Transcription:
Penny Crosman (00:03):
Welcome to the American Banker Podcast. I'm Penny Crosman. Paul Achleitner, former chairman of Deutsche Bank and former partner at Goldman Sachs, has written a book on leadership called Accelerate Your Experience. He's here with us today to talk about some of the themes of his book, which include managing people during a crisis, dealing with social media blowups, and coping with uncertainty in the economy, international relations, and business ups and downs. Welcome, Paul.
Paul Achleitner (00:30):
Well, thank you very much, Penny, for having me on your podcast. I'm looking forward to our conversation.
Penny Crosman (00:35):
Thank you. So your LinkedIn profile starts with a quote from Seneca, who was one of the great Stoic philosophers, who said, "Luck is what happens when preparation meets opportunity." And you said that taking this Seneca quote to heart allowed you to go from long-haired Che Guevara fan to becoming a Goldman partner and Alliance CFO and chair of the Deutsche Bank Supervisory Board. Can we unpack that a little? How did you become a Che Guevara fan and how did you go from there to working for Goldman Sachs, and did you have to cut your hair along the way?
Paul Achleitner (01:10):
Yes. So I was a Che Guevara fan because anybody who at the time was a 15, 16 year old was all about testing out the boundaries of the existing system and arguing for freedom and against the established situation. But then in between, I actually, as a student as a matter of fact, a high school student from a little town in Austria, I actually spent one year in Grand Rapids, Michigan, in 1974, and that changed my perspective. I got infected by the American dream. And so subsequently when coming back, I actually decided I wanted to not just study, but study at a specific university and ultimately emigrated to the U.S.
Penny Crosman (02:05):
So your book talks a lot about the value of experience, which you note is sometimes dismissed as obsolete experience. And one thing I was wondering was, what do you think makes the difference between going through a challenging experience at work or in your personal life and learning from it versus just going through something and not gaining from it, just staying stuck in a pattern of behavior or thinking or repeating mistakes? What qualities and efforts go into actually learning and benefiting from an experience and then becoming wiser because of it?
Paul Achleitner (02:41):
So first of all, I fundamentally believe you cannot transfer your own experience to third parties. Your experience by definition is subjective and it's the accumulation of previous experiences. But what you can do is you can actually accelerate somebody else's experience if you actually present them with the right kind of observations, catalysts for thinking and challenging them. And, of course, that process not only works doing this for others, but it also works for yourself if you actually are reflective about the stuff that you actually had just seen, experienced, and also learning from your own mistakes. Always sounds easier than it is in reality, but at the end of the day, in today's world, speed matters and therefore accelerating your experience can become a very important and potent success factor.
Penny Crosman (03:43):
So reflecting on what happened and what we did about it and what went well and what didn't go well and—
Paul Achleitner (03:50):
Yeah, it's fascinating, Penny, because a lot of companies spend a lot of money on scenario planning and on war games. And expensive people come in and they create a theoretical crisis scenario and then experienced or less experienced leaders are being challenged to actually role-play. The reality is if we all would take a step back and view existing crisis that the organization has actually gone through, larger or small ones, we could actually learn a lot more, but somehow that is way too touchy for people to actually do it that way.
Penny Crosman (04:37):
That's a good point. So another thing you point out in your book is that we're in a time when many people feel uncertainty about things like the tech broligarchy, the dangers of AI, geopolitical tensions. And you write, "There seems to be an almost masochistic delight in mutually reinforced pessimism in a triumphalism of competitive complaining." And you also quote Karl Popper saying, "Optimism is a moral duty." Why is optimism a moral duty and how can leaders instill optimism in dark times, especially if they themselves may feel weighted down by what's happening in the world or what's happening in their company?
