Podcast

Any of us can come to work and make progress every day. You may not get the EBITDA that you want, you may not get the outcome that you want, but it's actually a pretty low bar to just move the ball forward like even an inch. But if you do that enough times and over enough period of days or years or whatever, like that matters. Progress is more important than winning.

Welcome to the Happiness Squad Podcast. Your weekly dose of practical tips and inspiration to help you operate at your fullest potential by integrating the science of flourishing into how you live, work and lead. In each episode we will share insights, tips and stories from leading experts, company executives and flourishing solution providers that you can implement right away to make happiness your competitive edge and find more success, joy, health, love and meaning in everything you do. Hello friends. Welcome to the Happiness Squad Podcast where we share practical tips to make flourishing your competitive edge and help you achieve stellar performance powered by well being, not at its expense. I'm Ashish Kothari and I'm on a mission to help a billion people not just experience happiness as an emotion, but to use it as a tool to unlock their fullest potential. If you are interested in learning more, please make sure to follow me on LinkedIn and subscribe to our newsletter@happinesssquad.com today I had the privilege to sit with my dear friend Ryan Heckman, a two time Olympian turned private equity leader who's redefining the game. From competing on the world's biggest stage as a ski jumper to a leading multimillion dollar businesses, Ryan's journey is anything but conventional. But here's what makes his story truly remarkable. After years in traditional private equity, he had an awakening. He saw the cracks in the system and the high human cost of business as usual and set out to build something different. Together with his colleagues, he created Rally Day, a very different kind of private equity firm. Rally Day Partners isn't just about financial returns. It's about investing in companies leadership to enable human flourishing. It's private equity with heart where leadership, culture and conscious capitalism take center stage. Today we'll dive into Ryan's transformations, the lessons he carried from elite sports into business, and the groundbreaking ways Rally Day is proving that investing in people is the ultimate competitive advantage. Get ready for an inspiring conversation about resilience, purpose and the power of helping each and employee that you lead grow. Let's dive right in. Ryan, I am so excited to be recording this podcast with you my friend.

Yeah, well, we started our friendship at Chautauqua park in Boulder and I Remember, I think we walked almost about, I think it was about seven miles. And it went by like it was five minutes because you and I were.

Just like, yep, yep, yep, yep, yep, yep, yep.

And at the end of that walk, I just felt such a kinship with you both intellectually, emotionally and spiritually. And it's just so interesting how we both came from environments that were very performance oriented. And in your case, McKinsey, in my case, private equity. And we've both gotten to places in our lives where we can explore the unknown.

Absolutely.

It's just fun to do that with someone like you that thinks so far outside the box and has the right brain, the left brain and the heart like completely synchronized and on fire. And it's just fun to be with you. So this will be a fun hour or whatever this ends up being.

Yeah, an hour or three hours now we'll keep it to an hour. I know it's Friday and we have to get going because I feel the same, Ryan, about you. In fact, you know, I'll share this funny story of how we actually got connected. Right. So on a Saturday, I usually have a yoga sequence and I was doing my yoga and I was, I usually am listening to a YouTube or a podcast and there you were with Raja Sasodia. And I'm like, wait, here's Ryan. He's here. Private equity. Wait, what are we talking about? And I literally texted you on LinkedIn and you got back 10 minutes later. And that's how, you know, our relationship started. And then we met. An hour walk became a three and a half hour journey through Chautauqua. Man, I'm so excited for, you know, sharing your story and the work that you're doing because I feel the same about you. And I felt an instant, by the way, for our listeners, you and I are almost exactly the same age. Born two days apart, March 7th and March 9th.

I can't believe we're both 40. That's just so weird. Exactly.

There we go. But listen, I want to do a little bit of an arc, right, Because I know I didn't get, I wasn't born this way. I lived my first half mountain journey in a very one structured way and it helped me a lot and it still is a big part of what I do. But then I found something else. So I want to trace that origin story for you too. And so talk to me a bit. Look, I mean, you are, you know, you competed as an Olympic skier. You're a two time Olympian. I mean, and we all know I served The USA Olympic Committee. I served the USA Gymnastics. I know what it takes, right? I think people know what it takes. But I really know because I've been in the rooms with these people and what it takes, the level of discipline, the resilience, the focus, and you have all that. And I'm curious, that foundational, you know, the first 14, 15, 16 years of your life leading up to, you know, your highest achievements, what were some of the lessons that you took from that time that helped you to this day?

