Ready?
My biggest successes have been building great teams,
finding great leaders,
exciting those leaders to do things
that are beyond what they thought they could do.
In the beginning, I was more... If I had to think about it,
more of a micromanager.
I had to do everything myself.
And then as my responsibilities grew,
I couldn't do everything myself.
So, I eventually got to be a good delegator
and a good truster of teams.
That's where I knew I had to have great people
because I couldn't do it all myself.
I learned that I learn so much from others,
that I got smarter
from getting better people around me doing great things,
and I could take from them, their knowledge and information.
And we got better and better.
My style changed from micromanager
to trusting delegator.
I think it just happened, I'd like to think
that I knew I was too impatient, I knew I was a micromanager...
And both of those things came about when you hire great people.
You can't be an impatient jerk,
they won't let you, you won't have them.
So, you learn from these experiences.
You can't be a micromanager when you've got 400 000 people.
You can't micromanage.
These things evolve, everything is an evolution.
I kept hiring more and more people
but, when I say building a team,
you are still the captain of the team.
So, you don't give up the vision,
the values of the company, where you're going,
how you're gonna get there...
So, the broad strategy is still you.
They then, take the broad strategy
and make it much bigger and better than it was,
under the same umbrella.
For example, I wanna be number one or two of whatever business we're in,
I wanna be the most competitive enterprise on earth.
What does that mean?
It means something to that business, it means something to that business.
So, that leader will take that broad brush
and make it their own, they'll own it.
And they'll define it their way.
So, it's an evolution.
Everything is sort of evolving, all the time.
Getting it's an iteration it's better,
it's better, you learn. Then, of course,
once you get 15 great direct reports, or 20,
you take the best of each and you transfer across,
transferring the best ideas from one business to another,
from one person to another.
They then multiply
because they've learned from the other 14.
And so, everything keeps... The boat keeps going up.
Making mistakes is part of the game.
And I made more than anybody, so I would always use mistakes,
in the classroom, at Crotonville, where I taught the students, once a month,
where I taught our young managers.
I would use my mistakes as an example.
If I can screw this up,
you ought to be taking bigger chances, okay?
Teaching people to take risks
and make mistakes is an important part of leadership.
I played hockey till I was 50.
I wanted to be a professional hockey player. That was my dream.
I was very good in high school.
I was very good in every sport when I was younger.
I was probably the best 12 year old, 14 year old, 15 year old,
baseball player. Best pitcher.
I was a terrific hockey player, I was a pretty good golfer.
The problem was, the only thing I ever got better at was golf,
because my legs never got any longer,
I never got fast enough.
My fastball was great when I was 14,
when I was 16 it looked like a soft ball coming at people.
Because other 16 year olds were much better.
It happened it every sport. But I was lucky, I realised I wasn't good enough.
When I think the lucky break I had...
How hard it was, I always loved teams,
playing on teams, being in sports.
I loved hanging around with people.
You know, so, it was always there.
And it's a natural thing for me. And I think business is a game.
I haven't changed a bit in many ways. From the teams before,
to the teams now.
I learned much of what I learned about business from those teams.
When I was young, and I was playing baseball
and I was playing with the older boys.
You would go to the playground
and they would pick teams.
One team and another team.
They would throw the bat up and you would go like this with the bat
and the person who puts the hands on top gets first pick.
So the captain, he was always the older kid.
So I was the little kid, the older kid...
Would pick the team and he'd pick a pitcher,
the best player would be the pitcher.
The second best player would be the shortstop.
And then the last player picked, it was often the youngest kids,
would go to right field, way out right field, okay?
Not very... That's differentiation.
That is what you practice in business.
You take the best, we want them, we take care of them,
and the weakest... All these things are simple things.
They're not big sophisticated... They're from the playground.
I mean, business is a game.
The team with the best players wins.
I think fair is important.
For example, when you take somebody out of a job,
you gotta be sure you are doing it right,
you're treating them right,
you've evaluated that they should be the one to go.
All these affairs are a very important part of business.
You can't be perceived in any way as playing favourites,
You gotta try...
Now, one of the problems of being a leader and a CEO
you weren't trained to be a judge.
And you are often making the umpire's call,
the referee's call,
and you weren't trained to do that.
You have to...
Fair though is a very important part of being a good business leader.
And it's not...
You gotta try and make it as black and white as you can.
I don't think people know
that, in business, to be good you've got to be fair.
