Episode: 3 Habits of Wise Leaders

Michael Hyatt: Hi, I’m Michael Hyatt.

Megan Hyatt Miller: And I’m Megan Hyatt Miller.

Michael:  And this is Lead to Win, our weekly podcast to help you win at work and succeed at life. In this episode, we’re going to tell you the difference between the wise and the foolish and why it matters to you as a leader.

Megan: The truth is we’ve all done dumb stuff…losing our temper, telling a lie, making a bad decision. I mean, that’s just normal, and it’s often met with a sense of regret or shame or sometimes humiliation if it’s a big enough deal, but we become “foolish” when we repeat that behavior and don’t learn from our mistakes, which is particularly problematic if you’re a leader, because foolishness can be your undoing.

Michael: Definitely. We have Larry Wilson with us in the studio today to walk us through this topic. Hey, Larry.

Larry Wilson: Hey. If we’re going to talk about wisdom, we have to establish some street cred here.

Megan: About how wise we are? Is that what you’re thinking?

Larry: About how you’ve learned and grown. Somebody ‘fess up here. What’s the dumbest thing you’ve ever done?

Michael: Let me tell one on Megan. No, just kidding. I would say the place where I’ve been the most foolish in my life (and I would liken this to being naïve) is where I’ve tended to think I could enter into an agreement with somebody, enter into a business relationship, and I don’t need a contract or we don’t need to clarify expectations, that we both have the best of intentions and it’s all going to work out.

Thankfully, in many cases it has worked out, but I’ve also had some epic failures where I entered into an agreement with somebody, and this was just an oral or verbal agreement, and it wasn’t reduced to writing, and as it turns out, especially when we got into conflict or once there was some money to be made, which is often how it happens in business, then I realized our expectations were very different. The other party had one set of expectations, I had another, and now we were in a dispute.

Megan: The worst thing is when not only do you not write down your expectations or your agreement, but you didn’t even have it because you just assumed in your own head, as you and I have both done on numerous occasions, “Yeah, yeah. Of course that’s how she’ll do it,” and then you find out later you were on two completely different planets.

Michael: Right. So I’ve had to put things into place so I don’t repeat that behavior. If you keep repeating it, you go from a mistake to being a fool. If you do it one time, that’s okay. It’s like the old saying goes: “Fool me once, shame on you. Fool me twice, shame on me.”

Larry: So, how do you define wisdom?

Megan: I think wisdom is being an active observer in your life and learning its lessons so that you’re continually growing and doing better and acting with the presence of mind of your past experiences and what you know to be true rather than just in the moment and acting rashly.

Michael: I think it’s acting in a way that’s congruent with a desired outcome.

Megan: I like that.

Michael: In other words, I’m able to shape my decisions not based on the impulse of the moment or how I feel but with a view to something important I’m trying to accomplish and something that matters in the end. If I can do that, I’m wise. The fool is all about acting in the now without referencing anything outside of that immediate experience.

Megan: The other thing is wisdom is looking ahead into the future and seeing potential problems and acting accordingly in the present to avoid those things, whereas foolishness is kind of like a denial of the future.

Michael: On a positive note, it’s looking ahead and seeing opportunities and conducting yourself in an appropriate way.

Larry: What I’m hearing from you is that wisdom really isn’t about being a smart person, an educated person.

Michael: No, because I’ve known really smart people…people with PhDs, people with double PhDs…who do really stupid things. It’s not about knowledge. It’s not about talent. It’s really about being able to comport yourself or conduct yourself in a way, again, that’s congruent with something you’re trying to create in the end.

Larry: We’re talking today about the difference between the wise and the foolish and why that makes a difference for your leadership. We have three practices of wisdom that will help you avoid repeating foolish mistakes and become a wiser, more successful leader. The first practice is a wise person listens without becoming defensive.

Michael: This is really crucial. Gail and I have a friend. She’s a novelist, and at one point she wanted Gail to review the manuscript of her new novel. She hadn’t shown it to a publisher yet, but she was just wanting some early feedback. So, Gail dutifully read it, and by the way, that’s not a small investment of her time. She was willing to invest her time in reading the novel, and she came up with about three pages of… I wouldn’t call it exactly criticism, but it was certainly her feedback as to how to make the novel better.

