And I see leaders who want to take a risk, but keep it quiet. I don't want anyone to see. And if I'm successful, I'll tell you about it the day. But then it's hard to marshal resources and excitement and organization if you don't declare yourself. The fastest way to get stuck in your career, keep your boldest ideas to yourself. Welcome to How Leaders Lead. I'm David Novak. And every week, I have conversations with the very best leaders in the world to help you become the best leader you can be. My guest today is Dave Mackay, president and CEO of the Royal Bank of Canada. He spent more than three decades at RBC, rising through the ranks with a clear sense of values and vision. And what I really admire about Dave is how he puts those visionary goals out into the open. Look, it's scary to go public with your big goals. Believe me, I know, because in the back of your mind, there's that little voice saying, yikes, if I fail, I'm going to fail in front of everybody. But that's why you've got to hear from Dave today. Because you'll see, going public with your big goals is how you build momentum. It's how you attract performers. And it's how you turn big ideas into real, measurable progress. One thing I know for sure, when you go public with something, you can't go back because it means you're all in to make that happen. And if all that's not enough for you, you'll also hear how RBC leaned into Taylor Swift fandom to drive results. Trust me, Swifties and strategy fans alike are going to love this one. So here's my conversation with my good friend and soon to be yours, Dave Mackay. - Dave, you got your first job at RBC in 1983, which means you've worked at RBC longer than Taylor Swift has been alive. When you hear that out loud, what goes through your head? - Love Taylor Swift. I don't know if you know, we were her sponsor for the portion of the Aries Tour in Canada. And we had a great partnership with her in the tour. And it was a massive acquisition opportunity for us to bring new clients into the organization. So for many reasons, whether it's music or business results, love Taylor Swift. Yeah, for me, it's been a labor of love. I mean, I love this company. I love the people I come to work with every day. So it's been a wonderful journey of almost 40 years in total. And just love every minute of it, mostly every minute of it. - I know how that goes, but you're CEO, you can't love every minute, you know, 'cause stuff does happen, you know. But I love getting into the mind of leaders to learn how you really make a decision. You know, walk me through the decision that you made to partner with Taylor Swift and do the, in sponsor of the Aries Tour in Canada. - Yeah, music in general has been a big part of our overall sponsorship portfolio. So we sponsor golf, particularly in the United States. We sponsor the Olympics and we sponsor music. We're a partner of Live Nation. And even though this wasn't, the Aries Tour wasn't a Live Nation concert, we know the music industry very well through our entertainment franchise at City National. So it's been the confluence of being in music and supporting a lot of the musicians on the banking side through City National. We knew Taylor's team. And it was really Mary, my CMO, who came up with the idea to say, how cool would it be if we sponsored Taylor Swift? I gotta give credit to Mary. It was a brilliant idea and it worked flawlessly for us. - You know, I read though that this move that you and Mary made in terms of sponsoring the Aries Tour led to incredible results. You know, when you place a bet like that, 'cause this was not cheap, you know, how do you balance the risk versus the reward? - It's a great question. You've got to go through, 'cause some of it are soft benefits, some of them are hard benefits. In this case, a lot of times a sponsorship is a soft benefit. You can't directly link it to a business outcome 'cause you could have various offers in the marketplace, other initiatives trying to draw clients in. So how do you pinpoint it to that specific promotion and golfs a little bit like that, Olympics is certainly like that. But in this case, because we had a ticket inventory to give away, we could link it to a direct business outcome. So we had to make some assumptions upfront to say, you know, with these type of opportunities, how many people would apply for a new credit card? Would it really draw? I'm sure her brand was riding really high when we did deal and still is riding really high. I don't think it was a big stretch honestly to say, will tail herself, she absolutely sells. And I have to say, I've never seen, you know, an event draw people in from around the world. We had customers from around the world come into the cities where she was performing, but the atmosphere of positivity and unification in a world that's being divided. And so many levels was just really a special thing to see. So it was brand aligned, which we always have to do. There are some bands we wouldn't align with, but certainly very much brand aligned, outcome aligned. And we could see, you know, a direct impact to our business as you referenced, exceeded our expectations for sure. So those are the bets you make. It's a probability, if you look at the risks, you say, this is a good play, let's do it. Let's make it happen. You know, Dave, you've been the CEO of RBC since 2014. Give us a snapshot of the company today and how it compares to when you first took the reins. - Yeah, no, it's, we've come through an enormous period of growth. So our business strategy, I'd say it's the consistency and the business strategy has been really important. We, within Canada, we're number one in most businesses that we have, whether it's capital markets, wealth management, commercial banking, retail banking. We are the number one player with number one market share. And then outside of Canada, we compete in a couple of global businesses that we've done really well. And capital markets were a top 10 global player, kind of number 90, United States, one of the largest non-US based banks. And we compete very well, you know, a fortune 200 to, I'm a fortune 500. We have got a very strong investment banking and markets business in the United States and a global business. So I would say top 10 in the world in our global capital markets business with strong operations in North America, Europe and Asia. And then the global wealth business, another area we compete outside of Canada, exceptionally well. We're with again, similar footprint, United States for the number five player in wealth distribution, United States based on AUA, over 700 billion US and AUA. And then a strong presence in Europe where the number three player in the UK. So we've got a global wealth franchise. So in Canada, we're all things to all people. Outside of Canada, we really focus on capital markets, wealth and then commercial banking in the United States with City National. I made that acquisition my third month as CEO about 10 years ago. And that's been a really strong acquisition. So outside of Canada, we pick markets and customer franchises we think we can compete in and do well that link back. We're not a global retail bank outside Canada. Some banks tried that and pulled back. So it's our focus and our consistency of strategy and our execution against that has been really, really strong. And we've taken the business from like it took over about 110 billion market cap to 250. - Well, that's impressive. And when you think about the strategic process that you have, how much do you tweak your strategy every year? - You tweak the execution against the strategy for sure. 