Transforming Kindness into Capital

Anita Brick:

Hi, this is Anita Brick and welcome to Career Cast at Chicago Booth to help you advance in your career today. We're delighted. Oh my gosh, it's way more than delighted. I'm excited and I must admit a little intimidated by our guest today, James Rhee. He is an acclaimed impact investor, author of Red Helicopter, which is an amazing, amazing read. It made me think, made me cry, and it made me have hope for the future. So very excited about chatting. He's an educator known for transforming Ashley Stewart from Bankruptcy to Unprecedented Success from 2013 to 2020 by blending kindness and math, which often don't go together. And you may have been the first person, James to say that he's a former high school teacher and graduated both from undergrad at Harvard and also is a law graduate there too. He now leads Red Helicopter, a brand focused, values-based leadership organization and holds roles at MIT and Howard University. Well, we could go on and on, but I'm so glad you made time. I know you're busy. I know you have a very big mission in this lifetime.

James Rhee:

Hi everyone. Hi Anita. Thanks for having me.

Anita Brick:

Alright, let's jump in a booth. Alum said, hi, James. Your story shows what's possible when A CEO leads with goodwill and trust and a little math for those of us who don't have that position of power. What's one concrete act of kindness? First leadership and math that we can practice from the middle of an organization when we're not in the C-Suite?

James Rhee:

We're going to get right into it, huh? Sure,

Anita Brick:

Right into it. Let's do it.

James Rhee:

Red helicopter. What I've done, I think one thing that was missing from the bio is that I've managed billions of dollars of private equity money too, and we'll talk about later how I generally think and communicate through music, which captures all oxymorons. So Red Helicopter, it's a parable. It goes back to classic principles, and so I'll answer the question in this way. We are in the midst of understanding that many things, many norms that we take for granted as fact, they change. We are living in a seismic systems devolution once every 70, 80 years. When you ask about leadership, we have gone through the last 10, 15 years listening to a lot of people write prescriptive, commercially attractive books on what leadership is makes money. Oftentimes it's also with people who have not led and it's about steps, right? Do these three to five things, do it my way.

I don't believe in that. Leadership always, always starts with yourself. No one can lead effectively and sustainably unless you can lead yourself. Why would you follow someone that can't lead themselves? So my answer to the first question, whether you are the CEO, the president, a stay at home parent, a kid, the first step of leadership is to lead yourself, is to exhibit the behavior that you would want exhibited. That's my first answer. So so much of the book and the Red Helicopter process, the reason why it was necessarily so personal is that I learned a lot about myself in order to be able to pull off what people thought was impossible. And so as a private equity person who's managed a lot of leaders in my life, I dig very deep into motivations and inherent behavior and intrinsic behavior, high agentic behavior of leaders, whether that's at the CEO level, the direct report level or middle management.

Now I know it's a little bit long. I do understand and I do sympathize. It is sometimes very difficult to work in organizations where you want to lead yourself in a certain way and thus your division or your team and you are in a ocean where you don't agree with the culture or you are dissatisfied with the overarching board or CEO leadership that I understand and that is a difficult place to be in. I work with a lot and talk to countless people in that situation. Easier said than done for me to say than leave, do something else. That's not easy. It is sometimes very hard to work at a place where you really believe in the ethos that is promulgated and enforced by the tippy top leadership. And that's so much of the work I'm doing is to work with not just the tippy top but also the mid people and get them to understand and communicate with one another.

Anita Brick:

Okay, went to Harvard undergrad and became a high school teacher. You went back to Harvard and got a jd, did work in investment banking and a lot in private equity.

James Rhee:

Yes

Anita Brick:

Were indoctrinated to the way that you cut costs, you cut people, kindness. Are you crazy? What are you talking about? How did you unlearn some of that behavior and what became the driving force for you to even consider doing that?

