Navigating the Extraordinary Pace of Change (feat. Warren Rustand)

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Hi, I'm Susan Drum. And welcome to the enlightened Executive where your personal evolution sparks your leadership evolution. Each episode we feature groundbreaking techniques and strategies to help you get the edge in personal and leadership effectiveness. This episode is brought to you by Meritage Leadership. At Meritage, we strengthen leaders and empower teams to achieve high performance. Go to meritageleadership.com to learn more. Today we're looking at how our external environment and the massive changes that impact us are also impacting our own ability to lead. And I'm excited to introduce Warren Rustend. Warren was the former CEO of Providence Service Corporation, a $2.1 billion social services and healthcare company. He has created, led and grown many successful private, public and not for profit entities, including SC Capital Partners, Rural Metro Corporation, and TLC Vision, as well as dozens of other public, private and nonprofit organizations. Warren was selected as the White House Fellow and served as a Special Assistant to the Secretary of Commerce. He led the first ever executive trade mission to the former Soviet Union, and he's also been a Special Assistant to the Vice President of the United States. Welcome, Warren. That is quite an impressive resume, and I cannot wait to hear about all the wisdom that you've accumulated over the years and what we need to be thinking about as we head into this incredibly tumultuous time.

Well, it is a tumultuous time. It's a very difficult time. Thank you for that wonderful introduction. I appreciate that, Susan. As you know, I appreciate what you're doing and how important these kinds of messages are. So thank you very much. I'm not so sure I'll impart any wisdom, but I've got a lot of bumps and bruises along the way from which I've learned some things. Right, right. I think that's the story of leadership and entrepreneurship is the notion that we run into walls, we make mistakes, we fail on occasion, but we keep bouncing back. Right. Because we're resilient and we're strong and we bounce back, taking what we've learned from those difficult times, applying it, and ultimately finding success. And I think that's probably the story of my life. I was born in poverty in a state called Minnesota, near the Canadian border, on an isolated farm. I could be on that farm today, probably enjoying driving tractors and milking cows and doing all the stuff I did as a young man. But because of choices my parents made to move to California to show me another world, to see what's possible, I was able to make some different choices. And so I think each time we get exposed to Something new. We learn and we grow, and that creates more possibilities and opportunities. And I would suggest maybe, Susan, that's what's sort of happening in the environment right now, which is where we've been through some tough times over the last 25 years, if you think about it. HIV, swine flu, SARS. You know, we had the tech meltdown in 2000. We had the global financial crisis 2008, 9 and 10. We think we're coming out of COVID although it's certainly still around. And now we're on the precipice potentially of another global recession. Right. We don't know if that's going to occur. But my suggestion is that all of these events affect how we lead, how our businesses operate and choices and decisions that we make. And so at each juncture, we have the choice to learn, grow, and change. And if we just think about what's going on in the world right now with the war in the Ukraine and issues around the war, we've got issues around the economy in the United States and other countries in the world. We have a global food shortage, we have a global fuel shortage, and we have an issue with distribution out of many countries to the United States. And so as a result of that, we are inclined to make changes and adjustments in different ways. And that's the growth that we see and that's the potential that we see as executives, as entrepreneurs and doing what we do.

Yes, and I like the lens that you took of 25 years because so often we're saying, oh my God, in the last, like two years, there's been so much, three years, there's been so much change. But really, when you zoom back out, we have navigated change in the past. I think maybe what's different now is that the pace of change is occurring faster and faster. And with that, we have to navigate the complexity in ways that we never have in the past. I mean, just look at the rapid changes that are taking place with AI and its impact on business and how that's going to shift. I recently had a team member say, gosh, this is great, but it's sometimes hard to keep up with the pace of change. And I'm like, yeah, and it's going to get even worse. So what are we doing mentally and mindset wise to prepare for that? What do you suggest that leaders, how they think about how to approach that?

