3 Takeaways - JetBlue Chairman, Joel Peterson: Leadership and Building a Winning Culture (#4)

Episode Date: August 21, 2020

Learn how to inspire others, navigate through crises, and launch new ventures from the man who helped build JetBlue and served as advisor to hundreds of other companies, including seven start-ups which are now worth over $1 billion.

Welcome to the Three Takeaways podcast, which features short, memorable conversations with the world's best thinkers, business leaders, writers, politicians, scientists, and other newsmakers. Each episode ends with the three key takeaways that person has learned over their lives and their careers. And now your host and board member of schools at Harvard, Princeton, and Columbia, Lynn Thoman. Hi, everybody. It's Lynn Thoman. Welcome to another episode. Today, I'm here with Joel Peterson, chairman of JetBlue. Joel will provide practical steps to becoming a better leader based on his experience as chairman of JetBlue, CEO of several other companies, member of the board of directors of three dozen companies, and investor in 200 companies,

seven of which have become unicorns, that is, startups that have achieved valuations of over $1 billion. He is also a professor at Stanford and author of Entrepreneurial Leadership. Joel is special in that everyone he's ever worked with raves about him and what a wonderful person and leader he is. What's fascinating to me is that Joel's ideas on leadership fly completely in the face of conventional wisdom. Joel, welcome to Three Takeaways, and thank you so much for our conversation today. Thank you, Lynn. It's nice to be back with you.

It is great to be back with you as well. Joel, your ideas on leadership seem to have really started with yourself and the work you did to make yourself a better person. Can you tell us about that, what you did and what it involved? Yeah, so I realized fairly early on that I was not as effective a leader as I thought I would be. I, like you, went to Harvard Business School, where you do think a lot about leading other teams. And I realized that I was a little bit

too self-centered. I was a little bit emotional. And I was a little bit blaming. I was looking for things that were wrong. And I said, these three things are going to get in my way. I can tell. I'm getting enough feedback on it that I've got to do something about it. And so rather than blame my parents or teachers or peers or DNA or whatever people blame, I decided I would come up with three mantras that I would say every time I ran into thinking that I was the center of the universe, I'd repeat one of them. Or anytime I started to blame other people, I'd repeat another of them. Or when I felt emotions rising in me, I'd repeat the third one. And I found that over a couple of years, I actually rewired how I responded to events around me. And I wasn't derivative anymore of what was happening around me, but I was really in control.

And it was actually turning something that was a weakness into something that was a strength. How do you think about feedback? Most people hate feedback. Yeah, I think it's a gift. I think you should embrace it. You should seek it out. And one of the tricks that I've learned over time is if you repeat the feedback to the party who's given it, say, this is what I've heard you saying, and this is what I'm going to do about it. That's rewarding to them. And if you reward people for giving you negative feedback, they'll give you more feedback. And that's the only way you grow and learn. You know, it's like cooking without ever tasting the food. If you don't have feedback, you're going to make some lousy meals. So to me, feedback is the breakfast of champions.

Most people think of meetings as opportunities for themselves to shine. How do you think of meetings and what do you do in meetings? Well, there's several things. So there's a bunch of rules that I list in this book about running good meetings, including getting the atmospherics right, making the right people, making sure the right people are there, having them early in the day and early in the week rather than late in the day and late in the week, having follow up, having the meetings, do what I call daisy chain. So each meeting connects to the last meeting, being clear about what it is you're talking about. Is this a brainstorming meeting? Is this a decision-making meeting? Making them as short as you can possibly make them and being prepared. And then I try to make everybody, it's a little bit like, you know, you teach, Lynn, so you know that if you can get students to make a noise in the first class or two, they're with you forever. Whereas if they stay silent, my rule is if they

stay silent for three classes, I may never get them back. So I'll even cold call directors or cold call people in meetings just to make sure that everybody makes a noise. Can you talk about listening in meetings and capturing the essence of other people's viewpoints? To me, that's fascinating. Well, to me, it's the most important thing that you do as a lead. If you think about the communication skill being one of your more important skills as a leader, most important part of communication is capturing what other people think. There's nothing as gratifying and as verifying as when somebody has heard you. You know, a lot of us, you know, can observe other people being quiet around us, but just waiting until we're silent for a second so they can jump in and make their point. That's not listening. That's being quiet. Listening is really saying,

