13. CEO, Alliance of Chief Executives

Intro: Duration: (1:24)

Opening music jingle & sound effects

Jeff Hunt:

Hello everybody. I'm Jeff Hunt, and this is Human Capital, a GoalSpan podcast. On Human Capital, I get to interview top business thought leaders to uncover the deeply human aspect of work. My guest today is Paul Witkay, who founded the Alliance of Chief Executives back in 1996. Today, the Alliance has become the premier organization for chief executives in Silicon Valley and broader Northern California.

The Alliance creates private high-level confidential environments for leaders to have strategic business conversations that they either wouldn't or couldn't elsewhere. Paul has extensive executive experience with the fortune two 50 space senior executive experience, and he received his MBA from St. Mary's College.

Which happens to be right in my backyard here in Moraga, California. And in addition, he is a graduate of the inset executive management program and Fontainebleau France. And I know he happens to give back extensively to his community through various activities. Welcome, Paul!

Paul Witkay:

Oh! Thank you very much for having me, Jeff. It's good to see you.

Topic 1. Who or what inspired you to go into business? (01:25)

Jeff Hunt:

Take us back on your journey to the beginning of your career. I always like to start with this question about who or what inspired you to go into business and specifically into leadership?

Paul Witkay:

Well, that's an interesting question. I'm not sure I've ever been asked that specifically because, when I think back, my father was a management consultant and I grew up in the suburbs of Chicago and I helped him with his paperwork, but it seemed really boring.

And I actually remember, I was, I took AP chemistry and AP math in high school. And when I was thinking about what to major in college, and I went to the University of Illinois, one of my friends was going into business and I said, what are you going to the business for four years? I mean, everybody knows you try to buy low, sell high.

The rest is profit. What are you going to learn on day two? You know, and it just seemed relatively simple compared to science and math and those things. So, I went into, I got a degree in chemical engineering. I wasn't the natural engineer. I can solve all the problems, but I wasn't really passionate about it.

But I went into business, frankly. You know, as a personal decision to have independence and be able to have the freedom to live, where I wanted to live. Well, one of the weird things is when I look back, my career was not linear in any way from engineering to sales, to strategy, to product management, to a whole bunch of things in a small company and large.

But when I look back, every single thing I did enable me to do what I get to do today. And probably the number one was when I started with Witkay Associates, the recruiting firm. I literally remember. The first day at my office when I had to start and I realized, Oh my God, I've got to make a phone call to start this thing up and make cold calls.

I had never made cold calls before, but the fact that I told everybody I'm starting this thing, it said I can't fail it be too embarrassing. So I had to, I remember turning my head and looking at the phone and picking it up and making calls. To both managers that would be hiring engineers and leaders.

And also CEOs. They didn't know, I have a deeper voice, so they didn't know how young I was. And somehow it worked cause they're always looking for great talent. But that process of making cold calls to CEOs really helped me start as Laci Alliance and have that courage to be able to pick up the phone and talk to CEOs.

Topic 2. The beginning of the alliance and what it does. (04:16)

Jeff Hunt:

And so bring us up to the Alliance. So, what motivated you to start that organization? What problem were you solving? Tell us a little bit about that journey.

Paul Witkay:

After working for Amoco in Chicago and Dow chemical in Michigan at the headquarters there, we moved out to the San Francisco Bay area in 1977, and we really loved it here.

And frankly the company I was working with about a year into it. My boss calls me in for my performance review and he says, Paul, you're doing great. We love what you're doing. So, we're going to promote you to the next level, but you got to move either Philadelphia or Houston. I walked out of the office and I said, I think I just got promoted and fired in the same sentence.

And so frankly, once again, I didn't want to move to Houston. I love it here in the Bay area. So frankly, quite similar, I started thinking, okay, what am I going to do next? I started up the Alliance not really knowing what I'm doing other than the philosophy of really. I really highly value getting really intelligent, passionate people together in the same room.

