Steering the Ship in Stormy Seas: Walt Rakowich on the Power of Transformative Leadership

David Craig Utts - The Resilient Leadership Guy: 0:13

Welcome to Unfazed Under Fire, the podcast that aims to support executives in deepening their impact and resiliency on the path to growing their enlightened leadership Tuning into your needs. Here's your host and moderator, seasoned executive coach and self-proclaimed end-of-the-road seeker, david Craig Utz.

David Craig Utts - The Resilient Leadership Guy: 0:41

Hello and welcome back Dawn Faes Under Fire. I'm David Craig Utz, your host and moderator for the show, and this show aims to support executives in strengthening their impact and resilience in the face of these crazy times we find ourselves in, and our stand on this show is that human beings have all the resources resourcefulness they need within them to rise and address the biggest challenges we face Now. To gain access to these resources requires an executive or an individual to spend time turning a bit inward, to get to know themselves a bit better, what they care about most and really what kind of unique brand of leadership they want to express. But doing so, they walk the path of really self-mastery, which is supercharges their leadership impact, strengthens their resilience and deepens their personal fulfillment. Now I also want to extend deep appreciation for all the great feedback we've been getting on Unfazed Under Fire. That positive reflects back on the amazing guests I've had the opportunity to interview and I'm grateful for them as well. And if you're new to us, welcome to the show. Finally, if you find this podcast helpful and insightful, I just ask that you share it with other people through whatever means you have through social media or whatever.

David Craig Utts - The Resilient Leadership Guy: 1:52

Now today we have another incredible guest, walt Rakovich, and I was referred to Walt through a longtime client who has become a good friend, stuart Brown, and I'm grateful for that introduction. So shout out to Stuart Now. Walt has had a stellar career. He cut his teeth in business through the accounting profession at Price Waterhouse Coopers, was a partner commercial real estate firm Tramol and Crow for close to 10 years and served as a CEO of ProLogist, which he calls his crucible moment, and we'll be talking a little bit about that. But when he was the head of ProLogist the company was facing some major challenges. His stock price had dropped from $70 to $2.

David Craig Utts - The Resilient Leadership Guy: 2:34

Ouch and through your leadership, you turned that company around and oversaw its successful merger with AMB in 2012. I got that right and since then you've been serving on a number of boards, including host hotels and resorts, iron Mountain, where you and I know Stuart from, and the World Food Bank. You're also a prolific speaker and you wrote a book became a Polish author in 2020. Congratulations on that, which focuses on transformative influence and that supports executives to be more effectively lead and succeed in the face of this world's rapidly changing and chaotic environment, and you emphasize that book the importance of humility, honesty and heart, which I really value myself. Now, I've watched a couple of your interviews and I can tell Walt that you come from a deep sense of integrity and a deep passion for the subject of servant leadership. And, on a personal front, you live in Colorado. You spent your winter months in Florida every year. I don't know if you've moved down there yet or not.

Walt Rakowich: 3:42

We live there five months out of the year down in Lincoln, oh great.

David Craig Utts - The Resilient Leadership Guy: 3:46

And you do that with your wife Sue, and you have a son and daughter, and I understand you have a fairly new, recent member of your family and a granddaughter from your daughter, so congratulations on that as well, thank you.

Walt Rakowich: 3:57

Thank you so much.

David Craig Utts - The Resilient Leadership Guy: 3:59

And thanks for joining us today. Did I leave anything out or anything you wanted to mention before we jump in? And yeah, great, really good, yeah, good. Well, you know your book on transfluence. Your book entitled Transfluence was kind of grounded in a crucible moment and I know you've told this story a zillion times. So I want to, you know, ask you to do it again and talk about your experience at Prologous and how this became a crucible moment for you. And if you could I don't know if you can break it down into chapters in that experience I know you I remember one of the interviews you said you walked in the first day and you really didn't know what you were.

David Craig Utts - The Resilient Leadership Guy: 4:36

You kind of you accepted the job but in the back of your mind you weren't sure how you were going to approach the situation. That's that's. That's a human, that's a human reality. A lot of times we don't know. That doesn't mean we're not going to be effective, but if you could just share a little bit about that story to get us started as a foundation to talk to the rest of the interview, yeah.

Walt Rakowich: 4:56

Well, let me kind of set the stage I had been. Well, first of all, for those of your listeners that aren't familiar with Prologous, it's a Fortune 500 company. The company has over $150 billion of assets, one of the two or three largest real estate companies in the world and it focuses it's really the largest owner of industrial real estate. Fairly basic, we own warehouses, we build some of them and we acquire some of them, but basically we're in the business of owning warehouses and leasing it. And you know, I had been with the company at this time, taking over as CEO, for about 15 years prior to that and I was in various positions regional vice president and, you know, cfo president, chief operating officer and over all my years we had a very sound you know sound strategy, great people. We were really a darling on Wall Street in the early years and I think all of that was the result of great leadership.

Walt Rakowich: 5:53

But something when I became president, chief operating officer which was the number two person in the company something sort of changed. We went through a change of leadership. There was a new CEO who I reported to and, frankly, truly one of the smartest people I've ever met in my life, you know, and you know had many really good qualities, but I struggled with sort of reconciling with him what good leadership meant. And the fact of the matter is, in most cases people don't leave companies, they leave bosses. Yes, and probably heard that before.

David Craig Utts - The Resilient Leadership Guy: 6:34

And I've seen it happen.

