The Answer is Kindness and Math

THE INSPIRATION YOU NEED TO RECLAIM YOUR AGENCY AND DRIVE CHANGE

Let's Talk, People: Episode 19

[00:00:00] Emily Frieze-Kemeny: Hi, I'm Emily Frieze-Kemeny, host of Let's Talk People, where leaders come to bridge humanity and profitability. Informed by a couple of decades of work as a head of talent and leadership development, I'm here to amplify leaders so they can exalt everyone and everything they touch. Are you ready? Cause it's about to get real.

[00:00:28] Let's talk, people.

[00:00:37] This was our first live taping of Let's Talk People, and I was so fortunate to have the pleasure of being in real life with the incredible human and leader that is James Rhee. James is a teacher. He teaches at M.I.T., Duke, he's the chair of entrepreneurship at Howard University. He's a lawyer by training by way of Harvard Law School.

[00:01:07] He was a private equity Investor for many years until he stepped in and took over the reins of Ashley Stewart, a women's retailer as their CEO and did the most incredible turnaround story with how he describes it as the use of kindness and math. James and I could go a lot of places in this conversation and in the chats we've had.

[00:01:33] We do where we decided to land for this episode and where we wanted to really focus our attention as leaders is on agency and agency is a two-part point. It's about how we reclaim agency within ourselves and how we support and enable agency. Yes. With accountability in those that we lead, let's get into it.

[00:02:00] James. We've had so many great conversations

[00:02:08] Thank you for being here. And thank you most importantly for being you.

[00:02:13] James Rhee: You too. We've had so many incredible conversations.

[00:02:16] Emily Frieze-Kemeny: I'm so excited to share you and your work and your book, Red Helicopter, with our audience. Which I highly recommend for those who are listening to read If you're wondering, like, what kind of book is it? That's really a very hard question to answer. It's everything. It's beautiful. It's soulful.

[00:02:34] It's personal like a memoir. It's going to make you feel deeply. In terms of love and grief. It's a business book. How do you run a successful business? How do you lead? How do you lead a turnaround? It's about leadership. It's about humanity. It's about connectedness. It's philosophical. And for me, it's even spiritual.

[00:02:54] So James, give us your explanation. I know it does say that it's a parable. What is this book that you've put out into the world?

[00:03:03] James Rhee: You know, we’re going to explore this Korean concept of Jeong. I was giving a very formal, like, private equity, CO, MIT type lecture to 50 very serious Korean executives.

[00:03:14] And, they're like, what's the book about? And I'm like, it's hard to explain, like [speaks Korean]. It's about connectedness. It's Jeong. And then they said, we understand. We get it, right away. And I was like, and you're missing it, aren't you? They're like, we are, we lost it. I said, well, the book is to show you how to get it.

[00:03:40] one of the words is consonance. In chapter nine, the fractals. Where, you know, like, it's just more one life, but it's very complicated. And so it's a lot of ways. It's I'm basically warning the world. It's not about AI, but it has everything to do about it's all about agency. I mentioned AI twice. But the entire book is about artificial intelligence, and it's like, what are you willing to see

[00:04:05] And so I wanted the book. It had to be in and of itself. It had to embody the message of the book, so it couldn't be in a classification, which my publisher on Amazon was not happy about because they said it won't do well. The 27 bicep codes it's in from philosophy to Buddhism to CEO to management to leadership. It's race sociology. It's all of it. And I just said, well, I don't care. People will find it on their own terms when they're ready, because that's how you also build great companies and brands, right? Like, it's you want to win longitudinally. And so a lot of doors. It's just great.

[00:04:50] Total like market share right as well so that's number one why I wrote the book this way implicit message is like I will never put you in a box don't put me in one I just want I will never do that it's a sort of a defining trait right and people always wanted to do that. To me, and how lucky was I that a group of women that I never thought I'd be this close to, they were the only people other than my mother who allowed me that freedom.

[00:05:21] And I'm forever grateful. Everyone laughed at me, they didn't laugh. They knew, they were like, you're the right guy. I'm like, I think I am. Plus I'm the only one who, plus I'm the only one who came. But besides that? They were like, we think you're the right guy. I'm like, I am. So that's number one.

