C (3:40)

Mind? Oh, gosh, big one. First of all, it's terrific to see you again. Thanks so much for having me. And that was a mouthful of an intro. So thanks for. Thanks for.

B (3:48)

Putting. There's a lot there, but it's all super.

C (3:51)

Relevant. I mean, I think 2025 was a wild ride for everyone, Right. I'm not sure 26 is going to be any less wild. And so how do we as leaders and as people sort of stay grounded in all of this and sort of keep our heads about us and chart a path? Right. I think there's phenomenal opportunities out there. And part of it, as a leader is to kind of separate the signal from the noise. Right. And be able to.

B (4:18)

Navigate. And as you focus on what helps you separate the signal from the noise, what is it that you either do from a work standpoint or from a personal standpoint that allows you to. To separate those.

C (4:30)

Two? Yeah, that's a good question. I think it's something we're all working on, to be honest. You know, I do. I did spend some time over the holidays, as I think a lot of people do, both looking backwards, but also really trying to look forwards and say, how do I make sure I don't let my calendar just happen to me? Right. But as both, whether it's a leader at work or with my clients or with family or just myself, you know, what are the big rocks for this year? Right. What are the things that you really want to be making progress on? How will you carve out the time and attention for that? Because there is plenty that will just fill your days if not. And there is real benefit, I find, especially with leaders who can get so caught up in the firefighting in the day to day, they're almost apologetic for creating time to think and to plan and to do that integrative work. And as we'll get into today, that is part of the job as a senior leader. Right. You're the only one who sees all the pieces. So if you're not creating time to step back routinely. Right. And look across all those pieces, look around corners, see what's happening next. That's not something to apologize for. That's real work. That is part of your job. And so just reminding myself to do that.

B (5:45)

Too. And is there anything that you either learned or sort of got clarity on, either throughout 25 or at the end of the year that you have taken as sort of a New Year's resolution that is going to shift the way that Carolyn lives her life, either personally or.

C (6:01)

Professionally? You know, maybe two things are coming to mind. I'm sure there's more. Right. One was a learning from CEO Excellence. It came from Michael Fisher, who was the CEO of Cincinnati Children's Hospital. But he had this phrase, we all talk about your to do list. He talked about your to be list. And then as a senior leader, whether you're intentional or not, how you show up every day has a ripple effect through your organization, through your stakeholders. And so you better be intentional about it, because if you show up grumpy or this way or that way, or ask certain questions, people will read into it. And so you really want to be thoughtful. He took it quite literally. And he used to print his schedule every morning and right next to each meeting. How did he need to be in that meeting? What did the organization need of him in that meeting? And it, it's not about being inauthentic, right. It's not about pretending you're someone saying, look, you're in the privilege to be in these roles. What does the organization need of you for 26? Do they need you? And I'm trying to think of it. Do they need me to be decisive? Do I need to be bold and ambitious? Do I need to move faster? Do I need to help people connect the dots? Right? What, what does the organization need of you and how will you live into that, I think, is a really clarifying.

B (7:18)

Thought. Very much so. Let me jump back to CEO Excellence for a moment, because in CEO Excellence, you talk about the six mindsets that distinguish the best leaders from the rest, if you will. And you and your on that book, two colleagues spent 350 pages in this and went through these six mindsets, which I find to be interesting in the sense that you don't sort of call them characteristics, you don't call them habits, you don't call them strategies, you call them mindsets. And I, and I, and I do think that that's, I'm assuming that you all sat around for many hours trying to sort of say, okay, we've identified these six things that these leaders who've completely outperformed have done how do we sort of categorize them and what, what are they? Let me run through them and let me let you comment on that. But set a direction and be bold is number one, align people and specifically prioritize the soft stuff. Three, mobilize teams by tapping into human psychology. Four, engage the board and help the board create value for the company. Five, connect with stakeholders and focusing on the long term purpose of the organization. And six, enhance personal efficacy, prioritize CEO exclusive tasks of those six mindsets. First of all, are you surprised, given the number of companies that you and McKinsey work with, how many big company CEOs either disregard or skip one or several of those.

C (8:49)

Six? That's a good question because embedded in that list. Yeah. There's two parts to the question. One was what is the CEO job anyway? Which is where you came. We came to kind of the six categories. This is what a CEO does. I think we were hoping that there would be habits and tips of okay, you just need to do it this way. Well, it turns out leaders are really different, right? Jamie Dimon's different to Mary Barra. We spent time, Satya and Adela with all these folks. But their context is different, the organization, the size is different. So how they may choose to show up and spend their time might look quite different. But the mindsets, the way they thought about their role versus, you know, those six responsibilities was remarkably similar for those who do it really well. Right. And I think that's the distinction is you can imagine at McKinsey we took a really analytical approach. We didn't want to learn from just anyone. We said, well, who are the folks who have been in the top 10% of outperformers as CEOs? And there was a bunch of analytics behind that. What are their mindsets? And some of those mindsets are quite different from kind of prevailing wisdom. And we can get into some of that. But what were the mindsets of the folks who've gotten this job right and have done well with it? How do they think differently? And from that, a thousand different behaviors kind of bloom if you've got that right way of thinking. But that's what we were focused on for folks at the top of their game. How do they think.

B (10:13)

Differently? And if you look at industry, did the top performers just happen to gotten into the right company in the right industry at the right time, or did you, if you will, neutralize on that and strip that out, that it wasn't just tech CEOs who happened to have had a great seven year run as the tech industry was running off the charts. But it actually was more broad based than.

C (10:36)

That. Absolutely. And it's a good call out our methodology we had four criteria. One, you had to be in the top quintile of excess trs for your industry because we wanted to normalize for. Yeah, if you're the best of the best in mining. Right. But just the PE ratio is different. Right. Than in. Than in tech. We normalized for that and the kind of tailwinds and headwinds you have. We wanted you to be enrolled for at least six years. And that was because we wanted CEOs who'd been around long enough that they had to eat their own cooking. Right Decisions they made early they were now living with the consequence of that everyone can have a great first year. Right. How do those who had longevity. We wanted a range of ownership structures. They're mostly public company CEOs. There are some private, there are some family run, there are some founder led. Right. Although founders have degrees of of freedom maybe that are a little bit different. And then we did do a check for just kind of reputation and behavior. Right. So beyond the company performance itself we wanted these to be leaders that folks would be excited to.