okay, I understand what you're saying. Let me see if I've captured what it is you're saying. Are you saying the following? Or here's what I hear you saying. And once you get that done, you've actually described something better than the other party could say it themselves, then they're ready to listen to you. So you really then have genuine two-way conversation which is actually what you're trying to do which is getting rarer and rarer in this world that we're in right now when we think of leaders many people think of larger than life leaders like apple's steve jobs or tesla's elon musk does that style work for most people? Well, I don't think these are very charismatic, creative geniuses in a lot of ways. And I think leaders are not to the manner born. They can be developed and anybody can have leadership ability.

You know, if you learn to listen well, to generate ideas, to follow up, to care about others. People want to be respected. They want to be cared about. They want to have clear goals. You can learn to give feedback. I mean, these are skills that people can develop. And in fact, I think Elon Musk and Steve Jobs are not classically great leaders. They are entrepreneurs. They really do some great things. And Steve got to be a better leader the second time he was at Apple. He actually learned some things. But I don't think everybody needs to aspire to be that kind of leader. How would you describe your own style of leadership? Well, I'm very aware. So I've tried to list in this book that I just wrote five kinds of leaders, the presider, the manager, the administrator, the entrepreneur and the politician.

And so these are important skills. I'm not dismissing any of those as unimportant, but typically people have one or two or three that they are quite naturally good at or that they've developed or work on, and two or three that they're not so strong at. The great entrepreneurial leaders understand that all of those are necessary in creating a great and enduring company. And therefore, they may need to hire in others to do it, but they need to appreciate and celebrate what each of those does. Now, that said, you asked me what am I best at. I actually think I'm best, and I don't like this, but I actually think I'm best at being an entrepreneur lighting fires, creating things, and being a bit of a politician. I understand sort of how the, how people are, I understand how to make compromise. You know, what politicians do is they negotiate. The good ones understand there are two sides. They have to come to compromise. They have to give a little

to get a little. And I think moving things forward that way is, is, is important. I'm not the best manager. Managers deal with complexity. Administrators deal with policy. Often if you think about agency heads, they're really good at understanding that. And presiders, I'm probably okay as a presider. Presiders give speeches, kiss babies, keep the institution going, celebrate the values, make sure everybody knows this is still what we believe, this is still what we're about. But you need all five of those. And I think those are probably the three I do well, and the two I don't do so well. Can you describe a bit more what you call entrepreneurial leaders and why we need them so much now?

Yeah, the entrepreneurial leader, I define as the person who can create an enduring enterprise. So it goes beyond taking an idea to product or service to profitable company to creating an enterprise that can be run by others, that is enduring, that is durable. And that's the kind of leader that many entrepreneurs really aren't. Many entrepreneurs stumble after lighting fires and getting things going. They run into what's called the founder's trap and are unable to take it beyond that. So the entrepreneurial leader really understands there are all five of these elements that are required and really knits them all together. And I think that's the kind of leadership we need. We need institutions to be preserved, particularly in this time. We're going to need, post-COVID, a lot of leaders who've been almost pure presiders to be thinking entrepreneurially. They're going to demand entrepreneurial leaders. I've always said that I released this book at the worst possible time in the world where no bookstores are open. But I actually think that it's relatively topical right now. I think if people will embrace some of the notions,

I think people can get ideas and really restore their brands, their businesses, their covenants with everybody. The starting point, you believe, for people to become better leaders is building trust. What do you mean by that and how do you do it? Well, trust to me is the operating system of a life well lived. You can't fake it. You can't build it up in an instant. It's a conversation at a time. It's a promise delivered at a time. You know, we trust people who deliver on promises. That's really how you build trust. And that takes time. So to me, it starts out with the trustworthiness of the leader. And that means understanding your values and delivering on promises. And then it has to radiate from that to the enterprise.

So it becomes a cultural value. And I wrote this book called The Ten Laws of Trust, in which I kind of analyzed, you know, what actually builds a high trust organization and what destroys trust with the idea that I could generate a diagnostic that as a leader, you could apply to your organization and understand the trust level and then start to address it. Say, boy, we're not very good at communicating. That's destroying trust. Let's work on that. So that you can become intentional about it.