Well, I would start by sharing that I. I rarely talk about my athletic life. It can very quickly sound like a humble brag kind of way I talk about it and, and, or just flat out bragging. And the irony of it is that for me, my skiing career, which lasted from the age of nine to, I think I was 21 when I was done, was, you know, so formative and so humble from a how I felt standpoint. I could count on one hand the number of times I felt cool over that time. Perhaps when I was in Seventeen magazine when I couldn't get a date, you know, I was very underdeveloped, I had huge ears and nobody, no girls would talk to me at the age of 17. And when I was in Seventeen magazine, all of a sudden became super cool. So there was that time, I think, marching in the opening ceremonies for the first time with so many people I admired around me and in the stands. I felt cool then, but beyond that, it really was a life of so much discipline and solitude and I would say loneliness that it never felt glorious. So it's a fun topic, but immediately, if I bring it up, it's sort of like, oh, he wants to talk about how cool he is because of his skiing career. So I only want to preface with that because I'll. I will share some of that, but I. I just want you to know how much, how reluctant I am at times to talk about it. So the quick version of this is I was not very good at other sports, nor was I good at school. So I tried basketball, football, I even tried wrestling, you know, with the headgear and the singlet and everything. And they had weight classes, which, to give you a perspective on my size, my driver's license at. At age 16, I was 4 foot 10 and 105 pounds. And so I just sucked at all these other sports. And because I was also not very good at school, I was kind of dying for something that I could be good at. And for one reason or another, I was very good at skiing. And Progressed rapidly. I mean, When I was 10, I wrote a paper for school. I think it was third grade or it could have been fourth grade, where it was like, what do you want to be when you grow up? And I said, I want to go to the Olympics. And I guess the amazing part about that is it was only six years later that I was in the opening ceremonies at the Olympics in Albertville, France. It's just a short amount of time when you think about the notion and vision through all that execution and resilience and to come out the other side at that age. I think I was the youngest Olympian at the Olympics from any country. I for sure was the youngest Olympian from the United States. And so from that standpoint, like, wow, at that same age, I left home, which was a. Had some trauma associated with it. I lived in my truck at the base of Iscaria intermittently through the winter of that season. And I felt no sense of underprivilege or adversity. Amazingly, it was sort of like, no, I want to go to the Olympics, I want to do this. And this is part of my training. This is part of the, this is part of what it takes. And so it never felt beneath me or it never. I, you know, I was taking showers at the local pool and such and Taco Bell was where I would get food. There were three restaurants. There was McDonald's, Wendy's and Taco Bell. And I just rotate those and. But it didn't feel weird. My mom had given me the gas card to the Amoco station and basically said, like, don't tell your dad, you know. And unfortunately that Amoco station went out of business like six months later. But that was a place where I could buy groceries and such. Then a family let me live with them shortly thereafter. And that was kind of a big moment for me where when I would. It was the first time I noticed that feeling of walking into a home and the sense of security of smelling a home cooked meal. And I remember the first time I walked in their home after living like that for a year and I was just like, wow. I just felt so, maybe relieved or loved, but it was, it was definitely a strange way to grow up. There is no doubt. My, my son is 16 now and I just can't believe looking at him, that I was doing that then. But at any rate, you know, being an international competitor as I was, the one thing that's sort of interesting is the amount of time that you competed versus trained. And in the business world, we spend 95% of our time executing or competing and very little time training. And that's one difference between, you know, the competitive world and the business world. Another one is that in an individual sport, unlike a team sport, you pretty much lose all the time. I mean, like, in a team sport, you know, all else being equal, you have a 50% chance of winning. And when you're competing against 100 best athletes in the world every weekend, it's very unlikely. In fact, there's a 1% chance that you're gonna win. And so one of the things I. I like to talk about in this way is just how comfortable I had to get with the process and the input, the inputs, and the pride in those inputs, because you really never got to win. So you had to really trust in the process, and you had to take pride in the inputs with almost no regard to how you were going to be perceived as a winner or otherwise. So in business, that's very helpful, because at least when I was a CEO, I felt like every day was just a flogging of problems that I was required or requested to solve. And again, in that context, very rarely did I go home, like, pat myself on the back, and no one was gonna pat me on the back at work. It was just kind of similar, I would say, temperament that I had to adopt in business to. To my skiing world. I also think in a skiing world, I learned the power of coaching, which in later in my life was really helpful. Interestingly, I had a series or different coaches during my career, and my favorite coach was not the one that had the best technical ability. In fact, he was terrible at the technical side, now that I think about it. But what made him so special to me was I knew he just believed in me so much, you know, and that when he shared advice with me, it just came from this place of loving my potential more than my present state. And I just clicked with that, you know, and so when you're on the top of a ski jump, which, for those that don't know this, I was a ski jumper, you're up there by yourself, and there's oftentimes a jumbotron screen in the. In the bottom, and you can actually watch yourself on this screen, which is totally surreal, and it's windy, it's perilous, and your coach is on this little coaching stand, and when you push off, there's no turning back. And if you know that that coach believes in you, as I did, I just always perform much better with him there than anybody else. And so he was a very Special part of my life. And when I think about the relationships I want to have with the CEOs that we support, I want them to have that feeling from me that, that I love their potential so much that I'm willing to have that difficult conversation or I'm willing to give them that feedback. And if they know that I love their potential, they receive it in a way that I think I did in those years as an athlete. And so that's really translated nicely. And then lastly is just this word, resilience, which I is perhaps overused today. It's kind of this like grit. And we talk a lot about resilience, but being an athlete, just crashing and failing and picking yourself back up and touring around the world and youth hostels and planes, trains and automobiles, and you just learn to grind it out, you know. And if you think about business, so much of it is not the smartest wins. It's more like who can outlast the critics or yes, who can outlast the adversity? Who can endure discomfort the longest? And the compounding effect of the person who lives in discomfort from. For a longer period of time translates into more incremental personal growth over time. And I feel like I've just lived discomfort since I was 10 years old and that discomfort has translated into a significant amount of personal growth over the years. So those would be some of my, I guess, high level observations about that period of my life.

Look, I mean, I love each and every one of them and. Right. I can, I can see how shaping they can be. Right. All the way from not being afraid to fail that so many teams talk about. But it's just a very cognitive concept. But you know, literally as you describe it, I could feel it like, yeah, I'm going to not win. And that's okay because the moment I let that fear come in, then all of a sudden I know it's over. Right.

You know, what I attached myself to, which is really helpful in business, is progress. So, you know, any of us, any of us can come to work and make progress every day. You may not get the EBITDA that you want, you may not get the outcome that you want, but it's actually a pretty low bar to just move the ball forward, like even an inch. But if you do that enough times and over enough period of days or years or whatever, like that matters. And so with our businesses, I talk a lot about return on effort and that progress is more important than winning.

Yes, progress over perfection. Any given day, all day, all day long. Right. Like, just take that step forward. It's your choice what learning you get. If you stumble, take the learning, don't not take the learning, but then move on and put the next step right and the next step. And just over time, you will get there, especially if you have somebody who truly believes in you and is there, guiding you, supporting you in your journey.