Walt Rakowich: 6:37

On the one hand, I have a boss who I truly respect from a brilliance perspective truly one of the smartest guys you ever ever want to meet and, on the other hand, I frankly, david, I felt marginalized by his need to look brilliant. And, you know, the management team and I all felt that many times we didn't feel listened to, many times we didn't feel trusted, many times we felt like we didn't agree but weren't, you know, weren't listened to and and, frankly, we weren't being told the truth. And I could see our culture changing. We began to act in silos, you know. We didn't communicate as much with one another and we didn't talk in the open about things. Decisions were made behind closed doors in some cases and we made poor investment decisions and and we put too much debt on our balance sheet. At the end of the day, and even despite the fact that we didn't all agree about it and hold hands as a management team, and in the end, frankly, those, those decisions cost the company dearly, going into the great recession in 2008. And though I had no idea that the great recession was coming, I had a discussion with the board and I basically told the board I thought that the CEO, my boss, was running a server cliff and I didn't want to be a part of it and I was a really tough, tough decision and tough conversation with the board, and so I resigned in January of 2008, right on the precipice of the great recession, and our stock, as you mentioned, was at an all time high, was at $72 a share, which equated to a market cap of I don't know 25 or so billion dollars. So it's a reasonably sized company. Even back then, and from the outside looking in, we look great, but from the inside, looking out, we were a disaster waiting to happen. And and I left in January and February and March the stock had fallen to 60, and then April it's at 50, and then by June it's at 40, and so forth and so on. By September it's at it's at 10. And by October it's at five and hits November 2. And the stock hits $2 and 20 cents a share. That's crazy. And and I'm watching this from the sidelines and the board calls me up and said Well, we were going to part ways with the CEO, you were right and we need you to come back and run the company. And and and, by the way, the prologist at that point was the third worst performing stock in the S&P 500 year. Today we were down 95% and the Wall Street Journal did a front page article on us about how we were going bankrupt and it was a.

Walt Rakowich: 9:22

It was a sorry time and and so I knew it would take a Herculean effort. I really did. I was scared to death. I didn't know how I was going to turn around the company. I really didn't. I knew I had a great management team, but I also had hired a lot of the people that were there and, and you know, I kind of thought about it and I said, you know, I just can't walk away from this. I got to do it and even though I didn't want to spend the next three years of my life turning around a bankrupt company, I just somehow had this feeling we could do it. And you know what Crucible moments, as you mentioned, are sometimes the best opportunities that we have to shine, even though we would never, ever wish them upon anybody else.

David Craig Utts - The Resilient Leadership Guy: 10:07

Anybody else, anybody else.

Walt Rakowich: 10:09

And so over the next four years and we're going to talk about this, I know, and so I won't go into details, but on over the next four years, I learned what leadership meant and and you know, and frankly, I was never so aware of how my actions would be magnified as the day I took over a near public company and when I say magnified, I mean everybody was watching everything that I did so leadership mattered, and many of those things that I write about in TransFluence really came out of that crucible moment of coming back to prologists at that point in time.

David Craig Utts - The Resilient Leadership Guy: 10:46

So you know, I would assume that you know what you said about like you're a little you're disconnect with the former CEO around the style of leadership that you had a sense of the kind of leadership it would take. But you also intimated that something deepened in you and this experience, as you took on this scared as hell or what are scared to death or whatever, walking into this thing, everybody's looking at you, what was what? What? What transformed and waltz through this process and other, what deepened in you as you went through the process? Because I think that to me, a lot of times we look at leadership and there's, like you know, if you look on Amazon, there's 1517,000 books on the subject.

David Craig Utts - The Resilient Leadership Guy: 11:30

You know everybody's told to read a book a month on leadership. But you and I but you and I both know that intellectual understanding of leadership does very little when you're in the fire. That's something else has to emerge from within you. So so if you're given that, what? What if you could speak to it a little bit? What occurred within Walt that changed, that had him meet the day?

Walt Rakowich: 11:53

If you could speak to that a little bit, I came to the realization that it wasn't about me. And if you, and if you look at, if you read Transfluence the book and I know we'll talk a little bit about it but the premise of the book is leadership is not about you, yes, and I really believe that if leaders grasp that, it puts them in a position to, all of a sudden, listened other people, gather information around them. When you come to work and you think you've got all the answers, that's when you find out that you don't and, generally speaking, you fail. But if you come to the work, if you come to work with the notion that it's not about you, but, as a leader, it is about the influence that you can have on other people. And and if you come to work with that idea in mind, you can be open to so many things around you.

Walt Rakowich: 12:51

And I needed it because the truth matters, david, I didn't have all the answers. I didn't have, I knew I didn't and I was actually put in a fairly vulnerable position to, in essence, have to lean on other people. And and so, as I look back on reading or, excuse me, writing the book, trans transfluence stands for transformational influence. What does that mean? It means that leadership is about making a transformational influence in the lives of other people. But in order to do that, as you were talking about in the beginning, you got to put yourself in the position where it's not about you but it is about everybody else around you. And when you start leading that way, I think you can make a tremendous difference in your company and in the lives of the people that you lead.

David Craig Utts - The Resilient Leadership Guy: 13:39

Well, I think a lot of what you say in the book. You intimate the book and you know I I scan through it. I didn't read it in detail so I might have missed some of the stories, but one of the things, the essential nature of how do you build trust Right and and that is the foundation of influence trust and respect. Mutual trust and respect is a foundation of influence. I say, what did you have? If you look into, people knew you, he walked into the business but at the same time the business was in a certain state. What did you have to do when you were in that position to begin to build that trust? Either leverage the trust you had to deepen it or build it with some others that may have doubted. Maybe they doubted that it was going to be turned around, etc.

Walt Rakowich: 14:22

Yeah, so I talk about in the book I talk. I talk about fourth. You know, when you write a book, you always it, it. It causes you to say that I would say to yourself okay, what was I really thinking at that time, right?