James Rhee:

Yeah, look, I'm the son. Let's start from the beginning. I'm the son of two immigrants from Korea who one survived the Korean War and saw the worst that man can be, and then two, they immigrated here. It was not easy for them. They were one of the first immigrants from Korea. Number three, I'm from a long line of caregivers. My dad was a pediatrician, my mom was a nurse. I don't think it's surprising to me that I would self-describe as a humanist. So I'm a trustee of the National Humanity Center and I love science and I love math. So these are sort of laws of nature like trying to study why humans behave the way they do. How do manmade systems alter and trigger certain neurological tendencies and how is that different from natural systems? And so I've always been a humanist, so that's why I taught high school at Harvard undergrad. I studied basically synthesize what the Brits would call PP and e, politics, philosophy, economics, which is all about human behavior. I'm a human being. So as much as I like the fact and I laugh that people want unicorns financially, I'm pretty happy and content living on the earth as a human.

I don't need unicorns, right? I mean, I'm with people and this is the reality of things. People are not perfect. People make mistakes. People are also capable of the most courageous and grandest things. So there was a struggle for me when I went into private equity in my late twenties. Clearly it's generally a different culture than being a humanist, but I found pockets of people that I worked with and who the same thing. One of the reasons why so many of my investments tend to be very left, right side brain, human behavior oriented brands internal org. I understand how and why people behave and I've tried to throughout my career, live the values that I was taught with. I am a capitalist. There are many definitions of capitalism. I don't really believe, nor do I feel like I need to traffic in the sort of capitalism that deludes lies compels. In law school, they would call these contracts of adhesion where you sort of really take advantage of a negotiating or a position of leverage. I haven't had to do that. The companies that I've owned and led, it's been much more Zephyr. It's been pulling and pushing softly versus extorting and taking one. I won't live my life like that. Two, I've done quite well building ecosystems where everyone generally wants the ecosystem to win and everyone creates and shares in a much larger pie.

Anita Brick:

Okay, so why did you leave private equity in the first place to take on this basically dissolving Ashley Stewart if everything was the way you wanted it to be?

James Rhee:

It wasn't the way I wanted it to be. I'll answer that in many different ways. So this was in my early forties. I was at sort of a peak of my career and there was this business. There were many things that were happening and life happens. I hope your listeners understand that. Oh

Anita Brick:

My gosh, yes.

James Rhee:

Life is life. I mean if anyone in the last six years, people die. There's loss, there's injury, there's sadness, and there's also beauty and joy, almost like a perfect storm where my dad unfortunately was in the last years of a really gruesome fight with Parkinson's and he was dying and I had a lot of time to reflect. My mom was taking care of him. I watched my two parents struggle and I was very proud of them for how they were sort of just holding themselves through a very difficult time. I was a father of three young kids and I really thought about the role model that I wanted to be for them, that my parents were for me, and there was a business that was called Ashley Stewart, still is that historically, remember I'm a humanities person. I was one of the few who recognized that this wasn't just some apparel business, it was a historically significant business.

It was one of the largest, if not the largest business that had its roots in the black community. It was employing and servicing a segment of the black community that very few businesses serve. This was not a small business. It was hundreds of millions of dollars national, and you can imagine it didn't get the easy access to capital markets, had no wifi. It was disconnected from the system that my parents were disconnected from as immigrants and that I was not. I have two Harvard degrees, private equity, tall buildings in Boston. It was very important my parents' perspective to get me wired into that system. So I was very much a leader in that system, and so I saw consonance in all of these stories and I knew exactly why this business had been failing for 20 years. I knew exactly why it was going to liquidate and be liquidated in silence.

I knew too much. I wasn't that crazy. I volunteered for six months to sort of figure out if there was a way to just get it to be sold to a bigger company, to preserve the neighborhood stores, the way in which the company was treated, and I was treated frankly during those six months when the world basically turned its back on them and me. I had an extra jolt of like, oh yeah. And so I stayed for seven years as you know, and I called in favors and we built together a new world, a new operating system that first time this company, which had never been successful on conventional terms. I mean, I don't think there's much more success than being asked to deliver a TED Talk or be on Brene Brown's podcast. I mean, we received every accolade possible, like tech conferences and all of these things. And even though those are nice, as you know, those are fleeting moments of joy. They're not really joy. It's happiness. But the real joy was the personal relationships and the growing that we each did, our little team did and including me.