As she attempted to share it with her novelist friend, her novelist friend got super defensive and burst into tears. As it turned out, she wasn’t looking for feedback; she was looking for affirmation. That’s a fool. First of all, I think if you’re wise, you’re going to ask for feedback. You’re going to have the humility to realize you don’t have all of the answers, that there may be something you miss, that all you have is one perspective.

It was good for her to ask for feedback, but she wasn’t sincere about it. All she wanted was affirmation. If that’s why we’re asking questions, it is going to lead to defensiveness. We’re going to be defensive when we don’t get the affirmation, and we’re not going to be any wiser when we’re done.

Megan: I think about times when people on our team have had to come to me and talk to me about something I had done or some pattern they saw that was unproductive or problematic in some way. When I think about those times, on the one hand, everybody’s impulse is to be defensive, unless you’re super holy or super evolved or something. You’re always going to have that impulse, but what I have found over time is that they’re almost always right. If you want to look like a real idiot, start getting defensive, because everybody else knows it’s true.

Even if I start out defensive, in my own mind at least, I almost always get to the place of saying, “That’s really true. I really did do that.” I didn’t mean to, probably, but I said that thing and it was not well received or the timing was bad or I was just thoughtless or careless about it. If I go to defensiveness, not only is it obvious to everybody else and I’m still wrong, but I miss the opportunity to correct something that needs to be corrected that I’ve been blind to.

Michael: Somebody told me one time, “Take responsibility for what you can take responsibility for.” For example, let’s say somebody shares with me some feedback and I think, “You know, 90 percent of that is bogus.” Well, take responsibility and focus on the 10 percent that’s not bogus. That’s where you need to change. That has served me well throughout my life: to try to focus on where I’m responsible, how I can take responsibility for that and not be defensive and just let the rest of it go. I don’t need to defend myself against every accusation or claim or bit of feedback I don’t particularly like.

Larry: There is a lot of wisdom literature in the world, and I think probably every religion has its own sources or repositories of wisdom. One of them is the biblical book of Proverbs. Proverbs 2:15 says, “The way of fools seems right to them, but the wise listen to advice.” That seems to summarize what you’re saying here.

Michael: Yeah, and I think the measure of this as a leader, particularly, is if you are surrounding yourself with wise counselors. First, are you admitting that you need counselors, you need advice, or are you content to try to go it alone, to be the Lone Ranger? That also is foolish, because you can’t know everything you need to know to be successful in business or in life. You can look at a wise person and see if they have surrounded themselves with wise counselors.

This is, for example, for me, why I have a financial adviser, why I have a health coach, why I’ve gone into marriage therapy in the past and gone to marriage conferences. I want as many people as I can find to speak into my life, because I realize there are a thousand ways to go off the rails, and I don’t want to stumble into something by being foolish and miss an opportunity to grow and to develop my potential.

Megan: An intentional way you can do this in a professional context is regularly ask your team for feedback and make it safe for them to be honest with you. You have to kind of prove this. You can say it, but you have to do it before they’re really going to trust it, where they’re in a situation where they provide feedback and see you not get defensive.

I think the next level of wisdom is seeking out feedback, either through outside resources, like you’re talking about, Dad, or in your own organization or family, for that matter, and asking people what they see in you that you don’t see in yourself. We actually did this as an exercise with our leadership team last year. The two of us sat around a table, and everybody had the opportunity to provide kind of a 360 moment of feedback on us.

I would say most of what they provided… First of all, it was very constructive. It was done in a healthy way, but most of what they shared were probably not things we were completely unaware of, but there were a few things, at least speaking for myself, that I didn’t know I was doing that had become problematic. For example, with my one-on-one meetings… I was kind of juggling a lot of new responsibilities at that time. Demands on my schedule had been changing, so I kept moving my one-on-ones around. If I needed to fit something else in, I’d move them to a different day.

One of my direct reports said, “I just have to tell you, when you do that, it upends my whole week. I feel like I have to accommodate you because you’re my boss, but this is really disruptive. There’s a cascading effect that you don’t even realize when you reschedule your meetings with me at the last minute.” I’m kind of thinking, “Oh, it’ll be fine. He’ll probably be happy to have the extra time,” but no. I just thought, “Man, I am unintentionally disrespecting his time.” Thank goodness he told me, because I didn’t know.