David Craig Utts - The Resilient Leadership Guy: 14:35

Yeah, yeah, yeah. And then how do I write?

Walt Rakowich: 14:37

this down. But you know I talk about four things and and we'll probably from time to time in this interview, go through the four. But let me give you kind of the four pillars from my perspective. I think the first thing is you got to get out of your own way, as I talked about, and I think that that is about recognizing that there are demons for any leader, and those demons are too, too full to primary demons pride and fear and I hope we can talk a little bit more and dig into that, but for now let me keep it at 30,000 feet.

Walt Rakowich: 15:17

I really believe that the two greatest demons that leaders space are pride and fear either their hubristic pride about themselves and their abilities or their fear, which causes insecurity, which causes leaders to do things that aren't good. I think it's important for leaders, first and foremost, to reflect a little bit and and really try to understand themselves. I talk in the book about the importance of getting coaching. I think coaching is really really important for any leader. To have somebody to tell you what other people really think of you is something that you don't know and and you will learn a lot from. The second thing is, in this world that we live in today. We live in a world that is moving much more rapidly than it moved 30 years ago. Yeah, absolutely, transparency and communication are so critically important in this world. I think the world demands from leaders today and perhaps we'll talk a little bit more about this too but the world demands from leaders today a higher level of Communication and transparency than it ever did in the past. And so if you want to build trust in the organization a you got to get out of your own way and be. You got to start Communicating and be very transparent.

Walt Rakowich: 16:33

The third thing let's just call it a pillar is Authenticity, and you you mentioned in the beginning about the three H's. I hope that I had a chance to tell the story about John Mack, who was the CEO of Morgan Stanley and I, and he mentored me and he he talked to me about the three H's. The importance of the three H's and the three H's to me are humility, honesty and humanness right, and and those things are that they create authenticity in people. And the fourth thing is purpose. I think I think leaders have to actually Point their people in a direction that provides them with purpose. Meaning and purpose in life are so critically important. It's important for your employees not done is not just to understand where the company is going, but how their jobs fit into that in a company. And I think if you can provide, you know, get, get out of your own way. If you can be transparent, communicate, if you can be authentic and if you can provide purpose to your employees, those things are critically important in building trust.

Walt Rakowich: 17:39

And let me tell you one more Thing trust, in my view, is the currency of business. People talk about dollars. Now, it's not dollars, it's not euros, it's trust. Okay, and without trust, you got nothing. With trust, you got everything. And that's what in leaders ought to be thinking about. How do I build trust in my organization? If I build trust, then I, you know, I can take on anything, and I found that at Prologous in the deepest and darkest moments.

David Craig Utts - The Resilient Leadership Guy: 18:09

Yeah, and also Trust. If you know, like, if you are in a situation where you have trust, if you, if you make a decision that loses and erodes that trust, it's so much hard to get it back To the degree you had it before that decision right. So you have to be very mindful. That is the currency. I love that because that is fundamentally the foundation for everything else is possible, because Fundamentally, we're a collective group of people working together, hopefully collaboratively, towards the vision or goals that were we're trying to address. And you can't have collaboration without trust. So the whole thing breaks apart.

Walt Rakowich: 18:47

You know that's right. And, and back to your point, you can lose trust in a second. You can never build trust in a second. Yeah, takes time, it takes time to build trust and, unfortunately, when you lose it, you've lost it for a while, maybe forever. Yeah.

David Craig Utts - The Resilient Leadership Guy: 19:03

Well, I want to go, I want to start a point to a couple of this gremlins you meant, which are pride and fear, but I want to get to those and I went through a couple questions and then dig into that a little bit deeper. You, first of all, you talk about the difference between Traditional leadership versus transformational leadership. So maybe that would be a good way to set the stage a little bit, and I want to talk about what you think is the current status of this kind of Transformational leadership in the world, in the corporate world specifically today, just to get your assessment on that and say what's what I think is holding people that back from growing more is those two very things that you mentioned. So you could talk a little bit about how you distinguish traditional from transformational leadership.

Walt Rakowich: 19:45

Okay. So you know, david, when I took my job, my first job in 1979, coming out of college this will take you way back, right and it was as you said. It was with PWS for a price waterhouse. At the time it was traditional command and control leadership.

David Craig Utts - The Resilient Leadership Guy: 20:01

Yes.

Walt Rakowich: 20:02

I was happy to be employed. Leadership my bosses paid little attention to our culture, very little attention, I can tell you that, and and frankly, we didn't care either no one was talking about culture back then. Okay, leadership was really granted to those who had done their time not necessarily at base that had done their time, not necessarily those who know how to manage either Was those that understand absolutely, was those that understood the accounting profession the best, and their positions were more secure and People were less critical or vocal of management and what management had to say. And so my job is I look at that my job was more transactional At that point in time. Ie, I was going there, I was gonna be there for a period of time, I was gonna collect the paycheck, I was gonna learn as much as I could learn, and they needed a job done and I needed a paycheck, and I was fine with that and they were fine with that, and I had no questions as to what my leadership would be, what be about. I just wanted to gain experience and that was it, and I really believed that that was, that was work, and they knew more than I do. I think, right, right, right.

Walt Rakowich: 21:17

Today the world is just so different, completely different, and don't get me wrong, I'm gonna I'm gonna paint a picture for you that I know took place during the draconian time when I took over a CEO. But when I took over as CEO On the first day of work and again, this is a company that's going bankrupt, but I received over a thousand emails, calls, texts from the world, every everybody, from bond investors, equity investors, sell side analysts, rating agencies, the mayor of Denver, news, public Media outlets okay, you name it. And, by the way, they weren't asking me of questions. They were demanding that I answer their questions. Okay, online chats we're rampant talking about our future and my ability to manage, and I could read them, and our employees wanted answers quickly.