B (11:42)

Emulate. Any clear differences between public and private founder led that sort of that come to light. I personally having run this company as a private company and becoming a public company, the requirements of leadership changed dramatically from 2009 when we were a private company to 2010 when we became a public company. In the sense that I felt like I could run the company in the rearview mirror as a private company. I could look at what we did the last quarter, the last year and sort of sit around and sort of say okay great, let's improve on that next year. Let's do a little bit here or there. Whereas the moment that we got into the public format, I quickly realized that public shareholders only care about where you're going, not where you have been. And that that desire and need to contin be focusing on where are you going rather than what you've just done. I think a lot of people sort of. I've kind of underestimate the need for public investors on just set the vision and tell me where you're going and then go execute on it. Versus in a private format. I think you have a little bit more luxury to sort of live in the present or live in the past. Anything else Carolyn, that you see in looking at public versus private, even.

C (12:54)

The example you share I think is really interesting because even within private There's a difference between sort of family run or more patient capital funding, private versus private equity that where the time horizons might be really, really compressed. Right. And public. I do think the time horizon, the past versus present is different who your constituents are. Right. So what does it mean to have a board? Obviously in a public company context that's different. If you're a PE CEO and you have a, you know, a deal partner calling you every Friday like that's a different set of constituents as well. Family owned obviously has all the complexity often of multi generational as well. And so there are some differences. But the mindset of as the CEO, your role is to set the direction and mobilize people and kind of be the guardian of the institution, I think remains. Even if the time horizon or the context is a bit different. I do think founders maybe have more degrees of freedom than any depending on the ownership structure and a little bit more room to, to do their own.

B (13:56)

Thing. And does that from your view, without using any names, think that they might be suboptimal in management because they have that.

C (14:05)

Leeway. I don't think necessarily in some ways it enables you to be really bold. Right. And what, what does that look like? We've seen some founders who are still continue to be the CEO and the organizations are very, very big. Right. I think for newer founders, you think about all of the hypergrowth and AI and tech companies right now that are on these rocket ships and they, I think they're going to learn especially if they go public in the next year or two, some of what you learned of, okay, there's a different rigor, there's a different discipline. What does that look like? And so there's some growing pains.

B (14:35)

There. I'm sure you said founders may be able to make some bold moves in a CEO for all seasons. You sort of lay out the sort of the, you start in the spring when someone is coming into the role, then you move into the summer in this period of time where they really are going to start to have a, a real impact on the organization. And one of the things you say in the summer is to move quickly and, and make some bold moves. Make, you know, to your suggestion, two bold moves very quickly. Why is it a so important to make those bold moves? And then the second question would be, have you ever seen a CEO come in and make a big bold move that didn't work and recover from it? Because one of the things that I sensed from reading the book was if you mess up on one of those first two Bold moves. The chances that you're going to be a successful CEO are pretty.

C (15:22)

Slim. To be fair. It probably should say be bold and be.

B (15:26)

Right. Yeah.

C (15:27)

Exactly. You're bold and wrong. You wouldn't have ended up in our data set of high performers. Right. And so that's fair. But also if you're incremental, you wouldn't have ended up in the high performing data set either. And so all those folks who achieved that top quintile performance in their industry could point to very specific bold things they'd done early. I think it does a couple of things right. There's a lot of talk about the shortening of CEO tenure. Right. It keeps creeping down. Right. Nine, eight, seven, six point something. It turns out that masks, it's actually a bifurcation. One third of CEOs don't make it past the first three years. For those who make it past three years, there's actually quite a lot who stay for a decade and beyond and do remarkably well. So there is a make or break period in those first few years, especially in public company, well, private equity as well, where they're just not patient. Right. You have to show as you to your point earlier, forward momentum, forward, progress wins. And you have to do that early. And so, you know, some of this is just if you don't have a win or two in your first year or two, markets and investors get impatient. Right. I also think there's something about the organization, Right. So we were talking not, not Doug, who's retiring at Walmart now, but her previous CEO of Walmart before Doug. He saw Amazon coming, Right. He knew that that was starting to percolate. But he was the brand new CEO of Walmart, you know, had inherited this institution, families all sitting on his board. He didn't want to mess it up. And he thought he had to spend the first two, three years showing he could run the stores, showing he could be respectful to the history in the past. And by the time he was willing to make a bold move in year three or four, the organization and the markets weren't willing to follow. They'd already sort of thought, oh, you're not that guy. You're not the one who's going to be radical and bold. And so they'd, you know, you're setting a tone in the first year or two as well. For here's the kind of leader I'm going to be. And that's, that's another.

B (17:26)

Piece. That Walmart anecdote is very similar to the Andy Grove anecdote that You. That you have in the book. Will you talk about that? Because I think that that's a super important one as it relates to. Well, if someone came in from outside today and took your seat, what would they.

C (17:41)

Do? Yeah. Yeah, I love this. This was one where, yeah, the, you know, performance had been struggling and they were really worrying what to do. And they were having a really rough board meeting, and he kind of stepped out in the hallway with his counterpart, and they said, well, basically, if we were fired and two new people walked in to the organization to run this place, what would they.

B (18:01)

Think?

C (18:02)

Right. Another version of it is we hear CEOs say, almost write the activist memo for yourself before the activist does. Right. But taking that real fresh eye view multiple years into your tenure and say, if I took an outsider view, what would I see? What would be working well, what's not? And do we have the courage to have those hard conversations, especially in the middle years? The biggest risk in that middle years is complacency. You've been successful. Why can't you just keep running the play? And it takes real courage to say, wait a minute, okay, fresh eyes. Would I have this team? Are we being bold enough? Are we being really responsive to what's happening externally? Am I even the right leader for this next chapter? I mean, those are all really legitimate questions to.

