walker: You cite in your book along those lines from Victor Frankl’s book Man's Search for Meaning and in it Frankl cites Johns Hopkins research that as they research people and what they found is very important as far as their job only 16% checked making a lot of money, while 78% said their first goal was “finding a meaning or purpose to my life.” How important is it for companies to understand that people inside of them, while salary and pay is important, is for highly exceptional corporations, generally speaking, very, very far down on the list as it relates to why they're there, or why they're doing the work they're doing?
James Kerr: Yeah, I mean there's a sort of humanistic psychology behind it, but then, if you look at the work of Carl Rogers or, if you look at Maslov and his Hierarchy of Needs that once the basics are taken care of, and usually within the corporate world that's reasonably, comfortably taken care of relatively soon in your career. Then the fundamental urge is that search for meaning, that sort of sense of a need for self-actualization, to be the best that we can be of ourselves. To express our talents, to make a difference, to live purposeful lives, lives that matter. That we're not counting the days you know the Pink Floyd song “Living Lives of Quiet Desperation,” you know, we want to kind of get into it and we want our lives to mean something. So, I think in terms of really harnessing human energy and human effort, it's the intangibles, the intrinsic motivation, that is really, really strong.
I once had a very powerful and necessary… I once had a very interesting conversation with an HR director, I won't mention the company, but they talked internally about a pizza factor that they made some sort of back calculation that if you wanted to give somebody an incentive, you could pay them sort of, this is in the UK, 3000 pounds worth of salary or you could give them a 50-pound pizza voucher. The pizza voucher was more powerful for a number of reasons. 3000 pounds of salary might have gone and paid off a credit card. You know it's not very meaningful fundamentally it becomes part of that flow of money, and so on. Whereas a pizza voucher makes you a hero with your kids and maybe it's given to you just in a discretionary way by your line manager who didn't have to but decided to. So, reward of being seen and being acknowledged is tremendously important and powerful. We all want to feel significant in our lives. The joke I make is sometimes we're like children holding up our bad art to our parents saying you know, do you like it, and we want that affirmation. And I think sometimes business can kind of get into time and motion a little bit too much and we put on our suits literally our suits of Armor, in a sense, and we go out there and we do battle on the corporate landscape. But human beings are above all, human. And we want the same stuff. We want to grow, we want to develop, we want to express ourselves, we want to be able to live authentic lives, and we want to live lives of meaning. And so, any leader who neglects that I think is not just missing a trick is missing the point. Good people want to do good work generally and they want to do good work on their own terms, and they want to do good work with people they like or love or connect with and that’s kind of the basics of self-determination theory. If you can get those three things aligned, the sense of sort of mastery, a sense of autonomy, and relatedness and being connected to good people doing good work and you know you'll pay them, but maybe you don't have to pay them as much and the payment isn't what drives people, it's the work, it's the contribution that they get to make. It's the expression of themselves. So I think framing leadership around the provision of that becomes a very powerful paradigm in order to create the kind of results and the connection and the commitment that any leader wants to create from that teams or their organization.
Willy Walker: You referenced Jim Collins book Good to Great in your book and talk about that extra dimension of leadership or extra dimension of what companies stand for, and you go in and cite several very large companies that we know great brands. But you point out how each one of these companies has that extra dimension and the companies you cite and look at our Apple, Starbucks, Disney, and Procter & Gamble. When I think about a number of those brands, I think about just great branding. But what you do is you go through and point out that they have an extra dimension to what they're trying to accomplish in their industry and in the broader economy.
James Kerr: It's vivid I think, particularly in the early days of many of those organizations. There's a sort of a vision of the future that is compelling. So, if you look at Microsoft in its early days, to put up a PC on every desk and then it becomes a kind of very practical purpose that people can sort of see the benefit. Then there's the net effect of that which is about connecting people and making work more productive and enabling people to kind of tap into capitalism in a way they might not otherwise be able to do. It's a very purposeful and very clear sense of self of identity and of direction, and I think another thing that is often neglected, the more corporate a corporation gets is that kind of articulation of purpose. Often, it's very conceptual. We want to make a more sustainable company for a more sustainable future, and you go “well that's great, that's very purposeful” but it doesn't really imprint it on the mind. Not as much as if you're saying we want a city full of driverless, nontoxic cars and suddenly I can see something, and I can be that thing that I can see. I think it's not as simple as saying, “well, we have this great purpose let's all follow it,” I think it's also how do you create what's called collective cognition? How do you make that a common idea that is shared and believed in and engaged with by your people? Often the vision statements or the purpose statement become a political game of banging as many values as you can into the statement and making sure that every department is happy. The simple vivid articulation of something worth playing for becomes extraordinarily powerful and particularly on that small group level that we work.