If you get the trust levels really high, it's like people being belayed on a cliff. They really can rely on each other that they can make it to the top. Whereas if there's no trust, oh my gosh, people flee. They let go of the ropes and it's a mess and you're in politics full time. The second step to becoming a great leader in your book, you say, is setting a mission. Can you explain that? And can you give an example? I love your example of President Kennedy and the NASA janitor. Yeah, well, so that is the notion of raising the sights of everyone. He asked the janitor what he was doing. And he said, I'm helping to put a man on the moon. So he had a real vision that he was doing something that's important.

I'm part of something. People want to be respected members of a winning team doing something meaningful. And so what you're trying to do is create meaning. Mission creates meaning. And these mission statements that are delivered from the corner office don't do that. It doesn't matter how nicely they're framed or how many boardroom walls they're hung upon. They will create cynicism. People have to own the mission.

And if they do own the mission, you don't have to motivate them. It's their mission. And so the best way I've found to do that is give people the challenge of coming up with the five words they would like their brand to be known for, and then debating it, wordsmithing it, working their way through it until everybody says, okay, I have a line of sight from my job to the peak, to the summit. I know what we're trying to climb. Here's what I do. And here's how we're all going to get there. Then it's motivating. And so I think mission is not mission statement, but it's critical. Okay. I'm going to come back and ask you about JetBlue's mission statement a bit later when we

talk about JetBlue. But right now, you say in your book, when we evaluate leaders, we tend to focus on the substantive decisions on strategy and big product bets. But you believe that character matters too, not only what a leader does, but how he or she does it. Can you tell us about character and the five character traits that you believe are most important to inspire others and create change, starting with likable? Being likable is certainly not taught at business schools. Why do you feel it's the number one character trait? Well, in fact, in some cases, and in some industries, almost the opposite is true. In some of the tech industries, it's the sharper the elbows and the more abusive you are of others that seems to get people ahead.

And I think some of those things are true in the short run, but not so much in the long run. So I think leadership flows from character. And many times you don't know it until you're in a turnaround, until you're in a crisis. Many businesses have been thrown into crisis by COVID. And so they're having to rethink things. And all of a sudden, it matters. You know, are people likable? Are they, do they have a sense of humor? You know, I mean, some of these things that are really the human characteristic, are they kind? You know, I think these kinds of things are character traits that we really come to rely on when we're,

when we're roped together on the cliff. It matters. Some of the other character traits that you cite as important are grateful, happy, humble, humorous. Can you talk about those as well? Yeah, I mean, it's interesting. People who are happy and grateful somehow have shock absorbers. You know, they can handle things. They have other places to go in their lives to be refueled. It's one of the reasons that I talk about protecting your personal life, because otherwise I've known people who are really just completely dependent on what happens at work.

And they're overly sensitive, whereas people who have these other places to go to be grateful, to be happy, they have lots of room to absorb shocks and deal with things. So, yeah, I think building those things up are really, you know, not typically looked for, but really very important, particularly in moments of crisis. Many people agonize over each big decision. How important is one big decision compared to the millions of smaller decisions that follow every day? Well, I've always said that execution trumps strategy. And if you think about that in the terms of decision, the strategy is the big decision. Execution are all of the little decisions that follow on, and they are actually more important. These granular decisions are really important, but I think a lot of times, particularly people who are trained and who are bright and who are perfectionist and graded in schools, you see it in your students, I see it in my students, they have a hard time pulling the trigger. You know, it's just, they always need more information.

In many cases that I teach, I say, okay, so what are you going to do? Well, I'm going to go get some more information. Okay, I've got more information. Now, what do you do? Well, I need to get more information. You know, it's always I need to get more information. And ultimately, I say, you've just made a decision. Time has made the decision for you. So I try to convince people, you know, there's a diminishing cost, there's a diminishing return to the cost of information. And you have to decide to pull the trigger. And if it doesn't work, most things you can fix. You know, you can go in by making a bunch of small decisions, you can alter the course. And so I think making

decisions under conditions of uncertainty is one of the things that great leaders do. They pull the trigger, they move forward, and then they have the humility to go back and say, okay, this one we could do better on. Let's do the following. So let's turn to JetBlue now. How do you create the culture at JetBlue? And how would you describe that culture to start with? so i i would say it's a caring passionate fun loving culture that uh really cares a lot about our customers and about each other now i think you can kind of select for that on the front end you know you interview people carefully well i used to tell people that it's easier to get into stanford business school than it is to get a job with JetBlue.