Walt Rakowich: 22:08

Okay, let me tell you. We live in a world of Greater access to information. We live in a world with more diverse people who think differently. We live in a world where people live in different geographies and and and progress is accelerating Every day. Technology is accelerating, and I call them in my book climates. They are climates of change, yes, and I think they, on one hand, create tremendous opportunities for people To, from a technological perspective, to become efficient, but, on the other hand, you try to lead During this time, and I'm telling you what you, because we all live in.

Walt Rakowich: 22:49

We live in glass houses and when I say that, I say that in a book. It the whole world can see what you're doing. Okay, there is no hiding. And you have to be Transparent, you have to communicate, you have to be aware of the fact that people think differently all around you and they have elevated expectations because they see you more, they understand you more.

Walt Rakowich: 23:16

I think they do at least, and I think it requires, it requires from leadership a more constant drumbeat of transparency and communication. I think it requires leaders that lead with values based leadership, and we're leaders lead by example and because they can see everybody can see what you're doing and criticize you for everything. And I think Leaders have to enforce the human element and and therefore they have to be more empathetic, they have to be, they have to recognize, give credit to more, they have to be more balanced, they have to articulate a purpose, for people really wave the flag and say this is where we're going, and they got to convince people that they are moving down the right path, where they didn't have to convince anybody before they were right in the eyes of the world, before the world. Today we live in a very critical world and and we just do and it's a very, very difficult world. So when you ask me about differences in leadership, compare and contrast.

Walt Rakowich: 24:23

I think many years ago it was all about command and control, and the strongest at the top one. I think today it is about. It is completely different. I think the human element is important. Transparency, communication is important. You need a leader that can do a lot more than just pound the table and say this is it, it's my way or the highway. I think that's where we are today.

David Craig Utts - The Resilient Leadership Guy: 24:45

Yeah, I mean, and I think that you're you're pointing to like, if you make it about you, then you're just going to be taking a lot of Painful darts and it's gonna hurt. When you make it about you, those darts are gonna hurt. When you make it about the other situation, they may sting a little bit but you're taking it for the team, you're taking your, you, you, you, you're, you're, you're, you're Emphasizing that transparency with your team to move things forward. You're building different kind of relationship with those internally and and etc. So, you know, and if you look at the corporate I'm just curious about your assessment because you sit on a lot of boards you have a good vantage point of corporate America.

David Craig Utts - The Resilient Leadership Guy: 25:23

Yeah, you know, I've been in a leadership development profession for 27 years. I've seen a lot of changes and I've seen a lot of investment in leadership too. I've been a part of it. I've been, I've actually did partner development at PwC. I think after they learned there some of their lessons, they recognizing that they had to, had to help their partners a little bit. What is you? What is your point of view of the current state of corporate America and its ability to create an environment of servant leadership and empowering Cultures that create value and foster high performance and accountability and bring out the best. Another, how do you think we're doing in a scorecard with moving in that direction of having that be a more prevalent Way of leading and building organizations?

Walt Rakowich: 26:05

you know this might surprise you, but I sit on the board of three public companies, as you mentioned. I just came off of the board of my, my university, and I would actually tell you that I'm more encouraged today than ever before. And I say that from don't get me wrong, I don't, I'm not looking at the world through rose-colored glasses. But, yeah, not withstanding the rhetoric out there and you have to, you have to remember that what we read about every day and social media, or what we read about or listen to in the news, it's, it's all the negative stuff. I mean, that's what that is. I mean, people don't, you know, they don't make money, unfortunately, by publishing positive things.

David Craig Utts - The Resilient Leadership Guy: 26:46

Yes, unfortunately, and so.

Walt Rakowich: 26:49

What I see in the boardroom is this I Think we have more in-depth discussions as board members today about Employee development, about corporate culture. We spend time in every single board meeting talking about those things, about employee retention. I think there's more encouragement, and in fact I would I would even say that there's more acceptance towards engagement service. Employee engagement service what are they saying? Employee well-being. I think there's more discussion about medical and emotional Assistance and actually I think there's more willingness, or I should even say acceptance, towards coaching at the senior levels of organizations to try to learn how they should not only House, they should lead better. Well, what do people think of that? You know, how are they leading and what do they need to do to make changes? Midstream to that, I see Millennials and Gen Z Employees, which now make up over 75% of the world, and I think that they are less sensitive to and and yeah, let's sensitive to bad leadership today. If they don't like the leader, they'll lead, and there's a war and talent out there that I mean.

Walt Rakowich: 28:08

We only have 3% unemployment. Come on, it was different when I was in 1979, it was like 9% to 10% unemployment. Employers had all the leverage. Now I think employees have much more leverage. And then you have this whole ESG movement, which we can argue about whether or not it's gone too far one way or another, but there's so much more focus on governance and social let's put the environmental aside, just the governance and social aspect of organizations. How are we governing ourselves? What are we doing for the social wellbeing of our company, which always relates to employees?

Walt Rakowich: 28:47

Let me tell you, when I first went on the board at Prologis and this is God, I mean, this is I don't know over 20 years ago we weren't having these discussions at the board meeting. We weren't, we just weren't, it just wasn't taboo. Today, you have to have these discussions, you absolutely have to, and so I wouldn't necessarily call it a movement, but I do think that there's more attention being paid to good leadership today. What good leadership looks like, which is not to say that we're gonna have a bunch of bad leaders out there. We certainly still have them and we always will but I think there's a lot more attention today being paid to it, and so therefore, it's encouraging to me, kind of, in the long run.