'Cause like one of the questions I asked my team, we all talk about why we didn't win or where we didn't do well. But just as importantly, you have to ask your team, why did we win? And is it repeatable at the end of the day? 'Cause a lot of leaders assume or don't spend time thinking, we had a great year. Exactly which part of the things, all the things we did worked, which didn't and which ones are you gonna repeat and which ones aren't even repeatable? Like, I don't have Taylor Swift next year. I wish you would go on concert again on a tour, but I don't have Taylor Swift. So that's not repeatable. So what are you gonna do to get 600,000 accounts next year? So helping your team focus on why we won and what you're gonna do the same, but what you need to change. So I think you're always thinking about, I call it more the tactics within this strategy, you're looking at the environment and how the environment's changing. And when the world of tariffs that we have in the world of AI, geopolitics, are there macro forces that force you to think about serving different segments of the client base, pulling back here, expanding their serving new markets? So part of my job as a CEO is to constantly look five to 10 years out, where do we need to be? Do we need to be in a different market? Do I need to be bigger in Asia? Yes, do I need to be bigger in Europe? Yes, do I need to be bigger in the United States? Yes, I do. How am I gonna affect that change? What does success look like five years, 10 years from now organic and inorganic? So that's a big part of the CEO's job. So I'm always testing, asking, learning, thinking, what if we did this? So you're thinking strategically five years out, you're executing one to three against that plan, making sure that you continue to roll forward with strong performance. And you keep a horizon of initiatives, you don't just focus on the next year, but what do we have in the one to three year bucket that's gonna perform for us? And then what do you have in a three to five? So I think around horizons and making sure that we have a balanced approach in how we spend our $35 billion of NIE a year. You mentioned tariffs and I gotta ask you this. How is the Canadian United States relationship really impacting your business today? Since Trump has come on and acted the tariffs and there's been a lot of vitriol going back and forth, and how's this impacting you? - I think Canadians are shocked by the vitriol and we've been closest friends, sharing a common border with balanced trade for 100 years and more. And we've never questioned that. And when you have balanced trade and each side's winning $400 billion going each way, each year we trade a little bit more in energy, you sell us more goods and food, but net, net, it's $400, $450 billion and we should be focused just on growing both of those 'cause both nations prosper from that and we don't have to do it all ourselves. So we don't understand kind of the narrative and the objective then is to kind of what outcome are we looking for at the end of the day? So a lot of times being spent, a part of it administration wasn't confirmed. We didn't, the seats weren't there. Now everyone's in the administration's in their seat and therefore I think the dialogue is more focused and we can move stuff forward. But I don't think, I think we need to solve for this. I think we're going down a dangerous path that I think we're stronger, America's stronger with friends like Canada. I think America's success and enormous success and prosperity's come from multilateralism. Building bridges to the world being the free market leader and I think there's a huge benefit to America. I'm doing that. Going down an isolationist path is a different strategy altogether and I'm worried about it, to be honest. - Yeah, I think a lot of people are, certainly the markets are at least at this stage for sure. And you've spent your entire career at RBC and it's an amazing track record that you developed and I can't wait to talk more about it but I want to take you back. What's the story from your childhood that shaped the kind of leader you are today? - I grew up in Montreal and my family, my father was an entrepreneur, small business owner and I watched my mother and father run this small business for over a decade and I watched how hard they were. We imported high-end lighting from Italy. We had the rights to some of the top designers in Italy and Sweden and we sold it to high net worth individuals in New York and LA and parts of Canada for their homes and their businesses and whatever didn't sell ended up in our home. At the TASER home looked a little bit more like the Jetsons when I was crying out how stuff it didn't sell if people remember the Jets. Maybe you and I remember the Jetsons but maybe. - Oh yeah. I think I remember that jingle. I won't say it 'cause I'm not very good at singing. So watching them work so hard really made a big impression on me and the fun and the challenges of running a small business when how they dealt with their suppliers and in those days your suppliers, when they came in from Italy or Sweden, they came over for dinner all the time and then we got to know them so well, their families would come over in the summer and their kids would stay with us to learn English. So it was very much how business integrated and partnerships I watched on my father dealt with all stakeholders when the business, employees, I, 10 years old, I was in the warehouse kind of rewiring Italian lights for Canadian lighting standards. CSA standards and I pull in wires through this stuff and working with the back office to the sales side. So I saw all elements and I never forget one day my father took me to the bank. We happened to bank with Royal Bank. That was my only connection and we were small business customer of the bank and my father walks into the bank and we were gonna make a deposit that day and we were standing in line to see a teller and branch manager comes out and pulls my father out of the line. I don't think we're a big customer, but he liked my father and we sat in a manager's office. So here I am like nine years old, sitting in the manager's office and my father turns to me and says, we're gonna lend the bank some money today, which meant we're making deposit. I had to think about that, okay. Didn't think about it that way. So if that was my introduction to RBC and then I tragically I came home from school one day I was 13 years old and my father passed away. And that's a seminal event where it kind of changed everything in my life and our family's life and the business life. But I learned a lot from them in those years. I had them from, I remember kind of those early years up to age 13 and I learned a lot about the business world and how to build a business problem. I was incredibly curious individual. - It sounds like your father and your mother were very relationship driven. How much do you think that's led to your success