Yeah, we have a. There's a little, I guess, illustration or logo on our website that says, we want to be your first call on your worst day at Rally Day. And that comes from this place of emotional safety and knowing that our CEOs knowing that we've had those bad days, too, and that we want to be there for them as opposed to maybe other relationships in this way where maybe you're afraid to tell your boss or whoever, that may be the bad news. Because the reality is, you know, business is oftentimes like a whole bunch of bad news every day, and you just got to get through it. And we want to. We want to celebrate that as opposed to be critical of that, I guess.

You know, I want to pick that thread up, Ryan, because as you said, you know, you are a very different kind of a private equity firm than most private equity firms. You know, I served a lot of private equity firms from my time at McKinsey, and, you know, you are a different one. Most CEOs will not even think twice about even calling on their best day. Right. Because they're like, oh, my God, he's just going to give me the next target and say, go more. Right.

That's really well said.

Right.

Like, why do I want.

Like, let me just sit for a bit. Let me at least have the weekend and then let me enjoy this.

Let me enjoy this milestone before I'm being given a new one.

Given the new one. Right? And you're like, no, I actually want. I actually want to be the person they call. We want to be the person they call on their worst day because they know we've got you. Right? We invested in you because we believe in you and what you're trying to do. We believe in you. So talk to me a little bit, Ryan, about how is. That's one element, Right? Talk to me a little bit about how Rally day, the firm you built with your partners is really, really different. What's the core vision? And we will circle back on why you kind of, after 20 years of traditional private equity started. But first, start a little bit with what's the core vision behind Rally Day.

Yeah, it's hard for me to separate my personal Journey from Rally Day. But I'll do it because you've asked me to.

No, then tell the story. Then tell the whole story of how. What your experience led to this. I mean, do the arc. That would be most natural.

Okay, yeah, I apologize for being difficult, but. No, not at all. The Rally Day story is just kind of inseparable from where I came from. So, you know, when. When I ended my skiing career, I didn't really go to high school all that much. It just. The winter season happened to coincide quite perfectly with the academics season. So I would usually go to Europe sometime in early October, and I'd get home in April, right? And so I was spending all my time over there and didn't really go to school. And I rode on an airplane with a guy who was doing private equity. His name was George Gillette, by the way. He's a McKinsey alum. And I can't recall the years, but that's not that relevant. But I was on a flight with him from Dulles to Zurich, and I literally talked this poor guy's ear off the entire eight hours, you know, and he was with his wife, and, boy, I can't believe he let me do that. But I was less talking his ear off and more just sucking him dry in terms of his life experiences. So I think he kind of had fun, like, telling his story with me. It was like an eight hour podcast, you know, But I. I look back and I'm like, man, his poor wife must have been so mad. And then he didn't sleep at all on the flight, right? And probably landed horribly. But I was. I think I was 17 at that time. And we got off the plane in the Jetway, and he said, hey, if you ever get a college education, give me a call. And so when I stopped skiing, I did go to college. I applied to Stanford, funny enough. And I got like a cease and desist order from them. And it wasn't even like, don't come to Stanford or you didn't get into Stanford. It was like, we don't even want you coming to California. My. My application was so bad. I remember it. I spent days writing this stupid essay that would now take me probably an hour, you know, But I was just so ill equipped and didn't know what I was doing. Very naive. And I was like, okay, a backup plan. I'll go to the University of Colorado in Boulder. It's our state school. And I got denied there, too. And I was like, oh, my gosh, I am in so much trouble. I Don't know what I did to my life. And so I had to look life failure in the eye at that age. And the librarian from my high school got me into the back door at cu. I was on probation for two of my three years that I went to the school there. And I was woefully behind my peers. One sort of notable moment, I was in a introductory science class. I think it was biology, but you know, the requisite courses that you have to take. And I remember looking around the room, there were probably 500 students and thinking that I was just so anonymous compared to being an elite Olympic athlete. And then I had this second thought which was, oh, and I'm probably the dumbest guy in this whole building. And I was like, wow, to go from relevancy and being the best in this room to being irrelevant and the worst. Like, how did I let this happen? Like, what in the world? And it really motivated me to work harder in college. And, you know, I started over with algebra for, for example, in math. And my 13 year old daughter was doing algebra last year. And so it was like just a crazy, humbling time of my life. But I ended up doing pretty well. And I read the Wall Street Journal every day. So that was my like training. When I stopped skiing and training for skiing, my training was reading the Wall Street Journal. And I read it literally from the front to the back. And I became friends with this guy named Roger Lowenstein, who was a contributing writer for the Wall Street Journal. He also wrote the first biography of Warren Buffett. And he had a column, it was only one day a week, I think it was on Tuesdays, called Intrinsic Value. And he tried to teach through this column how businesses were valued and stole that, I guess, notion from Warren Buffett, who I think stole it from Benjamin Graham. But I called the Wall Street Journal's 1-800-number and asked for Roger Lowenstein and he answered. And so anytime I had a question in school, I could call him. And that was like kind of like a coaching feeling for me. And I got really attached to that two or three hours that I would spend reading. And at this age, in fact this morning I still do that. And I've been doing that this entire time, like from college at 21 to now, these years later, I carve out two or three more hours every morning, even on the weekends, to do that reading. So when I got done with my studies, I called the guy from the airplane, George Gillette, and said, I graduated from college, George, George, you still remember me. He said, I Do. He said, meet me at Monday Night Football, Raiders game, Broncos Mile High Stadium, and let's talk about your future. And so I met him in the parking lot of Mile High Stadium, and he said, do you want to work for me? And I said, I would love to work for you. And he said, how much do you want to make? And the peak wage of my father was 40,000, or at least that's what my mom told me. And So I said, $40,000. And he said, House, $37,500. And I said, done. And we shook hands. He said, my assistant will be in touch with you. And that's how I got into private equity. I was only 23, I want to say, and it was a real thin team, and we did a ton of deals. My last project for him was buying the Montreal Canadiens hockey team. And then I got a more institutional private equity job and did that for another 10 or 11 years. And by the time I was 40, though, I became very, I'd say, almost disgusted with my industry. I did not like the people in my industry. I thought they were arrogant and narcissistic. I didn't like the way my firm that I worked for communicated with executive teams. I didn't like the do as I say, not as I do aspect to kind of the preachy aspects of that relationship. I was at a conference in Orlando, Florida, 2000 private equity dudes, and I use that word deliberately, a blue blazer and a lanyard. And I looked down and I had a blue blazer and a lanyard. And on my flight homes, about three and a half hour flight, I decided to quit. And I mean, everybody in my family and friends, friends were like, what are you doing? You know, And I suppose it was a midlife crisis. I think Raj, who you mentioned, would call it an awakening. And when I talked to the CEOs that I worked with, they said, you know, it's about time. It's about time that you quit private equity and go get a real job. You know, go, go, go run something, go build something, go do something. Go lead people. And so the problem was no one was going to hire me. So I bought a little business with 11 employees, my office. It was a healthcare business. So they had a clinic. And then I was off campus in a little office. It was above Men's Warehouse. I had to walk through the tuxedo section to get to my office, which was so funny, you know, and they weren't nice tuxedos, by the way. And I built that business over a five year period of time, from 11 employees to 450 employees. We became the dominant player in the states of Colorado, Texas and Arizona. I built it to about 13 and a half million of earnings. And I kind of ran out of money. I didn't have any outside capital. And I built that with, believe it or not, about $3 million of equity, which is kind of amazing. I stretched the dollar quite far and sold it to a private equity firm because I needed capital to keep growing and it was the only alternative. I should back up and say that I never paid myself a dime because I was so woefully inadequate in the leadership and leading people in HR and the whole people side of the business. I hired what you could call an executive coach, but I hired him to teach me, but also to teach everyone in our company how to become a leader. And funny enough, I think that's why we were successful, because for many people in healthcare, whether they be doctors or front desk, they never considered themselves leaders. And so as soon as we said, we're giving you leadership training and we expect you to be a leader, we taught them the skills, but more importantly, set the expectation that we wanted them to, as we said, lead their 20 square feet. It just changed the mindset of the whole organization.

