Webcast transcript
Willy Walker: Thank you Susan and welcome everyone to another Walker Webcast. It's a pretty dreary morning here in Denver. But if you if we can get the clouds to lift a little, I think we will see that it snowed pretty hard up in the Rockies last night. Mother Nature has been teasing us we're spring out West but every time I think about taking the snow tires off my car we get hit with another snowstorm.
I had an interesting zoom call last week with six other CEOs and Michael Milken talking about the Edelman Trust Index that Russell Dubner and I discussed on the Walker Webcast last month. As trust in CEOs is far above political, civic, and religious leaders today, CEOs are feeling an obligation to not only lead but voice an opinion about seemingly every event that impacts our country. The discussion with Milken and other CEOs focused on where to draw the line. And how to make sure that the issues we are commenting on has a direct correlation to our businesses, customer bases, and employees. In our divided and highly politicized world finding the right balance is a real challenge for many leaders today.
Talking about politics, the headlines this morning are all focused on the $1.8 trillion American Families Plan that President Biden intends to discuss tonight in his speech before Congress. While there is plenty in the proposal to discuss and debate the most relevant from a tax perspective is the elimination of the 1031 exchange and carried interest. Two professors from the University of Florida, David Ling and Milena Petrova wrote a paper in September of 2020 titled, The Tax and Economic Impacts of Section 1031 Like-Kind Exchanges in Real Estate. In their paper they calculate that between 2010 and 202o, 7% of total commercial real estate sales transactions involve the 1031 exchange, 7%. They go on to point out that the average size 1031 exchange transaction from 2010 to 2020 was $500,000; so the change in the 1031 exchange rule will not have a significant impact on the institutional commercial real estate market. For example, Walker & Dunlop’s average sale price for the $6.4 billion in multifamily properties we sold in 2020 was $49 million. But Ling and Petrova do site Marcus& Millichap research saying that 23% of the transactions that Marcus & Millichap brokered between 2017 and 2019 were 1031 exchanges. which makes sense, given the smaller transaction sizes that M&M typically brokers. Ling and Petrova go on to state that the Joint Committee on Taxation estimate that $9.9 billion in tax revenues was lost in 2019 due to 1031 exchanges is wildly exaggerated and that their calculation is less than $4 billion. Nonetheless, they do project, the transaction volumes at the lower end of the market or smaller deals will slow due to the elimination of 1031 exchanges.
With regard to the carried interest, there is an unprecedented amount of private equity capital targeting U.S. commercial real estate right now. $324 billion per Preqin’s most recent estimate. It's my assumption that every fund that makes up the $324 billion has a carried interest component to it. A change to the tax law will not change that amount of money, but it will clearly have an impact on how future funds are raised, and how private equity investors get rewarded for their investments and returns going forward.
Final note, before I turn to my guest. I heard on CNBC yesterday morning that 2.1 million people rode the New York subway system on Monday. Which is a little less than 50% of the normal 4.3 million average daily riders. Pretty impressive. I spoke to Governor Polis last week, and he said the 32,000 Colorado State employees will all be expected back in the office on June 1. And JPMorgan chase announced this morning that all employees will be expected back in the office in July, which will likely set the mark for the rest of Wall Street. And to any of you listening today who have joined us for the Walker & Dunlop summer conference in Sun Valley, Idaho in the past, we are on for this July. And you should be receiving your invitation this week or next.
Willy Walker: So now on to my guest. Jim Loehr is the former Chairman, CEO, and Co-Founder of the Human Performance Institute. Through the use of energy management technology Jim and his team improve the productivity, and engagement levels of elite performers from the world of business, sport, medicine, and law enforcement. Dr. Loehr holds a Master's and Doctorate in Psychology. He has worked with 17 number one in the world athletes, predominantly in the sports of tennis and golf, and coached CEOs from 25 of the Fortune 100.
So, Jim first thank you so much for joining me I owe my friendship with you to my wife Sheila and so thank you Sheila for the introduction to Jim. I want to start by focusing on athletics and the elite athletes mind and performance, and then transition in discussing character, leadership, and performance in the corporate world. What I found fascinating when I was reading a lot that you've written and listening to a lot of your speech, which says a lot about you as a researcher, is that rather than focus on tennis players as they played points to help them better compete you studied them when they weren't playing during the 70% of a tennis match where they are resting, walking, framing where they are in the match, etc. Talk about how you came to focus on the non-action moments.
Dr. Jim Loehr: Well first of all, Willy thank you for having me on the podcast. I’m very excited. I hope we can create some value for your audience, thank you.