B (18:48)

Ask. And what did Andy Grove end up doing when they asked that question about if someone came in and sat in their.

C (18:53)

Seat? Oh, they. It prompted a massive.

B (18:56)

Transformation. They got out of the memory chip business and created the business that's created Intel.

C (19:02)

Right. Yeah, no, absolutely. Sorry. Yes. It was a massive pivot. Right. They. They're like, okay, clean sheet of paper. What would we do? And it was a massive strategic.

B (19:10)

Pivot. And, and on that, you use the anecdote of Michael Dell, which I think is. Is. Is. Is helpful for people to sort of say, okay, if you're not Andy Grove, and you don't say, I'm going to step out, someone else comes in, looks at this and says, let's get out of memory chips and let's move in this direction. But Michael Dell did an exercise with his management team that I thought was quite interesting that helped transition Dell. Dell did.

C (19:34)

Sure. And Michael's interesting because he's been a CEO since he was 19. Right. So probably one of the longest serving, if you think about that's out there. And he has had to shock the system multiple times to avoid this complacency issue. And so, yeah, he walked into his leadership team off site and he said, okay, you know, I've been having lots of conversations. There's a competitor out there that is moving really, really fast and in three years time they're going to clean our clock. They would have stolen our customers, have better products, have better service delivery. It's happening and so we better figure it out. That was kind of the frame. And then he admitted, he said, look, you know, that's, that's hypothetical, but let's assume that to be true. And what would it take for us to be that competitor? Right. If we were the competitor sitting out there trying to say, how do we attack Dell, how do we make sure that we beat them at their own game, what would we be doing now? And they went on a whole process of really digging into where were their gaps that they weren't seeing, what are the innovations they were missing. If they weren't afraid to kind of kill some of their pet projects and things they really loved and stop doing some things, what would that look like? And he did that and a version of that multiple times with his team to keep reinventing the.

B (20:49)

Place. And when I hear you talk about that, Carolyn, I think about scaled companies like Adele that have lots of resources, they've got a strat planning group, they've got all sorts of things to sort of have that kind of review. And I, and, and I am assuming that that sort of, that process should be done by every company that exists, big, middle, medium, small, that there are people who are listening to this that are real estate developers who own, you know, three properties. They've got a group of five or six people who run the company and they sort of say, well, Michael, Dell might go do that, but we don't either have the resources or the need to do that because we just kind of have our properties. I'm assuming that the viewpoint from you and from McKinsey is it doesn't matter how big or small your company is, whether it be resilience testing, whether it be risk management, whether it be this type of, we might be disintermediated or a competitor might come eat our lunch. These are the types of things that every company ought to be focusing on an annual.

C (21:50)

Basis. Absolutely. And this is one where technology is actually a great leveler. Right. Because we all are using, you know, we're playing around with ChatGPT to rewrite our emails and do all these things. But some of the better use cases I love that individual executives are using so, you know, not necessarily big at scale workflow things is to use it as a thought Partner, a sparring partner, right? You don't need that whole big team necessarily to prep all the documents. One of the things that whichever AI tool you like is great at is taking on a Persona, right? What if you said, okay, here's our strategy or here's what we're doing, Take on the Persona of our competitor, do some research. What would they be doing differently? What would they look like? Take on a Persona of someone outside of the industry. How would they be thinking about it? I even know someone who created almost a mini board of directors. They're just a very small shop, right? Founder led, smaller shop place. They picked four or five of their best kind of business leaders they admire out there in the world. They had their AI tool do deep research on those individuals. There's enough written about them, you can feed it in. And they have board meetings with that group of four or five on their phone and they say, here's my idea. Okay, Jeff Bezos, beat it up. Okay, Dario at Anthropic, tell me what I'm not looking at. And they have these people challenge their idea. I mean, not for real, right? But they've all been interviewed enough and there's enough out there that you can kind of get into what it is. So people are doing interesting things to challenge their.

B (23:24)

Thinking. So similarly, Carolyn, the book is all about CEOs and outperforming CEOs of the world's largest corporations. And yet, as I read it, there are a lot of lessons in here for pretty much everybody in corporate America. Everybody who is either an investor inside of a company, taking a leadership role either in a corporate environment or in a nonprofit environment, or in their community. Talk for a moment as it relates to. In a CEO for All Seasons, you start with positioning yourself to become a CEO. How do you get into a large corporation? You talk about how the chance of becoming since 1953 or 56, when Sir Edmund Hillary got to the top of Everest. 50. How was it 56? I think it was 56 there. Your chances of getting to the top of Mount Everest are higher than becoming the CEO of a Fortune 500 corporation. Okay, so less people. Seven thousand have gotten to the top of Everest. And there have been less than 7,000 CEOs of Fortune 500 companies since 1956. So it's a. It's a pretty small group of people. And yet at the same time, there are thousands of people who are both middle or upper managers who might be thinking about how to get to that top spot or people who aren't running a Fortune 500 company, but run a very either scaled or small enterprise that can learn from the way that the people who get to that corner office have led their careers, manage their attitude about how they're engaging with their colleagues, how they're dealing with crises, et cetera, et cetera. Talk for a moment about what you saw in those people as it relates to positioning yourself for that corner.

C (25:07)

Office. Absolutely. I would say 99% of our research and what we learned applies to any leader, whether you ever are in that corner office or not. Right. Anyone who's leading people at scale, Most of this applies. And of course, there are ways to help on that path. But if we take one of the mindsets, even around the amount of time and attention that these CEOs but anyone spends managing and aligning their organization. Right. Do you have the right talent? Do you have the right culture? Are they organized in a way that's getting in the way or actually helping them do their jobs better? Almost to a person, the leaders we talked to said they spend more time on that than they thought they would, and it's time well spent. This isn't something just for hr, right? Having your organization aligned, mobilized, working. Well, we use the phrase treat the hard stuff like the soft stuff in two ways. One is all of that, quote, soft stuff is actually really hard to do. Right. How do you move culture? How do you get the talent? Right. It's not easy, but those who do it well take a really almost an engineering approach and treat it with the same amount of rigor and quote, hardness as you would in operational initiatives. Right. And so rarely, if you had an operational breakdown, you wouldn't leave it to chance and say, we're going to put a poster on the wall and hope it works out. Yeah, we do that all the time with culture change. These leaders would say, no, this is the specific change. I'm trying to see the shift in behavior. Here's the mindsets that need to be different. Here's how we're going to pull all the levers available to us. We're going to have role modeling, we're going to build it into training, we're going to build it into incentives. You know, we'd think about what Satya Nadella did at scale at Microsoft to shift their culture. And those same levers apply if there's 10 of you. Right. Are you clear on the shift you're trying to make? Are you doing all the things? And so all of these tools apply no matter what role you're in? And separately, we can chat if you want, about, hey, if you want to be a CEO, right, what do you need to do to get on that path? But most of this applies to any.