in the world of banking, which you've got to build relationships? - It's such a great question. It's so true. You think about building long lasting relationships with customers, your relationship with your employees, your relationship with the board. We're in a world of relationships and trust. Like people do business with people they like and they trust. That's the kind of the rules that you and I have lived by and everyone lives by and therefore how you build that authentically and sustain that over time is critical. And they made a very strong impression on me whether it was a branch manager or the families in Italy that would come over and trust us with their kids or there's employees that worked in the warehouse or in the sales floor. You see and watch relationships and building. You see the ones that don't work as well. You learn as much from ones that fracture a little bit. Not everything's perfect. There's so much to learn there as well. And that made a huge impression on me. And it's kind of a foundation of think how I've operated throughout my entire careers, managing and leading and getting to know people across the organization but really building long-term relationships with customers. A part of the job I love the most at the end of the day. - Yeah, I can see that because you've got that personality where I'm sure you adapt to everybody. And that's a great leadership skill to have. And so your dad passes away at 13 and as I understand it your mother takes over the business and runs the business for five years or more. What leadership lesson did you learn from your mother watching her in action? - Yeah, she's my hero the end of the day. So I hear a picture of this 13, 10 and six family. Very traditional family, kind of middle income house in the suburbs. And she's a housewife and now she's got to run the company. And she's got to make the buying trips to Italy. And she's got to kind of build a different relationship with the families in Italy and in Sweden and others. And you know, I never forget like the neighbors would come over or we go to the neighbors for a week and she'd go on a buying trip to Italy. She went on buying trips to Sweden. So I watched her kind of run this business all elements of it deal with the loss of my father and they were very close and try to raise three young kids at the same time. And we all turned out okay, the day. That's pretty incredible, isn't it? Resilience. - Absolutely. - Love and resilience. - Yeah, that's great. And then you started your career in 1983. You mentioned a little bit earlier that as a co-op student in computer programming, you know, even though you didn't stay in that role for very long, what did you notice when you went to RBC about the culture that really made you want to stick around? - Yeah, I think my nickname as a quarter was Infinite Loop at the end of the day. (laughs) You know, it was my entry into the bank. I never forget, I really needed a job. And those days when I walked into the branch management of his office were long before that. I guess it was about 18 or 19 years old. And I got a coding job in the international banking division. For me, I started in the tech side as a coder, as an intern at the University of Waterloo. And that's kind of the MIT of Canada. And it was a great program. I didn't love the coding side of things. I really wanted to be on the business side, on the customer side. So when they came to me after, I guess it was, you know, a year and a half of doing this, I was all in to try something different from the bank. But what I loved about the organization was, how much they were willing to invest in their employees. Here they took this young person, I think I was 18 at the time. And they said, "We think you have management potential, "and we like to train you to lead "and to deal with customers." And I said, "That's just great." So it was, you know, first it was investing. I was a young person. I hadn't been in any other cultures. I delivered newspapers, been a lifeguard, done these types of stuff to get by, mold lawns. So this was my first big company. And so it was a great learning journey. It was how I worked with my manager, it was how I saw employees dealing with each other, they respect the debate with passion, but agree on a direction and implement. You could see that not everyone agreed, but everyone got on with it at the end of the day and worked together. So I saw this culture of working together on behalf of the objective. And then when I got into the customer side of things, that's when I really felt the customer's centricity. And it was real, everything was designed to put the customer first. So it's not just talking about it, but how do your reward systems or team work in a customer? You see so many competitors, so many companies that have divided their employees against the customer. They fight for the customer and the customer feels that. The end of the day that, oh, they're fighting for me. It's about them, not me. When you can present yourself as a unified team in front of the customer and you work out the compensation, the recognition issues that make that fair, you want the customer to feel the power of the organization's working for them, not for yourself. And I felt that when I moved in and I saw how the organization worked, and here's a company that's got challenges, like anyone, but it's customer focus, the systems and the culture work together. And I felt that. - Yeah, that's such an important point, because a lot of times people say, say they're customer focused, but their systems work totally against it. And as I was doing my research, and as you were coming up, I heard you talk about this idea of having three jobs at once. Could you explain that? - Yeah, it's something I tell young people in the organization, 'cause you're always, you know, as when you were, you're always asked, how did you get here? You know, give me something I can use every day to improve my upward momentum in the organization. And this whole idea of learning three jobs in every job, and it comes to the foundation of, you have to increase your knowledge and learning cadence faster than the people around you, if you wanna move ahead. And therefore, that's in your control to do that. And the faster you learn, and the more you learn, the more knowledge and value. So I saw data to knowledge to value. So I've always tried to, I've always curious, I always said it's massive and I appetite to learn. So learning three jobs is, you know, learn your own, learn your boss's job, because you sit in these meetings, these team meetings once a week, and you watch your boss, what challenges are they doing? How do they manage your peers? How do your peers interact with your boss? And you wanna do that, 'cause one day, you might be in that job. And therefore, train your mind now, as to how it's being done today and how you might do it. And then the third job is, learn one of your peers' jobs, because you may be lateraled into one of those jobs. So try to learn, and you wanna be a good partner to your peers, so the more you know about their role and what they're trying to achieve, the better partner you can be. So if you're staying a year in a job or two years, if you can learn three jobs every two years, over six years, you've