Absolutely.

And they knew I was on this journey with them very humbly. And so we were all just trying to grow as people so that we could grow our business. Now, this is an important part of the story that I wanted to get to because when you asked me the origins of Rally Day, it sort of boils down at least to one of our core principles, which is that one of our beliefs is that we have not just a responsibility but an obligation to help the people in our companies grow. Because if they grow, our business grows. And I know that sounds very simple, but there aren't many people in my line of work with that kind of, I guess, working principle. And it's really helped us succeed, at least to date, and I think it will continue to serve us very well in the future.

Enjoying this podcast? If so, you will be excited to know that Happiness Squad is launching a free online community on International Day of Happiness March 22. This is an opportunity for listeners like you to integrate the nine hardwired for happiness practices that exist in every wisdom tradition and are backed by scientific evidence from the fields of psychology and neuroscience into your daily life and rediscover your well being, balance, purpose and connection. Check out the details on our website or drop us an email. Excited to see you in the community Yeah, I would say, say, you know, first of all, Ryan, thank you for that. Thank you for that walk through. Right. Our experiences shape us into who we are and when we create certain beliefs. Right. I think it was really pivotal. So it's a beautiful story of how you came to see the world this way. And by the way, you said, in my industry, people don't see it that way. Unfortunately, I think today in the world of business, people don't think about it that way. People don't think about the fact that the businesses are in the end the net results of the people. And if you invest in the growth of the people, the growth on the business is way beyond what you think you'll ever get versus if I grow at the cost of people, I am fundamentally it's a drag. And in fact I was sharing this with you. The work, the person whose work really, really proves this. Right. There's a lot of like, you know, when I talk about this work and the work that I'm doing now, you know, I say don't do this work because you want to be nice to people or don't do it because somehow, you know, you got a moral kind of awakening, right. That you should be better. You need to do this because it's a financially fiduciary responsibility as a board or as an executive team or if you're a leader, because here's the research, here's the data, 2 to 3.5% higher shareholder returns that you can create if you really invest in new people and measurable over long periods of time. We'll talk a little bit about well being latest Oxford work done by Jan Emanuel and Sonia Lyubomirsky where they actually measure work well being across thousands of companies. You can in fact go on the website and look up any company's work wellbeing scores and what they found is if you invested in the top 100 portfolio of publicly traded companies. So anyway, there's a subset that portfolio from 21 to 24 outperformed every other index. Right. So it's real. But most people don't think about it that way. They don't take that long term of a view. And I think a lot of it is because nobody's ever invested in them and they only know one way. So I mean, I think what you're trying to do and that core tenant of yours, I truly think it's, it's, it's a game changer because I think.

We need more examples. But is, but Ashish, isn't it ironic that I fell into that because of an inadequacy in myself. Yeah, like, it's kind of, if you think about it, it's kind of wild, right? Like that. I felt insecure and inadequate in this area of business because I had never done it before. And I was trying to grow this business. And through my own desire to grow, kind of stumbled my way into an equation that I had never read about. And only in few instances, including our time together. You're in my time together do I hear people using this language. I mean, it's just like not out there.

It's, it's not out there.