[00:05:40] And then two, like the parable. I wanted to write a book that was transcendent, like, I think what we did at Ashley Stewart was transcendent. I really do. The language, the emotions, it was a parable, and that's why everyone rallied around it. They're like, we love it, you know so. Universal book, no classifications.

[00:06:04] And so if you think about, like, spiritual or faith-based things, I call it Red Helicopter Secular Faith. I'm like, it's for everyone. So in business terms, it's an operating system. In faith terms, it's an operating system. You're supposed to sort of live your life pretty consistently, right?

[00:06:18] Ideally. But the other thing, I didn't mean to write a parable at the same time. Like, that subtitle came from Harper Collins. Because after they read it, they were like, you wrote a parable and I said, Oh, then I did a good job, right? Because even though it's so personal and it's my mom and my dad dying and it's your story, you know, it's somewhere it's your story.

[00:06:44] And I was like, I think I did a good job then. So it was by accident. But to try to find that transcendent universal language it meant I had to write a parable, but I didn't do it on purpose. I think Ashley Stewart was a parable, and for some people will go into is very uncomfortable because no one can say it's not possible.

[00:07:06] So, we'll get into that, but that's also a practicality, too, in terms of as you're leading.

[00:07:10] So many people, like, it's over communication. Decibels ferocity. A lot of this book is about negative space and about like, what you don't say it's about silence. And so, it is very effective leadership management communication tool too internally and externally right now.

[00:07:30] Emily Frieze-Kemeny: Looking back, James, when you switched locations and moved from being on the private equity investor side and sitting on the board to stepping down and becoming the CEO of Ashley Stewart, Did you already know there was a story here? Did you know that you had something to teach? I'm curious about when this idea for putting your voice in this book out into the world started to surface for you?

[00:07:56] James Rhee: 2013 a lot of me died. There's a lot of death in the book, right? Ego death, like, like a lot of me died in August 2013. And then it really died in April 2014. And then, yeah, like after the entire world, the first six months was just like, I want to go home, and I'm going to do my thing and like I didn't want it to liquidate.

[00:08:21] I'm like, I knew why it was not doing well. I mean, that's chapter four of the game of Monopoly. It's not set up for these women to easily win, but then they blame themselves, and my mom did that her whole life, and it bothers me. I hate that, right? So I was like, and the irony is that The one thing I thought I could deliver, which was money, I failed.

[00:08:43] But I've delivered all these other incredible things I used to deliver just as a human. So after I called in favors, I just said, I was like, Oh, I just have to do everything almost backwards. Because a helicopter in Europe flies, the top prop goes this way, so long as the Newton's third law is adhered to, and it's opposite.

[00:09:07] It doesn't matter how the top prop goes. It can spin this way, this way. In the U. S. it's this way, this way. So I just said, I'm just going to design a new system. Like, we counted babies, right? It's all these things. I'm like, we're going to design a system. Neoclassical economics. Stupid. Doesn't make sense.

[00:09:29] Everyone's utility driven. No, they're not. Like, they're not. People are emotional. Like, so, your whole thesis is wrong. So I just dispensed with it. And so like, during that time, it became apparent to me, , things were happening, and early on, the women at Ashley in particular, the women on the front lines, they said to me, they're like, You're gonna be President of the United States one day.

[00:09:55] They said it. Within six months, we'd vote for you. We'll get you elected. I was like, wait, what? Like, I'm already absorbing the fact that I'm the CEO of a twice bankrupt, plus-sized fashion business for black women. But it started, they intuit right away, and then I had an intuition about what this could be broad vision and I think we were right about where the world was going to be which is I think we're at.

[00:10:23] Now, by the way, which no one believed in 2013, 14, but then it became a self-fulfilling prophecy. I was like, I think it's going to be here, but the notes and who's going to sing, let go people will hear it when they're ready to hear it. And it's sort of similar to how the book is going. And like when people are ready to hear it, you know, hear it and I'll be ready.

[00:10:48] And it's, I think that's also from a business side of really. Effective way to build great brands. It's how it happens. You can't force it down people's throat. And so that's my answer. It sort of was a feeling and I think we were right on the macro bets about where humanity was going. And sadly, it was pretty dark.

