Brené Brown: Hi, everyone. I’m Brené Brown, and this is Dare To Lead. Oh, do I have a conversation that we all need right now for you. Oh, I am talking with James Rhee. So let me tell you how we discovered him. We, the team here, came across his TED Talk. And it’s a Ted Talk about a red helicopter. It’s a TED Talk about how when he was five years old, the father of one of his friends came to this classroom, followed by his friends’ older siblings, and handed James a red helicopter. And he didn’t really understand why. It was a little toy helicopter. And it was a kindness gift, and a thank you because James’ friend’s mother had died, this man’s wife, and the child had come to school many days without a lunch, and James had shared his lunch with this young boy on many of those days. And this sets James on a course that is unbelievable.

BB: This is a really kind of hardcore investor guy, Harvard undergrad, Harvard Law, he’s now an impact investor, and he’s going to talk to us about why kindness matters, the powerful combination of kindness and math, and how revenue doesn’t define our lives. So there are other things that we need to be thinking about, other tools, other lenses, other music we should be listening to when we start to define what success looks like for us, or for our organizations. It is just a beautiful conversation. I’m glad you’re here for it.

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BB: Before we get started on our conversation, let me tell you a little bit about James. James Rhee is an acclaimed impact leader, an entrepreneur, an educator, and a goodwill strategist. I love how he defines goodwill. He transforms people, brands, and organizations by identifying and unleashing purpose through the union of mathematical and creative systems, all grounded in practice. The very celebrated reinvention story of Ashley Stewart, which is a brand serving and employing predominantly black women, under his unlikely leadership as chairman and CEO and investor, is tangible proof of the power of diverse ecosystems, and a blueprint for multi-stakeholder capitalism. At Howard University, he serves as the Johnson Chair of Entrepreneurship, professor of entrepreneurship, and senior advisor to the newly endowed Center for Women, Gender, and Global Leadership. He’s also the executive in residence, and strategic advisor at the MIT Leadership Center, and holds an appointment as senior lecturer at the MIT Sloan School of Management.

BB: As an investor, James founded FirePine Group, a family-office platform that has stewarded the capital of some of the world’s most sophisticated investors. FirePine is funding his most current venture, which is Red Helicopter, a futurist media education platform that is uniting a global community at the intersection of the values of kindness and math. He has an AB with honors from Harvard, and his JD with honors from Harvard Law School, where he was an editor of the Harvard Law Review. Let’s jump in.

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BB: So James, thank you so much for joining us on the Dare To Lead podcast.

James Rhee: What an honor. Thanks for having me.

BB: I have to tell you that many of us here, in preparation for this podcast, are mildly obsessed with your work.

JR: Okay. [laughter]

BB: No, it’s true. It feels like some kind of balm.

JR: It’s hard to believe it happened, or is happening, but it’s simple. I mean it’s then just doing things that I thought were right, actually, but it’s been a pretty consistent story, which I’m looking forward to talking to you about. But I appreciate you saying that it’s a bit of a unknown story until people are starting to learn about it more, I think during these past couple of years. I think people are in a place where they’re willing to receive a different story, maybe a little bit of a different possibility, and saying, “Wow, it is possible. Maybe there’s a different set of systems that we can all live together in.”

BB: Let’s start with, before we get to these systems, and this new possibility of doing work, tell us your story, please.

JR: Yeah. I am a husband, a father of three. I am a son of two Korean immigrants, who were caregivers. My father was a pediatrician. My mother was a nurse. Caregiving runs in… That’s how I was raised. And I’ve lost both of them, sadly, too young. And beyond that, I’m a bit of a hot mess, I guess. I’m a walking oxymoron. So I’m a high school teacher, who ended up managing billions of dollars of growth in distress capital. I went to law school to be a public defender. In many ways, I feel like I am. It just takes a different form. I teach. I’m a, I think, innately a teacher, and a lover of people. I think I am a caregiver. And so I teach at the high school, middle school level. I am recently at MIT and Howard now, and those two schools, people don’t put those in the same sentence, but in my world, in my vision for the world I hope that we live in, it makes complete sense to me that MIT and Howard should be friends.

JR: And so I think in that way, I’m a bit of a connector of people, through ideology, and feelings. And that I’m able to use financial literacy or investing skill sets, or being a CEO to help effectuate some of the org changes. But I think really at heart, it’s a teacher, a bit of a suppressed musician, like I wish I were talented enough where the canvas was different. My canvas is business and org theory. I wish I were good enough to sing professionally or to act professionally, but I’m not. And so, yeah, that’s sort of what I do. A little bit like Harold and the Purple Crayon, I kinda go through life with a crayon, and I feel more like I’m five or 10 years old now, at 51, than I’ve felt in a long time. I feel very free and I want to help people feel that too, and then help them effectuate that. So that’s a little bit about my bizarre… Crazy, right? That’s me.

BB: Yeah, it’s interesting. What were you like in high school?

JR: I was happy. I had a lot of friends. I was a friend to all the different groups, so I played sports, I was a scholar athlete, but then I was also valedictorian, I sang in the jazz choir. Like any good Asian kid, I played violin growing up. Yeah, but I had a really healthy social life. I would go out a lot, and I grew up in sort of a… It’s a middle class neighborhood that’s quickly evaporating in this country, like a good public school, socio-economically very diverse, not as much racially. It was a very carefree life, but always under the cloud of the fact that my parents always reminded us that there were only five of us in this country. There was no safety net. And so in our house, even though there was optimism, there was a bit always of a worry that what happens if one of us got sick? What happens if dad or mom got sick? That there was nothing left, nothing here. And so, I think that oxymoron, that sort of joy and sadness was very much a part of my life growing up, that there was a little bit of fear that it could all go away.

BB: And then tell me… Harvard Undergraduate and Harvard Law?

JR: Yes.

BB: Tell me about your undergrad experience, what did you study? What did you do to hang out?

