0:00

And I always say they're

0:02

trading relationships, but then they're

0:04

real partner relationships. A trading

0:07

relationship is just very transactional.

0:09

You really don't know the other

0:11

person's just a trade. But a real

0:13

relationship, a partnership, is that we know

0:15

each other. Yeah, we got contracts, we

0:17

have agreements, but we trust

0:19

each other. If

0:28

you want to build lasting success,

0:30

there's one resource you can't

0:32

afford to overlook. And it's not

0:34

money, it's not talent, and it's not

0:36

time. Welcome to How Leaders Lead. I'm

0:38

David Novak and every week I

0:40

have conversations with the best leaders

0:43

in the world to help you

0:45

become the best leader that you

0:47

can be. My guest is Ken

0:49

Bacon. He's the co-founder and managing

0:51

partner at Railfield Partners, a multifamily

0:54

investment and asset management firm. And

0:56

before that, he was an executive

0:58

VP at Fannie Mae. Ken has

1:00

built an incredible career in real

1:02

estate. And I've had the pleasure

1:05

of seeing his leadership firsthand as

1:07

we serve together on the Comcast

1:09

board. You know, one of the

1:11

things that makes Ken so

1:14

successful is this understanding that

1:16

trust isn't just a feel-good

1:18

concept. It's a real form

1:20

of currency. It's something you

1:23

earn, something you give. And

1:25

if you're not careful. something

1:27

that you can actually lose.

1:29

And just like financial capital,

1:32

trust compounds over time.

1:34

As you're about to

1:36

see, the more you

1:38

invest in it during

1:41

your career, the greater

1:43

the returns. So

1:45

here's my conversation

1:48

with my good friend

1:50

and soon to be

1:52

yours, Ken Bacon. By way

1:54

of background, I used to run

1:56

a division in Fannie Mae that

1:58

provided loans for apartments. So 12. years

2:00

ago when I left, another guy and I were

2:02

doing some advisory work and

2:04

an opportunity presented itself to

2:06

manage some money for a pension plan.

2:08

And I remember a friend said, oh,

2:11

you're going to get just enough money

2:13

to go broke. He was right. So

2:15

I had never been on the equity

2:17

side of the business. I had always

2:19

been on the debt side. I had

2:22

never been a borrower. And for years,

2:24

I said, that's something I wanted to

2:26

do. So when opportunity presented itself, I

2:28

got some guys that used to work

2:30

for me. Years ago we started railfield.

2:32

We invest in existing apartments. We manage

2:35

money for some family offices

2:37

and several pension plans. We're

2:39

in six states and 12

2:41

different markets, biggest market being

2:43

Texas where we're in Dallas, Fort

2:46

Worth, Austin, San Antonio, and my

2:48

hometown of Houston. And what we

2:50

try to do is by kind

2:52

of what I consider some

2:54

conservative operating principles,

2:56

make a good return for our

2:58

investors. while making a good place to

3:01

live for the tenants of our apartment

3:03

buildings. And that's kind of my answer.

3:05

You have, as I understand it, a

3:08

couple of other co-founders that are in

3:10

the business day to day. What's the

3:12

rhythm that you have, Ken, to stay

3:15

aligned and on mission as a leadership

3:17

team? I'd say there are a couple

3:19

of things. Number one, I have managed

3:21

a large organization for,

3:23

you know, over 20 years. And so when

3:26

I started my second career, I

3:28

wanted to be, I guess it's

3:30

the model I consider, like the

3:32

Orthodox Church, I wanted to be

3:34

first among equal, so to speak.

3:36

I didn't want to be the

3:38

leader. I was a person with gray

3:40

hair, I was a person who could

3:42

bring certain things at a table, but

3:44

I really wanted it to be more

3:46

of like a confederation. In other

3:49

words, we each have a swim lane,

3:51

we each do our thing. And it's worked

3:53

beautifully because these guys once worked

3:55

for me, they left Fannie Mae,

3:57

built their own business, but we trust

3:59

him. each other, we like each other,

4:01

but we have shared values, we

4:04

enjoy each other's company, we

4:06

agree on what we wanted to do

4:08

with the business. So it's made it

4:10

a fun thing to do. You know, you

4:13

mentioned that you spent 20 years

4:15

at Fannie Mae, which provides, you

4:17

know, equitable access to affordable housing.

4:19

And there you, you oversaw a

4:22

portfolio of nearly $200 billion, you

4:24

know. One of the biggest lessons

4:26

you learned. in that role that

4:28

you've carried with you? Well, one

4:31

of the things I've learned is

4:33

that no, your partners, know who

4:35

you're dealing with, you know, I

4:37

always distinguish in business between what

4:39

I used to, I used to

4:42

be an investment banker. And I

4:44

always say they're trading relationships, but

4:47

then they're real partner relationships. A

4:49

trading relationship is just very

4:51

transactional. You know, you do something, you

4:53

really don't know the other person, you really

4:55

don't care, it's just a trade. But

4:58

a partnership, a partnership is... And we

5:00

know each other, yeah, we got contracts,

5:02

we have agreements, but we

5:04

trust each other. We're working towards

5:07

the same goal. And that's

5:09

what I did at Fannie Mae. We

5:11

did our business through a network of

5:13

25 lenders. I made it a point to

5:15

get to know each and every one

5:17

of the lenders. I often knew something

5:20

about their families. And even

5:22

my biggest borrowers, the people

5:24

who borrowed hundreds of millions

5:27

of dollars, like Sam Zell. Steve

5:29

Ross. I made it a point. I

5:31

would go out and went to baseball

5:33

games with Sam Zell. I went out

5:35

to dinner with Steve Ross because if

5:37

people said, well, why did you do

5:39

that, you know, you've got all these

5:42

contracts? I said, yeah. But if

5:44

I have to resort to lawyers to

5:46

do business with somebody, that's

5:48

not a good place to be. You know,

5:50

the legal documents add clarity,

5:52

but the legal documents

5:55

should be built on a foundation

5:57

of trust. Where does that trust really

5:59

come from? when you're when you're you know

6:01

you have to meet these people and you've

6:03

got to kind of have your speller out

6:05

to a certain extent you know how do

6:08

you how do you smell or sniff out

6:10

the people that you really really know that

6:12

you can bank on you know you got

6:14

to spend time with people and get a

6:16

feel for the sense of integrity and what

6:18

they're doing look real estate it's

6:20

a tough business it's a sharp

6:22

elbow business and you understand that

6:25

right I mean everybody's trying to

6:27

get the best terms possible But

6:29

I won't mention one company, but

6:31

Sam Zell's, the reading had, EQR.

6:33

There were a couple of big reeks.

6:35

And the way I used to contrast

6:38

it, one, one, the big reeks would

6:40

say, can, we need $200 million and

6:42

here are the turns we want it.

6:44

And I bust my butt, I have my

6:47

staff work, and then I get to

6:49

the table and they'd say, well,

6:51

Freddie Mac is five basis

6:53

points cheaper or prudential will

6:55

give us more money. And so. I

6:57

learned, I said, okay, these guys just want

6:59

to trade. They're going to try to pick

7:01

me off. Sam's people were tough. They've

7:03

asked for something. I said, guys,

7:06

that's hard. That's impossible. They said,

7:08

that's what we want. I said, okay, I'm

7:10

going to bust my butt to do it. But if

7:12

I did it, they were good. So because of that,

7:14

I always said, if they asked me

7:16

for something, I would overexten myself because

7:19

they set the bar high, but I know if

7:21

I clear it, they're not going to not

7:23

going to retreat. And so, you know,

7:25

and I tell that to people, they

7:27

said, Sam Zell, he was the grade

7:29

dancer, he was this. I said, you

7:31

know what? He never, ever went back

7:33

on his word to me, neither

7:35

he or his people. Steve Ross,

7:37

his guys, Jeff Blyleil, is

7:40

one of the smartest, smartest

7:42

real estate operators I know,

7:44

but their word was good. And so,

7:47

you know, you do business with people

7:49

and you learn. You know, I want to

7:51

shift gears for a second, Ken, and

7:53

take you back to the beginning. What's

7:55

a story from your childhood that shaped

7:57

the kind of leader you are today?