[00:11:07] I don't think people really believe what I was saying. I was like, “No, it's gonna be really bad.” And like maybe during times like this brands and leaders and orgs that are imperfectly perfect, perfectly imperfect human. Maybe people intuitively gravitate because there's like the grasping for humanity. And I think that you're going to see that accelerate and we were math and tech savvy, but I want to like, you know, we came out a dream force in three years.

[00:11:36] Like, it's not like we were like kindness and math. We made very precise decisions. I mean, the math was it's right and the tech. We built the whole tech stack from scratch, but it was not ego driven.

[00:11:48] Like if it doesn't advance, doesn't make her life better inside or outside this company, we're not doing it. Right, so it was really that lens. If it's not better for her, if Cherry is not like I had all those pictures, if they would not do this for themselves, we're not doing it. And if you can't absorb it, you can't work here.

[00:12:13] And so I said that a lot too. Like, don't work here. It's okay. Like, but this is what we're doing.

[00:12:19] Emily Frieze-Kemeny: I want to stay with what you just said, because, you know, we are going to go macro. And then we also promised that we would come back to the practical. So I want to stay on that point that you just said, James, because that's the practical piece, right? I think what you're saying is there is a vision for us to need to lead in a different way to get to success, which really is what you are illustrating and teaching us, I think, through the book.

[00:12:49] But I feel we don't hear a lot of these stories about how this type of leadership and this type of human connection is translated into the business context. And I think that's what's so unique about what you're putting out here into the world for us.

[00:13:05] it's about seeing and being really connected with who you serve as a business.

[00:13:10] And for you, James, I think that's what's different about who you were as the CEO. It was personal. You were in it. You were spending time with the women who are running the stores with their clients. You were in those communities, and it feels like that was really grounding for you.

[00:13:27] James Rhee: Yeah, that was awesome. I was there in the stores all the time It was fun those stories in the book.

[00:13:32] They only they're only like the tip of the iceberg. and really but we had very intimate conversations in those rooms. I met their children met customers and.

[00:13:41] Yeah, I needed it to like, if I always think back, if the ladies had not accepted me the way that they did, I would have been very sad because the whole world rejected me. It was, it was terrible. Like, I was humiliating, begging for money. And like, Oh, my God, this is and the way I was treated.

[00:13:59] I'm like, “Oh, you're treating me. Okay. Got it.” You know? So I had a meeting with Mindy Grossman when she was running HSN in 10 minutes she like James. That's the single best brand presentation I've seen in my entire career. I just said, Oh, it just showed I showed her stuff. I'm like, “This is, this is the brand.” I'm good at that, I guess, but I've always owned brands.

[00:14:20] And so, like, face to face, I don't talk a whole lot. What cherry said everything he said he did. He did I do that. I'm like, “If I say it, we're doing it.” And it's been like that my whole life. And after 53, 4 years. And it's kind of like, do you believe me now? Oh, okay, then don't do it then.

[00:14:44] Don't, don't be part of the ride. Be all the people who laughed at us at Ashley Stewart. You missed a heck of a ride, a heck of a result. Be that way. I'm sorry I can't cut through your cynicism. What a sad way to live. That's tone I take now. Okay, I'm not going to try to convince you anymore.

[00:15:02] The thing that the Brené podcast, Brené had an aha moment, right? Brene said, oh my gosh. The reason why I have so many listeners and you know, it's because a lot of the people that go to work, they become miserable because they're playing in a game that they don't understand why it's making them miserable.

[00:15:20] On the TED talk, I only had 15 minutes to eviscerate accounting, which I did. I eviscerate accounting in the TED talk. And, you know, this is private equity guy, like, you know, Ginger Rogers was a better dancer than Fred Astaire because she did everything he did, but backwards.

[00:15:38] So, you have to know something so well that you can then deconstruct it and say, well, that's stupid. Why do they do that? And that's what chapter 5 and chapter 6 and 8 are about. I'm literally eviscerating what's taught in Business schools. Why? Well, that's how accounting is. I'm like, “Says who?” “Well, I don't know.”

[00:16:03] I'm like, “It's not a natural law. It's not physics.” You know? “It's not kindness and math. It's made up. So bend it.” And so that's one of the things that's missing.

