[{"_1":2,"_3":-5,"_4":-5},"loaderData",{"_5":6,"_7":8},"actionData","errors","root",{"_137":-5,"_138":-5,"_139":140,"_141":142,"_143":144},"routes/clips.$id.$slug",{"_9":10,"_11":12},"clip",{"_13":14,"_15":16,"_17":-5,"_18":19,"_20":-5,"_21":22,"_23":24,"_25":26,"_27":28,"_29":30,"_31":32,"_33":34,"_35":36,"_37":38,"_39":40,"_41":-5,"_42":-5,"_43":-5,"_44":45,"_46":-5,"_47":48,"_49":50,"_51":-5},"canonicalUrl","https://howleaderslead.com/clips/1307/in-a-negotiation-know-your-walk-away","id",1307,"title","In a negotiation, know your walk-away","subtitle","transcript","WEBVTT\n\n1\n00:00:00.000 --> 00:00:02.920\nwhich is if you're doing an acquisition or buying anything,\n\n2\n00:00:02.920 --> 00:00:05.240\nand I would say the same applied to our negotiations\n\n3\n00:00:05.240 --> 00:00:07.880\non content, know your walk away.\n\n4\n00:00:07.880 --> 00:00:09.480\nYou might not tell anybody,\n\n5\n00:00:09.480 --> 00:00:11.180\nbut you better know what your walk away is,\n\n6\n00:00:11.180 --> 00:00:12.760\nfirst and foremost, when you go into it\n\n7\n00:00:12.760 --> 00:00:15.160\nto avoid the emotion of the deal taken over.\n\n8\n00:00:15.160 --> 00:00:17.280\nSo, know where you're gonna draw the line\n\n9\n00:00:17.280 --> 00:00:19.400\nand say, okay, I'm out.\n\n10\n00:00:19.400 --> 00:00:21.640\nNumber one, the second thing I did,\n\n11\n00:00:21.640 --> 00:00:24.840\nand again, I learned this from a coach, Marty Selman,\n\n12\n00:00:24.840 --> 00:00:28.320\nis I put my watch on my right wrist\n\n13\n00:00:28.320 --> 00:00:30.280\ninstead of my left, I'm left-handed.\n\n14\n00:00:30.280 --> 00:00:31.520\nIt's on my left wrist,\n\n15\n00:00:31.520 --> 00:00:33.080\nbut I'd put it on my right wrist,\n\n16\n00:00:33.080 --> 00:00:37.000\njust slows you down in a discussion to breathe\n\n17\n00:00:37.000 --> 00:00:39.840\nand listen to what's being said.\n\n18\n00:00:39.840 --> 00:00:43.000\nAnd the third thing I learned was,\n\n19\n00:00:43.000 --> 00:00:45.000\nmake sure you get the right question.\n\n20\n00:00:45.000 --> 00:00:47.080\nI mean, at direct TV at one point,\n\n21\n00:00:47.080 --> 00:00:51.400\nmy guys were negotiating with Oprah, the Oprah Network,\n\n22\n00:00:51.400 --> 00:00:54.560\nand they weren't happy with how negotiations were going,\n\n23\n00:00:54.560 --> 00:00:56.880\nand I remember they came into my office,\n\n24\n00:00:56.880 --> 00:00:59.320\nand I said to them, you guys are asking the wrong question,\n\n25\n00:00:59.320 --> 00:01:01.480\nand they looked at me like, what?\n\n26\n00:01:01.480 --> 00:01:03.360\nI said, look, the question isn't,\n\n27\n00:01:03.360 --> 00:01:04.920\nare we gonna drop the Oprah Network?\n\n28\n00:01:04.920 --> 00:01:06.320\n'Cause I'm gonna answer it for you right now.\n\n29\n00:01:06.320 --> 00:01:10.240\nThe answer is no, we're not, okay, period, full stop.\n\n30\n00:01:10.240 --> 00:01:11.880\nSo therefore, the question is,\n\n31\n00:01:11.880 --> 00:01:13.240\nhow do I get the best price\n\n32\n00:01:13.240 --> 00:01:14.880\nrelative to Comcast or anybody else?\n\n33\n00:01:14.880 --> 00:01:17.720\nSo, I may not like the price,\n\n34\n00:01:17.720 --> 00:01:20.080\nbut I want it to be competitive and fair.\n\n35\n00:01:20.080 --> 00:01:22.960\nAnd so, I think making sure your team is asking,\n\n36\n00:01:22.960 --> 00:01:25.640\n'cause it's easy to get into the emotion of the moment,\n\n37\n00:01:25.640 --> 00:01:28.560\nAre they asking the right question and thinking holistically about what you're\n\n38\n00:01:28.560 --> 00:01:29.320\ntrying to get to?\n","pretty_transcript","start_time",2156279,"end_time",2245439,"keywords","negotiations, acquisition, Oprah, Direct TV, selling, comcast, best price, competitive price","slug","in-a-negotiation-know-your-walk-away","origin","cms","mux_playback_id","m0002nZZApNHefSxIjR01SDEJPispD8fFXD70102ikwmhens","mux_asset_id","DffKPFRZ01lB7zemyTqwVN5nOrykd7Cx6022xRs021Rx4w","leader_id",152,"episode_id",294,"updated_at","2025-03-07T15:43:07.000000Z","meta_title","meta_description","og_image_media_id","web_url","https://www.howleaderslead.com/clips/1307/in-a-negotiation-know-your-walk-away","og_image_url","leader",{"_13":36,"_101":102,"_103":104,"_105":106,"_25":107,"_108":109,"_62":110,"_59":110,"_111":112,"_69":113,"_39":114,"_115":-5,"_41":-5,"_42":-5,"_43":-5,"_116":117,"_89":118,"_44":119,"_120":121,"_122":123,"_46":-5,"_124":125,"_126":127,"_93":128,"_51":-5},"episode",{"_13":38,"_15":52,"_27":53,"_17":54,"_55":56,"_18":57,"_20":58,"_59":60,"_61":-5,"_62":60,"_63":-5,"_64":65,"_66":67,"_68":-5,"_69":-5,"_70":71,"_72":73,"_74":-5,"_35":36,"_39":75,"_41":-5,"_42":-5,"_43":-5,"_76":77,"_78":79,"_80":81,"_82":83,"_84":-5,"_85":-5,"_86":87,"_88":-5,"_89":-5,"_46":-5,"_90":91,"_92":-5,"_93":-5,"_51":-5},"og_image_media","Resilience in a changing world","resilience-in-a-changing-world","Learn how to lead well even when big shifts are happening all around you. Discover the power of an underdog position in the marketplace. Plus, discover a weirdly specific negotiation trick to use in your next deal.","summary","

Today’s guest is Mike White, who served as the Chairman and CEO of DirecTV from 2010 until his retirement in 2015.

As you might recall, that’s exactly when streaming services really took off. People were cutting the cord on traditional TV left and right and the whole media landscape got turned upside down.

So what does it take to be a great leader when the world is changing right before your eyes?

It takes resilience—and a lot of it! And if you’ve ever wanted to really see what resilience looks like in action, then you’re going to love this conversation.

Mike doesn’t lose his stride when things get tough. He knows how to see around corners and anticipate what’s coming. And most importantly, he knows how to keep people going when things feel uncertain.

The truth is, the world is ALWAYS changing, and this conversation will help you tap into the power of resilience in a changing world.

You’ll also learn:

What it’s like to be a CEO on the TV show Undercover Boss
Three big-picture market trends that every leader needs to understand
The most common blind spot in business (and how to account for it)
How to leverage the advantages of being an underdog to a major competitor
Three negotiation tricks—including one weird one you’ve probably never heard
The #1 factor that derails leaders

Take your learning further. Get proven leadership advice from these (free!) resources:

The How Leaders Lead App: A vast library of 90-second leadership lessons to stay sharp on the go

Daily Insight Emails: One small (but powerful!) leadership principle to focus on each day

Whichever you choose, you can be sure you’ll get the trusted leadership advice you need to advance your career, develop your team, and grow your business.