Anita Brick:

Okay, so couple of things. I'd love you to walk us through the process a little bit, but before you do or maybe incorporate this, why did this group in the African-American community, both the Salesforce and the managers and the customers, why did they accept you and why did they accept this process?

James Rhee:

So I'll answer that in a couple ways. So the first question is relating to trust. There is nothing other than trust. If you don't have trust in any part of your life, business included, it's a unsustainable short-term endeavor, and the world is obviously suffering from lack of trust, which is why everyone's on their phones and looking for some dopamine hit. People are having a hard time building for the future, which is what Munger and Buffett had been sort of banging their symbols about. We had to build trust. I had to build trust. Yeah, the first thing I said, now you have to picture this private equity guy, and by the way, I already said this, but this is a Korean American man speaking. I said to them, Hey, on paper, you're right. I may be the least qualified person to run this company. I stated the obvious. I said, I'm not black, I'm not female. I haven't been a retail executive, and by the way, I'm not particularly fashionable. Well,

Anita Brick:

You wore khaki pleaded pants the first day, right?

James Rhee:

I did with a blue blazer. You can picture that Boston private equity uniform. I just stated the obvious, I stated the truth. I said the similar things when I broke into private equity as a humanities law guy and said, listen, am I the best financial modeler right out of the gates? No. But if you want someone that will grow into leadership, then I'm your guide. If you're going to want me to win the first day, then don't hire me. But I invest like this too. I look for people who are the tortoise, right, not the hare. It's wise investing. And so I said all these things and there were stunned silence and I also told them that you're screwed. You're out of money in six weeks. I'll show you the financials. I just didn't lie. It sounds obvious, but I said it. I'm like, this is the truth.

This is what's going on. You can leave if you want to, but I think there's something here. And then the second party of the question I explained what I thought was here, intangible assets both in private markets and public markets. I forget the exact stat now, but we all know that that generates to 70 to 80% of the true value. You don't invest on liquidation asset value on enterprise ongoing cash and on hope, right on future. And this company had been valued entirely just on an asset basis. Think about car loans and think about predatory loans where you seize collateral. Any business or person who tries to build enterprise when they're stuck in asset land fails. I was saying to them in a more simple way, you have so many intangible good things here. Customer loyalty, brand value, compassion, friendship, neighborhood dynamics. I have to figure out a way for the markets to see it, and I also have to figure a way how to mathematically create a business plan that brings that out and monetizes it without cheapening it, without making it transactional.

That's what I did and in chapter five of the book, I eviscerate accounting. I just remind your listeners, physics is law, accounting is a convention accounting's made up. It only values the things that you can sort of value mathematically. It doesn't value the things that mean the most in a business or a life like trust or joy or agility agency. And so I spent a lot of my time at Ashley Stewart, but also just in general in my 30 plus years of operating in the private sector, I value things that are very difficult to value, where the arbitrage is both as an investor but as a human I find people who have interesting things about them. I do that on a personal side. I like interesting people and I think a kind environment creates an environment where people feel safe to show you that. And it invariably, it sounds obvious, creates interesting conversations, interesting ideas, innovation. Yeah, kindness is a bedrock of curiosity and innovation.

Anita Brick:

Agree. It sounds a little bit idealistic to me, especially when you had multiple groups within Ashley Stewart who wanted very different things and part of your battle was to manage and bridge those conflicting priorities. Some people who did not want to look at kindness and other intangibles and others that were very open to it because it gave them more agency. How did you resolve those conflicting priorities?

James Rhee:

One, I mean I always operate under practical idealism. Any venture brand or a life, I always aim for the moon with a very practical roadmap. And number two, it's not idealistic because I actually did it.

