Passion & Leadership: What's It to You?

Speaker Name: Robert S. Stec
Speaker Title: Chairman and CEO
Speaker Company: Lexington Home Brands
Lexington Home Brands Website

Robert S. StecFirst, I’d like to thank Frankie and the entire Boyles family for continuing to support this university and this lecture series. I selected my topic under duress because I normally don’t title my speeches, but somebody called and said “What are you going to talk about?” And I said, “I have to tell you that now?” I am the world’s greatest procrastinator, but it forced me to come up with a title for what I’m going to say today. I think it’s fitting to talk about leadership at a Harlan Boyles lecture, given the tremendous amount of servant leadership that not only Harlan but also his family has provided.

I thank you for the invitation and support. To the Dean, Provost, and Chancellor, it is a great honor to be here. I was excited to graduate. So, to be invited back…it tells you to never underestimate the grace of God. I am tremendously humbled to be here today and hopefully I will be able to impart a few things to you that I’ve had the benefit of being exposed to over the years.

The conversation I’d like to have with you today is on “Leadership and Passion and What’s It To You.” It comes at a time in our country and in business in general, certainly in my industry, when both are sorely needed. It may be an overstatement to say that apathy reigns, but certainly the need for outstanding leadership and passion in what you do is a huge opportunity and necessity as we move forward in some trying times.

But enough of that seriousness. First I have a fairy tale to tell you. There was a beautiful young woman, once upon a time, who came upon a frog. She fell in love with the frog and they developed a great relationship. Then one day she picked the frog up in her hands, lovingly looked at it and gave it a kiss. Poof! The frog became a prince and you know the rest of the story. While everybody knows that the kiss turned the frog into a prince, the underlying message is missed. What really happened was, the kiss enabled the frog to become all he could be, which is the definition of great leadership. Leadership is the ability to make the people around you better and in doing so accomplish a goal.

One of the questions I’ve been asked several times which has caused me great thought is, “What is the greatest business book you’ve ever read?” And I’ll give you my personal opinion. The greatest business book on leadership I’ve ever read is The Leadership Bible. It’s full of stories of great leadership that have lasted thousands of years. I’ll give you one story. Jesus was commissioning his disciples to go out into the world and convert. He sent 70 people out in pairs without any resources, without any inkling of what they were going to do, except a vision. Because they believed in the vision and worked hard, they had great success. When they returned full of joy of what they had done, they shared their successes. The leader listened. He praised their efforts and he praised and encouraged them. If there ever was somebody who had a master’s degree in servant leadership, it was Jesus…a PhD in leadership development. I encourage you to look at the book because it has a tremendous number of examples of how great leaders work.

Today we live in a world in which defining business success has taken on a warped perspective. People talk about how much money the CEO makes, how much stock he acquires…you’re all too familiar with the scandals. These are people we call leaders. I think what’s happening is that we’ve got a warped definition of what a leader is. What we’ve really confused is the role of leader and the role of leadership. Leader is a position. Sometimes you get elected, sometimes you get voted, sometimes you get drafted.

Whether you want it or not, it is merely a position that creates an opportunity. True leadership is an activity; it is something that you do. It doesn’t come with a title, it doesn’t come with a job description, and it isn’t restricted to the highest level of corporate office; it can happen anywhere. The truth is that sometimes the person in the role of leader is well equipped to run the company and ill equipped to lead the company.

Let’s talk about what leadership means and why each one of you should come out of your undergraduate or graduate studies, come out of this university, with a passion for leadership. Leadership makes things happen. Leaders do not create followers. Leaders create leaders. Leaders are not selfabsorbed and self-indulged. True leaders are probably the greatest servants you’ll ever want to meet. The business world, the community world, the nonprofit world is filled with great leaders who practice great leadership by raising up people who are able to go out and do what any one person could not do. I am amazed at how many times I run into companies that are very successful and they throw all this praise upon the leader, and the leader absolutely stands up there and accepts it. To me that’s unacceptable. The only way anyone like myself ever gets an opportunity to stand in the position that I stand in, is to have the benefit of hundreds of thousands of people who are able to connect in some way, shape or form and do something that one person could not do alone.