","WEBVTT\n\n1\n00:00:00.000 --> 00:00:07.720\nWelcome to How Leaders Lead, where every week you get to listen in while I\n\n2\n00:00:07.720 --> 00:00:08.560\ninterview some\n\n3\n00:00:08.560 --> 00:00:10.720\nof the very best leaders in the world.\n\n4\n00:00:10.720 --> 00:00:14.080\nI break down the key learning so that by the end of the episode, you'll have\n\n5\n00:00:14.080 --> 00:00:14.640\nsomething\n\n6\n00:00:14.640 --> 00:00:18.520\nsimple you can apply as you develop into a better leader.\n\n7\n00:00:18.520 --> 00:00:20.760\nThat's what this podcast is all about.\n\n8\n00:00:20.760 --> 00:00:25.300\nWell, my guest today is Mike White, who served as the Chairman and CEO of\n\n9\n00:00:25.300 --> 00:00:26.160\nDirectTV from\n\n10\n00:00:26.160 --> 00:00:30.840\n2010 until his retirement in 2015.\n\n11\n00:00:30.840 --> 00:00:35.200\nNow you might recall, that's exactly the time when streaming services really\n\n12\n00:00:35.200 --> 00:00:36.400\ntook off.\n\n13\n00:00:36.400 --> 00:00:40.760\nI mean, people were cutting the cord on traditional TV left and right and the\n\n14\n00:00:40.760 --> 00:00:42.140\nwhole media landscape\n\n15\n00:00:42.140 --> 00:00:45.120\ngot turned upside down.\n\n16\n00:00:45.120 --> 00:00:48.880\nSo what does it take to be a leader when the world is changing right before\n\n17\n00:00:48.880 --> 00:00:49.720\nyour eyes?\n\n18\n00:00:49.720 --> 00:00:53.000\nWell, it takes a heck of a lot of resilience.\n\n19\n00:00:53.000 --> 00:00:56.790\nAnd if you've ever wanted to really see what resilience looks like in action,\n\n20\n00:00:56.790 --> 00:00:57.240\nthen you're\n\n21\n00:00:57.240 --> 00:00:59.720\ngoing to love this conversation.\n\n22\n00:00:59.720 --> 00:01:02.520\nMike doesn't lose his stride when things get tough.\n\n23\n00:01:02.520 --> 00:01:06.360\nHe knows how to see around corners and anticipate what's coming.\n\n24\n00:01:06.360 --> 00:01:10.800\nAnd most importantly, he knows how to keep people going when things feel\n\n25\n00:01:10.800 --> 00:01:11.800\nuncertain.\n\n26\n00:01:11.800 --> 00:01:17.340\nThe truth is, the world is always changing and the best leaders understand the\n\n27\n00:01:17.340 --> 00:01:17.840\npower\n\n28\n00:01:17.840 --> 00:01:21.000\nof resilience in a changing world.\n\n29\n00:01:21.000 --> 00:01:32.280\nSo here's my conversation with my good friend and soon to be yours, Mike White.\n\n30\n00:01:32.280 --> 00:01:35.720\nI understand that you're one of eight kids.\n\n31\n00:01:35.720 --> 00:01:38.600\nHow much did that influence the leader that you've become?\n\n32\n00:01:38.600 --> 00:01:43.160\nWell, when you're the oldest of eight kids, it influences you a lot.\n\n33\n00:01:43.160 --> 00:01:48.110\nYou know, I think from the get-go, I was taught to be responsible for the\n\n34\n00:01:48.110 --> 00:01:48.960\nothers.\n\n35\n00:01:48.960 --> 00:01:53.680\nAnd I was also because I was the oldest, I was always the last to be fed\n\n36\n00:01:53.680 --> 00:01:54.760\nbecause my mother\n\n37\n00:01:54.760 --> 00:01:57.880\nalways said the last shall be first and the first shall be last.\n\n38\n00:01:57.880 --> 00:02:01.480\nSo, you know, you learn a lot about leadership just growing up, although there\n\n39\n00:02:01.480 --> 00:02:02.120\nwas a lot more\n\n40\n00:02:02.120 --> 00:02:04.640\nI learned from others along the way.\n\n41\n00:02:04.640 --> 00:02:09.050\nBut always, I think your parents and your family environment teaches you a lot\n\n42\n00:02:09.050 --> 00:02:09.520\nof core\n\n43\n00:02:09.520 --> 00:02:11.680\nthings that stay with you for life.\n\n44\n00:02:11.680 --> 00:02:16.720\nAnd we're going to dig into those as we go through this conversation.\n\n45\n00:02:16.720 --> 00:02:21.120\nI want to start out here with the, Mike, you're the first person that I've had\n\n46\n00:02:21.120 --> 00:02:22.040\non the podcast\n\n47\n00:02:22.040 --> 00:02:27.240\nwho had the courage to go on the hit television show Undercover Boss.\n\n48\n00:02:27.240 --> 00:02:32.080\nNow, you went on just after you became CEO of Direct TV.\n\n49\n00:02:32.080 --> 00:02:35.580\nHow did you muster up whatever it takes to go on a show like that and put\n\n50\n00:02:35.580 --> 00:02:36.320\nyourself out\n\n51\n00:02:36.320 --> 00:02:38.080\nthere on national television?\n\n52\n00:02:38.080 --> 00:02:45.090\nWell, I'd seen the show and the PR people thought it would be great PR for\n\n53\n00:02:45.090 --> 00:02:45.440\nDirect TV.\n\n54\n00:02:45.440 --> 00:02:49.460\nAnd because I was new in the role, I hadn't spent a lot of time in the field\n\n55\n00:02:49.460 --> 00:02:50.120\nwith the\n\n56\n00:02:50.120 --> 00:02:51.240\nfront line.\n\n57\n00:02:51.240 --> 00:02:56.050\nAnd yet, as you and I both learned at PepsiCo, we always spent time with the\n\n58\n00:02:56.050 --> 00:02:57.080\nfront line.\n\n59\n00:02:57.080 --> 00:03:01.720\nSo I thought, well, this is be a great way to connect with people.\n\n60\n00:03:01.720 --> 00:03:06.960\nAnd my dad had always said everybody puts their pants on one leg at a time.\n\n61\n00:03:06.960 --> 00:03:09.800\nAnd I thought, okay, what a great chance to experience that.\n\n62\n00:03:09.800 --> 00:03:14.480\nI clearly didn't know a bunch of things when I agreed to do it.\n\n63\n00:03:14.480 --> 00:03:19.960\nAnd then I was so busy until the day before I flew out to the first assignment\n\n64\n00:03:19.960 --> 00:03:20.160\nthat I\n\n65\n00:03:20.160 --> 00:03:24.460\ndidn't even know who they had picked or how they had picked the people they\n\n66\n00:03:24.460 --> 00:03:25.200\npicked.\n\n67\n00:03:25.200 --> 00:03:26.640\nBut it wasn't a coincidence.\n\n68\n00:03:26.640 --> 00:03:30.360\nI mean, I wouldn't say it was a setup, but they were obviously being in the\n\n69\n00:03:30.360 --> 00:03:31.280\nmedia business.\n\n70\n00:03:31.280 --> 00:03:34.200\nThey were looking for stories.\n\n71\n00:03:34.200 --> 00:03:38.490\nAnd as I understand that you don't get any editorial control and they decide\n\n72\n00:03:38.490 --> 00:03:39.080\nwho they're\n\n73\n00:03:39.080 --> 00:03:41.000\ngoing to have you meet with.\n\n74\n00:03:41.000 --> 00:03:43.400\nDid you have any surprises on that front?\n\n75\n00:03:43.400 --> 00:03:47.600\nMy head of operations was pretty upset and thought I was out to embarrass the\n\n76\n00:03:47.600 --> 00:03:48.160\ncompany\n\n77\n00:03:48.160 --> 00:03:49.280\nfor some reason.\n\n78\n00:03:49.280 --> 00:03:51.680\nMy secretary said, ignore him.\n\n79\n00:03:51.680 --> 00:03:56.290\nAnd he started yelling at me that he had seen the first clip and I didn't have\n\n80\n00:03:56.290 --> 00:03:56.800\nmy seat\n\n81\n00:03:56.800 --> 00:03:58.520\nbelt on in the truck.\n\n82\n00:03:58.520 --> 00:04:01.960\nAnd I turned to him and I said, that's because you didn't have a seat belt in\n\n83\n00:04:01.960 --> 00:04:02.760\nthat truck.\n\n84\n00:04:02.760 --> 00:04:04.280\nSo go check all the trucks.\n\n85\n00:04:04.280 --> 00:04:05.720\nWe got 15,000 of them.\n\n86\n00:04:05.720 --> 00:04:08.680\nMake sure they all have two seat belts.\n\n87\n00:04:08.680 --> 00:04:09.880\nThat's a great one.\n\n88\n00:04:09.880 --> 00:04:14.460\nWhat else did you learn from that experience that you really took some action\n\n89\n00:04:14.460 --> 00:04:14.720\nfrom?\n\n90\n00:04:14.720 --> 00:04:17.760\nI think first of all, you realize those are tough jobs.\n\n91\n00:04:17.760 --> 00:04:21.410\nThose frontline jobs, I mean, whether you're in a call center, direct TV, we\n\n92\n00:04:21.410 --> 00:04:22.560\nhad 15,000\n\n93\n00:04:22.560 --> 00:04:26.840\npeople in a call center answering 100 million phone calls a year, or whether\n\n94\n00:04:26.840 --> 00:04:27.480\nyou're on a\n\n95\n00:04:27.480 --> 00:04:31.650\ntruck, climbing a ladder in a thunderstorm in Alabama, which I was, I mean,\n\n96\n00:04:31.650 --> 00:04:32.120\nthose are\n\n97\n00:04:32.120 --> 00:04:33.120\ntough jobs.\n\n98\n00:04:33.120 --> 00:04:38.760\nSo I think it teaches you some empathy, first of all, for others and what they\n\n99\n00:04:38.760 --> 00:04:39.560\ndo for the\n\n100\n00:04:39.560 --> 00:04:41.080\ncompany.\n\n101\n00:04:41.080 --> 00:04:44.370\nThe second thing, because we were doing the show just after we had launched a\n\n102\n00:04:44.370 --> 00:04:44.800\nnew set\n\n103\n00:04:44.800 --> 00:04:48.160\ntop box, which I thought was going great.\n\n104\n00:04:48.160 --> 00:04:51.880\nAnd I got out to the field and found out that our inventories weren't really\n\n105\n00:04:51.880 --> 00:04:53.720\nvery good.\n\n106\n00:04:53.720 --> 00:04:56.760\nAnd everybody was scrambling to get the new set top box.\n\n107\n00:04:56.760 --> 00:04:59.280\nSo we hadn't launched it exactly perfectly.\n\n108\n00:04:59.280 --> 00:05:02.480\nSo there was some lessons learned about that as well.\n\n109\n00:05:02.480 --> 00:05:06.040\nI understand you started the tech appreciation day afterwards.\n\n110\n00:05:06.040 --> 00:05:07.040\nI did.\n\n111\n00:05:07.040 --> 00:05:10.640\nI guess I realized maybe this is my opportunity to make a statement.\n\n112\n00:05:10.640 --> 00:05:15.140\nYou know, when you're a new CEO, people are looking kind of what's the new\n\n113\n00:05:15.140 --> 00:05:15.880\nregime?\n\n114\n00:05:15.880 --> 00:05:17.920\nWhat do you stand for?\n\n115\n00:05:17.920 --> 00:05:21.000\nAnd I felt like tech appreciation day.\n\n116\n00:05:21.000 --> 00:05:25.850\nI also mandated that all the team had to get out on a truck once a year and\n\n117\n00:05:25.850 --> 00:05:26.560\nalso on a call\n\n118\n00:05:26.560 --> 00:05:30.090\ncenter for a couple hours each quarter where you kind of see how the promotions\n\n119\n00:05:30.090 --> 00:05:30.760\nwere going.\n\n120\n00:05:30.760 --> 00:05:34.270\nWell, I watched the show and you did pretty well on that call center for rookie\n\n121\n00:05:34.270 --> 00:05:34.400\n.\n\n122\n00:05:34.400 --> 00:05:36.080\nYou know, it was pretty good.\n\n123\n00:05:36.080 --> 00:05:41.320\nWe're going to dive deeper into your leadership story in the time at Direct TV.\n\n124\n00:05:41.320 --> 00:05:46.190\nBut first, I know that now you serve on three of the most fabulous companies in\n\n125\n00:05:46.190 --> 00:05:47.120\nthe world,\n\n126\n00:05:47.120 --> 00:05:50.480\nBank of America, Whirlpool and Kimberly Clark.\n\n127\n00:05:50.480 --> 00:05:55.070\nWhat are the big trends across these industries that you see that leaders need\n\n128\n00:05:55.070 --> 00:05:55.800\nto focus on\n\n129\n00:05:55.800 --> 00:05:56.800\ntoday?\n\n130\n00:05:56.800 --> 00:05:58.840\nWell, technology change.\n\n131\n00:05:58.840 --> 00:06:03.760\nI mean, I think disruptive change from technology is everywhere.\n\n132\n00:06:03.760 --> 00:06:09.280\nAnd I saw it at Direct TV and you see it in financial services.\n\n133\n00:06:09.280 --> 00:06:13.960\nYou see it in how you go to market with a Whirlpool or Kimberly Clark.\n\n134\n00:06:13.960 --> 00:06:19.130\nYou see it with your marketing dollars that are all, you know, now 70% plus are\n\n135\n00:06:19.130 --> 00:06:19.680\nspent on\n\n136\n00:06:19.680 --> 00:06:21.400\ndigital marketing.\n\n137\n00:06:21.400 --> 00:06:25.850\nSo you know, we're going through a revolution, I think, in that regard and, you\n\n138\n00:06:25.850 --> 00:06:27.200\nknow, understanding\n\n139\n00:06:27.200 --> 00:06:31.160\nthe implications of that for your particular business is just critical.\n\n140\n00:06:31.160 --> 00:06:35.220\nIt's the one thing that's everywhere, I suppose sustainability is the other\n\n141\n00:06:35.220 --> 00:06:36.080\nthing that cuts\n\n142\n00:06:36.080 --> 00:06:38.800\nacross any business to David, I think.\n\n143\n00:06:38.800 --> 00:06:46.010\nHow do you as a leader really stay on top of what technology is today and where\n\n144\n00:06:46.010 --> 00:06:46.560\nit's\n\n145\n00:06:46.560 --> 00:06:47.560\ngoing?\n\n146\n00:06:47.560 --> 00:06:49.520\nWhat advice do you have on that front?\n\n147\n00:06:49.520 --> 00:06:51.360\nI'm lucky being on those three boards.\n\n148\n00:06:51.360 --> 00:06:55.280\nWe've had outside speakers on artificial intelligence at all three boards.\n\n149\n00:06:55.280 --> 00:07:01.790\nSo I get, you know, the benefit of that from a learning standpoint, I have my\n\n150\n00:07:01.790 --> 00:07:02.960\nown network.\n\n151\n00:07:02.960 --> 00:07:07.430\nI read a lot, read the Wall Street Journal, Business Week, whatever, to try to\n\n152\n00:07:07.430 --> 00:07:08.200\nstay car\n\n153\n00:07:08.200 --> 00:07:09.200\nat.\n\n154\n00:07:09.200 --> 00:07:11.570\nBut I think fundamentally you got to stay curious and you got to realize the\n\n155\n00:07:11.570 --> 00:07:12.880\nworld is changing\n\n156\n00:07:12.880 --> 00:07:16.190\nand have the humility to know that maybe the way it was when you started out,\n\n157\n00:07:16.190 --> 00:07:16.640\nit isn't\n\n158\n00:07:16.640 --> 00:07:17.640\nexactly the same.\n\n159\n00:07:17.640 --> 00:07:21.940\nThere's certain, I think, philosophies and principles that still apply, but\n\n160\n00:07:21.940 --> 00:07:22.240\nwork from\n\n161\n00:07:22.240 --> 00:07:26.120\nremote to pandemic, it's a very different world out there.\n\n162\n00:07:26.120 --> 00:07:30.200\nYou've worked in five different companies over the span of your career.\n\n163\n00:07:30.200 --> 00:07:34.000\nYou know, I got to ask you this one because I came across this one.\n\n164\n00:07:34.000 --> 00:07:39.080\nSo it's a little question here that I'm sure you have the answer to.\n\n165\n00:07:39.080 --> 00:07:44.680\nWhat does having a baby and producing a Bain business strategy have in common?\n\n166\n00:07:44.680 --> 00:07:52.120\nWell, back then, I mean, it shows you how the world of strategy has changed.\n\n167\n00:07:52.120 --> 00:07:55.320\nSo I mean, the topic is really strategy.\n\n168\n00:07:55.320 --> 00:08:01.710\nAnd when I was at Bain and BCG was the same back in the early 1980s, a strategy\n\n169\n00:08:01.710 --> 00:08:02.200\nstudy\n\n170\n00:08:02.200 --> 00:08:04.000\nwas nine months long.\n\n171\n00:08:04.000 --> 00:08:08.760\nIt's been three months studying costs, three months studying competitors and\n\n172\n00:08:08.760 --> 00:08:09.200\nthree months\n\n173\n00:08:09.200 --> 00:08:11.200\nstudying the customer.\n\n174\n00:08:11.200 --> 00:08:16.080\nAnd we used to say, I guess it must take nine months to have a strategy.\n\n175\n00:08:16.080 --> 00:08:19.970\nBut, you know, that's a little facetious, except that, you know, the world of\n\n176\n00:08:19.970 --> 00:08:20.520\nstrategy\n\n177\n00:08:20.520 --> 00:08:23.080\ntoday, back then it was a closed loop.\n\n178\n00:08:23.080 --> 00:08:25.920\nYou don't have to worry about globalization.\n\n179\n00:08:25.920 --> 00:08:27.360\nEverybody played by the same rules.\n\n180\n00:08:27.360 --> 00:08:32.160\nYou're looking at experience curves for cost and whatever.\n\n181\n00:08:32.160 --> 00:08:37.200\nAnd now you have to think much more holistically about the business, I think.\n\n182\n00:08:37.200 --> 00:08:41.110\nAnd so I don't know how they do a strategy study today, but I'm sure as heck it\n\n183\n00:08:41.110 --> 00:08:41.560\n's not\n\n184\n00:08:41.560 --> 00:08:43.760\na nine month deal.\n\n185\n00:08:43.760 --> 00:08:44.760\nEverything happens.\n\n186\n00:08:44.760 --> 00:08:46.520\nI act a lot faster these days.\n\n187\n00:08:46.520 --> 00:08:50.510\nYou know, I understand that you work with presidential candidate Mitt Romney\n\n188\n00:08:50.510 --> 00:08:51.000\nwhen you\n\n189\n00:08:51.000 --> 00:08:52.000\nwere at Bain.\n\n190\n00:08:52.000 --> 00:08:53.640\nWhen did you pick up from him?\n\n191\n00:08:53.640 --> 00:08:57.040\nWell, I mean, Mitt is a terrific leader.\n\n192\n00:08:57.040 --> 00:08:58.280\nHe's smart.\n\n193\n00:08:58.280 --> 00:09:01.200\nHe's articulate, good communicator.\n\n194\n00:09:01.200 --> 00:09:04.480\nBut he's also not afraid to get his hands dirty.\n\n195\n00:09:04.480 --> 00:09:07.720\nSo I mean, we had one client, Minnesota Fabrics.\n\n196\n00:09:07.720 --> 00:09:12.620\nIt was a retailing store that sold fabric, kind of like a Joanne fabric store,\n\n197\n00:09:12.620 --> 00:09:12.800\nexcept\n\n198\n00:09:12.800 --> 00:09:14.520\nit was a super store.\n\n199\n00:09:14.520 --> 00:09:19.140\nAnd Mitt took it on and I ended up flying to Charlotte, you know, doing that\n\n200\n00:09:19.140 --> 00:09:19.800\nwork for\n\n201\n00:09:19.800 --> 00:09:20.800\nMitt.\n\n202\n00:09:20.800 --> 00:09:24.530\nAnd you know, you might have looked down on that kind of a client, but not Mitt\n\n203\n00:09:24.530 --> 00:09:24.760\n.\n\n204\n00:09:24.760 --> 00:09:29.400\nAnd you know, Mitt went out of his way to take time, you know, with the CEO.\n\n205\n00:09:29.400 --> 00:09:31.960\nAnd Mitt was a great supporter and teacher for me.\n\n206\n00:09:31.960 --> 00:09:33.560\nI mean, because I didn't have an NBA, David.\n\n207\n00:09:33.560 --> 00:09:34.800\nI didn't go to Stanford.\n\n208\n00:09:34.800 --> 00:09:36.320\nI didn't go to Harvard.\n\n209\n00:09:36.320 --> 00:09:41.810\nI showed up with my master's in international relations and had to learn a lot\n\n210\n00:09:41.810 --> 00:09:42.480\nfrom the\n\n211\n00:09:42.480 --> 00:09:44.040\nget-go when I got to Bay.\n\n212\n00:09:44.040 --> 00:09:48.800\nBut Mitt was a terrific teacher as well as mentor.\n\n213\n00:09:48.800 --> 00:09:52.120\nYou then went on to Avon and you mentioned that you learned the importance of\n\n214\n00:09:52.120 --> 00:09:52.540\nreally\n\n215\n00:09:52.540 --> 00:09:55.720\nrespecting everybody from the leader there.\n\n216\n00:09:55.720 --> 00:09:59.680\nI want you to know that my mother was actually an Avon salesperson.\n\n217\n00:09:59.680 --> 00:10:04.560\nAnd I remember the 40% commission that she used to rake in in the neighborhood.\n\n218\n00:10:04.560 --> 00:10:10.960\nShare a story from your days at Avon that you learned about leading others.\n\n219\n00:10:10.960 --> 00:10:15.600\nI had two terrific bosses, Bob Pratt and Jim Preston.