Michael: This brings up an important point. That is, I think we’re less likely to listen to the people who are closest to us. Let me give you an example. Maybe this is just because of my personality type, but if it’s a stranger who walks up with some constructive feedback, I want to listen, because I want to appear to be wise. Right? But now bring it a little bit closer to home. Where I tend to violate this the most, where I will get defensive or won’t listen like I should, is with Gail, with my wife, because I think I know where she’s going.

I might say something like, “Okay. I get it, I get it,” and then start to be defensive. I caught myself doing that earlier this week, and I thought after it happened… I went and asked her forgiveness, but I thought, “This is not who I want to be. I don’t want to be a person who won’t listen to the people who are closest and who have the best ability to give me help.” Honestly, she perceives things about me that I can kind of glam up and hide from the world, but she sees me in my raw state, so she’s in the perfect position to give me the best feedback and the best advice, and all I have to do is listen.

Larry: The first practice of a wise leader is to listen without being defensive, and the cost for not doing that is it costs you opportunities to grow and change. The second practice is accept responsibility without blaming others.

Megan: This is a hard one. This is one you have to practice. You have to let go of the need for fairness, because this is not going to satisfy that need. When you take total ownership of your mistakes, you’re not doing that in proportion to what someone else did. Like, “Well, yeah, I know I did that, but this was bigger…what you did or what this other person did.” You’re only focusing on yourself in that moment.

That’s hard. It’s difficult, particularly if you want to be right. I think our ego gets involved here. We really want a fair and reasonable accounting of how things went down. One of the fastest ways to build trust with your team is to take responsibility even beyond what’s called for and understand that at the end of the day, what happens on your watch is your responsibility even if you didn’t do it yourself. That’s a sobering thing to contemplate.

Michael: That’s one of the things I really have appreciated about you. When we haven’t gotten the business results, or whatever, you’ve taken full responsibility and ownership without blaming. You haven’t said to me, “Well, that was so-and-so’s fault, and I had no idea what was going on,” or whatever. You’ve taken full responsibility. I recently saw a Facebook post our friend Ray Edwards had. He had a tee shirt on that was “#everythingsmyfault.”

That could be misinterpreted, obviously, or you could abuse yourself with that, but I thought it was a great perspective. It’s a perspective of total ownership. I’ve told you and probably this podcast audience the story of an executive coach who asked me the question what it was about my leadership that led to that result when I was trying to blame external circumstances. I think this happens more than the obvious thing of just blaming a person. That’s kind of junior high school-level stuff, but when we start blaming circumstances, like it was the economy or it was our customers…

I see this a lot, by the way…people blaming their customers for their problems. I even see business owners blaming their employees. “My employees won’t let me do that” or “It’s because of them I can’t have the freedom I need to be able to work on that big project.” Well, who created this culture? Who created this reality? You did. So I think that’s where we have to own it 100 percent. A great book on that topic is Extreme Ownership.

Megan: I love this book. This was really my introduction to this whole idea.

Michael: What were your big takeaways from that book?

Megan: That leadership rises and falls on ownership. If you’re going to lead well, you have to ultimately believe and act as though the buck stops with you, that you don’t allow yourself to have the psychological or emotional out of blaming other people. It causes you to take different action in the moment. It causes you to assess things differently when they don’t go well.

In my experience of applying that idea, there’s always something about my leadership that is to blame. For example, even if I had a situation where, legitimately, I didn’t know something was happening, that’s also a problem with my leadership. If I didn’t know this whole situation was happening, I have failed in some way. I’m not using that language of failure in a “shamey” way. I don’t think that’s very productive, but to the point of wisdom, what we’re trying to do is learn the lessons of our lives.

If we default and give way to trying to save face, which is the opposite of this and ultimately leads to foolishness, protecting our own image, we’re hurting ourselves in the long run. We get a little short-term gain because we get to save face, but in the long term, not only, obviously, are we going to be found out if we’re foolish, but we don’t even have the opportunity to become wise, because life keeps presenting us with these invitations to learn and grow and we keep dismissing them.

