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It's a great honor for us to be here.
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Not many people ever think of a dialysis company, so for DaVita, on behalf of our 29,000 teammates, thank you for giving us a chance to yap a little bit about what we think about leadership.
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I will have to say one thing, though, to the dean that within DaVita, if you call the musketeer clothing a costume instead of a uniform, you're fired.
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>> Speaker 1: [LAUGH] >> Speaker 1: But we one mistake we allow for deans anyway.
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The ownership, you talked about the beginning at 1999, ownership, very important concept in leadership.
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So if I can just jump into that for one moment, since the dean reminds me of the history.
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Back in the beginning, we had a different name.
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We started off to do something very different, and I'll refer back to that a time or two.
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We started out with the explicit intent of creating a special community, to say we're a community first and a company second.
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And so, just as a village, which is what we call ourselves, the DaVita Village, just as in a village, it doesn't do you any good unless you have a sustainable economy, doesn't do you any good.
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All your good intentions for what you want to do for a community will fall apart.
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Similarly, we wanted our company to be successful, but it was a community first.
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As we embarked upon this task of communicating with, at that point, about 12,000 teammates, they, after a while, decided that they wanted to change the name of the company.
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More and more people, teammates, we call them, would come up to me and other executives and say, you know what?
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This place is so different, we want to get rid of the old name.
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Other than the fact it's an ugly name, Total Renal Care, that'd be like starting a Ferrari company and calling it the Red Car Company.
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>> [LAUGH] >> Speaker 1: We want a new name, and so we had the people select, thousands of people voted and picked the name of the new company, DaVita, which means he or she gives life.
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And then hundreds of people voted and picked a new logo.
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And we went through a six, seven, eight month process involving about 1,000 people to pick our core values.
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Actually sitting down in a room, forcing people to sit down in a room in the midst of a turnaround, we were on the verge of bankruptcy and put people in groups and say, okay, let's start with this list of values.
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100 all motherhood and apple pie values, start with that list and pick out which ones.
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If you presume for a moment that not all big companies have to be the same, if you presume for a moment that companies can be as different as people.
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What values would make the most difference for a dialysis company, for this dialysis company in this decade in this country?
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Which ones would make the most difference?
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And then it culminated in a vote in a room with 800 people, and that's where the core values came from.
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So the name, the logo, the core values all came from the people of DaVita.
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Now, what I was asked to talk about today is a little bit about personal life journey and a little bit about leadership.
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And with respect to the personal life journey, I'm reminded of what someone once said, which is that usually when someone starts to talk to you about their life story, it's a lot more about their story than about their life.
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And so I'll try to avoid that and speak the facts about different parts of my own journey to the spot where I sit here today.
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And then with respect to leadership, I'll try not to be boring, and I'll use a series of quotes as we step through it, just because, in general, these other people are more articulate than I.
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And I think it's a better way to have a shot at retaining, and at DaVita, with 30,000 people spread across about 1800 locations, it's very important that we talk in ways that people can take away and retain.
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That concepts get wrapped up in a saying and a slogan and something that they can take away and remember.
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Particularly since the majority of our teammates don't have college education.
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I wanted to explain the HBS part of this.
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There could have been a lot of different reasons why I went to Harvard instead of GSB.
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One could be that, of course, that's a school where they force you through a rigorous educational process.
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>> [LAUGH] >> Where the revered and hallowed case study method, where you really grow sort of inherent, innate, powerful leadership skills, is used across the board.
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That could have been the reason.
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It wasn't, however; the reason I went to HBS is that GSB rejected me.
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>> [LAUGH] >> Speaker 1: And so.
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>> [APPLAUSE] >> I just want to say that as of about five years ago, we had 1 GSB person, at this point, we have 16.
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And I think we got the ratio about right, 16 GSB people working for 1 HBS person, I think.
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>> Speaker 1: [LAUGH] >> Speaker 1: I'm going to go up to the admissions office after this and just let them know that I just want to say thanks.
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>> [LAUGH] >> Speaker 1: That's all I want to say.
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So management is different than leadership.
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A lot of wildly successful companies financially are not well led, some are not even well managed in general, although it's important to not overstate these things.
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Management is more about the what, leadership is more about the why.
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Management is more focused on the task, leadership is more robust around the spirit with which a task is executed.