I think of the Doc Rivers story, when he went to coach the Celtics, all the pennants, the flags were on the wall, I think they had something like 16 victories/championships, and he simply shifted the spotlight from the past and he put it on to a new piece of wall, where the new pennant would go. It's a pretty powerful way of articulating what everyone stood for and where they were going. There's another sort of secondary story, he then got money from all those players when they were in the Staples Center and put it in the ceiling. The only chance they had to get it back was to get there for the playoffs.
So simple storytelling that is able to capture hearts and change minds, that can really paint a vivid picture of what's possible, I think is the other half of it. There's no point in having a purpose or a vision or a way forward unless it really grabs people and I think that's something that most organizations in my experience are very poor at. It tends to be political; it tends to be very logical, but really, it's that sort of emotional, holistic way of seeing things that you need to capture people with normally and collectively to create that collective cognition.
Willy Walker: So as people think about that, clearly, the Doc Rivers story is a fantastic story and immediately I hear you say, “that makes perfect sense.” Let's stop focusing on the past and the history and let's start focusing forward where we're going and it's very impactful to hear an anecdote, a story that encapsulate that leadership that he showed the idea of coming up with that concept. In your book you talk a lot about singing the world into existence and how organizations, like the All Blacks, sing their world into existence. I must say, and I don't want to go politics here, but after reading your book I sat there and thought to myself, President Trump really sang his world, his leadership into existence because he would say the same things over and over and over and those people who believed in what President Trump was saying followed it and they watched him sing his world, his thought of the world into existence. Removing ourselves from the politics there for a moment, in great organizations, how do leaders sing their world into existence?
James Kerr: I think great leaders are great storytellers fundamentally. You almost must think about who the iconic great leaders are from the past, whether that's a Winston Churchill or again politics, JFK, Martin Luther King, who can sell a dream, paint a vivid picture of what's possible for people and it requires talent. I don’t think it’s an MBA skill necessarily, there's a little bit more to it than that. The ability to paint a picture, to tell a story, to sing that world into existence, is a talent and sometimes a rare talent but a necessary talent in terms of galvanizing. The great leaders of the past, have always been orators and great storytellers and have that ability and I think that's something that we can sometimes think “well where's the metric for that?” As long as the share price is going up and the investors are happy then we're all good thanks very much, but I think there's a lot more to leadership than that.
One of the things that I think has been interesting during the pandemic is, The Harvard Business Review put it well, they said that maybe leadership has to change a little bit at this moment particular in time, from the doing to the being. Rather than that “let's get stuff done” it's “well who are we and why does what we do matter?” If people are working from home, reluctant to come back into work, reluctant to socially mix again, which in many communities and many companies is an issue, and with that you get that kind of dissipation of connection, you get that drifting away, other things become priorities. Spending time at home with my kids is more important than spending time at work with my teams. Connection is created through two things, you either spend time together in proximity or it's because you believe in that same story. That same story that you mentioned with President Trump, equally you can mention Obama beforehand and their ability to really create a galvanizing story. One of the phrases I’ve heard that I really like is “what's the drum beat and who are the drummers? What's the rhythm that we're going to walk to and then, who are the people who are going to beat that rhythm out for you?” Finding that rhythm, finding that script, finding that story, telling that story, creating cohesion and coherence of effort, I think is a massively important skill or talent or genius done, really, well at the moment and it's never been more important in a more atomized, fractured, disputatious, difficult, challenge kind of environment, which is clearly one that we're moving through at the moment.