Anita Brick:

Well, it seemed like it at the beginning. We'll just say by the end of the book, I knew that it was not,

James Rhee:

But

Anita Brick:

At the beginning it seemed a little bit like, wow.

James Rhee:

Well, it goes to the fundamentals of what leadership is and kindness is, and I spent a lot of time in the book defining things correctly. What's accounting? Is it accountable? What is a waterfall? Is it water or is it like a priority of claims? I mean, it's really defining things, kindness. I spent a lot of time defining it and to show it because it's very difficult to define kindness. And so let's spend a minute on that. Kindness is not niceness and there are plenty of other people you can go listen to, and I don't think this podcast, we want to spend a lot of time on the science of it, but it's all over the place. Kindness is not niceness. It's not meekness, it's not self emulation. It is the highest form of leadership. I was on Francis Fry's podcast, the TED podcast, and she had a eureka. She's like, it's the highest form of leadership. I said, well, yes, because you have to manage yourself, your own ego. What kindness is, and there are very few people, it's been relegated to sort of faith, it's been feminized kindness is very strong. It's insisting that someone really seizes their own agency and someone's willing to invest in your agency. I mean, Anita, let me ask you, how many leaders in your life not in your family, have been kind to you as a boss?

Anita Brick:

If I define that as helping me grow and doing it with humanity, I would say two.

James Rhee:

Not many.

Anita Brick:

Not many.

James Rhee:

Most people when I ask that question, they say, we don't really have it at work, maybe one or two. And I say, well, generally speaking in investment terms, don't you want to be a person that is rare? Think about the future of ai. Ai. The whole book is about AI and about agency. Without saying it, can AI be kind? And so there's going to be a real switchback from a humanism standpoint over the next 10, 20 years as a strategy. But the second thing most people say is that, yeah, kindness. It's my best coach, my best teacher. And I said, exactly. These are service businesses where people are investing in you. And I look for this in language modeling basis, where in the private sector too, a great kind leader, what people say about them, they inspired me to be my best self or I didn't want to disappoint them. And a great kind leader will say, no, don't disappoint me. Just don't disappoint yourself.

That's ultimately what agency is, so I look for that, and that's the thing, right? Kindness, obviously it's not soft, it's defined correctly, and I spent a little bit of time explaining that Rousseau and Adam Smith, who are the inventors of free markets and democracy, they are two of the most prolific writers about secular kindness because both of those systems are highly agentic. That's why it is. And then I think the last part, I would say with kindness, when someone you enter into a relationship and I'm asking someone, I'm asking you to really seize your agency, I have to say in my career in many different contexts, most people don't want that because it comes with a high degree of accountability to yourself.

Anita Brick:

Yes,

James Rhee:

Asking you not to be mediocre or to be inertial or to be lazy or to be not self honest about your flaws. It requires a great deal of introspection. So if you loop it back to your first question, if you don't have introspection, you can't lead yourself. I'm very suspect about whether you really should be in charge of leading anyone.

Anita Brick:

I would agree with that. I'm curious though, both in yourself and other leaders in companies that you've invested in, how do they, for lack of a better word, coach people who may be struggling with internal negativity to get beyond that, to realize more of what they can bring to the world, more of their agency and greater capacity?

James Rhee:

Let's use the book as just sort of that narrative, and I have other narratives. So number one was the question earlier when I said I'm not all these things. I'm not some 50 year CEO, I'm not a fashion expert. It is. I was showing them what I'm not. Number one, a lot of leaders won't do that, right? You have a lot of leaders who come in on the horse and bare chested and say, I know all the answers. How many times I've seen that run away. That's the sort of unfortunate, a lot of business school curriculum, like the bad part of business school curriculum, not all of it. You have these Titanic leaders that come in, blah, blah, blah. I'm like, no, that's not what leadership is. Leadership is actually very quiet. It's relentless like water, but it's quiet. But the second thing, this kind environment, so I'll give you an example where math plays a role. You remember in the book that I created all this hedge fund math to manage the inventory. A turtleneck was like a high grade bond and a really hot skirt that was highly fashionable was like a real estate venture in Argentina. I created all these risk duration, portfolio management, math, basically using the math. What I did is I explained to them also, not just culturally, but I said mathematically, the business is in such mathematical truth. You cannot destroy this business. You can make mistakes. The model anticipates that you won't be a hundred percent correct on every fashion choice, so go forth. Right,