Michael: About 30 years ago, I went through, as you know, a very serious business failure. In that situation, initially, it was clear who was at fault. It wasn’t us. We got into a distribution relationship with a company that had promised they would exceed what we were doing on our own, and that’s what we thought we needed. We needed a bigger sales force. We needed more sophisticated distribution.

As it turns out, they ended up delivering about 10 percent of what we were doing on our own. It had a catastrophic impact on the business, and we essentially had to close the doors, and everything got repossessed by this company who had given us sales advances in order to tide us over and help us meet our cash needs. It was about two weeks after the company folded that I looked in the mirror and said, “Look. It’s my fault.”

By “my,” I said, “It’s my partner’s and my fault,” because we were the ones who had the expectations. We were the ones who didn’t vet the company like we should have. Nobody held a gun to our heads and said, “You have to sign this distribution agreement.” We did that because we didn’t do our due diligence. Here’s the thing about it: until you own it, you can’t change it. If you’re going to blame somebody else, then you’re basically seeding all control to an outside force. You’ve suddenly gone from being the actor to being the victim. You’re being acted upon.

Megan: That’s a really good point.

Michael: Once you take responsibility for it, and once I took responsibility in that situation, a lot of positive things happened. First, I stopped feeling angry about the other company. Honestly, they didn’t do anything unethical. They just didn’t perform like we expected, and I think it was a bad fit.

The second thing was I realized that next time there could be a different outcome, that if I would just learn from this experience, I would do my due diligence going forward. I wouldn’t be so naïve. I would make sure I vetted anybody I was going to get into business with and make sure they could deliver on the promise they were making. So there were a lot of positive consequences, but that only began when I started to accept responsibility without blaming.

Larry: Let’s turn this around for a second. We’ve been talking about the leader and your need to see yourself as responsible and accept that without blaming, but you’ll likely have subordinates or coworkers or team members who may display this kind of foolish blaming behavior. When you see that, how do you respond?

Megan: Well, in our company, one of our core values is total ownership, and that’s really what we’re talking about here. It’s an intentional part of what we teach and expectations we have. We expect everybody to take that kind of responsibility. If something doesn’t happen in alignment with our goals with one of my direct reports, I’m going to call them on it if they try to blame somebody else.

Thankfully, it doesn’t happen very often, but it’s not acceptable to me. Part of my taking ownership is making sure they’re taking ownership and holding them accountable. So that would be my expectation for everybody in our company. That same level of ownership goes all the way from the top throughout the entire organization.

Michael: It’s a cultural norm at Michael Hyatt & Company because we’ve said it’s a value, and then we’ve done our very best, as a leadership team, to try to demonstrate that ourselves. I mean, the most profound way you lead, as a leader, is to lead by going first. You are going to replicate whatever you are. If you’re the kind of person who’s always blaming outside forces, blaming the economy, blaming the weather, blaming your vendors, blaming your customers, or whatever, your people are going to replicate that, and they’re going to do the same exact thing.

The first place to look… If you see that behavior, you have to ask yourself the question, “Are they getting it from me? Am I contagious because I have the wrong behavior?” If the answer to that is “No,” then, “Did we make a bad hire? Do we need to do something remedial or do we just need to confront it and say, ‘Hey, look. That is not acceptable in this culture’?” What was it about your leadership or the way you conducted yourself that led to this outcome? That’s a powerful question to ask.

Larry: The first two practices of wise leadership are to listen non-defensively, which gains you opportunities, and to accept responsibility without blaming others, which is empowering. It gives you choices. That brings us to the third practice of wise leadership, which is to change without delay.

Michael: This one naturally follows from the last one. If you’re not to blame, then there’s nothing to change, which is exactly why people resist taking responsibility, because if you do take responsibility, it by necessity requires change. If you don’t change, if people share feedback with you and even if you listen intently, even if you say you’re accepting responsibility, and you don’t change, you haven’t listened and you haven’t taken responsibility, because those two things will result in change. They have to result in change.

Megan: This is where the rubber meets the road. You have to demonstrate how serious you are about the first two practices by making good on it with doing the things that have been brought to your attention.