JR: I went out a lot, probably too much. I think in retrospect, I should have taken studies more seriously, I wish I had. Made tons of friends, and a lot of those people are still my core friends today. Studied history and literature, 300 years of American English History and Literature, so effectively social scientist PPE. So, politics, philosophy and economics. So even back then, I was fascinated with the intersection of money, race, how people behaved, how it morphed systems, capitalism and government is just… They’re different in different times, and so my work was really in the Antebellum South, so I studied… Yeah, so I studied this very bizarre, unknown duel in 1837 between a southern and northern congressman, where the northern congressman was killed. And there was a lot of debate about dueling in the 1830s, but it really was a proxy for a debate about slavery and a debate about state sovereignty. And so you weren’t allowed to talk about slavery, there was a gag rule in place, so the communication and debate was stifled.

JR: And so instead, they talked about this duel, but there were many meanings behind what they were talking about. And so that fascination with sort of language and the words you’re using being very important, and there being five or six different meanings per word, it really influenced over the last 10, 12 years, it’s been top of mind for me, because a lot of the patterns that I was studying back then, I was seeing them happen in this country, that the same words were being used and that people couldn’t debate anymore and people were really taking sides, and I saw it very early and saying, “Jeez, this reminds me of college. This reminds me what I studied.”

BB: Give me the example.

JR: Today, so just part of the thesis as an investor… So I don’t distinguish, by the way, between investing in time or money. Capital, it’s not financial capital for me, it’s all forms of capital. I thought that the world was heading into a Bradburian Fahrenheit 451 Margaret Atwood reality. And these were the reasons why these novels started having importance again, and the violence toward… The misogyny, it’s all part of the same system of fear. We’re in a situation where the day of reckoning has been pushed back a little bit over the last 13, 14 years with some monetary policy, but you can’t hide some of the social compact fissures that’s been happening. You can’t legislate for trust, you can’t hyper-legislate in police for people being accountable to themselves and to their neighbors. And so I was worried that people were going to be hyper-lonely, like existential crisis lonely, and in that context, I started really going back toward more core human emotions, like things that you couldn’t lie about, so like kindness and love, and imperfection, and things that you couldn’t machine learn. There was perfection and imperfection, and sort of the grandiose in the small. And so that’s what I was noticing just in the political discourse, economic discourse. And in my life, I live in so many different worlds, I live in…

BB: Yeah.

JR: We live in Boston, it’s the private equity world. I’m in LA and New York, it’s a bit of money and media world. I spent a lot of time, ensconced, specifically when I was running Ashley Stewart in very moderate income neighborhoods with black women. So, every day for me, I was living in existence in all of these “worlds.” And during the course of the last 10 years, the worlds were not caring as much or as sympathetic or empathetic with each other, and I could feel it personally, because I was there. And so these things were fearful for me, so a lot of the work I’ve been doing particularly in the last 10 years is bringing people together with some transcendent values and also celebrating their differences and making that a reason to unite, that their differences were something to have in common. It’s like that song, “we have nothing in common, but there’s one thing we both like, that movie.” Breakfast at Tiffany’s. Do you remember that old song?

BB: Yeah, oh yeah, yeah.

JR: It’s just that, you both like the song. We’re good. And so, I had no idea what I had studied, this weird dueling thesis in college, it would really impact the way that I was thinking about the present day. Because in many ways, that 1830 to ’60 timeframe in the world was similar to pre-World War II, and I think we’re living it…

BB: Yeah.

JR: Similarly now. That’s what’s happening. And in this country, there’s an added complexity about race. It makes the ingredients a little bit more complicated.

BB: You mentioned Ashley Stewart. So you get out of Harvard… I could talk to you about the duel as a history buff for probably 10 hours, but I know other people are going to want to know other things. You take time off and teach before you go to law school, right?

JR: $12,600, I wanted to teach students who are potentially not going to go to college, and deconstruct it and say, “Hey, you can do this, you can do this too.” Then I went to Harvard Law School to be, I thought, a Public Defender, and then I got a bit of a testosterone bug, frankly, and said, “Hey, what’s this private equity thing?” Because it was new back then.

BB: Yeah.

JR: I didn’t even know how to use Excel. Okay? And so I sort of muscled into business school recruiting and people looked at me strange and said, “Why would we hire you? You’re a high school teacher and a law student.” And I said, “Well, those are labels. I’ll learn.” And back then, I couldn’t explain it well, but I used to say, “Hey, like at a hockey game, I have a really high plus minus ratio. I don’t have to score, but when I’m on the ice, people will score a lot.” Now that I’m 51 with some of the stuff I did, people are like, “Oh yeah, maybe he has a high plus minus ratio,” but when you’re 28 and you’re trying to explain this, people look at you like you’re crazy. But just like in life, I got a break. Few people in the industry, they said, “You’re a good guy. You’re earnest. We can tell. And you don’t have a big ego and you’ll learn. You’ll be a good team player.” And so they gave me a chance. So I did that for a long time, I still do.

BB: What is that?

JR: Invest.

BB: Okay.

JR: So, I invest. So I invest, but I am an activist investor, I think I’m an activist generally in life, it’s not a passive ride. I’m an activist with my friends. I don’t look the other way. I can’t. When someone’s hurting or sad or doing something that’s not consistent with them, I can’t not say anything. And I want to help.

BB: I get that.

JR: I wish more people did that with me, actually. It’s too easy to just look the other way. So I still invest, but I do it now with more unstructured, un-institutional family offices, because over time, I started to get uncomfortable with where institutional money management was going, that… It used to be you invested in companies, created jobs, sustainable jobs. It was less of a money management… Private equity was you’re creating companies. It’s changed.

BB: Yeah.

JR: And I thought there started to be a real disconnect, I got more and more uncomfortable with the disconnect between capital, like money, and real people who are working the jobs. And the companies became just assets in a portfolio, and it just didn’t jive with the high school teacher, law school person. So I just said there had to be a better way, and I didn’t even know what impact investing was. There was no name for it back then. So in ’09, I just said, “I think I want to manage money to help effectuate human things, not just to make money.” I didn’t understand why I felt that way. Now, there’s a whole new breed of investing, impact investing. And so that’s what I did. And then, Ashley Stewart, my life really changed in 2013 with Ashley Stewart. It was a whole new step forth about being an activist person.