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And it's important to think about this distinction, and now go ahead and go to the next slide, Brett.
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Because management is a business skill, so if you want to get better at management, you accumulate tools in your business toolbox, you become a better businessperson.
5:30
So management is a business skill.
5:32
Leadership, we think, is dominantly a human skill.
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And if that is true, if that premise is true, then in order to become a better leader, you have to become a better human.
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And we think that is a simple but powerful truth that one has to think about.
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Because if you believe it's true, you have to internalize that and approach becoming a better human with the same sort of creativity, rigor, and relentlessness that one uses to acquire business skills.
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And I think in many ways that's equally difficult.
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Why don't you go ahead to the next one?
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There's different forms of or different situations where leadership is required.
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In some cases, it's quite easy, for example, if you're a captain in the Marines and there's an award to be won, there's not a lot of debate about what the mission is.
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When I came to what was the old company, and there was a turnaround, there was not much debate about the business aspect of the mission.
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So there's times when the world delivers you a relatively clear mission.
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There's also times when the world delivers you a relatively motivated team.
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So when you hire six people from Stanford Business School to come and work for you in a small investment management firm, motivation is not really an issue there, there's other subtleties.
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But there are times in which the world delivers to you a relatively clear mission or a relatively motivated team of folks or group of folks to work on it.
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There are other areas of life where the leader creates the mission, and that can be a purely business, external objective.
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But separately, it can be more about the type of environment in which people are going to work while they're pursuing that objective, which could be happier, more fun, more innovative, whatever.
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And the third level of leadership is when you actually work to create a world that's more fulfilling for a lot of other human beings.
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And that's easier if it's a small number and harder if it's a big number.
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And so whenever you talk about leadership, it's pretty important to segregate out when you're just talking about having the most market share or the most profit growth, something like that, that's one form of leadership.
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It is a radically different form of leadership to want to create a highly differentiated environment for the human beings in sort of normal ways.
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And it's a whole other level to talk about trying to create fulfillment, particularly if a part of what you're focused on is human beings that are not like the folks here in this room.
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But a lot of you are going to be reaching management positions, which could be leadership positions where you've got a lot of folks not like you working for you and a lot of folks not like you whose lives you're going to influence.
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And so this is where you have to start developing a very personal definition of what leadership, Means to you.
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And that's why we use this phrase a lot at Davidica.
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Begin with the end in mind.
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Stephen Covey made it well known, but it came from, as I understand it, a Buddhist monk before that.
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Begin with the end in mind is a very powerful concept at two times in life.
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One is right now or whenever you decided you wanted to become a distinctively strong leader.
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I still remember the time.
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I vividly remember the time in fifth grade when the teacher said, who wants to run for student council?
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And I decided I wanted to do that with all the nervousness of putting up posters and that terrible day when you walked up to the front of the class to give your halting speech.
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And I remember a part of what I literally thought is, gee, I'd like, as I sort of look out at read books and stuff like that, I'd like to be a person someday who gets to lead something.
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And as horrified as I am, I better, I guess you got to start doing it.
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And as ignorant as I was in so many ways, that's one of the few things in life I got like that got right.
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Leading is like everything else.
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If you want to get good at it, you have to do it.
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And doing just normal things in normal ways, following all conventional paths and taking conventional mainstreams within whatever companies you're with or firms you're with or schools you're in is not the way to practice leadership.
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It's the way to learn and practice a lot of other things.
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And so, if you take upon yourself, if the end you have in mind as of this moment or a year ago or two years ago or three months from now to become a strong leader, then you better start thinking about what it takes.
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And part of it takes doing it.
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And that doesn't mean you sort of make up a leadership task.
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And part of it is studying people who do it, learning about it, because it is just like everything else.
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Some of you are more naturally gifted in this area with either certain functional skills or charismatic skills or certain value skills or value-based behaviors.
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But it is a function, it is a product of cumulative learning and practice just like everything else.
9:56
So, one juncture at which this begin, with the end in mind concept is relevant, is like is today, if X years from now, you'd like to be a skilled leader, a strong leader, a leader who does add value to the lives of a lot of other human beings who are not like the fortunate few in this room.
10:13
A second time, when beginning with the end in mind is really important, is when you're starting, whatever you do next, when you walk in that first time in that environment, or to your new team or to your organization, or the first time you're put in charge of something significant and you need to look out to folks and say, this is the end I have in mind.