It's rather literally right under our nose, meaning our heart. It's right there every day pumping. And anyway, I, I do find that fascinating. When I got done building that business and sold it to a private equity fund, they were perfectly good people, had great integrity, actually. But like, it was horrible. I mean, we did monthly board meetings. I'd spend a week with my CFO and the rest of the C suite, like, putting this board deck together, and then they'd beat us up for like six or seven hours. And then I'd spend another week helping my team kind of get their confidence back and maybe including my own. And it just was really tough. So this experience of building a business went from like the best thing that, that I'd ever done to maybe one of the worst things. And so I talked to them about a succession plan. We hired my replacement, I moved to chairman of the board. And then it was like, okay, what am I going to do with the rest of my life? I was only 45, I think, at the time, something like that. And so I could keep doing that, I could keep buying little businesses and building them. And I ran into a very dear friend of mine named Nancy Phillips, and she had just sold her business for the fourth time. And she had moved a chair and had similarly difficult experiences with four different private equity firms during her career. I should add that Nancy grew her business during a 20 year period of time from 0 to 120 million of EBITDA. And the, the dinner that we had, she. I asked her, she's Canadian, so not very prideful and sometimes apologetic of her own success, which I make fun of her about all the time. But I asked her, like, what, what are you most proud of with that outcome? And she sold her business for like $1.7 billion. Okay, so this is a pretty amazing success story. And she said, she gave me some kind of bullshit answers, like humbly humble answers. I said, no, come On Nancy, tell me. And she said, well, actually, here's what I'm proud of. She goes, I grew personally faster than the business did and more than the business ever did. She goes, that's what I'm most proud about. And I was like, oh my gosh, I have found my soul sister, you know. And so from that conversation and that bond over that principle, we decided to form Rally Day. And we've been doing that now for six years. Our first fund, I think we raised in 2019 or 2020. Covid's kind of got my timing kind of messed up. But anyway, it's just interesting how the twists and turns in our life lead us to where we are. But the Rally Day thing is kind of starts with another basic principle, which is if the function of the firm is to build like legendary businesses and we work in the smaller end of the market, so there's a lot of building versus managing. And when you look across, there's 4,500 private equity firms, give or take, in this country. I would say 99% of them are running by former investment bankers or consultants or other kind of quant oriented people. And they're trying to teach or otherwise coach CEOs, and they've never done that job.

They have never run anything, right?

And so that's happened because you can't have a private equity fund without capital. And the investor community doesn't quite understand that. It's very difficult to coach someone how to do something if you've never done it yourself. I mean, imagine trying to teach your kids how to ride a bike if you've never ridden a bike or how to swim and you've never swum. It just seems so obvious to us. But what's cool about Rally Day is that all of the managing partners have been not only CEOs, but like founders, and they have stumbled and failed and, you know, like, have a lot of texture and humility. And that really changes the relationship that we have with our leaders. And the culture within our firm is much different because of that kind of leadership style, I guess you could say.

Yeah, absolutely. By the way, you know, you were talking about, isn't it amazing that I fell into this because I was coming into this from my own place of feeling not enough, you know, and how our origins shape us. You know, I was reflecting as you were saying, of course, first of all, we don't choose things that happen to us. Right? That's just where you did. But our experiences shape us. So as a skier, you know, it's okay to fail. And so it's okay to acknowledge that I don't know what the hell I'm doing. How many people would say, oh, I don't know what I'm doing, Let me not tell anybody, let me show up bigger than I am, because they will find out. Right. Second, you know the power of a good coach. And you knew even though you were at the top of the game, without the right coach, you are not going to keep getting better. And so the second, picking up the call and calling somebody and saying, hey, I don't know this, by the way, I'm, I'm not afraid I'm gonna. Not only can you help me and oh, by the way, can you help others and let me actually share with them too, that we're in this together. You know, how many people without that experience would be comfortable doing that? Even if I'm getting coached, I'm not letting anybody else know I have a coach. Otherwise they're gonna like, not take, you know, me seriously.

I've never thought of it that way. And I suppose then the competitive skiing background did serve me in, in that way. The, the, the, the story of finding this coach, by the way, is kind of funny. I was, I had done maybe my first add on acquisition or maybe I was in second add on, I don't know. But it was early days and I was trying to do everything, you know, and doing everything really poorly. And it was like 2 or 3 in the morning. I couldn't sleep because like I had my own money in this thing, you know, our, our performance wasn't doing very well. I felt like the morale was really low. I was at an all time low in terms of my own confidence. And I was watching PBS television. Charlie Rose was doing an interview with Urban Meyer, who was the head coach of Florida at the time or in the process of taking over the Ohio State program. And he had a moment in his life where he had an anxiety attack of such intensity that he passed out. And his wife found him kind of face down in the living room. And it was a combination of stress and fatigue. And he had hit bottom from a well being standpoint, to use some of your words. And he reached out to an executive coach named Tim Kite. And Urban was talking about how transformational it was for him to work with Tim to develop a cultural system that would be more reliable than himself. And that if he had a system to depend on, then he wouldn't have the anxiety associated with having to show up perfect every day for his team. And so there was A dual benefit as he described, where the cultural system enhanced the performance of his athletes, but also helped him show up as a better human because he didn't have this anxiety. And it wasn't just on the field or with his coaching staff, it was with his family. And I was sitting there in my basement at three in the morning saying I, this is perfect. Like I gotta find this dude. So next morning on my way to work, I was on the web and found Tim Kite and there was a phone number and he and his son became my coaches for all of those five years. And so there's more to the failure or sense of insecurity than would otherwise meet the eye. And funny enough, all of that cultural architecture and how to put a system in place to otherwise elevate the performance of the people in the organization we now use at Rally Day universally in all of our companies. And that's our culture module. So it's just interesting, just funny, I guess part of the story.

Yeah, I think it's fascinating. I think that these are the experiences. I think that's why it's such so different. Right. So talk to us a little bit because you have a really interesting process when it comes to leadership development and how you really make sure that the companies that you're partnering with I won't even say just invest in. Right. The companies that you're locking step hands with are able to benefit from this very non traditional but really powerful and needed way of, you know, delivering what most of my mentors now at Michigan Ross call positive deviance.

Say it again.

They call it positive deviance. Right. Deviance always means negative, but it doesn't. Deviance is just different than normal. And you know, these practices can help you be positively deviant time and time again.