8:00

tell us to people sometimes

8:02

they're kind of amazed. I grew up

8:04

in the 50s and 60s in Texas.

8:06

It was a time it was

8:08

segregated and some people here, oh that

8:11

must be horrible. I said I

8:13

had a wonderful childhood and part

8:15

of that was due to the

8:17

way my parents raised me. I got something

8:19

from each one. So my dad

8:21

had grown up in Illinois where

8:24

his parents were servants and Lake

8:26

Forest. So he had gone to

8:28

school with very rich white

8:30

families. My mother on the

8:33

other hand was from a

8:35

Creole family. Her parents were

8:37

from Louisiana. She grew

8:39

up in Houston. So my

8:42

parents are very different,

8:44

but they each brought something to

8:46

the table. So for my

8:48

dad, I got my intellectual

8:51

drive, my sense of values.

8:53

In fact, I used to tell people

8:55

my dad because he grew up in

8:57

Illinois sounded like a Walter Cron type,

8:59

you know. And my dad would sit

9:01

up, he was a physician, and at

9:03

the end of the day he would sit

9:05

up, I could still see him sitting

9:08

in his favorite chair with his bourbon

9:10

in the cigarette, and he might put

9:12

on music, but he told me

9:14

the story about the musicians that

9:16

might be Count Basie and Duke Ellen.

9:19

And he was active in politics

9:21

and civil rights. And he really

9:23

gave me that sense and I got a

9:25

chance to see a lot of

9:27

leaders like Barbara Jordan. My dad ran

9:29

the campaign for her state legislation

9:32

to run at her first run

9:34

at Congress. So I kind of got

9:36

there for my dad. My mom on

9:38

the other hand was not really what

9:40

I call a high-minded person.

9:42

She was one tough, tough lady. I

9:44

mean, they had tons of common sense

9:47

and really a lot of her sayings.

9:49

kind of got me. So for example,

9:51

one of the things she used to tell

9:53

me she'd say, look, love with all your

9:55

heart and soul, but never love with your

9:58

mind. And by that she meant never your

10:00

feelings of love or even dislike

10:02

for something affect how you think

10:05

right always try to be

10:07

tough and objective when you're thinking

10:09

and another thing she told me

10:11

when I was older and I

10:13

was an investment baker and I

10:15

once got I thought jipped out of

10:18

a bonus and my mother I

10:20

used to call my parents every

10:22

Sunday and I was complaining

10:24

and my mom said boy you're too

10:26

old and too black to expect life to

10:28

be fair. get over it. Now when I tell

10:30

that to people, they say, what did she mean?

10:33

I say, look, my mom's thing was, there's going

10:35

to be a lot of stuff in life that's

10:37

going to be unfair. It might be because of

10:39

your race. It might be somebody that like, whatever

10:42

it is, don't sit around and cry about it.

10:44

Do something. And when I told her about that

10:46

thing about the bonus, she said, you can quit.

10:48

You can suck it up. Or you can go in there

10:50

and that boss at the band or demand

10:52

something. But don't sit there and have a

10:55

bit. But don't sit here and have a

10:57

pity party. So what did you do, Ken?

10:59

I got to ask you. What was the

11:01

end of that story? I went into

11:04

the boss, told him how I fell,

11:06

we reached an agreement, and he

11:08

didn't give me the money for

11:10

that year, but he treated me

11:13

right the next year. But the

11:15

reason I always like to tell

11:17

that story is when I say

11:20

my mom was tough, you know, you have

11:22

to be assertive. And you have

11:24

to stand up for what you believe

11:26

and don't let people push you around.

11:28

Hey everyone, it's cool. We'll get back to

11:30

the interview in just a second. Before we

11:32

do, though, I have a question for you.

11:35

Have you downloaded the How Leaders Lead app

11:37

on your iPhone? If you haven't, take 20

11:39

seconds right now, go to the App Store,

11:42

search for How Leaders Lead, and download the

11:44

How Leaders Lead app. In the app every

11:46

day, you'll get a two-minute video. that'll give

11:48

you a leadership insight from one of our

11:51

amazing guests from our podcast to inspire you

11:53

and to really get your mind in the

11:55

right place before you start your workday. So

11:57

go to the App Store, Sertile Leaders Lead,

12:00

Down. Download the How Leaders Lead app

12:02

and start your day every day with

12:04

two minutes of leadership wisdom. It'll take

12:06

20 seconds. Go to the app store,

12:08

download the app, and you'll be able

12:11

to watch every day, just like me,

12:13

the leadership insight from How Leaders Lead.

12:15

You actually were in segregated schools for

12:17

the first 11 years of your life.

12:19

Yeah, you know, so give us a

12:21

sense of what that was like and

12:23

what it really taught you. You

12:26

know, I tell people, look, segregation

12:28

was undoubtedly bad, an evil system,

12:30

a need to go, but there were

12:32

two benefits of it that I think

12:35

in some respects were good. One

12:37

was when I went to school,

12:39

my kids here in DC, my

12:41

kids went to private schools. And

12:43

yes, there were some poor kids with

12:45

scholarships, but you know, it's

12:47

kind of like upper middle

12:49

class and very wealthy people

12:51

they went to school. When I

12:54

went to school, I had to go to

12:56

school. There might have been some other

12:58

doctors and teachers kids, but I had

13:00

to go to school with some hoodlums

13:02

sometime. I remember when I was

13:04

a banker, I once came through Houston

13:06

and stopped at a gas station in

13:08

my old neighborhood and I was with

13:10

a senior person from Kidder Peabody and

13:13

the firm I was with. And as I was

13:15

getting gas, this guy came out with his

13:17

greasy overall said, kitty! And you know,

13:19

we started talking. So when I got back

13:21

in the car, my boss said, well, Ken,

13:24

who is it? I said, that's the

13:26

guy I went to elementary school with.

13:28

He said, does he own this? I

13:30

said, own it. I said, man, he's

13:32

just pumping gas. So I love it. So

13:34

I had to go to school and

13:36

interact with people from all different

13:39

classes. So that was one good

13:41

thing. Because that was a sense

13:43

of community. And the other thing

13:45

was when I went to a

13:47

football game, that quarterback was black.

13:50

And in my neighborhood, the first

13:52

black graduate of the University of

13:54

Texas Dental School lived on my block.

13:56

One of my friends' dad was one of

13:58

the first two or three. guys to

14:00

graduate from the University

14:03

of Texas Law School. Another

14:05

friend of mine's dad was

14:07

the first graduate of the

14:09

architecture program. So I grew

14:11

up with people who were pioneers,

14:13

I grew up with people who

14:16

were leaders. So as a result,

14:18

when integration came about,

14:20

I had no hang-ups and no,

14:22

you know, I was used to seeing

14:24

people who looked like me

14:26

in a leadership position. And

14:29

I think that's something, I see

14:31

in your book, you had something

14:33

from Carol Dweck, who's a

14:35

psychologist in Stanford. And Carol

14:37

once did a study about

14:39

looking at students from different ethnicities

14:42

and how they did at

14:44

Stanford. And one of the

14:46

things she discovered is it

14:48

wasn't uncommon for some black

14:51

students at the time to, if they

14:53

got a bad grade, to get discouraged,

14:55

because they felt, you know, they didn't

14:57

have that. in our like, what I call,

14:59

model of somebody successful doing what they

15:02

were doing. That's not all the time.