10:34
And is it going to be a narrow end?
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I'd like us to increase sales by 13% a year and increase margins slightly each year.
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And I'd like to have one new product every three years.
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That's one end in mind and then that's the end that people will relate to you around as a leader.
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It can't be, no, I'd like to do all those things, and I'd like to create a very strong and distinctive culture within our group.
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I'd like us to be more team oriented, blah, blah, blah, whatever that is.
10:59
Or it could be something much bolder, either in humanistic terms or in innovative terms or whatever else.
11:05
But you only get one opportunity when you're launching a new quest to articulate with everyone paying very significant attention to what your end is.
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So, when we started at DaVita seven years ago, we went out and remember, this is a turnaround.
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We're technically bankrupt.
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If one bank had asked for $1, we would have had to fold up our tents.
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And so, we'd spend our very first executive retreat.
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We spent the first two thirds of the day talking about how the heck we make payroll, how we improve our cash collection, how we get rid of the shareholder lawsuit, how we fill the half of the executives positions where people have been terminated or quit because they were so sure we were going bankrupt, how we deal with the SEC investigation, etc.
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Then we used the last third to start talking about the mission and the values.
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And a third of the people in the room had a positive reaction to that.
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The executive saying, well, this is different, it must be pretty important because we're talking about it at a time when the ship's almost sinking and we've just been bailing all morning and now we're starting to talk about some island that we can't even see.
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A third were sort of in the middle saying, okay, this is interesting, I will wait and see.
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And a third were very negative, feeling that this was foolish, naive, manipulative.
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Do you think you're going to keep us with some namby pamby concept of a mission and values and creating a special community?
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And it's hard to get up in front of a group in that setting, when you know that a very substantial percentage, by far the majority are not going to buy into what you're saying, are going to be at least modestly uncomfortable.
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And a very significant minority, or maybe half actually think you're full of it.
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And that's the reality that often happens.
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If you want to say as a leader, you aspire to building something that's highly differentiated, that's quite special and it doesn't exist yet today.
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It's very easy to come into a place that already has a healthy culture and say, I'm going to sustain it, I'm going to enhance it a bit on the margins, very different.
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But that's what leadership is about.
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And you only get that one shot because that's when people start to sense in that act and all the acts that follow that.
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In fact, you do fervently, sincerely, vehemently have that end in mind.
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And if you don't have it in mind, it's never going to happen.
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If you don't have it in mind, you're not willing to talk about it, then the day-to-day crush of operating reality will squeeze it out.
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Because you're going to have bad bosses, you're going to have tough budgets, you're going to have competitors who do difficult things.
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And what tends to get squeezed out in all those situations is the dream.
13:26
So, it becomes more of a job, hopefully a highly successful job, a very remunerative job, but then it reverts to being a pretty normal job for you and the people that work for you.
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That's the natural tendency to tend back towards the mean of human behaviors.
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And only you, the leader, can make clear that that's not acceptable, that that's not the end.
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And by making it clear and making it public, then you start to squeeze out time.
13:53
So, one thing we did back there in the beginning is the Turnaround is every six to eight weeks we get on the phone with the top 700, 800 people and in addition to giving a business update like yes, we met payroll again and other things like that, we would ask and answer the following questions.
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What is the incremental evidence since the last phone call we call these Voice of the Village calls.
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What's the incremental evidence that we're serious about the mission and values?
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We didn't have to discuss each component of the mission; we didn't have to discuss each of the core values.
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And in the first six, seven months, the core values didn't exist yet, just the mission but we had to discuss a couple.
14:28
And this is very powerful because when you say something out loud, people in general, if they say something out loud, they want to live up to it, even if it's highly qualitative, having to do with their own behaviors, their own aspirations, etc.
14:38
So, we said it way out loud and so the way that worked in the real world is that every six weeks or so, if you say the call was every eight weeks, two weeks before you'd be sitting there at 10 o' clock, you would have just finished working on some budget, trying to retain some customer, negotiating some payer contract, whatever, in our world.
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And you'd say, excuse my language, but you'd say, shit, that call's coming up in two weeks.
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And we have to answer that question again.
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What's the incremental evidence that we're serious about creating a differentiated place with respect to our mission and then subsequently our values?