I want to talk about what I’ll call the triangle of leadership. It involves three things—vision, talent, and risk. I’ll start at the top of the pyramid which you can picture in your head. This pyramid sits on a base which we will get to later. The top of the pyramid is “vision.” Vision is, very simply, a love affair with an idea that somebody is able to effectively communicate so passionately and so powerfully that people attached to that idea want to pursue it…whether it’s the idea to create the freshest newest product ever invented, create the greatest service business ever created, or simply create a hotel that serves people better than any other. You name the idea. The idea is not the issue. It’s something compelling that a leader is responsible for providing for the organization.

I talked to a class this morning and my closing comment to them was that the number one thing they ought to do is go find a tree, sit under it, and write their personal vision statement. Where do you want to be? Right now most people in this room want their first job. That’s a great objective. But what is your vision at 30 years of age? What do you want to have accomplished, what do you want to do, what skill set do you want to have? Create a vision for yourself that is compelling enough to make you want to get up early, stay up late, do the things that nobody else is doing to get to where you want to go. It’s been said many times that without vision, people perish. Without vision, individuals perish. It’s true whether we’re talking about an army of one or an army of thousands. Think of great things that were accomplished, none of them by wandering around without a vision. You have to have the vision—it’s the starting point. It’s the ability to create something compelling that other people are willing to follow, to commit their heart, mind, body, soul, time, and effort to. Vision comes first and then work has to be done for it to be accomplished.

The second side of the triangle is “talent.” You have to have it. There’s not a vision that’s been accomplished without talent. Talent, and I’m at the risk of upsetting some of the professors in this room, isn’t necessarily knowing all the hard facts and objective things about how to read a balance sheet or a profit and loss statement, and run a business.

That’s part of it. Talent is the ability to understand and use what I’ll call the soft stuff. I’m going to talk a lot today about the soft stuff. I’m going to go out on the limb, without looking at the curriculum, and say I don’t think there’s a business school in this country, including this one, that spends enough time and effort on helping students understand the soft stuff. That’s the human behavior—the ability to interact with others, the ability to lead and be led, and the ability to create a culture and environment conducive to doing something wonderful. Those are the soft issues.

So when I look for talent, when any successful company looks for talent to accomplish a vision, it’s not that I need accountants and marketing people and sales people. Those are the fundamentals. They’re the admission ticket to get into the game.

Whether you win or lose is how well you can create a talent pool that can execute that vision. We have fallen into a trap in this country of defining what talent is. We’ve put it in a box. Unfortunately, large companies have put it in a smaller box which implies, “you can do these things; you can have this job.” People have asked me what’s going on with the textile, the apparel, the furniture and tobacco industries. Manufacturing jobs are leaving this country.

Where are people going to work? It’s a subject near and dear to most of the students’ hearts in here? Where am I going to work? What industry will be left in North Carolina? I’ll tell you my impression of where industry is going. I think it’s an exciting vision that hopefully you will follow. The fact is that we are not a low-cost nation. We have high costs and a high standard of living. We all love it. I don’t think anybody wants the standard of living to go down. We’ve always been manufacturing-based businesses. But what’s happening is if you really look at it, yes we make a lot of stuff, but I want you to think about the most creative innovative products, services, and businesses that have ever been created. Think about what percentage of those were created in this country by Americans. I don’t know how many, but it’s an unbelievable number. We are a creative and innovative group of people. Just think about Microsoft and Dell. It’s beyond Procter and Gamble putting blue sprinkles in boxes and saying it’s new and improved. We’ve created serious innovations over time.

You can go into a car dealership today and customize your car. Who came up with that idea? I talked in class today about Abercrombie and Fitch, a company most of you know. Does anybody know what that company started as? It was a staid, conservative old men’s clothing store that made outdoor wear for fishing and hunting. How boring is that? Somebody took that heritage and created something so compelling that people are willing to pay 29 bucks for a product that cost $3. And I’ll tell you, the margin in the store is a heck of a lot bigger than the margin in producing that $3 tee-shirt. It’s innovation, it’s creativity, and it requires talent. Let’s talk about what kind of talent—accountants, yep; marketing people, yep; salespeople, yep.

I’ll tell you what it takes—it takes deviants, it takes crackpots. Okay, everybody heard me now, crackpots are the ones that let the light in, the light that shines on brilliant new ideas. This was a quote out of Fast Company. If you haven’t seen the magazine, you ought to get it. Deviance tells the story of every mass market created which starts out weird and dangerous and then becomes America’s next big corporate payday. So if you’re looking for the next market idea, it’s out there—way out there.