For example, in negotiations,
you wanna leave something on the table
so the person you negotiated with goes home feeling well.
It's not a victory if you take all the spoils
and they're mad at you.
And they don't trust you and they won't do business with you again.
So, "fair" is a very important word,
I'm glad you brought it up. Because it is an important thing
for every young business leader to think about.
But I believe, deeply, in that word.
The most self-confident people are simple.
But to be simple is hard.
Anybody can write a 20 page paper.
Try writing two paragraphs and getting your message across.
But use the word "informal".
Making a company informal is a big deal.
A big company.
And I don't mean no tie,
I don't mean Friday afternoon casual,
I mean culturally.
I mean everybody's first name,
everybody is able to talk to everybody.
There's no floor that is isolated, there's no...
Nobody is above talking to the lowest person in the place.
Anybody with an idea that's good can surface it.
That takes a lot of...
A lot of...
We put a process called "workout",
which I described in my first book in great detail.
Where we had...
Hundreds of employees would tip in to a meeting.
The CEO of the business where we would tip in,
maybe would have 120 people,
The CEO would come in,
the CEO would say: "Here's where we're going, here's what we're doing.
"I like your best ideas about everything.
"Your own job, the company's job"...
The CEO would have a facilitator there,
in those days, a professor from a business school
would be sitting there with him.
Then the CEO would leave
come back 24 hours later.
We had easels
with the writings on them.
And they would've come up with 50 ideas.
The rules were the CEO had to say "yes" or "no"
to 75 % of them.
And within 30 days,
had to have 25, the last 25 %
answers. So the employees learned one thing from that:
We gave them voice and dignity.
And voice and dignity to every employee is critical,
so that they don't have to wait for a hierarchy to...
These people...
I remember sitting once in a meeting,
with the Union Steward in Louisville...
Was... An engineer was up describing
a paint line.
The doors of the refrigerator
would go up around the building and be spray painted
and covered with this and everything...
And the engineer had a suggestion, was describing what he would like to do.
And the Union guy got up and said: "That's bullshit.
"Let me show you how that really works up there."
And he showed the whole thing. That gave him voice, in that meeting.
And it was... Cause I went to the final day
when they were telling what the ideas for everyone, just sit in on it.
And he got up and he just...
That guy never would have spoken before.
We gave them voice. So everybody felt they had a role in the company.
No one... And the guy said at the end of the meeting,
he used a great line and I'll never forget it as long as I live:
"Hey, Jack, you've been paying me for 25 years
"to get my hands and my legs,
"you could've had my brain for nothing.
"You never asked."
You cannot make a head decision without a heart.
There's no question.
You'd like to be able to clearly draw a line,
but you can't.
Because you're an emotional human being.
To think you could isolate your heart or your head,
is impossible.
Now, balancing, that's tricky. Sometimes you're heart gets in the way.
And you don't make the best decision.
Sometimes your head jumps in too analytically
and you don't think of the consequences.
But you're always trying to balance that.
It's the challenge.
It's the challenge of it being a dream, short range, long range.
Business is a bunch of paradoxes.
Short, long.
Heart, head.
And you try and do your best, and you don't always get it right.
Intuition got to me.
It's, at least, 75 % of the game.
And when you're in a job like I had, as CEO,
with thousands and thousands of people, everyone wanting something...
Every deal you look at has got a perfect return
otherwise, they wouldn't bring it to you.
It's 100 %.
We have a DCRR of 25 % on return investment point...
So, every deal you're gonna look at, no one brings in a bad deal.
It wouldn't show up.
So in order to him to say "yes" or "no" it's got...
The numbers are all gonna be perfect.
I had...
... 10 to 12 real close buddies.
And what we always said: "We're running the family grocery store."
You know?
What happens in the family grocery store?
You want to be that family grocery store.
You know your every employee.
You know when they're sick,
when their mother's sick, when their kids can't get enough money for school...
You know everything.
You know your customers, "Mrs. Jones didn't show up this morning.
"You think something's wrong? She always gets her milk at this time."
But you know everything.
That's what you'd love a big company to be, a corner grocery store.
Have feelings for the people, soul, know them, be about them.
Now, you fight every day to get there, you never get there.
But that is the goal, the family grocery store.
And you and your friends are running the grocery store.
And so you're talking like grocery store owners:
"How's the customer? How's the customer doing?"
Employee engagement, how good is it?