B (27:09)

Leader. And when you talk about mindset, one of the things that you dive into is that, you know, you have to have a sustainable mindset, not a self orientation or self doubt. And there's a part in the book where you kind of talk about where you need to be from a mindset standpoint and where you sort of don't want to be. Do you think that mindset is, if you will, innate or do you think that mindset can be taught or.

C (27:34)

Learned? That's such a good, important one. I do think that the reason we focused on mindsets rather than leadership characteristics or qualities is because I think they can evolve. I think people, you can choose mindsets over time and unleash a whole bunch of latent potential that was there and we've all had it happen to ourselves, right? Something happens and you see something in a new way and you can never see it the old way again, right? And we have, you know, you. I'm trying to think of an example even in. In, well, the not wanting to evoke Covid, because this wasn't Covid, but I lived in Toronto during SARS, right, way back in the 90s and there was a thing where at first there was a bunch of people wearing masks. And again, I'm not trying to be political on this one, but in Toronto, in SARS, the time they were. And at first I thought, oh, that's really weird. Why are they wearing masks? Are they also sick or, you know, are they afraid of getting sick? And at the time it was, it started in a certain area of Toronto and a friend of mine who lived there said, no, no, people are actually being really polite. They don't want to get others sick. And it was sort of, it's an odd example, but for me it was this shift of oh, like they're actually being really thoughtful anyway, I know that's become a political one. So maybe not a good example, but sometimes you. Something reframes for you and you don't go back. But the specific example you were raising about the right mindset, that chart in the book is really about preparing to be a CEO and do you even want the job anyway, right? And there's a set of mindsets some people have, which is, I just, I want to be a CEO because it's my turn, I deserve it, I'm going to make all the decisions, right? I can't wait to be it, then life will be so much easier. Those tend not to serve people well over time because the honeymoon wears off fast. And I'd love to hear your experience, really having done this for so long, if your primary motivation is just because I want to be a CEO and I deserve it, that doesn't sustain you on the days and months and years when this job is really hard. The CEOs we talked to who'd been in role and been successful for many years had something else that was driving them. Either a vision for where they wanted to take the company, what they wanted to do for their employees, the impact they wanted to have for investors, or the communities or the customers they served. There was something bigger beyond themselves that was driving it, that got them through the hard times. And that's one where, you know, there's some of these mindsets that are a red flag that if it's only just because you really want the corner office, it's likely not to sustain you for very long. But I'd be curious, your.

B (30:07)

Experience? Yeah. No, I mean, clearly, I think being in a family company is distinct in the sense that there was. But I'd wanted to be CEO of a public company long before I joined Walker Dunlop. And so I'd been in publicly traded companies and was trying to move my way up to get positioned to be CEO at some point. So there was clearly a desire, if you will, to get into the corner office because I wanted to use my leadership capabilities to do something and build something. And quite honestly, one of the interesting things for me was having been in private private equity and investment banking, what was missing in those two experiences was building teams and managing and kind of getting. I would sit in private equity meetings where we'd be making an investment in a company, and I wasn't interested in sort of the DCF or like the financial returns as much as I built the model. I'd sit there with the CEO and talk about strategy and about marketing and about, you know, building the company. The next thing I sort of said to myself, I want to be over there, not over here. I, you know, know it's not, it's not to make the extra buck. It's to actually go and build something. But I do think, you know, as you talk about mindset, I was, I, over the, over the holiday break, I was with a former Navy seal and as everybody in the group were sort of sitting around talking about this gentleman and a. How impressive he was, but how in some instances he wasn't what they would have thought a Navy SEAL would act like. And one of the things, having now spent time with, I don't know, a dozen OR so Navy SEALs over time is that there's this, there's this calm confidence that seals have. They're not. There's no bravado. There's no sort of here, my, you know, medals on my, on my, on my.

C (31:47)

Shoulder. They almost. They don't have to. Right. It's kind of how.

B (31:50)

Fat? 100%. But everyone talks about, like, what it takes to get through Bud's training. And there are all these people who show up at Bud's training and they're, they're these specimens as far as physical attributes, and they've got this rah, rah. And they get in the water. And because they're there for themselves and not for something that's a little bit bigger than themselves, they typically don't make it through Bud training. They, they, they get in the water, it's just too cold. The body can't handle it. And it's those people with that sort of deeper sense of purpose. I would put it. It's back to your mindset issue that make it through Bud's training and become SEAL commanders and have this sense of they're doing it for the right reasons and not for themselves. And I, I think that. And, and that's just one analogy that I would put as you focus on this. But the, the, the seals are those types of people who seem to have the mindset properly adjusted, if you will, to succeed in their jobs. And as you're pointing out in your book, really successful CEOs also have that mindset properly.