I just love that. I will give you attribution, but I will use that probably as soon as today, later today. Here's the deal. So private equity firms, the major KPI or the thing that's on everybody's websites is this thing called Assets under Management aum. And if you're at this, hopefully none of you are, but if you happen to be in Orlando at this conference with 2,000 other private equity dudes, the question that you'll ask and have to answer is what's, what's your aum? You know, it's like a thing. And like we hate those words. First of all, we don't look at it as assets. We, we look at it as people. You know, like people have chosen to let us invest in their companies and so just calling a collection of human beings a collection of assets is absolutely, like, really sad if you really think about it. The word under is also fairly demeaning.

Yep.

You know, we'd like to think that we're under the company supporting them, not over them. Right. And then this word management. Some people tell me I'm wrong here, but I think management is a primitive form of leadership. In other words, it's like managing functional, functionally these assets or whatever. And I think leading is more of a heart work than a mind work. And so, like, all that is just terrible. Language and words matter to us, and so we don't use that expression. But once you make the leap to saying that we're leading people, then it's a matter of, well, how do you lead people to building a better organization? And so in the first six months of all of our investments, we have this thing we call rap. It stands for the Rally Day Accelerator Program. A lot of people think that the word acceleration in this context means we're trying to accelerate growth. But actually, when we built this system, it was to accelerate trust. And the question was, what if we could be as aligned and trusted by the executives of the company we invest in in the first six months as we typically are at year five? How would that change the quality of our conversations and the transparency that, you know, you have to earn? People use this word, transparency all the time, but there's two parts of that. Someone has to be vulnerable, vulnerable enough to share, but they're only going to share as much as they feel trusted, and the safety. The emotional safety of that relationship. So in the first six months, we start with purpose, and we have a wonderful partner in this way. Her name is Haley Rushing. Haley did all the work with Herb Kelleher at Southwest Airlines, building Southwest Airlines from the inside out. Herb hated advertising to this day. That's why employees are used in their advertising. And Herb's philosophy was that if the employees are find meaning in their work, they're going to do things not because they have to, but because they want to. And when they want to do things above and beyond that, the experience that their customers get will be wholly different than, say, one of the big carriers like United Airlines, of course. And Hayley worked with him over 12 years to do that. And she has since done the purpose work for Whole Foods and Airbnb and BMW and Walmart. And I could keep going on and on, but Haley leads us through a stakeholder scan of why does this company exist?

Why does it exist?

Yeah, why? And why do employees work there and what brings meaning to their work? And it ends up becoming a purpose statement for all of the companies where we invest. And then the second module after Haley goes is around strategy, which is kind of table stakes. But I guess the difference here is that whatever strategy we choose is in service to that purpose. The third thing we do is we say, okay, if this is our purpose and this is our chosen strategy, what changes to our culture do we need to make if we're going to execute that strategy? And how specific do we need to get in terms of the behaviors that we expect so that it's more probable that we're going to achieve that strategy? And importantly, if our strategy is to maybe triple in size over a three year period. Do companies usually, do their cultures improve when they get big bigger or do usually they get worse? Ashish, what's the answer?

Mostly it gets worse. You get spotting fire removed.

I think study after study after study. Even if you ask employees, you know, as the company's gotten bigger, has the culture gotten worse or better? And most of the og, like the people who were there early are like, oh yeah, like when we grew, the culture went to shit, you know, and so our standard is that a good culture should get better with size, not worse. And that's absolutely really hard to do. And then we end with a bunch of leadership development. Now there's different kind of leadership development and we're early innings here, but we started in the executive team. That's pretty easy. I mean if you go to Amazon, I think there's like 104,000 books on leadership and lots of that content is directed at the C suite. You know, you think of the typical leadership books, some of which are over your shoulder there. If we could zoom in, most of those, I think sheets are made for the L1s or L2s, whatever. So that was relatively easy. Content to get our arms around the second layer down, which is more for, call it middle management. It is really important and there aren't a lot of books for them. And it's a really important place because that's the connective tissue between, you know, call it vision and reality. They make the trains run. And so we had to build a lot of that content here at our firm and we're still developing it. We have a team here called our architectural team who you know very well and they've been developing that content. But it's stuff like, you know, how to have a one on one, how to give and receive feedback and these things that we think people know how to do. But the thing about the middle layer is typically they are individual contributors that were so good at their jobs that they were promoted to become leaders and not taught how to actually be a leader. Right. So there's a big gap there in terms of the content that's out there available for that layer and the need. And so we've, we've spent a lot of R and D time there. We're only now getting to the front line. And that's where you're going to see my eyes really light up. Because that front line is actually where the vision and the strategy produce an experience for the customer. Like, you just think of, think of a shoe company like, you know, somebody sells those shoes and that's the front line. And that front line is how the company is perceived by the customer. And when you look at that layer, oftentimes they're hourly employees. And if you go to Amazon and you type in leadership books for hourly employees, you're going to see a grand total of 300 books. And so there we had to start from scratch.

Yeah, well, I'll tell you, right, we.

Can talk about that later.

No, no, I think I'll tell you. Look, I mean, this is where I think we are so in sync, right? So I have to have you get over for dinner and you'll find 80% of the books behind me are actually about the middle and front. It's a very different, unique. That is right. You know why? Because they're coming a big chunk, like the top one. That whole thing is from the research at Michigan Ross, the Center for Positive Organization Scholarship, which is Kim Cameron, James Dutton and Bob Quinn, all in their 70s now, but really formed the architecture of how certain cultures out, compete, outperform, are positively deviant because they unlock the human magic.

Ooh, I love that expression. Unlock human magic. That's great.

