James Rhee: 'The value of kindness at work'

(February 13, 2022)

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I’m Victoria. You can read why I’m publishing Carer Mentor here: Who Started Carer Mentor and Why?

Summary

Entrepreneur James Rhee reimagined how business can grow by focusing on kindness, sharing his experience of saving a fashion company from bankruptcy. Rhee's strategy involved establishing a culture of kindness, making internal goodwill tangible to the world, and focusing on people. This approach transformed payroll from an expense to an investment, made vendors co-investors, and redefined human resources as a source of value. Real goodwill. His strategy resulted in significant financial success, demonstrating that goodwill can be a real, scalable asset independent of financial capital.

It makes me wonder what else is possible. How can care/caring be reimagined?

About the Author:

James Rhee is a high school teacher and Harvard Law graduate who became a private equity investor and unexpected CEO. He bridges math with emotions by marrying capital with purpose. His transformational leadership has been recognized by the leading business and civic organizations. His upcoming book, entitled red helicopter―a parable for our times: lead change with kindness (plus a little math), will be published in April 2024 in partnership with Harper One, an imprint of HarperCollins that seeks multi-platform ideas that “transform, inspire, change lives, and influence cultural discussions.” He is working on related film, music, and television projects. His TED Talk and Dare to Lead interview with Brené Brown have captured the imagination of millions.

His book is being released April 9th 2024: ‘red helicopter—a parable for our times: lead change with kindness (plus a little math)’

Website: red helicopter website

"Give yourself permission to look at the business of life, and the life of business, in a different way." - James Rhee

From the TED organisation: Kindness can go a long way when it comes to reshaping a business. Having saved a fashion company from the brink of bankruptcy, entrepreneur James Rhee shares the value of investing in a culture of compassion at work and shows why we should all lead with our hearts.

1.06 The Red Helicopter story.

1.39 My friend's father had rewarded kindness without cheapening it, and he made it tangible with an object, and he made it human in that exchange, and he made it shareable with this story. And in doing all of this, he created real value out of thin air by turning kindness into a scalable, collectively-owned asset called goodwill.

2:42 Ashley Stewart story

4.24 And I felt alone, like, on every dimension you can think of --geography, industry, gender and, yeah, race.

4.42 "Hi, I'm James. I've never done this before. You know, I may be the least qualified person to run this company. But I'm here and I'm willing to learn. Oh, and by the way, after this speech, I’ve got to head out to the DC,” -- that’s a distribution center, right -- "I've got to head out to the DC, I've got to find stuff to sell to fund payroll. But don't panic. Because I think that if we can centre kindness and math together, then maybe we can get out of this together."

6.40 Real goodwill, it is a real asset that can compound and be amplified independent of financial capital.

And I'm going to use these words very deliberately --

6:53 It inspired me to compose, draw, design, create a new business plan with new mathematical formulas, operational protocols that were woven together with multi-sensory storytelling, whose singular purpose was to create real value, driving real goodwill.

7:15 The business plan fundamentally had three concentric spirals underpinning it. So picture this.

So first, we had the courage to establish a culture of kindness in the workplace. Period, end of story. It was a strategic priority day in, day out. And yeah, there were moments as individuals we failed. But as a collective, we were very successful in changing attitudes about the transformative power of kindness at work.

7:43 Because you see, what kindness does, it distributes the joy, actually, of problem-solving to everyone. It creates a safe environment that unleashes innovation, especially the unselfish kind. And it turns perceived liabilities into assets, which, as any financial accountant will tell you, mathematically has to result in the creation of real equity value in every meaning of the word.

8:10 Second, once we felt sure about the authenticity of the internal goodwill that we had co-created, we just wanted to show the whole world and make it tangible to everybody. So by trusting our employees and our customers and by leveraging their smartphones and their social media platforms, we were able to scale our marketing creative efforts very fast in a very low-cost and organic way. We invited everyone in, and we were able to merge ecosystems and blurring the lines between outsider and insider, and them and us.

8:46 And we were able to create a seat at the table for everyone, which, by the way, enabled us to leverage the assets and the balance sheets of everyone. And third, once we centered goodwill, we had to center people.

8:59 And it wasn't long before we realized we had to redo our financial formulas and our financial reporting. So payroll, instead of being an expense, became an investment. And internal communications, well, that was just a great way to train and to teach. And the materials that we created became critical first stanzas of the overall narrative that was our brand song.