C (32:46)

Adjusted. Absolutely. I'm smiling because I love that example so much. I've had the privilege of spending time with Admiral Eric Olson, who was in charge of the Special Forces, and he tells these such similar stories. And one of the learnings he had early days, the first time he was sort of used the wrong terminology, but commanding sort of a small group of seals when he was earlier in his career, they had to get two of the guys to stay up all night. And everyone else was there, but they had to keep watch. And the first night or two, he was reminding them, you got to stay up. This is for you. You need to stay alive if you're going to stay alive. You need to be awake. You need to be alert. And he was trying to prompt them. And finally, the third day, one of the much more old guard seals pulled him aside and said, you're asking the wrong question. That's not what these guys do to stay up at night. You tell them you stay up at night to keep your buddies safe. And it was one of these reframes, right. And so even both for ourselves. But as you think about motivating your teams, think about the team you have and what do you want to pull out of them? Is it is because they're the same? Right? Sure, some are self motivated, but a lot are team motivated. A lot are motivated by the impact on their customers or their company or the society. It turns out in the population, we're Almost an even 20, 20, 20, 2020. Split it against our primary motivators of these five things, right? The impact on myself, my team, my customer, my company and society. And any company, you're going to get that mix. So when you're telling the stories or motivating people, you know, is it just a dollars and cents story? Because that's only going to get the hearts and minds of 20% of the people, or are you really trying to tap into that intrinsic motivation they have too? Right? Not just your.

B (34:29)

Own. How does you, you. I'm going to go back to Michael Dell for a moment and he, he figures prominently in the book, as do a couple other people like Jamie Dimon and Mary Barra and some others. But he talks about, do you have followership? How do you, as you sit around and talk to boards of directors that are trying to pick a CEO and you're saying to them, look at all these different criteria. How do you, how do you determine whether the followership is because they actually sit in the seats or because people like following.

C (34:57)

Them? Such a good question. And this is where, you know, as boards are looking at candidates, they have more information about the internal candidates than they do external. Right? But there's markers that you can look for. But there are markers throughout people's career, right? When they change jobs, do people come with them? Right. That's one. Right. And we can all just sort of see if those are the kinds of folks. Are they able to have influence in the organization outside of their silo? Right. Do they rely on the hierarchy and only can influence within their function or business unit or geography? Are they able to influence broadly in the enterprise because people respect them and their leadership? And what does that look for? There are clues, right, of whether or not people have followership, have people who are excited to be led by them and what does that look like? And I think it's a hugely important thing, right. You can have a hundred percent the right intellectual answer, but if no one's willing to go there. These jobs are too hard to get anything done on your own. You have to be able to attract talent, develop talent, bring people along. That's just part of the.

B (36:01)

Job. And as you look at both these really successful CEOs, do they over index on IQ or EQ? And I know both have to play in, but as you look at them and you say, okay, that's one case and that's another case, the answer's the question is there, do they over index on IQ or.

C (36:19)

Eq? I mean, a cop out answer. There's obviously a mix. There's definitely a mix. But I think even for people whose natural tendency isn't necessarily to rally the troops, they realize that is part of the job and they have found a way to do it. And so we found very few examples of sort of a just intellectually brilliant person who can sit in their own office by themselves and not bring it along. I mean, you see some interesting pairings not so much in big company CEOs, but in tech. You see this right? Where you might have a brilliant product engineer, founder or CEO who's pairing up with a co CEO or a president, or a right hand who's doing a lot of the running of the functions of the organization. You see some of those pairings that seems to be more so in tech than other places. But typically these CEOs if anything, are surprised how much of their time is spent on stakeholders, whether it's their own team. They describe themselves as marriage counselors half the time to their own top teams, right? Getting them functional, the organization, all their board. You suddenly have 12 bosses. How do you navigate that? All the external stakeholders. You're the public face of the company. Most of the CEOs we were talking to were spending at least half their time on managing all of.

B (37:42)

That. I think about my business school class and now it's, you know, it's ancient history. It's 30 years ago, but if you'd done a poll of my classmates to sort of sit there and say, okay, who in your section or in your class is going to go on to lead a Fortune 500 company, who's going to be a really successful investor, who's going to, you know, who's going to flame out, if you will, whichever, however you want to, I just find it would be really interesting because it's it as you talk through eq, iq, there's one person in my class who was off the charts iq. I didn't feel that this person had great EQ but has gone on to run an exceedingly large company. And so you'd sit there and I would have, I would have missed the, hey, that's a person you'd put the check mark next to of running a big company. Interestingly, there, there as I look at, at my class and the people who've, who've been super successful, I think I would have gotten a bunch of them, right? But clearly there's always the ability back then and over a 30 year period, a lot of careers take different paths where you can sit back and say, okay, that either surprises me or that kind of plays to form once someone gets in the role. CAROLYN and we talked previously about, you know, kind of the two big bets and make your mark on the enterprise and you call it playing big ball, like, you know, do something that's going to really put your mark on it and then also nailing your firsts. So to the point that you said, you know, make bets but make them work, what happens when they're not? Does it. Is the is, I mean, you clearly have had clients who've come to you and said, hey, we made this move and the early signs are it's not going to work out. Is the, is the, is the decision there, stick with your bets and gut it out. Is it to pivot off of that, particularly in these large corporations where I'm assuming there's been huge amounts of capital that's been invested in those big bets, or do you kind of say to the person, good luck because the board's coming down the, down the hallway pretty soon and it's probably not going to be that long that you're in that seat. And I can obvious, I obviously know you never say that, but what's the, what happens if it goes.

C (39:55)

Wrong? Yeah, there, I mean, I think there's different versions of it going wrong. Right. We did hear, is it an interview with the Banco Itayu CEO down in Latam and they had gotten really, really far down pike on a big acquisition. It was going to be a transformational acquisition and he literally got like night before cold feet, call off the wedding type thing and he ended up, up pulling out of the acquisition very, very late. And yes, took flack for it, you know, massive heat. What enabled him to survive personally, right. In that role and to help pivot the organization was a couple of things, I think. One, he had been really open with the board all the way through and I would say one of the mindsets where there was the biggest difference between the high performers and prevailing wisdom is CEO's attitude toward their board. You know, a lot of general attitude is honestly, the board is something to tolerate. You get through your board meeting, you get to go back to running your day job. These CEOs, and again, they've been enrolled at least six years. So I don't know that they started this way, had all come to a point of, wow, how do I actually show up with my board? If I genuinely want the board to be helpful to me, I'm much more transparent than maybe I would have been. The goal is not to show you've got it all nailed and all together and show just confidence. They shared the good, the bad and the ugly. As they'd gone through, they had given a heads up well beyond any big decisions, so that the board was brought along and had the context. They tapped into individual board members who had certain expertise, almost like free consultants. And so this bancoitayu CEO had done all of those things right. He'd brought the board along. The acquisition conversations since early, early days. They understood the rationale, the concerns. He shared early when he was starting to have some worries. There were one or two folks on the board who he brought in very close, who had a lot of M and A experience almost as personal advisors. And then they were helpful with the board. So he didn't always have to be the one explaining they were helpful to kind of manage the board through it. So there was a number of things he'd done that way. That being said, it's still not easy, right? And I'm sure there's plenty of CEOs that have made bad calls early and haven't lived to tell the tale. But if you are bringing people along and doing some of those things, you're not as alone in the decision. And I think that was part of it. Both his top team and the board, they were in it together. So when they had to make the hard choices together, it wasn't just. It was all on.