Yeah, my mind is I tend to look at things through a little different prism. My Father was an Engineer, Civil and Petroleum Engineer, and he was a numbers guy and he got numbers in my head. And I spent the early part of my career trying to understand tennis, maybe from a little different perspective. So, one of the things that hit me very early in my career was that as much as 30% of the of the total match time was spent playing points. I mean only in sometimes considerably less and 70% or more was spent you know doing something else, not playing points and so the majority of the match time was not actually involved in actual play competitive play. In that 70% was referred to as “dead time” and then when I used telemetry with heart rates, I began to realize that something very important was happening in that dead time. It either was enhancing their ability, the athletes ability to perform or it actually was serving as a barrier and when heart rates rhythmically increased during points and very, very, very predictively if they use that between point time properly actually fell, and there was an oscillatory rhythm between expenditure and recovery of that heart rate and the more we actually began to understand that the more we began to look into that and study intensively what the best players in the world were doing between points and then I did a number of interesting things. You might find this interesting, I took matches and only showed an audience what the players were doing between points they never saw the during point action and asked them if they thought the player was winning or losing; did they win the point or did they lose the point? And in the lesser competitors everyone could tell. It was very obvious that those who were losing showed it in their body language, by the way they walk, the way they carry themselves, the way they handle their rituals. And then I showed the very best players in the world, and no one could tell the difference. The very top five best players in the world at that time, no one could tell that they had done something between points that the others hadn't done and that's what led me to develop this kind of what I refer to as the “16 second cure.”
Willy Walker: So, there's a video on the Human Performance Institute's website of Roger Federer and it is 35 seconds long. Talk us through what it is that a pro like Roger Federer does in that 35 seconds that is so distinct to make him the competitor and the winner that he is. I’m not going to play it; I’m asking you to comment on it.
Dr. Jim Loehr: Okay, so what you will see Roger do is he will complete a point and whether he wins or loses it he goes and he resets. He will take maybe 15, 16,17,18,20 seconds, but he's got plenty of time to launch into the next point, and he will find an opportunity to make sure that he's 100% ready to give his absolute best and no negativity. You'll see, it's almost like he is in a Zen trance, he’s almost meditating. He's so graceful during points but he's equally graceful and composed between points regardless of the outcome, regardless of whether he's winning or losing. And that is an acquired skill set. That's not easily acquired but is essential to being the best you can be as a competitor.
Willy Walker: And so, you've worked with both elite athletes and trying to train them for between points, between swings, and you've worked with CEOs. What are the lessons as it relates to getting into that state to not allow what you're seeing around you to impact how you're going to perform on that next, if you will, time up to plate?
Dr. Jim Loehr: So, we are oscillatory creatures in an oscillatory universe. Everything is rhythmic and we expend energy, we put stress into things and then there'll be a moment, maybe it's only 10 seconds or 20 seconds that you have to kind of make sure that you've reset and you're ready to take on whatever it is not being somehow compromised by what just happened, or what you just saw. So much of life is focusing on what's relevant and leaving somehow in the distance the things that actually compromise your ability to make good decisions and to do the right thing at that moment. And we've learned that in this beautiful, magnificent laboratory of competitive athletics.
Willy Walker: And so, if you if you think about that all of us every day are faced with challenges on something from home, from work what have you. What's the work you've done with the competitive athletes that we as mere mortals can sort of take away as it relates to somethings moving away from you, you're down in a match 5-1, 40-Love, how do you get the player to sort of forget about how far down he or she is and really focus on the point at hand, and not all that's happening around them?
Dr. Jim Loehr: So, in 1983 I published a paper in a sports science periodical called the Ideal Performance State. I spent a couple years collecting data on high-level performers in just about every sport. I was involved in 23 different interview opportunities with athletes in different sports. And I asked them to describe what they felt like, what was the best descriptor that they could use to describe what happens to them when they're at their best. And I was shocked, in a sense, when I realized that across all sports there is some place that people go that actually enables them to ignite whatever talent and skill they have at the highest level. And it was a very, very balanced there were physical, emotional, mental, and even spiritual components to this purpose components, character components that help them bring that to the forefront so physically relaxed, mentally alert, very low anxiety, know very little if any kind of frustration or anger, there was a great sense of enjoyment of being very present in their focus. There were 12 characteristics and all of them kind of hovered around the state of fun. We found that the more fun you have the more you draw in this very interesting, I call it the “IPS Chemical Soup”. It's a mind body kind of you know kind of combustion that is really driven by these chemicals in your body that are always trying to find a certain kind of resting place. And if you're angry you're not there normally for any length of time. Anger, frustration, so the key is learning what I call IPS control. That you understand where you are when you feel your absolute and perform at your best and how do you control those processes, where you can as quickly as possible stay relaxed, stay focused in the moment and reach inside and have confidence that whatever comes out is going to be the best you have at that moment. And that is a trained capacity. That's true not just in sport it's true in every dimension of life and the more we practice, the more we know what the goal is the better we will get.
Willy Walker: So, we're going to talk a bunch about the practice piece of it a little bit later, but I want to stick on these elite athletes that you worked with. You work predominantly with tennis players and golfers which makes sense is there is there any difference in the successful mindset between a tennis player and a golfer?