It's a great question. I think we live in exponential times. The world is growing exponentially, which means at an ever increasing pace. And change is the relevant Word, because status quo doesn't work on anything anymore. And so everything is changing quite rapidly. Technology. The average shelf life of technology today is probably 58 to 60 days. Right. So things are evolving so fast. So we have to keep pace with that, particularly as leaders of businesses. If we don't, we quickly fall behind. And so what do we do? How do we think about that? Well, it's from everything we read to how we think, to the people with whom we associate, all help shape our mindset at a given point in time. So let's be looking for good sources of information. Let's be talking to good people with good ideas. Let's take time and space to really reflect and think about where we are and where the world's going. And therefore, how do I lead my business or my family or my community in situations where there's doubt and uncertainty and difficulty and challenge? I think it's not as simple as just showing up to work every day. I think as executives, we need to be much more focused on the external world than we ever have been before, because that external world is changing so rapidly. And understanding the forces of change, the trends that are going on in the world today and the people who are driving those trends, the organization. Sometimes it's government through government policy and public policy that affect us. Sometimes it's the competition in our industry, the big players, sometimes it's the small players that have a big impact by creating new technology, creating iconic unicorn companies. So I think there's forces of change and we need to be alert for that. And we need to be a part of that in learning and then driving them in our own business.

Yes. Now let's make that practical. What should a leader be doing? Shift a bit more from the focus to the external and then its impact on us, I want to say in terms of how they lead, but also what does a leader need to do for their internal state of being in order to handle this level of complexity?

Yeah, that's a great question. Again, I think first, Susan, is that we need to be able to address the issue of learning for ourselves. There's an old Zen term called shoshin. And shoshin means to have an open mind and be a beginning learner. That all of us, all the time, no matter how much we think we know and how smart we might be and how expert we might be, we need to be open minded and open and willing to learn new things. The opposite of that is the expert learner, the person who believes they know everything about a particular subject and therefore are closed off to new knowledge and new thinking. And so what we need to be is that Shoshin state of mind. First, be a willing learner, understand that we don't know everything. Second is what are we reading? Where are we getting our information? Right. And we need to really have new sources of information, different sources of information that, yes, it's some social media, yes, it's some traditional media, but there are some other sources around the world that we can get that are objective, reasonable sources that provide data and information that are good for us. Then in our companies, we need to invite outside experts into our companies to speak to our employees, to speak to the people with whom we associate. So they're not just listening to our voice or my voice. They're listening to other voices who have a perspective on the world. And then we need to engage in that broader world in ways that give us a sense of what's happening. If we can do those few small steps, it begins to help us as an evolutionary process for our own leadership and for our own thinking. And there's no good way to get there. There's no easy way. There's no magic bullet, there's no silver bullet. It's hard work. We just got to stay abreast of things that are going on in the world.

Yeah, I think having a growth mindset is going to make all the difference. But even further, maybe looking at the assumptions that you're making about how your business. Because I think everything is going to be called into question. We're on a wild ride right now and it's going to get wilder. One of the exercises I found particularly helpful was just to jot down what assumptions have I been operating from in my business and let me just jot them down. And to your point, let's get some external opinions about what do we think will happen with those assumptions going forward. Is that going to stand? Is there a chance for those assumptions to be disrupted? Right. In terms of how we lead, and I get really specific on that, we think about a process even for producing this podcast. Right. And there's many people involved in it, not just me and you as we are recording here, there's my team that sets up, that does the research to find guests. There's creating the bio that I'm going to read. Right. The, the B roll behind your bio. And then there's all the post production piece, the editing, writing the blog post that goes with it, all the social media clips that we take from each of these. Well, as we're learning and many entrepreneurs are learning, as well around the impact of AI. A lot of that be automated in the back end. I can use, using a program called Descript, I can easily edit this video and I may not need like a full blown video editor to make that happen. I could use a VA to make some very simple edits without a lot of differences. That's going to save me. So there's some cost savings piece to it. But this is just an example of I already put all these people in place and now I've got to rethink how does this process look and how do we change it. And I think that's just in a micro microcosm. There are so many things like this where we can start to evaluate how business can change very rapidly.

I think you make really excellent points. I think one of the things that we miss as leaders is we miss taking the time and creating the space to think deeply about things. We get so caught up in a linear way of getting the widgets out the door, or getting this or that done, or scheduling appointments end to end to end in a linear way all day long. We don't take the time. So what I do on my schedule at 10 o' clock in the morning and 2 o' clock in the afternoon, I close my door, shut down my computer and my cell phone and I spend an hour each time just thinking deeply about the world or about specific subjects or reading about specific subjects. So that I'm spending 10 hours a week looking at vision and strategy. And if you were to ask other executives that you have in your program, if you took a look at their schedules, how much time would they be spending on vision and strategy? Too many people are really spending time on operating the business, not in thinking about the business and what it's going to be. And so that future thinking is really critical for us to keep pace with the world as it's changing. If we fail to do that again, we fall behind really quickly. I know my first company did $1 million in revenue and did $50,000 in profits. I thought I was the wealthiest guy in the United States. I thought that was the greatest thing could ever happen, right? Well, as I grew, I led larger and larger companies, you know, 400 million, 600 million, a billion, 2.1 billion. And so I had to keep growing because of the growing complexity of those very businesses and the world in which they operated. And again, if we fail to do that, then we just miss the opportunity to grow. And lots of executives and entrepreneurs are sitting around thinking, why can't I grow my Business. Why can't I scale my business? And I argue it's because you haven't scaled yourself. You haven't grown yourself. And until you grow yourself, you will not be able to grow your business.