Michael: The wise person is eager to change, because they’re committed to a certain outcome. They want to get there. They don’t want their own stupid behavior to pull them off course, so the best thing they could do is receive that correction and make a change so they can get the result they want. In the case of Gail’s friend who was the novelist who didn’t want to change, she didn’t listen very well, first. She didn’t accept responsibility, but she didn’t want to make any changes. She thought the manuscript was perfect, and trust me, it was a long, long way from perfect.

Any author who thinks they can’t make improvements to their manuscript is an idiot. I’ve had authors in the past who have delivered me manuscripts and said, “I don’t want you to change a word of it, because it’s perfect.” That’s a fool, and that’s not somebody I want to work with. When you’re talking to editors who are working on manuscripts all day every day, who are working in the world of ideas, who see the best of writing and the worst of writing, if you’re unwilling to listen to them, you’re a fool.

That applies to a lot of areas of life. If I’m listening to my financial adviser and he tells me I need to take certain actions so my family is covered and I have what I need to retire if I aim to retire, yet I don’t do it, that’s foolishness. A wise person is going to seek that counsel, accept responsibility, and modify their behavior. That’s where the rubber meets the road. If there’s no change in your behavior, you really haven’t listened and you really haven’t taken responsibility.

Larry: Let me ask you this. Let’s say you’re dealing with someone you have tried to coach. They seem to have been listening, they seem to accept responsibility, but you just don’t see any change. They just go back and repeat the same behaviors over again. How do you respond to that? How do you deal with it?

Megan: Well, that’s really hard. I think you have to have an honest conversation with yourself about the likelihood that they’re going to change, because it’s probably not very likely. Like we said in another episode recently, you can’t want somebody to change more than they want to change. So, depending on what it is you’re talking to them about, you’re going to have to make some choices. If it’s not that big of a deal or if it’s not egregious enough to warrant termination in a professional context, then you’re going to have to decide if you can live with it or if you’re going to let it go, or if it is egregious, that’s a different conversation.

Michael: I think you have to confront the lack of change. I think you owe it to them and to yourself to at least confront that and then see where it goes, but call them on that. I think a lot of people, particularly in large organizations, have sort of learned the way it works. “I need to sound like I’m listening. I need to take ownership, but then I can just go away and not change, because they’re going to be busy and on to something else.”

I think to confront that and say, “You know, you were in my office a month ago. We talked about this problem. You seemed to understand. In fact, you even took responsibility for it, but to be honest, I haven’t seen any change in your behavior. What’s up with that? Let’s talk about that.” Then you make it about that.

Megan: I like your answer better than mine. We’ll go with that one.

Larry: Let’s keep them both. As Mark Twain put it so aptly, “Never argue with a fool. Onlookers may be unable to tell the difference.”

Michael: That’s really, really good.

Larry: Today we’ve learned that wisdom is an essential characteristic for good leadership and three practices of wisdom you can adopt today: listen nondefensively, accept responsibility without blaming others, and change without delay. So, final thoughts today, guys?

Megan: These practices can seem really unnatural at first. If this is not the kind of family you grew up in or maybe hasn’t been characteristic of any organizations you’ve worked in, these can feel really uncomfortable, but over time, with practice, they become more comfortable and more familiar, and though they require some effort, they’re really worthwhile. The payoff in terms of your leadership is so worth it.

Michael: I’ll tell you a practical takeaway for how I try to build wisdom in my life daily and incrementally. I read the Bible every day of my life, because I believe it’s a repository of wisdom, so I want to assemble this content, which has stood the test of time and is written, in large part, to give us wisdom, into my brain.

Secondly, I want to journal. I’m making mistakes every day, I’m doing a few good things occasionally, and I want to process all that through my journal so I can latch on to it and not lose those nuggets of wisdom. That has really served me well. To have a daily practice of some sort where you’re collecting wisdom… The Bible talks about being like a bee collecting honey. To collect wisdom is a really good thing.

Larry: Good advice. Thank you both.

Megan: Thanks, Larry.

Michael: Thank you, Larry, and thank you guys for joining us on Lead to Win. Join us next time when we’re going to show you how to learn from your failures and setbacks, and we have a few to share with you. Until then, lead to win.