15:04

I'm just saying that some people came

15:06

up in situations when integration came

15:08

and people like me started

15:10

leaving the neighborhoods, some people

15:12

didn't have role models. And it

15:14

was something that they had to acquire later

15:17

in life. And I'd say that's, I mean,

15:19

and I've talked to some friends about it

15:21

who grew up in the South. And people

15:23

have often said the same thing that

15:25

like the teachers. When I went to

15:27

class if somebody didn't do their homework

15:29

to teach them I'd say now Johnny

15:31

you didn't do your homework I'm gonna

15:33

see your mom at church on Sunday

15:35

I don't want to tell her you

15:37

didn't do your homework So that sense

15:39

of community that sense of seeing people

15:42

in positions of authority That was

15:44

one of the good things I got

15:46

You know, I also understand that I

15:48

was fascinated by this that when you're

15:50

growing up the late world, you know,

15:52

renowned jazz musician Count Basie Would

16:01

actually come over to your house for

16:03

dinner when he came through town? You

16:06

know, you got to tell us one

16:08

of those stories. Well, what happened? My

16:10

dad was a music nut, right? He

16:13

really loved music. He knew a

16:15

lot of blues musicians. I mean, like

16:17

Lyckon Hopkins, Bobby Broublin, and

16:20

he knew a guy who was a drummer

16:22

for Count Basie. And what happened,

16:24

one time Count Basie was

16:26

coming through Houston. And the drummer

16:29

was coming to our house and

16:31

my mother was an incredible cook,

16:33

an incredible cook. I mean,

16:35

my mother, at one time another, she

16:37

served Count Basie, Sam Cook, a mayor, a

16:40

governor in Texas. People raved

16:42

about her cooking, particularly

16:44

her gumbo. So anyway, this drummer

16:46

was going out, Count Basie, he

16:48

said, where are you going? He

16:50

says, look, my friend Bob Bacon's

16:52

wife is an incredible cook. So Count

16:55

Basie heard this and said, let me

16:57

come along. And I think the first

16:59

time we came in the house of

17:01

our memory seriously correctly, I think my

17:04

mother had some red beans and rice

17:06

and maybe she had some gumbo and

17:08

Count Basie said he liked greens, collar

17:10

green. So the next time we came

17:12

to town, my mother kicks in collar

17:14

greens and stuff. And she knew the

17:16

way to the man's heart. Oh, that's

17:19

right. That's right. And so that that

17:21

was one of the. Like I said, my

17:23

brother and I often laughed that when

17:25

we grew up, we think about all

17:27

the characters and all the people we

17:29

met. And it was like, it was

17:31

a wonderful child. Absolutely, you know, and

17:33

you know, I'm a little surprised, Ken,

17:35

after doing some of my research, that

17:37

you don't have a hen of a,

17:40

you know, English accent because, because you

17:42

were a martial scholar while you were

17:44

at Stanford, which meant that you had

17:46

the opportunity to study in London. Tell

17:48

us about that experience of what it

17:50

taught you had taught you. Well, you

17:52

know, I'm in business today because

17:54

of what happened when I

17:56

went to England. I was kind

17:58

of a left wing. intellectual when

18:00

I was at Stanford. You know,

18:02

I was involved in student protests,

18:05

nothing destructive or violent, but

18:07

you know, I was always

18:09

looking at what was wrong with the

18:11

system. And I get the scholarship because

18:14

I wanted to be a professor. That's

18:16

what I wanted to do. I wanted

18:18

to teach. And I get to England,

18:20

I'm going to study economics, and

18:22

I still remember there was a

18:25

guy who was a martial in my year,

18:27

and he once probably told me, he says,

18:29

I'm going to be working at Lehman

18:31

Brothers. I said, what's that? He said, Lehman

18:34

Brothers is like Morgan Stanley. I

18:36

said, what's that? So he sat up and

18:38

explained to me about investment

18:40

banks. And I said, okay, this

18:42

sounds interesting, sounds like another kind

18:44

of like this capitalist thing. Well,

18:46

all of a sudden, I was

18:49

in this dorm with people from

18:51

all the British colonies. I mean,

18:53

from Africa to West Indies, India,

18:55

Pakistan. So one day I was talking

18:57

to one of my Nigerian friends and he

18:59

was studying accountancy and he was very proud

19:01

he was going to get something at Royal

19:04

Dutch Hill. And I said, well, why do

19:06

you want to go work for a company

19:08

that's exploiting your country? He says, Ken, I

19:10

just don't want to work for the company. I

19:12

want to own a company or run an oil

19:15

company. And what I realized and it's unfortunate

19:17

a lot of people in this country

19:19

don't get this. When you get on

19:21

an international stage, everybody is a capitalist

19:23

capitalist. You know. What I realized

19:26

when I was there, I said, you know, all

19:28

the Africans and West Indians, I know

19:30

these guys are making plans to go

19:33

back to their countries and run things.

19:35

So that got me looking at business

19:37

from a different perspective.

19:39

And when I went to England,

19:41

it was also the labor government

19:44

was empowered. Jim Callahan was prime

19:46

minister. There were labor strikes.

19:48

I had to deal with national health.

19:51

And I started saying, man, just

19:53

a socialism. You can have it.

19:55

Get me back to the

19:57

go USA. So that's what

20:00

got. interested in business. So

20:02

I started talking to people and

20:04

I think if Margaret Thatcher, I'm

20:06

not a huge fan of Margaret

20:08

Thatcher, but she did get England back

20:10

on the right course. And one of

20:13

the things, and the reason I say

20:15

that, I had an opportunity to go

20:17

work at Royal Dutch Shell. But the

20:19

reason I didn't is when I figured

20:21

out what the taxes were, I said,

20:24

hell, I'm living better as a student

20:26

than I would if I took this

20:28

job. So when I... finished my studies,

20:30

I did my thesis, I traveled some,

20:32

I got back to Texas, I shaved

20:35

my beard off, got a white shirt and

20:37

tie, and my father's minister,

20:39

Reverend Lawson, his wife, knew

20:41

there was somebody in that church

20:43

who belonged to who worked at IBM,

20:46

and I went down to IBM, and

20:48

that's how it all started. I

20:50

got a job at IBM and

20:52

sales. save my beer put on

20:54

that white shirt tie every day

20:56

and blue suit I'm sure oh

20:58

yeah yeah I mean was famous

21:00

for that and so you you

21:02

work your way to Wall Street

21:04

and I know throughout your career

21:06

can you've seen crisis time and

21:08

time again you know yet the

21:10

stock market crashed in 87 the

21:12

Russian bond crisis 9-11 the financial

21:14

crisis of 2008 the pandemic all

21:16

these things you know what What's

21:19

your approach of leading a

21:21

team through such uncertain times?

21:23

And how do you keep

21:25

people motivated, you know, when

21:27

their future isn't so clear?

21:29

You know, I'd say that

21:31

up until the financial crisis,

21:34

most of the things that

21:36

happen, I can see the kind

21:38

of temporary in terms

21:40

of their economic impact

21:42

on people. Like 9-11 was

21:44

clearly devastating. Talking

21:47

other day. Someone I remember I had teams

21:49

all over the country and how do we get

21:51

people back home with the global financial

21:53

crisis I'd have to say it was the

21:55

hardest one because Fannie Mae got taken over

21:58

about the government. People stopped. got

22:00

wiped out. And I remember there

22:02

were people, I mean I was feeling

22:04

bad for myself because so much

22:06

of my net worth got wiped out.

22:08

But then I realized there were other

22:10

people who made a lot less than

22:13

I did who were really feeling it. So

22:15

one of the things I did is

22:17

I didn't try to sugar coat it.

22:19

I held meetings, I traveled to my

22:21

different offices, and I started

22:23

off by acknowledging the pain that

22:26

people felt. You know being honest.

22:28

I know what you're going through.