[00:16:14] They don't know FPNA, they're not private, they're not deconstructing the entire accounting system and saying, “Oh, my gosh, it's measuring this, priming this behavior.” I just know it's off. And so the second step to execute this is like, you really have to get controller-type person, like a real thoughtful finance person who's willing to engage and say, Oh, my gosh, you're right.

[00:16:38] We're not measuring these things. And so that's, that's the other thing. It's not just communicating and getting people to feel it, but we created a self-perpetuating system that rewarded this type of behavior, right? It's like root cause all of it, even like the hedge fund math, remember the blue prom dress?

[00:17:00] The math that we put in was kind, because people felt safe to take risk. They couldn't blow up the company. That is kind. To do that, and that's why that incident was so important She thought she was going to get fired, like Aretha, come on, it's been three, four years, like, I guess it's ugly, I don't know, you didn't sell one, we couldn't even donate the goods, it was so ugly, apparently, the, the not for profits wouldn't accept the blue prom dress, which I said, because I was holding it up, and I was laughing, I'm like, “Aretha, it's pretty grim, huh?”

[00:17:33] It's a safe culture, but it's a performance culture. It's both. that's Jeong.

[00:17:38] You have to put it into the math and it's not that hard. It's just I think sometimes people don't pause and say, Oh, my gosh, the accounting system.

[00:17:46] It's forcing us into these things. And it's like, no, I, I choose not to for a second. What are some things that we're not measuring and we can put it into the internal reports and measure it and let it hit earnings, right? And then when you report out to the board then pull it out, like report the normal numbers, but your behavior driving internal numbers, you can put things in that hit your earnings.

[00:18:09] So if you had a great year, but everyone hates you and your retention is zero and you should be penalizing yourself for that, right? Like your earnings actually kind of sucked. Right, because you're discounting the future cost of your culture degradation.

[00:18:23] Emily Frieze-Kemeny: So James, you were recently speaking at a conference of 700 deans of business schools. And given what we were talking about, about eviscerating accounting and looking at different ways of driving performance that will impact earnings, I'm really curious, what did they think about all this? I mean, in some ways you're really challenging the way we've been doing things for generations.

[00:18:49] James: I think what I'm teaching, I'm very particular about language. When people say, oh, you can do good, be emotive and kind. And still be successful. I guess I would challenge that

[00:19:00] If you picture the world 10 years from now, We're in like a once in every 80-year systemic shift in everything. It's what we read in social studies and you always say, Why did people do that?

[00:19:12] It's fascinating and scary. Right. So picture AI and 5-10 years from now. Picture the definition of nation states changing. Currency. It's all changing. It's chaos, right? It's natural entropy, and like the rules that held society together for 70, 80 years, it's fracturing. And it really fractured in '08, and then we put band aids on it, and it's lasted actually for like almost 20 years now.

[00:19:39] We're all old enough to remember '08 '09. The game stopped in '08 '09. And I was full time in private equity. My father in law was running one of the big banks. I mean, he was, you know, eight guys inside Goldman Sachs office with Paulson. The game was over. And so, that's where we are. And this is not alarmist, it's just, how history works, you know?

[00:19:58] And so, picture that, and then picture, automation, and like, the decision making that's being done Who's making the decisions on AI? you know, OpenAI is, it's not a not for profit. Just look. And so, there's gonna be a lot of pain. And so what is the meaning of agency?

[00:20:19] Like what, will humans do in , five to ten years? the events that are in this book, of this guy partnering with these women to do what we did. The way I wrote the book, no AI will ever be able to do this. The looks on the women's faces, who if you had met them when I met them, they would never have done that.

[00:20:38] And so those are the skill sets of future leaders, and it's being able to sort of be fluent in lots of languages, be augmented with AI, so you have supplemental learning right? So you can get smart really quickly, but it's like how your brain works.

[00:20:50] It's not the neurons that are important; it's the synaptic connections that's important. So this book is all about synapses. It is. And so that's like connectedness or Jeong is connectedness. I think future leaders, future humans, will have to be experts in connectedness, people, emotions, disciplines. And unfortunately for our kids, all the school systems, because they're group thinkers, they're forcing our kids to go vertical.

[00:21:20] Right? And it's like STEM, STEM, STEM, STEM, STEM. I'm like, “We all knew that coding would be fully automated.” Everyone knew that. And so I kept raising the alarm bell at Howard. I'm like, “No! Those jobs are not going to exist.” Right? It's a solution for three years.