thought about nine jobs, and therefore you accelerate how you think about leading in an organization, the challenges in organization, invariably, I got promoted into my boss's job. And the narrative that I was able to develop was, it looks like Dave's done this job already for two years. Like he stepped into, he's two months in the job, and it looks like he's been there two years. Yes, because I've been thinking about it for two years. So I'm ready. So you accelerate your ability to add value, you accelerate your learning curve, and you progress through a large organization or a small organization much more quickly, and you become a more valuable asset. So I get to tell all young people, every opportunity does, not just one job. That means in 10 years, you might only have five jobs. You wanna have 15 jobs in 10 years in your head. That is such a great insight. I mean, that is a tremendous insight, and it worked for you, obviously, because you climbed the ranks faster than just about anyone at RBC had ever done before, and when you're coming up like that, you're blowing by a lot of people, okay? You know, how did you deal with that pressure? Because that does put pressure on you. All of a sudden, you've got older people working for you. You've got a lot of things are changing and dynamics there. How did you deal with the pressure? Yeah, it's a great question. Part of it is because you've trained yourself to understand the role, you bring a certain amount of credibility in how you talk about the job. Versus, "I'm here, I don't know anything, please teach me." And that's where the animosity can be, "Well, they put this Dave in the job, he doesn't know anything." Why do I have to train him? And you get a lot of that in big companies, honestly. If you get to the job, and you know the questions that asking you dealt with a number of these individuals before, you can be more relevant and more focused and create value and build credibility more quickly. So part of it, everything you wanna build credibility more quickly. I also had a strong motto for leaders. It's more important to be respected than liked. I have thought so many leaders that overemphasize liked. I wanna be liked. And it stops you from making the tough decisions. And in many cases, I had to move some people out because I set a very high bar and I have very ambitious goals. And that's kind of one of the signature, I don't will talk about that signature themes I bring to every job is ambitious goals. And many people weren't willing to sign up for that. So you make the change and you surround yourself with those teams. So partly credibility, partly goal setting, setting an ambition, some people check out from that. And then you rebuild your team around what you wanna do and you do it fast. So try to stay away from the emotion of being liked at the end of the day all the time, but being respected was really important. - Hi everyone, it's Kula from Hal leaders lead. And if you're seeing my face right now, it means you're watching this interview on YouTube. I wanna say thanks. Thanks for watching it on YouTube. And if you love the show, subscribe to the channel. So you never miss an episode. And if you like one of the episodes, let us know in the comments. You guys, these conversations are incredible as you know. And if you love them, hit subscribe on our channel, leave a comment. If you love one of the episodes, it'll help us in our mission to make the world a better place by developing better leaders. And we truly believe that better workplaces, better communities and a better world starts with better leaders. And when you help this podcast grow, it helps us do more of that. So subscribe to the channel, let us know if you love one of the shows. And thank you so much for listening. - Say more about the power of setting ambitious goals. - It's everything. It's everything. And maybe I'll start at the top. So when I evaluate leaders in the top 50 or 100 leaders in our organization, we have 100,000 people. David, I use a two dimensional grid. I, on one axis, I have personal ambition. And on the other axis, I have organizational ambition. And what I'm looking for is both. But particularly I need to see organizational ambition. We have many leaders who show personal ambition for title, for status, for power, for money. But some of them don't show organizational ambition. And those are the ones who tend to be a problem in the organization. Their status, their blockers, their silent blockers is about them. They want to get ahead. They're protective. They're not confident at times. They present a challenge. Ideally you need both. To take on organizational ambition, you need some personal ambition to take risk. So we're always trying to measure, have you set an ambitious goal for the organization at the end of the day? What does that look like? Whether you're running a product, service, a back office, whatever you happen to do, what is your ambitious goal? And will people follow you in that goal? It's okay to have organizational ambition but lower personal ambition. It means I don't necessarily want to be seen. Or maybe I don't want to be on the group executive, but I want to be part of a team that's high performing that stretches itself. That's fine too. So we try to slot people in and say, how are they behaving now? Can we coach them if they're off track? But when we think about setting an organizational ambition, it's critical to getting ahead in our organization. And then we have to coach down. It's so easy to fall back into let's play it safe. Let's set a budget or a target that we know we can meet 'cause I don't want to fail. And that is not good the end of the day. So when people set budgets and then we rate it after, well, what's that? We have a note. Did you set an aggressive target or did you set a safe target? And if you beat the safe target, maybe that's not good enough. You've missed the aggressive target, that still might be better. So we have a qualitative approach to our budget setting as well. It tries to evaluate upfront how much risk did the person really stake their claim to? The other element of taking risks, I firmly believe, is risk taking in an organization about declaring yourself publicly. We have a lot of leaders and I see leaders who want to take a risk but keep it quiet. I don't want anyone to see. And if I'm successful, I'll tell you about it the day. But then it's hard to marshal resources and excitement in an organization if you don't declare yourself. So I really push my leaders and we're gonna have an investor day in 10 days and each one of my leaders can get up and declare themselves publicly in front of investors. I'm gonna drive the organization to hear, these are my KPIs, you can measure me every quarter against it. That's how we play. And I think declaring yourself as another element of ambition and of taking risks. So we push our leaders to say, I'm gonna do this. And that's what I've done my whole career. Whatever role I took on, I started by saying, okay, took the credit card business. We're third largest credit card business in the country. I said, we are going to double this business in three to four years. And I saw people in the back row of the auditorium rolling their eyes and snickering and saying, he's out of his