I grew up in the time when the greatest thing you could do with marketing was to get a great brand, a great product and do what are called line extensions. Nobody has ever made it into the business hall of fame doing line extensions. The people who have made it are crackpots and deviants and weirdoes and people that you wouldn’t want to sit next to at dinner. But they create ideas and they create markets, and everybody knows this country needs new ideas and new markets, needs things that have been defined the same way for 20 years, to be defined totally differently. If you think about how different it was from the days of Henry Ford when everybody could have a car as long as it looked the same and was black, to literally going to a dealership and choosing what stereo, what leather, the speakers, the color inside and out, and producing that car and being able to get it to you fast. That’s creative innovation mixed into the business mix.

Can you imagine the guy who first walked into Ford and said “I’ve got an idea. Let’s make everyone a custom car.” I guarantee you he’s not working at Ford today. But it was a deviant, it took somebody to change it. Or the first guy who said, “I want every consumer in America to have a cell phone, everyone to have a computer, have a laptop, a wireless laptop,” and on, and on, and on it goes. Those ideas didn’t come out of factories. They came from people who stepped back and didn’t ask why things are the way they are. They asked what could be and how they could create it.

As future business people, I challenge you and encourage you to develop your creative side. Sit under that tree and think, because it’s not going to come out of the accounting book. It comes from looking at the way things are and asking how you can do it differently. That talent and those jobs are in tremendous demand in this country and will be for certainly your lifetime. It doesn’t mean that the hard stuff, the objective stuff, the how-to stuff that you learned is worthless. Of course it’s not.

Instead of being the ticket to the winner’s circle, that’s merely the price of admission. You have to understand how it runs to even get in the game. Once you’re in the game, what are you going to do? The way you’re going to do it is, you’re going to outcreate, out-innovate, and out-think the competition. To that point, I have some good news and some bad news. Who is going to win this war of being the most creative and most innovative? Here’s the good news. I’d like all the women students to stand up. Now, all the male business students who are sitting, look at the people who are standing because they’re probably going to be your bosses. I believe it and the reason is what I just described as talent. Again, that’s somewhat sexist and, obviously, it doesn’t apply to all men and all women. But, women’s strengths match the new economy imperatives. Women link workers together rather than rank workers, women favor interactive collaborative leadership style rather than empowerment, meaning top-down decision making.

Women sustain fruitful collaborations, are comfortable with sharing information, and see redistribution of power as actually a victory, not surrender. They favor multi-dimensional feedback, value technical and interpersonal skills, value individual and group contributions equally, readily accept ambiguity, honor intuition as well as pure rationality, are inherently flexible and appreciate diversity. That’s what’s true with women. Now, shame on us guys, we know what it is, and we can do that too. It’s what it’s going to take; it’s thinking outside the box. The numbers say we make more money when we make the same black car 420 times. Intuition says women influence the decision on the majority of the car buying and, you know what they want, they don’t want black. And they want the stereo button where the stereo button needs to go for them. If you can provide that, you can make a lot of money and build a market.

As land continues to get scarce, nations will battle over it. The resource that’ll be battled over in your lifetime will not be land. It will be talent— innovative, creative, expressive talent that isn’t afraid to say, “It might work, so let’s try it.” At the final side of the triangle is the word “risk.” It’s amazing to me that ours is a country built totally on risk. Can you imagine Columbus getting on a ship? Is there a more risky situation than what he took? Or the first guy who decided to go to the Mississippi, the first guy who decided to cross the Mississippi, and the list of risk takers in America goes on and on and on. We don’t have enough time in the next month to capture it all. We are a nation of risk takers.

It is amazing at a time when we need to take risk more than ever before, we want to stand on the sidelines and be conservative, allowing competitive advantage to waste away and people who can make cheaper what we already make, take all our jobs. We are in the creation business; you are in the creation business. There is nothing creative that didn’t become created without great risk. Great leaders know the talent that’s required and they know that risk is involved. Great leaders create other leaders, great leaders create risk takers, great leaders love to create new markets and love to hire and work with people who are willing and able to do so. How do you become such a person? The biggest problem is not how to get new innovative thoughts into your head, it’s how to get old, dated thoughts out of your head. The biggest block you have is a box that says this is how this thing I’m looking at works. Find a way to throw it out.