22:30

So one is to be honest with

22:32

people and at the same time

22:34

point a way out to deal with

22:37

that, to deal with that hurt. And

22:39

the way to do it is not to

22:41

lie, a funny picture, but what

22:43

I told people, as I said,

22:45

look, we're all hurting. Yes, your

22:47

stock's been wiped out. But you

22:49

know what? We have a job.

22:51

You're going to get a check.

22:53

And most important of

22:55

all, we have a mission. And what

22:57

I used to tell people, like, look, you

22:59

might be mad at the company, you might

23:01

be mad at the government, but

23:03

you know who you work for, you work for

23:06

your family. And if you can find

23:08

a better job right now, come to me,

23:10

I will help you, I'll give you a

23:12

reference, I'll do whatever. With me while you're

23:14

here, and you have an obligation to

23:16

your family, but you also have

23:18

an obligation to your customers,

23:20

because your customers are hurting

23:22

too. So I said, you know, you know, we can

23:25

sit here, you can have a pity party. Or

23:27

you can get up, just yourself

23:29

off, go get the paycheck,

23:31

go help your customers,

23:33

and keep doing business. And

23:36

I said, you know, what's done

23:38

is done. I can't make that

23:40

come back, but we can move

23:42

forward. Your mom's

23:44

tutelage is really helping you

23:46

there for no doubt about that.

23:49

Now, Ken, when did you, when

23:51

did you catch the real estate

23:54

home ownership bug? You know,

23:56

I wish I could tell you this

23:58

was a result of something long thought out.

24:00

process. It wasn't. When I was

24:02

in business school, I told

24:05

you I got interested in

24:07

business, but I never lost what

24:09

I call my liberal, do-good

24:11

impulse. So when I was

24:13

in business school, Kenner P

24:16

Body's public finance team

24:18

came to campus and I

24:20

just went, I'm not going to

24:23

lie, I went to the reception.

24:25

just to get some free food, right?

24:27

Because, you know, all these investment banks

24:29

would always have great food, so I

24:31

went to get some great food, and

24:33

I met the people, and I loved the people,

24:36

the guy who was running that division

24:38

there, Mike Hernandez, just a great

24:40

guy, met some other people. So I joined

24:42

public finance, because again, it

24:44

was gonna deal with government

24:46

municipalities. I said, look, I can make

24:49

some money, I'm not gonna make as

24:51

much money as like Bill Lewis who's

24:53

a good friend who was going to

24:55

but I'll be able to make a

24:57

good living. And one of the senior

24:59

people, I was talking to him, and

25:02

I mentioned that my girlfriend, who's not

25:04

my wife, was in Houston. He

25:06

said, well, let me get you on

25:08

some Texas accounts. And the business

25:11

they were doing in Texas was

25:13

primarily taxing them housing bonds.

25:15

So it happened by happenstance

25:18

because I would go to Texas every

25:20

week. I was going to Dallas, Waco,

25:22

all types of types of places.

25:24

And some people were concerned about

25:26

me going to Texas because everybody

25:28

said, well, I don't know if

25:31

we can send this black guy

25:33

down there. Some of these clients

25:35

were kind of rednecky. And I remember

25:37

I said, you know what? I'm going

25:39

to do better than you. And they said,

25:41

why? Because I said, it's my home state. I

25:44

said, I know how to deal with big

25:46

people. And we went down and it

25:48

was Grand Prairie, Texas, which is at

25:50

that time was just a tiny spot.

25:52

and they wanted to do some housing bonds

25:55

and I remember the guy in charge

25:57

of the housing finance agency was a builder

25:59

and he was a Texas Tech guy, Big

26:01

Burley guy. And my boss went up

26:03

there and she, you know, got started

26:05

talking about football. And I started talking

26:08

about Texas Tech, wrestling you, the longhorns.

26:10

And then something came up about hunting.

26:12

I asked, you know, what are you

26:15

shooting? And she just lost it. She

26:17

said, it was a hard old people.

26:19

I don't want to do it. You

26:22

deal with them. So what happened, I

26:24

would go down to Texas every week,

26:26

and that's what I really started kind

26:28

of falling in love with real estate

26:31

because I realize that, you know, you

26:33

do a lot of things in finance

26:35

and it's just moving paper. I got

26:38

to see things out of finance come

26:40

out of the ground. I really like

26:42

that. And one of the most moving

26:45

moments in my career came when I

26:47

was in Fannie Mae. And we were

26:49

the largest investor in the low-income tax

26:51

credits in the country. One of my

26:54

wife's grandmothers died and I was going

26:56

back to Houston for the funeral and

26:58

I went to the neighborhood that my

27:01

my grandmother used to live in my

27:03

mother used to live in and I

27:05

was going to the church Catholic Church

27:07

that the Creoles had built back in

27:10

the 1930s when they came over from

27:12

Louisiana and I just hadn't been in

27:14

the neighborhood in decades and I'm riding

27:17

along and I remember it myself you

27:19

know. Miss Broussard used to live here

27:21

was because a bunch of people were

27:24

French speaking French names and a lot

27:26

of them were dead but the houses

27:28

were dilapidated everything was kind of old

27:30

in the neighborhood had really gone down

27:33

and then I was going man this

27:35

is really really bad and all of

27:37

a sudden I saw this sign senior

27:40

apartments built by such and such a

27:42

church finance by session such a bank

27:44

with financing from financing from Fanny Mae.

27:47

And I saw that right before I

27:49

went to the church. And that just

27:51

made me feel so good because I

27:53

said, you know, the best thing happening

27:56

in this neighborhood. is a project that

27:58

my division is financing. And to this

28:00

day, I still like seeing properties because

28:03

again, it's tangible. I'm sure David like

28:05

the pride you would feel if you

28:07

went to a well run franchise and

28:10

you know, the food was just right.

28:12

Yeah. So when you get a chance

28:14

to see and what I mentioned to

28:16

you earlier, how I would go spend

28:19

time with some of my borrowers, I

28:21

remember when they were building the time.

28:23

Well, I think they called the Time

28:26

Warner Center up in the Columbus Circle.

28:28

And Steve Ross invited me and my

28:30

wife to dinner. I remember we were

28:33

walking through the condos of wires hanging

28:35

from the ceiling. Steve was going, yeah,

28:37

and this is going to overlook the

28:39

Hudson and this is going to see

28:42

the part. You know, he was just

28:44

animated about it. When you see people

28:46

identify with their projects, when you see

28:49

a neighborhood change, it's just nothing like

28:51

it. That's great. And you were quite

28:53

the innovator in this in this field.

28:56

You know, you were the first to

28:58

securitized commercial mortgages at scale. First, explain

29:00

to our everybody what what that means

29:02

in layman's terms, you know, securitizing commercial

29:05

mortgages, and then what it took to

29:07

really pull this off. I had left

29:09

to the people body. I was at

29:12

Morgan Stanley and I was doing, I

29:14

had gone from tax exempt to taxable

29:16

financing when securitization first started. And I

29:19

left Kidder to go to Morgan Stanley,

29:21

but most of my clients were savings

29:23

alone. So 1989, they're all going under.

29:25

And I was going to have to

29:28

do something different in the firm. And

29:30

there was a guy I knew who

29:32

was a partner, Michael Youngman, Vincent Elkins.