15:12
But you would do it what it is, is often the idea that didn't flow naturally while you were already working 16 hours a day came out then, well, agree, if we were really serious about that, we would do this.
15:23
We would create a scholarship program for the kids and grandkids of our teammates.
15:27
If we were really serious about this, we would do village service days where we serve the communities where we live.
15:34
If we were serious about this, we would launch an environmental program.
15:38
If we were serious about this, we would have medical missions that go overseas.
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If we were serious about this, we'd have a safety net to take care of our teammates who make $25,000, $30,000 a year.
15:48
And when cancer strikes a spouse or when a fire burns down or whatever, there is no safety net for those people.
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And unless we're there to provide it, their life as they knew it is over and so that's what happens.
16:00
With every successive forced public event of accountability is we came up with additional programs, real world programs that did substantiate the premise that we wanted to be different.
16:11
And the message is, had we not had that public reckoning, had we not had the public bar that we set out, had we not explicitly said the end in mind, despite the embarrassment that came with it and the discomfort and some people feeling manipulated or very skeptical or even cynical, had we not done that, I can tell you right now, we would only done half of what we have done over the last six or seven years.
16:32
Which is to create a place with 29, 30,000 people, a whole bunch of which, a very high percentage of which think they work for a different kind of place.
16:39
Where we bought a similar company a couple years ago, and their turnover using the same wages, working in the same markets, in the exact same business, often just blocks apart, their turnover is 38% higher even though we paid the same.
16:51
It was all work environment different.
16:54
Our clinical outcome is better than other places, not driven because we're more clinically insightful, but because people have a different feeling around the place that they work.
17:04
Can you go ahead and flip to the next one, please?
17:10
In order to get yourself to navigate the path of leadership, it's so important to remember that just as beauty is in the eyes of the beholder, leadership is in the eyes of the lead.
17:22
Because we each have our, I have my self-image of what I'm like as a leader, you have your self image, what you like as a leader.
17:26
In general, we think we're pretty good men and women, it doesn't matter at all.
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What good leaders do is make sure that they know how other people experience them and attack that with very significant rigor.
17:39
So, for example, in our situation, everybody, including me, gets a review every year done by an outside person where you're scored with respect to your behaviors as they relate to the mission and values.
17:49
And for me, for example, my request, my scores go to the board of directors.
17:53
So, if people are thinking that, whoa, the words on that banner, the words on that plaque are nice but not real, they get to tell the board of directors that.
18:01
They get to tell, they give me the gift of that feedback.
18:05
And this is a relatively extreme case.
18:07
But the important point is there's a very good chance that half of what you think about how other people experience you as a leader when is probably wrong.
18:15
It misses the nuances, it misses the test of if they were asked whether or not Mary Jones or Tom Smith really intensely believes about certain core values or in creating a certain type of work environment.
18:27
It misses the fact that in a lot of cases they'll say no, I'm not saying Tommy or Mary are bad people, but they don't hold those things that close to their heart.
18:36
The business imperatives, the business objectives trump every time in such a significant way that while they don't violate those rules, I would never tell you that they're a leader who's actively promoting those rules, those values, those behaviors.
18:50
So, leadership is in the eyes of the lead.
18:54
How does all this relate to some near-term decisions for you folks?
18:59
Well, picking a job, picking the job you're going to choose when you leave here.
19:02
Again, this is all in the context of if you are contemplating wanting to become a differentially talented, effective, strong leader, particularly for people not like those in this room.
19:15
Well, then in choosing a place to go work, it is not logical to pick a place that doesn't talk a lot and invest a lot and care a lot about leadership.
19:27
If you really want to learn something, don't go to a place where most of the people are not good at it.
19:32
That not wise, you might do that later in life to run and transform it.
19:37
But right now, if you want to become a great marketer, don't go to a lousy marketing place.
19:42
Yeah, you'll get more marketing responsibility, perhaps, but that's not what you need to become great.
19:46
One of the things you do need to become great is learn from people who are really good at it and study them with great intensity.
19:52
So, as you pick a place, think about this and secondarily think about the broader DNA of the place you choose, all organizations have DNA.
20:01
DNA typically doesn't change much, I'm always struck now that I'm getting so darn old when I talk about the brand image of different firms on the campuses here and at Harvard and Northwestern and talk about the adjectives you would use to describe different companies, different firms.