Willy Walker: When we think about leaders, I mentioned previously that you focused on Jim Collins’ book a great number of times and in Jim Collins’ book he talks about level five leadership. I haven't gone back and looked at all the qualifiers of level five leadership, but I’m pretty sure it doesn’t say being able to sing your story into life or being a great orator. As people think about how you become a level five leader, I just want to understand your thoughts as it relates to, the coach of the All Blacks was not known for showing up before the matches and doing some big ru rah and here we go, we're going to go take the field type of speech. In fact, he left the team to be amongst themselves and think about the strategy and get themselves cranked up for the team. Graham Henry, as what we would typically define as a leader or a typical coach actually wasn’t that way, yet he was a level five leader. How do you think people can look through that as it relates to the qualities of a leader and being able to lead in distinct manners, if you will, and if there isn't sort of a list of you have to be able to do this, but you must, at the end of the day, be able to articulate your vision and get people to buy into that vision?
James Kerr: My take on the level five leadership is that it is serving something bigger than oneself. It is a contributor of leadership style in which the personal ego is subsumed, perhaps, towards a greater cause, towards a greater good and that has a number of benefits. One, it's not about me, it's about us, so there's a clear kind of bonding and modeling of the kinds of behaviors, that mission focused kind of behavior, that I think that of the team first kind of behavior that's so strong. Of course, it doesn't necessarily come clearly. I think Ted Graham Henry is a great example of it. I don't want to speak for him, but I know that as an individual he went through a quite a personal transformation from very command and control by nature, he was a headmaster, he was a schoolteacher, to really reading the room, and realizing that that style wasn't necessarily the most effective way of getting the most out of his people. He really kind of flipped it on its head and really went into a mode, a paradigm, which his leadership style which was about being a resource for those within the group. That contributor, that kind of servant/leadership model. Collins looks at it and looks at it in terms of maps and in terms of success, they tend to be the ones who stay. There in it for the right reasons and people can see that. It tends to galvanize a group through modeling and through following. It models the kind of behaviors that you would want to see, and you know, in most organizations, they thrive, or they rot from their head from the example. That said, we really do lead by example, by how we're being not by what we're doing necessarily, and so I think that example is a great example of a model of a leader that works really well because it creates an environment of sustained success and models the right behavior. It's also something that works particularly well with an emerging generation or the emerging generations. We're now much less in a command-and-control hierarchical environment, many of the millennials and the post millennials are asking questions much more around meaning and around purpose and not necessarily taking the old orthodoxies. So, leaders who can create an environment around themselves that acts as a resource for their people and kind of harnesses that passion whether that's on a large scale, or on a small team. I was going to say, it I can only take you so far, but the contribution that is making a difference to the people around you becomes a powerful part of life and almost anthropologically as what we're wired for, so I think both organizationally and personally it's an it's a model that works.
Willy Walker: The book Legacy is focused on the All Blacks and as we just spent 20 minutes talking about, the book is far broader than just the All Blacks, but they are sort of the case study at the center of all of it. The All Blacks had this incredible legacy and this incredible history, but it was in 2004 after a bruising defeat to South Africa that Graham Henry realized that something had to change and so as they flew back to New Zealand, he got together with his coaches and he really started to figure out what he had to do to change the culture inside of the All Blacks and then to implement those cultural changes. Can you take us back to that? James, I think a lot of people sit there and say, well, if you're starting up a business you've got the ability to change or establish the culture from the get-go. But if you're stepping into a business has been ongoing for a period of time cultural change is extremely difficult. You've got people in the organization that have done things a certain way, you're either successful or not successful and getting people to change behaviors is a big challenge for many, many leaders. But here's someone who stepped into an organization that had all the tracks records, all the history that said we're good at what we did. He had the best players in the world, but something was wrong that he knew he needed to change. Can you walk us through what he did to start that change?