And that's true. The numbers prove that out. So we're quite selective in that. But then I think the leadership has to demonstrate, you know, if leadership isn't demonstrating that. And so I think it starts at the top. I know as chairman, I gave all of my board fees every year to an emergency fund that went to crew members who lost a home or a child or something had happened. We just had a way to. So over the years, I gave a lot of money to the employees and they knew I cared. And every interaction is a respectful interaction. We did things like set people up so they could get college degrees, you know, and cover those. And so we did a lot of things that we didn't have to do,

and it just said, hey, we care a lot about you. And it's interesting. That reciprocates. The other thing we did is we said, you know, we want to be good community, members of our communities. So the JetBlue crew members voluntarily gave over a million hours to their cities. And that meant planting trees, building parks, delivering meals. I mean, it was just all kinds of things. And they felt better about themselves. They felt better about JetBlue. They recruited better people to JetBlue who stayed

more with us. So there's this kind of virtuous cycle, but it has to start at the top. And people really have to feel it. You know, people are too smart to fool them, to do these little things that are symbolic. You know, I see a lot of people virtue signaling in today's world. And to me, it almost has the opposite effect when people go out of their way to virtue signal. I'd rather see somebody that you don't even know about rolling their sleeves up and helping in the inner city or wherever. You'd much rather see actions than words or statements. Absolutely. Can you talk about JetBlue heroes and your hero stories?

So I have several, but I'll tell you one that I can think of. One of the associate deans at Stanford Business School was flying from San Francisco to Boston, and she was seated in the very back seat in the plane with So she was with her little baby. And she was the last person off. And so by the time she got to the carousel to pick up her baggage, her stroller for her baby had broken apart. And George Force was the pilot, the captain, the left seat captain on her flight. And he was still down there, you know, kind of checking, making sure everything was okay. And noticed this mother, young mother with her infant,

and he went over and he helped assemble this stroller that she wrote me. And she said, I'll never fly anybody but JetBlue. And so I read her letter at the beginning of a board meeting. Because I think people learn by example, we learn inductively. And I think great cultures celebrate the prowl as a leader for behavior that you want to reinforce. You want to celebrate that whenever it happens. And you often talk about JetBlue heroes at meetings to celebrate all of the culture, the wonderful people and everything they've done. Absolutely. Yeah, it's fun, too. It's way more fun to live that way than barking at people. How do you lead and communicate in a time of COVID when in-person meetings are limited or not possible? Well, it's certainly a challenge, isn't it? I know if you've taught online,

it's not the same experience. Human beings like to be together. We're social animals. We read body language. It's better than I thought it would be. I will say that much. But you have to hold the meetings. I think in this book, The Trillion Dollar Coach, that you and I were talking about, Bill Campbell would always take a minute or two at the beginning of every meeting to ask people about themselves, about their lives, about the recent soccer game, about something like that. And people initially were sort of put off by saying, why is this guy wasting time on this? And yet what that did is that connects people. And so I think there's, even that can be done online. When I was teaching this last

quarter, what I did was just hold lunches with six to eight students and just for an hour, get to meet them and talk one-on-one, which you couldn't do in a class with 60 or 70 people. So I think you have to break it down. It takes a little more energy, but it's worth it. I think that's one of the reasons you're one of Stanford's beloved professors. Can you talk about JetBlue's strategy to get through this difficult time with COVID? Yeah, so I always say that job one is survival. And survival is typically an issue of cash, having the liquidity. If you're out of cash, you're out of business.