BB: So tell us that story. Let me back into it. I love your TED Talk, it’s so great. Before we go into the Ashley Stewart story, I am so fascinated, I had no idea until I saw your TED talk, that goodwill is an accounting term.

JR: Yeah. In that TED Talk, I’m being really nice, Brené, right? Like, I’m sort of looking at the camera, or I’m sort of saying, “Are you kidding me?” In our whole world… Sorry to interrupt, but like the first couple of drafts that TED… You know, it’s hard to do these TED Talks. It’s a really discipline exercise. I was drafting things. One of my first drafts was to say to the adults in the world, because that TED I ended up doing was both to… Particularly to mom and child, that was how I was speaking to the world on this TED Talk. I wanted to say, “I think that we should just stop lying to our children. Why do we read them these fantastical kids books when they’re young and talk about integrity and character and grace, and then we send them off to work and we act differently? Why is it okay that if you… In a corporate environment under the auspices of corporate law with this Delaware entity, that you can act in a different way? Why can’t you be a gracious person? Why is being smart or effective mean you cannot also be kind?

BB: To me… My upbringing would be, kindness is a barrier to smart business.

JR: Yeah. And I felt that way in my 30s. Kindness to me is a first cousin of being a fiduciary. When you are a fiduciary of someone else’s money, you’re putting someone else first. I think you were not necessarily rewarded for being an incredible fiduciary.

BB: No.

JR: And I was uncomfortable. Again, my father and my mother were caregivers, and I hope that my kids think that I’m a really dedicated parent, and with my friends, now that they’re older they really appreciate, I put them first. I always have done that. I think when you’re younger, it’s kind of maybe it’s annoying, but now at 50, 51, people…

BB: Yeah.

JR: We appreciate that in you, that you care about us. I said, “I care about you. Is that not cool? Is that weak?” And they’re like, “No, it’s not.” So our initial TED drafts, I said, “Well, we could either rip up all the kids books, why don’t we just write them new kids books about, that instead of money growing on trees and being laid by a goose, let’s just talk to them about how brutal work can be, and then there’ll be no cognitive dissonance when they are adults, so maybe they’ll be happier at work.”

[laughter]

BB: I talk to a lot of young first-time career folks, and they’re devastated.

JR: Yeah. And this generation now, they’re not tolerating it, right?

BB: No, I love it.

JR: There’s a real… I do too. I think this generation that they’ve been really responding to this TED talk. They said, “Wow, it’s possible.” So anyway, yeah, I was sitting there in 2013, I was 42, and what’s not in the Ted talk was that my father was dying of Parkinson’s. And I was a father of three, and I’m looking at my children, and I was increasingly not proud of some of the things professionally that… It’s hard, just money and my value system. And there was this company called Ashley Stewart. It is, for your listeners, it’s arguably one of the oldest and largest businesses for black women, a certain segment of them, moderate income and plus size. It’s AKA one of the most vulnerable populations in this country, plus-sized, black, female, moderate income. And you can imagine the business was treated similarly, unfortunately, to how these women are. A business is just an aggregation of individuals. No access to capital markets, the people were disrespectful generally of the business, and it was about to liquidate, and I just didn’t love the way it was being talked about. “Oh, it’s a portfolio company, just whatever.” And some people said harsher things. I think because also I have this face, people say things sometimes about other minorities and they think that it’s okay in front of me. [chuckle] You know?

BB: Yeah.

JR: And I didn’t like it. For me, it reminded me, this lady, of my mom. The most formative person in my life was my mom. I spent a lot of time as a child translating and sticking up for my mother, because her life was not easy in this country, and she felt very small here. And I would often tell her, I just said, “Mom, you’re the best leader I’ve ever met in my life, and you shouldn’t listen to them, you shouldn’t let them get you down. But obviously that’s easier said than done.”

BB: Right.

JR: And so a lot of people say, “Well, big shot, if you’re saying that you don’t love the way this is going down, what are you going to do?” So yeah, then I just basically said, “Okay, well, I’ll resign from the board.” And what I didn’t say in the TED, I effectively walked away from my resume, my life. All the life that my parents had hoped that I would build here, I’d go to Harvard, be private equity, be in these social circles in Boston, New York, I left. And I just left very quietly for six months, I wasn’t quite ready to take the plunge. Like, I said, “I’ll come back in six months.”

BB: Yeah.

JR: But in the six months I was there, I saw first hand how much our systems, they were crushing. They were crushing. It reminded me of growing up actually, reminded me of my mom and just on an amplified level. I’m sitting here now, I’m a pretty sophisticated, distressed investor, I’m a lawyer, a secure transactions banker, I know how all these work. And my friends on Wall Street said to me, they’re like, “James, come on, man. Like, you know how this works, just… ” And I said, “I can’t let you do that, this is not right. It’s not right.” And so I went around begging for money to have someone help save this company from liquidation, so that I could go home, I wanted to go home. And no one would give me money. And I said, “I can’t believe I can’t raise money for this.” And I felt like I failed. I felt like I let the ladies down, because the one thing I thought I could deliver was money and I couldn’t. And in retrospect, I delivered a better part of me, I delivered the better part of James, right?

JR: My heart, and that I saw them and that we became family. And so I had a moment where my wife said, “It’s okay for you to come home six months.” And I said, No, not only was I right with my heart, but also not putting my business head on, and having met these ladies and lived with them for six months, I was like, I know I’m right about her, I know I’m right about our plan that we’ve put together, and with the doing, I knew I was right about where the world was going. If you think about 2013-14, things seemed pretty good. Right? It was…

BB: Right.

JR: Social media is cute. Everything’s fine. And the macro bets that I was making was that I think why wouldn’t friendship, warmth, social capital, those things will be really important in times of loneliness, when money is in an inflationary environment where financial capital becomes like a commodity, real things… Which, that’s you, that is real, that these things mean a lot, they have a lot of value. And so then I called my friends, I raised some money, it was like, It’s a Wonderful Life. You know, when you call in your chips for your…

BB: Yeah, oh yeah.