James Kerr: Yeah, and again I think you know, this is a good, small-team environment, and some of the principles translated into larger organizations, but clearly there's a lot more complexity and inertia with a large organization that needs special attention. In terms of The All Blacks, I think if you look at this of the Kaiser model, a case for change. There needs to be a clear case for change, For the All Blacks at that point that was reasonably obvious they were losing, and their commitment is to be the best team in the world and to win every game and it wasn't acceptable. So, there was a pretty clear case for change. I think what they did quite brilliantly was they created a kind of a theme if you like, or a philosophy an endgame, and they called it “Better people make better All Blacks,” and it was a way of changing, and it was what they wanted to do. Better people make better All Blacks. Better All Blacks, they’re rugby players, athletes who can dominate on the field, easy to recognize. But the area that they really focused on was the better people side of it. How can we create an environment in which those in our charge can grow and develop not just as athletes, but as human beings? And so, they had a very, very clear vision of what they wanted to do, and it was a shared vision that they were able to connect with each other as a leadership group. Connect the broader organization, the governance around them, if you like, the Board of Rugby, and the feeder teams coming into the All Blacks. And the All Blacks themselves in terms of developing that. So, they had a very, very clear vision of what they wanted to do, and then they put into place a stepwise plan, if you like, that was rationally made sense. And I think the other key factors, you know, you need to have a reason to change. You need to have somewhere to go, and it needs to be believable. It needs to be practical, and believable, and intuitive, and stepwise and then it really comes down to a number of factors on a large organization. Communication is tremendously important. Walking the walk. Leadership doing what it's asking of everybody else, you know, most leadership initiatives fall because leaders just don’t either buy it internally or don't enable people to engage and to buy into it. Then, really focusing on that leadership at every level aspect. When I work with large organizations the joke that we have is the permafrost, that kind of middle-management it's like it's not changing on my watch! And usually, it's not changing because it just means more work and maybe less money, and maybe it's threatening in terms of career and career progression. Maybe they've got their little fiefdom worked out and they really don't want to kind of strip that one back. A lot of the time you know we forget that they are your agents of change, you know, what is your drum beat and who are the drummers? They are the drummers. So, it's really understanding and identifying who your drummers are, and what are the barriers to that? What are the incentives to that? What do they need? How can they be empowered to do what is necessary? They are either the dead weight or the freedom that you want to get. So clearly, it gets a lot more complex and time-consuming, if you like, on a larger corporate level. So, it also needs investment, and I think one of the things that I've seen a lot is a huge under-investment, not just in terms of money, but in terms of resource, and time, and energy to make the changes and over a sustained period of time. If you're not prepared to finish, don't be prepared to start, you know, because it's going to take that effort. It's like everything! It takes five times as long as you think and cost five times as much. I think the appetite needs to be there and the real commitment to make those changes culturally need to be there and often that's built on a burning platform on you need to change, you need to digitize, you need to go into new markets, you need to evolve, you need that burning platform often to maintain the consistency and the coherence of effort than any large-scale change needs.
Willy Walker: You mentioned “Better people make better All Blacks” and in the book, you cite Brian Lahore who is one of the old warhorses on the All Blacks, really adopting that. I read that and I sort of said to myself, “Well here's someone who's a world-class rugby player, has been around the block many, many times and sort of who cares how good of a person I am? I’m a great rugby player and whether I play for the All Blacks, or the Swans, or somebody else, I can go find another job!” How was it that Henry got one of the old guard, one of the old players on the team to buy into this concept that better people will make better rugby players? Because I hear that and I sort of, say, it sounds good and obviously in hindsight reading in your book, it's unbelievable, but I also know that if I walked up to a colleague of mine at Walker & Dunlop and said, “Better people make Walker & Dunlop better,” which I truly believe, and we've talked about a lot in our company, but a lot of people kind of look at me sideways and say, “Look, I’m a great banker! I’m a great broker! I don't need to be a better person; I just need to be better at what I do on a day-to-day basis.” So, how did Henry get that leap of faith from you just need to be a better rugby player to you just need to be a better person?