Dr. Jim Loehr: Well, yeah, it's interesting again. We looked at the numbers and about 95 to 99% of the time golfers are playing, they're not actually striking the ball. It's actually a closer to 99%. So, they're doing something in 88 or 89% of that that has nothing to do with striking the ball. So, there's an enormous opportunity for the demons to come in and actually change or alter what we might refer to as this ideal place for them to be to perform at their best. In tennis it's about, you know, 70% of the time. But both of their challenges are the same. They have to figure out how to control the dead space and actually recruit the dead space to help them be at their best when they are actually executing. Golf has unique, just like all sports have unique components, that really demand something different from you. Golf, if you make a mistake, a tragic mistake, maybe get a seven or eight on an early hole in a tournament, you have to carry that forward all the way to the end. Mistakes are much more costly, and the game of golf is far more precise; a small little variation can result in a catastrophe. Tennis, if you have a very bad first set, you can win that match and that's history, and you can go on and actually win the championship. So, there are demands of every sport, and even in life, we have to learn what really is crucial, what are the things we really need to be able to execute on and pay attention to those things. Because life demands something different than golf or tennis, but both of those sports can help us develop a sense of self-control and self-regulation that can be brought into an arena of life that's not a game. It's actually something that matters much more importantly and that's why I think sport is such a terrific opportunity for young people, and people of all ages, to learn how to master skills that have an enormous implication for later in their life.
Willy Walker: So, when I hear you talking about the amount of time that golfers and tennis players aren't actually performing their sport, it makes me think a little bit about baseball. Did you work with any baseball players, as it relates to mental preparedness for receiving pitches and being able to…?
Dr. Jim Loehr: …I have. I have. And I played baseball for nine years. My father was a semi pro baseball player and that's what I did in the early part of my life.
Willy Walker: And so similar concepts, even though it is a team sport?
Dr. Jim Loehr: 100% the same. When you look at teams versus individual sports, it's an interesting thing. That the most important understanding that an athlete on a team sport really contributes, is it really isn't about them, it's about how they can make others better. A great coach is always instilling that if you are a star, your stardom has to contribute to everyone becoming better and the team actually doing better. If you're a star on offense in basketball and all you do is score, but you're terrible on defense and you lose games because you don't really play the defensive role properly, you know, you are a detriment to that team. I like to look at a team as every person has a cell in the body of that team. And every one of those cells has to be healthy. And it really isn't about what they can contribute by themselves, it's the way in which they interact and help others achieve IPS in that moment of high stress. So, IPS is contagious, both positively and negatively. And being a great team player means you finally understood. You bring your talents and skills, not for your own welfare or benefit, it’s for reaching out and helping everyone else get better. And you lift everyone out by whatever contributions you have. And that's what makes a great teamwork and great coaches know that.
Willy Walker: And when we talk about team sports, goalie is a position that's a pretty lonely position, particularly in the sport of hockey. I know you worked extensively with Mike Richter. You want to comment a little bit on how you worked with Mike, as it relates to his mental preparedness to play goalie?
Dr. Jim Loehr: You know, Mike is an amazing example of mental tenacity, mental focus, and he would literally…he would work 24/7 if he could, 365, to become the most extraordinary example of genius as a goalie possible. I worked with him for eight years and every year he had more and more obstacles, injuries, things that got in his way. He was one of the people that really demonstrated how powerful journaling is and writing and getting very clear on what you want to have happen and get it down and read it and write it and reread it. And every note he made in year 1 he reviewed; and we would talk about it in year 6, in year 7, and at the end of his career he actually got better and better. I mean he was obviously a Hall of Famer. He was a Stanley Cup, you know, he was on a Stanley Cup team. But the thing that impressed me most about Mike Richter, is that every part of his life as a performer, he actually dedicated every second that he could to become stronger, more robust in his ability to prevent anything from interfering with what he believed was the most important mission on that team. He was a total team person. And you know, I remember so many vivid examples of him undergoing surgery with a torn ACL and wanted to get back and they said, you’ll never get back to the playoffs, ever. And he said, “I will make it to the playoffs.” He had the surgeon, when he was under anesthesia actually read him a bunch of notations about how great the surgery was and how he would…this was going to…he was going to heal miraculously; this was the best outcome; he’d probably make the playoffs. He made the playoffs. He never played a single game. He made one practice and he really didn't practice that hard. They put him in in the playoffs. His first game was pretty good and from that point he was a genius. Imagine being a goalie, with the speed of those pucks, never getting a chance to practice. He practiced mentally and emotionally until the sweat came off his brow and he was living it every single day. He stepped right up and was ready to perform, even though he had no physical practice.
Willy Walker: You mentioned, Jim, his scripting, and his journaling. Can you talk for a moment as it relates to the work you've done with great athletes, as well as with CEOs, as it relates to journaling and scripting; how you're going to perform, and how you think through what you're going to do?