Paul Achleitner (05:19):
So allow me a step back. I believe that the fundamental social divide that we have in all of our societies, no matter where you live, is the question if you have a positive outlook on the future or if you have a negative outlook on the future. If you have a negative outlook on the future, you want to go back to something that you think you had before or society had before. If you have a positive outlook on the future, you want to move forward. And unfortunately, increasingly, a lot of people have a negative outlook on the future. They don't think that their own lives are going to be better going forward, or even the lives of their children will be better than what they have had. Now, it is therefore, I think, the duty of leaders to instill more positive attitude in people. And you can say optimism.
(06:10):
Yes, I do believe optimism is a moral duty. Of course, optimism is just an attitude. What you also need to do is combine this optimism and the attitude with actions. So if I am insecure about my future, I look to the leaders. And if these leaders are all sitting there complaining, as opposed to actually emanating some level of optimism and showing by their action that this can be done, how should I actually get a positive attitude?
(06:45):
So yes, there is a moral duty to leadership that actually shows people that we can overcome the challenges that we'll currently face.
Penny Crosman (06:53):
Now you also point out that you don't want to get into wishful thinking and a let's-all-feel-good-and-hope-for-the-best kind of attitude. How can leaders keep things real and give bad news without being kind of depressing, bringing people down?
Paul Achleitner (07:10):
So one of the biggest themes about actual leadership is integrity and authenticity. People are fed up with leaders who actually promise one thing today and then do something else tomorrow and they want to be taken seriously. They want to be respected. So if you take people seriously and you respect them, you can actually share unpleasant news in an appropriate fashion with people. You can take them through the type of challenges that you face that maybe you didn't expect, but you got to communicate that in an appropriate fashion. And I believe that authentic leaders in today's world have a serious opportunity to take people along. Another theme that is in my book is that I believe there are two kind of leaders, artists and operators. And everybody loves artists, but unless you actually have a few operators who make things happen, things are going to go haywire.
(08:17):
Eloquence is a poor substitute for competence.
Penny Crosman (08:22):
Sure. You also mentioned in your book the current backlash against ESG, sometimes called greenhushing. Do you have any advice for companies that want to continue their ESG efforts in spite of the current pressure to back down?
Paul Achleitner (08:38):
Sure. I am the last person who argues against having clear values and actually also live according to those values. The problem is you don't have to actually constantly sing the song of your values and you don't have to actually try to force other people to live up to your own values. You have your own values. Good. You have values that are shared among your organization. That's also great. You don't have to impose those on everybody else that you do business with. You actually accept the fact that other people may not share those values, other people have other preferences, and you actually deal with that accordingly by being tolerant of other people's values.
Penny Crosman (09:29):
That makes sense. That reminds me of being a vegan at Thanksgiving. It's the same idea.
Paul Achleitner (09:34):
A good point. Yeah. We've got too many people who are running around who think being value-driven means you have to be a missionary. It doesn't.
Penny Crosman (09:46):
Yeah. So you also talked a little bit about social media and you noted that unfounded rumors can spread like wildfire. And you wrote, "To build resistance to controversy, fake news or unfounded assertions, a company should strive for a positive balance in its legitimacy account." How can a company build up legitimacy? What might be an example of that?
Paul Achleitner (10:10):
So allow me to step back. My argument is good leadership today means to strike the right balance between the performance dimension and the legitimacy dimension. Most people know what the performance dimension is. Legitimacy to me contains all the soft factors, the pressures that come from different groups of society. It's more about emotions, it's nonquantifiable, and of course it gets impressed most strongly in social media, but also in government actions. Regulatory environment also falls under this legitimacy dimension in my definition. And who is better suited to appreciate that than banks? Banks have always needed to balance between their performance and the trust that society puts in them. Trust is a big important element of the legitimacy damage. And yes, you need to invest in that trust because it can easily be lost. And once it is lost, you actually get a problem in today's world that happens faster than it may traditionally have been because of the ubiquity of social media, the transparency, the speed in which information true or false gets disseminated.
(11:37):
All of that, of course, is a big challenge that leaders have to deal with.