Yeah. It is a deep reflection on how much internal growth we've come to. Our business is an example of that. Now, what was pivotal for you in your journey leading from the smaller companies all the way to the several billion dollar companies? What was the mindset shift and what caused that success? Have you always had this of taking an hour out every day to stop and think about the world and stop operating the business, to think about the vision?

No. It's something I had to learn as well because I was like most people. I was keeping score based on how many appointments I had during the day or how many things I got checked off my tv.

I'm so busy. Look at my calendar, I'm so busy.

Right. I'm so important because I have more to do than anybody else. And that's just a fallacy. You know, you look at Warren Buffett, Warren Buffett may have four or five appointments in a month. Okay. Because he's spending all of his time thinking, reading and studying. And it's one of the reasons why he's so successful. And in fact, he and his relationship with Bill Gates was able to coach and teach Bill Gates how to reduce the urgency of his schedule and to spend more time thinking. And Gates now does that regularly. So I think this notion we can learn from our elders, we can learn from people around who have done it differently. Very important. But as I grew up, I mean, I grew up poor, then we moved to Southern California, then I went to a university, then I got drafted to play professional basketball. You know, then I started companies, and at each point I had to transition or change my mindset. Going to the White House when I was 29 years old and working on things that I'd never dreamed about working on nuclear arms and stuff like that. Right. Just stuff I didn't know or understand. So I had to grow, change, adjust my mindset. So it's how quickly we can learn as each challenge or failure comes our way, how quickly can we learn from that, apply the new knowledge, and then go become more successful? So I think it's an application process. But prior to that is learning.

Yeah. What were some of those mindset shifts that you made along the way? I'd love to hear a few examples of where you got knocked down, how you shifted your thinking and how it served you going forward?

Well, I was leading a couple of small businesses. I'd had an interesting career up to that point in playing, being an all American basketball player and stuff like that. So a friend of mine came along and said, have you heard of the White House Fellows Program? And I said, no. He said, well, here's an application. I filled it out, sent it in, Never expected to hear anything again. I got, you know, a call back later says you're one of 600 semifinalists. I had a great. Didn't expect that. And then I had to go through an interviewing process. Anyway, 11 months later, out of 14,000 applicants, there were 17 of us who were selected as White House Fellows. Well, that's a huge mindset change from leading a small company to going to work for the Vice President, United States, or leading a delegation to the Soviet Union to negotiate trade agreements, and then becoming appointment secretary to the President of the United States. And so I had to appreciate and realize that there's a whole world out there that I'd never been exposed to. And how quickly could I get up to speed? For instance, if I was going to the Soviet Union, I needed to speak some Russian. So I went to the Foreign Language institute in Washington, D.C. learned as much Russian as I could in a three week period of time to be able to open and close meetings and make sure that I was being deferential to our hosts. Those kinds of things, and those are just small things that I had to learn. I had to learn about public policy in a new and different way. Not just how it affected me as a citizen, but how it was created from the White House perspective. How you work with Congress, how you do those kinds of things to get public policy. So those little things that, you know, you get to learn along the way become big things later. Everything I learned in the White House, all the people I associated with there became my friends, and later and subsequently helped me build companies and make deals. And so it became a very interesting thing. But at each point, our mindset changes. There's a big difference between playing college basketball and playing pro basketball. And your mindset has to change. How you think about yourself in that new environment will lead you to success or failure. So that mindset is really critical.

And what was the mindset that you needed to make to then get to the pinnacle of leading a $2.1 billion company? How did you do that?