Anita Brick:

Right. No, I get that, but I guess what I'm asking is a deeper question. I'm asking the people in some of the stores, you had stars that you talk about a lot of people from reading and reading between the lines. They didn't necessarily have the confidence to believe that it really was okay to make a mistake. They had been, in some cases, been beaten down for a long time. How do you help them elevate their own sense of capacity and talent and worth?

James Rhee:

Yeah, well, that's what the entire red helicopter process is, right? In some ways it's what I just said. It's cultural, sociological. It is elementary school, just how you deal with people and treat them and talk with them. I explain that a lot of my environments, which are very high performance, they feel like school. It's learning. It's constant learning that you're supposed to learn,

Anita Brick:

But this sounds very clinical, James and your approach, the book is anything but clinical. It feels a little bit at arm's length. Give me an example, a real example where someone was struggling because of disbelief in themselves and you had to find a way to get them past that or help them get past that.

James Rhee:

In that situation, it was the entire company. You had 20 something years of failure. Yeah,

Anita Brick:

Understand. Give us an example because it'll make it more real.

James Rhee:

I mean, let's go back to what I was saying about the inventory, the flows, the blue prom dress. There was that story where despite all the math, and I used to tease the merchants, you'll never buy something that's so ugly that no one will buy it. One day it happened. There was one merchant who bought this blue prom dress. We couldn't even give it away to charity, and we had taken a pretty significant inventory position on it, and she was scared. In a lot of businesses, you get railed on fired,

Intimidated, you're only as good as your last choice. They disregard a track record, a trajectory of excellence. And so I held up the blue prom dress and I'm not some fashion guy, and I said, is it this ugly that no one would buy one? And she was a little scared, and I just smiled and I said, do you remember what I said? We've mathematically created a model. Of course this happens. We're good. What happened? The face, the room just went, oh my gosh, this is like, and we took a loss on it. It wasn't insignificant, but that person, the woman who I was speaking with had been one of the best gross margin over inventory investors of fashion capital over the last year and a half, and that moment, it opened her up. She got even better. She took more risks quantitatively justifiable risk, her fashion choices got even more on trend faster. Most people, when you're scared, this is why kindness is the opposite of fear. When you are fearful, when you get yelled at, you make a mistake, what's your instinct? You shut down.

Anita Brick:

Of course

James Rhee:

You don't take risks. I'm saying, no, we need to keep going. We need to keep leading the market. And that's what's happening in the world today in a lot of companies, right? Everyone, it's not everyone, but many, many companies and leaders are operating completely out of fear and it's troublesome because you cannot be successful long-term, even midterm, by being fearful and not taking calculated risk and innovating Innovation is the opposite of fear, right? Kind environments. If you really do your homework and understand really what it means, it is a very agentic, highly accountable no bs, no politics, no bullying. It is a very meritocratic system, and any system that I'm a part of, whether it's CEO or my classroom or this musical I just produced, it is a high performance environment. It demands excellence, excellence in character excellence in your longitudinal view on the world that you're not a one trick pony trying to make money just once and be lucky and then leave excellence in deductive reasoning. It also requires excellence, and this is also neurological, right? When you are vagus system, vagus nerve system is activated and you're not fearful and you're breathing. I demand excellence in future thinking and innovation and imagination and curiosity. This is where we are as a humanity, right? AI is going to be able to do so many of the deductive calculations already, much better than any of us could do, and this is why the skill sets kind environments and humanist environments, systems thinking environments are very difficult for computers and AI to replicate to do.