Penny Crosman (11:42):
Another thing you mentioned in your book is that some startups lose focus by modifying their product to meet each new customer's needs. And I think it was an interesting point because I would think to some extent a young company has to be able to adapt to customer needs. How can a startup like a fintech startup do that and meet what their customers want without getting themselves pulled into too many directions?
Paul Achleitner (12:09):
So I would argue that not only young companies and startups need to adapt to changing customer needs, but particularly also incumbents. Now, incumbents may be much less prone to switch to the latest tendency out there because they are too slow to adapt and therefore they will actually still be thinking about the last move when already the second next is around the corner. But yes, flexible startups actually can easily fall into the risk of losing focus and trying to do too many things, which will drive up their complexity and their complexity costs, which is a problem in itself. So I think that's a leadership challenge. For the large incumbents, it is to adapt to new customer needs and for startups to make sure that you don't overadapt and you actually pick and focus on the most prevalent and most significant customer needs.
Penny Crosman (13:21):
That makes sense. So one of your principles is the art of muddling through, which I like that phrase. What is the art of muddling through?
Paul Achleitner (13:30):
It's recognizing the reality. The great philosopher Mike Tyson once said, everybody has a plan until they get punched in the face. And the reality is there's another, maybe more thoughtful thing that says, everybody needs planning, but nobody needs a plan because it will always turn out differently than what you had planned, but the process of planning is very helpful because you can then use that when it goes into execution mode. And I also talk about the power of excellent execution, and at the end of the day, excellent execution can compensate for deficiency in a plan, but a good plan can never make up for a bad execution.
Penny Crosman (14:23):
And another principle of yours is the art of gracefully exiting. So if a leader or anyone decides it's time to move on to a different opportunity, how does one make that graceful exit?
Paul Achleitner (14:36):
So first of all, anybody in a responsibility has to be aware of the fact that that responsibility is only temporary by definition. And what you want to do is you want to actually keep that in mind when you actually try to figure out what it is that you want to accomplish, but then in time, you actually want to be in a position that you quote unquote exit gracefully. That means bringing successors into play, being able to draw on talent that can actually replace you because you will not have a graceful exit if there is no smooth succession process. By the way, that's a big difference between industry, business and politics. As some senior politician once pointed out to me, in politics, you do not support your successor. You kill him or her. That's a different attitude than what we want to have and see in a corporate context.
(15:49):
So center your exit around the right kind of results, the right kind of events. A smart friend of mine once told me when I was considering when I should leave my job at Deutsche Bank: Paul, I've seen more people leave two years too late than people who leave two years too early.
(16:17):
And I think there's a lot to be said for that.
Penny Crosman (16:19):
All right. And you have three poems at the end of your book. What are those poems and how did you choose them?
Paul Achleitner (16:27):
So to your great relief or the reader's relief, none of these poems is mine. They are just three poems which have influenced me at very different phases of my life. The first one is called "The Calf Path" and is by a guy called Sam Walter Foss that very few people know, but it is a very interesting poem that helps you and helped me not to fall for the traps of conventional wisdom thinking about it. The second one is very well known. It is "If" by Rudyard Kipling, and it obviously is something that yes, captured some challenges in my active life very well and is always worth reading. The third one is also a discovery that few people know, it's actually called "My Soul Is In a Hurry," and there is a little bit of a disputed origin, but let's see, it was Mario de Andrade and not that well-known Brazilian poet who wrote it.
(17:37):
But if I would actually recommend to any one of my readers to read anything of my book, it would probably be this last poem with which I actually end the book by Mario de Andrade, which culminates in the very simple bottom line, which says, "We all have two lives." And the second begins when you realize you only have one.
Penny Crosman (18:05):
Well, not everyone believes that. Paul, thank you so much for joining us today. And to all of you, thank you for listening to the American Banker Podcast. I produced this episode with audio production by Adnan Khan, WenWyst Jeanmary and Anna Mintz. Special thanks this week to Paul Achleitner. Rate us, review us and subscribe to our content at www.americanbanker.com/subscribe. For American Banker, I'm Penny Crosman, and thanks for listening.