[00:21:34] So it's, to me, the humanities that will be the most important. And so I said this to the business school professors, and look at their numbers right now. The unemployment rate of MBA grads. And like the big schools, the name schools will rest on their laurels. They will, right?

[00:21:50] So the business school deans, I'm asking them, do you have the courage to do it? Like as CEOs, you have the courage to do it. You don't have to do it in like a fire and brimstone way. The best leaders and the best transformations - its emergence theory.

[00:22:03] It's very actually, very pleasant because you see the faces people like, oh I see. I'm like, great. it's very natural, actually, and it's very calm.

[00:22:14] So I think that that's the other thing I'm trying to teach. It's like, you know, you have these leaders, I mean, we're surrounded by them right now. It's like, they're loud, and we're gonna freaking do this.

[00:22:23] I'm like, okay. I, I think real leadership is very, it's actually very opposite, very quiet. It pushes agency on each person. It gives them space. And you have to sort of track their development and like everyone learns in a different way. It's a different journey.

[00:22:42] And it's more like faith in some ways, like people have their own journey. And so yeah, that's what I said. And they have to do it because I kept asking what's the value of your degree Jensen Huang didn't go to business school. Steve Jobs didn't go to business school. Elon Musk didn't go to business school. Like, what's the value proposition when 20 percent of HBS right now is unemployed after graduating? Tell me. They have no choice. And so, what I'm saying, getting back to the language, I'm like, This isn't a nice-to-have. You have to do this. because these jobs, AI will not be able to replace.

[00:23:18] It's going to be synaptic connections. It's judgment. So we need to be having more polymaths and why Ashley Stewart, I would teach, like everyone got like a degree because I was like, I want you to know accounting. Oh, I don't know accounting, but what if I taught it to you with a lemonade stand? Oh, I can do that.

[00:23:36] I'm like, great. Let's do that. And so I still teach it to this day, like at MIT, with a lemonade stand. it's like, not scary. And then, too, I was like, if you can't run a lemonade stand, how are you running a five billion dollar, I don't understand. And you'd be surprised.

[00:23:50] These CEOs come in, and they can't balance a balance sheet in a lemonade stand. And so. that is sort of the macro thesis of what, the book is saying and sort of what I'm doing and why I'm teaching it at MIT and Howard and Duke.

[00:24:04] I wanted to see if I could teach it, you know, like, can I teach it in a classroom? So MIT Business School, Duke Law School, Howard undergrad, three different places in their journey. And so I chose those stories and that language and that way it became a parable because it's like, oh, and I think that's why it's spreading globally because we're human.

[00:24:29] Emily Frieze-Kemeny: When I reflect on this common thing that unites us, that we're human, it makes me think about kindness. Do you feel that we can teach kindness?

[00:24:38] James Rhee: You can teach kindness. It's Agency, determination, free will, family. it can be taught, and obviously I learned it from my parents. that's usually the easiest and best place to learn it, but not everyone does.

[00:24:51] And It was like one of the highest initiatives to support families who wanted to have families. Like, I want, if you want a kid, we're having kids. I want babies. There were tons of babies, but you think about how hard that is to encourage babies.

[00:25:07] I said this at the J. P. Morgan conference and Robin Leopold almost fell off her chair. She's like, I just didn't think of it that way. And I was like, think about how many things you can change 5 percent each. It's not radical change. It's like, if you do it in a systems-based it's 5%, 5%, 5% all at the same time without the silly. Corporate silo things, no one's upset and it doesn't feel radical. It's like, Oh yeah, of course we like babies. Great. We got these 10 changes we're doing today. We're tweaking 10 things. Everyone good? Great.

[00:25:42] So it is teachable. and we need it more because what's happened historically to the word kindness. the two most radical concepts of democracy and free markets, which were Rousseau and Adam Smith. They're the two most prolific writers about kindness.

[00:25:57] No one knows that. Kindness was the underpinning of free markets and democracy, like it's agency. Instead, over time, the last 300 years, kindness has been relegated more to faith. And it was feminized. Women can be kind, men can't, you know? That's part of why I felt like I had to write this book too, and like, no one's ever accused me of being Shrinking Violet.