And creating an environment where they can talk totally openly. So, they have to be able to trust each other. And I also believe very much in the power of diversity, cognitive diversity, but everything that matters, whether it's industries, business models, skillsets that can sell and people came up through legal or finance or marketing or operations, but also where you grew up. Where you grew up poor or rich.

And how you looked at the world and what impact you might have on it, and where your passion comes from. So, frankly, that was the Genesis for the Alliance. And frankly, I haven't been bored since I'm privileged to deal with so many amazing people that are out there and striving to change the world.

Jeff Hunt:

And then just to conclude the conversation on the Alliance, where are you at today? How you have CEOs mostly in Northern California, but also elsewhere. Right? So you actually have CEOs around the world now, don't you?

Paul Witkay:

Yeah, it's been an amazing past year. Frankly, by design, I kept it to be primarily Northern California.

We always had a few members that would fly in from LA, Seattle, even one from Portugal, because this is Silicon Valley. People come here to get funded, to collaborate, and such. So we always had a few, but it was primarily Northern California and it was by design because I was tired of traveling 250,000 miles a year prior to launching the Alliance.

And we had young kids and the Alliance enabled me to do what I love doing. Dealing with super-intelligent people, but I could live the kerosene through their exploits. Flying around the world to create new businesses, and launch new markets, and new products, and be kind of the strategic provocateur for them.

But I could go home at night and be with my family and coach my kids' teams and such. Now that my kids are grown. Actually, I have been traveling more, and then when COVID hit and every CEO in the country was forced to go on zoom or go virtual on the same day and all their calendars were wiped out.

And then you layer on the most uncertainty any leader had to deal with in his lifetime, all of a sudden CEOs from around the country. Many of them were members that used to run companies in the Bay Area and Northern California. Now they run companies in Detroit, Austin, Nashville, New York, and other places. They started coming back because they could.

And that all of a sudden than I've always made friends with other people who share my passion, who have built organizations for CEOs in Europe, and in Canada, on the East coast. So we started reaching out there. So frankly, we now have CEOs that are video conferencing in and engaging in just as deep and confidential conversations from all over the world.

From Sweden, from Lebanon, from Australia, from France. It's really exciting and engaging. And at the CEO level, it really doesn't matter where they're at. They're trying to make a difference and they find talent all around the country, all around the world. You have customers all around the world.

But the unique factor is because we were founded in the 1990s when the internet was just taking off, globalization was just happening. So our whole culture is a bit about growth, and innovation, and leadership, and strategy, in a changing world. So frankly, the fact that our core values and core community already include leaders from virtually every industry already. It's a natural fit for other CEOs around the world to build bridges to Silicon Valley or vice versa. So it's been really fun and amazing this past year.

Jeff Hunt:

Tell us a little bit about the structure. So, these groups get together. Are there 10 or 12 CEOs in each group? And then those are facilitated by a chair and they get together monthly just real quick pragmatically. How does it work for those that don't know?

Paul Witkay:

There are lots of things we do. We are community CEOs, but frankly, the absolute core, it all starts with creating a small private group where they're carefully curated to who's in that room so they can trust each other. They can respect each other. And they can truly willing to engage and challenge each other.

We have a unique methodology where we really encouraged them to think. As if they are the CEO and to be able to challenge all assumptions, but they meet for half a day. Once a month. Se do have several other groups that meet on different schedules and such.

We're not a meetings organization or a strategy leadership organization, but the core is. They do get together and their groups range from 10 to 60 members or so. And nobody makes all the meetings. But we average about, you know north of two-thirds of the meeting. So, frankly there's always more breadth of depth, but the core is if you invite the right people to join, they form deep, trusted relationships.

So, they can talk about virtually anything in very unique environments. And then as a result of that. It's still in confidentiality, do know all privates. But frankly, a lot of other things happen as a result is a by-product of knowing that somebody is reinventing the transportation space, or doing autonomous flying vehicles, or having trouble with attracting the right talent or things just happen because all the CEO's have deep connections and resources, and if they understand what somebody else is going through and they care about them, all of a sudden, lots of other things happen.