29:35

And Michael had left his law firm

29:37

to go work for the board of

29:39

the Resolution Trust Corporation. That's what they

29:42

formed to deal with the bailout. And

29:44

it used to call me all the

29:46

time to ask me questions. And one

29:48

day he just happened to say, you

29:51

know, boy, we could really use somebody

29:53

like you. with your knowledge of the

29:55

markets. I said, well, why don't you

29:58

make me off? He said, well, Ken,

30:00

you would have to take a tremendous

30:02

pay cut to coming. I said, well,

30:05

you did it. So much to my

30:07

wife's sugar in and to the people,

30:09

everybody thought I was crazy to leave

30:11

Molden Stanley. But I took this job

30:14

in government, one of the best things

30:16

I ever did. And we got there,

30:18

and what I discovered, I was in

30:21

charge of policy. And I discovered that

30:23

at that time the government thought they

30:25

were going to end up with over

30:28

$100 billion, $150 billion in assets. Now

30:30

that doesn't seem like a big number

30:32

today, but 99, that was a huge

30:34

number. And when I discovered that the

30:37

biggest bank failure that FDIC had ever

30:39

dealt with was Continental Illinois, which I

30:41

think was either $8 billion or $10

30:44

billion. And it took them over a

30:46

decade to resolve that. So Michael and

30:48

I were talking, and we said, look,

30:51

we'll be here forever getting this done

30:53

getting this done. And so Michael one

30:55

day said, well, couldn't we bundle his

30:57

stuff and sell it like that? And

31:00

I said, well, you know, no one's

31:02

ever done commercial mortgages. They've been single

31:04

family. And we started talking to rating

31:07

agencies and exploring it. And people said

31:09

it. You couldn't do it. We said,

31:11

why not? So our first battle was

31:14

to convince the powers of B and

31:16

government to do it. And there are

31:18

some people who I don't think get

31:20

enough credit. Nick Brady was Secretary of

31:23

the Treasury. So my board at the

31:25

board I reported to was Nick Brady,

31:27

Jack Kemp, Alan Greenspan, a guy named

31:30

Bob Larson who was here at the

31:32

Taubman Organization, and another guy named Phil

31:34

Jackson, it was a retired governor of

31:37

the Federal Reserve. And there were people

31:39

at the FDIC, there were people in

31:41

the Senate. Everybody didn't want us to

31:43

do it. And I remember that one

31:46

guy we got into a meeting, Greenspan

31:48

who was not quiet in private meetings.

31:50

And one guy said, well, you know,

31:53

if you package these things, Wall Street's

31:55

going to make a lot of money.

31:57

And I remember a Greenspan said, precise.

32:00

This is America. That's what people do.

32:02

People make money. If they make

32:04

a lot of money, other people

32:06

will get into it. And over

32:08

time, the price equilibrium will set in.

32:11

The taxpayers benefit, but the

32:13

government should not hold assets.

32:15

So Alan Greenspan and Nick Brady

32:17

to me were two unsung heroes who

32:19

really made a difference. So they let

32:21

me and might do it. So Ken, what

32:24

does it mean to securitize a

32:26

commercial mortgage? It means that you...

32:28

put a bunch of mortgages together,

32:30

which allows you to diversify risk.

32:33

You get them raided. You do a

32:35

filing with the SEC. So

32:37

now you have a publicly

32:39

traded rated security, which means

32:41

that the universe of investors

32:43

is huge, right? When we first

32:46

did it, most insurance companies, people

32:48

didn't know what to make of

32:50

it. But once we educated them,

32:52

all of a sudden we had

32:54

the biggest pools of capital in

32:57

the world available to us insurance

32:59

companies bank pension plans who couldn't

33:01

buy either couldn't buy because of regulatory

33:04

reasons individual mortgages or else it just

33:06

wasn't worth their time all of a

33:08

sudden they could buy a security they

33:11

could trade it they could go to

33:13

Goldman Sachs they could go to Solomon

33:15

Brothers who was still in business at that

33:17

time and they could trade it they could

33:19

repul it and so it allowed that part of

33:21

the real estate market to play in

33:24

public markets. So there

33:26

was more liquidity that led

33:28

to better pricing and it was

33:30

just a win-win all the way

33:32

around. You know, you mentioned people

33:34

who have such powerful reputations like

33:36

Alan Greenspan. I mean, you know,

33:39

incredible leader in his own right.

33:41

And you've had these huge jobs

33:43

with all kinds of power. How

33:45

do you really get to the real

33:47

truth? You know, because a lot of times

33:50

people are angling for something

33:52

to... to their own benefit. How did

33:54

you really get to the real

33:56

skinny? You know, I didn't plan

33:58

on it, you know. It just happened.

34:01

And I think one of the

34:03

things is that when I had

34:05

that job, I got to meet with

34:08

people like Ace Greenberg

34:10

and Bear Stearns. I met the

34:12

heads of every major Wall

34:14

Street firm, Dick Ford, I

34:16

met them all because I

34:18

controlled a lot of business. And

34:21

I learned that when you have

34:23

something that's a value

34:25

to people, a lot of people

34:27

want to talk to you.

34:29

But I also learned something,

34:31

a lesson I joke about today,

34:34

that I said, you know, and you

34:36

have a big job, like when

34:38

I ran Fannie Mae and I

34:40

controlled all this money, I told

34:42

people, you know, I was

34:45

a visionary leader, strategic genius,

34:47

until the day I walked

34:49

out the door, I was just

34:51

a, just another schmuckler, a

34:53

tie in a dream, right?

34:56

So I learned sometimes some

34:58

people confused. their position

35:00

with themselves. And so one

35:03

of the things I learned is like,

35:05

hey, you got this job where you

35:07

have a lot of power, you can use

35:09

it, but realize it ain't

35:11

you, right? It's that title, it's

35:13

that job, and when you leave it.

35:15

And that's why I think some

35:17

people, it's so hard for some

35:20

CEOs, for some politicians

35:22

to walk away, because their

35:24

identity gets wrapped up in what

35:26

they are, not who they are inside.

35:29

We'll be back with the rest of

35:31

my conversation with Ken Bacon in just

35:33

a moment. Chile's recently reported its third

35:35

straight quarter of double-digit sales growth this

35:38

year. And if you want to see

35:40

what's driving their incredible comeback, check out

35:42

my interview with Kevin Hachman, the CEO

35:45

of Chile's parent company, Brinkers International. I'm

35:47

in a Chili's in Chicago. Just outside

35:49

of O'Hare, I'll never forget this. And

35:52

I'm in, we call it the Hard

35:54

House, so the back of the house,

35:56

the kitchen, we call the Harder House, at

35:58

Brinker, and I'm in the... of the house

36:00

with a team member and she's

36:02

counting shrimp. So her job for

36:04

the first hour of the day

36:06

was she counts eight shrimp, puts

36:09

him in a little bag, twists

36:11

the bag, counts eight shrimp, puts

36:13

him in a little bag, twists

36:15

the bag and so on. She'll

36:17

do that for probably 45 minutes.

36:19

It's called portioning. And so when

36:21

I asked her the question, hey,

36:23

what's the one thing that you

36:25

would do if you were CEO

36:27

or CEO? When the customer orders

36:29

a shrimp taco or a shrimp

36:31

fajita, I'll count eight shrimp, I'll

36:33

put them on the grill. You

36:35

know what? Sometimes I'll count seven,

36:37

sometimes I'll count nine, but guess

36:39

what? Most of the time, I'm

36:41

in a county, right? So we

36:43

took that idea back to the

36:45

restaurant support center and they said,

36:48

hey, we got a test this,

36:50

we're going to county, right? So

36:52

we took that idea back to

36:54

the restaurant support center and they

36:56

said, Absolutely nothing, right? Literally didn't

36:58

change. We measure this stuff literally

37:00

every day. We get reports every day.