20:18
And what's so amazingly striking is that they're virtually the same as if you had sat down with eight students 25 years ago.
20:27
Virtually the same and despite all the trials and tribulations that different firms have had and things that have gone in their industries, the adjectives end up being the same.
20:34
DNA runs pretty deep in most organizations unless someone takes very active steps to change it.
20:39
So, respect the DNA of the entity and don't be misled by the DNA of some particular little department or team you're joining, because unless it's your aspiration to stay there.
20:48
It's very difficult to contemplate DNA shifting, and it is very relevant, again, particularly in the context of learning about leadership and whether or not it's a culture that treasures, nurtures, celebrates, rewards, and invests in leadership in addition to management.
21:07
For me, after business school, that translated to a decision to join Bain, which was for two reasons.
21:12
One, I wanted some place, I wanted a consulting firm that was more implementation oriented because I knew I wanted to be an executive someday.
21:18
And second, because versus the other places that I was looking at, they seem more team oriented, which to me had a lot to do with what I wanted to do when I grew up.
21:26
I wanted to be a team leader, that was my end in mind.
21:31
And so, that was a very heavy criteria separate from anything else in picking where I went to work, so I just encourage you to contemplate the same stuff.
21:39
Now I'm going to switch gears radically and switch to marriage, because in fact, it has, and since I spend time every year with first years and second years contemplating jobs, and often the conversation turns to what is sort of the rest of life like.
21:57
The obvious thing to say marriage has a relatively important effect on the rest of your life.
22:06
But what's striking for my wife and I, who is also an HBS grad and then became one of the first female venture capitals in America, is how many of our friends no longer have marriages.
22:18
They're either about a third of them, a little over a third are divorced as we look across the class roles, and there's about another 15, 20% where the love in the marriage is dead.
22:27
And so, that's pretty striking because these people, they're from schools like this, a bunch of them are from this school.
22:34
And what we see is they're couples where one of two things happen are the ones that are most likely to have a dead marriage or an ended marriage.
22:44
One is when there's a real differential capacity for continued personal growth.
22:49
And the way this relates to leadership in part is that to become a strong leader over time takes that sort of commitment to sustained personal growth, that sort of introspectiveness, self-awareness, courage to confront your weaknesses, courage to talk about them openly.
23:02
Courage to talk openly in public about how other people experience you in a way that you don't think is fair to you, don't think is accurate, but it's just how they experience you.
23:12
Well, similarly in marriages, a lot of the divorces and stuff we've seen are from where there's a different trajectory of personal growth.
23:19
And the other is when one of the spouses gets way too focused on work, and there's a tremendous disconnect on that balance issue.
23:29
And how one's life goes has dramatic impact on what kind of leader you can be.
23:35
There's a great Buddhist quote, one does not pour from an empty cup.
23:39
And a great marriage adds to your cup, and a low-quality marriage takes away from your cup.
23:46
And so, it's obviously an important part of life, and some of the principles that make it important and take it up or down are the same kind of things, ironically, and maybe not intuitively, obviously, to what it means to be a leader of. Of other human beings.
24:19
In talking about leadership, there's always that question, what makes a good leader?
24:23
It's a relevant question. It's worth discussion.
24:25
There's lots of lists out there, lots of different books, lots of different articles, many worthwhile in my mind.
24:33
There's a lot of overlap in those lists as well.
24:36
And some lists are slightly more appropriate for someone if you're a CEO or president than they are if you're something else. But it's valuable.
24:44
From my experience at this point, I say, gee, those lists, those are important, but they tend to be behaviors or skills or practices or disciplines.
24:53
And what I've come to appreciate more over time is how much.
24:58
It's not so much those that matter, but what are the attributes, the values, the aspects of the person's being that allowed them to develop those skills, consistently practice those behaviors, possess that discipline, etc.
25:13
So there's a root cause underneath a lot of those lists which doesn't get as much attention and has a lot more to do with the human being.
25:21
And on my list in that category, and I think we have this on a slide, Brett, if you can go ahead and put it up. Well, this is.
25:32
I'll do a quick segue here.
25:34
This is a different subject.
25:36
This is more typical list of what you would find in an article.
25:40
The point to make here is that in our organization, we went through a significant process with hundreds of people to define what it meant to be a DaVita leader.
25:49
And again, the exact list doesn't matter.