\n\n220\n00:10:15.600 --> 00:10:22.580\nBob was the kind of EVP of strategy and administration and Jim Preston was the\n\n221\n00:10:22.580 --> 00:10:23.600\nCEO.\n\n222\n00:10:23.600 --> 00:10:27.240\nAnd all that at the beginning, Hicks Waldron was, but then Jim became CEO.\n\n223\n00:10:27.240 --> 00:10:31.360\nAnd I mean, Jim is as great a people person as anybody I know.\n\n224\n00:10:31.360 --> 00:10:37.240\nI mean, I learned from Jim about integrity and caring about the front line.\n\n225\n00:10:37.240 --> 00:10:40.480\nI also learned how hard it is to change and transform a business.\n\n226\n00:10:40.480 --> 00:10:45.480\nI mean, even back then, and this was in the mid-80s, we were trying to think\n\n227\n00:10:45.480 --> 00:10:45.720\nabout a\n\n228\n00:10:45.720 --> 00:10:50.380\ndifferent model because we knew that go-to-market system wasn't going to\n\n229\n00:10:50.380 --> 00:10:51.680\nsustain itself.\n\n230\n00:10:51.680 --> 00:10:54.720\nAnd we were trying to think out of the box.\n\n231\n00:10:54.720 --> 00:10:59.200\nWe ended up deciding to do some acquisitions of some perfume companies.\n\n232\n00:10:59.200 --> 00:11:04.480\nAnd at least we were able to make it go and make them successful.\n\n233\n00:11:04.480 --> 00:11:06.000\nBut they didn't transform the company.\n\n234\n00:11:06.000 --> 00:11:10.320\nAnd in the end, I was there to acquire them and to spin them back out again.\n\n235\n00:11:10.320 --> 00:11:13.280\nAnd I ran the international part of that business in the meantime.\n\n236\n00:11:13.280 --> 00:11:19.030\nBut it was my first chance to get back running a business after I was the\n\n237\n00:11:19.030 --> 00:11:20.560\nstrategy guy.\n\n238\n00:11:20.560 --> 00:11:23.520\nThey asked me to go run international perfumes.\n\n239\n00:11:23.520 --> 00:11:28.300\nAnd I had two Frenchmen reporting to me who weren't too happy that Jim Preston\n\n240\n00:11:28.300 --> 00:11:28.880\nhad put\n\n241\n00:11:28.880 --> 00:11:33.940\nan American who was 30-something over them in the perfume business because they\n\n242\n00:11:33.940 --> 00:11:34.120\nknow\n\n243\n00:11:34.120 --> 00:11:35.760\neverything and I don't know anything.\n\n244\n00:11:35.760 --> 00:11:40.630\nAnd I think I won them over because I've always felt, you know, go in humble,\n\n245\n00:11:40.630 --> 00:11:42.480\nask a lot of questions,\n\n246\n00:11:42.480 --> 00:11:43.440\ndo a lot of listening.\n\n247\n00:11:43.440 --> 00:11:45.280\nThat doesn't mean you're not going to have a point of view.\n\n248\n00:11:45.280 --> 00:11:49.520\nBut you start out by listening and demonstrating that you care.\n\n249\n00:11:49.520 --> 00:11:53.600\nAnd then it was off to PepsiCo where we worked together.\n\n250\n00:11:53.600 --> 00:11:57.760\nAnd you ran the international division there and became vice chairman and CFO\n\n251\n00:11:57.760 --> 00:11:58.800\nof the corporation.\n\n252\n00:11:58.800 --> 00:12:03.600\nTell us the experience at PepsiCo that you think really taught you the most.\n\n253\n00:12:04.160 --> 00:12:07.520\nOh, there's no question it was the implosion of the Pepsi international\n\n254\n00:12:07.520 --> 00:12:07.920\nbusiness.\n\n255\n00:12:07.920 --> 00:12:12.640\nI had been moved over to be CFO of Pepsi worldwide.\n\n256\n00:12:12.640 --> 00:12:18.960\nAnd I remember it was April Fool's Day, I think 1996 or something.\n\n257\n00:12:18.960 --> 00:12:22.960\nAnd at the time it had been flying high.\n\n258\n00:12:22.960 --> 00:12:26.960\nI did a presentation in May called the Five Warning Science of a Heart Attack\n\n259\n00:12:26.960 --> 00:12:28.160\nbecause I could see\n\n260\n00:12:28.160 --> 00:12:29.600\ncertain things that worried me.\n\n261\n00:12:30.160 --> 00:12:34.620\nAnd by that summer, we were starting to see things implode on all kinds of\n\n262\n00:12:34.620 --> 00:12:35.840\nfronts internationally\n\n263\n00:12:35.840 --> 00:12:41.120\nand trying to pick up the pieces, get the business back on track, working with\n\n264\n00:12:41.120 --> 00:12:41.280\nCraig\n\n265\n00:12:41.280 --> 00:12:44.770\nwhether up in Peter Thompson, Craig used to say, Mike's in charge of the\n\n266\n00:12:44.770 --> 00:12:46.240\nemergency room and\n\n267\n00:12:46.240 --> 00:12:50.800\nPeter's rebuilding the capability and, you know, building that business back\n\n268\n00:12:50.800 --> 00:12:52.000\nand living through\n\n269\n00:12:52.000 --> 00:12:55.840\nthe challenges of Venezuela flipping the Coke.\n\n270\n00:12:55.840 --> 00:12:59.920\nI got delivered, you know, the documents from the lawyers on that one.\n\n271\n00:12:59.920 --> 00:13:06.250\nYou had a lot of tough stuff thrown at you, David, over a couple of years of\n\n272\n00:13:06.250 --> 00:13:06.800\nchallenges,\n\n273\n00:13:06.800 --> 00:13:11.040\nincluding pulling out of South Africa, which was a really tough decision.\n\n274\n00:13:11.040 --> 00:13:15.920\nI don't know if you remember the Five Warning Science, but the Five Warning\n\n275\n00:13:15.920 --> 00:13:16.480\nScience of a\n\n276\n00:13:16.480 --> 00:13:19.280\nHeart Attack and Business, I think that's really fascinating.\n\n277\n00:13:19.280 --> 00:13:21.120\nCould you rattle us off for us real quick?\n\n278\n00:13:21.760 --> 00:13:26.320\nI mean, in that case, it was making investment bets for growth without building\n\n279\n00:13:26.320 --> 00:13:27.680\nthe capability,\n\n280\n00:13:27.680 --> 00:13:31.040\nthe talent and the organizational capability that you need.\n\n281\n00:13:31.040 --> 00:13:37.360\nIt was over leveraging them with too much debt in a number of cases and not\n\n282\n00:13:37.360 --> 00:13:37.920\nthinking through\n\n283\n00:13:37.920 --> 00:13:39.520\nthe capital implications of that.\n\n284\n00:13:39.520 --> 00:13:44.220\nAnd it was also in emerging markets, you know, if you go in with no gross\n\n285\n00:13:44.220 --> 00:13:45.520\nmargins to start with,\n\n286\n00:13:45.520 --> 00:13:46.960\nyou'll never have gross margins.\n\n287\n00:13:46.960 --> 00:13:51.040\nYou know, it's one thing if you're starting up a business, but you've got to\n\n288\n00:13:51.040 --> 00:13:51.600\nhave a sense\n\n289\n00:13:51.600 --> 00:13:54.880\nof a price cost relationship, or it won't work.\n\n290\n00:13:54.880 --> 00:14:00.560\nAnd I think having too many bets, frankly, again, when you have 100,\n\n291\n00:14:00.560 --> 00:14:04.680\nyou might as well have none as opposed to picking the three or four things you\n\n292\n00:14:04.680 --> 00:14:05.200\n're really going to\n\n293\n00:14:05.200 --> 00:14:05.760\nfocus on.\n\n294\n00:14:05.760 --> 00:14:07.440\nGreat insights there.\n\n295\n00:14:07.440 --> 00:14:09.520\nI don't remember the exact wording, David.\n\n296\n00:14:09.520 --> 00:14:13.040\nI wasn't as articulate as Enrico with his take back the street stuff, but...\n\n297\n00:14:13.040 --> 00:14:15.280\nNo, I got all those.\n\n298\n00:14:15.280 --> 00:14:16.240\nThose are great.\n\n299\n00:14:16.240 --> 00:14:20.320\nAnd then I know that you taught a five day leadership program to PepsiCo\n\n300\n00:14:20.320 --> 00:14:21.200\nexecutives every\n\n301\n00:14:21.200 --> 00:14:23.520\nsummer. You know, what did you focus on?\n\n302\n00:14:23.520 --> 00:14:26.560\nWhat was the major message that you had for these leaders?\n\n303\n00:14:26.560 --> 00:14:30.160\nWell, when I started, I thought about this the other day because I still do it.\n\n304\n00:14:30.160 --> 00:14:35.760\nSimilar version, smaller with a couple of schools, universities.\n\n305\n00:14:35.760 --> 00:14:43.200\nAnd I realized it was when Roger Rico took a week out to take us all to Montana\n\n306\n00:14:43.200 --> 00:14:43.920\nto talk about\n\n307\n00:14:43.920 --> 00:14:47.930\nchange and leading change, making us watch Martin Luther King's, \"I Have a\n\n308\n00:14:47.930 --> 00:14:48.960\nDream Speech,\"\n\n309\n00:14:48.960 --> 00:14:52.240\nthink about how he was trying to build alignment to a change agenda.\n\n310\n00:14:52.240 --> 00:14:59.500\nAnd I thought if Roger can take a week and take, I don't know, where there are\n\n311\n00:14:59.500 --> 00:15:00.240\n10 of us in each\n\n312\n00:15:00.240 --> 00:15:04.830\nprogram, and as you know, a whole pile of us went through it over four or five\n\n313\n00:15:04.830 --> 00:15:05.440\nyears,\n\n314\n00:15:05.440 --> 00:15:08.880\nI said, \"Then I should be able to do that for my team.\"\n\n315\n00:15:08.880 --> 00:15:15.770\nAnd in particular, international hadn't had the same depth of training and\n\n316\n00:15:15.770 --> 00:15:16.800\ndevelopment\n\n317\n00:15:16.800 --> 00:15:18.320\nthat the US businesses did.\n\n318\n00:15:18.320 --> 00:15:24.770\nSo I decided I would start by putting a program together when I was living in\n\n319\n00:15:24.770 --> 00:15:25.360\nGeneva.\n\n320\n00:15:25.360 --> 00:15:29.120\nBut I knew I'm not Roger. I can't be Roger. It has to be my thinking.\n\n321\n00:15:29.120 --> 00:15:36.540\nAnd I spent a lot of time working with my HR person and deciding what do you\n\n322\n00:15:36.540 --> 00:15:37.120\nwant to teach.\n\n323\n00:15:37.120 --> 00:15:40.890\nSo, you know, it's like on leadership, you got to decide what you really\n\n324\n00:15:40.890 --> 00:15:41.600\nbelieve it is,\n\n325\n00:15:41.600 --> 00:15:45.280\nbecause I wasn't there to teach them accounting or marketing or whatever. They\n\n326\n00:15:45.280 --> 00:15:45.840\ncan get that in\n\n327\n00:15:45.840 --> 00:15:52.040\nother venues. And it was really thinking about that a lot, and also then\n\n328\n00:15:52.040 --> 00:15:54.160\ndeciding what the capstone\n\n329\n00:15:54.160 --> 00:15:58.640\nfor the program was going to be. As you know, people will forget what you said,\n\n330\n00:15:58.640 --> 00:15:58.960\nbut there's\n\n331\n00:15:58.960 --> 00:16:03.640\ncertain things they'll never forget. And over the 10 years I ran that program\n\n332\n00:16:03.640 --> 00:16:04.160\nevery year,\n\n333\n00:16:04.160 --> 00:16:09.200\nI brought in one surprise guest speaker every year. It just so happened, it was\n\n334\n00:16:09.200 --> 00:16:09.840\nthe same one\n\n335\n00:16:09.840 --> 00:16:14.650\nevery year, but they were sworn to secrecy. And it was, I had watched the movie\n\n336\n00:16:14.650 --> 00:16:15.680\nHotel Rwanda\n\n337\n00:16:15.680 --> 00:16:22.710\non a flight to Hong Kong. And I called back to my PR guy Dick Detweiler, I said\n\n338\n00:16:22.710 --> 00:16:23.840\n, find the hotel\n\n339\n00:16:23.840 --> 00:16:28.740\nmanager. It's all about leadership. And this guy was in an international\n\n340\n00:16:28.740 --> 00:16:30.320\nsetting and impossible\n\n341\n00:16:30.320 --> 00:16:37.710\ncircumstances. I thought was an incredible leader. And every year, inevitably,\n\n342\n00:16:37.710 --> 00:16:38.480\nhis talk\n\n343\n00:16:39.120 --> 00:16:42.230\nwas the highest rated talk of the program. And it was kind of the culmination\n\n344\n00:16:42.230 --> 00:16:43.120\nof the week\n\n345\n00:16:43.120 --> 00:16:47.410\nwhere we talked about value-based leadership. And unfortunately, he got\n\n346\n00:16:47.410 --> 00:16:49.040\nkidnapped like Agami.\n\n347\n00:16:49.040 --> 00:16:53.570\nI think he's now back in the States. His name is Paul Russo-Sabagina, but he\n\n348\n00:16:53.570 --> 00:16:54.400\ntaught me a lot\n\n349\n00:16:54.400 --> 00:16:58.800\nabout leadership. And how did you end up defining leadership for that program?\n\n350\n00:16:58.800 --> 00:17:04.720\nFor the program, it was really three parts. Leaders set the agenda, which is\n\n351\n00:17:04.720 --> 00:17:05.200\nall about\n\n352\n00:17:06.000 --> 00:17:10.290\ndefining context, having the right perspective, looking around the corner to\n\n353\n00:17:10.290 --> 00:17:11.200\nsee where change is\n\n354\n00:17:11.200 --> 00:17:15.870\ngoing, and setting priorities and a strategy. I mean, it's really strategic\n\n355\n00:17:15.870 --> 00:17:16.720\nthinking.\n\n356\n00:17:16.720 --> 00:17:22.000\nTaking others with you is about self-awareness. The old Socrates just starts\n\n357\n00:17:22.000 --> 00:17:22.960\nwith know thyself\n\n358\n00:17:22.960 --> 00:17:29.360\nand self-awareness and people skills, how you connect with other people. And\n\n359\n00:17:29.360 --> 00:17:29.680\nalso\n\n360\n00:17:29.680 --> 00:17:34.180\nthe subject of organizational politics and how to avoid getting blindsided by\n\n361\n00:17:34.180 --> 00:17:35.440\norganizational politics.\n\n362\n00:17:36.400 --> 00:17:40.890\nAnd the last bucket was value-based leadership. And as I said, the closing\n\n363\n00:17:40.890 --> 00:17:42.160\nmodule was always,\n\n364\n00:17:42.160 --> 00:17:48.730\nthey had to have watched the movie Hotel Rwanda. And I started a discussion\n\n365\n00:17:48.730 --> 00:17:49.520\nabout,\n\n366\n00:17:49.520 --> 00:17:52.510\nwas this guy a good leader or a bad leader before he walks in the room, and\n\n367\n00:17:52.510 --> 00:17:53.680\nthen he walks in the room.\n\n368\n00:17:53.680 --> 00:17:58.640\nBy the end of it, most people were pretty impacted.\n\n369\n00:18:02.880 --> 00:18:07.120\nHave you ever wondered what David is thinking as he interviews our guests each\n\n370\n00:18:07.120 --> 00:18:08.080\nweek? Or have you\n\n371\n00:18:08.080 --> 00:18:12.620\nbeen interested in hearing David's take on some of the questions that he asks\n\n372\n00:18:12.620 --> 00:18:14.000\nhis guests? Well,\n\n373\n00:18:14.000 --> 00:18:18.740\nI do, and I know a lot of you do too. My name is Koolah Callahan, and together\n\n374\n00:18:18.740 --> 00:18:19.360\nwith David,\n\n375\n00:18:19.360 --> 00:18:24.320\nI host the three more questions podcasts that airs every Monday. These episodes\n\n376\n00:18:24.320 --> 00:18:25.360\nare just about 15\n\n377\n00:18:25.360 --> 00:18:29.980\nminutes, and in them, I asked David three questions that dive deeper into the\n\n378\n00:18:29.980 --> 00:18:31.360\nthemes of his episode\n\n379\n00:18:31.360 --> 00:18:36.120\nwith his guests. David shares incredible insights and stories from his career-\n\n380\n00:18:36.120 --> 00:18:37.120\nleading young brands,\n\n381\n00:18:37.120 --> 00:18:41.220\nand all of his answers are super practical and inspiring. Like this great\n\n382\n00:18:41.220 --> 00:18:41.920\ninsight, David\n\n383\n00:18:41.920 --> 00:18:44.800\nshared in one of our most recent three more questions episodes.\n\n384\n00:18:44.800 --> 00:18:50.640\nYou know, one of the things I hate Koolah is this word empowerment. I just hate\n\n385\n00:18:50.640 --> 00:18:51.120\nit when people\n\n386\n00:18:51.120 --> 00:18:57.590\nsay I want to be empowered. I just think that's BS, okay? Autonomy is earned\n\n387\n00:18:57.590 --> 00:18:59.840\nright. I will empower\n\n388\n00:18:59.840 --> 00:19:05.440\nyou once I know you're capable of doing the job. But don't ask me to empower\n\n389\n00:19:05.440 --> 00:19:06.800\nyou before you've\n\n390\n00:19:06.800 --> 00:19:11.760\ndemonstrated that. Get the three more questions podcasts in your feed each\n\n391\n00:19:11.760 --> 00:19:13.280\nMonday and dive even\n\n392\n00:19:13.280 --> 00:19:17.160\ndeeper into the episodes you know and love. Just subscribe to How Leaders Lead\n\n393\n00:19:17.160 --> 00:19:18.080\nwherever you get\n\n394\n00:19:18.080 --> 00:19:19.040\nyour podcasts.\n\n395\n00:19:26.960 --> 00:19:30.960\nAnd then I know you went to DirectTV, and there I know one of the first things\n\n396\n00:19:30.960 --> 00:19:31.760\nyou did was\n\n397\n00:19:31.760 --> 00:19:36.240\nre-look the strategy. What was the process that you used to do that, Mike?\n\n398\n00:19:36.240 --> 00:19:41.280\nDirectTV had been very well-run. My predecessor Chase Kerry had done a superb\n\n399\n00:19:41.280 --> 00:19:41.840\njob with the\n\n400\n00:19:41.840 --> 00:19:46.240\nbusiness that had gone back to Fox. Like anything when you go in new, and I was\n\n401\n00:19:46.240 --> 00:19:47.440\ncoming across industry,\n\n402\n00:19:47.440 --> 00:19:53.190\nwhich is never easy. So I came in wanting to learn a lot from the existing\n\n403\n00:19:53.190 --> 00:19:54.400\norganization,\n\n404\n00:19:55.280 --> 00:19:59.770\nbut they had never really done a formal strategy process. So in that case, I\n\n405\n00:19:59.770 --> 00:20:00.800\nheard McKinsey. It\n\n406\n00:20:00.800 --> 00:20:05.400\nwasn't because it was McKinsey. It was a woman, Laura Corb, who was a real\n\n407\n00:20:05.400 --> 00:20:06.880\nexpert in telcos,\n\n408\n00:20:06.880 --> 00:20:12.540\ntelecom, media, that whole space, which I wasn't. And we had a good working\n\n409\n00:20:12.540 --> 00:20:14.560\nrelationship. So I had\n\n410\n00:20:14.560 --> 00:20:19.840\nMcKinsey in. But again, it starts with defining the right questions. You know,\n\n411\n00:20:19.840 --> 00:20:21.040\nand the first question\n\n412\n00:20:21.040 --> 00:20:26.800\non my mind was, how come we're trading at six times e-ba-da when Pepsi bottling\n\n413\n00:20:26.800 --> 00:20:27.760\ngroup traded at\n\n414\n00:20:27.760 --> 00:20:32.350\nseven and a half, and our return on capital was 26% and Pepsi bottling groups\n\n415\n00:20:32.350 --> 00:20:33.200\nwas about eight.\n\n416\n00:20:33.200 --> 00:20:39.550\nSo you had to kind of decide what is it in the valuation that's not working,\n\n417\n00:20:39.550 --> 00:20:40.160\nand can you change\n\n418\n00:20:40.160 --> 00:20:46.680\nit? And then second, looking at where is this business changing? And so it's\n\n419\n00:20:46.680 --> 00:20:47.760\nhard to believe,\n\n420\n00:20:47.760 --> 00:20:51.310\nbut when I went to DirecTV, Netflix was still sending stuff out in red envelop\n\n421\n00:20:51.310 --> 00:20:51.680\nes.