[00:26:18] Kindness is like, relentless. It's a place of strength. Like, I was like, there's no freaking way these women were gonna lose.

[00:26:26] It wasn't gonna happen. and if you don't think I had a fight, holy cow, you're underestimating what happened. There are a lot of people who wanted us to fail. So this, like, face, the dimples, they left. And believe me, like, I went toe to toe with some people you would know very publicly. I'm like, if you want to fight, you will lose.

[00:26:47] And then the women, like, when they would laugh at me and they would say, Oh, you know, James, you make us feel very calm and safe. You are just that person. But then they would chuckle and they would say, but, and I say, what? They're like, holy crap. You're gonna fight to the death And I said, ladies, I don't lose street fights.

[00:27:02] I don't. And they said, we know. And I was like, but you don't want this guy. If you're willing to fight, I will fight alongside you. The minute you stop, I'm out. I won't do it. it gives you a strength. And I think as a humanity, we need it. Because, If we can't agree on what kindness means, and math, we're done. It's over.

[00:27:27] Emily Frieze-Kemeny: There's a quote from the book about a hedgehog that I think is very powerful. The quote goes, the hedgehog has two distinct sides, one soft, another forceful, sort of like kindness. There was one last and crucial element of kindness that became evident to me around the same time. Fundamentally, kindness involves helping other living beings embrace their agency.

[00:27:52] So James, when I read this quote, what came up for me is I worry that people think they have to leave their kindness aside to be effective leaders who drive performance. And this idea that agency is really our way back to performance. And also our way back to finding kindness at work. I'm concerned that that's not intuitive to leaders. We haven't taught that.

[00:28:16] So how do we, how do we unpack this? How do we understand this relationship between kindness, agency, and results?

[00:28:27] James Rhee: You know, I think part of this journey for me, like I'm a Met fan, Long Island, it was a liability for me, to be Korean for most of my life. It really was. It was not an easy thing. And then during my 40s, as my parents were dying, I'm like, Oh, there are a lot of really good things about being Korean.

[00:28:48] And I'm like, Oh, if I can sing Bruce Springsteen and understand Korean philosophy in counterpoint, and then I apply that to Ashley Stewart. And a predominantly female employee base black at first, but black, white, and Hispanic.

[00:29:05] They're like, we like that. We like how that sounds.

[00:29:07] And I said, oh, teach me your things. That's what you heard. And that's this book. It is counterintuitive, but it's not. It's actually intuitive, I think, and it's like, it is a little bit like the matrix, and it's like, wake up.

[00:29:22] I think about this. You've been programmed to go into work and say, okay, in this space, the rules are different.

[00:29:29] But most people don't really know the rules. They didn't go to law school. They don't understand the governance system and fiduciary duties and why the tax system is this way. They don't understand the finance. And so you're sort of going into like this and it's like, oh, this is the rules. It is a little bit like The Matrix, which is what the movie was about.

[00:29:48] And so I think most people, like even now when people are debating like work-life balance, work from home. I think people are saying, “Do not treat me like this. I'd rather not work then.”

[00:29:59] It's a human thing. And so you're having more biblical level despair, right? When you, when you have despair and lack of hope, then not only do you have suicide and drugs and alcoholism, but you have just more of a, “Screw this. I'm not doing this.”

[00:30:13] And our kids are doing that. They're like, why should I? Why should I buy into the system?

[00:30:18] Despair is bad, right? It really is lack of hope.

[00:30:22] It's the opposite of having agency. Why would you care to have agency? So you gotta get people to care. I mean, that's fundamentally, I think what it is, and that's the language of civics. It's humanity. It's the stuff you learned in social sciences and things and putting them into a business that generally speaking, the cultural mores.

[00:30:41] They don't want you to talk like that, but you then you have to say, well. Why? Like, you're still you at work,

[00:30:49] Even me though, like, this is a process, right? You know, like when my dad died, that scene, the women at the funeral home, they like yelled at, they really yelled at me.

[00:30:57] They're like, what's wrong with you? That you didn't feel like you could ask for help? Like, what's wrong with you? You said all these things, but you, you can't receive help?

[00:31:08] To give you another tangible example in a business, that's not Ashley Stewart I'm spending a lot of time in care industries right now, because if you care, you're generally getting punched in the face.