Dr. Jim Loehr: The brain exists, in my estimation, for only two reasons. This big neural processing center exists for two reasons, and that's to get you what you want and need. And the brain actually functions on two basic inputs. One of them is images. And the brain when you're imaging something or visualizing something vivid very vividly the brain can't tell the difference between whether that actually happened or is it something fantasy. It can't tell the difference between what actually happens and what's actually vividly visualized. The other input is words. This is a word-sensitive computer. Words matter. And when you’re journaling, and Mike did both, he would visualize and visualize. And all the athletes that I’ve worked with that have done amazing things, we worked with that until they actually had the experience of actually being there and doing it. And then the other side was the word side: very carefully picking words and writing them longhand, not typing them on a computer. But actually, there's a number of researchers, James Pennebaker and many others, who helped pave a lot of the understanding of how that writing with one's hand actually imprints in this executive function of one's brain more powerfully than almost any other kind of imprinting, except maybe imaging at a very powerful level. So, for training purposes, I really want an athlete and executive, anyone who wants something to happen, to make sure the brain understands what it is you want, what it is you need, and to put it in clear pictures and get it in writing over and over and over again. So that private voice, which controls the ship, is actually equipped with the words that are absolutely the best possible to instruct the brain on what it is that needs to happen for you to succeed in life on the level that is really most important to you.
Willy Walker: So, on that, Jim, you write about having athletes get in trouble when they focus on world rankings; when they focus on, well, essentially that: their kind of win/loss record, and not things that they control. And so, take that journaling down to a little bit, if you will, down a level in the sense that if you write in your journal, “I want to have our company be worth X amount of money,” or, “I want to be the number one tennis player in the world,” you don't want us focused on that. You want us focused on much more sort of day-to-day tangible efforts that we make to move us forward, is that correct?
Dr. Jim Loehr: You're 100% right on, Willy. So, I want the brain to set the target. So, I would like for Dan Jansen, 35.99-he wanted to break the 36-second barrier. But that was not his daily target in his thinking. What he wanted to set the brain was, that this is a goal I believe I can achieve and I’m going to train hard to make that happen. Or, to win a gold medal or win an Olympic medal in the 1000. And for Mike Richter, to get back and to have a brilliant opportunity to play and to really meet the standards that I’ve always set for myself in the playoffs. I want to set that as a goal, but what I want to really be tuned into are what are the things that are going to make that happen for me? And I control my focus on the things that I actually have some ability to direct, to have an influence on.
I can't really directly influence, you know, the stock market price. I can't really influence a lot of the things that are happening around me in terms of either positives or negatives, but I do have control over a couple things. And this is where I put all the pressure on players, or athletes, or executives. And one is, I want you all-in. I want you to give your absolute best energy, which is what I call your full engagement. It's the greatest gift you have to give and it's the hardest gift. I want you in physically, emotionally, mentally, and spiritually in the game. With no…I don't want you holding back. I don't want you to be playing it safe. I want you all-in.
And the second thing you can control is the quality of that energy: how positive or negative your sense of optimism and hope. I want you to control your attitude and your effort at all costs. And those are the two things I’m going to hold you accountable for, and you can hold yourself accountable for. And those are the things that will make the difference in any competitive arena in that moment of competition.
Willy Walker: So, you talk about these fantastic athletes like Roger Federer who you can't tell whether they’ve won a point or lost a point. They've got what I would call a “calm core”. They reset very quickly, and they don't let their anger get the better of them. But we all know and have seen athletes such as John McEnroe, Jimmy Connors, whom you worked with quite extensively for many years, reach incredible success using anger, and we've seen CEOs who use anger and control, and bullying behaviors to actually get the results they want. Talk about that as it relates to either those people who are successful, using that are very, very rare or actually, people can tune into that rather than their calm core and that's just a sort of if you will, a decided path.
Dr. Jim Loehr: So, first of all, I spent two years at the Jimmy Connors United States Tennis Center in Sanibel and my reason for being there was to study Jimmy Connors. I didn't work with him, I studied him. He was my first intensive study of what he did between points, how he fueled himself, what was his mind like, and so forth, and it’s so interesting. I began to develop this understanding that, you know John McEnroe, for instance, and there are many others who've kind of fallen victim to this notion that we're all trying to control the nerves. Nerves are the big deal. If you're in a competitive battle, you know it's like, how do you control the fear of failure, the fear of not measuring up, and all these fears? Its “fear is the enemy,” and so, when players get in there, they begin to realize that if they just quit and give up, it's called tanking in tennis, they're not as nervous. They sometimes play better in that moment, and they get confused because you say, “I want you all in and want you trying.” When they try hard, they play miserably, they get nervous and then they begin to realize that when they get very nervous, if they get angry and upset, and they start fighting on a different level with temper tantrums, or maybe throw the racket, it begins to break the chemistry of fear. There's a very different chemistry of fear, these adrenal cortical hormones associated with fear, and are very different than those associated with anger. As a species, we were not designed to be both. Both angry and fearful at the same time. One dominates! John learned that he actually could control his nerves better by throwing temper tantrums or getting angry and that cleared him out and he actually performed better. When he was not performing better and he felt a little nervous, he would go after a line’s person, he’d go after the Chair Umpire, he'd find something to get angry about and that would settle him down.