\n\n422\n00:20:51.680 --> 00:20:57.520\nBut you could see the world was beginning to change, and that you couldn't just\n\n423\n00:20:57.520 --> 00:20:58.480\nhave a service\n\n424\n00:20:58.480 --> 00:21:02.080\nthat was the television in the living room. You had to be able to watch it on\n\n425\n00:21:02.080 --> 00:21:03.120\nan iPad or an iPhone\n\n426\n00:21:03.120 --> 00:21:06.540\nor whatever, although most of the video streaming really didn't take off till\n\n427\n00:21:06.540 --> 00:21:08.720\n2013-14. And I got\n\n428\n00:21:08.720 --> 00:21:13.410\nthere in 2010. But defining the right questions, I think, is the first and\n\n429\n00:21:13.410 --> 00:21:14.640\nforemost thing, and\n\n430\n00:21:14.640 --> 00:21:17.970\nthen looking at your competition and trying to understand your strengths and\n\n431\n00:21:17.970 --> 00:21:18.560\nweaknesses\n\n432\n00:21:18.560 --> 00:21:22.480\nis what your biggest opportunities and threats are. Was there anything that you\n\n433\n00:21:22.480 --> 00:21:23.280\ndiscovered about\n\n434\n00:21:23.280 --> 00:21:27.680\nthe business that really surprised you? Well, the whole negotiation with the\n\n435\n00:21:27.680 --> 00:21:28.800\nmedia companies for\n\n436\n00:21:28.800 --> 00:21:34.290\nrights fees is like nothing I'd ever seen. Anybody who talks about win-win\n\n437\n00:21:34.290 --> 00:21:35.440\nnegotiations,\n\n438\n00:21:35.440 --> 00:21:44.270\nforget it. I mean, it is a very tough, tough part of the business. And the\n\n439\n00:21:44.270 --> 00:21:45.600\nmedia companies back then,\n\n440\n00:21:45.600 --> 00:21:51.600\nthey have a lot less leverage today with streaming. But back then, if you want\n\n441\n00:21:51.600 --> 00:21:52.400\nESPN,\n\n442\n00:21:52.400 --> 00:21:56.310\nthen you've got to give them Dizzy, ABC, and a whole bunch of other channels\n\n443\n00:21:56.310 --> 00:21:57.280\nthat nobody will watch.\n\n444\n00:21:57.280 --> 00:22:04.160\nThat's just how it worked. It was a bundling game. And it was very tough. And\n\n445\n00:22:04.160 --> 00:22:05.040\nyou had to constantly\n\n446\n00:22:05.040 --> 00:22:10.880\ntry and figure out if license fees, which were 60% of our costs are growing 7%\n\n447\n00:22:10.880 --> 00:22:11.520\na year,\n\n448\n00:22:11.520 --> 00:22:16.240\nthen I got to be pricing at 4.5% a year. With my consumer background, I'm like,\n\n449\n00:22:16.240 --> 00:22:22.020\nthat's not going to end well with consumers. And so that was probably the\n\n450\n00:22:22.020 --> 00:22:22.960\nbiggest surprise,\n\n451\n00:22:22.960 --> 00:22:27.600\nDavid. On the positive side, I was impressed with the quality of the people.\n\n452\n00:22:27.600 --> 00:22:29.360\nThe branding,\n\n453\n00:22:29.360 --> 00:22:34.000\nthe marketing was superb. I had two superb guys doing marketing and a great\n\n454\n00:22:34.000 --> 00:22:34.640\nagency that we\n\n455\n00:22:34.640 --> 00:22:40.790\nworked with. And I would say we had a lot of brand equity to start with. We had\n\n456\n00:22:40.790 --> 00:22:41.760\nthe best service in\n\n457\n00:22:41.760 --> 00:22:45.160\nthe industry. We had the best sound, the best picture. I mean, we had a lot of\n\n458\n00:22:45.160 --> 00:22:46.640\nassets. The\n\n459\n00:22:46.640 --> 00:22:50.960\nchallenge was the world was about to change even more than I mean, I knew it\n\n460\n00:22:50.960 --> 00:22:51.920\nwas changing, but even\n\n461\n00:22:51.920 --> 00:22:56.080\nI wouldn't have predicted it. The billions in streaming losses that the media\n\n462\n00:22:56.080 --> 00:22:57.040\ncompanies are now\n\n463\n00:22:57.040 --> 00:23:01.520\nrunning. Yeah, I don't think anybody could have predicted that. And I also\n\n464\n00:23:01.520 --> 00:23:02.240\nunderstand in the\n\n465\n00:23:02.240 --> 00:23:06.510\nearly days, you're boarded already made the decision to sell your Latin\n\n466\n00:23:06.510 --> 00:23:07.760\nAmerican direct\n\n467\n00:23:07.760 --> 00:23:13.120\nTV business. But you reverse course. And I was thinking, you know, there\n\n468\n00:23:13.120 --> 00:23:13.920\nprobably is a lot of\n\n469\n00:23:13.920 --> 00:23:17.410\nreally good reasons to do that. But that's still pretty tough to do when the\n\n470\n00:23:17.410 --> 00:23:18.400\nboard's already made\n\n471\n00:23:18.400 --> 00:23:22.630\nthe decision and you're the new CEO. How'd you do that? I wouldn't say the\n\n472\n00:23:22.630 --> 00:23:23.200\nboard had made the\n\n473\n00:23:23.200 --> 00:23:28.400\ndecision. I would say at least one member of the board had been public that we\n\n474\n00:23:28.400 --> 00:23:29.200\nshould spin out\n\n475\n00:23:29.200 --> 00:23:34.600\nLatin America. Those first three months I was CEO. The first thing I felt was\n\n476\n00:23:34.600 --> 00:23:35.760\nwe didn't have a great\n\n477\n00:23:35.760 --> 00:23:41.370\ngrowth portfolio, right? We had the core business in the US and Latin America,\n\n478\n00:23:41.370 --> 00:23:42.080\nI thought was our\n\n479\n00:23:42.080 --> 00:23:45.890\nbiggest growth engine because the streaming issues and some of the other issues\n\n480\n00:23:45.890 --> 00:23:47.760\n, even the content\n\n481\n00:23:47.760 --> 00:23:52.150\ncosts were not as severe in Latin America. So I thought it was our best growth\n\n482\n00:23:52.150 --> 00:23:53.120\nopportunity number\n\n483\n00:23:53.120 --> 00:23:57.040\none. Number two, because we were we had such an underleveraged balance sheet, I\n\n484\n00:23:57.040 --> 00:23:57.920\nwas going to buy\n\n485\n00:23:57.920 --> 00:24:02.780\nback shares. And you know, again, some of the training I'd gotten from being C\n\n486\n00:24:02.780 --> 00:24:03.520\nFO PepsiCo,\n\n487\n00:24:03.520 --> 00:24:08.650\nyou know, I got there with trading at six times Z but you can borrow at 2%. We\n\n488\n00:24:08.650 --> 00:24:10.400\nhad no debt and we're\n\n489\n00:24:10.400 --> 00:24:16.040\nspinning out a billion dollars of free cash flow a year. So over the five years\n\n490\n00:24:16.040 --> 00:24:17.920\n, I think we bought\n\n491\n00:24:17.920 --> 00:24:23.130\nback half the shares. And that was a big win for shareholders in being able to\n\n492\n00:24:23.130 --> 00:24:24.160\ndo it consistently\n\n493\n00:24:24.160 --> 00:24:29.380\nover five years. Absolutely. You know, and I also know that in your leadership\n\n494\n00:24:29.380 --> 00:24:29.840\nseminar,\n\n495\n00:24:29.840 --> 00:24:34.380\nwhich you give to MBAs at Boston College and Johns Hopkins, you say leaders\n\n496\n00:24:34.380 --> 00:24:35.840\nneed to understand\n\n497\n00:24:35.840 --> 00:24:39.990\ndecision-making blind spots in the boardroom. You know, what are some of those\n\n498\n00:24:39.990 --> 00:24:40.800\nblind spots?\n\n499\n00:24:40.800 --> 00:24:44.610\nI think it's no different than the Bay of Pigs invasion. You know, when you get\n\n500\n00:24:44.610 --> 00:24:45.680\ngroupthink going on\n\n501\n00:24:45.680 --> 00:24:51.600\nand sometimes we're all a bit guilty of looking at an opportunity, oftentimes\n\n502\n00:24:51.600 --> 00:24:52.800\nan acquisition,\n\n503\n00:24:52.800 --> 00:24:58.250\nwith rose-colored glasses and not asking tough enough questions. And I've been\n\n504\n00:24:58.250 --> 00:24:59.360\nguilty of it. I mean,\n\n505\n00:24:59.360 --> 00:25:04.260\nI, you know, Rope will made a major European acquisition that's been a complete\n\n506\n00:25:04.260 --> 00:25:05.760\nbust. And\n\n507\n00:25:05.760 --> 00:25:09.520\nI knew internationally, you know, I should have asked more questions. I should\n\n508\n00:25:09.520 --> 00:25:10.160\nhave known better.\n\n509\n00:25:10.160 --> 00:25:16.020\nBut I think the blind spots that you run into is that are we looking at reality\n\n510\n00:25:16.020 --> 00:25:16.640\nand the change\n\n511\n00:25:16.640 --> 00:25:21.130\nthat's coming at us? Are we moving fast enough that we got to get out of our\n\n512\n00:25:21.130 --> 00:25:22.400\ncomfort zone? And I\n\n513\n00:25:22.400 --> 00:25:29.420\nthink great boards are both collegial, but also open to discussion and pushback\n\n514\n00:25:29.420 --> 00:25:30.160\nand dialogue.\n\n515\n00:25:30.160 --> 00:25:34.090\nAnd I think it's the balance of those two that can occasionally get out of wh\n\n516\n00:25:34.090 --> 00:25:35.440\nack in a boardroom\n\n517\n00:25:35.440 --> 00:25:40.450\nas a Ken and any other circumstance. I mean, in that case, David, I used ther\n\n518\n00:25:40.450 --> 00:25:41.840\nmos actually as the\n\n519\n00:25:41.840 --> 00:25:48.160\ncase study for what went wrong, you know, with their boardroom, but they weren\n\n520\n00:25:48.160 --> 00:25:49.200\n't a public company\n\n521\n00:25:49.200 --> 00:25:53.120\neither. So yeah, but you think about the board that they had, you know, people\n\n522\n00:25:53.120 --> 00:25:54.000\nlike George Scholz\n\n523\n00:25:54.000 --> 00:25:57.530\non the board and, you know, these people are supposed to be so wise. And yet\n\n524\n00:25:57.530 --> 00:25:58.560\nthis happens right\n\n525\n00:25:58.560 --> 00:26:03.010\nin front of their nose, you know, that really, I think, blows everybody away.\n\n526\n00:26:03.010 --> 00:26:03.760\nYou know, one of the\n\n527\n00:26:03.760 --> 00:26:07.430\nthings you say that a CEO has got to do and you say it's really important for\n\n528\n00:26:07.430 --> 00:26:08.720\nthem to do it is\n\n529\n00:26:08.720 --> 00:26:14.140\nis to own the customer. You know, how do you go about doing that? In the case\n\n530\n00:26:14.140 --> 00:26:16.400\nof, of direct TV\n\n531\n00:26:17.760 --> 00:26:23.870\nand even Pepsi, you've got millions of customers. But it starts with making\n\n532\n00:26:23.870 --> 00:26:24.800\nsure you understand\n\n533\n00:26:24.800 --> 00:26:29.890\nthe customer. What do they want? And how good a job are we doing? When I got to\n\n534\n00:26:29.890 --> 00:26:30.880\ndirect TV, we had\n\n535\n00:26:30.880 --> 00:26:35.370\nall these accolades for having the best service in the industry. But the\n\n536\n00:26:35.370 --> 00:26:37.120\nindustry is notoriously\n\n537\n00:26:37.120 --> 00:26:44.720\nterrible at service and hated the cable business. And so I thought sometimes\n\n538\n00:26:44.720 --> 00:26:45.760\nyou you learn something\n\n539\n00:26:45.760 --> 00:26:51.380\nby changing the metric. So we ended up bringing in a net promoter score to\n\n540\n00:26:51.380 --> 00:26:52.560\nstart assessing how\n\n541\n00:26:52.560 --> 00:26:57.540\nwell we were servicing customers. And you start asking different questions and\n\n542\n00:26:57.540 --> 00:26:58.480\none question leads\n\n543\n00:26:58.480 --> 00:27:02.970\nto another. So in one case, where we were looking at early installs and new\n\n544\n00:27:02.970 --> 00:27:03.840\ncustomers,\n\n545\n00:27:03.840 --> 00:27:08.420\nwe found out that they were calling in in the first two months, something like\n\n546\n00:27:08.420 --> 00:27:09.360\neight times.\n\n547\n00:27:09.360 --> 00:27:13.520\nWell, if they're calling it eight times, this is because you didn't do it right\n\n548\n00:27:13.520 --> 00:27:14.160\nthe first time.\n\n549\n00:27:14.880 --> 00:27:17.950\nAnd you can all of a sudden start to not only look at what does it take to\n\n550\n00:27:17.950 --> 00:27:19.840\nbecome a passionate\n\n551\n00:27:19.840 --> 00:27:24.440\npromoter of the brand as a customer, but also who are the customers that hate\n\n552\n00:27:24.440 --> 00:27:25.360\nyou and why.\n\n553\n00:27:25.360 --> 00:27:30.610\nSo you get two agendas working on detractors. You know, what do we need to fix?\n\n554\n00:27:30.610 --> 00:27:32.000\nAnd then what do\n\n555\n00:27:32.000 --> 00:27:36.810\nwe need to do better to get more passionate about, you know, customers for the\n\n556\n00:27:36.810 --> 00:27:38.160\nproducts that we sell.\n\n557\n00:27:38.160 --> 00:27:41.670\nBut in any business, everyone's a little different. You know, the direct TV\n\n558\n00:27:41.670 --> 00:27:42.640\nbusiness is quite different\n\n559\n00:27:42.640 --> 00:27:48.720\nthan selling Pepsi and and and Lay's potato chips. But but in both cases, you\n\n560\n00:27:48.720 --> 00:27:49.520\ngot to have a great product.\n\n561\n00:27:49.520 --> 00:27:53.120\nYou got to have a good distribution system and you better understand the\n\n562\n00:27:53.120 --> 00:27:53.840\ndifferent customer\n\n563\n00:27:53.840 --> 00:27:58.000\nsegments that are out there. And you made major strides though, in terms of\n\n564\n00:27:58.000 --> 00:27:59.040\nimproving your customer\n\n565\n00:27:59.040 --> 00:28:03.440\nservice to direct TV. You know, how do you do that? I mean, how do you, okay,\n\n566\n00:28:03.440 --> 00:28:04.640\nso you got the facts\n\n567\n00:28:04.640 --> 00:28:08.080\nthat said, hey, you can do a lot better. But what do you what do you do to put\n\n568\n00:28:08.080 --> 00:28:08.720\nin place the\n\n569\n00:28:08.720 --> 00:28:11.740\nthings that really move the needle on the net promoter score? Because as I\n\n570\n00:28:11.740 --> 00:28:12.640\nunderstand it,\n\n571\n00:28:12.640 --> 00:28:18.240\nyou improved dramatically. We did. And we put a central team together that was\n\n572\n00:28:18.240 --> 00:28:18.720\ngoing to own the\n\n573\n00:28:18.720 --> 00:28:24.210\ncustomer experience. And we started out, as I said, we changed the metrics to\n\n574\n00:28:24.210 --> 00:28:25.520\nstart looking at net\n\n575\n00:28:25.520 --> 00:28:29.920\npromoter score and measuring it. We also changed the metrics for the front line\n\n576\n00:28:29.920 --> 00:28:31.120\n. And we changed\n\n577\n00:28:31.120 --> 00:28:34.340\nthe incentives for the front line. You know, people do what they're incented to\n\n578\n00:28:34.340 --> 00:28:36.320\ndo. And so,\n\n579\n00:28:36.320 --> 00:28:39.660\nand there were a couple of cases where in the pilot that we were doing with\n\n580\n00:28:39.660 --> 00:28:40.400\ntechnicians,\n\n581\n00:28:40.400 --> 00:28:45.460\nwhere we were trying to get them to do something different in the field, you\n\n582\n00:28:45.460 --> 00:28:46.000\nknow, they came to me\n\n583\n00:28:46.000 --> 00:28:51.270\nand they wanted to do a bonus. And I said, fine, look, you both recognize folks\n\n584\n00:28:51.270 --> 00:28:52.160\n, catch them doing\n\n585\n00:28:52.160 --> 00:28:56.830\ngood things like you always did at Yum. And at the same time, you know,\n\n586\n00:28:56.830 --> 00:28:58.720\nfinancial incentives can go\n\n587\n00:28:58.720 --> 00:29:03.210\na long way. And that helped us a lot in changing the incentives for the tax.\n\n588\n00:29:03.210 --> 00:29:05.120\nAnd kind of making it\n\n589\n00:29:05.120 --> 00:29:09.660\na front line driven effort to really change how we surface the customer. And\n\n590\n00:29:09.660 --> 00:29:10.480\nthen you got to start\n\n591\n00:29:10.480 --> 00:29:15.640\nmapping out the whole customer experience, you know, which in the case of\n\n592\n00:29:15.640 --> 00:29:16.480\ndirect TV was quite\n\n593\n00:29:16.480 --> 00:29:21.290\ncomplex from the initial phone call to signing them up to getting the install\n\n594\n00:29:21.290 --> 00:29:22.560\nright the first time\n\n595\n00:29:22.560 --> 00:29:27.520\nto then, you know, issues they would have with their bill. I mean, we, the bill\n\n596\n00:29:27.520 --> 00:29:28.240\nwas so confusing,\n\n597\n00:29:28.240 --> 00:29:33.470\nnobody could understand it. I think the industry liked it that way. So we took\n\n598\n00:29:33.470 --> 00:29:34.080\nnine months to\n\n599\n00:29:34.080 --> 00:29:39.350\nredo the whole bill. So a customer would understand what changed, why did it\n\n600\n00:29:39.350 --> 00:29:40.080\nchange,\n\n601\n00:29:40.080 --> 00:29:44.000\nwhere are my incentives and rebates, you know, all the questions that were\n\n602\n00:29:44.000 --> 00:29:44.800\npretty common and\n\n603\n00:29:44.800 --> 00:29:49.910\ntypical from the customer. But it was clear to David that boy, it's a never\n\n604\n00:29:49.910 --> 00:29:51.360\nending journey. I\n\n605\n00:29:51.360 --> 00:29:56.410\nmean, as great as we did on trying to rethink the customer experience, there's\n\n606\n00:29:56.410 --> 00:29:57.920\na lot of moving parts,\n\n607\n00:29:57.920 --> 00:30:02.840\nyou know, and when you have a big army, like we did with technicians and call\n\n608\n00:30:02.840 --> 00:30:04.400\ncenter operators,\n\n609\n00:30:04.400 --> 00:30:08.720\ngetting them all to kind of sing the hymn together takes a lot of work, a lot\n\n610\n00:30:08.720 --> 00:30:09.280\nof systems\n\n611\n00:30:09.280 --> 00:30:13.200\nreengineering, a lot of retraining that we did and change in incentives.\n\n612\n00:30:13.200 --> 00:30:18.580\nI also know that you're a huge believer in just the power of culture. And if\n\n613\n00:30:18.580 --> 00:30:20.240\nyou had to pick one\n\n614\n00:30:20.240 --> 00:30:24.850\nbehavior besides integrity that you'd want to have in every company that you\n\n615\n00:30:24.850 --> 00:30:26.000\nmight lead,\n\n616\n00:30:26.000 --> 00:30:30.720\nwhat would it be and why? Speak with truth and candor. You know, and it was my\n\n617\n00:30:30.720 --> 00:30:31.520\nexperience from\n\n618\n00:30:31.520 --> 00:30:37.350\nthe Pepsi International blow up that we weren't as candid with ourselves about\n\n619\n00:30:37.350 --> 00:30:38.160\nwhat was working,\n\n620\n00:30:38.160 --> 00:30:42.160\nwhat wasn't working. And you see people, I've asked the question on org health\n\n621\n00:30:42.160 --> 00:30:42.880\nsurveys different\n\n622\n00:30:42.880 --> 00:30:48.040\nways. Are you comfortable bringing bad news to the boss? You know, that's as\n\n623\n00:30:48.040 --> 00:30:49.280\nsimple as you can\n\n624\n00:30:49.280 --> 00:30:54.020\nmake it in a culture like that. You know, you're going to hear about things. It\n\n625\n00:30:54.020 --> 00:30:54.800\n's also about being\n\n626\n00:30:54.800 --> 00:31:00.880\nopen, curious, being a lifelong learner. But I would at its core, it's having\n\n627\n00:31:00.880 --> 00:31:01.360\nan open\n\n628\n00:31:01.360 --> 00:31:04.880\nculture where everyone feels comfortable to bring their whole selves to work,\n\n629\n00:31:04.880 --> 00:31:05.440\nbut it's also\n\n630\n00:31:05.440 --> 00:31:10.720\ncomfortable speaking up, you know, if they have a concern or a question. I'm\n\n631\n00:31:10.720 --> 00:31:11.600\nblessed to have Wendy,\n\n632\n00:31:11.600 --> 00:31:15.360\nmy wife is that she's my number one truth teller. I could tell you that. So it\n\n633\n00:31:15.360 --> 00:31:16.240\n's mine.