David Craig Utts - The Resilient Leadership Guy: 29:33

You have to agree, there's progress, certainly not perfection, but we're moving in the right direction. And I think what you speak to is leaders having to face these two gremlins of pride and fear within themselves. To me, as I look at, the research shows we have also a very traumatized society for various reasons. I grew up in the time of Dr Spock being the head of how parents should parent and he didn't really do any justice to those growing up at the time of parents who took that seriously. But we have people that are I say that and they show up in the executive suite too.

David Craig Utts - The Resilient Leadership Guy: 30:18

So and what I'm pointing to is like when you are in such a spotlight you're in that class house the survival mechanism is you're not your best friend. It's good when you have your face in a saber's hooch tiger if they would face that, or a bear, or you've got a fire in your house it's good to have a survival mechanism in place, but it also kicks in at those times when it feels dangerous. It may not be dangerous, but it feels dangerous, and pride and fear is always wants to reach in and be your friend at the wrong time.

Walt Rakowich: 30:51

Yeah, that's exactly right, I couldn't agree with you more.

Walt Rakowich: 30:54

You know I write about this. I believe I wrote about this in the book. I don't remember if I found this afterward or not, but there was a survey that was done by Harvard Business Review many years ago and it's called what are CEOs afraid of? And they interviewed over a hundred C-suite executives not all CEOs, but a lot of them and they asked them what their biggest fears were. Okay, now you would have thought that these people, being at the top of the heap, would have said well, it's my competition, or it's losing good people, or maybe it's my financial wellbeing. I know we've got to refinance the balance sheet or we've got to get up and get liquidity and those sort of external things. Now you know what the number one fear was, david incompetence. The number one fear that C-suite executives had was incompetence, which is their own incompetence.

Walt Rakowich: 31:54

Their own. The fear of being wrong okay, not having the right answer, and CEOs talked about how it led to them being dictatorial, not listening, because they wanted to be right, and so they just the opposite. They did the opposite thing, and that is to shut people off. The second one was underachievement okay, the fear of not doing enough, because their competitor was going to do more, and so the CEOs talked about how they felt like that might have led to the lack of discipline, and in my case, in the real estate business, that means overpaying for assets, because if you don't, your competitor will. I saw that firsthand at Prologous. And the third fear and I won't go through the five, but the third fear was appearing vulnerable, ape Vulnerable. The fear of either not being important or not being relevant, and CEOs talked about how that led to a lack of delegation. Why? Because they wanted to hoard everything right.

David Craig Utts - The Resilient Leadership Guy: 32:58

They wanted to keep all the information right.

Walt Rakowich: 33:01

And again, here you go, not listening to people. And that's what I'm talking about. Because you're right, when you're in the glass house, you get protective of yourself, right. And when you begin to get into that, when you begin to get protective, your insecurities begin to surround you and those insecurities begin to take over, and that is the absolute wrong thing to do and it's a knee-jerk reaction, but it's the wrong thing to do.

David Craig Utts - The Resilient Leadership Guy: 33:25

Yeah, yeah. And then you start taking actions that actually you say counter what you're trying to accomplish by holding your clothes to your chest, by screaming at people, by whatever, of not being transparent. Well, and as far as you look at, what do boards need to keep in mind with that as they're hiring CEOs? How do you hire for that being to resolve, or how do you hire for a heart and humility and transparency and all the great things you talk about? I'm hearing that you think I think probably there's more attention going on those things, but what is something, as a board member, that you've seen people struggle with? Did you say that this would be helpful if people framed this a little differently? And how we're hiring top executives in our organizations?

Walt Rakowich: 34:18

That is a really good question, because sometimes those things are hard to find. I mean, obviously, if you're hiring a C-suite executive, you really need to do your due diligence. You need to talk to as many people and ask those questions of as many people as you can. I think you need to run certain tests. Personality tests can help a lot in that and a lot of companies don't do that. The best companies do do that. I think when you're hiring a C-level executive, it's hiring anybody. One of the first things I look for is listening skills. Are they really listening to me or they wanna tell me about what they wanna do? And I think the best leaders of the world are the best listeners at least the iPhone, that's true.

David Craig Utts - The Resilient Leadership Guy: 35:10

I don't think a truer thing could be said.

Walt Rakowich: 35:11

That's my experience, and so you look for all those things. There's just a litany of things, and I think it's also important as a board to have your listing of things that are important to you. What is important in your business? If your service business capital allocation may not be important, If your real estate business capital allocation is critical and so there's those sorts of competency kind of things Absolutely that's critical.

David Craig Utts - The Resilient Leadership Guy: 35:35

The technical skills of that particular industry. What you pointed to is we don't run these personality tests and I think there was some high percentage of sociopathic, narcissistic personalities that tend to get those positioned because they're really good at schmoozing and confidently influencing the board. And if you're buying into that, you're actually buying into the very thing that's gonna cause you problems when you hire them, because that's what they do, and then they don't necessarily have a full cup underneath that right, especially when troubles happens. So I think it's really important that organizations start taking a look at the neuroitypical people that can come in and actually be very good at influencing in a particular way which I wanna talk to you about.

David Craig Utts - The Resilient Leadership Guy: 36:17

At distinction, there's certain different kinds of influence, different ways of influencing. Right, there's charismatic influence and ability to kind of pull the wool over people's eyes. It doesn't necessarily mean charismatic means that, but it can. And then there's other. There's a deeper sense of influence, which I think you're pointing to, and transfluence. So that's important, but so anyway. So maybe you could speak to that a little bit. Is your the distinction and different level? Cause the influence is this broad word. I want it, I need to influence without authority, I need to be a better influencer and organizations have different definitions about that, and maybe you've already spoken about it and you can bring me back to that. But what is the best kind of influence in your mind and what does it take to be that kind of influencer?