I mean, there is so much. But again, like, unless you go looking, Ryan, you don't find it. You know, like you, I spent, you know, my first 20 years, the CEO was the client or the CXO and we told people what to do. And then once you shifted that to I want to enable people, I want to help them build the skills. I want them to feel the trust, and I want to give them voice and let them lose. You go from six initiatives to a thousand initiatives that they feel owned, empowered, and they go crush it, Right? But for that, you need the right strategy and you need the right purpose. So couple of things that they're so synced up because I think you are. You really are onto something amazing. And there is quite a bit of research and there's quite a bit of material that, you know, that we've, like, ended up curating. So on your purpose, I love it. And again, Alex, who I was coding, has this line that I love, and I think people need to, because a lot of people think about purpose as the words on the wall. It's not the way you talk about purpose and what you do with your companies. And what Hayley's done is not that. And these are the words that capture and, you know, combine these two worlds, right? They really are performance at. Through well being rather than performance at the cost of well being. And purpose is a big ingredient of well being. It's a big ingredient of flourishing. Here's what he said. If you want to reach the land of profit, follow the road of purpose. If you want to reach the land of profit, follow the road of purpose. And here's why it's important. When you look at purpose in most companies, we studied it at McKinsey, 85% of the senior leaders, the OGs, or maybe the people who are making all the decisions now, many times feel they. 85% feel they find their work meaningful, right? When you ask the front line, 15%. 15% is the number, right? And then you can take the middle. So think about the frozen middle and the. And the bottom. What that means, friends, and this is what's amazing about what you're doing with your companies, right? Bringing this language and kind of getting them to do the work. What that means is that for majority of your employees, all you're getting are their arms and legs. You're not getting their hearts and minds, because this is just a way of survival. I work here so I can live my life. By the way, the reason why there is so much stress, anxiety, lack of meaning, disengagement. Because if you're living, you know, majority of your waking hours doing work that has no relation to your soul, it's not soul work. It's not connected to meaning. Then how can you flourish in. In your life? Because you're languishing for the biggest chunk of the day. You combine that with not teaching people how to have better conflicts, using different points of view to come closer and create something magical. So now I find my work draining and I don't find meaning in it. And, oh, by the way, I'm always looking over my shoulder because somebody is going to fire me. I don't have the trust.

So the words that you mentioned and Then your boss says that you need to smile when you talk to a customer.

Yes, yes. Hey, we're doing psychological. So we want to be psychologically safe, right? So you have all of that. And, oh, by the way, yeah, if a customer complains, I'm fired. And. And I have to put on a good face. But come on. I do. Once a. Once. Come on, Ryan. Once a year, I do manager appreciation week. I appreciate you. Once a week. What's your problem? Right? You should smile 365 days. So I think there are all of these things that are out there. By the way, the story that I love. If you haven't read this book, you should. It's the book written by Hubert Jolie on the Best Buy transformation.

Can you text that to me or email it to me?

I will. It's called the Heart of the Business. And he highlights how that 10 years under his leadership, right. It was the best. And they literally followed the roadmap, the blueprint that you guys are doing. They started with purpose, followed that with strategy, and translated into behaviors. Like, it's literally that book. And he said, look, before I took over with his team. Right. Also a former McKinsey guy, right. Best Buy was about. It was the largest electronic store, Right. They were selling electronics. Their job was to sell electronics. So if you're a blue shirt, your job is. Ryan walks in. Hey, what do you want, Ryan? I'm looking for a stereo.

Yeah.

Let me show you the latest model out there, and I'm going to premiumize you. Right? They did purpose work and they fundamentally redefined the purpose. All of a sudden their job was not to sell electronics, but they reframed. The purpose of Best Buy was to use technology to make a positive difference in the life of people. All of a sudden, you walk in. My job is not to sell you the biggest one, but to really understand what is it that you need and how can I help you use technology to better your lives? Now I'm creating solutions. Now I create Geek Squad. Now I figured out I can actually have a way that seniors can live in their homes and feel comfortable. And 80% of the blue shirts didn't change. But those 10 years with Best Buy were the best 10 years in the history of the company.

That's a great story.

Circuit Circuit went bankrupt, right?

Yeah, they went beautiful. Bye, bye, bye bye.

Right? So it's really, really beautiful. And I love what you're doing because they. The truths you're speaking are things that people don't think about. Nobody trains the middle. Nobody Trains the middle. And if we are able to train the middle to execute better, to lead better the people and truly unleash this human magic that is untapped, what becomes possible is something that no amount of top down, you know, we used to call them tear downs. No amount of a tear down of a business will capture.

You know, I think there's also something in there for us. There's this guy named Bob Chapman. I don't know if you've heard him speak. He runs a really large, industrial, kind of boring business in the Midwest, but that's anything but boring. But Bob's on the podcast thing. You can type his name in there. And he has this anecdote or story about he was with a private equity investor like me at dinner, and he was asking this guy, real famous guy, you know, like, what are you proud of? And because Bob puts off this very spiritual Persona, people oftentimes, like, step into something more than, you know, I manage a trillion dollars of assets. Okay. I mean, the guy was trying to give a good answer and he said, well, I'm really proud, obviously proud of the business I built. But what I'm really proud of is my wife and I set aside a whole bunch of money and we provide scholarships to like 30 underprivileged students and pay for their college education in the state of Florida, I want to say. And Bob, being kind of a disagreeable fellow, said, that's cool, but like, not that cool, actually. And the private equity guy was like, what are you talking about? He's like, how many employees are in your companies? Like, and so the guy's sitting there and he is like, well, we own about 80 companies and average company has about a thousand, maybe 2,000. So he said, I don't know, we probably employ around 150,000 people. And Bob said, well, what if you gave all 150,000 of your employees an opportunity to grow personally and that Your platform gave 150,000 people and their families a better way of living? How would you feel about your job then, Mr. Private Equity Guy? And his point is that this notion of giving back philanthropically after you've been successful or after you've got a million dollars or whatever is like doing a disservice to yourself.

Yeah.

Because when you're in business of at any layer, you've got this opportunity to touch lives. And at a private equity firm, it's like on steroids. And I don't know how many employees we have, but, like, I feel a sense of calling and a summon. Absolutely Pride wholly different than the financial outcomes that we're producing because we're giving permission and content to, you know, employees where they go home and, like, to better people and, like, boy, I can't tell you how good that feels. And it's taken me a while to find meaning in my own work at this spiritual level, but now that I've found doesn't feel like work anymore.