It’s amazing to me how some of the products we take for granted today are packaged. Water used to be packaged like this [glass of water], now they put it in a green bottle, you drive to the grocery store and spend $4 for it. Can you imagine the guy who thought of that idea? We’re going to take a green bottle, put a French name on it, charge $4 and people are actually going to drive to the grocery store and get it. No, no, no! I don’t have to leave my house and I get water 24/7. It’s a creative, wacky idea but once we broke out of the fact of thinking of water as a commodity, then the whole possibility of using water as an innovative product became available to us. Do you know how many water filtration systems exist today because somebody convinced us that the water out of the tap really isn’t that good? It’s created an entire industry. But the first time somebody walked in with this idea, can you imagine the response? Getting the old ideas out of your head is a must!

Here’s a great example and it’s too good to paraphrase. Believe it or not, as relevant as this is today, it’s a quote from Mark Twain. He said, “The best swordsman in the world doesn’t need to fear the second best swordsman in the world.” No, the person for him to be afraid of is some ignorant antagonist who has never held a sword in his hand before. He doesn’t do the thing he ought to do and so the expert is not prepared for him; he does the thing he ought not to do and often he surprises the expert and ends him on the spot. How true is that today for all the crackpot thinkers out there?

When I got in the furniture business 5 years ago, I listened to the litany of why I was doomed to fail because the furniture business is a unique business and I didn’t grow up with sawdust in my veins. That’s pretty sobering information when you take over a company. So, I sat back for a few months and watched and listened until I couldn’t bite my tongue any longer. At my first sales meeting, I observed that the furniture industry, while the product was different, was nothing more than what I’d seen in the apparel industry, only 15 years behind the curve. I felt that there was great insight from watching one industry go through what the furniture industry is going through. Before I found the Mark Twain quote, my comments to the sales force were very similar. Today in business, I’m not worried about the competition that I know. I’m worried about somebody sitting on the sidelines, with creative people and a pile of money, asking what is being done that they can do better. Not trying to knock me off but truly saying there’s a dissatisfied consumer out there who doesn’t like the way this industry is being run and if I start fresh with no paradigm, no box to think of, and create something truly new and different, not only will I be able to survive, I will absolutely gobble up market share like you would not believe.

I’ll give you a great example in the furniture business. Today, the furniture business is roughly $26 billion in this country. The research says that the business is flat, that consumers have tremendous demand for furniture but they’re not buying, and it’s the economy and it’s all this stuff holding them back, but when it busts loose, everybody is going to do tremendous amounts of business. That’s been the word on the street for four years—tremendous pent up demand. You look at housing starts and interest rates and, you say, the furniture business ought to be booming. All historical indicators say it’s booming. But the traditional manufacturers say it’s not booming. It’s barely crawling along. An investment firm did a recent piece of research and what they found was startling. They found a swordsman who never had a sword in his hand before. What is happening is while traditional American manufacturers and traditional American furniture stores were in fact not growing, there was a whole category of business above and below them that was explosive—Pottery Barn, Crate & Barrel, Restoration Hardware and Ikea at the high end, Rooms to Go, Cosco and Wal-Mart at the low end.

What was happening was that the overall furniture business was growing 5-6 percent a year. The problem is, the traditional channel of manufacturing retailers were not gaining share; they were losing share. No wonder they felt miserable. What had happened is, a group of people above them had found a better way, and a group of people below them had found a lower cost path. Market share was being gobbled up at an unprecedented rate. Four companies—Ikea, Crate & Barrel, Pottery Barn and Restoration Hardware—last year represented $4 billion worth of furniture sales out of $26 billion sold in this country. That my friends is a definition of market share. It happened with the traditional people having no clue.

When I first came into this business and told people that Crate & Barrel and Pottery Barn were competitors, they laughed at me and said that they don’t sell furniture. None of the people who said that come anywhere close to doing a billion dollars in sales today. I had an opportunity a few weeks ago, being in San Francisco, to meet with the people from Pottery Barn. They volunteered to me that they believe they are successful because they went out and hired the brightest, most talented consumer products people they could find, none of whom had ever worked in the furniture industry.

You want opportunity, there’s opportunity! They did not want anyone who knew “the box.” They wanted people who were willing to come up with a better way. If you think that all they sell is glasses and stemware and plates—a billion dollars worth of furniture was sold by Pottery Barn last year. Amazing. So again, the pyramid.