What John did though he never got upset with himself. It was always someone around him, that was the was the problem. A lot of people get the opposite of that. They attack themselves; they go crazy with themselves and that just turns the fire inwardly and actually makes it far more difficult to actually find that very special place of calmness and confidence and present focus. Connors had to get angry and to find a reason not to like his opponent. He was at a war, and if you ever liked his opponent, he really was afraid he would lose to them. So, but those are anomalies let's put it that way. It is possible.
But the best way to approach this is to understand that if you're nervous, you're one step really closer to the bullseye because it means you care, you're all in. Now, we have to handle the nerves, and not with anger, but by taking these oscillatory moments, learning how to take a deep breath, throwing your shoulders back, having a smile on your face, learning how the body is fully connected, the way you carry yourself, the way you walk, the thoughts, the coaching that your private voice gives you, and all the rituals that you develop can help you move right through that nervousness and you actually go, “You know, it's a good thing I’m nervous because it means I care, I’m all in. Now, I have to move beyond that, I’m not afraid of it, I’ve been here many times.” Everyone has moments like this, and they will, and as long as they compete because the stakes are high, and we don't have perfect control of that. So, John McEnroe and Jimmy, were you know, they're interesting models to study, but I would not say that those are the models that we need to be following for the fastest accelerated route to the best we can become.
Willy Walker: So, when you talk about nerves Jim, it makes me think about a comment you made that I thought was fantastic, which is “Chase stress until you die,” and I when I heard that I just I laughed because it's so perfect. But you said, “Chase stress until you die because it's not stress that kills you, it's not recovering from stress that kills you.”
Dr. Jim Loehr: It's so counterintuitive because there's been so much bad messaging around stress. I wrote a whole book about stress for success. We love to spend! We are creatures that love to be all in, and as long as we have a purpose and we are all in for the right reasons, you know it's like we want it, we were born to chase! And as long as we're chasing something, oftentimes that has nothing to do with us, but it's to make the world a better place. We get a sense of fulfillment, I call it the hidden scorecard, where you actually are, you're doing great things in the world, but you're also feeling really good about what you're doing because you're actually helping others helping the world actually get to a better place. So, the whole key is not to eliminate stress in one's life, the culprit is not stress almost invariably, it's the insufficiency of balancing recovery. The secret is to chase something that actually matters to you, and then find ways to recover, to renew, and to heal from the whatever it was that drained you physically, emotionally, mentally, and even spiritually from that stress, and the more you can oscillate, the more you can actually grow, stress is the most powerful stimulus for growth in our lives. Growth actually takes place in recovery, in those moments of rest. What we used to think of as dead time, that's the time people actually renew their spirit, and if you get too linear on the stress side, you will burn up and you'll blame old man stress. And it wasn't stress, it was the insufficiency and the inadequacy of your recovery opportunities. If you get great recovery, you just get stronger, and stronger, and stronger, but you need to have balanced recovery. The fitter you are physically, emotionally, mentally, and spiritually, the faster you recover. If you go and you just simply stay in the recovery zone, and all you do is recover, you lose your capacity for life and life goes away. That's what happens to a lot of people when they retire! They think that is the time to just step out of the fast line and their life goes away very quickly. We were designed to chase! If you're not chasing something, it's probably a signal to your physiology; it's time to check out.
Willy Walker: So, when you talk about finding something to chase, talk about the Goldman Dilemma and the study of Olympic athletes as it relates to what they do to win.
Dr. Jim Loehr: Goldman was a really extraordinarily insightful physician who, for a number of years, presented a dilemma to our best Olympic athletes and it's shocking what he found, year after year. He asked them, listen, here's the dilemma he presented them. “If I could give you a pill that would ensure you would never lose again, that all of your Olympic dreams would be fulfilled. The pill would clearly be illegal, but we have figured out how it would never, ever, it would not be possible for this to ever be discovered. It's 100% certain that no one will ever know. You would take it, and all of your Olympic dreams would be fulfilled. You would not lose again. The only downside would be is that you would die in five years from taking that pill. It is lethal over a longer timeframe,” and you'd say, “Well, who in the world would buy that deal?” Well, he got over 50% every single year he did the inventories, he found that 50% of the athletes would opt-in and take it, and what that tells you is that we have placed such an important imperative on winning that they would take any path to the summit that is there, even if it meant it was cheating, deliberately, and that it would cost them their life. That winning is all that matters!