Anita Brick:

Totally agree. Okay, I am a business person with an MBA or getting an MBA, and I'm thinking, wow, I want to work at a company like Ashley Stewart or any company that operates the way James has just described. There aren't many of them. What are some clues when someone is looking around at public information, when they chat with people, how do you even find an organization that believes in this human focus, innovation over fear, focus? How do you even find an organization like that that's for real like that? Yeah.

James Rhee:

Again, another compound to answer your question, it's a great question. So that's one of the reasons why I've been carving out a bunch of my time in my life the last five years actually teaching in universities, Howard, MIT, duke, and now Yale, and then I think you know this, but Harvard Business School, they're about to publish a case study on this. I am counseling a lot of young people. They come to me a lot and I'm investing capital, financial capital, always other capital, but financial capital, some of them, many of them are starting their own companies or they're buying small businesses with the generational shift in retirement and wealth, they're saying that I'd rather just own it. The buck stops here. I'm the owner. I'm going to run it. And so that's why you see a proliferation of search funds right now, and I think a lot of business schools also talk about entrepreneurship by acquisition. I think that's a pretty common sort of term.

Anita Brick:

Absolutely it is.

James Rhee:

And so I see that those numbers are skyrocketing, and I have them in my inbox, so I'm counseling a lot of young people on how to buy a company and to run it, which is effectively at Ashley Stewart, what I did. If you join a larger company out of the gates, it's not forever. We know that most people don't stay forever and you're going to have 5, 10, 15 jobs, even identities in your life, things that I look for, they're very hard to find in public data because of the accounting thing that we talked about. They're not measured. The whole saying, how they act is look at how they act. So I often counsel people the interview process, how do you feel about it? How are you treated? That process of how one gets onboarded, interviewed, and then onboarded is a real telltale sign. There are plenty of companies that treat people awfully during interview process, and I often ask them, do you think that they're going to treat you better once you're an employee?

Anita Brick:

Yeah, you're right. I do the same thing. They're treating you this way. Do you think it's going to get better? And they're like, oh, I never thought about that, but that's a really good point.

James Rhee:

And then the second one is the onboarding. So once you get a job, if they don't take it seriously on onboarding you, what is the mission of this company? This is the history, these are the expectations. Here's the culture, here's the full p and l. We want you to understand how this company makes money, who these people are. If they're not investing that time, then you're being treated a little bit like it's an itinerant. The onboarding is also a real telltale sign that they want you there for keeps. They're hiring you, they put you through the ringer. They want you to stay. Those are the things I advise, and I think what you said, Anita, is exactly right. A lot of people are programmed to doubt themselves. A lot of the book is about trusting your intuition, which is in the same family as Croatian imagination.

These are intuition, at least in Western civilization, we tend to minimize it. It's like, oh, it's deductive, deductive, deductive. But in a lot of other global cultures, intuition is the, and Einstein would agree or did agree, it's the highest form of intelligence, intangible, unexplainable, pattern recognition. I find a lot of young people because they're scared and they look for some savior or seer who's writing the book and says, do these five things and do it my way, and I really tell 'em the opposite. I'm like, there's some decent principles that are applicable all the time. Look for those universal principles. Number two, trust yourself. If your intuition says that it's not a good place for you, if it makes you feel sick, bad, insecure, stupid, unwelcome, then trust yourself and don't go there. It's not good for your health and brain science wise. You're not going to perform well.

Anita Brick:

No,

James Rhee:

No.

Anita Brick:

The data shows that cognitive functioning in those environments, in addition to productivity goes down and there's no clear path whether it is regained and it's not age correlated. It's fascinating.

James Rhee:

By the way, can I add one thing there? Oh, yeah, yeah.

Anita Brick:

Go for it. Go for

James Rhee:

It. I'm going to butcher this reference, but I think before COVID and I haven't seen research since, but there was some paper, it's not surprising. A lot of the papers that come out, I'm like, yeah, of course I forgot work is the third or fourth leading cause of death in the United States, and I am asking your listeners and all the young people, I'm like, listen, I get it. Having a successful, successful career and doing these things, it's important. I understand. I get it. And is it worth being sick like dying, not having a personal life as much as the attention goes now to health span in terms of the medicine 3.0 in terms of physical, if someone said, we have the science to have you live until you're 150 now and you're going to be miserable for 150 years, why would you do that?