JR: That’s what happened. I said, Please, I need… And I got the money and I said, “You’re not liquidating this company,” and then I served as CEO for another six and a half years. And we did some things that I think today people are saying, “Wow, this little company, a lot of ripple effects globally.” And we showed people that, again, it was possible.

BB: Yeah, I have goosebumps actually. Tell me about the center of your strategy as kindness.

JR: Yeah, the first thing was taking back control of words. In the TED, that real goodwill is it took George Bailey in It’s a Wonderful Life. Goodwill in finance is a ridiculous… Sure, let’s plug the balance sheet and make it balance and the auditors can balance. It’s ridiculous.

BB: I don’t understand. Tell me financially what goodwill is exactly. I don’t understand it from a math perspective or accounting perspective.

JR: Sure, your listeners who are Wall Street analysts are going to laugh when they hear this. Late nights, when your model doesn’t balance and your assets don’t equal your liabilities plus equity, goodwill is the plug. It’s the amount that you have to add to assets. You just make it up and say, “This will make the two sides equal.” So when a company pays for another company, to the extent that there’s a gap between the value of the identifiable assets of a company and what you paid for, that gap the accountants say, “Oh, there must be something called goodwill.” [chuckle]

BB: If what you have is worth $2, and I pay you $3, that’s a $1 of goodwill?

JR: Yes.

BB: Okay, that’s the accounting meaning of goodwill.

JR: Yeah, and the irony is that the only person who can create goodwill in a accounting universe, it’s a buyer. It’s money. And in my TED Talk, I’m like, “You can’t buy goodwill in real life. You earn it through action, and it compounds very slowly over time.” And so with kindness, it was another word, where we’re taught very young that it’s noble, it’s wonderful, it’s like it’s love. There’s nothing stronger than love and kindness. Trying to love. You can move a mountain for it. But then you get old, or older, and you enter college and the workforce, and it’s not so cool to talk about kindness and love then. Now it’s weak. Now it’s weak.

BB: Vulnerability.

JR: Yeah, and I’m like, “Why is that the case?” At work, kindness is weak, love is weak, but at home, it’s strong? And I was like, I don’t have enough time in the day to coach shift constantly like this. I’m just going to be one person in every context, and so I said to everyone, I said, “We have to be kind here.” And people laughed. They also laughed at me when I said, “Listen, I’m not a woman. I’m not black. I’m not plus size. I don’t know the difference between Templeman and Marylands and… ” I do now, but I was like, “Who’s going to teach me?” And so kindness was a way of explaining to them that we were fiduciaries, that this business meant something more than selling clothes, that my instinct that it was really the main product was safety, was respect, that this is a little place where this woman who generally does not have a lot of safe places, physically or emotionally, she could just be.

JR: And it reminded me of my mom with the one time a year we would go to a Korean grocery store that I saw my mom, I’m like, “Wow, that’s mom.” Like just her shoulders are back, she’s in control, and she looked like the mom at home. But mom in every other context, shoulders were down, head down, and any time you find a place or something that makes a group of people feel great or safe, I think you have to fight for that, for them. And so I fought, and kindness was that it’s not weak, and I don’t like our current tolerance of random acts of kindness. I don’t think kindness is random. It’s purposeful. It’s deliberate.

BB: Intentional.

JR: And it’s intentional, and it’s very strong, and it’s not something that you just video tape once and you do it. Kindness is every day, every… And you would recognize imperfection, like sometimes you don’t deliver it the way you should and… But the intent. It’s something that it’s hard to communicate in words. People can feel it. They can see it. And so that’s what I explained. I said that we were fiduciaries for this safe place, and that kindness was strong, and that this environment was going to be so safe, it was going to create so much innovation and creativity, because a lot of my artist friends really appreciate this sentiment. It’s like riffing that you can’t be wrong. Let’s just be. And so that’s what we established very quickly. And per my TED, it’s really the women in the stores who I’m forever grateful because I got laughed at a bit in the corporate headquarters, but the women in the stores, they didn’t laugh. And they could’ve been hard on me. They could have said, “Who’s this Korean guy, private equity guy with no experience wearing pleated khakis? Who is this guy?” And they didn’t. They said to me, they said, “We can feel your heart. That you care.”

JR: And I said, “I do care. Please tell me what’s going on so that I can do my best to help. Tell me what you want, and let me help.” And so that’s why in my TED Talk, I said late nights after spending time with the ladies, it was more like I was composing a score, a symphony. I created a world that was a safe place. It was a majority, minority world where this woman was the majority. It was her voice, her feelings, her concerns. The whole voice of it. All I did was let her sing the song that she wanted to sing, and I was behind the curtains waving and saying, “I got you. They’re going to love you. You’re good.” And then on top of that, then I put my legal and financial theories in. I gave them the plumbing for it to be self-sustaining and grow, and the tech. And so that was kindness where I felt… You know the movie, The Matrix, when he’s moving really slow motion at the end? I felt in that state that it was so clear to me despite the fact people were screaming in my face, threatening us. The bankruptcy lawyers are screaming in your face. The company had zero terms with cash and delivery, lost money for 20 consecutive years. It had never been successful financially, but despite all that, I just was moving in slow motion, very calm. I was at a place. I’m like, “I know this is right, and things seemed so obvious.”

BB: You were in the zone.

JR: In the zone. And it reminded me of the reason why this was, I was working for her, and all my silly little things like you have your own issues and ego issues and insecurities, I just forgot about them. And I was so focused on her, making this right for her.

BB: Wow, so other-focused.

JR: Yeah.

BB: This is so meaningful to hear right now, so I’m so grateful. What does kindness operationalized at work look like? I think it means something beyond… Because what I love is, you know what you are too. To me, even when I was watching the TED Talk, I was reading a lot about you, I watched a Key note that you gave, you’re not afraid to straddle the tension of paradoxes.

JR: Thank you for saying that.

BB: You find a lot of power in those.

JR: Yes. A nicer way of saying, hot mess. [laughter]

BB: No, I have to tell you that I’ve come to believe, even as a researcher who’s been studying leadership for over a decade now, I really have not met a transformational leader in my career who does not harness the power of duality, I just… I don’t think that exists. And so you talk about kindness and math.

JR: Yes.

BB: Tell me about that.

