“I wanted to build a company. I had no money, I had no business experience and I had no business idea. So I was perfectly qualified. I didn’t want to build a bank. I wanted to build a technology company. Many days I went to work wondering if it would be my last day. There were many near-death experiences over the first 5 years. Our idea involved doing the business differently and that was hard to sell.”
This is the transparency that Capital One CEO Rich Fairbank shared with 300 entrepreneurs and Capital One customers as he kicked off his 90-minute talk. He reminded us that regardless of industry or size of company, there are many universal truths that apply to all organizations and entrepreneurs.
I’ve summarized Rich’s insights and lessons learned here:
Lesson 1: Finding Opportunity in Crisis:
“Companies miss a fateful strategic fork in the road. When the world is about to change, the ones that are closest to it are usually the last to see it. Our greatest opportunities come in the debris of crisis…. Out of the ashes of near failure, come our greatest opportunities. It is always darkest before the dawn. We want to find a way to harness the bad energy that’s out there and be a catalyst for change.”
(I summarized this idea in a previous column, “Your Greatest Success Lies behind Your Greatest Challenges.” where I spotlight “Three Feet From Gold” by by Sharon L. Lechter and Greg S. Reid, which is a synopsis of Napoleon Hill’s success philosophies.)
Lesson 2: the Role of Great Talent:
“Great talent is the most talked about and least delivered. People spend 1% of their time recruiting and the rest of the time managing their recruiting mistakes.” Rich suggests pursuing the people you need. Let them know you want them. Tell them, “I can’t make you come here but I can put you on my short list.”
The greatest threat to organizational greatness is not the low performer. It is the medium performer. “Companies get filled with medium performers. They are the most dangerous. They can add value but they can not take you to the next level.”
One of my favorite business books is “What Got You Here Won’t Get You There” by Marshall Goldsmith. As a CEO, one of the hardest parts of the job is filtering out loyal employees who are no longer a fit for the firm.
Lesson 3: The Power of Markets: The Real Company Strategy
“I am reverential about the power of the markets. Markets are moving faster and faster. Strategy is not what we are going to do. It’s about the market. Most companies don’t have strategies. Most “strategies” are just to do lists. Real strategy is about where the market is going. When you have a clear view of the end game, you can build a strategy. Companies need to try to figure out the end game for your market. So many companies are working against the current for where the world is going, and that is a very hard way to live and to run a company.”
Lesson 4: The Uniqueness of Entrepreneurship
“It’s very cool to be part of something big. 199 of the 200 of the most common traits of 200 entrepreneurs studied by Stanford were ordinary traits. The one trait that was way off the charts was their fanatical quest for their dream. It’s as much about what’s inside the entrepreneur but it’s also about the idea. It’s important to ask “what is wrong with my idea” so that you can continuously improve it.”
(This explains why my family thinks I am crazy….)
Lesson 5: Feedback is Essential
Creating a feedback loop with customers, investors, and employees is critical to understanding how you can be your greatest version of yourself. “How long did they hold the feedback in? Who else did they tell? What else are they thinking? Build a culture that encourages feedback.”
Lesson 6: A Change of Command is Good for the Company
The average CEO tenure is 7 years. Very few companies that launch end up having the original CEO indefinitely. This is due to the fact that CEOs are not oriented to change. I believe The Peter Principle (when an employee rises to their highest level of incompetence) applies to the C-suite as well. CEOs hit their highest levels of incompetence, and often are not the right people to get the company to the next level. A newly launched firm eventually will grow into a process-oriented firm if it is successful. Entrepreneurs love to build. As some point, they often become prisoners of their own success. “Be careful what you wish for – because everything will change as your company grows and therefore the CEO will need to change.”
Lesson 7: Invest in a Great Coach
CEOs need to find great coaches and mentors. “A great coach is essential to the CEO’s growth.” (Shameless plug for Successful Culture: I am currently accepting applications for two more available spots for CEOs that want to push through their obstacles, get to their next level, and will benefit from time-management, accountability, goal-setting, and work-life integration coaching. Email me to set up a call!).
Lesson 8: Weed Out the B Players
“The greatest gift I can give to my employees is confronting the B players and getting them out of the company. Give them soft landings when they leave. A company should be judged by the way it treats its employees as they depart.” Repeating Lesson 2, the greatest threat to organizational greatness is not the low performer. It is the medium performer. “Companies get filled with medium performers. They are the most dangerous. They can add value but they can not take you to the next level.”
Rich’s Wisdom on Culture, Mission, Vision, and Values
- Culture is intimately tied to our values. Have to get past the imperial leadership model. “Elevate others.” Celebrate the humble leadership model.
- Culture is what is lived through people it’s not what the CEO says.
- Vision is incredibly important. You can’t outsource it. The three pieces that make up vision: the strategy, mission, and values.
Rich’s Wisdom on The Quest
(This was one of my favorite remarks…. your journey can’t be about you.)
Is your quest about you? Or is it about your dream for a better world? What holds people back is that they make their quest about themselves, instead of about doing something great. No one wants to sign up for YOUR quest. They want to sign up for something that will change the world. It’s all about the purity of that quest. Then the journey is a peer journey.
The goal of life should be to go out where you are going to learn the most, and have the most fun. Go on your quest. It’s not about how big someone else thinks your quest is. It’s about how big you think it is. Live your dream – not someone else’s dream, or the dream that others think you should live. Live your quest.
Additional Great Nuggets of Wisdom
- You are never as good as you think you are on your best day, and you are never as bad as you think you are on your worst day.
- Michelangelo didn’t carve the marble to form David. David was already in there. He simply scraped away the excess.
Rich’s Favorite Books
This is my favorite book as well. I read it the first week it came out, two years ago. I was the only passenger on a 5,000 person cruise ship walking around with a highlighter. I read the entire thing in one week. It was a crash course in entrepreneurial genius. If you haven’t read it and you’re reading my column, buy it today!
Favorite things about Jobs: Fanatical focus on top talent, laser focus on the destination, would never be stopped in his quest.
Did any of Rich’s insights particularly resonate with you? Please share your stories of how you have learned the same lessons, or how you will apply them. Looking forward to your comments.