mind. And they go, no, this is how we're gonna do it. And then you take these big goals and you start breaking them down. So if we're gonna double a business, I need this many new customers. I need each customer to use their product this much. I need to take out this much cost. And you chunk it down. If I need this many customers, how many new products do I need? And you just break it down into digestible pieces and say, okay, you're gonna run with this piece, you're gonna run it. So it sounds scary, but then you break it down into more manageable pieces. And I've always found, we see this, leaders who set ambitious goals attract A talent. And leaders who set unambitious goals attract C talent, be it best. - Yeah, and the fact is, is that people do not wanna go to work and be a part of something mediocre. And one of the things that I've always believed and you espouse this very clearly is that once you go public, you can't go back 'cause you lose your integrity. I mean, all those people rolling their eyes, right? In the back of the ground. And if you don't do what you said, I mean, how much credibility are you gonna have the next time you get up there, right? - And you don't do it, it's a lot more fun. It's a lot more fun. - I couldn't agree with you more. And you have the personal ambition and the organizational ambition and spades. And you've used this phrase, why not me? Well, when did this why not me phrase start to shape your thinking? Now, how early on were you in your career where you started thinking, why not me? - Why not me kind of came out early in my career when I was a co-op student and I joined the firm full time in the 90s, as you pointed out, I didn't even know what the CEO did to tell you the truth. I was an account manager in the commercial bank and training to do that in the branches. And I knew there was a CEO and I interacted with them once in the first kind of 25 years. I didn't know what they did, but I knew it must be an interesting job and an incredible job to lead an organizational like RBC. So even though I was 21 years old at the time, I said, I think I like to be CEO at the end of the day. And I had this voice inside my head to say, why not me? Like, why can't it be me? I'm 21, I got a good degree. I think I can create value and I've offered to a good start. So I never dwelled on it honestly, but I always had this quiet voice in my head that kept in tells someone tells me it's not me, the other day, then I'm gonna keep thinking, why not me? And I'm gonna keep building my career towards that. I had one person try to tell me, probably isn't gonna be you early in my career. And I thought about it for a while and I said, I don't think they're right, still, why not me? So I always had this quiet, I never talked to anybody really about being CEO right up until the last couple of years until I was made CEO, but I always had this quiet confidence that it could be me. And Dave, you obviously, and you did put forth and you achieved it and you are, you have quiet confidence and you exude confidence, okay? And, but I have to ask you, did you ever have one of those moments when the doubt really creeped in, about the why not me or whatever it might be? And then, how did you handle it? I did, in a number of cases, I worked on a few projects where I knew I was gonna have to take risk and if things didn't work out, I said, this might not be me, it doesn't work out. So for the most part, I always took that risk saying, if it's not here, it could be somewhere else. The end of the day, so I think one of the things that gave me psychological freedom to take risk in the organization, 'cause I was always viewed as someone who was willing to take risk, to take larger bets and to innovate. And I did that 'cause I had psychological freedom, I've never afraid to lose my job. So I got a good degree, I think I'll be okay, I'll find a job somewhere. So I was never worried about failing and I try to liberate others around me. But sometimes we took on projects where it got bumpy. We thought this was the path, this is the path and therefore this is a little bumpier than we planned. At the end of the day, I always put what's best for the organization and what do we do about this? And if it looks bad on me at the end of the day, I'll wear that. I think it's so important to celebrate success with your team, they get all this success and you gotta wear the failures. That way they'll continue to take risk with you. At the end of the day, if it's the other way around, they'll never take risk with you. So I was always mindful of just need this team to be always aligned and therefore, I said guys, if this thing fails, I'll wear it. And even with our largest acquisition of HSBC, I continued to say, look, if this deal doesn't go through for some reason, I'm gonna wear that. So I think that part of that philosophy gave me psychological freedom. I honestly never dwelled on, oh man, I might not be CEO if I get this wrong. That would have really caused me to be fearful. And I think it's a terrible hockey analogy, but when teams have a lead and they're continually dumping the puck out of their end and they're playing defense and variable the other team comes down to scores today. It's a bad formula. And I never got into the mindset, I gotta keep dumping the puck out of my own end to play it safe. I just said, like, I'm gonna play it the way I've always played it. I'm gonna stay on offense. I love doing that. And why not me? - So when you're coming up, you obviously have to make some big presentations, some big pitches to really get things done. Could you tell us the story of the first time you had to present to your predecessor who was Gordon Nixon, you understand? And what lesson did that teach you? - I do remember one, I've talked about this internally, but not externally. I do remember one of my first presentations to board and the senior management team. I was a senior vice president and I was in charge of our deposit franchise, our consumer deposit franchise. And I just taken it over. And I noticed that we were losing a lot of market share to INGs of the world on the high-interest savings account. And we didn't have a high-interest savings account. And I said, why don't we have a high-interest savings account? Because it's expensive. I said, that's not a very customer-centric answer. I said, customer wants it. Why don't we have it? I didn't get a good answer. I said, well, we're gonna build one at the end of the day. And then the team came to me, do you realize how much money we're gonna lose if we build this product? And I said, do you know how many customers we might lose if we don't? I said, well, they said, you're gonna have to go get an approval from board to launch this 'cause we don't normally do products that lose money. And I said, well, this is an investment in the long term of the client franchise. So I had to present to them why I wanted to launch this product and how much money was gonna lose. And I never forget, I was sitting around a table of kind of eight senior executives and boards at the head of the table. And I presented the customer philosophy and building a long term franchise. And this was an important product suite to maintain the customer relationship and not let others get a wedge in. And