Topic 3. Returning to the office or staying at home? Predictions about the future of work. (11:15)

Jeff Hunt:

With the pandemic waning. I want to talk about this for just a few minutes. Hopefully, we're seeing the light at the end of the tunnel, and it's not the freight train, but my question for you, because you've had so much exposure to different leaders and executives, and probably had a lot of conversations about this, should employees return to the office?

If so, when. Will CEOs ask employees to come back full time? Is this going to be some sort of a hybrid situation? Do you have any predictions? What have you heard and what are your thoughts about this topic?

Paul Witkay:

Well, first of all, I've had lots of conversations about it tonight, and I do think some of the talks in the media are kind of silly because frankly, every single I know. Even before COVID hit, there were a number of organizations and leaders that already set up remote or virtual organizations.

So it wasn't totally unique. They didn't do it to prepare for a pandemic. They did it because it was effective for them to get the best talent anywhere they may be, and provide a flexible environment. So I think what I realized very quickly COVID is that, first of all.

I was amazed at our own team that was able to take all these in-person very human gatherings of leaders and put them on zoom at virtual meetings overnight. Because we were forced to actually, we learned how to make it work very quickly. I'm very impressed with it. The CEOs gathering and they had to, and they leave in like never before attendance went up 25% because they could, and they didn't have to commute. But basically, you know, if it had ended after six weeks, six or eight weeks, I think we would have gone right back the way we were.

We now really learned how to do it. And as much as for many people, it sucks. Sitting on your butt for eight or 10 hours a day. Because you have to learn how to do it. So we've just gained a new tool, a lot of new tools, basically everything. So many things we've been doing, it's just experimented with how we work, how we live nowadays.

So, basically the best leaders I know are all thinking about, again, we have one or many more tools to play with. So, they focus on what's important. How do we serve our customers best? How do we get new customers? And when do we need to be in person? When is it more efficient or, and possibly more effective virtually? How do we take care of our employees as well?

There's a human need to come together, but I am absolutely convinced we're going to move into a more hybrid world. Where we can pick and choose how we communicate, how we collaborate. And frankly, I think it's somewhat crazy for an organization to be mandated unless you're building things. And then you have to be there to construct physical entities or physical products. It's somewhat crazy to commute every day from nine to five, and get your cars, and have to be together all the time. Absence makes the heart grow fonder. So what do you do once a week or just for lunch or something like that?

I think we're going to really rebel, and enjoy being together more often because we certainly are going to do it when we first come back. But then frankly, we get tired of each other a little bit every day. And zoom is going to feel a whole lot better when it's just, you know, once a day or once a week or three times a week, whatever.

And it's more efficient, you know if you get in your car and you can do it, whatever time of day works for everybody. So, it's just another tool. So we are moving into a hybrid world that makes sense for the customers, the employees, and the executives for all these organizations.

Jeff Hunt:

It's kind of exciting and COVID is really been a catalyst for so many changes, many of those positive, including really adapting to remote work and doing it effectively. And, you know, so.

Paul Witkay:

And I gotta say I'm blessed. I grew up in Chicago, the Chicago Cub fan. And when you mentioned the light at the end of the tunnel cut fans, you know, we waited over a hundred years to win a World Series championship, but we never lost sight. There was a light at the end of the tunnel.

So we're persistent optimists and frankly, CEOs and leaders really shouldn't be leading companies if they're not at least long-term optimists. And to have a vision of a better future that they're building.

And so frankly, we saw that to this pandemic and the work from home environment where, they still were able to communicate what that light was, what they're building, keep people focused on what really matters. I love dealing with leaders because you know, they don't wind for very long before they really start saying, okay, the situation sucks, but what do we do about it?

Hey, how do we fix things and where are the opportunities? And so, frankly, it's been amazing to work with really great leaders during this time. So, we're creating new ways to bring in value and taking care of their employees.