JR: Yeah, so my theories are, is that the things that I’m saying now I do them with people, but then in a business or a contest it’s with a private equity lens on a brand or a whole company, right, it’s just the same type of principles. So kindness, the way that we are primed to behave in corporate America, just given the law and giving the conventions of accounting, we are primed and legally you have to… Unless you’re on a C corp to maximize shareholder value, so even in the accounting statements, the last line is net income to shareholders, you’re solving for that riddle.

BB: Say that one more time again. It seems so important. I want to make sure I understand it and everyone listening understands it.

JR: So because we are here to maximize shareholder equity, which may be in a bygone age when equity was more evenly distributed and more people owned it, so you solve for the very end, you have revenue on the top, how much comes in, how much you pay out, everything else is an expense, including people, people are an expense, it’s labor, then at the end of it, you have this net income to shareholders. Whatever is remaining is for the shareholders.

BB: Okay.

JR: And in our culture as well, when you think about the words we use to describe success, we talk about revenue growth, we talk about income statement items, how much money did you make as a person? How much revenue did you make? How fast are you growing? In the way I invest, partly because I also invested in distress for a long time, I tend to live my life and advise people to focus less on growth but more on their balance sheet.

BB: What does that mean?

JR: Like what do you own?

BB: Got it.

JR: What assets are important to you? And instead of it just being, “Hey, let’s just grow.” I always bring that duality point, what’s the effect of your growth? Let’s make sure it’s sustainable. And so this is on a personal level, like how many people just spend money and then their balance sheet is bereft, they’re not saving, and then they don’t have freedom, they have no time, they become captives to the assets that they bought, like the second home, the third home, and you constantly scrambling in your life to pay for things that you think are assets, but they’re not. They become liabilities because you are not free, if you don’t really want them, they become a liability.

BB: But you’re also putting value on time and freedom, right?

JR: And health.

BB: And health, but do companies actually do that?

JR: I think companies increasingly are being forced to. That’s this whole debate right now with workforce where people are saying, “I don’t want to be… ” Like you think that the only form of compensation is cash? What about dignity? Flexibility?

BB: Respect.

JR: Respect, continuous learning. Particularly for women, this is the hot issue these days, where women, they’re leaving the workforce, there are women, small business owners, they can’t balance everything right now. And so even back then, at actually Stewart, I paid people, I asked them how they wanted to be paid. So sometimes what we would do, let me give you an example of kindness and… The general rule for your listeners that the things that you perceive as cost centers, like no one listens, that’s where the secret is in finding kindness. So let me give you an example. After I found some money to keep the company from not liquidating, we almost were not able to get workers comp insurance because the history of the business was so bad, and it wasn’t just because it was operationally bad, it was because people weren’t happy. Like people were getting hurt. And then sometimes people weren’t really hurt, but they… Like they said, “I’m hurt,” and it was a form of disobedience, civil disobedience a bit, right.

BB: Yeah.

JR: And what I said, I said, “No workers comp,” I said, in one of the first speeches to the whole company I said, “Hey, it doesn’t matter if this is work, but if you come here and you get hurt, that’s my fault. You can’t come and get physically hurt here,” it doesn’t make sense to me, so I said, “If you get hurt, I have to know, I’m accountable for your safety.”

BB: Fiduciary. Yeah.

JR: Yeah for your safety, like the CEO is accountable for your safety, and I took it very seriously. People rallied around that and said, “Yeah”, and then I explained the concept of insurance. I said we’re all in this together. It’s a collective asset. And if we can all be more well and more excellent in operation and not get hurt, the insurance premium will come down. And so we track that, and so the whole well-being of the company, one of the measurements was workers compensation incidents. And the insurance plummeted so much, that the actuarials from the insurance company came into my office and we were awarded, effectively… It’s not very sexy, but it’s the Oscars equivalent of actuarial… I won the Actuarial Oscars.

BB: Congratulations. How was your red carpet moment? Yeah…

JR: Yeah, believe me, it’s not sexy, but I was really proud of it, because they said we’ve never seen this happened. Things were down 90% to 99% every year.

BB: Jeez.

JR: They said, “We’ve never seen this happen.” You changed behavior on scale and they said, “How did you do this?” I said, “Kindness and ops.” And I took the premium savings and I paid it out to the people on the front lines, but I didn’t pay them in cash. I reduced their working hours.

BB: Wow. You gave them time.

JR: This is the biggest gift I can give you, this is freedom. It’s time. You choose how you want to spend the time. And mathematically it was effectively a 20-25% raise, by the way, because you’re keeping the numerator the same, but the denominator you are reducing the time. So even back then I was tinkering with different forms of definitions of saying, what’s compensation? Well, we immediately see dollar signs. But I don’t think that’s true. We think financial capital. I don’t think that’s true. There’s social capital right. There’s other forms of definitions that I think when you really explore kindness and business, you unlock the other definition, so goodwill, what’s the other definition? And so goodwill, in most of the businesses I’ve been involved in… So I’ve owned a lot of very soulful brands, not just to Ashley Stewart, but Meow Mix cat food, Murray’s… I’ve been involved with a lot of these high personality companies. Truly, true brands and people that are singing a very pure song, it also shows up in your marketing numbers. You have it, Brené, you have it.

BB: Me?

JR: People come and listen to you, organically. You’ve grown… What you’ve done has been an organic journey. I bet 15, 20 years ago, you didn’t say one day, I’m going to…

BB: No.

JR: You just lived your life, and you did right by people, and it was not in the public eye and it has… People know. And so brands are like that, too. When you sing the right song, it’s a pure song, people can hear it. Your performance marketing spend is actually less, right. So it’s a savings, and “expense”. Two, it shows up in your PNL, because you spend less in marketing dollars per audience, per ear, per head. And so that’s another example of how…

BB: Wow.