then they got to the financials and I said, the bad outcome is X and the good outcome is Y and Y was still had a negative in front of it, red. I'd say, I never forget one of the senior guys was looking down at the table and looked up and he said, are you really here to tell us that you're gonna lose money on this product? I go, yeah, I am and dead silence around the table. And Gord, it was a great lawyer, he leaned back and he said, but Dave's right, like, what choice do we have? This is about building a long term customer value. Like we kind of got to do this, don't we? And I go exactly. But I went in there having no idea how he and the team would react but had conviction that this was good for the long term health of franchise. - I haven't told that publicly before, but I tell it story internally about having conviction about long term value. - Here you are now, you used to be pitching the ideas. Now you're getting pitched too. And so how did the earlier experiences that you had, pitching ideas to Gordon or top executives, how has that shaped how you listen and respond to the people who are pitching you now? - You know, it's so important because you got to recognize how scared it is to come and pitch to a CEO today. They prepare a lot, they don't get a lot of moments, they want to be successful. So you have to empathize with that, this is a big moment, a lot of works gone into that, but you got to also make the right decision for the organization and therefore you have to get the answers. And I don't know how you found it, but I certainly found that information flows unevenly to the CEO office at the end of the day. This is not the Harvard Business School where everything's written down in 15 pages, you got to read it the night before and come prepared to discuss it. You got to find information across the organization, some of it's subconsciously changed and some of it just doesn't come in full format. So a big part of a CEO's job is just getting the right information to try to make the decision and understanding where it's done. So you have to work hard as a CEO to triangulate, I call it, to make sure you understand the dimensions to the larger problem, not every problem. And therefore you have to work with people and recognize some of their tendencies to say, am I getting the whole story or hard story? Do you have the context of how this could impact the organization or is your, because of the role you have in the organization, your context is limited and you might not see everything else, which often happens and therefore senior people bring more context, more connectivity of what happens. So I'm very conscious of context, I'm conscious of the moment in time and then opportunities to develop an individual. So if there's holes in the kind of thinking or theory, you kind of have to gently walk people through, doesn't impact this decision, but is it next time, it would be good if maybe we looked at it this way or we brought a different framework to analyze our problem, but for this decision, I'm okay moving forward or not. So it's always a coaching moment. Try to be conscious of every interaction like the three for one, how can you help the team and this individual in a short term and the long term be better leader, better thinker? - We'll be back with the rest of my conversation with Dave Mackay in just a moment, but he's not the only leader who understands the power of a big vision. Taco Bell CEO Mark King also believes in big aspirations. He says they're key to unlocking new levels of creativity on your team. I believe that we have to try to do something extraordinary and that changes depending on where your company is, where your brand is, but I just really believe in chasing something that's really out of reach. And I would just say we need a big aspiration. And my aspiration here wasn't fixing the world. It was 10% same source sales growth because I believe that if you have this big aspiration and your thinking is here, meaning you don't know how to get there, you fill that gap with creative ideas. And so for me, it's unlocking the potential of people to find new creative solutions to be disruptive by driving with a big aspiration and filling that gap with creative ideas. - Go back and listen to my entire conversation with Mark, episode 163 here on How Leaders Leave. You know, we talked earlier about what you found attractive when you were just joined RBC in terms of the culture and the work environment. Now is the CEO, you're shaping the culture. You know, what are you trying to bring to RBC from a cultural standpoint that's new and different or you think will take the company, the next level? - The way I describe it to the team is when you're the market leader, you're on the open road and there's nobody in front of you to mark. Like so my competitors get up in front and say, "Hey, we wanna beat royal here. "We're gonna match royal here. "We're gonna take market share from royal." So they're targeting you and you're going down the road and they're trying to beat you. We have open road in front of us. So we have to take the turns for the first time and therefore you're really coaching people to think about boldly looking at the road ahead as a number one market player and how do you coach them to really ambitiously wanna take the corners at speed? And as we like to say, let's take the middle of the highway and let's force our competitors if they wanna try to pass this to be in the ditch 'cause we got the middle of the highway and there's no room for anybody else. So as you think about, as I call the culture of a winning culture from the front, we are not copying people, we have to create and therefore you're creating the strategies of the future. You are always scanning for best practices and we're not arrogant that we don't think our competitors can hurt us. We're always looking over our shoulder to say, "Are they coming at us? "What are they trying to do?" So we're very conscious of that 'cause everybody does something well, but we're also trying to create a culture of, you're out front, you gotta figure out the next move and you gotta execute it and you're not copying it from anybody and that requires a different type of leadership and mindset. It's like a winning team taking the floor, we take the floor, we expect to win. That's our culture. We don't just wanna try or do okay. We expect to win because our investors expect that to win. - I had heard you were a competitor. - Okay. I'm a little bit afraid to play a golf or anything right now because you're gonna take no prisoners and you're gonna win, okay? And competition is a great thing. I mean, being a competitor is a great thing and something that I value in people. But sometimes people can misinterpret it, okay? Or they don't quite get what you mean by it. How do you help everybody understand the competitive animalistic attitude that you have? - I am hyper-competitive. But I don't know. (laughing) - Yeah, if you ask me how do I define myself, I know I'm competitive. But I also balance it with the how 'cause our culture is about the how as well. So it has to be both. If you're, or we're 160 years old, we plan on being here for another 160 plus years. So how you do business is critical and that's what our clients really value in us is that