Employee engagement is a big word.
What it is is: "How involved are your people
"in the mission of the company? Do they have a purpose?
"Have you given them purpose?"
"Have you given them a direction, a way to go?"
There are many difficult ups and downs.
"Knocked off the horse", I like to say.
It's how well you get back on the horse after the horse throws you.
Early on my career, I blew up a factory.
And I was only in the company 18 months.
And my boss...
I was a chemical engineer, I was running a little pilot plant,
and I blew the roof of the building, no one got killed, thank god.
And my boss didn't know me anymore.
So, he sent me to New York, to meet his boss' boss.
To explain what had happened.
He thought I was gonna get booted.
So I went down to see his boss and this boss told me...
Couldn't have been nicer. Took me through the Socratic Method.
"Do you know why it happened?"
"Do you know how to fix it?", "How would you fix it?"
Instead of beating me up, I thought I was gonna get fired,
you know, I thought I was gone.
And, instead I got to know him very well,
and in the end he was very helpful for my career,
from this disaster.
So that was one.
Also, when I was CEO, I bought out an investment bank called Kidder, Peabody.
I was getting too full of myself.
You know, buying everything.
And they were all working,
so I bought an investment bank.
The numbers looked good, we were in GE capital,
we had lots of fees we were paying to investment banks.
But we had a culture of sharing ideas,
of building employees.
Investment banks have a culture of "my bonus, my bonus".
And it didn't work at all, we had disasters.
And The Wall Street Journal pummelled us every...
18 out of 24 months we were on the front page as being stupid,
for buying it, okay, in some way.
Now, we sold it, we got out, we made money.
But you'll never make up for the pain you went through, for buying that.
What was wrong there? There numbers worked,
but the culture didn't fit.
So I learned culture counts.
And I understood more about when you make an acquisition
or you make an arrangement,
you've gotta have the culture right.
If the culture's not right, you don't have it.
And so,
each one of those things were all painful, ugly, awful,
and you had to look in the mirror everyday
to get your self-confidence back.
I mean, your self-doubt creeps in, there's no question.
Every one of us has self-doubt,
we all look like we're full of confidence.
But self-doubt is always lingering.
So I've always had a healthy paranoia,
that this thing was gonna end.
This dream was gonna end.
And you gotta wrestle yourself back up again.
My mother always, you know,
was right there with me.
I have always told everybody:
"You gotta eat while you dream."
And so, don't tell me about, you can fix this ten years from now.
How are we gonna eat today?
So you gotta eat and you gotta dream.
Anybody can eat, squeeze to get it done tomorrow, anybody can say:
"Come back in 5 years I'll let you know how it worked out."
No! You gotta eat and dream.
And if you just use those two words,
and we use them every day all day,
that was eat and dream.
And you can't do one and not do the other,
or you won't have a long term company, but you can't just dream,
cause you won't have... Tomorrow's shares will throw you out.
First thing I would tell CEO's in succession
is: "You never know. You never really know what that person is...
"gonna be like when they have the job."
Let me explain what I mean by that.
When you were born, you were tied to your mother,
and your mother takes you through or your father takes you through your life.
You go to school, your teacher is your boss,
Your teacher is grading you, evaluating you, doing things to you.
You go to college, your professor is doing the same thing.
You go to work, and you work for some manager,
so you're always trying to manage your manager.
You haven't really set who you are yet, in all these places.
You become CEO,
it's you.
You go for the first time in your life unsupervised.
So, everything about you is you.
Deep-seated prejudices you had, biases you had,
feelings you had,
behaviours you had that were suppressed,
are all out there.
You never know what those things are. What you wanna do is try and find out
who the person really is,
as best you can,
and recognize
it's the most brutal job to find out you'll ever...
So you test them in different environments,
you try them remotely, you try them in close
working in the same building,
you try them working in another... In Angola.
Okay? You try them there.
How many times can you read these people
in different settings, high-growth,
then low-cost.
Then get them in one of your toughest grinding businesses,
get them in the high-growth where everything looks good all the time.
Try every situation you can get them to,
to try and find out who that person really is.
And recognize you're on a mission,
that is probably the most impossible mission that ever existed.
Who you have hired,
and what have they gone on to do?
Tell me about your hires,
the people you selected. Where did they go,
what did they do, did they leave the company,
did they grow into something else?
How many successes have you had?
How many people are now in jobs that are better than the job you have?