James Kerr: I think it's you know Greg Carvel talked about it in terms of select on character. John Wooden talked about a character wins a championship. Talented will win a game, but the character will win championships. So, it's that you know, the Navy Seals talking about the home, and the military talk about the whole man. Because life is about relationships; success really is about relationships. Between task and team, give me team! Most of the time. If you're good at your task, great! So, you should be that's the price of entry. You know you've got to be a decent hockey player; you've got to be a decent broker, you've got to be good at your job, but you know, that's just the beginning of it. There's a whole bunch more to them and so leadership really is... There was a very interesting... there's been a couple of studies about leadership and another John Hopkins study about teachers in hospitals, you know, medical doctors teaching and the three things they need to be to be good at that. They need to be good doctors, they need to be good at tasks, but they need to be good at relationships. They need to be emotionally connected. They need to have the ability to both connect with people and connect to people, and they need to be good teachers, they need to be good communicators. And if you look at that and you think well that's more than just being a good rugby player, that's being a more rounded human being. But there are also other aspects, you know, around kind of human attributes, that are positive human attributes in terms of grit and resilience, compassion for others, empathy. All of those aspects, although some of them are innate, they can be enabled to flourish in the right environment and they're tremendously powerful. Those soft skills are tremendously powerful in delivering the hard skills. Napoleon once said, “The moral to the physical is as 3 to 1.” You know, the soft skills, the moral skills, if you like, the human factor is a force multiplier for your competitive advantage. So, to go, well I’m just that is not a particularly evolved, example of a broker, you know, get with the program a little bit, because your strength of character… You know you might be a good trader, that's fantastic, but your strength of character will make you a leader in this organization and will be a force multiplier for whatever skills and talents you might have. And you put that together collectively as a group and the bonds, and a connection, and a force field, if you like, of that group, through that those soft skills, those human connections, you know, that's an unstoppable force. Great teams really are about great relationships or great chemistry, the ability to connect to know each other to have each other's back. They are character assets, they're not just talents. You can have some very talented, the word that's used as Dickheads within the and I send my apologies out there, you know, but the talented Dickheads often bring teams down, you know how often we have seen that? They become the thorn in the side, the pebble in the shoe that the enemy inside the tent that really means that rather than that unit is going out there and taking on the world, they're taking on each other. So, that character piece and finding the right piece and getting their character and getting that chemistry, you know, I think is vital for any team. You know you might get short-term gains from talent, but you'll get long-term pain if they don't have character.
Willy Walker: Yes, talk about that for a moment, because on the selection side, like Rich Diviney, who is a Navy Seal, wrote a book The Attributes, who was on the Walker Webcast. Rich underscores the fact that in Navy Seal selection they're not looking for skills, they're looking for attributes, and on all the things that you just talked about James, underscore exactly what that is and it’s reflective of exceptional teams, picking the people who they want to have on the team. In many instances we come into situations where there isn't, to use the term that the All Blacks stole from the Swans, and that is in your book, there is a dickhead, and there's somebody, let's call them jerks so that we don't have to keep using that term. There's a jerk on the team, and I’ll give you one quick example from Walker & Dunlop’s history of something that we had to deal with, and then I want your thoughts on how companies can do it as well.
There was a jerk on the team back in the 2000s, and I was at a YPO conference down on the eastern shore of Maryland and the speaker was talking about that if you have someone who's not bought into your vision, they are a cancer on your team and must go. So, I wrote on this little white pad next to me, “I've got one of those on my team,” and my friend who is next to me wrote back on the white pad, “Well, you heard the man! He's got to go.” And then I wrote, “What if he's 70% of our revenues?” My friend wrote at the bottom of the white pad, “You're Fucked!” And so what we ended up having to do was scale Walker & Dunlop to make it so that that one big banker was not 70% of our revenues, and by the time we got it to the point where his book of business was a much, much smaller amount of our business, we then had the opportunity to go and have the hard conversation and he ended up leaving Walker & Dunlop. But many, many organizations are faced with a jerk on the team, who is incredibly valuable, the star player of a team, and working through sort of, I can't give up that you know, high-goal scorer, to use a sports analogy, or the most successful trader on your team is something that leaders are constantly confronted with. How have you seen great leaders work through that? Because it's not as easy as just saying they got to go.