37:02

It didn't change. And then most importantly,

37:04

that team member, she doesn't want to

37:06

do that. She doesn't value that. To

37:08

her, that thinks it's a waste of

37:10

time. So that makes her job way

37:12

more engaging when we're like, hey, we

37:14

listen to you, we got rid of

37:17

that, and go do something that you're

37:19

excited about doing. Go back and listen

37:21

to my entire conversation with Kevin. So

37:23

what led you, Ken, to start your

37:25

own firm at Railfield Partners? You know, I

37:27

still like real estate. I still like the

37:29

essence of what I did, but I

37:31

didn't like the luggage that came with

37:33

it, having to manage people, and I

37:35

didn't like committees. So when opportunity

37:38

presented itself, I decided, well, you know,

37:40

let me go out here and try

37:42

it. And I like to tell people

37:44

to be an entrepreneur you should

37:46

either be twisted. 25 and broke

37:48

a 55 and have your kids

37:50

educated. So when I started, my

37:52

son had already finished college and

37:55

was kind of out of my pocket,

37:57

not completely, but kind of

37:59

out of. pocket and my

38:01

daughter was getting ready to

38:03

graduate and my parents were

38:05

both to see so basically

38:07

I didn't really have a

38:09

lot of obligations and so

38:11

I could be a little

38:14

selfish and so I decided

38:16

let me give it a

38:18

try. Someone asked me, well,

38:20

did you miss Fannie Mae?

38:22

I said, every two weeks.

38:24

That's funny. You missed that

38:26

regular paycheck. On the other

38:28

hand, no, the sense of

38:30

freedom, the sense of what I

38:33

call you eat what you kill,

38:35

I've enjoyed that. You know, in

38:37

your business today, you have to

38:39

be extremely intentional about building relationships

38:42

and you're really good at it.

38:44

You know, what's something that you

38:46

think everybody can learn from that

38:49

you put into practice when it

38:51

comes to building relationships? Well, you

38:53

know, I talked earlier about building

38:56

trust and about conducting yourself

38:58

in a certain way. I mean,

39:00

look, I dealt with hundreds of people, if

39:02

any me, and I said, you know,

39:04

if I dealt with a hundred, Big

39:06

real estate people I said they're

39:09

going to be 10 who are going to

39:11

be Good to meet when I leave

39:13

I said the thing is you don't

39:16

know who that's going to be And

39:18

we got some deals. I remember

39:20

I was once at a conference

39:22

was walking along and I ran

39:24

across a guy whose company and

39:26

almost gone under the

39:29

financial crisis But they handled it

39:31

so nicely. They didn't try to go

39:33

into bankruptcy. They didn't try to fight

39:35

me. They work with me. And so

39:37

I didn't deny them credit. I just

39:39

put the, you know, on more conservative terms.

39:42

So they survived and I ran across

39:44

the CEO and he said, Ken, how

39:46

are you doing? I said, man, it's

39:48

hard out here. I said, I need

39:50

some deals. He said, you know what? We've

39:52

got some properties for sale. He says, look,

39:54

I've got a fiduciary responsibility

39:57

responsibility responsibility.

40:00

I'll let you get a last look. And so

40:02

I got a deal like that. Another time

40:04

there was a guy who had worked

40:06

at one of my lenders, I called

40:08

him up and I used to call

40:10

it knee pad and chapstick time. I'm

40:12

on my knees begging and I got

40:14

chapstick because I'm having to kiss a

40:16

lot of you go away. You know, when

40:19

you come from a big company,

40:21

David, I don't know if you've

40:23

experienced this, you know, when you're

40:25

in a big company, everybody comes to

40:27

you. All of a sudden you're not at

40:29

the big company, you have to go to them.

40:31

And some people can't make that change. But I

40:33

went to another guy and I said the same

40:36

thing and he called me up and said, look,

40:38

I've got a deal, I'm going to put it

40:40

along the market, I'll give you notice. He called

40:42

it back the next day, said, you know what,

40:44

I'm not going to put it on the market. I'm

40:46

going to get a broker's price opinion and

40:49

you and you and I will negotiate

40:51

the price. And I will negotiate the price.

40:53

And that's how we'll negotiate the price.

40:55

because I had treated them honorably and

40:57

the global financial crisis presented an opportunity.

41:00

I could have shafted a lot of

41:02

people, but I tried to treat everybody with

41:04

respect and there's some people who

41:06

remembered that and returned the favor. That's

41:08

great. You know, and you know, you just

41:11

mentioned negotiations and you've mentioned earlier that, you

41:13

know, you're kind of in the sharp elbow

41:15

business. You know, you know, what are your

41:17

rules for negotiation? Do you have any or

41:20

what's really key from your perspective to find

41:22

that win? My key, and I used to

41:24

tell this to my staff, is don't kill

41:26

over the last nickel. Even if the other

41:29

guy is trying to do it, let people walk

41:31

away feeling they got a victory. If

41:33

to the degree you can afford to

41:35

the you can afford to do it.

41:37

You can afford to do it. because

41:39

that builds goodwill and trust. Now there's

41:41

some people you do that with and

41:43

they walk away saying, oh, sucker, you

41:45

know, I got him and they don't

41:48

appreciate it. But the other people will say,

41:50

you know what? I like doing business

41:52

with this guy. So I never tried

41:54

to just pin people against the

41:57

wall, you know, when I got close to

41:59

what I want. And, you know, it was

42:01

hard. Sometimes my staff would say,

42:03

we should have got another five

42:05

basis points. I said, you know what?

42:07

It's not going to change our life

42:09

that much. Let the customer win.

42:11

And some people forgot about

42:13

that, but there's some people

42:16

appreciated. And again, I did

42:18

my fiduciary duty, but there

42:20

comes a time in any

42:22

negotiation where it's the point

42:24

of diminishing returns. You know, I've

42:26

heard you say that you actually

42:28

got your PhD in bad deals.

42:31

Tell us about one of those

42:33

deals in a key lesson that

42:35

you learned from it. Well, what

42:37

I learned when I was at

42:39

the RTC, there was a guy, Tim

42:42

Ryan, I think he's now the

42:44

head of Santander, U.S. Tim

42:46

was the guy who, the

42:48

regulator, who would close down

42:50

the savings loans, and if

42:52

they closed him down on

42:54

Friday. You know, that weekend, my team

42:56

would go in and look at the

42:58

books. And what I learned a lot

43:00

of times is that I talk about

43:02

trust, but there, Reagan had a

43:05

great thing, trust would verify.

43:07

So I'll give an example. I would

43:09

go in there and see a deal,

43:11

and you'd say, well, wait, why did

43:13

this deal go belly up? I mean,

43:15

it looked like it was fully leased.

43:18

And then you start pulling the leases,

43:20

and you'd say, oh, this person said

43:22

they were a dancer. Well, they

43:24

might have been working the script

43:26

club. Oh, this person said they were

43:28

in the auto business and you

43:30

found out maybe the guy

43:32

was like a taxi driver.

43:34

In other words, people would

43:37

sometimes some of these landlords

43:39

would inflate people's income or

43:41

inflate their profession in the documents.

43:43

So I learned that the first

43:46

time you do business with

43:48

somebody, check all the little things.

43:50

Just don't take things that face

43:52

value. You know, trust is something

43:54

that should be earned. And so

43:56

I learned that that's number one.

43:58

And number two is. a lot of

44:00

people do deals assuming

44:03

that the world will always

44:05

be as it is. Another

44:08

saying for my mother, assume

44:10

spells, ass out of you

44:12

and me. I think my mom

44:14

taught me that one too, you

44:17

know. So I'll give you an

44:19

example. In my little business

44:22

at Railfield, we

44:24

did some deals from 2014,

44:26

I'd say 2018 to 2019.

44:28

we would get an adjustable

44:31

rate mortgage, and we would buy

44:33

a cap. And we would do

44:35

that, and we would watch it, and

44:37

we'd always say, if rates, you

44:39

start seeing rates go up, we'll

44:42

lock in a fixed rate. When

44:44

we got to 2020, when rates

44:46

were really low, we started saying,

44:48

you know what? This is, you know,

44:50

I hope that people draw on

44:52

power for gives me, but I

44:54

felt the Fed was like a

44:57

drug dealer dealer. And they were getting

44:59

everybody free drugs and everybody was getting

45:01

high off low interest rates. And I

45:03

said, you know, this can't last. I

45:05

said, if we can get a good

45:07

fixed rate, let's lock it in. And we

45:10

were losing deals to people doing these

45:12

bridge loans. And it was a temptation

45:14

to go doing. But I said, you

45:16

know, these bridge loans, this isn't an

45:18

adjustable rate mortgage. It's purely floating.