I always ask this question:
"Tell me about your last job, talk about it."
If they start telling you their last boss was a jerk,
a jackass...
Guess what, six months from now you'll be that person.
You'll be the jerk, you'll be the jackass.
I had a brilliant Irish mother,
who never went beyond the eighth grade.
Who did all the taxes for everybody in the neighbourhood,
who is terribly smart,
but didn't have any of the advantages in life.
And she was in her 40s,
and her family had all died from heart disease.
She had her heart attack,
her first heart attack, the same year I had my heart attack.
Not the same year, the same age.
And she had it with what her parents had...
Had it. Now, she didn't have bypass technology I had,
so, I was lucky.
But... So, she was always prepared to die.
And I was an only child.
So, she would send me to Boston,
by myself, which was a big deal,
on the train by myself.
She was always pushing me out into situations,
"Go out there"... And if there was gonna be a fight,
a street fight, she'd say: "Get out there and defend yourself."
And I'd be out in the street fighting.
And it was just the opposite of protection.
And some of the kids had big brothers, like 5 or 6 brothers,
and I was and only child,
and she'll say: "You get yourself...
Kick me in the bum: "Get out there and take them on!"
You know, you'd have to have a... Cause in my...
Neighbourhood, you'd have a fight,
you'd have... Teams would form and you would fight.
And "You can't be a wimp about this, Jack,
"You gotta go take it." Sometimes I'd get a bloody nose,
a black eye or whatever.
And she: "Get out there!"
She was always preparing for her death.
It was wild.
So, I was mature beyond my years.
Caddying, I recommend to every kid, because you learn
who's the jerk, how jerks behave,
how good people behave. You learn tipping, you learn generosity,
which is a very important part of leadership.
You learn...
... All kinds of adult behaviours, you watch them.
You see what you like and don't like,
you see people behaving in private again.
Some people cheat.
You see all those things. So it's an incredible experience,
for a 12 year old kid to be caddying.
This MBA thing is the most exciting thing I've ever done,
cause we're transforming an educational experience.
In our school, we take middle managers,
beginning managers, some not managers yet,
average age is 35,
and we teach them how to hire, fire, motivate, build.
We teach them heart, head,
we teach them short range, long range,
eat, dream...
We teach all these practical things about how to win.
Now, we don't promise you, if you come to our school,
a job in another company. We have no place for an office.
We teach you things to grow in your company.
We're a vertical, not a horizontal school.
Now if you want to take the degree and go out and get yourself a job, fine,
but in order to get in you must have a job,
you must have at least 5 years of operating experience.
And it's taking leaders...
And online, while they work,
while they're working,
learn it on Monday, practice it on Tuesday,
share the experience with their classmates of their success on Friday.
So, it's real life...
... training, if you will.
And 75 % of our people are getting double digit raises or promotions,
while they're in school.
A unique thing about this school is,
the students are the customer,
not the faculty. The education today,
it's all about the hierarchy and the faculty, etc...
We put the hands on the students. Our net promoter score
is 77. Better than Amazon,
better than Apple. Our students are that satisfied,
cause they determine... They're spending their money,
they determine that they're learning,
if they're not, we take the professors out,
they don't go to the next semester.
So, it's a... We're taking business principles,
and applying them to education.
It's exciting as can be.
Building this school,
making this school a great school,
changing the educational model,
so that everybody... It's affordable,
You get in MBA for 39 thousand dollars,
and you keep working.
If you drop out of school and go get in MBA,
you lose your salary, 100 thousand dollars a year,
that's 200, costs you a 100 more to go there.
It's 300 thousands, puts you in debt,
puts you behind the eight ball, so,
If you got rich parents, the traditional school is still wonderful,
if you got a rich aunt, great.
But, the kids that are fighting their way to better lives,
and better improvements, we give it to them.
I'm confident that this country,
the young people are entrepreneurial.
There's no country in the world that gives everybody a chance like we do.
If you think of the biggest advantage of America,
it's the match of intellect and money.
Other countries have intellect and they don't match it with the money.
So, anybody with an idea here,
can make it happen. Look, it happens every day.
How many businesses we start every day,
how many businesses we close every day.
We start and close thousands.
I think that every one of us who's out there,
should take what they like about each person,
to choose and put together who they wanna be
and what they wanna be and what they can learn from each one.
Translation and Subtitling Ana Luísa Aguiar / PSB Studios