James Kerr: No, in a sports team it's very easy. There's a lovely story, one of the All Black coaches says, you know here's a bucket of water, put your hand in it and take it out. That's how long it takes to replace you. There are a lot more issues involved, as you point out. And I don't think there's a sort of silver bullet for this one. I think there are various degrees of jerks. There’re jerks who know they are jerks and have decided that's the way that they're gonna profit themselves which perhaps your example points to. And I think your example is probably the ideal way of dealing with it, it creates structures in a business that can do without them, make them obsolete in one form or another is probably your best way forward and it's going to be painful, and it will take time. I think there is sort of the other jack who is the unconscious one and a lot of the time, if you take the sporting analogy, one of the most important conversations that happen, happens in a sports team is preseason and it's around standards and expectations. What are we going for and what do we expect from each other? One thing that very rarely happens, in my experience, in business groups are those kind of committed conversations about behavior, about who we are going to be both for and with each other? And therefore, a lot of groups run on assumptions, they run on the assumption based on what the last organization they worked for was like or their nationality or their parents. You know, where they come from comes into the room, and you can have some very, very different value systems around the table, trying to be on the same team. But they are not on the same team. You've never formed that team. You've never normed that team. You’ve never had the important conversations about, well, what are our boundaries? What are our guidelines? And so, one way to kind of deal with that is to have those conversations up front and powerfully. Now, that’s not always going to work, you're going to have the jerks who want to be jerks; the incorrigible jerks or the ones who are unable to change. But often you'll get those kinds of 50/50 calls where we're creating kind of terms of engagement, actually having honest conversations and saying, well listen, what can we expect? Do we hassle each other on the weekends or don't we? What is the protocol here? And, in having those conversations you achieve two things, one you set some protocols but two you allow a little bit of that tension and that understanding to go in.
The other aspect of that and appreciative inquiry deals with this very, very well, is that kind of generative metaphor. You know, what the narrative? What is the story that we're all living in? Can we align at least around some common values and a common set of understandings about who we are and where we're going? You know if you've got a very individualistic jerk and you've got a very collective culture, the twain will never meet because the assumptions are fundamentally different. But if you can create a way and I think of a corporate problem we had with a bank in London, it was a Dutch Members bank. So, in Holland it was all about collectivism and doing right and very purposeful and very principled. In London, it was about trading for more money and executing that deal as quickly as possible and moving on to the next one and it didn't really matter. They we're very, very different cultures. What we set out to do was trying to find what is the common ground and it was that the line that we used was, “we profit from our principles”. You know it's important to profit but it's important that we profit the right way and it's important to have principles but it's critical that we make a profit. And it's very simple and simplistic almost in the paradoxes, is the solution and tension. There's the solution but it created the kind of overlap of that Venn diagram, so in the middle of it there was a set of guidelines that everyone could at least have as a benchmark for their behavior. It was very, very successful in bringing two warring factions together. It created a new metaphor to live into.
So, I think there are some solutions, but again I think it needs investment of time and resource and patient and talent often to resolve those. But the question is, are you one team or are you a bunch of lone wolves? And if the expectation is to be a team, what are those team formation techniques that you can use that can start to bring people together as human beings, not just a sort of business department, and warring factions.
Willy Walker: In your book you write. “the role of the leader is to know when to reinvent and how to do it.” And you spend a bunch of time focusing on concepts such as Kaizen, the continuous improvement which is made great corporations like Toyota as great as they are. And you focus on adaptive cultures and how to create a culture inside of a company that is adaptive to change and one of the most noteworthy examples you point out James, is Tiger Woods, changing his golf swing mid-career when he's at the top of his game, and he redoes his golf swing and all of us can sort of remember Tiger trying to figure out how to redo his golf swing at a time when he could have kept on going at a high level and been winning tournaments and instead, he went basically into the middle of the pack and then got back to being the great superstar that he was previously.
How have you seen leaders in the business world figure out when it's time to go and completely redo your swing because most will look at kind of incremental change. We're doing good enough there, we're losing a little market share in that business, but we got another one to compensate off there. You've looked at lots of great organizations as well, both on the corporate side as well as on this sports team side, what is it that makes leaders understand when it's time to reinvent their game?