I think the big thing was appreciating and realizing the level of complexity that increases at various places. Leading a $10 million company is different than leading a hundred million dollar company, which is different than leading a half a billion dollar company, which is yet again different than leading a $2 billion company. And so I think at each to the levels of complexity and the bigness of the scale you're on and the stage you're. You're now on is quite different. And so I think that takes that time and space that I was talking about to step back, really think about where you are, who you are and what you're trying to do, and then go forward with new knowledge to try implement that. And guess what? We're going to make big mistakes along the way. And I've made plenty of them in my life, both personally and professionally. I just have you run into a wall or you do something stupid, or you make a mistake or say something you shouldn't have said. We just have to face that knowing we make mistakes, apologize, ask for forgiveness, whatever's necessary, and then move on again. Right. And I think the great thing about entrepreneurs is we're so resilient, we just bounce back so well. And I love entrepreneurs for that reason. Just the ability to keep going in spite of all odds. But I think if we adjust our mindset, almost everything is possible.

That is absolutely true. I was talking to an advisor who has worked with a lot of tech startups and been very successful. And he said, you know, what separates the tech CEO that's successful from the one that's not? And I said, what? He's like the refusal to give up. And I said, well, what do you mean by that? They keep going with a design or a product that's not working. He goes, no, they don't give up. They iterate, they keep iterating. They keep iterating. So he looks forward in terms of who he's going to be backing. What's the history of the person iterating in their career and their business when he sees that he's going to back a winning horse versus the person that doesn't iterate just keeps, you know, banging their head against a wall.

Right?

If you keep doing what you're doing, you'll keep getting what you're getting. Y but I think our ability to adapt and our quickness of adaptation will make all the difference and will be our not extinction, but our thriving.

Well, there's a great old Chinese story about that where a man was on a journey and he came to a wall. It was too high to climb over, it was too long and wide to go around, and he pushed as hard as he could against the wall, but he couldn't move the wall. But every day, he came back to the wall, and he pushed as hard as he could for as long as he could. And he did that day after day after day. Well, one day he came to the wall and he pushed through the wall. Why? Because he had not only stayed after it and continued after it, but he had grown his muscle capacity, his. His strength capacity. He had grown by pushing against the wall every day until his strength was greater than the weakness of the wall, and he pushed through it. And I think sometimes that's what we do as entrepreneurs. Right. We continue to p hard and finally we have breakthroughs, and it's that ability to adjust and adapt. And when we do that, then we have the opportunity for success.

Yeah. And, you know, the other thing that makes the difference is getting connected to what is the mission that you're really after, because that allows you to withstand all the times and the potential frustration of pushing against the wall, like, what's on the other side of it. That's why I say that vision piece, what's on the other side. And if I keep my attention on that, then I have the resilience to be able to push that down. So I love that story.

Susan, I agree with you. I think there are three great principles of leadership, Right. The first, clarity of vision. Where are we going? The second, certainty of intent. Intentionally acting on that vision every day. And the third is the power of our values. It's modeling the behavior that we think is important for the journey. And if we can do clarity, vision, certainty of intent, and the power of values consistently, we have a chance to be successful leaders.

I love that, and I loved how you explained that. So crystal clear now, thinking about how leaders need to take that step back, as you mentioned, to be successful, and yet change is happening so fast that it feels like we don't have a second to even go to the bathroom. How would you recommend that actually take place?

Yeah, I think we have to tell ourselves that it's one of the most important things that we can be doing is taking the time and the space necessary. And so each of us has to decide, where's that time and space? Where do I find it on my daily calendar or on a weekend calendar? And where do I find the space? Well, for some people, the space is sitting on a mountaintop. For some, it may be sitting on a boat in the middle of a lake. For others, it's taking a long hike. For others, it's sitting in the house where it's quiet with soft music and really meditating and focusing on what is it that I need to be doing. So it's different for each of us, but each of us needs to find the space where we are most creative and can apply the most attention and motivation to where we're going with our lives. And when we do that, we begin to change the formula by which we're going to have success, because we will develop the highest priority thinking process and action process out of that. Susan, It's a little bit like people who create a to do list every day. Yeah, there may be 20 or 25 things on that to do list, but very rarely have I ever seen a to do list where people rank order the things that are on it from the most important to the least important. People simply write it down. And then we began checking, checking things off because we'd love to see that we're doing something. So we begin checking them off. What do we do? We do the easiest things first because we can get more checks that way. And so when we look at the to do list, we've done 20 of the 22 things. But the two most important and hardest to do, we've avoided all day long. We haven't gotten them done. You got to start with what's most important, and you have to do that first. And if that's the only thing you get done in the course of a day, then you've done what's most important. That's called advancement. That's where you make gains. But if all you're doing is the busy work, not the productive work, but the busy work, then you're not going to make the gains you want to. So learning how to be productive instead of busy is a critical piece of leadership.