25:52
But what matters a lot is having a very serious conversation about it and forcing every individual to reflect on what they think is most important, to hear what other people think most important, and to instill this in their mind.
26:05
And then what we do is try to remind people of what they said a good leader was because.
26:11
And we were talking earlier today, I was with Professor O'Reilly, and the issue of reminding organizations and leaders about core values and the mission and what it means to be a leader is a very big deal.
26:26
And the metaphor I use, it's like, why do people go to church?
26:30
Some people go to church every Sunday.
26:31
You say, why do you go to church every Sunday?
26:34
Because you've had that Psalm read to you before or you've probably heard a similar sermon before.
26:38
Now, you go to church to be reminded.
26:41
Well, similarly, if you're trying to create in the real world, the real hectic world, the real world with budgets and turnover and family conflicts, etc.
26:48
The real world of managing teams, building teams, trying to create a differentiated environment, you got to figure out a way to remind people of what they dreamt of, remind people of what they aspired to.
26:56
And one of the ways you do it is by making sure there's a reasonable consensus on the right words, one set of right words and then making sure people are reminded of it.
27:03
And that can be through banners.
27:05
We do it through songs, we do it through slogans, we do it through an annual exercise where every single person has to sit for half an hour at a meeting where we're all in the same room and reflect and fill out their own mission and values report card.
27:17
And then if they want to talk about it with others that are around their table.
27:21
It's a part of every professional development review that the first thing you get is your most important message about your performance and your professional development over the past year.
27:29
The second section is comments on you in the context of every one of our core values and every component of our mission.
27:35
So a huge amount of not only continuing to develop yourself as a leader, but your organization is this issue of reminding and hence in that sense, any list that's a write up at your organization is probably the right list, but underneath it.
27:49
And Brett, if you could go to the next one, please.
27:53
That what I think as I look at who have emerged as successful leaders who create fulfilling environments for other people over time.
28:01
They tend to have these sort of points of view, core values, things that are in their being and that allows them to do all those other things without it being painful and long to break in the system.
28:11
First of all, they're committed and people know they're committed and that can be to a particular set of values, a particular type of environment or whatever.
28:18
But there's a palpable commitment which is deeply held and not tactical and not just situational, but beyond that.
28:27
Second, they're personally secure.
28:31
You're going to have weaknesses.
28:32
People in your organization are going to have weaknesses.
28:34
If you can't get to the point where you can get up in front of a crowd and say, you know what? I'm Kt.
28:39
That's what they call me at work.
28:41
I get a lot of feedback and I'm micromanaging this next year.
28:46
I get a lot of feedback and I'm showing too much anger when someone underperforms.
28:50
It's fine to give objective feedback.
28:52
Totally inappropriate and unfair for a CEO to show anger.
28:55
These are all real examples, by the way.
28:58
Kt, this year you got rid of that anger thing that was good.
29:02
But in debates you sort of have to be right and you have the benefit of position and why don't you grow up and stop having to be right?
29:09
And so if you can't get to the point, and these are all real world examples, unfortunately, some of which I've conquered and some which I haven't.
29:21
Then you're not on the path to being a great leader because you're not personally secure enough to face the truth and discuss it with people and your organization's never going to be. Never going to be.
29:31
And then when you tell them what's wrong with them, where they have to grow, they don't necessarily want to listen to you much because they say, well, what are you yapping at me for about micromanagement or this behavioral deficiency?
29:43
Because your faults are legendary, Kent.
29:45
And until we get them out on the table, just back off. So it's a very big deal.
29:52
Just personally secure communicates.
29:54
And by that it doesn't have anything to do with your ability to articulate, your ability to speak.
29:58
Now communication is primarily non verbal when it comes to leadership.
30:02
The fact that you can give a good speech only matters if everything you've done before it and everything you've done after it supports it.
30:09
Everything you've done behaviorally in terms of decisions, otherwise, in fact, the speech is a huge negative because people look up there and say it's a fraud or maybe something short of that.
30:17
But not reinforcing, not powerful, not motivating, not instructive.
30:22
So communicating is about listening in particular.
30:25
So, what's one thing we do at DaVita is it's a rule.
30:28
Every executive at DaVita, whenever you're any place where there's more eight teammates, you have to do a town hall. That's expected.
30:34
Now of course sometimes it happens, it just can't quite work.