\n\n634\n00:31:16.240 --> 00:31:21.600\nSo it's great. You know, I got to ask you, how do you think about competition\n\n635\n00:31:21.600 --> 00:31:23.680\nat direct TV versus\n\n636\n00:31:23.680 --> 00:31:28.560\nPepsi? I mean, you know, the two wildly different categories. They are, but\n\n637\n00:31:28.560 --> 00:31:29.360\nthere was some things\n\n638\n00:31:29.360 --> 00:31:33.320\nabout direct TV that were much more similar to Pepsi than anybody realized when\n\n639\n00:31:33.320 --> 00:31:34.160\nthey hired me.\n\n640\n00:31:34.160 --> 00:31:41.160\nFirst and foremost, they're both challenge your mindsets. You know, you're not\n\n641\n00:31:41.160 --> 00:31:42.080\nnumber one. We don't\n\n642\n00:31:42.080 --> 00:31:46.580\nhave as much money as Comcast. Pepsi doesn't have as much money as Coke. So you\n\n643\n00:31:46.580 --> 00:31:47.520\ngot to work harder,\n\n644\n00:31:47.520 --> 00:31:50.320\nyou got to be more entrepreneurial, you got to be more creative, you got to\n\n645\n00:31:50.320 --> 00:31:51.200\nfind different ways\n\n646\n00:31:51.200 --> 00:31:55.640\nto compete. And I think the passion was the same at direct TV as it was at\n\n647\n00:31:55.640 --> 00:31:56.800\nPepsi in that sense.\n\n648\n00:31:56.800 --> 00:32:02.320\nAnd I think it's, you know, it's unique at both companies to have that amount\n\n649\n00:32:02.320 --> 00:32:03.120\nof passion for\n\n650\n00:32:03.120 --> 00:32:08.090\nperforming and for making a difference. They were more similar than you ever\n\n651\n00:32:08.090 --> 00:32:09.200\nwould have imagined,\n\n652\n00:32:09.200 --> 00:32:13.680\nplus the front line. You know, Frito-Lay, I don't know, used to have 15,000\n\n653\n00:32:13.680 --> 00:32:15.680\nworkers driving a truck\n\n654\n00:32:16.240 --> 00:32:20.580\nto deliver the chips, you know, at direct TV. I used to say we had their\n\n655\n00:32:20.580 --> 00:32:22.160\nbrother, you know,\n\n656\n00:32:22.160 --> 00:32:26.330\nwe had 15,000 technicians, high school educated, driving the truck doing the\n\n657\n00:32:26.330 --> 00:32:27.680\ninstall, you know,\n\n658\n00:32:27.680 --> 00:32:32.480\ndifferent, but a similar demographic and a similar dynamic in terms of how you\n\n659\n00:32:32.480 --> 00:32:34.160\ngo about\n\n660\n00:32:34.160 --> 00:32:38.000\nconnecting and listening to them. Yeah, you know, Pepsi wanted to kill Coke. It\n\n661\n00:32:38.000 --> 00:32:38.720\nwas pretty simple\n\n662\n00:32:38.720 --> 00:32:45.200\nwho our who the enemy was. And then direct TV, the industry was exploding. You\n\n663\n00:32:45.200 --> 00:32:45.520\n're getting\n\n664\n00:32:45.520 --> 00:32:49.280\ncompetitors coming in from everywhere. How do you get your people to see how\n\n665\n00:32:49.280 --> 00:32:50.080\nthe world was\n\n666\n00:32:50.080 --> 00:32:55.020\nmoving? Well, it changed. It changed while I was there. And I mean, just as a\n\n667\n00:32:55.020 --> 00:32:55.920\nmeasure of,\n\n668\n00:32:55.920 --> 00:32:59.870\nit used to be, you could set a strategy for at least five years at direct TV. I\n\n669\n00:32:59.870 --> 00:33:00.320\nrebooted\n\n670\n00:33:00.320 --> 00:33:05.370\nthe strategy at least five times in five years. So when I went, it was pretty\n\n671\n00:33:05.370 --> 00:33:06.320\nclear it was\n\n672\n00:33:06.320 --> 00:33:14.560\ndish and it was Comcast. Full stop. Okay. All of the other stuff was later on\n\n673\n00:33:14.560 --> 00:33:15.280\nwhen you started\n\n674\n00:33:15.280 --> 00:33:21.540\nseeing what was happening with Netflix, Google, Amazon, you name it, and all of\n\n675\n00:33:21.540 --> 00:33:22.000\na sudden,\n\n676\n00:33:22.000 --> 00:33:28.640\nyou're in a whole different world where there aren't easy answers, to be honest\n\n677\n00:33:28.640 --> 00:33:29.440\nwith you. And\n\n678\n00:33:29.440 --> 00:33:36.010\nI would say it was a little easier when I went because the first couple years,\n\n679\n00:33:36.010 --> 00:33:36.800\nit was pretty clear.\n\n680\n00:33:36.800 --> 00:33:44.320\nIt was Charlie Ergun and Dish and it was, you know, it was Comcast. Over time,\n\n681\n00:33:44.320 --> 00:33:44.880\nthat started\n\n682\n00:33:44.880 --> 00:33:50.560\na shift with Verizon, AT&T, we had a whole bunch of competitors. And you had to\n\n683\n00:33:50.560 --> 00:33:51.440\nstart thinking about it.\n\n684\n00:33:51.440 --> 00:33:58.640\nAnd my goodness today, you know, you've got so many alternatives out there as\n\n685\n00:33:58.640 --> 00:33:59.600\nto how you get your\n\n686\n00:33:59.600 --> 00:34:03.600\nmedia. I think that'd be a really tough challenge for any CEO.\n\n687\n00:34:03.600 --> 00:34:11.200\nYou know, Mike is one of several guests I've had on over the years who spent\n\n688\n00:34:11.200 --> 00:34:12.240\ntime at PepsiCo.\n\n689\n00:34:13.040 --> 00:34:17.840\nAnd let's face it, you just can't talk about leadership at PepsiCo without\n\n690\n00:34:17.840 --> 00:34:18.720\ntalking about the\n\n691\n00:34:18.720 --> 00:34:23.960\ngreat Indra Nui. I've had the pleasure of working alongside Indra for years,\n\n692\n00:34:23.960 --> 00:34:25.200\nand I love how she\n\n693\n00:34:25.200 --> 00:34:29.740\nalways strives to elevate others. From my perspective, one of the things that I\n\n694\n00:34:29.740 --> 00:34:31.120\n've gotten the most\n\n695\n00:34:31.120 --> 00:34:35.480\nsatisfaction, it's not an award, it's not giving them a little certificate or\n\n696\n00:34:35.480 --> 00:34:36.080\nwhatever.\n\n697\n00:34:36.080 --> 00:34:40.510\nWhen I write letters to parents of some of my executives, and I tell the\n\n698\n00:34:40.510 --> 00:34:42.080\nparents, what a great\n\n699\n00:34:42.080 --> 00:34:48.640\njob their son or daughter is doing, that recognition is worth more than money,\n\n700\n00:34:48.640 --> 00:34:51.040\nstock grants, hugs,\n\n701\n00:34:51.040 --> 00:34:55.480\ntickets, anything. Because at the end of the day, and I go back to where I\n\n702\n00:34:55.480 --> 00:34:56.240\nstarted,\n\n703\n00:34:56.240 --> 00:35:01.540\nwhen your parents say to you, I am so proud of you. And your boss just wrote to\n\n704\n00:35:01.540 --> 00:35:02.480\nme saying that you\n\n705\n00:35:02.480 --> 00:35:08.000\nare awesome. And the look on their face, you know, is worth a million dollars.\n\n706\n00:35:09.120 --> 00:35:14.640\nListen to my entire conversation with Indra, all the way back on episode nine,\n\n707\n00:35:14.640 --> 00:35:16.000\nhere on How Leaders Lead.\n\n708\n00:35:16.000 --> 00:35:26.980\nYou know, we both worked for Craig Weatherup when he was at Pepsi, and he\n\n709\n00:35:26.980 --> 00:35:29.040\nalways described you\n\n710\n00:35:29.040 --> 00:35:33.410\nas he said, you're one of the best negotiators he'd ever, ever been around. Do\n\n711\n00:35:33.410 --> 00:35:35.680\nyou have any rules\n\n712\n00:35:35.680 --> 00:35:40.960\nfor negotiation? Or what's your concept when you go into a negotiation?\n\n713\n00:35:40.960 --> 00:35:45.120\nI appreciate Craig's compliment, but I'm not sure I ever felt that way when it\n\n714\n00:35:45.120 --> 00:35:45.360\nwas a\n\n715\n00:35:45.360 --> 00:35:49.210\ndirective he'd be negotiating with Kraft and Goodell and the NFL or anybody\n\n716\n00:35:49.210 --> 00:35:49.680\nelse.\n\n717\n00:35:49.680 --> 00:35:56.010\nYou know, I did have a couple of things. So one, I learned from Enrico, which\n\n718\n00:35:56.010 --> 00:35:56.800\nis if you're doing\n\n719\n00:35:56.800 --> 00:36:00.280\nan acquisition or buying anything, and I would say the same applied to our\n\n720\n00:36:00.280 --> 00:36:01.680\nnegotiations on content,\n\n721\n00:36:02.240 --> 00:36:06.160\nknow your walk away. You might not tell anybody, but you better know what your\n\n722\n00:36:06.160 --> 00:36:06.960\nwalk away is,\n\n723\n00:36:06.960 --> 00:36:09.970\nfirst and foremost, when you go into it to avoid the emotion of the deal taken\n\n724\n00:36:09.970 --> 00:36:10.400\nover.\n\n725\n00:36:10.400 --> 00:36:16.120\nSo nowhere you're going to draw the line and say, okay, I'm out. Number one,\n\n726\n00:36:16.120 --> 00:36:17.360\nthe second thing I did,\n\n727\n00:36:17.360 --> 00:36:23.560\nand again, I learned this from a coach, Marty Selman, is I put my watch on my\n\n728\n00:36:23.560 --> 00:36:24.480\nright wrist instead\n\n729\n00:36:24.480 --> 00:36:28.780\nof my left, I'm left handed. It's on my left wrist, but I'd put it on my right\n\n730\n00:36:28.780 --> 00:36:30.400\nwrist just slows you down\n\n731\n00:36:31.200 --> 00:36:36.720\nin a discussion to breathe and listen to what's being said. And the third thing\n\n732\n00:36:36.720 --> 00:36:37.120\nI learned\n\n733\n00:36:37.120 --> 00:36:42.920\nwas make sure you get the right question. I mean, at direct TV at one point, my\n\n734\n00:36:42.920 --> 00:36:43.360\nguys were\n\n735\n00:36:43.360 --> 00:36:48.660\nnegotiating with Oprah, the Oprah network, and they weren't happy with how\n\n736\n00:36:48.660 --> 00:36:50.320\nnegotiations were going,\n\n737\n00:36:50.320 --> 00:36:54.290\nand I remember they came into my office and I said to them, you guys are asking\n\n738\n00:36:54.290 --> 00:36:54.640\nthe wrong\n\n739\n00:36:54.640 --> 00:36:59.120\nquestion and they looked at me like, what? I said, look, the question isn't,\n\n740\n00:36:59.120 --> 00:36:59.600\nare we going to\n\n741\n00:36:59.600 --> 00:37:02.250\ndrop the Oprah network? Because I'm going to answer it for you right now. The\n\n742\n00:37:02.250 --> 00:37:03.360\nanswer is no,\n\n743\n00:37:03.360 --> 00:37:08.160\nwe're not. Okay, period, full stop. So therefore, the question is, how do I get\n\n744\n00:37:08.160 --> 00:37:08.960\nthe best price\n\n745\n00:37:08.960 --> 00:37:13.920\nrelative to Comcast or anybody else? So I may not like the price, but I want it\n\n746\n00:37:13.920 --> 00:37:14.720\nto be competitive\n\n747\n00:37:14.720 --> 00:37:19.340\nand fair. And so I think making sure your team is asking, because it's easy to\n\n748\n00:37:19.340 --> 00:37:19.840\nget into the\n\n749\n00:37:19.840 --> 00:37:23.360\nemotion of the moment, are they asking the right question and thinking hol\n\n750\n00:37:23.360 --> 00:37:24.240\nistically about what\n\n751\n00:37:24.240 --> 00:37:28.480\nyou're trying to get to? You were direct TV for five years. You bought back\n\n752\n00:37:28.480 --> 00:37:29.440\nhalf the stock,\n\n753\n00:37:29.440 --> 00:37:34.360\nyou know, the shareholder, you know, benefited greatly from your leadership.\n\n754\n00:37:34.360 --> 00:37:35.280\nAnd then you end\n\n755\n00:37:35.280 --> 00:37:41.450\nup selling direct TV for a great price to AT&T in 2015. You gave them this at\n\n756\n00:37:41.450 --> 00:37:42.720\nthe time, it was very\n\n757\n00:37:42.720 --> 00:37:47.960\nhigh performing business, but the acquisition has been described by many as one\n\n758\n00:37:47.960 --> 00:37:48.800\nof the worst\n\n759\n00:37:48.800 --> 00:37:53.600\nacquisitions of all time. What was the biggest reason why direct TV failed\n\n760\n00:37:53.600 --> 00:37:55.680\nunder the AT&T umbrella?\n\n761\n00:37:55.680 --> 00:38:00.790\nThe world changed. Now, I've always felt when you're selling your business, you\n\n762\n00:38:00.790 --> 00:38:01.360\nbetter,\n\n763\n00:38:01.360 --> 00:38:04.890\nyou only sell it once. So make sure you want to sell it and we had a lot of\n\n764\n00:38:04.890 --> 00:38:05.680\ndiscussions with the\n\n765\n00:38:05.680 --> 00:38:11.700\nboard. And I was clear in my mind that for a couple of reasons, I was concerned\n\n766\n00:38:11.700 --> 00:38:12.560\nabout direct\n\n767\n00:38:12.560 --> 00:38:18.070\nTV's future as a standalone business and streaming and not being able to turn\n\n768\n00:38:18.070 --> 00:38:18.960\nit into an internet\n\n769\n00:38:18.960 --> 00:38:22.850\ncompany. The cable guys could say, all right, I'm an internet company, I sell\n\n770\n00:38:22.850 --> 00:38:23.760\ninternet, I don't\n\n771\n00:38:23.760 --> 00:38:28.430\ncare about paid TV. I couldn't do that. We were solely a paid TV provider. And\n\n772\n00:38:28.430 --> 00:38:30.320\nso I was really clear\n\n773\n00:38:30.320 --> 00:38:34.160\nthat it was time to sell if we had the right opportunity and the right offer.\n\n774\n00:38:34.160 --> 00:38:35.920\nAnd you could\n\n775\n00:38:35.920 --> 00:38:38.830\nsay they overpaid for it. They didn't overpay for it relative to what it was\n\n776\n00:38:38.830 --> 00:38:39.440\ntrading at.\n\n777\n00:38:39.440 --> 00:38:45.080\nI mean, I think we sold it eight times e-padah and we had been trading at six.\n\n778\n00:38:45.080 --> 00:38:46.640\nSo it wasn't that.\n\n779\n00:38:46.640 --> 00:38:53.860\nI think it's just the world changed much faster than they ever realized. And to\n\n780\n00:38:53.860 --> 00:38:54.880\nbe honest with you,\n\n781\n00:38:54.880 --> 00:38:59.750\neven I wouldn't have guessed that sports ratings would fall through the floor,\n\n782\n00:38:59.750 --> 00:39:00.160\nthat the media\n\n783\n00:39:00.160 --> 00:39:04.110\ncompanies would be losing a billion dollars plus a year, each of them on\n\n784\n00:39:04.110 --> 00:39:06.080\nstreaming and not\n\n785\n00:39:06.080 --> 00:39:10.330\nbeing able to figure out how to protect the core model that they had before. I\n\n786\n00:39:10.330 --> 00:39:11.840\n'd also say it's a\n\n787\n00:39:11.840 --> 00:39:16.960\nbad luck. I mean, bad timing and bad luck more than anything. And it also makes\n\n788\n00:39:16.960 --> 00:39:17.680\nyou a little humble\n\n789\n00:39:17.680 --> 00:39:21.280\nbecause you realize there was some good luck involved in my timing.\n\n790\n00:39:21.280 --> 00:39:24.480\nWell, it sounds like you're pretty prescient. You're talking to the board about\n\n791\n00:39:24.480 --> 00:39:25.040\nhow, hey,\n\n792\n00:39:25.040 --> 00:39:28.260\nthe future could be really tough. And if we're ever going to sell it, this is\n\n793\n00:39:28.260 --> 00:39:29.440\nprobably the right\n\n794\n00:39:29.440 --> 00:39:34.190\ntime. And if we sell it, we got to give it to a huge competitor that can\n\n795\n00:39:34.190 --> 00:39:37.040\ncompete. And this is the\n\n796\n00:39:37.040 --> 00:39:41.740\ntime. So you're being a little humble here, I think. It seems like you had good\n\n797\n00:39:41.740 --> 00:39:43.120\ntiming for good reason.\n\n798\n00:39:43.120 --> 00:39:46.480\nWell, you make your luck sometimes. But I'm also humble enough to realize,\n\n799\n00:39:46.480 --> 00:39:51.120\nif I was trying to run it today, we wouldn't put the same performance up on the\n\n800\n00:39:51.120 --> 00:39:51.920\nboard. It's a tough,\n\n801\n00:39:51.920 --> 00:39:56.240\ntough business and a tough business model. I totally agree with that. You led\n\n802\n00:39:56.240 --> 00:39:56.800\nbusinesses\n\n803\n00:39:56.800 --> 00:40:01.440\nthat had to counter major consumer shifts. You had a huge decline in carbonated\n\n804\n00:40:01.440 --> 00:40:02.160\nsoft drinks,\n\n805\n00:40:02.160 --> 00:40:06.320\nwhich we both weathered that storm as leaders. And then you went through the\n\n806\n00:40:06.320 --> 00:40:07.200\nwhole court cutting\n\n807\n00:40:07.200 --> 00:40:13.760\nissue. How do you lead, Mike, when the wind is against your sail? I think that\n\n808\n00:40:13.760 --> 00:40:15.120\nthere are some\n\n809\n00:40:15.120 --> 00:40:20.210\ndifferences. The first and foremost, you've got to be straight with your\n\n810\n00:40:20.210 --> 00:40:21.040\norganization.\n\n811\n00:40:21.040 --> 00:40:26.380\nI think you could say define reality, but you've got to be straight and yet you\n\n812\n00:40:26.380 --> 00:40:26.640\n've got to be\n\n813\n00:40:26.640 --> 00:40:30.450\noptimistic and positive, right? You've got to provide people hope and a\n\n814\n00:40:30.450 --> 00:40:31.920\npositive view of the future.\n\n815\n00:40:32.160 --> 00:40:38.790\nBut you also can't just ignore reality. And so it's a much trickier balance for\n\n816\n00:40:38.790 --> 00:40:40.640\na leader, I think,\n\n817\n00:40:40.640 --> 00:40:46.730\nand how you both provide the positive sense of confidence and direction and\n\n818\n00:40:46.730 --> 00:40:48.640\nwhere you're going.\n\n819\n00:40:48.640 --> 00:40:54.370\nBut at the same time, be honest with them about reality and what the challenges\n\n820\n00:40:54.370 --> 00:40:54.960\nare.\n\n821\n00:40:54.960 --> 00:41:00.080\nI mean, and that doesn't mean doom and gloom, but I mean being straight. Also\n\n822\n00:41:00.080 --> 00:41:01.440\nbeing transparent and\n\n823\n00:41:01.440 --> 00:41:05.510\nclear about what direction you're taking and why and where you need them to\n\n824\n00:41:05.510 --> 00:41:05.840\nhelp.\n\n825\n00:41:05.840 --> 00:41:09.920\nYou know, this has been so much fun, Mike. And I want to have some more with my\n\n826\n00:41:09.920 --> 00:41:10.640\nlightning round\n\n827\n00:41:10.640 --> 00:41:15.360\nof questions. So are you ready for this? Sure. Okay. What are the three words\n\n828\n00:41:15.360 --> 00:41:16.560\nthat best describe you?\n\n829\n00:41:16.560 --> 00:41:23.700\nPeople would say smart, intense. And I hope they'd say caring too. Who would\n\n830\n00:41:23.700 --> 00:41:24.640\nplay you in a movie?\n\n831\n00:41:27.440 --> 00:41:32.760\nMaybe Michael J. Fox, because he's short and I'm short. Speaking of movies,\n\n832\n00:41:32.760 --> 00:41:33.600\nwhat is your favorite\n\n833\n00:41:33.600 --> 00:41:37.400\nmovie? Well, I just saw up in the hammer. That was terrific. But my all time\n\n834\n00:41:37.400 --> 00:41:38.480\nfavorite would be Dr.\n\n835\n00:41:38.480 --> 00:41:43.040\nChicago. I loved off in a hammer too. That was that's the best one I've seen in\n\n836\n00:41:43.040 --> 00:41:43.840\n10 years. Yeah.