And so, I’ve spent a lot of my career trying to help people understand that, you know, winning really isn't the end game. The game is fulfillment, satisfaction, and understanding that this hidden scorecard we're all basically, going to hold ourselves accountable for at the end of our life is our treatment of other people! Our honesty, our integrity, our kindness, our compassion, a lot of these things that are kind of viewed as soft. I began to realize that actually, those are the things that enable people to feel like they didn't have to win another match or another grand slam, or another Olympic medal to feel like they were decent, that they were only as good as their last performance. They were very fragile and at the end, they go, “Is this all it was about? Because I gave my life to all of this, and I still don't feel that great.”
And then we began to look deeper, and it was this hidden scorecard, our connection to other people, our treatment of others is how we're going to hold ourselves accountable at the end of our life. That's where fulfillment comes, and what I also found was that also fuels extraordinary performance. So, you scale the mountain, you get to the top, but you don't walk over dead bodies to get there. You understand that treating others along the way, the way you want to be treated, actually has a performance-enhancing side effect.
Willy Walker: So, to that, do you believe that sport teaches character?
Dr. Jim Loehr: You know, it's a huge question Willy, and I will tell you it only is true if we have coaches who understand why sport actually exists in the first place. It is a microcosm of the real world, and if you're learning lessons that will apply to just about every phase of your life in a positive way, sport is such a gift. But I will tell you when you look at the data around this, the longer you stay in competitive sports and the more competitive the arena, the more the emphasis on “winning is everything”. Players begin to compromise; they take shortcuts, they've figure out how to, it's called “the fudge factor”, whatever they have to do to win, and the coaches actually become part of that culture. If you have to do these things, and there are what they might call, “Little dirty tricks, but we won,” and it kind of paves the way for those little nudges, those default so to speak, that you felt were okay in that environment. Now you are faced in situations as CEOs, as leaders in industry, and you found that was how you could win a national championship or get your ranking where you wanted and why wouldn't you continue to do that in this next phase of your life? And that's the sad part about the whole equation.
Willy Walker: You and I talked about that a little bit as it relates to CEOs coming into jobs. I think the stat you have in your book, Jim, is that 50% of new CEOs fail within the first 12 to 18 months. And we were talking about the fact that if you step into a CEO role and their high expectations, the ability to go at the core issues that you're talking about is very challenging because everyone wants results before you can go and build it. And I raised the example of my friend Greg Carvel, at the University of Massachusetts who, after they won the NCAA hockey championship recently, one of his captains was interviewed on ESPN and said what's the culture at UMass like? And he said, “well it's really easy, Coach Carvel puts character above skill.” But, Carvy had the ability to revamp a program from the seller of NCAA hockey to number one and built it the right way. But, if you're coming in at the top of a program, at the top of a corporation's success, being able to do it right is very, very challenging, is it not?
Dr. Jim Loehr: You put your finger right on the pulse of one of the biggest issues that face coaches and face CEO’s that are going to step into a very successful regime. They look at what’s been happening and it's nothing but success. And so, this new role, this new coach, I don't care what you teach, I don’t care what you do, we've got to maintain. We need to be top 10, or we need to be number one and if you don't, we're not going to give you four years, we're not going to give you three years to get your act together. We need to have those results; we need them now. So, CEO’s feel a sense of urgency. All of their salary and all of their bonuses and stock options are going to be lost if they can't get those numbers where they belong. And so, the pressures to actually make this fudge factor work for a while, so that they actually have enough breathing room and it'll all work out a little bit later, but they actually take shortcuts that they wouldn't imagine taking if they had enough breathing space. And a lot of the programs, a lot of the companies, a lot of the boards that are hiring the CEO’s, are not really that patient because you're being paid well, you were expected to come in and carry the banner like it has been carried before. And I know you think character is important but I’m telling you, we want shareholder value to be what it was and we're not looking for any special kind of philosophy that you might have unless it's working and working right out of the chute.
Willy Walker: It does make me think about governance and about boards that bring in both new CEO’s, that bring in new coaches, that bring in new headmasters of schools, and the typically unrealistic timelines that they give those new leaders to be able to come in and set up a program in the way that they want to set it up.
Dr. Jim Loehr: It's such a great point Willy. It's absolutely true that you need room to be able to articulate and to put into a fact, sometimes building character and building a program on character, which you might have Billy Donovan or Coach K or someone, it took years to develop that and now you have someone who's proven their ability to lead and to win. My experience has been once you get the culture of character properly installed; it drives character. John Wooden had the most extraordinary winning in history and NCAA to a history and his whole focus was on the person, who they were becoming as a consequence of basketball. And they became extraordinary basketball players, as well as extraordinary human beings. And they all think back on this extraordinary impact that he had on them as persons and that's a legacy. But he didn't start out winning NCAA championships, they had to give him a little bit of lead time to put this special sauce into place. And we really need to communicate that to boards, to community organizations who are hiring people and expecting a very high character program, but it has to win right out of the gates. And it's a terrible misnomer but that's why so many CEO’s, I think, are struggling and top line leaders because they're not given any time to really put what they believe is the most important thing forward and that is the treatment of the human being and to expect them to be operating above the waterline clearly, morally and ethically.