B (42:29)

You. And you raised Banco Itau. And one of the things that was somewhat unique to Banco Itau was that that CEO did 4s curve movements describe what an S curve movement is. And one of the things that I thought was interesting was your quote of Jamie Dimon which said that even the most talented people get complacent. So why is an S curve or an S move so important kind of mid mid life cycle for.

C (42:54)

CEOs? It's this idea that you're right, doing well is actually the biggest risk because you get complacent and you think you can ride it out. S Curves are really about this idea of every and every. It changes by industry, but call it every three, four years. You know, you look around corners, you say, okay, here's where we're headed next. You set a new bold vision, set of strategies, set of priorities. Then you get your team and your talent lined up against it. You kind of get them running that play. Now it's year two and three, and they're executing on that strategy while it's going well. As the CEO, you're now popping your head up and starting to say, okay, what's going to come next? What does that look like? So you're starting to think ahead and plant the seeds for, okay, when that. That growth curve runs its course, what's going to be the next engine that's going to fuel? Now those cycle times in shipping might be 15 years, in tech might be 2 years. But this idea of you, you can't just ride the same thing forever. You need to be looking ahead. And if you wait until the growth is waning on your current trajectory, for you to be the one to think ahead, you've kind of waited too long, right? As a senior leader, you're the one that needs to be thinking ahead. And Jamie talks about that. He talks about kind of heart paddles, right? Like shocking heart paddles of how do you also jolt your leadership team? And it's not just that you're holding up the mirror and reflecting on strategy and priorities. You also then quickly say, okay, do I need to make changes to my team and to my talent? Are they still the right ones? Are there other shifts we have to make? It's a little bit of a rethink every three, four years around. Okay. And you see Banco Itau. You did it. Lego did this a lot. Right. They went through a period where they frankly had to do a lot of divestitures and clean up their books and earn the right to then start making. Okay, now we're back in growth mode. Okay, let's rebuild. Okay, now we've run out of things to do with little plastic bricks. Now we're going to go into movie franchises and theme parks and all these things. Things. But you can chart those eras, if you will, of their.

B (44:58)

Company. Yeah. You mentioned in the book that Lego, I think, sells 30% of their Lego products now to adults and sits there and say, you know, he thought it was just a kid's product. And then all of a sudden they figure out how to go and. And sell into.

C (45:10)

Them. And that's a good example of a CEO being willing to get out of their office. You know, they, and being almost like the person who has to be always in learning mode. They, he'd heard about these groups of adults getting together, doing Lego kits, and they thought it was just some quirky subculture and, you know, what is this all about? And he decided to show up. So he showed up to one of their meetings and, you know, learned more about it and it ended up becoming this orthogonal Idea that is 30% of their business.

B (45:36)

Today. Talk about the lottery effect and how important it is to get buy in or participation from a broad set of people as you create these new S curves, as you create the next strategic.

C (45:48)

Plan. Yeah. The lottery ticket experiment is one that social scientists have been doing for many, many years. It's been done thousands of times. Here's how they do it. They go out into a room. Imagine a hundred people in a room, and they say, we're going to conduct a lottery. Half the people in the room, they give a ticket with their lottery number on it. The other half of the room, they give a blank sheet of paper and they say, you get to pick your own number between 1 and X. People write down their number, they collect them all up. They're about to then pull the winning lottery ticket out of the hat and they say, timeout, we're not doing that yet. We are going to give you the chance, instead of waiting for the lottery, for us to buy back your ticket. And the question that they're trying to answer is how much more, if any, do they have to write pay the people who wrote their own number versus the people who were handed the lottery ticket number. So you've read the story, so I'll give. But just before you had read it, what would you think? What would you have thought the answer might.

B (46:44)

Be? If, if, if the price is $5 a ticket. I would, would think theoretically that everyone ought to just sell it back for $5 a ticket because that's what you paid for.

C (46:52)

It. That's rational, right? The purely rational. There's equal chance of all those numbers. It turns out we are highly irrational, but very predictable. So they have never found, and I could kind of get my head around, oh, it's a little bit more because, you know, it's your kid's birthday or somehow you think it's your lucky number, they've never found less than five times more. They've had to pay the people who are. Which is so irrational. Right. But it says something about the sense of ownership and belief you have in Something that you are part of creating. Right? So some CEOs have taken that quite literally. And whereas, you know, strap planning and all those things might be much faster with just you and a couple of people in the back room. You rob the organization of the buy in and the energy that it's frankly going to take to execute against that strategy because they were just handed it. Here it is, go do it. Okay. The organizations that really invest the time in bringing people along, it pays dividends. And this doesn't mean it's a full democracy. You don't go out to 10,000 people and say, what should our strategy be? But you can say, here's where we're headed, here's our priorities. What will it take to make those successful? Right? So that can be the question. It doesn't have to be just a blank sheet of paper. What is this team? How will this team make it successful? What role will you play in May? And having people write with their teams, their stories, their plans around, not just numbers on a chart, but what role will we play in making that happen just wins huge dividends and you end up with people way, way more bought in and willing to put in the extra ergs of energy to make it.