Anita Brick:

Alright, so you practice what you preach. Tell us about the rock opera you did. I know you are super proud of it, and I want you to be able to share a little bit.

James Rhee:

I see and listen and invest and always have kind of like a musician. I have a lot of professional musicians in my family. I'm a trained musician and unfortunately not good enough to be professional. But music has always been how I hear people, how I memorize things. Like people say, you have photographing memory. I'm like, I don't. It's actually musical memory. It's like when you listen to a song and you remember the lyrics for 50 years. I remember conversations that way, Timur, I hear people get to know them. I'm like, oh, you're like a clarinet G major. It's how my brain works. It's not quite synesthesia, but it's coming handy a lot when I invest. So when I owned Meow Mix, cat food or some of these iconic brands, Meow, meow, meow, meow, Meow. Music has been and always has been very important in conveying a message so that people remember and it's neurological that they remember deductively, but also emotionally.

The book, which is based on a true story, which I ran Ashley Stewart, I used to tell people, I am running a musical. I composed a new musical. The first 20 years the musical didn't work, so I'll have to communicate and write a new musical, different notes, tempo instruments and the math, which is music. Music is just math of sound. We did a musical internally and then the rest of the world watched the musical and said, we really like the musical and we were wrong, and can we please be part of it? So the book, not surprisingly, is written as a piece of music. In my acknowledgements, I write, I wrote the book an E flat major. It's structured in three acts with a bridge and a coda and a prologue, so it's literally structured as music. There are different tempos and tams in the book, and there's actually original music on my website that is the musical inspiration underneath the words and the flow of the text at Yale. Last week, I guess two weeks ago, I actually produced and presented and helped compose a bunch of the music, an actual rock opera that fleshes out the music, right?

Anita Brick:

That's great.

James Rhee:

It's performed. It was an hour and 20 minute fractal version of the entire musical. Yale had just named me their artist in residence because it was important for them. They're like, this is a CEO business quant guy who is an artist and that future leadership for our students. If you think about the predictions of AI artistry creating things from different forms of clay, different groups of people, it's a very important skillset. Yeah, I was really happy how it went, and I'll play you snippets of it off the podcast, but one of the songs that your listeners might really enjoy, which I don't have my guitar here, but I'll sing it a little bit in chapter five when I eviscerate accounting, it's just a made up convention. It's a artificial constraint, really figure out the math, not the accounting. And I wrote a song called Control Alt Delete that it's a metaphor about rebooting. You reboot your computer, reboot your life, reboot a model. And so the lyrics are something like this. It says, I'm at the office, my wife's mad at me, and I'm like, listen, I got to go. And my model's reffing out. I sing kind of lamenting. I say accounting's really easy. It never makes you really place a value on things that you just can't price. You just draw this magic TT account

And ignore all sorts of future liabilities. And to make the model balance, all you got to do is press F nine, not once, but twice. The song is in sort of American folk tradition, just gently, but very pointedly, reminding people that excel and accounting, they don't measure the most important things that hold together businesses and countries like social compact and mutualism and agency freedom, agility. There are no measurements per gap, and I've spent most of my career finding analogous quantitative measurements of those things and trying to make sure that those are improving as well. Even while I'm looking at gap financials.