James Kerr: I think there's two aspects of that, there’s the individual leadership judgment call side of it but actually I think the most important part is the culture in which that is expected. The culture in which that is restlessly discontent with the status quo and that really thrives on that. And you mentioned, Toyota earlier and I think that's been a big part of their successes, that restless kind of reinvention of what's good to make it better all the time. I think it is incremental and evolutionary, rather than revolutionary a lot of the time. It's about being prepared to kind of not fall into formulaic thinking, and I think that's very much a cultural side of it. It enables mistakes. It's a culture that is forgiving of mistakes that looks at the problem, not at the person. And I think that's really, really vital. It's really looking at the problem rather than if something goes wrong on your watch. Yes, it's on your watch, it's not personal, it's what's the problem and how do we figure that problem out and wrestle with that problem. And, if you look at you know the great kind of engineering environments, NASA is a great example of that kind of culture. It can get bogged down and it has been bogged down, it has been through periods of all of that but at its best NASA is a constantly striving and reinventing fan of environment that keeps getting better. So, even at scale and massive scale it's possible to create that culture. So, it doesn't come down to individual decision makers quite as much as a kind of fundamental attitude to the way we do business.
From a decision-making point of view, you know, generalship if you look at the military thing, generalship in its original kind of etymology is around judgment. And that's about being a good judge of what's necessary and I don't think there is an answer to that, there isn't a formula that fits. But I think it's being in a culture that wants that and being the kind of an individual that restlessly has that kind of excellence reflex, I think it's sometimes called. To kind of constantly strive to improve. But I think one of the things you're referring to is the difference between the alpha curve and the sigmoid curve. You know the alpha is that sort of well, some days you're on and some days you're off. In sporting terms it’s well, we're rebuilding this season and you don't expect too much of it. The All Blacks and other great teams and you get this particularly in elite military units because you know if you kinda go into a low swing you die. You need to be at a constant state of pressing it forward and always trying to do better, and always innovate those small innovations.
The San Antonio Spurs call it pounding the rock. Take a piece of marble, take a chisel, take a hammer and start chiseling away, hammering away, it won't break the first blow or the fiftieth blow, but on the hundred and first blow it will split perfectly for you. The breakthrough thinking comes from the incremental pressure. And I think that mindset is that mindset that delivers that sigmoid curve. You get to the top of your game, it's not good enough, it's never good enough. If you think well, we're winning, we'll just hold on for dear life, someone's going to catch up pretty quickly and you'll get knocked off the throne. That's a Kodak moment. You know, there are plenty of organizations that have fallen into that trap, but the culture of restless kind of incremental innovation, I think, is where those breakthrough results tend to come from.
Willy Walker: So, you talk about singing your world into existence and setting up the culture, leading leaders, creating new leaders and making sure you got the right people on the team, getting the wrong people off the team, and then you talk about planning and setting out plans for how you're going to achieve that vision of where you're going to go. And you referenced Jim Collins and the BHAG’s and all that stuff but there's a quote in your book which I absolutely love, which is from Mike Tyson. And you say, “everyone has a plan until they are punched in the face.” And it was so brilliant, I love that you put that in there because yes, everyone's got a plan and then suddenly the plan isn't the same plan and you've got to be able to adapt to what's going on. How can we as leaders, make sure, or how do we react when we get punched in the face because we're all going to get punched in the face. What have you seen in great leaders?
James Kerr: Well again, I think there's a cultural aspect to that. It's about having a culture that is fundamentally adaptable and that comes down to creating a culture that has autonomous parts, a distributed leadership model and that's a high trust environment in which everybody knows their role in something bigger than themselves. In military terms, mission command or the commander's intent. You have a very clear idea of where you're going, and everyone has a clear idea of their role in delivering their how. How to make that happen and that creates a hugely agile and adaptable set of teams, teams of teams if you like. So, I think there's that sort of sense that things are going to go wrong and you're going to have to kind of make it up as you go along to an extent or respond accordingly. And usually that happens at a much lower level than sort of the C suite. That really happens down where it's happening, and you want to make sure that A) your front line, whatever that looks like is able to be responsive, make good strategic decisions on a tactical level, knows the big picture and has a very clear idea of what that strategic kind of intent is and feels that you got their back to make those kinds of decisions. That kind of level of autonomy as distinct from a kind of a command and control, you know to micromanage kind of environment is one of the great blessing you can give upon a team because that will create adaptability or enable adaptability when times get tough.