Willy Walker: So, in your book Jim, Leading with Character, you mentioned that character is not an instinct and it's not natural human response to lead with character, but rather to put ourselves first. And therefore, to put others first must be a trained response. We've all heard the question about whether leaders are made or born, but if we aren't born with character, we're born with I want to put myself first, what can we do to build and train character?
Dr. Jim Loehr: Well, first of all, we have to acknowledge that there's so much emphasis on individual success, that it's like, it's all about us. And you get into the corner office, and you know you want to hold on to that position, and you begin to realize at some point that to lead means to bring others to a whole new place. And that, whatever it is that you're doing has to connect deeply inside of them. And the most important, I think, for me, the most important realization was that, if you want people to really, really work at their highest and most intense level they have to feel valued as human beings. And they begin to realize very quickly, is it all about you, or is it really about what you can do for others in your leading them to a better place.
It's very, very counterintuitive in a way, and we come from a childhood where it is all about us and at some point we have to be awakened to the reality that if you're going to be a leader you've got to leave yourself behind, you have to have confidence, but you have to have great humility and confidence. And it really isn't about you anymore. It's about what you can do for others and a corporation, and the broader world. And the more people sense that about you, the more they're inclined to allow you to lead them. So, it's a very challenging thing.
When we first came into the world, when you look at evolutionary psychology, you know those who were all about themselves and they went off, to kind of fend for themselves, those are the ones that didn't make it. Oftentimes we find that when we get ourselves back in touch with other people, when we care for others, when we reach out and help them find their way, that's how our ancestors survived, so it's deeply embedded in who we are, in our DNA. But there is such a competitive world out there today, we lose sight of that. And when we get back to it, that takes us back to that hidden scorecard, where we actually feel like we're winning in our own life. When we help other people win and the more we realize that our lives are here, this was a gift, and we get the most out of it when we give it away and we help others become better. That's a huge transformation that really is the essence of great leadership.
Willy Walker: You give two suggestions, if you will, or tips on how to build character and they are journaling, which we've talked about a little bit, and then also a credo. Can you talk for a moment about establishing a credo and living to the credo?
Dr. Jim Loehr: So, every company has an organizational credo, and that organizational credo is in a sense, their true north. This is how we're going to conduct business. There's what we do and then there's how we do it. And the organizational credo is about how you are going to make whatever it is you're doing become a reality and that credo is almost always around certain character, assets that must be adhered to for this company to operate in this world that they're in. Now sometimes those organizational credos are just words on a page. But there are a lot like Johnson and Johnson with their credo, it became the absolute most important document for guiding them through these difficult organizational decision times and crises in the company and it served them well for nearly 100 years.
The problem that I really discovered in all my work is that we have no real solid personal credo, from which we make those decisions. We kind of use whatever has come to us. The more I got into it, the more I realized how flawed the moral machinery is that we have; it's deeply flawed in so many ways. And I outlined in the book, 25 different ways that our moral machine can get hijacked. And that what we're trying to do here is to intentionally take control over the process and develop our own personal credo that becomes the document through which every moral and ethical decision we make becomes vetted. And we're not going to just fly off the handle and make some quick decision, kind of off the cuff, we're going to actually suffer far more in a sense, because we have a way of vetting this. We're going to look at the facts on both sides of the equation. We're going to really look at our heart, what is the compassionate side of me saying here and what is my intuition say, what is my gut say. And then we try to come to terms with all that information and then we make a decision based on that personal credo which took 150 days to put together. Every single day for 10 minutes a day, you're constructing this magnificent document. That is your true north for getting home. Getting home morally and ethically which is probably the most important imperative you will have in your life. And then it's always something that's in process of improving for the rest of your life. But without that document, we see people in government, we see people in every out, we make about 10 to 12 moral and ethical decisions every day. And we just trust the moral machinery we’re given to get us home, and we see over and over again where failures continually pop up that are tragic. Tragic for that individual, tragic for their families, and tragic for the companies that they are leading.
Willy Walker: So, you talked about getting home Jim and I love that phrase. But you talk about it in the sense of purpose, then knowing who you truly are and then taking action. But if you don't have purpose, if you don't know who you truly are, you really can't take the action. So just talk us through that. Because you just very well-articulated, the you got to get home, you got to figure out the purpose and you've got to create the credo on it. What about knowing who you truly are and then taking action?
Dr. Jim Loehr: So, you know when you get in your car and you decide you want to go somewhere, you have a navigational system, and if you don't know precisely, if you can't really put that in your nav system, you're not going to get there. I mean it can't do the calculations. And most of us don't spend enough time. I spent an enormous amount of time in people's lives, getting them to understand what their purpose is on this planet. What is their ultimate mission in life and how they're going to define a really successful life? What is getting home for them? I asked them to go to the end of their life and to look back on their life and what really matters, after all that’s said and done. What do you want on your tombstone? What do you want in your eulogy? What is it and we work backwards from there?