45:20

And I said, I'm not going to do

45:22

it. So part of our discipline was knowing

45:24

that sometimes you see the crowd going one

45:27

way and you got to sit on your

45:29

hands and say, look, this doesn't make sense.

45:31

I'm not going to do it. That's how

45:33

we stayed out of trouble. You know, we

45:35

just sat on our hands because there were

45:37

times when I mean, it's just like investing.

45:40

I've had people, I remember when crypto was

45:42

happening, I'd say, you know what? If I

45:44

don't understand it, I'm not going to do it.

45:46

I'm not going to invest in. Because I don't

45:49

know what I'm doing. So when interest rates

45:51

got crazy, when they were so

45:53

low, I just said, you know

45:55

what, I'm not going to do

45:57

a floating rate deal because...

46:00

There's only one way for

46:02

rates to go on us up. And

46:04

there were people who did bridge

46:06

loans, that is, they did short-term

46:08

loans, floating rate, when SOFA, which

46:10

is like LIBOR, it's like an

46:12

index, was at five basis points.

46:15

A couple of years later was

46:17

500 basis points. And so people

46:19

said, oh, I'm going to do this

46:21

loan of 250 basis points over

46:23

SOFA or LIBOR. It's five bips.

46:25

They said, oh, this is cheap

46:27

money. But I said, the index is floating,

46:30

guys. This is historically, this is

46:32

very low. I didn't think it was going

46:34

to go to 500. I knew I'm going

46:36

to stay at five basis points. So I

46:38

just said, I'm not going to do that

46:40

kind of long. And it proved to be

46:42

a good move, for sure. I like to

46:44

say that in the risk management, the biggest

46:46

impediment to good risk management is

46:48

imagination, because people often assume that

46:50

this is how the world is, and this

46:52

is how the world's going to stay. And you

46:54

got to be able to imagine that things

46:56

could get worse. You know, kids so much wisdom there,

46:59

and this has been so much fun, and I want

47:01

to have some more with you with my lightning round

47:03

of questions. So are you ready for this? I'm ready.

47:05

All right. The three words that best describe you. Empathy,

47:07

integrity, humor. If you could be one person for a

47:09

day beside yourself, who would it be? I tell you,

47:11

somebody just passed away, Quincy Jones, the music producer. Your

47:13

biggest pet peeve. People who dissemble. In other words, people

47:15

who don't really come out, come out, or what they're

47:17

trying to do, or what they're trying to do, and

47:19

they're trying to do, and they're trying to, and

47:22

they're trying to, and they're trying to, and they're,

47:24

and they're trying to, and they're trying to,

47:26

and they're trying to, December and

47:28

beat around the bush. I can't, I

47:30

can't stand that. Who would play

47:32

you in a movie? Trying to

47:35

think of somebody good-looking with three

47:37

pieces. So I can't say Denzel

47:39

Washington, who would play me? Jeffrey

47:41

Wright. What's something you'd only

47:44

know about Houston if you're

47:46

from there? Now I'm going

47:48

to cause some controversy for

47:50

people from Houston. Where to

47:52

find the best barbecue? You're

47:54

only able to answer

47:57

this next one in

47:59

front. French. Okay. Do

48:01

you still speak French?

48:03

What's the one thing you

48:05

do just for you?

48:08

Hunting. Your most prized

48:10

possession. A painting by John

48:12

Biggers was a friend of

48:14

my family. He's a great

48:17

artist. He's deceased now

48:19

and I have a painting

48:21

of his and I saw

48:23

it when he first was

48:25

doing the drawing for the

48:27

painting. And I got a little,

48:30

I videotaped it on a super eight

48:32

camera. I just found the little cassette

48:34

the other day. If I turned on

48:36

the radio in your car, what would

48:38

I hear? Serious radio, the jazz

48:41

station. No surprise there. What's

48:43

something about you a few people

48:45

would know? That I'm a good

48:47

cook. Pick that up from your

48:49

mom. What's one of your daily

48:51

rituals, something that you never miss?

48:53

My coffee. All right, we're out of

48:56

the lightning round now, good job, that

48:58

was great. You know, you know, Ken,

49:00

I've had the great honor of being

49:02

on the Comcast board with you, and

49:04

I have to tell you, of all

49:07

the directors, I don't think anyone

49:09

ever asked for extremely insightful

49:11

and thoughtful questions. How do

49:14

you stay current to be

49:16

able to bring such a studied

49:18

point of view to the table?

49:20

Because it's all your

49:22

questions seem to be rooted

49:25

in reality or something you

49:27

experienced. Comcast was the first

49:30

board I got on and I learned

49:32

a lot of lessons. And I

49:34

only want to go on a board

49:36

where I know respect and like

49:38

the management team and I

49:40

like the business. Even if

49:42

I don't fully understand it,

49:45

I have to like the

49:47

business. And with Comcast, I

49:49

have Google set up so

49:51

every day I get all

49:53

the headlines about Comcast.

49:55

I read about the competition.

49:58

I read about... broadband. And

50:01

I'm fascinated. I have to say

50:03

of all my boards,

50:05

Comcast is probably the

50:07

most intellectually challenging because

50:10

when I first joined the board, it

50:12

was just, oh, what's DISH doing?

50:14

What's AT&T doing? And now,

50:16

I mean, we're looking at

50:18

Amazon. I mean, everybody's a

50:20

free-for-all. So I find it very

50:23

stimulating. And I just try

50:25

to, you know, I'm a voracious.

50:27

reader of newspapers and magazines.

50:29

I get a lot of

50:32

newsletters. And if I like

50:34

something, I just like reading

50:36

about it and finding out

50:39

about it. And Comcast is,

50:41

I think Brian Roberts

50:43

is one of the best CEOs

50:45

in the country, but the whole,

50:48

the board, I always thought all

50:50

boards would like the Comcast

50:52

board. But it's a very

50:55

collegial board and the management

50:57

is accessible. I've never had

50:59

anybody from Comcast push me

51:01

away to assemble. And because

51:03

I love the company, I

51:05

love what they do. It motivates

51:07

me and keeps me excited. What

51:09

have you learned about leadership

51:12

just watching Brian Roberts in

51:14

action? What strikes you most

51:16

about leadership from him? Brian

51:19

Roberts does something that's very

51:21

rare. He goes into every

51:23

meeting, he parks his ego

51:25

at the door. He listens

51:28

extremely well, and

51:30

when he gets ready to

51:32

make a move, he never

51:34

tries to sell you on

51:36

what he's going to do.

51:38

He says, I'm thinking about

51:40

doing X. Here's the pros,

51:42

here's the cons. And he

51:44

will argue that conside,

51:46

just as much energy.

51:48

and much thoughtfulness and integrity as

51:50

he will the pro side. And

51:52

so as a result, you feel

51:55

comfortable pushing back or agreeing

51:57

or disagreeing. Now I always tease

51:59

him. that I say, look, when you

52:01

want to do something, I'm the wrong

52:04

guy to ask, because I'm going to

52:06

say, put the pedal to the metal,

52:08

let's go for it, right? But I

52:10

do that because I know that he's

52:13

thought it through completely. And that's to

52:15

me what makes him great, because I've

52:17

been around a lot of people. And

52:19

by the way, I'm not saying this

52:21

in a critical sense, but a lot

52:24

of people say, here's what I'm going

52:26

to do. I want to know what

52:28

you think and I told someone maybe

52:30

he deserves an Academy Award but

52:32

I mean I'm sure you've experienced

52:34

as David where he will call

52:36

an individual board member and say

52:38

I'm thinking about doing something what

52:41

do you think and he listens

52:43

to what you have to say. Yeah

52:45

he's definitely sexy input and is

52:47

a great listener and I you

52:49

teach a finance course as I

52:51

understand it for an NBA program

52:53

at Georgetown. What's a key thing

52:55

you wish that students do earlier

52:57

on in their careers? I wish

52:59

that, you hear people say follow

53:01

your passion. Yeah, that's good advice.