\n\n837\n00:41:43.840 --> 00:41:47.630\nYou know, if you could be one person for a day beside yourself, who would it be\n\n838\n00:41:47.630 --> 00:41:48.880\n? I'd have loved\n\n839\n00:41:48.880 --> 00:41:52.370\nto have been in the US Senate and been at politics, but not the way politics is\n\n840\n00:41:52.370 --> 00:41:53.360\nthese days. So\n\n841\n00:41:54.640 --> 00:41:58.250\nwhat's your biggest pet peeve? You know, I'm probably not the most patient\n\n842\n00:41:58.250 --> 00:41:59.600\nperson in the world for\n\n843\n00:41:59.600 --> 00:42:02.850\nfolks that don't try hard. You don't have to be a genius. You got to put some\n\n844\n00:42:02.850 --> 00:42:04.000\nsweat into it and\n\n845\n00:42:04.000 --> 00:42:10.320\nwork hard at stuff. Favorite soft drink? Pepsi. Favorite snack chip? Cool ranch\n\n846\n00:42:10.320 --> 00:42:12.080\nDoritos. Favorite\n\n847\n00:42:12.080 --> 00:42:19.980\nTV show? Mad Men. The best gift you ever received in education. If I turned on\n\n848\n00:42:19.980 --> 00:42:21.040\nthe radio in your\n\n849\n00:42:21.040 --> 00:42:26.160\ncar, what would I hear? Jazz piano. I played jazz piano. Something about you a\n\n850\n00:42:26.160 --> 00:42:27.120\nfew people would know.\n\n851\n00:42:27.120 --> 00:42:32.960\nI played jazz piano and pop piano too. I thought that would be good. That's the\n\n852\n00:42:32.960 --> 00:42:33.600\nend of the lightning\n\n853\n00:42:33.600 --> 00:42:38.340\nround. Well done. That's great. You talk about what you call your 60 40 formula\n\n854\n00:42:38.340 --> 00:42:39.280\nfor leadership.\n\n855\n00:42:39.280 --> 00:42:44.800\nExplain 60% self confident and 40% to be humble enough to know what you don't\n\n856\n00:42:44.800 --> 00:42:45.920\nknow and and be\n\n857\n00:42:45.920 --> 00:42:51.680\nopen to learning. From your experience, Mike, why do you think leaders derail\n\n858\n00:42:51.680 --> 00:42:52.000\nego?\n\n859\n00:42:52.000 --> 00:42:57.380\nI once heard Callaway asked the same question for my chairman of PepsiCo and he\n\n860\n00:42:57.380 --> 00:42:58.160\nsaid it's your ego.\n\n861\n00:42:58.160 --> 00:43:04.160\nAnd I think you can derail for a lot of reasons. I mean, I think I usually have\n\n862\n00:43:04.160 --> 00:43:05.120\nfour of them. You get\n\n863\n00:43:05.120 --> 00:43:09.630\nsideways with your peers or your team or your boss. You get blindsided by\n\n864\n00:43:09.630 --> 00:43:10.960\npolitics. You get the\n\n865\n00:43:10.960 --> 00:43:16.280\nwrong strategy or you lose the culture that you want in the organization. But\n\n866\n00:43:16.280 --> 00:43:16.960\nit's your ego that\n\n867\n00:43:16.960 --> 00:43:20.860\nyou got to manage. I know you have a great partnership with your wife Sue. What\n\n868\n00:43:20.860 --> 00:43:21.600\n's the best\n\n869\n00:43:21.600 --> 00:43:28.960\nleadership advice she ever gave you? Listen, she would say, I don't listen.\n\n870\n00:43:28.960 --> 00:43:34.480\nOne of the things that I learned that you didn't, I wasn't aware of this, but\n\n871\n00:43:34.480 --> 00:43:34.960\nyou made\n\n872\n00:43:35.920 --> 00:43:41.280\nfor all the leadership off sites that you had. You made volunteering a big\n\n873\n00:43:41.280 --> 00:43:42.800\ncomponent of what you\n\n874\n00:43:42.800 --> 00:43:47.690\nand your team did as part of that off site. Give us an example of what you did\n\n875\n00:43:47.690 --> 00:43:49.040\nand what the outcome\n\n876\n00:43:49.040 --> 00:43:54.240\nwas. Well, when I went to DirecTV, we did some things with the Heart\n\n877\n00:43:54.240 --> 00:43:55.520\nAssociation and some other\n\n878\n00:43:55.520 --> 00:44:00.690\nthings, but they weren't as directly applicable to the business. And I got\n\n879\n00:44:00.690 --> 00:44:02.000\ninvolved with the LA\n\n880\n00:44:02.000 --> 00:44:07.280\npartnership for schools, which because you couldn't do charter schools in LA,\n\n881\n00:44:07.280 --> 00:44:11.840\nthis is the politics. We did get them to agree to take the bottom third of the\n\n882\n00:44:11.840 --> 00:44:12.640\nschools, the worst\n\n883\n00:44:12.640 --> 00:44:17.030\nperforming schools and let the private sector help, help provide money to pay\n\n884\n00:44:17.030 --> 00:44:18.560\nprincipals more,\n\n885\n00:44:18.560 --> 00:44:22.520\nwhatever else. So I got pretty involved in that. Mayor Villa Raghosa was the\n\n886\n00:44:22.520 --> 00:44:23.600\nmayor at the time and\n\n887\n00:44:23.600 --> 00:44:28.880\nhe was incredible to work with. And because that was such a good cause and it\n\n888\n00:44:28.880 --> 00:44:29.760\nwas local for us,\n\n889\n00:44:29.760 --> 00:44:34.620\nbecause we were based in Los Angeles. I also found you develop better leaders.\n\n890\n00:44:34.620 --> 00:44:35.360\nIf you got people\n\n891\n00:44:35.360 --> 00:44:38.880\ninvolved in a nonprofit situation where you can't tell everybody what to do,\n\n892\n00:44:38.880 --> 00:44:40.880\nyou actually have to\n\n893\n00:44:40.880 --> 00:44:46.230\nlisten, you have to learn a bit about humanity, you have to build empathy in a\n\n894\n00:44:46.230 --> 00:44:47.280\ntotally different\n\n895\n00:44:47.280 --> 00:44:51.880\nenvironment. And it really clicked with the organization. So I think one off\n\n896\n00:44:51.880 --> 00:44:52.880\nsite, we ended up\n\n897\n00:44:52.880 --> 00:44:58.640\npainting at inner city school. We got the painting, painted murals and painted\n\n898\n00:44:58.640 --> 00:44:59.680\nrooms and did everything.\n\n899\n00:44:59.840 --> 00:45:06.320\nAnd it was, I just realized it was reinforcing the culture and the values. And\n\n900\n00:45:06.320 --> 00:45:07.280\nit was also\n\n901\n00:45:07.280 --> 00:45:12.010\ndeveloping talent at the same time. You know, you talk about the importance of\n\n902\n00:45:12.010 --> 00:45:13.040\nhaving a hip pocket\n\n903\n00:45:13.040 --> 00:45:19.020\nskill as you move up the ladder. And yours was obviously finance. You came up\n\n904\n00:45:19.020 --> 00:45:20.240\nconsulting and\n\n905\n00:45:20.240 --> 00:45:25.990\nthen finance work and strategy and you were a guru on that front. But a lot of\n\n906\n00:45:25.990 --> 00:45:27.120\npeople can't make\n\n907\n00:45:27.120 --> 00:45:33.620\nthat shift from being a finance person into a general manager role. And yet you\n\n908\n00:45:33.620 --> 00:45:34.400\nwere able to\n\n909\n00:45:34.400 --> 00:45:40.270\nreally become a great consumer marketer. And you know, that you made that the\n\n910\n00:45:40.270 --> 00:45:40.560\nreal\n\n911\n00:45:40.560 --> 00:45:46.960\nrallying cry for your organization. What advice can you give to leaders who\n\n912\n00:45:46.960 --> 00:45:48.720\nwant to move into that\n\n913\n00:45:48.720 --> 00:45:53.200\ngeneral manager role, particularly from a finance perspective?\n\n914\n00:45:54.080 --> 00:45:58.450\nLook, I majored in Russian and English literature. So I wasn't a finance guy\n\n915\n00:45:58.450 --> 00:45:59.520\ncoming out of college\n\n916\n00:45:59.520 --> 00:46:05.420\nand I got a master's in international relations. So I learned all my finance at\n\n917\n00:46:05.420 --> 00:46:06.320\nArthur Anderson. But\n\n918\n00:46:06.320 --> 00:46:11.330\nI think a lot of people that are in finance are really good with the numbers.\n\n919\n00:46:11.330 --> 00:46:11.600\nThey're not\n\n920\n00:46:11.600 --> 00:46:16.210\nnecessarily as good on the people side. And so I think the two things that I\n\n921\n00:46:16.210 --> 00:46:17.360\nwould say you can\n\n922\n00:46:17.360 --> 00:46:21.790\nnever learn enough about. One is strategy. You know, because you got to think\n\n923\n00:46:21.790 --> 00:46:22.800\nholistically about\n\n924\n00:46:22.800 --> 00:46:25.920\nthe organization. If you're a general manager, you got to think about the\n\n925\n00:46:25.920 --> 00:46:27.200\nenterprise as a whole.\n\n926\n00:46:27.200 --> 00:46:30.880\nYou got to think about the long term and the short term. And so thinking about\n\n927\n00:46:30.880 --> 00:46:31.680\nstrategy and I think\n\n928\n00:46:31.680 --> 00:46:35.360\nthe second is how you take others with you. It's your people skills, how you\n\n929\n00:46:35.360 --> 00:46:36.560\nconnect, show empathy.\n\n930\n00:46:36.560 --> 00:46:40.290\nYou know, people don't care what you know until they know you care. I mean, it\n\n931\n00:46:40.290 --> 00:46:40.800\n's basics.\n\n932\n00:46:40.800 --> 00:46:46.340\nLast question for you here. If you had one piece of advice you'd give to any\n\n933\n00:46:46.340 --> 00:46:47.360\naspiring leader,\n\n934\n00:46:48.160 --> 00:46:52.240\nwhat would it be? I think it'd be two things. I think one, integrity and\n\n935\n00:46:52.240 --> 00:46:53.600\ncharacter comes first.\n\n936\n00:46:53.600 --> 00:46:59.120\nNo question. But second in a world of change, you got to look around the corner\n\n937\n00:46:59.120 --> 00:46:59.600\nand skate to\n\n938\n00:46:59.600 --> 00:47:03.730\nwhere the puck is going to quote Gretzky. And in this world in particular, the\n\n939\n00:47:03.730 --> 00:47:04.240\nchange has come\n\n940\n00:47:04.240 --> 00:47:08.560\nin so fast and furious. You've got to make sure, you know, what to keep and\n\n941\n00:47:08.560 --> 00:47:09.680\nwhat to change. And\n\n942\n00:47:09.680 --> 00:47:13.830\nthat's a constant challenge. I got to ask you this while you talk about change.\n\n943\n00:47:13.830 --> 00:47:14.800\nWhen Blockbuster\n\n944\n00:47:14.800 --> 00:47:20.930\nturned down the opportunity to buy Netflix, did you ever see Netflix becoming\n\n945\n00:47:20.930 --> 00:47:22.240\nwhat it is today?\n\n946\n00:47:22.240 --> 00:47:25.360\nCertainly not back then. I mean, a friend of ours, both.\n\n947\n00:47:25.360 --> 00:47:30.400\nWas the one who made that decision. Now, Reed Hastings says he never had an\n\n948\n00:47:30.400 --> 00:47:31.040\noffer to buy the\n\n949\n00:47:31.040 --> 00:47:40.170\ncompany. But who knows? I don't think anybody realized how fast. And by the way\n\n950\n00:47:40.170 --> 00:47:41.120\n, it was sequential,\n\n951\n00:47:41.120 --> 00:47:45.820\nDavid, technology change doesn't happen all at once. People forget that in the\n\n952\n00:47:45.820 --> 00:47:46.800\ncase of Netflix,\n\n953\n00:47:46.800 --> 00:47:53.840\nthey were sending out all those red envelopes until 2012. And it was not just\n\n954\n00:47:53.840 --> 00:47:54.640\nthe internet that\n\n955\n00:47:54.640 --> 00:48:00.180\nunlocked it. It was a combination of the telecommunications industry doing 4G\n\n956\n00:48:00.180 --> 00:48:00.800\nand 5G,\n\n957\n00:48:00.800 --> 00:48:05.000\nwhich enabled you to do video streaming. It was compression technology that\n\n958\n00:48:05.000 --> 00:48:06.000\nchanged. So they\n\n959\n00:48:06.000 --> 00:48:11.140\nwere like three or four different innovations that all of a sudden unleashed\n\n960\n00:48:11.140 --> 00:48:11.840\nvideo streaming\n\n961\n00:48:11.840 --> 00:48:15.740\nlike we're doing right now. And all of a sudden, you're in a whole different\n\n962\n00:48:15.740 --> 00:48:16.960\nworld. And Netflix,\n\n963\n00:48:16.960 --> 00:48:22.720\nthey pivoted themselves. And it's not that easy. Spotify spent a billion\n\n964\n00:48:22.720 --> 00:48:23.360\ndollars trying to get\n\n965\n00:48:23.360 --> 00:48:27.880\ninto podcasts. And they should have talked to you first because they haven't\n\n966\n00:48:27.880 --> 00:48:29.280\ndone very well at it.\n\n967\n00:48:29.280 --> 00:48:32.960\nWell, what's really interesting is that, you know, we're talking here about\n\n968\n00:48:32.960 --> 00:48:34.720\nNetflix, a 11-year span,\n\n969\n00:48:35.440 --> 00:48:41.300\nyou know, I mean, that seems like, you don't think that's very long. But in\n\n970\n00:48:41.300 --> 00:48:42.400\ntoday's world,\n\n971\n00:48:42.400 --> 00:48:46.960\nthat's an eternity. I mean, it really is in terms of what's happened. I talked\n\n972\n00:48:46.960 --> 00:48:47.760\nto Reed and tried to\n\n973\n00:48:47.760 --> 00:48:52.700\nget him to merge with DirecTV because I was looking for another strategy. But\n\n974\n00:48:52.700 --> 00:48:53.840\nReed was too smart for\n\n975\n00:48:53.840 --> 00:48:58.160\nthat. So, well, let me tell you something, Mike, you have it all. You are\n\n976\n00:48:58.160 --> 00:49:00.400\nincredibly smart. You\n\n977\n00:49:00.400 --> 00:49:04.380\nare a great believer in people. You understand the value of people. You can\n\n978\n00:49:04.380 --> 00:49:05.920\nbring it all together.\n\n979\n00:49:05.920 --> 00:49:09.460\nAnd that's why you're such a great leader at all these great companies that you\n\n980\n00:49:09.460 --> 00:49:10.000\nwork for and\n\n981\n00:49:10.000 --> 00:49:13.990\nwhy you're such a great board member. And it's been great catching up with you.\n\n982\n00:49:13.990 --> 00:49:14.080\nAnd\n\n983\n00:49:14.080 --> 00:49:18.080\ncongratulations on your tremendous career and success.\n\n984\n00:49:18.080 --> 00:49:22.770\nWell, I appreciate it, David. I think as I've reflected back, though, for\n\n985\n00:49:22.770 --> 00:49:23.520\nanybody who's an\n\n986\n00:49:23.520 --> 00:49:28.080\naspiring leader, first of all, I think anybody can learn to be a better leader.\n\n987\n00:49:28.080 --> 00:49:29.520\nAnd they aren't\n\n988\n00:49:29.520 --> 00:49:34.160\njust born with charisma or whatever else. You can learn to be a better leader\n\n989\n00:49:34.160 --> 00:49:34.640\nby listening to\n\n990\n00:49:34.640 --> 00:49:38.760\npodcasts like this. But the second thing I would say is resilience. I learned\n\n991\n00:49:38.760 --> 00:49:39.760\nthe hard way when my\n\n992\n00:49:39.760 --> 00:49:44.970\ndad died at 50 of liver cancer and my mom was left with a $25,000 life\n\n993\n00:49:44.970 --> 00:49:46.160\ninsurance policy,\n\n994\n00:49:46.160 --> 00:49:50.320\nwhat resilience and taking life one day at a time was really all about. And\n\n995\n00:49:50.320 --> 00:49:55.280\nmy dad was a hero to all of us, but my mom was the real hero.\n\n996\n00:49:56.240 --> 00:50:00.050\nThat's great. Thanks for sharing that. And thanks for giving me so much of your\n\n997\n00:50:00.050 --> 00:50:01.040\ntime. I appreciate it.\n\n998\n00:50:01.040 --> 00:50:15.360\nYou know, there's a reason why big companies like Bank of America and Whirlpool\n\n999\n00:50:15.360 --> 00:50:16.080\nwant Mike on\n\n1000\n00:50:16.080 --> 00:50:21.360\ntheir board. I mean, he's smart as a whip, and he clearly has so much insight\n\n1001\n00:50:21.360 --> 00:50:22.480\ninto people.\n\n1002\n00:50:23.200 --> 00:50:28.830\nBut he also is so resilient. He knows how to stay the course, even when things\n\n1003\n00:50:28.830 --> 00:50:29.360\nget tough.\n\n1004\n00:50:29.360 --> 00:50:34.320\nNow, listen, you may not ever face the kind of headwinds that Mike faced when\n\n1005\n00:50:34.320 --> 00:50:35.200\nhe was a direct\n\n1006\n00:50:35.200 --> 00:50:40.220\nTV and the Pepsi Cola company, both brands and both categories under siege by\n\n1007\n00:50:40.220 --> 00:50:41.440\ncompetition.\n\n1008\n00:50:41.440 --> 00:50:46.800\nBut the world is always changing. And it's your job as a leader to understand\n\n1009\n00:50:46.800 --> 00:50:47.680\nthose changes\n\n1010\n00:50:47.680 --> 00:50:52.320\nand to help your team navigate them. It starts with constantly looking around\n\n1011\n00:50:52.320 --> 00:50:52.880\ncorners for\n\n1012\n00:50:52.880 --> 00:50:57.520\nwhat's next. It also means you got to define the reality of a tough situation\n\n1013\n00:50:57.520 --> 00:50:58.160\nwith your team,\n\n1014\n00:50:58.160 --> 00:51:02.870\nwhile also giving them a clear path forward and some hope for the future. And\n\n1015\n00:51:02.870 --> 00:51:03.840\nof course,\n\n1016\n00:51:03.840 --> 00:51:09.120\neven when a lot of external factors may be out of your control, you've got to\n\n1017\n00:51:09.120 --> 00:51:10.080\nlook for what you\n\n1018\n00:51:10.080 --> 00:51:15.170\ncan control, like how Mike really owned that customer experience at DirecTV and\n\n1019\n00:51:15.170 --> 00:51:16.240\nimproved it.\n\n1020\n00:51:16.240 --> 00:51:20.880\nSo this week, I want you to carve out some time to consider the ways that the\n\n1021\n00:51:20.880 --> 00:51:22.000\nlandscape in your\n\n1022\n00:51:22.000 --> 00:51:26.870\nworld may be changing. What threats could be on the horizon? This kind of\n\n1023\n00:51:26.870 --> 00:51:27.760\nthinking gets\n\n1024\n00:51:27.760 --> 00:51:33.640\noverlooked a lot in the day to day, but it's vital because let's face it,\n\n1025\n00:51:33.640 --> 00:51:34.800\nunexpected changes\n\n1026\n00:51:34.800 --> 00:51:39.150\nare always the part of life and leadership. But after the day, I hope you've\n\n1027\n00:51:39.150 --> 00:51:40.240\ngot some tools and\n\n1028\n00:51:40.240 --> 00:51:45.060\ninsights to lead through those ups and downs without losing your stride. So do\n\n1029\n00:51:45.060 --> 00:51:46.240\nyou want to know how\n\n1030\n00:51:46.240 --> 00:51:51.070\nleaders lead? What we learned today is that great leaders understand the power\n\n1031\n00:51:51.070 --> 00:51:52.080\nof resilience in\n\n1032\n00:51:52.080 --> 00:51:57.640\nthe changing world. Coming up next on how leaders lead is Paul Serbati, the\n\n1033\n00:51:57.640 --> 00:51:59.600\nChairman CEO of Inspiriti,\n\n1034\n00:51:59.600 --> 00:52:04.800\nwhich is an all-in-one HR solution company that's really changed the HR game.\n\n1035\n00:52:04.800 --> 00:52:11.820\nAlways being open to a new idea that can help build your skill set. Leadership\n\n1036\n00:52:11.820 --> 00:52:13.040\nis a matter of skills\n\n1037\n00:52:13.680 --> 00:52:20.860\nand experience and growing in your attitude and your manner of interaction with\n\n1038\n00:52:20.860 --> 00:52:22.160\nother people\n\n1039\n00:52:22.160 --> 00:52:27.040\nand that we all can get better every day. So be sure to come back again next\n\n1040\n00:52:27.040 --> 00:52:27.840\nweek to hear our\n\n1041\n00:52:27.840 --> 00:52:32.820\nentire conversation. Thanks again for tuning in to another episode of How\n\n1042\n00:52:32.820 --> 00:52:33.760\nLeaders Lead,\n\n1043\n00:52:33.760 --> 00:52:37.400\nwhere every Thursday you get to listen in while I interview some of the very\n\n1044\n00:52:37.400 --> 00:52:38.240\nbest leaders in the\n\n1045\n00:52:38.240 --> 00:52:42.810\nworld. I may get a point to give you something simple on each episode that you\n\n1046\n00:52:42.810 --> 00:52:43.920\ncan apply to your\n\n1047\n00:52:43.920 --> 00:52:47.600\nbusiness so that you will become the best leader you can be.\n\n1048\n00:52:47.600 --> 00:52:57.600\n[BLANK_AUDIO]\n\n1049\n00:52:57.600 --> 00:53:07.600\n[BLANK_AUDIO]","