30:36
But there's hundreds and hundreds of town halls.
30:38
I personally do lots and lots of town halls everywhere, all over DaVita every year.
30:42
And it doesn't really matter what gets discussed.
30:44
Of course it matters to some extent.
30:46
What really matters is that they get to hear any question being asked, any advice being given and they get to see how a leader, an alleged leader responds in public all the time.
30:56
And we get, is that people who come to us from other companies and they say we have seen the CEO or the COO or the C whatever more times in the last two years than we ever saw the CEO or whomever in the previous 15 years.
31:08
And they don't bring up, they don't say and Kent, you made a good comment or you said something smart.
31:14
They just say, no, you were there, you listened, you answered the questions. That sort of works.
31:20
That sort of works very powerfully. That's communication. That's communication. And it's huge.
31:26
It's huge because they're back to this thing where leadership is a human skill.
31:30
And as the old saying, they don't care how much you know until they know how much you care.
31:35
And if you're not willing to get out there and listen and have a team that goes out there and listens and communicates through their actions in those kind of ways, then the rest of the stuff just doesn't.
31:45
The leadership train stops. It just does.
31:49
Being accountable is a big deal.
31:51
When we do our annual we call State of the Village speech to all sorts of people, including shareholders, the first slide is always the areas where the CEO and the C.
31:59
Myself, and the COO underperformed, that's how we started off with.
32:04
Because how are we going to talk about all the rest of the stuff and take some of the good stuff and other people's failures unless we kick it off by talking about ours?
32:12
It turns out accountability is just one of the most powerful differentiators because relatively few leaders get it right.
32:18
Relatively few leaders will just calmly stand up and say, you know what, this went wrong and I own it.
32:26
And you know what, I'm not going to blame the wind, I'm not going to blame the budget.
32:31
There's a whole lot of extenuating, and what happens is, if you take accountability, people will start to say, well, you know what, that budget was kind of screwed up to start with.
32:39
Well, you know what, we never knew the competitor was going to do that, they will fill in the rest.
32:43
If you start from a spot which says, I'm accountable for that, I own this, and if you don't do that, it gets very difficult when you want to own successes.
32:50
I always love it when every year you have people come in halfway through a year and certain people are behind budget, and they go, well, the following six unexpected, uncontrollable things went wrong, that's why I'm behind budget.
33:01
Now, No one comes halfway through the year that's ahead of budget and says, the following unexpected, uncontrollable things happen, and that's why I'm ahead of budget.
33:09
>> [LAUGH] >> So it's a fascinating world out there, it only works one way, only bad unexpected things happen, never a good unexpected thing happens, and then lastly, the most powerful leaders serve.
33:20
They serve the cause, or they serve the people, they serve some combination.
33:23
When people sense that you're the boss, you get to make decisions, you get paid more, you get a bigger office, whatever that is, they don't mind that as long as you serve the cause that they serve, or you serve them or both.
33:36
That is when people start to say, I will follow this person, I trust this person, because they care about me, and they either serve the cause I love or they serve me or both.
33:46
And again, you can do a lot of other things, but if you don't get those basics, it ain't happening.
33:51
It ain't happening unless you're in a small seven-person investment management firm where really leadership isn't quite the same issue as it is for most human beings out there working at different levels.
34:01
I was at Bain, I want to be an executive, I left, went to a dialysis company in 1991.
34:08
Should have been fired in the first year, I was just terrible, I was intent on proving how smart I was to a lot of people who didn't have Harvard MBAs and Stanford undergrads.
34:17
If the guy who was the place I was taken as CEO wasn't a very generous, mature man, I would have been fired, I wasn't, so I got to learn, I had training wheels and an easier business, I got very, very lucky.
34:31
I intended to leave that business within a year or two because for me, it was the opposite of a sexy business.
34:38
Dialysis, it's a lot of Medicare patients, everyone dies, so I said I'm going to prove I can be a CEO of a public company, and then I'm going to go on to something that is more befitting my race driver status in life.
34:52
>> [LAUGH] >> And what happened instead is I fell in love with it because there are lots of blue collar Americans working hard, doing good stuff and to add value to their lives found out to be this amazing fulfilling thing.
35:05
Not because I planned it that way, but it happened that way in front of my eyes, and so I didn't leave.
35:12
I stayed until we got taken over, unfortunately, by a much larger company.