Jeff Hunt:

Yeah, well, and mentioning the Chicago Cubs building an organization always takes longer and costs more than you think. It's just like a home improvement project, right? The sooner you can accept that, then the better off you are.

Paul Witkay:

So just do it one step at a time and keep, keep moving forward.

Topic 4. Compassionate Leadership: How to maintain committed and high-performing teams during a crisis. (16:51)

Jeff Hunt:

Exactly. So well, speaking of the pressure that organizations have been under because of COVID. Talk for a minute about the leadership balance between trying really demanding that objectives are achieved by employees versus trying to be compassionate with each person's unique home situation.

So you have this trickle-down effect and in some companies, the financial pressure has become severe. And so how can they sort of balance this?

Paul Witkay:

That's a good question. I do think during crisis leadership matters more than ever. And the best leaders really thrive and step up and actually enjoy it.

It's one of the few times where virtually all employees actually listened to their leaders during a crisis. They tune them out, whenever things going well, but when times are tough, whether it's for self-preservation, to understand whether they're going to have a job or not, or to hopefully if they build a strong culture.

That is towards serving their customers and, taking care of themselves and collaborating this is when it really pays off where again, they know what's important. Leaders have different perceptions of what their priorities be. And some, some leaders think.

Boy get the best talent to take care of them and they'll take care of their customers. Other ones that may focus on customers first and knowing you have to have great, great talent and people to take care of them. It's almost a chicken and the egg as to what you prioritize. But these are times when leaders really focus on what's most important, and it's actually transparent to the employees by their actions.

As much as, you know, as much as their words as to what really is important, they will see it. You know certainly if the economics require it financial cuts are often necessary, but they'll see how it's done and why it's done. And they'll understand if it's done right but again are they making decisions based on what's the best interest of the shareholders? Or what's the best is for the customer? the best interest of the employees or the communities?

And are they making the best decisions in short-term interest or just survival or long-term of retaining, finding ways to creatively retain all the talent that's necessary? As well as taking either to the customers that will be there when the pandemic's over. And those have us built strong relationships with our customers and strong, trusted relationships with employees.

Actually, this is one, it pays off as well, but you see what they, what they focus on, and what's most important to them. There was a crisis.

Topic 5. Delaying difficult decisions (19:45)

Jeff Hunt:

Yes. Great point. So I'm sure you've seen this, but there, there are a lot of times that executives delay making difficult decisions. Once again, COVID it's kind of been a catalyst for forcing some of those decisions forward, but in a normal environment, what are some of the reasons that you believe executives, delay making difficult decisions like pulling out of an unsuccessful endeavor or letting an underperforming employee go.

Perhaps even closing an unprofitable division, you know, what are some of the reasons and what can they do to improve in this area? Because I've seen this a lot too in my consulting work over the past 15 years.

Paul Witkay:

Well, I think the first answer is, believe it or not, CEOs are actually human beings. Like the rest of us. I mean, there are human beings, and we don't like to make mistakes or admit them any more than anyone else does, we make decisions and they don't all workout, whether it's hiring the right people that don't work out or best of making acquisitions or starting new products.

I mean, frankly, particularly here in Silicon Valley, more things fail than succeed. And the best leaders learn pretty quickly to move. As far as talent goes, there's probably a no better example of that, than Reed Hastings of Netflix. He’s written a number of books. So the latest one is “The no rules company”. And he's very clear about the philosophy.

So frankly, if you don't want that type of culture, don't join, but they get the very best. He exemplifies making decisions by constantly re-evaluating your own assumptions and decisions you made. And not looking at some costs or some time. Facing reality today. And oftentimes reviewing the things that matter and saying if I had to make a decision today, what would I do? Forgetting about what I've done in the past?