9:21 And working capital? Well, our vendors became effectively co-investors, and we would measure working capital as a unit of trust that we were rebuilding together step by step.

9:35 And finally, human resources. Well, how could that possibly be a cost center? See, when you center on maximizing goodwill, it forces you to actually measure it. And you realize that despite what the rules of accounting might say, that it's operations and leadership and culture that actually create goodwill. Not some outside source of financial capital. And it makes accounting actually accountable. And it isn't long also before you realize that the entire flow of your operations has to naturally follow suit.

10:13 So to illustrate all of this, I'm going to take you back to the holiday season of 2013, which was only four months removed from my sort of "meh" town hall. We were out of money at this point, and I was terrified. But we made a couple of decisions that seemed to have long-term importance for our efforts.

10:32 We hosted a really modest holiday party at a homeless shelter for women in Brooklyn, New York. And at this point, we didn't have anything to give, so we gave our time. We gave our hearts, and we found a few boxes of merchandise samples that we donated. And around that time as well, we organized a chain-wide sales competition. The top 40 stores earned the right to donate 250 dollars to a local charity of their own choosing.

11:03 Together, these two things, right, the event -- the party, the competition, they were just a way for us to say "thank you" and "goodbye" to the local neighborhoods and communities that had supported this company for 20 years.

11:17 And the outpouring was just amazing. We saw real friendships that have been developed over those 20 years play out right in front of us. And our newly installed e-com platform? We operated it in a way that accentuated that and connected people, rather than diminishing humanity.

11:35 And sales just exploded. And just like that, we had found a way to operationalize goodwill. In our internal culture, in our outbound sales and marketing, but also, perhaps most significantly, in our sense of compensation system.

11:50 There were all three spirals just sort of doing this, mutually reinforcing each other. We measured everything.

11:56 You know, down the road, as the strategy really took hold, and I was finally able to secure some financial capital and make some necessary technological investments, we just did the same thing, just over and over again at scale.

12:11 So we rolled out something called a CEO Citizenship Award. That was the most prestigious, highest-compensated bonus system in the company. It went to those employees who lived out the following credo. You act like an owner. Be a good friend. Be a good mentor.

12:26 We never factored in sales or revenues into these determinations. Second, you know, our marketing team, our outbound-facing consumer team continued to do most of the most important internal communications.

12:40 And I, as a former high school teacher, I relished the fact that I could teach the principles of money, life and joy to my colleagues at scale.

12:49 And that really kind of sad holiday party? Well that evolved into something big. We called it Finding Ashley Stewart, which was an annual, nationwide, year-long search for unsung women leaders in our communities. It would culminate in front of 3,000 screaming fans at the Brooklyn Kings Theater and a star-studded concert.

13:12 And the best part of all of it was that the vendors, which by now included some of the world's leading tech and financial companies, they're the ones who funded all of this.

13:22 You know, I ended up spending seven years at Ashley Stewart, leading it. So, far from getting on with my life, it became part of my life, especially the friendships. And we had to make some tough business decisions along the way, and not everyone made it.

13:37 But our overall strategy and philosophy generated staggering results. And yes, it showed up in our financial statements, too.

13:46 So within two years, we generated more in annual operating profit than we paid for all of the assets of the company. And our digital strategy, which never forgot to center the real friendships in the stores, it landed us on the stages of the most prestigious business conferences in the world celebrating our growth and our innovation, only a few years removed from not even having Wi-Fi.

14:10 And it wasn't long before the financial community, well, they changed their minds and they showed up at our headquarters, but this time with their checkbooks, and they stroked us a check that made us convert our real goodwill into accounting goodwill to the tune of well north of 100 million dollars.

14:28 And I know that none of this would have been possible without the lessons that I learned from my friend's father way back in kindergarten. He invested dollars, but also his time and his heart into a little toy red helicopter in 1976. And in the way that he did it, it created a real asset called goodwill.

14:50 And that goodwill compounded quietly for decades and then ultimately helped save a company, around a thousand jobs, a safe place for a really deserving group of women, and over 1 billion dollars in overall economic productivity. And, in doing so, he taught an enduring lesson that helped this grown man regain his balance, a true balance, by remembering to slow down and to see the world through the eyes of a five-year-old child who knows unequivocally that there is one and only one definition of goodwill that creates real value in life and yeah, in business, too.

15:36 Thank you very much for listening.

AND James Rhee’s playlist

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