Walt Rakowich: 37:05

Well, that's a really good question and obviously everybody's a little bit different, but I'm gonna get to and I referred to this earlier, I'm gonna get to a conversation that I had with John Mack, who was a CEO of Moonspeely.

Walt Rakowich: 37:17

Now keep in mind what in 2008, I'm taking over and the stock market's down 40%, everybody is going bankrupt, supposedly. Remember, goldman Sachs was rumored to be going bankrupt, as was Morgan Stanley, and we were too. And I had an investment banker friend of mine who said, well, I really want you to talk to John Mack, who's our CEO. He'd like to talk to you, you're a big client. And I said, sure, let's do that, so I get on the line with John. And John was pretty much revered in the investment banking business as being truly one of the better leaders, because banking business that produced tremendous leaders with empathy and eating and all that stuff.

Walt Rakowich: 38:04

John was that kind of leader. And I said to him the first question. I said, john, I want to ask you a question. I said, during this time of difficulty internally, what do you look for in people? Number one and number two, like, what drives you as a leader? What do you think your best qualities are and people need the most today? And he's like well, I look for people and I manage people on the basis of the three Hs which you referred to before and that's a basic tenet in my book. And I said, wow, john, what do you mean by the three Hs? And he said he said, walt, the best leaders you will ever meet are leaders that are humble, they're honest.

Walt Rakowich: 38:54

And he said in this day and age, a banker needs to have a sense of humor. And I sort of laughed at that. And he said see what I mean. And I said, well, that's interesting. And I kind of took that and I went home and dwelled on for a little while and I couldn't get my arms a little bit around that much around humor, because I didn't really view myself as being a humorous person, although I could crack a joke from time to time. But I think what he really meant was that humor fell underneath this broader word, which is being human, that people, whenever you walk into a room, people have to see you as being a human being, that they can relate to what actually cares about them.

Walt Rakowich: 39:38

Cares, right, yeah. And so people ask me all the time well, what do you mean by those three words? Because I gotta tell you, if you look humility up in Webster's dictionary, you'll read stuff like weak understood.

David Craig Utts - The Resilient Leadership Guy: 39:53

Yeah, it's terrible. It's terrible. Yeah, terrible stuff, not understood, not well understood, yeah.

Walt Rakowich: 39:58

Yeah, you'll say, david, I don't wanna be that kind of leader, right? There's absolutely no way, right? But I don't think. I think real humility takes amazing amount of courage, and I think it's not about being weak, but it's about accepting that you have weaknesses and, by the way, being willing to admit them from time to time. You know, honesty is another one. It's like everybody thinks they're honest, except for the fact that few leaders are really comfortable with bad news and they're real honest with good news. Bad news, I don't know that.

Walt Rakowich: 40:28

I'm going to talk that much about it and, by the way, you're somewhat dishonest just by virtue of the fact that you won't talk about it. Right, exactly, you know, sometimes silence is not golden. And then this word humanity I mean humanity is about empowering people, listening to people, lifting them up, recognizing them, realizing that you're the conductor and the orchestra, not the soloist. You know, you don't have to be the soloist, you just conduct it, and all you have to do is make people feel better about themselves and feel great about what they're doing. And you know, that's, to me, what real leadership is about. Now, you might say that's the soft side of leadership, but I had the CEO of the largest, one of the largest investment banks banks period in the world, telling me well, that's how you have to leave, right? And so I'm not telling you something because I'm a soft guy. I'm telling you something because I believe it's proven and I believe that people have come to the realization that's how you manage people today.

David Craig Utts - The Resilient Leadership Guy: 41:30

Well, quite frankly, that is also a touchstone of traditional to transformational leadership. Right, and quite like I was. You know, I recently had a podcast guest on you, eric Harkins, who wrote a book how to Be Great Leaders Make Sure Monday Morning Stones Suck. That was the title of his book, and it's really good book, actually Highly recommend it. He calls it a two glass of wine read.

David Craig Utts - The Resilient Leadership Guy: 41:58

But you know, in this whole thing is that he mentioned and I agree with this, I've said this all the time when you become an executive, you just your job just became easier, not more hard. Individual contributors have the hard job, but if you think it's on your shoulders, it's the most difficult job in the world. Yes, right, but if you're facilitating from a point of view of I don't know everything, here's the problem. I know we have to solve that problem. Let me bring the right people around and let's talk honestly about the good, bad and the ugly of that and come up with a solution. And then you're fundamentally facilitating brilliance around you to get in and probably a high percentage of the cases, the solution is not coming from you.

Walt Rakowich: 42:41

Right, oh, in a high, high number of cases, in fact, I can. Can I tell you a quick story about that? I think that vulnerability is actually the most, one of the most difficult things that a leader can do.

David Craig Utts - The Resilient Leadership Guy: 42:57

It is very difficult, and I think that's one of the things that we all face in a certain way, and yet it can be one of the most powerful tools.

Walt Rakowich: 43:06

Yes, because it's human and it's the ultimate expression of honesty and transparency. So this happened to me and I I did write about this in my book and maybe you've heard the story, but your audience they hasn't. So I had, I had taken over the company and I had been in the job for maybe a month and a half and I was worried. The company was on the verge of bankruptcy and I had a meeting. It was after midnight, but we were working dog years and I met with my finance team after midnight. There are about 10 people in the room and one of the financial people in the organization said well, I've got some bad news for you. Oh boy, what's that? And he said well, I think we're going to blow our bond covenants in the month of January, and we had about I think we had between eight and $10 billion of bonds outstanding and once and a couple of them were cross collateralized, in that if you blew one covenant and wanted it, it hurt you on the other. And and basically we weren't going to meet our income test in order to keep our bonds outstanding. And so I looked around the room and I said well, what does this mean, guys? And everybody looked at me and said, well, well, we don't see any way around it, we're probably going to have to declare bankruptcy.