B (48:28)

True. A CEO has these S curves going and you're going on to the next one. And clearly the cohort that you studied lead understands exactly how to make sure that they're onto the next S curve before the current one is going to start to cycle down. You counsel CEOs to remember that they're only in the seat for a certain period of time and that somebody else is going to come in and sit in that seat. How do you instill that, if you will, sense of humility in the CEOs who are sitting there sort of in many of these, you know, the largest corporations in the world, they've got all the accoutrements that come with being a successful CEO. They've seen their stock price go up, they fly around on their corporate jets. They've got massive relevance in the dialogue that's going on both inside their company as well as outside. How do you sit there and say to them, yeah, but one day someone's else can be sit in that seat. So just take this moment and understand the relevance of it. But also don't get thinking that it's just, for me, it's just Willie Walker in that seat. And everyone's looking to Willie Walker because at some point there will be another CEO of Walker.

C (49:27)

Nilop. I think it's such an important one. This is one where Ajay Banga, who's at MasterCard for over a decade, obviously now at the World bank, he really drove this home as well of always remembering that, you know, a lot of times people are reacting to you because of the seat you're in or their role. You're not actually because of you and just sort of trying to keep that separation. The fourth season that we talk about is about finishing strong, and I'm so glad we have that chapter because there's a lot written about first hundred days and first year. There's not a lot written about how you finish strong and hand it over to be better. And there's four things that we that really came out of those interviews on it. One is, yeah, being thoughtful about the timing. Right. And really the reflection questions, both for you and for the board on are you the right leader for this next era? Do you have the skills? Do you have the energy? Is it what you want? Right. There's a whole bunch of things about really thinking thoughtfully about when is the time to transition, getting excited about what could be next for you. To your point, a lot of folks cling to the role because they're worried about not being relevant past it. Right. And these are 247 jobs. A lot of the time you've sacrificed friendships and hobbies and family, and there's a lot that has gone into it. And so starting to invest the time if you have to do some rebuilding there, that's real, right? So that you're excited about your world after being a CEO. I think it's so important. You don't want to be hanging on just because you're afraid to leave. Right. But. But that requires real work, developing the next generation. Right. So actually feeling like you have options of great people whose hands you can leave this institution in. I think that's a lot of what very seasoned CEOs are spending their time on is getting the next generation ready and developing people passing on their wisdom so that it can continue beyond them and then just really tactically handing the actual handover with real grace. Right. We've all seen CEOs who either, what, Steve Ballmer locked in their deal, like, two weeks before Satya took over as CEO. Like, there's some things that, you know, probably not great to do right before. Right before you're handing over, but at the same time, you want to leave the institution strong and on a high. And so to the extent when you start knowing who your successor might be, how do you gracefully hand over warm relationships to them, involve them in the thinking. Right. When it can be a planned transfer, it's so much better for everyone. And then this idea of giving them men's space though, Right. I love the phrase that it's a one way phone. So once you step away, it's not your job to then be calling back into the organization two, three levels down, checking up, seeing, frankly stirring drama. I've seen that happen. If they want to call you for help, be available. It's amazing. But it's not your job to be poking your nose back in. You actually have to let them, let them thrive. And that's really hard to.

B (52:21)

Do. Yeah, I, I saw Ginny Rometti just posted out that Lou Gerstner passed away this past week. And I think about people like Lou Gerstner and the Sam Palmisano and Digini Rometti and IBM and just the incredible leadership that that organization has had and everyone sort of, you know, letting the next person step in and make their mark on the enterprise and not stick around for too long. There are a couple cases you mentioned. Microsoft is one I don't need to name another entertainment company that we've.

C (52:54)

Seen a bunch of boomerang.

B (52:55)

CEOs. Right, exactly. Boomerang.

C (52:56)

CEOs. That should not be a badge of honor that you have to come.

B (52:59)

Back. Exactly. Well, some people view it as such, but you're very clear. I will tell you, as I read that part of your book, being chairman and CEO of Walker & Dunlop, and when I either, you know, stepped down and have someone come back in, I was sort of like, okay. I'd always thought maybe I just give up the CEO title and become like a chairman. And what I, after reading the book, I'm like, okay, the day that I say I'm out, I'm out. I gotta, I gotta, I gotta get out. I probably gotta bring in a new chairman of the board and allow the company to, to, to go to the.

C (53:28)

Next chapter. Warren Buffett, now I know he's in his 90s, so it's not like he left early, but I loved his phrase in the fall about, he said he's going quiet. Yeah, right. There's, there's grace to that. Right. It's, it's hard to.

B (53:40)

Do though. Very much so. You point out in the book that the, the average tenure, you said is now dropped down below seven years. But in the book I thought it was.

C (53:48)

About 7. Yeah, it's.

B (53:48)

About 7. Average tenure of a public company CEO. But the true outperformers, the average tenure is 11.4 years. Should all of us like watch successful CEOs and like invest in their stocks in years 8, 9, 10 and 11? Because they've got that, that, that stub period that has out, out performance of that 11 years. I mean, why is it, do you think that those true outperformers are around for a decade, whereas the average tenure is seven? Obviously. I guess the average tenure is seven because they're those people who only last for two or three years and have been.

C (54:20)

Changed out. So that's, that's a big part of it. There's a huge swap out in the first couple of years, then drags down that average. Right. It's even more so in pe. So there's people who don't make it through that gauntlet. If you do, your odds are you actually do quite well. It's a good fit, it's working. Right. And then the more reps, they learn, as long as they avoid complacency. I think that's just the risk, right, is you want to see a CEO that have had a couple of those boosts along.