Would I be doing this product? I hire this person again? That's working here. Really good question. Okay. And if the answer's no. Then you have to wonder, okay, what do I do about that? Do I just live with it because I'm embarrassed to admit it? Or do I free that person up or free up the time and investment from a product that ultimately I don't believe in anymore?

Or do we redesign or tweak it? It's facing brutal reality and saying, okay forget about the past. What do we do now? The resources we have, what's it going to take to make this successful? Can we make this probability of success? And make a conscious decision to reinvest that day or that week, you know, that time period on re-investing or cutting bait and moving on to it so that you can focus on the things that do matter.

Jeff Hunt:

Sure. And sometimes I think it's a false paradox for leaders because they have the sense that they're being compassionate by letting the person stay that's underperforming, but the greater compassion is actually letting them go or moving them to a different position where they can shine.

Paul Witkay:

Right. I totally agree with you. I think also could be a rationalization for if you've made a mistake and not feeling too bad about having to cut someone, but the best ones do recognize it was their mistake. But they can't let the organization suffer as a result because their ultimate duty is to the long-term sustainable success of the organization and allowing whether it's people or products or business units or anything else to suck time.

And sometimes it's firing customers. It might be your first customer is really no longer supportive or productive or profitable or something really supporting the long-term success of the company. And sometimes it's firing a customer, it's hard to do.

Topic 6. Level 5 leadership and charisma. Building a leadership culture (23:45)

Jeff Hunt:

Okay. I have one more question for you. And then we'll jump into some lightning round questions.

We were chatting before we started about Jim Collins, who we both love, but he taught us that the single charismatic leader is really much less effective in the long run than a leadership culture that's not dependent on the personality of a single leader. And so my question for you is how can organizations reduce dependency on any one leader for success?

Paul Witkay:

Well, first of all, I am a big fan of Jim Collins, and we just had an event with him yesterday, so it was very energizing and he's a great business and leadership thinker. So, but first I'd say it's not about charisma. Okay. There are very very successful, great charismatic leaders, and there are absolutely great leaders who haven't an ounce of charisma.

So, charisma is not good or bad. It just is somewhat you know, a personality trait.

Jeff Hunt:

It’s so helpful to hear you say that, Paul because so many people do not realize that. They think that great leadership is only the person who is highly charismatic.

Paul Witkay:

Yeah. I think sometimes you conflate charisma with the egomaniacs who is all about, because they may be louder and more boastful and more about them. That's not necessarily equivalent to charisma. There can be very quiet charisma I've worked with leaders where you can sense where they've entered the room, even though you don't hear or see them here, they're behind you, but you can just sense their energy level. And the room is just changed and such, and they can be very, very quiet leaders, but people listen when they talk.

Yeah. But it's not about charisma. It is a level five leadership and Jim Collins’s words he says is really about. Once you've had the individual competency and you build team competency, and you've learned how to manage people and you're able to lead, lead an organization, the level five or really the humble leaders.

And it's again, it's, you could be allowed humble. Okay. But it's all about the organization's success and not about their personal success. I think I had a talk earlier today with a very successful CEO, just had a very successful exit. And you know, and she was talking about how they don't teach leadership in business school and so much.

And as we're thinking about it, I think one of the industries that actually does teach individual leadership is football. Quarterbacks are, you know, the great quarterbacks are taught pretty early on that. If they're going to be a great quarterback and lead a team when a play is successful, they score a touchdown or win a game.

They give all the credit to their offensive line for blocking. They give the credit to the defense. They give credit to everybody else. And when there's an interception or they lose a game, they take all the accountability for the loss themselves. Great leadership lesson. And, and that's really what Jim Collins is talking about.

As far as level five leadership, where their focus is on the organization. And then as far as building long-term successful organizations, yes, the best ones are building a culture of leadership where they're building both successions, where everybody on their team understands the vision, mission, purpose.

The why of their organizations. Understands the strategy and whether they totally agree, they have a culture where they can disagree about strategies and actions and such, but then ultimately make a decision, align around it and execute whether they agree with it or not. They now execute once a decision's been made and build an organization that functions like that.