So, if this is getting home, now we know what the destination is, so we put that in the nav system. And then we have to look at where am I now? So, the car has to be able, wherever you are in the air, the car has to be able to pick up somehow. What is the reality of your position right now? What is location now? And then, once we understand that, we know this is where I am now, and now I know where I want to go and then it's going to take action, it's going to take energy to get you to move from where you are. And every day you try to move closer and the decisions you make are always vetted against that destination that you ultimately have to arrive to be a success in your terms and by the way you have defined life for you. It really is why you're here and without a why life becomes a complete nightmare and total chaos. And it is in your car, where you get in your car and you don't know where you're going. And you just drive around looking for something that's interesting, you might find it and maybe you won't find anything except chaos.
So, it’s understanding your purpose and digging at that in 90 days, and then you have another 60 days in that journaling with Leading with Character. It's all about really understanding what that purpose is and making that the most important dynamic of everything you do and making sure your energy, your energy investments are aligned with that purpose and then trying to find ways to keep that energy up. So, we're going to have to oscillate. Resting is not for wimps, that's how you retool, you rebuild your reserves, and then I want you chasing again. And what are you chasing, you're chasing those things you defined that matter most in your life and that's how it all works, so that you in fact have the life you want.
Willy Walker: So, in your book, The Power of Full Engagement, you talk about 90 minute cycles and you talk about the need for recovery. We've all been on Zoom call, after Zoom call, throughout the pandemic and I have to tell you, guilty as charged that I don't go 90 minutes and then take a break. Talk about the need. Well first of all, talk about the physiological ability to focus and that 90-minute period, and then the need for recovery and give some tips on how people can recover in those 15-minute periods.
Dr. Jim Loehr: So, engagement, full engagement is your greatest gift to the world. And what that means is you're physically energized, emotionally connected, mentally focused and spiritually aligned with whatever's going on in the moment. And that is really, it's the greatest gift. It means you care about someone or something and people can pick it up in a second when you're not there. When you're multitasking. When you're not all in. You know we're very sensitive to engagement because that means I matter to you. Even if you start checking your email just for a couple seconds, people can pick it up on the other end of a phone and it signals, you know, I mustn't be that important because he or she is checking their email. And so, this is a remarkable gift, it's what makes everything in life work. But that is something that has to actually be honed and practiced. And first of all, you have to have the energy. You have to take care of yourself. You have to have plenty of glucose in the system to actually drive the unity of glucose and oxygen, that's how in this Krebs cycle, how we produce energy in the mitochondria of the cells, without that we have no energy. And then we want to have the most powerful positive emotions working because that's the highest quality. And we need to be focused in the presence and we need to understand that this is all aligned with what I believe is really important for me to be doing in this moment. And that understanding has to be really committed to intentionally and you have to practice it. And you'll get very good at this. And most people don't understand this is what we're all seeking from others, we're seeking full engagement, because that means you deeply care enough to take life out of your body and give it to me, give it to this team, give it to this organization. I am literally giving life to whatever I give my full engagement to. And I cannot be fully engaged unless at times in my life, I am fully disengaged. Disengagement powers full engagement. And that's the oscillatory nature of who we are, as human beings. Being fully engaged all the time is impossible. You have to find moments, even if it's just a few seconds, like the tennis players do, you find moments in time to disengage physically, emotionally, mentally and spiritually. And to renew your spirit and come back and give the greatest gift you have to give to the world and to demonstrate that you truly care by rallying that inside. And you have a lot more than you think you do, and even if you come home tired with your family you just like to chill out, that's where you dig deep and that's where your family will know you really care about them. Because you don't just become a dead person walking because you've had a tough day. You reach deep into the reserves of your energy and you marshal something very, very hard to do, and believe me, it is noticed.
Willy Walker: Well Jim, it is noticed that you spent 59 minutes being fully engaged with me and sharing so much about your research, your writing, and your speaking with our guests today. And as you well know, I could keep going for another hour, but then I’d be beyond your 90 minutes and I’d have to go and walk some steps or listen to some music. I thought, one of your tips about if you want to get emotionally connected, text somebody who's a friend of yours and get those endorphins running by just texting something funny. And that comes back and hits that kind of emotional reset for us to disengage, then come back to work, I thought that was fabulous, but I am incredibly appreciative. I loved our conversation.
Dr. Jim Loehr: I love the questions, I hope we connected and I really want to tell you how excited I am for your success you're an amazing guy, amazing family, and it was a privilege to be part of this.
Willy Walker: Well, thank you for taking the time and to everybody on the webcast, thank you for joining us today. I hope you enjoyed it as much as I did.
Back next week with Will Ahmed, the founder and CEO of WHOOP. I look forward to talking about performance and performance tracking with Will next week.
But Jim, thanks again, and everyone have a great day.
Dr. Jim Loehr: Thank you.
Willy Walker: Take care.