I’ve got to have a vision, personally, and professionally as a company. Great. You’re going to be interviewed. I don’t interview people to find out what they know. I interview people to get ideas. Best thing you can do if you interview with me for a job is to give me great ideas. Show me that you can think. I know what’s on your resumé. A great interview question for you is: “Could you tell me what the vision for your company is?” If they can’t answer that, then run. Run far, run fast. Why would you work for a rudderless ship? Personally, or a business, has to have a great vision. It’s all about the talent. No successful company has ever made it because the CEO was a visionary and he was a dynamic speaker and he was great and there was nobody behind him. I’m as good as the talent that works in my company today and I give them every last bit of credit. I consider myself a decent orchestrator, I strike up the band and they play wonderful music. But if I didn’t have the people behind me, the company by no means would be as successful as it is today. You’ve got to have the talent.

The third side of the triangle is that you have to be willing to take risk. Incremental gain, when someone else is willing to take the risk on fundamental change, will never win. Inventors, creators, pushing the envelope—does that sound like an exciting job to anybody in this room? Those are the jobs that you ought to go seeking and if you can’t find one, create one. Do your two- or three-year stint in a traditional company and then take that expertise and go do what you really want to do. You may be the next great deviant, or the next great crackpot could be sitting beside you in this room.

There’s my triangle of leadership—vision, talent and risk. It sits on a platform that I’m going to get very emotional about as I end. The platform is passion. I’ve been very blessed in all the jobs that I’ve worked in, some of which I liked and some of which I didn’t like. I’ve never worked in a job, in an industry, in a business that I didn’t get passionate about. It’s soft stuff; I don’t think there’s a passion class on the curriculum. But it comes from the heart.

You have to create it. What have you always wanted to do? Find something that you’re passionate about. The path to your passion will not be a straight line; it’ll take a circuitous route. But never lose sight of it. I want to be passionate about what I do. I’m a man and I’m not afraid to say it. I know that women know what I’m talking about; I hope the men do as well. When you get up in the morning and you are so phenomenally excited about what you’re going to do today, that’s passion. I guarantee your work will be 250,000 times better if you’re passionate, than if you’re punching the clock and doing the job.

I was passionate about apparel. I’m passionate about furniture. I’m passionate about developing talent and watching people grow. I’m passionate about taking risks and saying, you know what, that was the most excellent failure I’ve ever seen. What did we learn from it? Let’s go do something else because maybe the next idea will be the breakthrough. I’ve never seen anybody win the batting title by not swinging at any pitches. And if you hit a third of them, you’re in the hall of fame. It’s no different in business; there is a level of calculation that you can take, but at the end of the day here it comes. I’m going to hit it or I’m going to take a swing at it or not. Nobody ever won from the dugout. You’ve got to be up there swinging and taking risks. And you’ve got to be passionate enough about it to say, I’d be a fool not to try.

What if you took the serving leadership of Harlan and Harvey, mixed in the passion of Ken and Lyle, and put it all together and bottled it? See, that’s my new product here and it’ll be on sale in the lobby afterwards. What a great combination.

You’re blessed to have tremendous role models to pull from. Don’t just learn the accounting jargon and the marketing and the manufacturing and how to run an operations schedule. Learn the servant leadership and the passion. Learn how to interact with people. Learn how to be a talent and how to develop talent. Learn how to spot talent and realize that at the end of the day, as I said earlier, the most valuable resource is people.

The two most powerful things in existence are a kind word and a thoughtful gesture. That comes from somebody who has a heart for servant leadership. Harlan Boyles was a servant leader. Look what he accomplished. You want to harness that power? It’s the wave of the future and it’s a great opportunity.

I’ll close with two comments. The first is a quote from Michaelangelo, “The greatest danger for most of us is not that our aim is too high and we miss it, but rather it’s too low and we actually reach it.” Take that with you as you go.

The last comment is from an Appalachian professor, no longer here. He said this to me in 1975 and it has stuck with me since then. It’s one of the greatest gifts this university has ever given me. He was trying to motivate me because I was the typical junior who was trying to stay as many years as I could possibly stay. I’m sure no one in this room is in that boat. But he looked at me, knowing that I was minimizing my potential and he said, “When you look back on your college days, when you look back on your first job, when you look back on your career, when you look back on your life, it’s not about what you actually accomplished, rather it’s about what you could have accomplished.”

I wish you all the best. Thank you, God bless.