Just going back to another industry but our military. Some of the best leadership organizations are the military academies. And building the servant leadership of the mission-based leaders, where they may not know exactly what actions, how the battlefield is going to play out. It's all gonna change as soon as the battle starts. But everybody on that field understands what the overall mission is. And they've created a culture where they can collaborate as quickly in real-time to reconfigure strategy. Find creative ways to still accomplish their mission. And so I think that's a Jim Collins might agree with me. I would never, never presume to tell Jim Collins anything about leadership, but I think those are kind of examples of what you're talking about.

Topic 7. Lighting round questions. (28:59)

Jeff Hunt:

Very well stated. Very, very well stated. So, okay. We're gonna jump into some lightning round questions. You haven't heard any of these in advance, and I just want you to give me the quick top of mind answers that come to you. How about that?

Paul Witkay:

Well, with quick, you mean one second, or do I have 10 seconds to think?

Jeff Hunt:

You get 15 seconds per. Some of them are pretty easy. Like this first one. What are you most grateful for?

Paul Witkay:

My family, my life. I love my family and I'm so grateful, particularly during COVID. First of all the technology wasn't there to engage I'd be going crazy, but I've been able to engage with so many amazing leaders, probably three times more than I was before because virtual is more efficient. It may not be as much fun, but it's more efficient. And to see how people are reacting in real human and inspiring ways. I am so grateful just to be able to hang around these people.

Jeff Hunt:

That's great. Yeah. The pandemic would have been a different ball game 20, 25 years ago. Wouldn't it have been?

Paul Witkay:

And my family has come together and supported each other and it's just been it's a time of global experimentation and a global re-evaluation of what matters to us and how we want to live our lives.

Jeff Hunt:

Very well stated. Okay. What is a difficult leadership lesson that you've learned over your career?

Paul Witkay:

Oh, I think I'm still learning it. God, the pace of change is accelerating so fast. The gap between what I think, I know and I've learned. Is getting bigger and bigger against what I'd like to know or should know to really have the impact that we might have as human beings.

So frankly, I don't know how to learn fast enough. But I do still believe in surrounding myself with people smarter than myself. Who has as many different perspectives and skillsets as possible to learn from them? But I'm thinking in that gap of understanding versus the potential for what's happening, you know, that is possible out there.

Jeff Hunt:

It's a journey, not a destination, right?

Paul Witkay:

But being a Cub fan, I've learned not to be depressed about that at all. And learned to be inspired and enjoy that journey. We always had fun as Cub fans, even though we lost.

Jeff Hunt:

Right! No question. Who is one person you would interview if you could, whether they're living or not?

Paul Witkay:

Oh boy. Nelson Mandela? Steve jobs?

Jeff Hunt:

What's the best piece of advice you've ever received.

Paul Witkay:

I'm going to screw up the lines, but it's basically if you can understand and differentiate between what you can control and what you can't control and basically accept those things that are outside your control and focus on the things that you can and just keep moving forward. Accept the reality and have a, you called it a light at the end of the tunnel, but never lose that light and do things you enjoy doing and find people you enjoy doing it with as well.

Jeff Hunt:

Great advice for all of us, Paul, and a great note to end on. So, I just want to thank you for coming to the show today. It's been an insightful conversation. I've really enjoyed it. Paul Witkay:

Thank you so much. I remember meeting you the first time and the passion you showed for your work and is a pleasure knowing you over the years. So, congratulations to you.

Jeff Hunt:

Thanks so much, Paul take care.

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Outro (33:06)

Closing music jingle/sound effects

Jeff Hunt:

Thanks for listening to the show this week. We release a new episode of Human Capital on the first and third Tuesday of each month, I would really like to know what you thought of this episode, send your comments to humancapital@goalspan.com. Human Capital is produced by GoalSpan, subscribe wherever you get your podcasts, and please share this podcast with your colleagues, team, or friends, thanks for being human kind.