And so there are ways to preserve cash. Number one, you can arrange to have more cash by debt. You can defer capital expenditures. You can cut operating expenses. But you have to be really clear and you have to communicate, but you have to do that. So that's job one. Job two, I think, is that you have to really think about all of your constituents and think about what is your covenant with them. You may have to reimagine your business. You may have to extend your covenant. For us, our number one value at JetBlue is safety. And so as we were thinking about that moving forward, the safety category expands to health. And so we had to really think through, well, how do we make sure

that people feel and know that it's safe getting onto a plane? Well, that means sanitizing the plane. It means taking temperatures. It means wearing masks. It means blocking the middle seat. You know, it means all these kinds of things that people would say, okay, it is safe to travel again, but we have to think that through and reestablish that. So I think that's the thing. And then the third one to me is this kind of vague thing about communicating kindness and thoughtfulness. is an underrated element of leadership, and particularly in times of crisis. People will never forget how they felt when they were afraid. And so people are stressed out right now. And so I think taking an extra second to just be kind. There's this fellow that, I don't know if you've heard about,

rapped by Abraham Heschel, but he said, you know, when I was young, I used to admire clever people. And now that I'm old, I admire kind people. And maybe it is that I'm just getting old, but I actually think it's a really powerful way to communicate. Even when you're having to do really hard things, you may have to let people go. You have to make hard decisions, and you have to make them. And you have to do them, but you can do them thoughtfully, clearly, generously, and kindly. We said earlier that we would circle back to JetBlue's mission statement. Can you tell us what the mission statement is? So I can tell you what it started out to be and what

is just variations on it. I think they've come up with a clever one that is about the same thing, but it was when David Nielman started, it was he wanted to bring humanity back to air travel. And I think it's something like now humanity on the ground and in the air, something like that, serving humanity on the ground and in the air. But it's this idea of humanity, which captures a lot of these things about serving people, delighting people, being kind to people, treating them as our guests, and just creating an experience that's great for everybody who ever touches the brand. Before we come to your three key takeaways, is there anything else you'd like to discuss that you haven't already touched upon? You're such a great interviewer, Lynn. You cover ground that I wouldn't know how to cover. And I told you when we first started this, I'll go wherever you take me. Well, thank you.

I'm fine. Thank you, Joel. There's so much that I could ask you about. It's very hard to limit the questions. So what are your three key takeaways that you've learned over your life and career? You know, I've been thinking about this since you posed this question because, well, I knew you were going to ask me and I wanted to be thoughtful. And I realized I've

written two books and I'm getting ready to write a third. So I think these must be my takeaways. And the first one was about trust. You know, the nature of trust, its fragility, its power, how you can be intentional about it. I think people who are deeply trusted are really in a place to change the world. And so to me, that's my number one takeaway. The second book I wrote about was this one on entrepreneurial leadership. And I think it's the notion of really being an intentionally trying to build something enduring through teams. I'm a huge believer in teams. I think business is a team sport. And I think it really ennobles the lives of other human beings to make them a member of a great team. So this, the whole idea of

entrepreneurial leadership and the fact that we need more entrepreneurial leaders who have this skill set is probably my second big idea. And my third one that I'm just, I'm actually just working on it right now. I'm calling it moments of truth. And it's really this notion that we get to choose the optic through which we view things. We get to pick the lens. And so in many cases, you know, the facts are not all that clear. And it's really the attitude we take into how do we want to filter the realities. And so I'm picking 10 moments of truth in my life.

In some cases where I picked a kind of a fuzzy or vague lens that wasn't perfect and it didn't work out as well as when I really was very careful and thoughtful about the lens. You know, I use the example of Robert Frost's poems, Stopping in the Woods on a Snowy Evening, where the paths diverge and the path he chooses makes all the difference. What he calls the road less traveled by. So picking the roads really makes a huge difference. And so I think that idea of getting the lens cleared up is probably my third idea. Joel, thank you so much for our conversation for three takeaways. And thank you for your important ideas and your book, Entrepreneurial

Leadership. Well, thank you, Lynn, for being who you are and what you do. Enjoyed talking. If you enjoyed today's episode, you can listen or subscribe for free on Apple Podcasts or wherever you listen. If you would like to receive information on upcoming episodes, be sure to sign up for our newsletter at 3takeaways.com or follow us on Twitter, Instagram, Facebook, and LinkedIn. Note that 3takeaways.com is with the number three. Three is not spelled out. For all social media and podcast links, go to 3takeaways.com.