Walt Rakowich: 44:27

So my face got white as a ghost, david, and I didn't know what to do. Okay, and so I walked. I said, guys, do you mind if I just take a break? And they're like no, well, go ahead. So I took off and I walked down the hallway and I felt like I was going to faint. And in fact, when I felt like I was going to faint, I saw this chair that was not too far in the distance and I be lined to the chair to try to get to it to sit down. And unfortunately I didn't make it. And on my way down fainting, I hit my head on the corner of the guy's desk empty desk and and was laying in a turned out to be a pool of blood for about 10 minutes as my, as my body is bleeding, okay, and it's dark outside.

Walt Rakowich: 45:17

And finally I come to my senses and I wake up and I see that it's dark outside and literally for about 30 seconds, didn't know where I was and then, all of a sudden, it dawned on me. Oh my God, I'm the CEO of this company, I'm running it, and there's 10 people in the room waiting for me to come back as to what we're going to do. So I quickly I went to the bathroom, I sutured up my head, I got it to stop bleeding. I had this God awful lump on my head. And I come into the room and everybody's looking at me and they go well, so so, are you okay? And I go yeah, I'm fine.

Walt Rakowich: 45:57

And I said you know, so let's talk about this, this bankruptcy issue. Let's not use the word bank or let's make it call it the B issue or something. And and my CFO looks at me and he said well, no, well, let's talk about that God awful lump on your head. What happened to you. And I remember looking around the room and I said you know what, guys? I was hired into this job to keep us going bankrupt. I said you guys, just use the B word. I have absolutely no idea what to do. And you should see the look on everybody's faces. They look around the room, you know, looking for answers, and and and one person and I can't remember who it was said well, let us, let us handle this. We got your back, okay, and you know what. We came up with an answer within 30 days as to what we were going to do. That kept the lights on and kept us out of bankruptcy, and it would take me too long to explain it.

Walt Rakowich: 47:03

Yeah it had to do with the sale of our business in China and the sale of partially our business in Japan, which created earnings to give us some runway. But the one thing that I realized is, well, two things. One is the power of vulnerability as a leader. Not always, I think. Sometimes you do it too much. Actually, people might wonder why you're leading in the right Exactly, but at the appropriate time it can be a very powerful tool. And the second thing is, I think, by letting your guard down, you invite others to do the same, and that's where real communication happens in organizations is when people feel free and liberated to say the things that they need to and want to say, and I think part of that was just coming across to them. Like you know, I was part of them. I wasn't some guy that was sitting in an ivory tower that had all the answers and in fact I was looking to them to produce the answers. I think that that was really powerful for me, starting off as the CEO of the company.

David Craig Utts - The Resilient Leadership Guy: 48:09

All three H's apply there, right, and you weren't thinking about that when you're walking in the room and they asked that question you just came up with. This is my answer. I don't know. I really love this conversation and appreciate everything you're saying about this movement towards this kind of leadership and the need for it.

David Craig Utts - The Resilient Leadership Guy: 48:32

I can't help but look out at the world today and wonder sometimes. I do believe, as you were pointing to earlier, that this is progress and not perfection, but we are making progress and business leaders are showing up and I've had the great fortune of coaching some, interviewing many, meeting many through the course of my networking and building relationships and so forth and sometimes I wonder if pre-World War II, we had the George Pattons and the Eisenhower being developed at war colleges. That saved our button World War II. And I sometimes wonder if the crisis that is emerging in our world right now is not going to be potentially saved by leaders who have actually been in the fire in business, where you can't divide people and succeed in business. You can't break down trust with one group in order to embolden your own side and expect to succeed in business. So I'm just wondering if you've ever had that thought. Where is the leader? Where is the leader is going to come? That are.

David Craig Utts - The Resilient Leadership Guy: 49:39

There's a book that was written for turning. I don't want to go into it, but they talk about we repeat history. We go through these four turnings and we're now in this turning of crisis, like a World War II and the Civil War and the Revolutionary War, and it's one of those times that humanity's got to pull themselves up and figure out how to reconvene in a more effective way. So I'm wondering what your thoughts are on that. That's kind of an out of the box question, but given everything we've talked about and what your thoughts are, and if that is that a relevant possibility or just your thoughts on that.

Walt Rakowich: 50:09

Well, I will tell you that when I left Prologus, the first thing that somebody asked me is would you go into politics? I was only. I was the ripe old age of 55 and I believed strongly in leadership, and I actually believed strongly in my ability to lead. But I have to tell you, I decided not to do it for various reasons, not the least of which is just overall exposure my family being exposed, yeah yeah, yeah, it's a mess.

Walt Rakowich: 50:41

And you might say that that's being a coward, I don't know, but I was just concerned about it and I hope that, as a society, we can get to a point where business leaders feel good about retiring early and taking significant positions in politics, because I do believe that we would be a better country if we did. And now I know don't get me wrong there's a number of people in Congress that do have business backgrounds, and so I'm not trying to make them out to be politicians only, but I do think that there's a number of people that will not want to do that because, unfortunately, it's just so divided and it's divisive and it's so divisive and divided that we've lost some sense of professionalism, I think. And so that bothers me, and, quite frankly, david, I'm not really sure. I do think that things change, crises change things, and maybe we need a crisis in the country to Well, yeah, you talk about the crisis.

David Craig Utts - The Resilient Leadership Guy: 51:48

I think everybody feels like we're approaching that. I mean, unless something miracle happens or somebody shows up as that kind of leader that pulls us together, it's like what is it about needing crucible moments? But you mean seem to need crucible moments to free discover their brilliance. And when we have it all going forward, somehow we start losing our awareness and we get more on autopilot and then become more expected or more focused on ourselves.