JR: Where if you really deconstruct the PNL, and this is what I do with companies and I just… And I do it with people too, it’s like, this is ethos, this is your song, and we’re not going to do it on this one, but I actually picked keys and timbers of people… Like I’m an E-flat major, and I’m a cello, I think. And so I find it with brands and with people, I’m like I think this is you, and then if we agree, watch what happens in your entire PNL of your life and PNL of your company. Why are you spending this here? You should be spending more here. You’re not capturing this ethos. It becomes very simple. And so I think a lot of the best brands, like if you think about Apple, even Warren Buffet and Charlie Munger, it’s so simple. They say it’s this very simple word, simple symbol. The Red Cross sign, first aid, right. It’s simple and it’s profound.

BB: But it’s lyrical.

JR: And it’s lyrical.

BB: It’s simple, but it’s lyrical.

JR: It’s multisensory, right. And I think it’s in this age…

BB: It’s multisensory.

JR: Where you’re going in machine learning and AI, it’s so easy to trick your eyesight, increasing your errors, but I think what you’re going to see is that more and more people are going to have to come up with a multisensory branding strategy that includes taste, smell, things that you can’t lie about these are… Particular your nose, right. It’s wired. It goes right there.

BB: Right to childhood. Yeah, and it’s… And the emotion of smell is so profound. Let me ask you a question, I’ve been really struggling with it. Just personally as a business person, as a leader and also when you think about venture capital, and a lot of people have come to us over the years. We’ve never done it, because it doesn’t make sense, and one of the areas it doesn’t make sense for me. In personally, is it doesn’t seem to be an enough threshold. Like if you can make X amount of dollars, then why can’t you make 10X that? And why isn’t there like a… But we could get here and it seems like a decent return on the investment, and our folks could work four days a week, young parents could leave at three. Why is venture capital so impatient and why is there not an enough button?

JR: Well, this is that… Remember that, is it Joseph Heller? Who, he was at a party at a hedge… This is many years ago, decades ago, and his friend said this fellow made more money in one day than you’ve made for all of Catch 22. And Joseph Heller said, “But he doesn’t have one thing that I have.” And the friend said, “What?” And he said, “I know when I have enough.” Enough’s enough. And so I think that what we’re having in culturally…

BB: Wow.

JR: We are fascinated with, again, that revenue is just growth, at all costs. Just growth. In other countries, even when they measure these other measurements of wealth, like we use GDP, other countries, particularly in Scandinavia, they use different measurements.

BB: Like?

JR: They involve like social health as well. Right?

BB: Yeah.

JR: GDP is a convention, GAAP in accounting is a convention. We as people, we choose these conventions and it ends up priming behavior. I think that the choice, this is you this is you’re accountable, this is your family, friends, society, this is your life.

BB: Right.

JR: And one of the reasons why I’m so passionate about small business is not for entrepreneurship in sort of a bro-tech sort of way, but small business, you need to have social capital. It holds neighborhoods together.

BB: Yes.

JR: Right? It’s life, it’s the fabric of a social compact. And now you’re doing the private equity guy like meet the guy who studied history and literature in college about… I’m worried about our democracy, like small business is important for democracy.

BB: Essential, right?

JR: Makes people accountable. And women and small business owners, and women of color in particular as well, have gotten demolished over the last two years, and it’s worrisome. And so without small business financial capital, there’s no proximity, there’s no accountability to people. And so that’s where as a society that we are, is that there’s been a divorce between financial capital and social capital accountability. And those are the things where I’m trying to walk the middle and help pull them back together, and then also say to my financial people, Look at my returns, it works. But you have to care, it’s more of a long-term strategy, and you have to not view it as, oh, it’s a portfolio company, it’s a… Whatever.

JR: You have to care that the company does well, and that the employees do well, and that families do well, and that you know that they’re feeding families off of these jobs. And I don’t think that that is countered to capitalism, I think capitalism does feed people. And it’s not perfect, but in a better form, it does… We have to eat, we consume. So that’s what I would say is that it’s a portfolio company for them, Brené. It’s an investment. This is something you’ve built. This is you. That’s meaningful.

BB: And people that I work with that I love and care about and… Yeah. And its kids I care about and… Yeah. Oh yeah, it’s a community.

JR: And one day when you look back, like your success, you’re going to remember this and, again, remember I buried both my parents. I’ve buried both my parents. I see, unfortunately, first-hand, that’s really influenced me too, what matters. And my dad died the first year of Ashley Stewart. My mom died the last year. And when my mom died, you should have seen the amount of flowers she got from black women all over the country. They sent flowers and said they felt like one of them had died, because I always talked about my mom. And in the first year when my dad died, people sometimes ask me, When did you know this would work? This crazy thing that you wrote, this musical.” And I said that…

BB: This symphony.

JR: Yeah. A year into doing this, I had a week that I was really tested from… I don’t know who was testing me, but it was a tough test. My dad was in the hospice. That’s… And my youngest daughter almost died in a camp accident.

BB: Oh god.

JR: So she was in children’s hospital in Boston, my dad was dying in New Jersey. The company was still unstable, right, you don’t just reinvent something, so I was still working 100 hours a week. And that same week, and I said to my assistant, I said, “Hey, I just need a week, and please don’t really tell everyone what’s happening. Let them focus on the business.” But when my dad died, and my wife and my youngest daughter couldn’t come because they were in the hospital, I thought it was going to be a funeral or a wake of like Korean pediatricians.

BB: Yeah.

JR: Okay? And some Jewish pediatrician, because we grew up on Long Island. That was my dad’s social scene. [chuckle]

BB: Yeah.

JR: But in walked my whole company, which was sort of effortlessly the UN. But then when I really started losing it was the women… You have to picture a group of black women from the stores, from Newark, Trenton, they came together, they came up to my mother… And they were a little uncomfortable because they said this wasn’t their scene either. And they came up to my mother and said, “Hey, your son… You did a good job. He’s a good man.” And then they came up to me, and one of the ladies grabbed my hand and said, “Mr. James, you didn’t tell anyone about your dad or your daughter.” And I said “No, I didn’t want to… There’s enough going on, I didn’t want to… ” And she looked at me and said, “You didn’t think we’d find out and be here for you?” And then I cried like in front of everybody, and my mom started really crying because she understood finally what we had done. And I’ll never forget that. I’ll never be able to repay… I’ll never forget that. But I knew from that day that we had done something special together, that it was us against the world. And I had no idea one day that I’d be with you and do a TED talk and all of these things.