35:17
And that's probably the only company in the history of the New York Stock Exchange that when the board voted that they had to accept this offer from this European company, The CEO cried in the boardroom.
35:28
Stopped the meeting while I cried because this beautiful thing that we had going as my aspirations of building a community were just starting to form intellectually and functionally was dashed by this wonderful large amount of cash.
35:43
But unfortunately which terminated the dream of a different place, then I ran a different company, and it was a failure from which I learned more about myself and people than I had learned in all previous years.
35:56
And then I was done, I was going to resign, take six to nine months off of my family and go into the not for profit world.
36:05
So when I got hit 100 calls, I would say nope, I'm taking six, nine months off with my family and then don't know what I'm going to do, call me then.
36:13
Because I didn't want to preclude myself from maybe if I changed my mind.
36:18
And then I got a call from this dialysis company, this total renal care, and I literally picked up the phone and was going to give the same pitter-patter I had given to other search firms.
36:28
And I have no idea what I said because all these, the memories of how my experience in that setting were the most fulfilling I had ever had professionally came flooding back, and I don't know what I said, I do remember the next part.
36:43
I went home and my wife Denise was sitting at her desk and I said, Denise, that Total Renal Care called, and she looked over her shoulder and said, well, we've been expecting that.
36:53
Because I'd been a CEO in that industry and was regarded as successful and there was a turnaround, and it was in the same state of California.
37:00
So we've been expecting that, and she turned back because of course I was supposed to give the answer I'd given to everybody else.
37:06
And then five, six seconds later, since I'm still standing there, and she turned with a look of very intense anger- >> [LAUGH] >> And said, Kent, you didn't, and I like a little boy, said, didn't what?
37:24
>> [LAUGH] >> And she said, you didn't tell them you would interview for that job, and I said I didn't, but I want to.
37:34
And so we had this hellacious conversation because she said, you testosterone, ego driven son of a gun, so to speak >> [LAUGH] >> What happened to the family time? What happened to this?
37:48
And I said, well, there's some truth in what you're saying >> [LAUGH] >> But there's also this other thing which I think I can live my professional dream, I think I can add great value.
38:04
I like these people, this is a pitch I want to try to hit, this is where I can do everything I wanted to do, if I took a not for profit job, I can build a community here.
38:17
I know this place, this is what I think I can do, and so we went up and down for a couple weeks, just a very stressful time for our marriage as we wrestled with it.
38:28
And we decided ultimately as a family that we would do it because what felt like a burden at the time, which is it was a turnaround, it was going to be very hard in the family, was in LA.
38:42
And she made very clear we weren't moving from this area, the Bay Area, so I was going to be commuting up and down away from our two kids, so heavy, heavy, heavy issues.
38:52
But we decided that this was an opportunity for me to live my values in a way that I might not ever get another chance to, just can't count on that.
39:01
That second, our kids would probably take away the right message, that even though daddy was gone more, he was gone because he was trying to do good, and he loved his job very, very much.
39:11
And so we gave it a try, and so the burden of that decision turned out to be a gift because I've never entered a job with such clarity about the end in mind.
39:20
And since then, we've done a whole lot of things only recruiting folks, using our mission and values of parameter, helping develop people as human beings.
39:29
Reinforcing this, honoring those folks who behave differently as human beings more than we honor folks who are better at business, we reward them with greater bonuses and stock option exercises.
39:39
In the special nights and special days, we honor those people who are better human beings, not the ones that are better business people.
39:47
And so it's been this glorious adventure, so my final comment is that once you find, once you're near the area that you think can allow you to serve in an unfettered way, have your passions express themselves in a professional way, it doesn't matter what kind of business it is.
40:04
It doesn't have to be not for profit, just jump into it with all your heart and soul, because you can't go very far wrong.
40:13
You can't go very far wrong, and there's an old Indian saying that most people go to their graves with their music still inside.
40:20
And so just be sure that as you climb up whatever ladder that you're focused on that all GSB students get to climb, that you figure out where your music is, because it's terrible.
40:32
We have so many 51-year-old friends who are not fulfilled, they're financially very secure, and they're not fulfilled.
40:39
There's in fact no correlation with our HBS class with net worth and fulfillment.
40:44
And so those are my closing thoughts, thank you very much. >> Speaker 1: [APPLAUSE]