David Craig Utts - The Resilient Leadership Guy: 52:21

You know, I don't need that yeah, yeah, so well, I mean, this has been a great conversation. One of the things I think it points to is how do you get anything you want to say about or suggestions to other executives out there that might be saying well, how do I get around that issue of my own pride and fear that I might have gotten in touch with during the podcast or may realize that sometimes we look at those gremlins and they seem to really big to us, like I just seem to. I might see myself as a good human being, but then I do that and it's not necessarily it's coming from pride or it's coming from fear and almost like I can't help myself. What do you say to a leader like that and what they can do to begin to address those gremlins in a way that will help them grow into more of a transformational leader?

Walt Rakowich: 53:12

You know, I would say the first and the most important thing that comes to my mind is accountability. Group or coach somebody that can hold you accountable. I think you need information. I don't think you can manage in a bag, a paper bag or manage in a box. Whatever. However you'd say, I think you got to reach out to as many people as you can and grab advice, be open to advice. So not only do I think you should be talking to other C-level executives, but I think it's important to perhaps have an accountability group of gray-haired people that surround you and have lived through it and can help you in your experiences. You cannot be afraid to listen, open your ears up and listen.

Walt Rakowich: 54:03

I had a coach during the entire time that I ran the company, and it was a person that not only talked to me but did 360 degree interviews of everybody that worked for me and in fact, our entire management team was coached. And in doing that, he walked into a room one time and told me Walt, let me tell you the good news and the bad news. The good news is that everybody likes working for you, he said. The bad news is that you are running around like a chicken with your head cut off trying to solve all the problems in this company. And he said the problem is nobody feels comfortable knocking on your door and walking in and talking to you because you're too damn busy. He said you got to get out of your own way and you're not the one to save this company. And he had to remind me of the very thing that I knew, and so I think it's important that you have coaching in your lives, if you can afford it and if you're in a position to do it.

Walt Rakowich: 55:02

Otherwise, do it in an accountability group. Ask people, ask your employer. Can I get an understanding of what other people think of me? And be open to that. If you are, you'll be a better leader. You can't manage in a box, is my point.

David Craig Utts - The Resilient Leadership Guy: 55:19

Right, I want to follow up on something else you said and then I want to give you some final if you have any final comments. But one of the things you said is I was wording around trying to attend to everything and I was too busy and I see a lot. I actually one of the challenges I coach when I come across a really good leader, somebody that's already blossomed into the understanding you have around servant leadership and really taking care of their team is sometimes they are running around not necessarily focusing on the not important, not urgent things, or the urgent, important things, like taking care of their team, because they don't have time. Any thoughts you have, I mean, it's a big question to kind of try to synopsis. But if you say like one or two things you have to do, when you realize you're too busy and you're doing too much, how do you, how do you parse that out?

Walt Rakowich: 56:06

I just I don't know. The first thing comes to my mind is get advice.

David Craig Utts - The Resilient Leadership Guy: 56:10

Advice.

Walt Rakowich: 56:12

You know intuitively your issue, although I will tell you it's a natural thing.

David Craig Utts - The Resilient Leadership Guy: 56:16

I mean, look, it is a natural thing it's well, it's because you because if you've got you have a true leader, they care. So there are more maybe involved in certain details that you know. Say 80, 20, will these details that I'm paying attention to may not be having a big bang for their buck or whatever, and you have to. You do have to parse that out and it's a very individual thing about what you pay attention to or don't pay attention to versus somebody else. But yeah, yeah.

Walt Rakowich: 56:42

So, anyway, that's, that's what, that's what comes to mind, but yeah, hopefully that helps.

David Craig Utts - The Resilient Leadership Guy: 56:48

Yeah, great. What do you think else you want to say that you feel you didn't say to feel complete today, as far as I really appreciate you having you on and so it was a great, great conversation, and just want to see if there's anything else you wanted to share.

Walt Rakowich: 57:01

Well, I'm just. It's an absolute pleasure to be on and I would just say that leadership is a privilege and an honor and you should think about it that way. Leadership is not something that because you're good, you're there for and and it's people are giving you accolades. No, people put you into that position because now they actually believe that you know how to manage a flock. And managing a flock is not managing yourself, it's managing all these other people. Leadership has a greater degree of responsibility outside of yourself than you've ever had in your life and if you're willing to do that, great. But if you're not and you know that you're that kind of you're you're a I don't know, let's just say, a transactional person, or you're a person that has to have gratitude and making the deal and getting you know, getting all the, and you're probably not going to be a great leader. Stay in your sweet spot, stay in your sweet spot yeah.

Walt Rakowich: 58:02

Don't worry about the promotion. Stay where you are, because you will not be happy at the end of the day. You will not be successful unless you can get out of your own way.

David Craig Utts - The Resilient Leadership Guy: 58:10

Yeah, well, I absolutely agree. Well, it's a real privilege and an honor to be a leader. You're touching people's lives. You know, I had one leader say if I have my people go home and they have space and time to be with their family, I've done done my job. You know, part of what I've done is done my job, but they don't go home and kick the cat, you know they're going homes.

David Craig Utts - The Resilient Leadership Guy: 58:30

They're going home with a little less stress. So, anyway, I really I really appreciate the time you took to be with me today is real honor and privilege to have you on our show, and I want to thank all our listeners for tuning in today to this incredible, rich conversation. I hope that I'm looking forward to having more conversations like this and phased under fire, and again, thank you very much for taking the time to watch today. Have a great rest of your day. David Craig Utz, the resilient leadership guy, signing off. Thank you, david, thank you all. Take care Bye.