[00:31:17] I think a lot of people in this room care, and it's like, there's some people don't really exhausted and then it's doubly worse. If you're in a care industry or care department, I've been working with the senior living business. Because senior living businesses, like… How you take care of vulnerable people defines your character.

[00:31:38] It's of a nation. We treat old people in this country not so well. And by the way, again, systems approach and feedback loops. The people who generally care for older people tend to be women, the front-line workers at a lot of the senior living businesses tend to be not just women, but they're of color.

[00:31:59] And so I've been studying this industry and saying, “If there's a way to have a better business model, you can create all these feedback loops of, like improvement.” So that's why I'm spending all this time right now. And so, we put the system in place into this company. The CEO called me and said, “I'm in. Help me.”

[00:32:16] I said, great. So we put in the system… Let's just call it losing double digits, millions to making 30, 40 million bucks in 18 months, and it's two consecutive years they earned best place to work.

[00:32:29] They didn't buy it. They earned it all the actuarial data that I tell you about workers comp, safety, wellness, same things, And this is what I study in businesses, right? Like, it's like branding, but inside a company. So in Ashley Stewart, I spent a lot of time with, light bulbs and ladders.

[00:32:48] Right? I'm like, ladies, you can't come to work and get hurt. And they would say, Oh, we know. I'm like, no, you don't know. Listen to me. I'm going to say it again. You can't come to work and get hurt. It's unacceptable. Like, we, I don't care their statutory this and, like, just think about the existential premise of it.

[00:33:09] It's not good. And I would suck as the CEO. I'd rather resign. And they heard me, and they're like, we know you care. I'm like, okay. So, how do you make it tangible? Every day it was the light bulbs. And we changed them, eliminated the ladders, and it created this virtuous cycle that I write about in the book, right?

[00:33:32] Better lights, clothing's brighter, safer, more volume, clothes look better. No one cares about light bulbs in a company. But it became like they knew they're like, Oh, it's James. It's light bulbs and ladders, right?

[00:33:46] It's a symbol of care and feedback loops, systems thinking and profitability all in one symbol.

[00:33:56] And that's how we communicated light bulbs. Got it. We're going to do it again. Step and repeats. Got it. And the communications think about what's going out now to the field. It's like there's a picture of a light bulb and that's a heuristic, right? That's a mental prime. It's like. I understand. It's very complex thinking in one symbol. No words.

[00:34:17] Emily Frieze-Kemeny: So when I listen to what you're saying, it really sounds like there is not a difference between caring for people at work, making good business decisions and being profitable. It's directly connected,

[00:34:29] James Rhee: It's one thing, and it's just general wellness.

[00:34:31] I think intuitively you all know that well people who care will do better, but the way accounting and your departments are set up arbitrarily, by the way, it's taught this way prevents you from doing that. And so you have to sort of you know, take on your own voice.

[00:34:47] But that voice it's the second singer. That has to come in and say, I agree, right? And so you can really practice that, like, just like not overly scripted, right? But like, you can be the 2nd person being the 1st person is easier than being the 2nd person that says, I agree with the madness that the 1st person said,

[00:35:10] but the 2nd person that is change. It's that second person. I agree with what he or she's saying. And so on the senior living, the light bulbs, it was food because the frontline workers, you know, they were hungry and they weren't eating well.

[00:35:28] And so one of the core competencies of the business is that they feed the residents. So I was like, make sure coming from a really like a real place and explain that if you want to eat a nutritious meal on your way home, take one, and then explain that that, as I write in here, that is You know, not to cheapen it.

[00:35:48] Is that part of your compensation? Oh, yeah, and the quick all the quick quits, retention rate, you should the stats are staggering No one wants to leave and you know when you get new people and they don't on board and they quit it's gone And the care of the residents, that's now the longer feedback loop.

[00:36:09] We're seeing that the residents are healthier because they're better taken care of. There's less slip and falls. There's less triage. So they're, they are more profitable and because they live longer, there's less retention marketing and acquisition marketing. The whole P and L, like the margin structure has changed.

[00:36:27] It's incredible what's happened, but it's not incredible. It's very predicted. And these are things that GAP does not measure.

[00:36:34] Emily Frieze-Kemeny: James, as we wrap up, if there was one leadership pattern you feel like you're here to break, what is it?