B (54:47)

The way. In the conclusion section, one of the things that I loved that you and your co authors did was we all seem to think that these times are unique. We all sit there and say, oh gosh, with AI geopolitical setting and you know, blue versus red in the country. Like we've never been more divided and we've never had more complexity and we've never had more technology. And you all sat there and said, well, let's pause for a second and back up to 2004. And you, you very, you meticulously and clearly outline that if you were sitting in 2004 in any seat, CEO seat or anywhere else in the, in the, in the economy, in the world, the United States, the challenges facing leaders in 2004 were equally as challenging as they are today. And, and I just, I loved that sort of reset because I think we all typically sort of think these times are very unique because there are always challenges. Nobody ever knows what's coming down the pike. You know, everyone. I, I hear investors who say it's really hard to kind of figure out where we're going now. Harder than it's ever been. And I'm sort of like, no, it's, it's as hard as it ever is. Which is there's never clairvoyance, there's never the ability to look ahead and oh, by the way, the moment that we typically think that everything is like the, the coast is clear and we're going to sail for a period of time. Some shock comes into the system like the GFC that just like knocks everything up. So it's like, you know, there's no ability to really see forward. But as you think about today and how to lead today, particularly given AI and the advent of AI and quite honestly, the fear in many white collar jobs that they're somehow going to become irrelevant, replaced by technology. I think in the past there's been this sense in the white collar community of, oh, well, if we can become more efficient and we can take manufacturing offshore, that's okay. That doesn't sort of impact us. And now all of a sudden, it's kind of coming back to those who might have a child who's coming out of college. I have three right now, and I sit there and say, you know, what are the opportunities for them and where's that analyst job going to be for them three or five or ten years from now? What's the what. How are you counseling CEOs right now, Carolyn, as it relates to how to set a vision, how to be bold in their leadership, and how to manage the anxiety that exists in our economy and in our.

C (57:08)

Country today? Gosh, there's so much in that, as you say, I think if we think about AI specifically and just broader volatility and change out there, I think it's important not to forget that as leaders, it is our job to shape how we want to use those tools, what we want the future to be. Even in the language we're using with AI, we're giving it a lot of agency, right? We say, well, AI is cutting jobs. AI is. AI doesn't do anything. Right? AI is an input. It can give you suggestions and ideas and insights. As leaders, we cannot abdicate the responsibility we have of deciding how we want to leverage the benefits of something like AI. To what extent you want to use it to drive efficiency versus bold ideas versus other things. I mean, even Jensen in the video you heard before the holidays in his Big Task town hall, he had heard that his own managers were telling people to tone down the use of AI because they were worried about what it would do to their own teams, right? So if even they're having trouble, there is a lot of fear in the system. And I think part of that comes from this idea that things are going to happen to us, that we somehow aren't the humans who get to decide what we want. And I would just encourage leaders to kind of step into that agency and say, these are incredible tools. How will you Use them. What is the organization you're trying to shape? What do you want that to look like and not just kind of sit back and wait to be a victim. There's a little bit of that language creeping in and I worry.

B (58:45)

About that. One of the hallmarks of future leaders that you talk about is leading through leaders. And I thought it was such an interesting concept. Andy Jassy was a year behind me. Makes me feel very old at, at, at hbs. And I think about Andy's job on a day to day basis at Amazon. I just can't imagine how you've possibly managed the scale that he has. I just, I literally, I'm like, I just can't imagine what it's like to have all that complexity and be able to actually manage it as effectively as he does. But you talk about leading through leaders where you know we're probably going to have a 10 trillion dollar market cap company before too long and that 10 trillion dollar market cap company might have 10 million employees. That is way too much for any one person to manage. And so you posit future leaders will need to really be able to lead through other leaders. If you were someone who might be thinking about leading that $10 trillion company in the future, what would you be doing today to position yourself for that kind of job given that one of the key components will be leading.

C (59:54)

Through leadership? I mean, I think leading through leaders is something you can do in whatever role you're in today. Right? It's finding that right altitude of empower, getting great team underneath you, empowering them and expecting a lot of them and then figuring out where the places that you uniquely add value. Right? We talk about the CEO doing what only the CEO can do. Because if you're trying to do other people's jobs as well, like there's just not enough you, you were the firms scarce as resource because there's only one of you and 24 hours in a day, right? And so you thinking about the highest and best use of that next hour of your time is a strategic resource allocation decision, right? That's not selfish. And so do you have the right leaders? If you find yourself diving really deep, it's probably a signal that you might not have the right person. Right? And you actually need to get big leaders underneath you for that to be true. And then you need some sort of radar or markers of ways of knowing because if you're trying to keep all these plates spinning, right? How will you know if one's wobbling or not so that you can dive in and maybe spend the time to right the ship. That's one place CEOs spend time. Right. They dive in to help where it's needed. They're looking across, connecting the dots. Right. Satya talked about it being a lonely job because in his mind, it's an information asymmetry problem. No one else sees all the pieces that you see. They all see individual bits. And that one of the reasons is lonely is he's the one that sees all of it. But there's work in that. So are you carving out time for you to look across and be the integrator and see what's connecting and what's not? You can't do that if you're firefighting everyone else's jobs. Right? Because that's your own job. That's unique work only you can do. Right. So there's things that CEOs have to think about. What, what's the job that if I, as the CEO, I'm not doing it, no one else possibly could. And everything else, you've got to have great pivotal talent who are waking up in the morning just as paranoid about delivering it as you are. Right? And then that's a real.

B (61:55)

Reality check. You talk about that hour and investing that hour in something that you uniquely can do. One of the great joys for me, you talk about it in the book about continuous learning. And one of the great joys for me, doing the webcast on a weekly basis, is it for me to get great guests like you and then go and read incredible books like this, which I get to learn from. And the idea that I get to talk to the author about it and have this sort of one on one coaching session with you on a webcast is really, really a great joy. And so I just want to thank you for A, writing such a great book, B, joining me today and C, for providing such fantastic insights around all that is inside of this book. I hope everyone who's listening today realizes that I think this is one heck of a good book. And is that it? Fifteen years into my tenure as a public company CEO, I can tell you that it's an incredible, very insightful book that is somewhat of a cheat sheet on where to spend your time and your efforts and your resources as it relates to being a great leader. So, Carolyn, thank you so much for joining.

C (62:57)

Me today. Thank you so much. It's been a thrill and I've learned a ton. So thanks for.

B (63:01)

Having me. Thank you. Thanks everyone for joining us today. Have a great day. We'll see you.

C (63:05)

Next.