we'll do the right thing and we're playing for the long term. So you wanna win, but you're not just playing the short term win game, you're playing the long term win game. And sometimes that means you gotta give here and you gotta give there to get it. So we very much build a culture of the how. How do we play together internally? Do we talk about structuring systems and rewards to promote teamwork, like a referral equals a sale? Don't fight over the sale. If you find the customer, this is the better place for the customer, you'll get credit to and your sales targets. So referral equals a sale. So you're constantly making sure that you talk to partnership, you talk to client first, you talk to how. And therefore, if you put too much pressure on people and they start deviating from your culture and start doing bad things, bad things for the client, bad things overall, then you've gotta be all over that. So you can never set a target or set an ambition. It's we will do anything to meet this. That's not kind of the message. It is we'll be creative. We will lead, we'll take organizational risk, but we have to live within our values and our culture. Otherwise we have nothing. So it's the balance of the two that's so important 'cause you will get wayward players in various businesses that will do something's other, the pressure or they'll do something that's self-centric 'cause they're on a commission structure and you have to just jump on that so fast and there's zero tolerance. So it's as winning but how you win has equal importance in our organization. And we celebrate success is a big part of our culture as well. Sticking on the subject of competition, winning is fun, winning there's nothing like but losing things, it hurts. And did you ever have a moment in your career where you really got stung? It didn't turn out the way how you wanted it to. And then how did it influence what you did going forward? - All these things you do that don't work. I mean, I've had a number of product launches that haven't worked out and you used to have to go back and say, did you miss something on the way in or did you not execute well? So was it the idea or the execution or just kind of something happened? I mean, I never forget one. It's still, these are all public things. But I launched the mic we are credit card right after he won the Masters at Augusta National. First left you to win the Masters in 2003. And we launched the mic we are credit card and it was innovative that you use the card and you got your normal points on spend and purchase volume but we also gamified it for the first time thinking of business where each time he won you got bonus points as a card holder. So if he won a regular PGA tournament, he was X if he won a major tournament like the Masters, he could defend the Masters, he got three X. And so we gamified the loyalty to mic as a Canadian left-handed golfer in a world of golf. And it was a good idea and we were all excited about it and it didn't do very well. (laughs) (laughs) And we had to pull it. So you go back and you say, what did we miss at the end of the day? It was riding high in popularity. Now the card just didn't sell and it didn't resonate with enough Canadians. And we missed some stuff along the way and we could have executed better. You know, other things I put employees into our largest drug store chain. And we opened up kind of an RBC kiosk and I had employees there and I said, look, there's 10 million non-customers that walk into these drug stores. Like it's a ready aid or they have all greens of America. How good is that? Like, where are you gonna find these customers? They don't come to our branches. So I'm gonna put two employees in this kiosk in CVS and you're gonna open up credit cards and checking accounts. Well, that didn't work either because they ended up telling people where the toothpaste was and throw that paper. Nobody asked them about credit cards. So they ended up being free employees for CVS at the end of the day but or equivalent here in Canada. So stuff doesn't work, but they were good tries. You invest time in it, you invest energy, you go back and say, what would we have done differently? And you kind of move on and I think you just have to kind of say, hey, not having works, let's learn something from it. And often you do learn something and you just pivot to something else and say, well, if the product looked like this, maybe it would work better. And just never be afraid of those moments. - You mentioned earlier that you made a big acquisition three or four months into your tenure as CEO. You know, how'd you muster up the courage to do that? I mean, you definitely weren't playing it safe. - Yeah, I think the investor said, who is this guy? Three months in, he makes the largest acquisition of our VC's history. Part of the story is I've been thinking about it for two years. I had the chance to talk to the board about it for two years about the strategy or we had a Southeast regional banking operation in North Carolina. We sold that before I became CEO. I always felt it was so important that we had a commercial banking operation in the United States and private banking. So I was anxious to re-enter the US with the different strategy. And even though I was running Canada, I wasn't even running the US. I didn't know I was gonna be CEO. I believed for the benefit of RBC. I should work on this and think about it. And if I'm CEO, I can execute it. If I'm not, then whoever is, we'll do it. So I was given the freedom to work and think and talk to some potential acquisition targets. And I worked on one that I thought I was gonna do a deal with and then decided not to. And then, but got to know Russell Goldsmith and the Goldsmith family as well as another opportunity. So I was thinking about it. And we went pens down a number of times through that process. So honestly, when I got there, I became CEO. We were pens down at that point. And I had to think, okay, I can make this happen. Now it's within my bailiwick to do that. But I had a number of people on my team that weren't sure it was the right thing. I had to convince them to do that. So it was a pretty bold move three months in 'cause you don't know the job that while you're learning the job, you're trying to manage all these stakeholders. You really wanna take on an acquisition at that point. You're largest acquisition. And my instinct was don't wait. You've got an interested party. They fit the strategic framework that you're trying to do. The culture you'll align to you. You've got a couple of banks that are in trouble in the US that would wanna buy this that probably aren't able to right now. You gotta get it done even though it's a heavy lift in your early 10 years. So it put a fair amount of stress on me to, as I was learning the job of being a CEO, as you know, that first year's tough. To do this three months in, at the end of the day, what I'm really happy I did in hindsight. - And Dave, this has been so much fun. I wanna have a little bit more fun with you here and do my lightning round of questions. Are you ready for this? Okay? All right. The three words that best describe you. - I think we covered one of them, right? (laughs) Besides competitive, I'll let you give it two more. - I'm incredibly