David Novak 0:04

Welcome to How leaders lead where every week you get to listen in while I interview some of the very best leaders in the world, I break down the key learning so that by the end of the episode, you'll have something simple, you can apply as you develop into a better leader. That's what this podcast is all about. Well, my guest today is Mike White, who served as the chairman and CEO of DirecTV from 2010 until his retirement in 2015. Now, you might recall, that's exactly the time when streaming services really took off. I mean, people were cutting the cord on traditional TV left and right, and the whole media landscape got turned upside down. So what does it take to be a leader when the world is changing right before your eyes? Well, it takes a heck of a lot of resilience. And if you've ever wanted to really see what resilience looks like in action, then you're going to love this conversation. Mike doesn't lose his stride when things get tough. He knows how to see around corners and anticipate what's coming. And most importantly, he knows how to keep people going when things feel uncertain. The truth is, the world is always changing. And the best leaders understand the power of resilience in a changing world. So here's my conversation with my good friend, and soon to be yours, Mike White.

I understand that you're one of eight kids? How much did that influence the leader that you've become? Well, when

Mike White 1:39

you're the oldest of eight kids that influences you a lot? You know, I think from the get go, I was taught to be responsible for the others. And I was also because I was the oldest I was always the last to be fed. Because my mother always said the last shall be first and the first shall be last. So So you know, you'll learn a lot about leadership just growing up, although there was a lot more I learned from others along the way. But, but always I think your parents or your family environment teaches you a lot of core things that stay with you for life.

David Novak 2:11

And we're going to dig into those as we go through the this conversation. But I want to start out here with Mike, you're the first person that I've had on the podcast who had the courage to go on the hit television show Undercover Boss. Now you went on just after you became CEO of Direct TV, how'd you muster up whatever it takes to go on a show like that and put yourself out there on national television?

Mike White 2:38

Well, I'd seen the show and the PR people thought it would be great PR for DirecTV. And because I was new in the role, I hadn't spent a lot of time in the field with the front line. And yet, as you and I both learned PepsiCo, we always spend time with the front line. So I thought well, this is be a great way to to connect with people. And my dad had always said everybody puts their pants on one leg at a time. And I thought, Okay, what a great chance to experience that I clearly didn't know a bunch of things when I agreed to to it. And then I was so busy until the day before I flew out to the first assignment that I didn't even know who they had picked, or how they had picked the people they picked. But it wasn't a coincidence. I mean, I wouldn't say it was a setup, but they were, you know, obviously being in the media business. They were looking for stories, you know,

David Novak 3:33

and as I understand that, you don't get any editorial control, and they decide who they're going to have you meet with, you know, did you have any surprises on that front?

Mike White 3:43

My head of operations was pretty upset, and thought I was out to embarrass the company. For some reason, my secretary said ignore him. And he started yelling at me that, you know, he had seen the first clip and there were no, I didn't have my seatbelt on in the truck. And I turned to him. And I said, That's because you didn't have a seat belt in that truck, Mike. So go check all the trucks, we got 15,000 of them, make sure they all have two seat belts.

David Novak 4:08

That's a great one. What else did you learn from that experience that you really took some action from?

Mike White 4:14

I think first of all, you realize those are tough jobs, those frontline jobs, I mean, whether you're in a call center, Direct TV, we had 15,000 People in call center, answering 100 million phone calls a year, or whether you're on a truck climbing a ladder in a thunderstorm in Alabama, which I was. I mean, those are tough jobs. So I think it it teaches you some empathy, first of all, for for others and what they do for the company. The second thing because we were doing the show, just after we had launched a new set top box, which I thought was going great, and I got out to the field and found out that our inventories weren't really very good. And everybody was scrambling to get the new set top box so we hadn't launched it exactly perfectly. So there was some Lessons Learned about that as well.

David Novak 5:02

I understand you started the tech appreciation day afterwards.

Mike White 5:05

I did. I guess I realized maybe this is my opportunity to make a statement. You know, when you're a new CEO, people are looking kind of what's, what's the new regime? What do you stand for? And, and I felt like tech Appreciation Day, I also mandated that all the team had to get out on a truck, once a year, and also on a call center for a couple hours each quarter, where you kind of see how the promotions are going.

David Novak 5:31

Well, I watched the show and you did pretty well on that call center for a rookie you. Good. We're gonna dive deeper into your leadership story in the time at at DirecTV. But But first, I know that now you serve on three of the most fabulous companies in the world, Bank of America, Whirlpool and Kimberly Clark, what are the big trends across these industries that you you see that leaders need to focus on today? Well, technology

Mike White 5:57

change. I mean, I think disruptive change from Technology is everywhere. And I saw it at Direct TV. And you see it in financial services, you see it in how you go to market with a whirlpool, or Kimberly Clark, you see it with your marketing dollars that are all, you know, now, 70% Plus, are spent on digital marketing. So, you know, we're going through a revolution, I think in that regard. And, you know, understanding the implications of that, for your particular businesses is just critical. It's the one thing that's everywhere, I suppose sustainability is the other thing that cuts across any business to David, I think, how do you,

David Novak 6:38

as a leader, really stay on top of what technology is today? And where it's going? What advice do you have on that front?

Mike White 6:49

I'm lucky being on those three boards, we've had outside speakers on artificial intelligence at all three boards. So I get the benefit of that, from a learning standpoint. I have my own network, I read a lot, read the The Wall Street Journal, BusinessWeek, whatever, to try to stay current. But I think fundamentally gotta stay curious. And you got to realize the world is changing, and have the humility to know that maybe the way it was when you started out isn't exactly the same. There's certain I think philosophies and principles that still apply. But work from remote the pandemic, it's a very different world out there.

David Novak 7:25

If you've worked in five different companies over the span of your career, you know, I got to ask you this one, because I came across this one. So it's a little little question to hear that. I'm sure you have the answer to what does having a baby and producing a bain business strategy have in common?

Mike White 7:46

Yeah, well, back then. I mean, it shows you how the world of strategy has changed. So I mean, the topic is really strategy. And when I was at Bain, and BCG was the same back in the early 1980s. A strategy study was nine months long. I spent three months studying costs three months studying competitors, and three months studying the customer. And, and we used to say, I guess it must take nine months to have a strategy. But, you know, that's a little facetious, except that, you know, the world of strategy today. Back then it was a closed loop. You don't have to worry about globalization. Everybody played by the same rules, you're, you know, looking at experience curves for cost and whatever. And now you have to think much more holistically about the business, I think. And so I don't I don't know how they do a strategy study today, but I'm sure as heck it's not a nine month deal. Every they

David Novak 8:43

have it's a heck of a lot faster these days. You know, I understand that you work with presidential candidate, Mitt Romney, when you were Bain. What did you pick up from him?

Mike White 8:53

Well, I mean, MIT is a terrific leader. He's smart. He's articulate, good communicator. But it's also it's not afraid to get his hands dirty. So I mean, we, we have one client, Minnesota fabrics, that was a retailing store that sold fabric, kind of like a JoAnn Fabric Store, except it was a superstore. And MIT took it on, and I ended up flying to Charlotte, doing that work for, for MIT. And, you know, you might have looked down on that kind of a client but not MIT. And, you know, MIT went out of his way to take time, you know, with the CEO, and, and MIT was a great supporter and teacher for me. I mean, because I didn't have an MBA, David. I didn't go to Stanford, I didn't go to Harvard. I showed up with my master's in international relations, and had to had to learn a lot from the get go when I got to Bain, but that was was a terrific teacher as well as mentor.

David Novak 9:48

You then went on to Avon and you mentioned that you learned the importance of really respecting everybody from the leader there. I want you to know that my mother was actually an Avon salesperson and I remember Remember the 40% commission this used to rake in in the neighborhood. share a story from your days at Avon that you learned about leading others. I had

Mike White 10:11

a terrific two terrific bosses, Bob Pratt and Tim Preston Bob was the kind of EVP of of strategy and administration and Jim Preston was the CEO. And although at the beginning, Hicks Waldron was but then Jim became CEO. And I mean, Jim, is as great a people person, as anybody I know. I mean, I learned from Jim about integrity, and care and about the front line, I also learned how hard it is to change a transformer business. I mean, even back then, and this was in the mid 80s, we were trying to think about a different model, because we knew the go to market system wasn't going to sustain itself. And, and we were trying to think out of the box, we ended up deciding to do some acquisitions of some perfume companies. And at least we were able to make it go and make them successful. But they didn't transform the company. And in the end, you know, I was there to acquire them and to spit them back out again. And I ran the international part of that business in the meantime, but it was my first chance to get back, running a business after I was a strategy guy. They asked me to go run international perfumes. And I had two Frenchmen reporting to me, who weren't too happy that Jim Preston had put an American who was 30 something over them in the perfume business, because they know everything, and I didn't know anything. And I think I won them over. Because I I've always felt, you know, go in humble. Ask a lot of questions do a lot of listening. That doesn't mean you're not going to have a point of view. But you start out by listening and demonstrating that you care. And then

David Novak 11:50

it was off to PepsiCo, where where we work together and you ran the international division there and became vice chairman and CFO of the corporation. Tell us the experience at PepsiCo that you think really taught you the most? Oh, there's

Mike White 12:04

no question. It was the implosion of the Pepsi international business. I had been moved over to be CFO of Pepsi worldwide. And I remember it was April Fool's Day, I think 1996 or something. And at the time, it had been flying high. I did a presentation in May called the Five warning signs of a heart attack, because I could see certain things that worried me. And by that summer, we were starting to see things implode on all kinds of fronts internationally, and trying to pick up the pieces, get the business back on track working with Craig whether up and Peter Thompson, Craig used to say Mike's in charge of the emergency room and Peter's rebuilding the capability and you know, building that business back and living through the challenges of Venezuela, flipping the Coke, I got delivered, you know, the the documents from the lawyers on that one, you had a lot of tough stuff thrown at you, David over a couple of years of of challenges, including pulling out of South Africa, which is a really tough decision.

David Novak 13:11

I don't know if you remember the five warning signs, but the five warning signs of a heart attack in business. I think it's really fascinating. I could you rattle those off for us real quick.

Mike White 13:21

I mean, in that case, it was making investment bets for growth without building the capability, the talent and the organizational capability that you need. It was over leveraging them with too much debt in a number of cases and not thinking through the capital implications of that. And it was also in emerging markets. You know, if you go in with no gross margins to start with, you'll never have gross margins. You know, it's one thing if you're starting up a business, but you got to have a sensible price costs relationship, or it won't work. And I think having too many bets, frankly, again, when you have 100, you might as well have none, as opposed to picking the three or four things. You really got to focus on. Great insights there. I don't remember the exact wording. David, I wasn't as articulate as Enrico with his take back the screen itself.

David Novak 14:13

knows I got all those. Those are great. And then I know that you taught a five day leadership program to PepsiCo executives every summer. You know, what did you focus on? What was the the major message that you had for these leaders?

Mike White 14:27

Well, when I started I thought about this the other day, because I still do it. A similar versions smaller with a couple of schools, universities. And I realized it was when Roger Rico took a week out to take us all to Montana to talk about change and leading change, making us watch Martin Luther King's I Have a Dream speech. Think about how he was trying to build alignment to a change agenda. And I thought if Roger can take a week and take I don't know whether 10 of us Each program and as you know, a whole pile of us went through it over four or five years, I said that I should be able to do that for my team. And in particular, you know, international hadn't had the same depth of training and development that the US businesses did. So I, I decided I would start by putting a program together when I was living in Geneva, but I knew I'm not Roger, I can't be Roger, it has to be my thinking. And I spent a lot of time work with my HR person in deciding what do you want to teach? So you know, it's like, on on leadership, you got to decide what you really believe it is. Because I wasn't there to teach them accounting or marketing or whatever, they can get that in other venues. And it was really thinking about that a lot. And also then deciding what the the capstone for the program was going to be. As you know, people will forget what you said, but there's certain things they'll never forget. And over the 10 years, I ran that program every year, I brought in one surprise guest speaker every year. It just so happened he was the same one every year, but they were sworn to secrecy. And it was I had watched the movie Hotel Rwanda on a flight to Hong Kong. And I called back to my PR guy, Dick Detweiler. I said, find the hotel manager. It's all about leadership. And this guy was in an international setting and impossible circumstances, I thought was an incredible leader. And every year, inevitably, his talk was the highest rated talk of the program. And it was kind of the culmination of the week, where we talked about values based leadership. And unfortunately, he got kidnapped by Kagami. I think he's now back in the States. His name was Paul Rusesabagina. But he taught me a lot about leadership.

David Novak 16:55

And how did you end up defining leadership for that program?

Mike White 16:59

For the program, it was really three parts, you know, leaders set the agenda, which is all about, you know, defining context, having the right perspective, looking around the corner to see where change is going. And setting priorities and a strategy. I mean, it's really strategic thinking, taking others with you is about self awareness. You know, the old Socrates just starts with Know thyself, and self awareness, and people skills, how you connect with other people, and also kind of the subject of organizational politics and how to avoid getting blindsided by organizational politics. And the last bucket was values based leadership. And as I said, the closing module was always they had to have watched the movie, Hotel Rwanda, and we start I started a discussion about was this guy, a good leader or a bad leader before he walks in the room and then he walks in the room and by the end of it, most people were pretty impacted.

Koula Callahan 18:02

Have you ever wondered what David is thinking as he interviews our guests each week? Or have you been interested in hearing David's take on some of the questions that he asks his guest? Well, I do and I know a lot of you do, too. My name is Kula Callahan. And together with David I host the three more questions podcasts that airs every Monday. These episodes are just about 15 minutes and in them, I asked David three questions that dive deeper into the themes of his episode with his guests. David shares incredible insights and stories from his career leading yum brands and all of His answers are super practical and inspiring. Like this great insight David shared and one of our most recent, three more questions episodes.

David Novak 18:45

You know, one of the things I hate cool is this word empowerment. I just hate it when people say I want to be empowered. I just think that's BS. Okay. Autonomy is earned. Right? I will empower you. Once I know you're capable of doing the job. But don't ask me to empower you. Before you've demonstrated that.

Koula Callahan 19:08

Get the three more questions podcasts and your feed each Monday and dive even deeper into the episodes you know and love. Just subscribe to how leaders lead wherever you get your podcasts.

Unknown Speaker 19:27

And then I

David Novak 19:27

know you went to direct TV and there I know one of the first things you did was relook the strategy. What was the process that you use to do that Mike

Mike White 19:37

DirecTV had been very well run my predecessor Chase, Kerry had done a superb job with the business that had gone back to Fox, like anything when you go in knew I was coming cross industry, which is never easy. So I came in wanting, you know, wanting to learn a lot from the existing organization. But they had never really done a formal strategy process. So in that case, I heard McKinsey wasn't because it was McKinsey was a woman, Laura Korb, who was a real expert in telcos telecom media, that whole space, which I wasn't. And we had a good working relationship. So I had McKinsey in. But again, it starts with defining the right questions, you know, and the first question on my mind was, how come we're trading at six times EBIT da, when Pepsi Bottling group traded at seven and a half, and our return on capital was 26%, and Pepsi Bottling groups was about eight. So you had to kind of decide what is it in the valuation that's not working? It? Can you change it? And then second, looking at where is this business changing. And so it's, it's hard to believe, but when I went to direct TV, you know, Netflix was still sending stuff out in red envelopes. But you could see the world was beginning to change, and that you couldn't just have a service, that was the television in the living room, you had to be able to watch it on an iPad or an iPhone or whatever, although most of the video streaming really didn't take off till 20 1314. And I got there in 2010. But to finding the right questions, I think is the first and foremost thing and then looking at your competition, and trying to understand your strengths or weaknesses, or what your biggest opportunities and threats are.

David Novak 21:21

Was there anything that you discovered about the business that really surprised you?

Mike White 21:25

Well, the whole negotiation with the media companies for rights fees, is like nothing I've ever seen. Anybody who talks about Win Win negotiations, forget it, okay. I mean, it is a very tough, tough part of the business. And, you know, the media companies back then they, they have a lot less leverage today with streaming, but, but back then, you know, if you want ESPN, then you got to give him Dizzy ABC and a whole bunch of other channels that nobody will watch. I mean, that's just how it worked. It was a bundling game. And it was very tough. And you had to constantly try and figure out if license fees, which were 60% of our costs are growing 7% a year, then I gotta be pricing at four and a half percent a year. With my consumer background. I'm like, That's it, that's not going to end well with consumers. And so that that was probably the biggest surprise, David I, on the positive side, I was impressed with the quality of the people. The branding, the marketing was superb. I had two superb guys doing marketing, and a great agency that we worked with. And I would say we had a lot of brand equity to start with. We had the best service in the industry, we had the best sound, the best picture. I mean, we had a lot of assets. The challenge was the world was about to change even more than I mean, I knew it was changing. But even I wouldn't have predicted it. The billions in streaming losses that the media companies are now running.

David Novak 22:57

Yeah, I don't think anybody could have predicted that you don't. And I also understand in the early days, your board had already made the decision to sell the your Latin American Direct TV business, but you reverse course, and I was thinking, you know, prized a lot of really good reasons to do that. But that's still pretty tough to do when the board's already made the decision. And you're the new CEO. How'd you do that?

Mike White 23:21

I wouldn't say the board had made the decision, I would say at least one member of the board had been public, that we should spin out Latin America. Those first three months I was CEO. The first thing I felt was we didn't have a great growth portfolio, right? We had the core business in the US. And Latin America, I thought was our biggest growth engine because the streaming issues and some of the other issues. Even the content costs were not as severe in Latin America. So I thought it was our best growth opportunity, number one. Number two, because we have such an under leveraged balance sheet, I was gonna buy back shares. And, you know, again, some of the training I gotten from being CFO, PepsiCo, you know, I got there with trading, six times EBIT, da, you can borrow a 2%, we had no debt, and we're spitting out a billion dollars of free cash flow a year. So over the five years, I think we bought back half the shares. And that was a big win for shareholders in being able to do it consistently over five years.

David Novak 24:25

Absolutely. You know, and and I also know that in your leadership seminar, which you give to MBAs at Boston College and Johns Hopkins, you say leaders need to understand decision making blind spots in the boardroom, you know, what are some of those blind spots?

Mike White 24:41

I think it's no different than the Bay of Pigs invasion, you know, when you get groupthink going on. And sometimes we're all a bit guilty of looking at an opportunity, oftentimes an acquisition with rose colored glasses and not asking tough enough questions, and I've been guilty of it. I mean, I you No, Whirlpool made a major European acquisition. That's been a complete bust. And I knew international I shouldn't you know, I should have asked more questions I should have known better. But I think the blind spots that you run into is, are we looking at reality? And the change that's coming at us? Are we moving fast enough that we got to get out of our comfort zone? And I think great boards are both collegial, but also open to discussion and pushback and dialogue. And I think it's the balance of those two, that can occasionally get out of whack in a board room as it can in any other circumstance. I mean, in that case, David, I use Theranos, actually, as the case study, for, for what went wrong with their board room, but they weren't a public company, either. So yeah,

David Novak 25:50

but you think about the board that they had, you know, people like George Schultz on the board, and you know, these people are supposed to be so wise. And yet this happens right in front of their nose, you know, that really, I think blows everybody away. You know, one of the things you say that a CEO has got to do, and you say, it's really important for him to do it is is to own the customer. You know, how do you go about doing that?