JR: We just did it in solitude. We just did it, and over time it was real, so the ripple effects… When JPMorgan Chase calls you, it’s like the leader from JPMorgan Chase or a big… They’re like, “James, oh my gosh, you’re changing the vector of capital, it’s having broader effects. How are you guys doing this?” So our little company, and I love the fact that on the front of it are black women, we are teaching the leading companies how to do it.

JR: Anyway, it reminded me just about how important the other side of a definition is. Capital has many definitions goodwill we forget. And so I’m approaching life really again as a child, and there are a lot of people spending billions of dollars trying to recapture a child-like neuroplasticity and things, and I think a lot of it is… That’s why I picked up the red helicopter. That story, for me, it’s like the movie Inception, it takes me back to that place. And I remember, and I said, “Do not confuse skill sets from wisdom.” And so child-like wisdom, alright don’t forget James. And that story, the TED people were nice enough to let me tell it, like people ask… They’re like, “Oh, I have a red helicopter moment. I understand. It’s kind of when you were at your, effortlessly, your best, and you weren’t expecting a reward for it, it just was.” And I see that in people all over the place and all over the world, and in every group that I’m in, it’s there. It’s caught. It’s not being amplified enough, and I think, obviously, you’re playing a huge role in amplifying stories like that. So thank you for amplifying this one.

BB: We’re so desperate for it. I mean, people are not okay right now, you know, we’re not. And we’re so desperate and we’re so afraid, we’re just so afraid of kindness. We’re afraid to get sucker punched if we’re too vulnerable or too open, but it’s what we’re desperate for.

JR: Yeah.

BB: And kindness, and a lot of the metrics that we hold important are not mutually exclusive. I just don’t believe that. I’m not buying that story. I think you’re proof of it.

JR: Yeah. What’s the definition of success? And then having buried both my parents, I know we weren’t wealthy. They didn’t accumulate up, but when my dad died, for instance, the number of letters and pictures all of his former patients, three generations of… They sent letters and pictures and said Dr. Rhee. And that’s a well-intended life. And in that movie, it’s a Wonderful Life, that’s the reason why we always cry when we watch George Bailey, but the real hero in that is obviously his wife, it’s Mary. Why do we not… I’m trying to recognize the George Baileys before they want to jump off of the bridge.

BB: Right, right.

JR: And say, “Listen, this is what leadership is.” George Bailey and Mary, these are leaders. It’s not the other guy. That’s why you cry at, when you watch it because you know that that’s not how it is in the real world. And I’m not a Pollyanna. It’s not like, this is not rainbows and unicorns. I’m in the business world, it does work, and it just requires maybe a little bit of un-learning and then… Or maybe re-remembering what you already knew, and then sort of saying, “Aah.” And I now know finance theory and accounting, a nd these complex things, but it’s through the Gossamer prism of kindness, of helping people, solving problems versus the words we use today, which are pretty destructive, right. It’s a war on talent. I’m going to disrupt. Entrepreneurship is, I’m going to kill. I’m going to…

BB: Kill or be killed. Change or die.

JR: Yeah. I don’t… And I don’t think that’s really what the definition of entrepreneurship is. I think it’s much more of a sort of throw, sort of self-reliance and… Not recommending living on a bean farm, but to have that feeling of control, of understanding that we’re okay. And that’s why I teach a lot of systems and at MIT, it’s in the systems org vertical that I explain to people all the systems, and then I say to them, “Now do you feel better? You’re doing pretty good. You have a lot of odds against you, it’s not you… You’re doing great, but this is how it works.” And then they’re like, “Oh.” And I’m like, “You’re pretty good.” And they’re like, “Yeah.” “Great. Now, how can we do something a little bit different, a little further?” And so anyway…

BB: God. I’m so grateful of this conversation. Alright, you… We have time for some rapid fires?

BB: Okay. Fill in the blank for me. First one, vulnerability is…

JR: Strong, courageous, natural state.

BB: Wow. Yes. Beautiful. What’s one piece of leadership advice that you have been given that’s so remarkable, you need to share it, or so shitty that you need to warn us?

JR: My dad used to say this to me a lot, I now really understand it. He said, “You will be a real leader and you’ll have real success when other people want you and are happy for your success, and happy for you to be the leader.” That there’s no resentment, that there’s no jealousy, that they’re truly happy for your success, then you’ve achieved real leadership, real success.

BB: Wow, that’s powerful. That’s power. That takes your breath away a little bit, doesn’t it? Yeah.

JR: Yeah.

BB: Okay, here’s a good question for you. I’m so interested. What is a hard leadership learning or lesson, that the universe keeps putting in front of you and you have to keep learning it and re-learning it and unlearning? What’s that one thing that you just have to keep working on?

JR: That… Although people are really inclined, there’s so much… I love people, so there’s a real heroism and generosity innate in people. That said, it is again, a more natural state for some, for most, to look away, to just not act, and to not speak about what’s right. That as much as I hope that people will do that, a lot of people don’t and I think as a leader, we have to reward that behavior, which is why in the TED talk, the real hero is my friend’s father. It’s not me, it was him. And that he said, “I see what… This happened between these two boys, and it’s good.” And so to create that environment, where more five-year-old James’ gets, not cheaply rewarded for a good gesture a real… How do you compensate people for that in non-monetary ways and not cheapening it? I think that’s the big… And businesses right now, again, it goes back to the other forms of compensation. This is not just… Yeah.

BB: Yeah. And for other forms of compensation to be meaningful, you have to be invested in knowing people and understanding and seeing people, and knowing what’s important to them. It’s not easy. All right, tell us one thing you’re excited about right now.

JR: Well, this.

[laughter]

JR: And I think the other thing, too, I’ve been spending the last year and a half teaching, formally at companies and universities and middle schools and some writing finally, I do everything backwards. So the TED people… Most people have a book and then they do a TED, but I haven’t written anything. So I’m writing and it’s hard.

BB: Oh, I love it.

JR: It’s hard, Brené.

BB: It is. I know. But God, we need it.