curious, curious, driven, competitive. - There we go. If you could be one person for a day beside yourself, who would it be? - A lead guitarist for Pearl Gem. - Who would play you in a movie? - People think I look like Steve Martin. So I guess I'd have to be Steve Martin. So people come up to me in restaurants. Are you Steve Martin? No, not Steve Martin. I was in the hair, so Steve Martin would have to play. Yes. - Do you speak French and if so, please answer in French. - You stepped on Mosh, should you be dang? May you get on that also lead? - A party. - Is it pronounced about or a boot? - About, yeah. (laughs) - I mean, yours and how. (laughs) - What's a Canadian sayin' or phrase that you use that Americans never understand? - We use A a lot. - What's the one thing you do just for you? - Playing guitar really loud in the man cave. - Your most prized possession. - 57, Les Paul. Or, you know, my uncle was a policeman of Montreal. And at the end of his career, he was assigned to the Montreal Forum, was where the Montreal Canadiens play. Great Hawk team. In 1972 after they won the Stanley Cup, he passed a hockey stick through a locker room for all these great famous Hall of Fame hockey players. And they all signed it and he gave it to me for my birthday, so that's pretty cool. - Oh, great gift. If I turned on the radio in your car, what would I hear? - Series XM Pearl Jam. - Let's say 22. (laughs) What's something about you a few people would know? - They wouldn't know I've been to see Pearl Jam 35 times. - What's one of your daily rituals, something that you never miss? - Thanks to my wife, I have this green drink that's pretty awful every morning called AG1. Let's say she wants too much Huberman Labs. So yeah, pretty much a ritual with vitamin D keeps the doctor happy as well. So, AG1 every morning. - You look very healthy, Dave. She's doing a good job. And that's the end of the lightning round. - And good job on the lightning round. Now, I got a few more questions. I'm gonna let you go 'cause I know you got things moving ahead here. So, you know, such a celebrated career. And going forward, Dave, what do you see as your unfinished business? - As you know, in big companies, there's always internal unfinished business. But for me, it's also, you know, continuing to work with youth in the country. A big proponent of helping youth find their way in this complex world, getting them their first job, getting them the training and the skills that they need are universities and education institutions or in a bit of a crisis on both sides of the border, but certainly in Canada. And my unfinished business is, you know, it's good for the organization 'cause that's the source of talent for the bank. But there's a lot of work to do with our educational institutions and getting us back to kind of the place that's gonna allow us to compete and be prosperous as a North America, including United States. It's a challenge. So for both sides, I think there's a lot of work to do. And I'm really excited about it. And the technology that's coming here, we haven't talked about generative AI at all. It's like super exciting. It's gonna change business models. We're gonna rewire a lot of things with this. We are well on our way to deploying these technologies today. And it's makes the journey a lot of fun. - Last question. What's one piece of advice you'd give to anyone who wants to be a better lead? - I mean, when I look at leaders and where they are, even though I talk to CEOs, you don't have to fill the air with everything you gotta say. When you're talking, you're not learning at the end of the day. So when I look at a CEO, there's a lot of tells, as you know. One of the first tells is, did they ask you a question? Did they listen? Or are they just in broadcast mode? So leadership is about learning and listening and reflecting and choosing your spots. It's not about sucking all the air out of the room 'cause you don't have all the answers and you need to get the answers. So leadership's about getting the answers and making the right decisions, not having the answers at the end of the day. It's about building a vision and getting people aligned to it and rewarding them and taking a hit if it doesn't work. So from that perspective, I really think, and take risks, take risks and have fun with it. It's a journey you're on. You only get one chance to do this journey. Playing it safe is so dull the day and it's not gonna work. You know, the last thing I say dream, I think really only the dreamers are gonna win at the end of the day. I consider myself a dreamer because there's so many things you can do in this world now with tech. There's so much information out there. There's so many levers to pull. Don't be afraid to dream. The dreamers are gonna win. - Well, that's great advice. And, you know, I knew I was gonna enjoy this conversation, but I'm, you know, there's a reason why you've had so much success. And I wanna thank you for sharing all your insights. This conversation is chock full of great leadership insights and I appreciate you taking the time to share them with us. Thank you very much. - I really appreciate the opportunity and I've been looking forward to this. So thanks for the opportunity. - I love how clearly and confidently Dave talks about big goals. He doesn't just think about the future. He brings people into it. I see a lot of leaders who set big visionary goals and then they keep quiet about them. And it's understandable because putting your goals out there means putting yourself out there. But when you go public with a big goal, everything shifts. You create alignment, you build trust and you attract people who want to help you make it happen. Do that and you won't just move your projects forward. You'll move your career forward too. So this week asked yourself, what's a big goal goal you believe in? But haven't said it out loud to your team yet. Reflect on what that is and why you're holding back. No one gets up every day wanting to be part of something mediocre. Go for greatness, set big goals and make sure everyone on the team knows they are key to making it happen. So do you wanna know how leaders lead? What we learned today is the great leaders go public with their big goals. Coming up next on how leaders lead, I'm talking with the renowned media executive Marc Shapiro. He's the president and managing partner of WME Group. And he's the president and chief operating officer of TKO, the parent company of both UFC, that ultimate fighting championship and WWE World Wrestling Entertainment. It's an eat what you kill world, right? People have to deliver. Now they need to know the expectations, they need clear feedback, they need performance reviews, they need resources and tools, right? They need help getting there, but as long as everyone understands up front what we're aiming for, what the measure and the metrics of success are, then it's full throttle to get there. And if you get there, everyone wins. So be sure to subscribe to YouTube or wherever you get your podcast so you don't miss it. Thanks again for tuning in to another episode of How Leaders Lead, where every Thursday you get to listen in while I interview some of the very best leaders in the world. I may get 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.