[00:36:41] James Rhee: I think number one is not even to break. it's to sort of put my hand on your shoulder and say the things that are in your stomach and chest intuitively, they're right.

[00:36:51] It's really saying, “No, you're right. I gotcha. I see it.” And then to give you the courage to sort of be that curious kid, like I'm like, if you hadn't met me in like high school, junior high, this me, like the baggage is gone, like armors, it's just gone, like, I'm just like living, like, I'm like, this fun, like enough, like, do you want to win?

[00:37:15] Let's win. And so that's what I would say is like your intuition, I think, particularly for women who are often like pounded to not. Trust their intuition, you know, like to not trust, you know, like emotion, which is also feminized, right? It's not. It's emotions is brain science. Pixar. The entire franchise is built on the neuroscientific understanding of emotion.

[00:37:36] It's nonsense. What people say emotion is natural brain science. And men can be emotional too. A lot of unhappy men in the world these days, right? Because they feel like they can't talk to anyone. It's all here. Like, in Korean, it's a [speaks Korean]. They're frustrated. I have so many men call me, and they cry, I want you to know, from the book. The women are like, Thank god. We knew.

[00:37:57] The men, it's interesting more tears, and they're like we're so unhappy, we're trapped. We want to feel this way, but we're not, we don't feel like we're allowed to do that.

[00:38:06] And so that's what I would say. It's like trust your intuition. and that there is a process. Maybe your earnings look like this, but if you actually do accounting correctly, you may see that your earnings, your real earnings are much better. Right, there are lots of gains that are happening in your culture, your workers comp things, retention of your employees, the training, they're not in your earnings, but if you start measuring them, which you can, you know, how, well, you have things like external NPS scores, you can have that internally, you can take 80, 90 percent swag, doesn't have to be perfect.

[00:38:43] A lot of it, a lot of the data resides in your actuarial data, your insurance data, because those don't lie, right? Like, that's how people behave. You can pull that data and start looking at your earnings like that and saying, “Look, we had a bad year, but holy crap, we're set up for massive growth in year two, three and four.”

[00:39:01] Emily Frieze-Kemeny: It's a very different way, but it's correct.

[00:39:05] James Rhee: It's correct. Right. it is Jeong and people craving it right now, and think about that from a, just market share growth and recruiting, or just if you're doing that, you're going to win, you will, you know, in business and you'll be happier too

[00:39:19] Emily Frieze-Kemeny: I could not agree more.

[00:39:21] Thank you.

[00:39:22] Wow, there was so much richness and so much to unpack! What I'm taking away from it is kindness. What does that really mean? I love the metaphor of the hedgehog hedgehogs. I have a special place in my heart anyway, but this idea that it is soft and it's forceful. It's what our country. And democracy was built on.

[00:39:46] I loved that. It's about helping others to embrace agency with accountability. I think that's such a helpful reframe. The other takeaway for me is what are we measuring? As James said, it's time to relook at accounting. And how do we add in measurements that have to do with creating a sustainable, profitable company and culture, because that's what delivers results.

[00:40:15] And again, he said, you don't have to report in your earnings release, but internally, you need to make sure you're measuring the right things that will drive the right types of behaviors. The other thing, which I think it was really important to name, which we talk about, I think, in smaller circles all the time, is how many people are miserable at work.

[00:40:33] Clearly, work is not working for us. So what if we paired kindness? Meaning how we work together, how we give each other agency with math, the math that actually drives the right type of behavioral change. Could that make us more inherently happy and connected? We know this is what we need, so why are we not trying to change things more fundamentally?

[00:40:57] And last but not least, with where AI is going and how difficult life can be, really future leadership is about - Being experts in connectedness, about building bridges, about building relationships, and taking this holistic approach to business that in all honesty resembles who we really are in life, where wellbeing, happiness, relationships, emotions, and humanity matter.

[00:41:24] Thanks for joining today's episode of Let's Talk, People. For more info and insights, visit arosegroup.com and find me, Emily Frieze-Kemeny on LinkedIn and Instagram. If you're enjoying the show, please follow, share on social, and leave a rating or review in your podcast app. It helps other listeners to discover us.

[00:41:46] Well, that's a wrap, friends. Until next time when we come together to talk people.together to talk people.