53:03

But I also think that people,

53:06

one of the things I always

53:08

like to tell people, what price are

53:10

you willing to pay for success?

53:12

And I say that because, you know,

53:14

everybody wants to go to heaven, but

53:17

nobody wants to die. You know, so

53:19

a lot of people say I want

53:21

this, but are you prepared. whether it's

53:23

the time whether it's the moves you

53:26

know I know in your background

53:28

you moved around a lot when

53:30

you were younger and you you know

53:32

you excel at that you learn to

53:34

embrace that and you're good

53:36

at it you're comfortable at it

53:38

a lot of people aren't so

53:41

you know I'll talk to somebody

53:43

like this happens a lot I've

53:45

talked to a lot of young

53:47

people oh I love to work

53:49

for Comcast in New York And I

53:51

say, well, the headquarters is Philadelphia. Well,

53:53

I don't, I say, well, maybe that

53:55

didn't place you. If I could work

53:57

in New York, I just said, if

53:59

you're. not prepared to embrace

54:02

Philadelphia, then maybe just sit in

54:04

the place for you. I'm not saying

54:06

that you're going to be your whole

54:08

career, but if you really like the company,

54:10

you should be prepared to spend time

54:13

there. And I'm not saying that's bad

54:15

if you don't want to do it.

54:17

I'm just saying this isn't the thing.

54:19

That's what I mean about the price.

54:21

And I've gone through this with my

54:23

kids and my nephew, nieces and nephews,

54:26

where I tell people, look, look, if

54:28

you want something, Friends Mother

54:30

once commented, when my daughter was working

54:32

at Morgan Stanley before business school, she's

54:35

working so hard. Why do you make

54:37

her do that? I said, well, first

54:39

of all, hard work ain't never killed

54:41

nobody. She ain't doing nothing that I

54:43

didn't do. And I said, exactly, I'm

54:45

not making her do anything. I said, if

54:47

you want certain things in life, you gotta

54:50

put in the time. So hard work. And by

54:52

the way, not everybody wants to do it.

54:54

And I say, that's fine. Yeah. When you

54:56

think about what's next for

54:59

you, Ken, what's your unfinished

55:01

business? My unfinished business, there's

55:03

a ton of books that

55:05

I've started. I haven't completed.

55:08

I want to do more

55:10

reading. I'd like to do a little

55:12

more teaching. Remember I once said

55:14

that that's what I wanted to

55:16

do to teach. I love my

55:18

course at Georgetown. I like to

55:20

teach more. I'd

55:23

like to, while I'm still

55:25

mobile, travel more and more

55:27

time with family. You know,

55:29

I've been very, very blessed.

55:32

I've been married for

55:34

40-something years. My kids are

55:37

both fine and employed. I

55:39

love my end laws. I regard

55:41

some of my nieces and

55:43

nephews almost like my kids.

55:46

And you realize as time

55:48

goes by. that sometimes your

55:50

kids have less use for

55:52

you. You realize that some

55:55

of your friends may not be

55:57

here. So I'm at the stage in

55:59

life. where I still like being

56:01

in a game, the business, but you

56:03

know, I'm going to start having to

56:06

pull back from some boards

56:08

and I think it's more

56:10

time for like friends and

56:12

family and the mind. Last

56:14

question here, Ken, you know, what's

56:16

one piece of advice you'd get

56:18

to anyone who wants to be

56:20

a better leader? Peace of advice

56:22

is think hard and long about

56:24

why you want to lead and what

56:27

you hope to achieve by leading. I

56:29

see people oftentimes, I want to

56:31

be X, I want to be the

56:33

big chief, and I'll often say, why?

56:35

I'm amazed sometimes some people

56:37

say, well, it's the money. I say,

56:39

well, you know, you make money being

56:41

a drug dealer, right? You could. Oh,

56:43

that's illegal. I said, well, why do

56:45

you want to do it? And what do

56:48

you want to accomplish? One of

56:50

the things I always like to do

56:52

is to say I took something from A

56:54

to B that whatever I took over, I

56:56

made it better. And once I've

56:58

made it better, you know, Fannie Mae didn't

57:01

fire me, but I looked up one day

57:03

and I said, you know, I think I've

57:06

accomplished everything. I've had several

57:08

jobs where I say I've

57:10

accomplished everything that I wanted

57:12

to do. It's time to move on.

57:14

And so I think to be a good

57:17

leader, you should have in your mind.

57:19

It might be fuzzy, but like, what

57:21

is the end point? What does success

57:23

look like? And why are you doing

57:26

what you doing? It was building

57:28

something, taking something

57:30

that was good and making

57:32

it better. You know, Ken, you

57:35

know, I've observed you now for

57:37

a number of years, and you

57:39

have a really great moral

57:41

compass, and you do a

57:44

fantastic job of finding that

57:46

magic between... mission and

57:49

making money. You know, making money

57:51

in a way that it betters

57:53

the world. And you know, anybody

57:55

who has the opportunity to work

57:57

with you always comes out better.

58:00

I want to thank you so

58:02

much for taking the time to

58:04

be on this podcast and sharing

58:06

your insights. And I want to

58:08

thank you because when I was

58:10

looking at your book and the lessons

58:12

there, I said, man, I wish

58:15

I would have had that like

58:17

40 years ago. You could write

58:19

your own book, I'm sure of

58:21

that. Thank you, Kim. Wisdom is,

58:23

what does they say, energies wasted

58:25

on the young and wisdom on

58:28

the old. That's great. Ken is

58:30

one of those leaders who

58:32

just gets it. What really

58:34

stands out to me is how much

58:36

he values trust, not just

58:39

as a fluffy concept, because it's

58:41

not fluffy, but because it's real,

58:43

it's tangible, and it's a form

58:46

of currency in business and leadership.

58:48

Trust is what makes everything else

58:51

possible. You've got to have wisdom

58:53

to extend it to the right

58:55

people, and you've got to earn

58:58

it yourself by being consistent and

59:00

true to your word. Do that,

59:02

and it comes back to you

59:05

exponentially, both in the

59:07

reputation you build and the

59:09

opportunities you're gonna find. So here's

59:12

something simple for you to try this

59:14

week. Ask yourself how you're earning

59:16

the trust of others. Do you follow through

59:18

on what you say? Do you show up

59:20

consistently for your team? Now pay

59:23

special attention to those little moments

59:25

because that's where trust grows. So

59:27

do you want to know how

59:29

leaders lead? What we learned today

59:31

is that great leaders understand that

59:33

trust is a form of currency.

59:35

Coming up next on how leaders

59:37

lead is Lindsay Snyder, the owner

59:39

and president of in and out burger

59:42

and boy do I love their burgers and

59:44

fries. We want them to not

59:46

only serve the best burger, fries,

59:48

and drinks, but we want them

59:50

to do it in a way

59:52

where our customers feel the difference.

59:54

They feel that we care. So

59:56

the loyalty goes both ways. Customers

59:59

trust our brand. because they know we're

1:00:01

giving them the best. Thanks again for

1:00:03

tuning into another episode of how leaders

1:00:05

lead, where every Thursday you get to

1:00:07

listen in while I interview some of

1:00:09

the very best leaders in the world.

1:00:12

I'm making a point to give you

1:00:14

something simple on each episode that you

1:00:16

can apply to your business so that

1:00:18

you'll become the best leader you can

1:00:20

be.