Yeah. That is a big mindset shift. And how many people have on that list. Take time out for white space thinking. Right. Is what you say is going to be so critical in order to navigate these changes because it doesn't feel as productive, it's amorphous. Right. Oh, I should do some research. I should do some deep thinking where it's almost a quicker hit to be like, okay, I got that email out. Oh, I wrote that report. I did this. Right. It feels in the short term better, but it's not serving us in the long term.

Correct? Correct. Yeah, I think we have to do that long term thinking, and I think we have to prioritize. That's why clarity of vision is really important. Each day when we get out of bed, let's just as soon as we realize our eyes are awake, I practice a routine called 10, 10 and 10. But the first thing I do is I sit on the edge of the bed, dangle my legs over the bed, and for a minute I say, what's my purpose for today? What's my highest level activity for today? And I firmly put that in my mind to be certain that I stay focused on that and that alone until it's done. And when I get that done, the rest of the things I have to do seem a lot easier if I can just get what's most important done first. And it may take me all day to get it done. It may be taking you to two or three days to get it done right. But as long as I'm working on what's most important, the chances of my success are greatly increased and greatly enhanced.

Mm. And I like that. I don't put my feet on the floor till I get clarity on that. It's almost like I can't start my day and even get out of bed until I'm clear what the purpose is. It's a very good connector to your physical body of what needs to happen before you step up. What else is part of your morning routine that makes the difference?

Yeah. So it takes 31 minutes. The first minute is deciding my purpose. Then I take 10 minutes for gratefulness. There's so many things that we need to be grateful for, right? Our families, our homes, our spouses, our partners, you know, our businesses, the flowers, the sunshine, whatever it is. And so 10 minutes for gratefulness, 10 minutes for inspirational reading. So I have some books around where you can turn to any page, and you'll be inspired by what's on that page, and then 10 minutes of journaling. So now I'm 31 minutes into my day. Where's my mind? Well, my mind's on fire. It's all been positive, nothing negative. I haven't turned on a tv, read a newspaper, brushed my teeth, gone to the bathroom, walk the dog. None of those things prepare you for success. Not one of them. So why would we do them first?

Probably not even checking your email either, which is never.

Never. Well, you got about 87% of what's in newspapers is negative, 73% of what's on TV is negative, and 52% of what you get on your cell phone is negative. Why would you ingest anything negative when you're trying to focus on success? It's a little bit when I, as an athlete, right in the locker room before the game, you're sitting there and what are you thinking about? We're Thinking about winning. Right. We don't sit around and tell each other, boy, we're going to get killed today. We can't beat these guys. They're really good. Well, that's what all that social media and traditional media tells you, tells you about the bad stuff. There's no reason to put that in your mind. Put only positive, uplifting, enthusiastic information in your mind. And then you change the day. You change everything about the day, and.

You'Re coming from that perspective. Then you see new opportunities. And it doesn't mean you don't want to research what's going on in the world. We just talked about that. But I think starting your day is really important so that you can handle maybe some of the bad news that's out there in the world with a different frame of mind to see opportunities for change.

Yeah, well, and I think a positive mindset is just where we need to be. You know, I think we all know that all the studies show that people with positive mindsets tend to achieve more than those with negative mindsets. So I think we have to put ourselves in that place.

Yeah, absolutely. Well, I would really encourage listeners to think about your morning routine either take what Warren suggested, create your own. But how much time are you taking before you pick up that phone and getting yourself set to be the most productive that you can? So thank you so much for sharing your wisdom, Warren. This was really, really helpful.

Well, Susan, thank you for allowing me to be your guest. You're doing a great job with this podcast. You're helping so many entrepreneurs and others who are trying to do the best we can to make the world a better place. So thank you very much. I appreciate it.

Well, thank you. And, oh, I wanted to mention one other thing. What I've witnessed with you, Warren, is so impressive of the way that you've worked with women entrepreneurs to forward their aspirations and breakthrough ceilings. And I just want to commend you and express my gratitude for your commitment for women like me in the world.

Thank you very much. You're doing a great job. Appreciate it.

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