Anita Brick:

I love it. I know we are rapidly running out of time, but I want to thank you, Ken. Thank you enough for doing this very hard work that you've done and creating something that is a blueprint for an alternative to what we see today. But I'd love it if you would leave us with one to or three things that someone thinking, yeah, but I'm not sure that this is going to work or I want to do this. What are three things that someone can begin to do today? Just very briefly,

James Rhee:

I think that the reaction I get so from the world over is like, geez, wouldn't, we're so frustrated. We know intuitively this is right. We're stuck in a matrix. That's generally the thing, which is why a lot of people are heading toward the entrepreneurship route, which we talked about earlier, where I'm really also trying to define entrepreneurship as agency rather than it's not broTECH. There's lots of entrepreneurship, small

Anita Brick:

Business owners,

James Rhee:

And my dad was an entrepreneur and he immigrated here and set up his own pediatric practice. That's the ultimate form of entrepreneurship. It's another word that's gotten co-opted. I think that the practical advice I would give people, it's a very difficult exercise, so sounds easy, but it's not. Number one, what is your red helicopter story? What is it? I actually have a literal red helicopter story, but there's a reason why there's no helicopter actually on the cover of the book. It's metaphoric. So it's a story of hyper agency, psychologically intrinsic motivation, autonomy, connectedness, all the clinical definitions of what agency is, what is your red helicopter story, internal narrative you're telling yourself and saying, I can do it. I solved the problem. I wanted to solve it. I didn't do it for money. I didn't do it because someone told me I wanted to do it. I was interested in doing it and I did it. And that internal narrative is also very important to get people through difficult times because all of us are guilty of having very negative internal narratives saying it's opposite of agencies learn helplessness. That's one, right? What is your red helicopter story? It's so simple, but it's hard. But do it because that's your personal statement. It's your personal life brand.

So that's number one. And then once you do that and really write it down and then say, oh, what's the song that gets connected to this? So I've been working with people that compose music for their red helicopter story too. What is the music? What's it look like? What's the film? You start really manifesting and seeing your life the way that you want it to be, and it's predictive, right? You're sort of saying, I want this 20 years from now, this is how it feels. Here's the protagonist. Why do I have these people in my movie? They're bad for me. You start eliminating all sorts of liabilities. And so the second thing I would, after you do that, by the way, whether it's CEO of yourself or ceo O of a company, CEO of yourself, always first. Because if you can't do it to yourself, it's hard to do it for a company.

Second one is chapter five, which is when I sort of talk about the deconstructed lemonade stand, what's your balance sheet look like? What's the T account of your life? It's not just your fidelity or Schwab holdings and your tangible assets. How are you measuring your health, your relationships, your joy, all of these things, they do have an economic cost, and if you really wanted to net present value your negligence of your health, you could, and it would really hit your quote earnings. So the second thing is what's the T account of your life look like today? What are the liabilities that you should be just getting rid of? What are the liabilities that you're hiding from people because you're embarrassed, but they're actually your biggest advantage in your arbitrage? And what are those assets that are perceived as assets? Because accounting tells you to put them as assets, but they're not assets.

They're liabilities are holding you back. FY. A lot of people, one of those assets tends to be like status and they never let go. They won't do the dream job, the dream startup because they're like, what would people think? So that's number two, right? So what's your red helicopter story? That's the overarching transcendent meta story. Two is more of a financial, but spiritual little bit accounting of your life, and to put that into quantitative terms. And then three, I would sort of ask people to remember what we talked about in the beginning of the podcast, kindness. It's very difficult to be kind to other people if you're not kind to yourself. And so I often tell people, give yourself some grace. You're really hard on yourself. Those three things sound very simple, and they are, but they are hard. We're conditioned to not think any of the ways that I just mentioned in those three ways. We're always very hard on ourselves. We only look at financial assets. And then when's the last time someone asked you to actually write the brand ethos of yourself?

Anita Brick:

I got it.

James Rhee:

That's my life.

Anita Brick:

It's great. Thank you. Thank you, thank you. I appreciate it. I know my sense of reading the book and chatting with you today that you did not take the easiest path, but in a sense you did because if you had not done the work that you've done on you, you would be somewhere, but probably not where you want to be. So thank you for being a great example of that and for giving us all this time.

James Rhee:

It's one of the most profound and gracious statements I have received. So thank you very much, Anita. Thank you for saying

Anita Brick:

You're very welcome, and thank you all for listening. This is Anita Brick with Career Cast at Chicago Booth. Keep advancing.