One of the great examples used, and again I mentioned Team of Teams, Stanley McChrystal’s book, which I think is an absolute classic. Lord Nelson the battle of Trafalgar, he sailed his ship sideways into the amateur, he deliberately created chaos and he did it because he knew that he had to have created a culture in which his leaders were adaptive coping with chaos. You know, he had given them autonomy. I think there was one basic order, which is get alongside the enemy's ship and blow it up, pretty much. It was simple stuff but there was a high trust environment. It wasn't kind of centralized and organized and trying to kind of dot every T and dot every I and cross every T, it was about creating a culture that was fundamentally adaptable, and that is enabled through autonomy and empowerment of leadership at every level. So, if you have that culture when you get punched in the face, someone will help you out. You know, you've prepared properly for that if it's static and there's only one way of doing it that tends to be a centralized form of control and as we know, totalitarian regimes don't tend to work in any environment. So, it's that autonomy, that sense of freedom of movement, that sense that everybody has. There's a phrase from rugby, it's a CEO in every position, that really understands what the strategic intent is and is empowered and resourced and has authority to make strategic decisions on a tactical level, if that's a way of saying it.
Willy Walker: I have to say, as our time is running out, I either question management or the fact that I've so enjoyed our discussion, it's either one or the two but I've got about two more pages of notes that I want to go through with you and questions I want to ask and I'm running out of time on it. So, I'm going to ask you one final one which I think does bring a lot of this together. Which is that because you focused on the All Blacks, you talk about the ritual at the beginning of rugby matches where the All Blacks come out and do their Haka and this great chant and they intimidate the opposition, but they also have this ritual to it. And what you did James, though, which I thought was fascinating, was you tied the Haka to the opening of an Apple product. And I sat there, and I said to myself wow, that's the ritual, there is a ritual of opening up an Apple product. Like every apple product you get, you know, you expect that it's going to be very simply designed, it's going to come in cool packaging that you feel is worth more than the product that's inside the packaging. It's sort of like a Tiffany's blue box, but you've gotten an Apple, even air pods that cost 120 bucks or whatever else, you feel like you're getting a special gift by opening it. And what it made me think about and you drew the connection, is that you don't have to be a sports team doing a Haka to either have ritual or some type of special feature to the product and service that you're giving that makes your employees or teammates feel like they're part of something special.
James Kerr: Yeah, listen I think that's spot on, and I think again, it needs some creativity, and it needs to be authentic, it needs to come authentically from your culture. But you know, we are very ritualized as a species, we shake hands or used to at the beginning of meetings. We give gifts at Christmas; we turn up with gifts when we turn out for dinner. There are many, many different rituals that are kind of nonverbal ways of communicating and belonging or gratitude or belief and all of those things. I think we tend to produce them in our work environments, sometimes by default during kind of Friday night. It's a continuation of that story you know, that if you can create how you want to communicate that ritual will embody literally who you are and what you stand for. So, I think they're very, very important and very, very powerful way of connecting a team and that connection is what you want, that connection about organization we're all in this together and we're all moving in the same direction and we value each other's contribution to that. Rituals like the Haka are a tremendously powerful way of literally embodying what that group is about, or what your group is about. So, I think it's an underutilized an extraordinarily powerful phenomenon in human behavior that organizations and leaders can use.
Willy Walker: It's fantastic. James, as I said, I've got a many, many more questions, hopefully I’ll have the opportunity either in person or in another time to be able to go through the rest of them.
James Kerr: I would like that very much Willy.
Willy Walker: I’m very appreciative of you joining me today. To everybody who's listened in, I would as you can tell, strongly recommend reading the book Legacy. And if your company could use some of James’s great insight, I'm certain he would be happy to hear from anybody who might want to work with James as it relates to all the things that his book contains and how you can implement them into your company, so thank you, James.
To everyone who listened in today, we will be back next week with Matt Kelly, CEO of JBG Smith will be on to talk about how they've taken JBG Smith from being a small partnership, into an institutional real estate developer, into one of the largest publicly traded property REITs in the United States and their partnership with Amazon in building HQ2, so, I hope you will join me for that. James, thank you very much and have a fantastic day.
James Kerr: Thank you very much Willy, thank you everyone.
Willy Walker: Take care.