JR: I’m writing an adult book. That’s just philosophy and giving people a JD-MBA with a bit of neuropsych and org theory in an accessible way. It’s not meant to be just for that, it’s for everybody. And then there’s a kid’s book coming, that’s called The Red Helicopter. And it will look like, let’s say, The Giving Tree, if you can picture the book, telling the story in all black and white, and the only thing that will be in color will be the red helicopter.

BB: Mmh, I love it. I can see it.

JR: Yeah, so it’s teaching and here relating it also to link the compounding long-term value of good behavior to compound value of money. So I want to teach money principles, but with a lens of ethics.

BB: Oh, God. It’s so good. I can’t wait. When are we going to get the book in our hands?

JR: Oh, geez, that requires another… I need a motivational talk from you. I need lessons on how to write a book. It’s hard. [laughter]

BB: It’s really hard. Someone told me one time… A long, long time ago, maybe 10 years ago, it’s your butt in a chair.

JR: I tried, I’ve had my butt in a chair and then I’m looking at the screen. I’m just like, “Oh geez.” The fingers, they’re not moving. I’ve made some progress. But…

BB: It’s hard.

JR: I think I need conversations like this. It helps me formulate it better. I’m seeing it clearer and clearer. It’s one thing doing it and then as you know, one thing writing it so that everyone can understand.

BB: Yeah, yeah. Yes. Well, if you need an early reader, I’m volunteering as tribute right now. So yeah, I would love to.

JR: Thank you.

BB: Tell us one thing you’re deeply grateful for right now.

JR: My wife. You know, as you get older, you feel like the more fortunate, I got the better end of the deal. She’s a really good person.

BB: God that counts for so much.

JR: And people are like, “Oh, she’s so smart all the time is… ” I’m like, “No, she’s fundamentally a good person. And she makes me better.” I am accountable to myself. Obviously, that’s what character is, but because we’ve been together for so long, I don’t like disappointing her. I just want her to be proud of me. To be proud that she’s married to me. And so I’ve been thinking about a lot. We just came back from a really good vacation. And it’s been a hard two years for the world. But our family has really enjoyed playing Scrabble. I spent a lot of time with my wife. More than I have in the last 10 years because I’m not traveling. And I really love her, still.

BB: It’s beautiful. Yeah.

JR: I know.

BB: Alright, this was so fun to look at. So we asked you for five songs you couldn’t live without and you gave us a mini mixtape. Born to Run, Bruce Springsteen. Don’t Dream It’s Over, Crowded House. Stairway to Heaven. Oh, as performed by Heart at the Kennedy Center Award Ceremony. Oh my god. So good. I’ve watched every Kennedy Award Center five times. It’s just goosebumps city. Somewhere, Leonard Bernstein, West Side Story, of course. And God Only Knows by the Beach Boys in one sentence. What is this mini mixtape say about you, James?

JR: All of them. There’s a story of a journey. You’re not sure if you get there. But you’re asking someone to take your hand, which I do, please take my hand. You want to walk? Let’s go. Let’s try. And let’s not settle. Let’s think about that place. That’s a better space-time continuum. Let’s not compromise our values even though the world, it’s real it makes it hard. Are you willing to take my hand and walk? And for Bruce, it was, jump on my bike. Right?

BB: Mm-hmm, yeah.

JR: And then Tony and Maria, it’s a place. And the reason why I love the Heart, Stairway to Heaven, by the way, is that when you watch that performance, which I think is one of the best performances, ever.

BB: Vocal and guitar best ever.

JR: Yeah. And when you watch what happens, Heart always… The history of is that they wanted to be Led Zeppelin when they were starting off because there were no woman rockers. And in that performance, you can see them they were Heart performing Led Zeppelin, they weren’t Led Zeppelin.

BB: No.

JR: And that they were really themselves and the audience could feel it, know it, and you can see in Robert Plant’s face. He’s watching skeptical, everyone’s skeptical, covering Stairway to Heaven. And then as they’re singing and it’s their own voice, but they’re still giving homage to the original. People, they appreciate it, they loved it, and they knew what was happening, it’s a really emotional performance. And I think Ann and Nancy Wilson, in my mind that video… I teach this at various schools and companies, that’s leadership what they did. It’s really lonely. You’re saying there’s no… You have an acoustic guitar at best, but if you listen to that Led Zeppelin Stairway to Heaven, the percussion doesn’t set until… It’s like minute 3, something like that…

BB: It’s far in… And it is crazy, it’s so good.

JR: And when people really can feel what you’re trying to get them to be… In their own time…

BB: Yeah.

JR: Are you giving permission for them to hear the song on their own schedule? And then as a leader, you can… Into it, right? You can say, “A-ha, it’s time to shift tempo… Tempo.” Anyway, so all of those, they’re very simple journey… Like songs of journey and hope, and it’s not strident leadership, it’s sort of a little bit fearful, too, right? Saying, I don’t know what the future holds, but hold my hand.

BB: Yeah. It’s learner not knower, isn’t it?

JR: Yeah.

BB: God, James, thank you so much for joining us on the podcast. What a privilege.

JR: Thank you for everything that you’re putting out in the world for many, many years. It’s everything that this… You’re doing is so well-deserved and it’s so impactful, so thank you.

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BB: Oh God, y’all I loved this conversation. You need to watch the TED Talk. I’ll put a link on the episode page… Every podcast, both Unlocking Us and Dare To Lead has an episode page on brenebrown.com. You can find all the links to find James, to find the TED Talk. I hope this conversation was as meaningful for you as it was for me, I just… It was just an infusion of hope and possibility for me. I just know there’s a different way to do things, that puts people and relationships and connection and community first. It’s just a matter of, do we have the will to want to do it? I hope you have a great week. Stay awkward, brave, kind. Super kind. Let’s just do it again, let’s say awkward, brave and really super kind. Y’all take care. The Dare To Lead podcast is a Spotify original from Parcast. It’s hosted by me, Brené Brown. Produced by Max Cutler, Christian Acevedo, Carly Madden and Tristan McNeil, and by Weird Lucy Productions. Sound design by Tristan McNeil and Andy Waits. And the music is by The Sufferers.

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