It doesn't. It does not. Right. Especially when you are able to make that. When you're able to make that connection that you made for yourself. You know, I went from a world where I was really good at work life balance. Right, Right. Like, I was really good.

I don't believe that for a second. When you were hinting you were working your ass off, it was like, well, tell me it was work balance.

I will tell you. So my first 20 years, I was, you know, okay, at work, work life balance. It was mostly work. My last five years, I was. I worked 36 hours a week. I worked three days a week, three and a half days. I served one client, and I did the work I wanted. So it was work life balance, really. Then I shifted into a period of what I would call work life integration. Right. Where, you know, the work I did, I loved so much, and I love my life. And so it was all about integrating. You know, Bezos talks about that. There's a lot of people talk about that. This morning, I literally, you know, last two years with Happiness Squad. Today somebody asked me, I was in a meeting. They said, how's work? I said, I don't work. He said, what do you mean? Did you retire? I said, no, I don't work. I just live. My work is an expression of my life. This is it. Right. And I think that's a little bit of what. What you're doing. And, you know, the. The crazy thing, Ryan, is people say, oh, yeah, I wish I had that. That's often what people say, yeah, that's great you found it. Amazing. I don't believe it anyway. But still, that's great you found it. First, I don't believe it. Then, second, that's great you found it. It's not for me or I haven't found it. And this is the crazy part there. We can help every person in our companies, and let me not just say, it's not our obligation, it's our responsibility to help every person who works for us or in our companies find meaning in what they're doing every day. It's just good business anyway. But more importantly, I think it's a way for us to change their experience of life and their experience of growth. And that investment means a lot. It's the reason why another one of my favorite authors and thinkers, you know, Clay Christensen, called business and management the most noblest profession it can be. The noblest professions if you are able to help people grow and give them an experience that they're proud, they leave more energized and are proud about what they are able to achieve and share that with their families versus leaving exhausted with nothing to say, you know.

Well, and I guess that's like, if we go full circle to the private equity industry, which has a very well earned reputation for being really difficult, it's no wonder that the companies owned by private equity firms don't have a lot of well being in them. And it's just because, like, if a CEO feels under fire every day, they're going to treat their executive, his, his or her executive team, you know, a certain way and then the middle layer gets treated a certain way. And you know, it. It's a cliche, but it really does start at the top. And so rally day is never going to change the world of private equity. But we hope that we can produce returns that are so exceptional that more firms like ours adopt these principles and that we have some sort of ripple effect on our industry. And that's why we make all of these innovations that we're talking about open source. I mean, we, we, we spend a lot of time sharing all this content with our competitors and are hopeful that they take these tools and use them. It's our way of elevating our industry. And I hope even by this podcast, for example, that maybe one private equity person listens to this and says, boy, I'd like to maybe do this a little bit differently. So thank you for giving me the opportunity to share this in this way and it's been really fun.

No, Ryan, thank you. And I will tell you, my friend, I am excited about what we do together and what we partner because I truly believe actions at speak way loud. You know what I mean? Like, you are leading in a particular way and the results will follow because what you are doing, I also came to it from a place of spirit. And then my mind, as you know, opened, kicked in and I looked for all the reasons because, look, you and I can shout, but we are not going to convince 90%. So we have to meet them where they are. And hence I found the language and the science and the science is so robust around the fact that if you invest in your people to help them flourish. You outperform. That's why we call. You know, we say we are all about one democratizing flourishing. That what that means is every person on earth frontline to the senior leaders. We should help them integrate this work so that they can flourish. But second, make flourishing your competitive edge. If you really do this way, work this way, most teams, most individuals are at 20, 30% of their potential. 70% of potential of human is lost. And if you can tap that and over you're six years, in 10 years, 15 years, I am convinced your returns are not going to be slightly better than your peers. They're going to be positively deviant and much way higher than the normal private equity returns.

I can't wait to use that in a fundraising conversation. I mean, I'll tell you the conviction that I have about all this stuff, and I would rather lose doing it this way.

Yes.

Than win in any other way like that. That's how I feel about it. And I think a lot of the other my colleagues and partners here at the firm feel the same way. And we're having a great time. Not every day is a happy day, but it can be a joyful day. Just contributing to the lives of other people. And yeah, we're having a blast. So I can't wait to maybe do this in five years and share our positive deviance with you even more.

Absolutely.

By the way, thank you for teaching us. I think we're just starting this relationship with you and, um, it's cool that we've gotten you at a place in your career where you're, you're doing this work. And I don't think you could do it with the rigor or the quality of client had you not had your years at McKinsey. You know, I was looking at your deck yesterday. I was like, man, the quality of this is totally McKinsey, you know, and so you had to go through that as she's to get to where you are. And I can't wait to share our learnings with you. And I can't wait to learn from you and grow our businesses together and do it the right way. So thank you.

Thank you, my friend. Have a lovely day. Look, we can go on for hours and hours, but it is for almost 4:20. It's Friday evening. I want to have you go back to your family. I'm going to go pick up my son. But thank you. I am so grateful that we had a chance to. I'm so grateful that we actually got a chance to come into each other's lives. We've had such parallel lives, but I think we are now walking, you know, almost step by step, hand in hand together. So thank you.

You're only 45 minutes away and I'll look forward to seeing you again. Ashish.

Absolutely. Cheers, my friend.

Cheers. Take care. Bye.

That wraps up another episode of the Happiness Squad podcast. We hope you found the insights actionable to any, enhance your journey towards happiness and fill your life with more joy, health, love and meaning. Please consider leaving us Review and share the podcast with anyone in your professional or personal life who you feel will benefit from some of these very insights. It's a really simple way to extend support and spread positivity. Take care and remember, happiness is a choice that's available to you moment to moment in the here and now. Take care and see you next week.