Mike White 26:13

In the case of of DirecTV, and even Pepsi, you've got millions of customers. But it starts with making sure you understand the customer, what do they want? And how good a job are we doing? When I got to DIRECTV, we had all these accolades for having the best service in the industry. But the industry is notoriously terrible at service and hated the cable business. And so I thought sometimes you learn something by changing the metric. So we ended up bringing in a net promoter score to start assessing how well we were servicing customers. And you start asking different questions. And one question leads to another. So in one case, where we were looking at early installs, and new customers, we found out that they were calling in and the first two months, something like eight times, well, if they're calling eight times this is because you didn't do it right the first time. And you can all of a sudden start to not only look at what does it take to become a passionate promoter of the brand, as a customer? But also, who are the customers that hate you? And why. So you get two agendas, working on detractors, you know, what do we need to fix? And then what do we need to do better to get more passionate about, you know, customers for for the products that we sell, but in any business, everyone's a little different in a direct TV business quite different than selling Pepsi and Lay's potato chips, but but in both cases, you gotta have a great product, you got to have a good distribution system, and you better understand the different customer segments that are out

David Novak 27:54

there. And you made major strides, though, in terms of improving your customer service at DirecTV. You know, how'd you do that? I mean, how'd you? Okay? So you got the facts that said, Hey, you could do a lot better. But what do you what do you do to put in place the things that really move the needle on the Net Promoter Score, because as I understand that, you improved dramatically, we did.

Mike White 28:14

And we put a central team together, that was going to own the customer experience. And we started out, as I said, we changed the metrics to start looking at Net Promoter Score and measuring it. We also changed the metrics for the frontline. And we changed the incentives for the frontline, you know, people do what they're incented to do. And so there were a couple of cases where in the pilot that we were doing with technicians, where we were trying to get them to do something different in the in the field. You know, they came to me, and they wanted to do a bonus. And I said, fine. Look, you both recognize folks catch him doing good things like you always did it. Yum. And at the same time, you know, financial incentives can go a long way. And that helped us a lot in changing the incentives for the techs, and kind of making it a frontline driven effort to really change how we service the customer, then you got to start mapping out the whole customer experience, you know, which in the case of DirecTV was quite complex from the initial phone call to signing them up to getting the install right the first time to them, you know, issues they would have with their bill. I mean, we the bill was so confusing, nobody could understand it. I think the industry liked it that way. So we took nine months to redo the whole bill. So a customer would understand what changed, why did it change? Where am I incentives and rebates, you know, all the questions that were pretty common and typical from the customer, but it was clear to David that point, it's a never ending journey. I mean, as great as we did, on trying to rethink the customer experience. There's a lot of moving parts, you know, and when you have a big army like we did with technicians and call center operators, getting them all to kind of sing the hymn together takes a lot of work, a lot of systems reengineering, a lot of retraining that we did and changing incentives.

David Novak 30:13

I also know that you're a huge believer in just the power of culture. And if you had to pick one behavior besides integrity that you'd want to have in every company that you might lead, what would it be? And why?

Mike White 30:27

Speak with truth and candor? You know, and it was my experience from the Pepsi international blow up that we weren't as candid with ourselves about what was working, what wasn't working. And you see people I've asked the question on oral health surveys different ways, are you comfortable bringing bad news to the boss? You know, that's as simple as you can make it in a culture like that, you know, you're going to hear about things. It's also about being open. Curious, being a lifelong learner, but, but I would at its core, it's having an open culture where everyone feels comfortable, bring their whole selves to work, but it's also comfortable speaking up, you know, if they have a concern, or a question.

David Novak 31:10

I'm blessed to have windy my wife is that she's my number one truth teller, I can tell you that someone's mine. seems great. You know, I got to ask you, how do you think about competition at DirecTV versus Pepsi? I mean, you know, the two wildly different categories.

Mike White 31:27

They are. But there was some things about DirecTV that were much more similar to Pepsi than anybody realized when they hired me. First and foremost, they're both challenged your mindsets. You know, you're not number one, we don't have as much money as Comcast, Pepsi doesn't have as much money as coke. So you got to work harder, you got to be more entrepreneurial, you gotta be more creative, you got to find different ways to compete. And I think the passion was the same at DirecTV as it was at Pepsi in that sense. And I think it's, you know, it's unique at both companies to have that amount of passion for performing and for making a difference, they were more similar than, than you ever would have imagined. Plus the front line, you know, Frito Lay, I don't know, used to have 15,000 workers driving a truck to deliver the chips. You know, at DirecTV, I used to say we had their brother and I, we had 15,000, technicians, high school educated driving the truck during the install, you know, different but a similar demographic and a similar dynamic in terms of how you how you go about connecting and listening to them. Yeah, you know,

David Novak 32:36

Pepsi wanted to kill Coke is pretty simple. who are, who the enemy was. And then direct TV. The industry was exploding. You're getting competitors coming in from everywhere. How'd you how'd you get your people to see how the world was, was moving?

Mike White 32:51

Well, he changed. It changed while I was there. And I mean, just as a measure of it used to be you could set a strategy for at least five years at DirecTV, I rebooted the strategy at least five times in five years. So when I went, it was pretty clear. It was dish, and it was Comcast. Full stop. Okay. All of the other stuff was later on when you started seeing what was happening with Netflix, Google, Amazon, you name it. And all of a sudden, you're in a whole different world where there aren't easy answers to be honest with you. And I would say it was a little easier when I went because the first couple years it was pretty clear. It was Charlie Ergen and dish and it was, you know, it was Comcast. Over time, that started to shift with Verizon and AT and T we had a whole bunch of competitors. He had to start thinking about it. And my goodness today, you know, you've got so many alternatives out there as to how you get your media. I think that'd be a really tough challenge for any CEO.

David Novak 34:07

You know, Mike is one of several guests I've had on over the years who spent time at PepsiCo. And let's face it, you just can't talk about leadership at PepsiCo without talking about the great Indra Nooyi. I've had the pleasure of working alongside Indra for years. And I love how she always strives to elevate others.

Indra Nooyi 34:28

From my perspective, one of the things that I've gotten the most satisfaction historian award, it's not giving them a little certificate or whatever. When I write letters to parents of some of my executives, and I tell the parents what a great job their son or daughter is doing. That recognition is worth more than money, stock grants, hugs, tickets, anything because at the end of the day, and I go back to where I started, when your parents say to you I am so proud of you and your boss just wrote to me saying that you are awesome. And the look on their face is worth a million dollars. Listen to

David Novak 35:09

my entire conversation with Indra, all the way back on episode nine here on how leaders lead

Paul Sarvadi 35:22

you know, we both

David Novak 35:23

worked for Craig whether up when he was at Pepsi, and he always described you as he said, You're one of the best negotiators he'd ever ever been around. Yeah. Do you have any rules for negotiation? Or what's your what's your concept when you go into a negotiation?

Mike White 35:41

And I appreciate Greg's compliment, but I'm not sure I ever felt that way. Whether it was a DIRECTV negotiating with Kraft and Goodell and the NFL or anybody else. You know, I did have a couple of things. So one I learned from an Ricoh, which is if you're doing an acquisition or buying anything, and I would say the same applied to our negotiations on content, know your walkaway. You might not tell anybody, but you better know what your walkaway is first and foremost, when you go into it to avoid the emotion of the deal taken over. So know where you're gonna draw the line and say, Okay, I'm out. Number one, the second thing I did, and again, I learned this from a coach Marty Selman is, I put my watch on my right wrist instead of my left, I'm left handed, it's on my left wrist, but I put it on my right wrist just slows you down in a discussion to breathe and listen to what's being said. And the third thing I learned was, make sure you got the right question. I mean, DirecTV, at one point, my my guys were negotiating with Oprah, the Oprah network. And they weren't happy with how negotiations were going. And I remember they came into my office, and I said to him, You guys are asking the wrong question. And they looked at me like what? I said, look, the question isn't, are we going to drop the Oprah network? Because I'm going to answer for you right now. The answer is no, we're not. Okay, period, full stop. So therefore, the question is, how do I get the best price relative to Comcast or anybody else? So I may not like the price, but I want it to be competitive and fair. And so I think making sure your team is asking because it's easy to get into the emotion of the moment. Are they asking the right question and thinking holistically about what you're trying to get to

David Novak 37:25

your DIRECTV for five years? You did, you bought back half the stock, you know, the shareholder, you know, benefited greatly from your, your leadership. And then you ended up selling DirecTV for a great price to at&t in 2015. You gave them this at the time was very high performing business. But the acquisition has been described by many as one of the worst acquisitions of all time. What was the biggest reason why DirecTV failed under the AT and T umbrella,

Mike White 37:55

the world changed. Now. I've always felt when you're selling your business, you better you only sell it once. So make sure you want to sell and we had a lot of discussions with the board. And I was clear in my mind that for a couple of reasons. I was concerned about DirecTV is future as a standalone business, and streaming and not being able to turn it into an internet company. The cable guys could say, all right. I'm an internet company. I sell internet. I don't care about pay TV. I couldn't do that we were solely a pay TV provider. And so I was really clear that it was time to sell if we had the right opportunity, the right offer. And you could say they overpaid for it. They didn't overpay for it relative to what it was trading at. I mean, I think we sold it eight times EBIT da. And we had been trading at six. So it wasn't that I think it's just the world changed much faster than they ever realized. And to be honest with you, even I wouldn't have guessed that sports ratings would fall through the floor, that the media companies will be losing a billion dollars plus a year, each of them on streaming, and not be able to figure out how to protect the core model that they had before. I'd also say some bad luck. I mean, bad timing and bad luck more than anything. And it also makes you a little humble because you realize there was some good luck involved in my timing. Well, it

David Novak 39:21

sounds like you're pretty prescient, you're talking to the board about how Hey, the future could be really tough. And if we're ever going to sell it, this is probably the right time. And if we sell it, we gotta give it to a huge competitor to conduct tech compete. And you know, this is the time so you're being a little humble here. I think you know, you it seems like you had good timing for good reason.

Mike White 39:43

You make your luck sometimes, but but I'm also humble enough to realize, if I was trying to read it today, we wouldn't put the same performance up on the board. It's a tough, tough business and a tough business model.

David Novak 39:53

I totally agree with that. You know, you led businesses that had to counter major consumer shifts. You'd had a huge decline in carbonated soft drinks, which we both weathered that storm as as leaders. And then you went through the whole cord cutting issue, you know, how do you lead Mike, when the wind is against your sail?

Mike White 40:12

I think that there are some differences. You know, the first and foremost, you got to be straight with your organization. You know, I think you could say, define reality, but you got to be straight. And yet you got to be optimistic and positive, right? You've got to provide people hope, and a positive view of the future. But you also can't just ignore reality. And so it's a much trickier balance for a leader I think, and how you kind of both provide the positive sense of confidence and direction and where you're going. But at the same time, be honest with them about reality, and what the challenges are, I mean, and you know, that doesn't mean doom and gloom, but I mean, being, being straight, also being transparent and clear about what direction you're taking, and why and where you need them to help.

David Novak 41:06

You know, this has been so much fun, Mike, and I want to have some more with my lightning round of questions. So are you ready for this? Sure. Okay. What are the three words that best describe you?

Mike White 41:17

People would say smart, intense? And I hope they'd say yeah, caring too.

David Novak 41:23

Who would play you in a movie?

Mike White 41:27

Maybe Michael J. Fox, because he's short. And I'm sure.

David Novak 41:31

Speak speaking of movies, what is your favorite movie?

Mike White 41:34

Well, I just saw Oppenheimer. That was terrific. But my all time favorite would be Dr. Zhivago.

David Novak 41:40

I loved Oppenheimer do that was that's the best one. I've seen it in years. You know, if you could be one person for a day besides yourself, who would it be?

Mike White 41:48

I'd have loved to have been in the US Senator Bennett politics, but not the way politics is these days. So

David Novak 41:54

what's your biggest pet peeve?

Mike White 41:56

You know, I'm probably not the most patient person in the world for for folks that don't try heart. You don't have to be a genius, but you got to put some sweat into it and and work hard at stuff.

David Novak 42:05

Favorite soft drink.

Mike White 42:06

Pepsi,

David Novak 42:08

favorite snack chip.

Mike White 42:10

Cool Ranch Doritos,

David Novak 42:11

favorite TV show?

Mike White 42:14

Mad Men?

David Novak 42:14

The best gift you ever received an education. If I turned on the radio in your car, what

Mike White 42:21

would I hear? Jazz Piano? I play jazz piano? Something about you? A few people would know. I play jazz piano? Piano.

David Novak 42:31

I thought that would be good. That's that's the end of the lightning round. Well done. That's great. You talk about what you call your 6040 formula for leadership. Explain

Mike White 42:40

60% self confident and 40% to be humble enough to know what you don't know and be open to learning.

David Novak 42:47

From your experience. Mike, what do you think leaders derail

Mike White 42:51

ego? I once heard Callaway asked the same question, former chairman of PepsiCo. And he said it's your ego. And I think you can derail for a lot of reasons. I mean, I think I usually have for them, you get sideways with your peers or your team or your boss, you get blindsided by politics, you get the wrong strategy, or you lose the culture that you want in the organization. But it's your ego that you got to manage.

David Novak 43:18

I know you have a great partnership with your wife, Sue, what's the best leadership advice she ever gave you?

Mike White 43:26

Listen, she would say I don't listen.

David Novak 43:30

One of the things that I learned that you did, and I wasn't aware of this, but you made for all the leadership off sites that you had, you made volunteering a big component of what you and your team did, as part of that off site. Give us an example of of what you did and what the outcome was.

Mike White 43:49

Well, when I went to direct TV, you know, we did some things with the Heart Association's some other things, but they weren't is directly applicable to the business. And I got involved with the LA partnership for schools, which kind of you because you couldn't do charter schools in LA, there's a politics, we did get them to agree to take the bottom third of the schools, the worst performing schools and let the private sector Help, help provide money for to pay principals more, whatever else. So I got pretty involved in that. Mayor Villaraigosa was the mayor at the time, and he was incredible to work with. And because that was such a good cause. And it was local for us because we were based in Los Angeles. I also found you develop better leaders, if you got people involved in a nonprofit situation where you can't tell everybody what to do. You know, you actually have to listen, you have to learn a bit about humanity. You have to build empathy in a totally different environment. And it really clicked with the organization. So I think one off site we ended up painting in an inner city school, we got the paint and painted murals and painted rooms and did everything And it was, I just realized it was reinforcing the culture and the values. And it was also developing talent at the same time.

David Novak 45:09

You know, you talk about the importance of having a hip pocket skill as you move up the up the ladder, and yours was obviously finance. You came up, you know, consulting, and then finance work and strategy. And you know, you were a guru on that front. But a lot of people can't make that shift from being a finance person into a general manager role. And yet, you were able to really become a great consumer marketer, and you know, that you made that the real rallying cry for your your organization, what advice can you give to leaders who want to move into that General Manager role, particularly from a finance perspective?

Mike White 45:54

Look, I majored in Russian and English literature. So I wasn't a finance guy coming out of college, I got a master's in international relations. So I learned all my finance at Arthur Andersen. But I think a lot of people that are in finance, are really good with the numbers, they're not necessarily as good on the people side. And so I think the two things that I would say you can never learn enough about. One is strategy. You know, because you got to think holistically about the organization. If you're a general manager, you got to think about the enterprise as a whole, you got to think about the long term and the short term. And so thinking about strategy, and I think the second is how you take others with you, it's your people skills, how you connect, show empathy. You know, people don't care what you know, until they know you care. I mean, this basics.

David Novak 46:41

Last question for you here. If you had one piece of advice you'd give to any aspiring leader, what would it be?

Mike White 46:49

I think the two things I think one, integrity and character comes first, no question. But second, in a world of change, you got to look around the corner and skate to where the puck is going to quote Gretzky. And in this world, in particular, changes coming so fast and furious. You've got to make sure you know what to keep and what to change. And that's a constant challenge.

David Novak 47:11

I got to ask you this while you talk about change, when blockbuster turned down the opportunity to buy Netflix, did you ever see Netflix becoming what it is today?

Mike White 47:22

Certainly not back then. I mean, a friend of ours both was the one who made that decision. Now, Reed Hastings says, You never had an offer to buy the company. But but but who knows, I don't think anybody realized how fast it by the way, it was sequential David, technology change doesn't happen all at once people forget that. In the case of Netflix, they were sending out all those red envelopes until 2012. And it was not just the internet that unlocked it. It was a combination of the telecommunications industry doing five, 4g and 5g, which enabled you to do video streaming, it was compression technology that changed. So there were like three or four different innovations that all of a sudden unleashed video streaming like we're doing right now. And all of a sudden, your whole era and a whole different world and Netflix, they pivoted themselves. And it's, it's not that easy. Spotify spent a billion dollars trying to get into podcasts. And they they should have talked to you first because they haven't done very well at it.

David Novak 48:29

Well, what's really interesting is that, you know, we're talking here about Netflix, 11 year span, you know, I mean, that seems like you don't think that's very long. But in today's world, that's, that's an eternity. It really is in terms of what's happened. I talked to

Mike White 48:47

read and tried to get him to merge with DIRECTV, because I was looking for another strategy. But he was too smart for that. So

David Novak 48:54

well, let me tell you is that Mike, you you haven't all of you are incredibly smart. You are a great believer in people, you understand the value of people, you can bring it all together. And that's why you're such a great leader at all these great companies that you work for, and why you're such a great board member. And it's been great catching up with you, and congratulations on your tremendous career and success.

Mike White 49:18

And I appreciate it, David, I think as I've reflected back though, for anybody who's an aspiring leader, first of all, I think anybody can learn to be a better leader. And they aren't just born with, you know, charisma or whatever else. You can learn to be a better leader by listening to podcasts like this. But the second thing I would say is resilience. I learned the hard way when my dad died at 50 of liver cancer and my mom was left with a $25,000 life insurance policy. What resilience and take in life one day at a time was really all about. And you know, my dad was a hero to all of us, but my mom was the real hero.

David Novak 49:56

That's great. Thanks for sharing that and thanks for giving me so much here.

Unknown Speaker 50:00

Time I appreciate it

David Novak 50:11

you know, there's a reason why big companies like Bank of America and Whirlpool want mike on their board. I mean, he's smart as a whip, and he clearly has so much insight into people. But he also is so resilient. He knows how to stay the course even when things get tough. Now, let's you may not ever face the kind of headwinds that Mike faced when he was a direct TV and the Pepsi Cola Company, both brands and both categories under siege by competition. But the world is always changing. And it's your job as a leader to understand those changes and to help your team navigate them. It starts with constantly looking around corners for what's next. It also means you got to define the reality of a tough situation with your team, while also giving them a clear path forward and some hope for the future. And of course, even when a lot of external factors may be out of your control, you've got to look for what you can control, like how Mike really owned that customer experience at DirecTV and improved it. So this week, I want you to carve out some time to consider the ways that the landscape in your world may be changing what threats could be on the horizon. This kind of thinking gets overlooked a lot in the day to day, but it's vital. Because let's face it, unexpected changes are always a part of life and leadership. But after today, I hope you've got some tools and insights to lead through those ups and downs without losing your stride. So do you want to know how leaders lead? Well, we learned today is the great leaders understand the power of resilience in a changing world. Coming up next on how leaders lead is Paul sir body, the Chairman and CEO of Insperity, which is an all in one HR solution company that's really changed the HR game.

Paul Sarvadi 52:05

Always been open to a new idea that can help build your skill set. You know, leadership is a matter of skills, and experience and you know, growing in your attitude, and your manner of interaction with other people, and that we all can get better every day. So be

David Novak 52:25

sure to come back again next week to hear our entire conversation. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen and while I interview some of the very best leaders in the world. I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be

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