#266: Richard Fain, Former CEO of Royal Caribbean Group – Push past comfortable

24:03David Novak:And doing it right, which was a big part of your culture. If you're going to do something, do it right. And that's a great story that you could tell. You know, you helped pioneer the the megaship era, at a time when a lot of people thought it was crazy to build ships as big as you built them. What did that teach you about taking risks? Just that whole process of trying to reinvent the size of what you offer. You know, that was a key learning for me. And a key part of our culture is taking risks. You can't innovate without taking risks. Now, you can do a lot to mitigate those risks by studying it, by trying things.

24:45But in the end, there just has to be a confidence that you know enough about your customers, that your customers are giving you enough feedback that you can feel good about this. These were, in fact, bet your company kinds of decisions. But what we had seen, and one of the quotes that I like to use when we talked internally and our people like to use was attributed to Henry Ford. I don't know if he actually said it, but I still like the quote, so I'll use it. And it was, if I asked people what they wanted, they would have said they wanted a faster horse. And so you really have to say, let's not just ask people what they want, but what are they ultimately trying to do?

25:33And what we saw was that people wanted a good vacation. They wanted time with their families. They wanted something that different people could do. And so it was a number of these innovations that we did, particularly the size. The real thing we saw was that people wanted choice. And the tradition in the industry was, let's give everybody what they want. And it turns out that not everybody wants the same thing. So if you build a ship where everything satisfies everybody, it's a smaller ship because you don't have to have so much choice. But if you build a ship where this satisfies this category of guests, this satisfy your families, and this satisfies somebody who just wants to read, and this satisfies somebody else, that we felt confident would attract.

26:24And we've been proven very right. The ships, nobody ever imagined ships of the scale that we're looking at today.

26:32David Novak:So you build this big, your first big mega ship, right? And you say it's a bet your company kind of decision. You know, what do you have inside of you, Richard, that makes you go for it like that? I mean, you know, what can leaders learn from just how you build your own conviction on a big idea? You know, people think about it as the inspiration, it's the confidence. No, it's the people. It's the people, it's the people, it's the people. And in this case, the people were two sets of people. One were the people within the company who studied this and studied this and really felt confident about it.

27:14And the other was some of my mentors, the board of directors, who said, yes, we also believe this. And so we had alignment. We all saw this the same way. And we all said, we actually have nothing to lose because if we continued the path we were, we would remain a niche industry that was sort of incidentally interesting to a few specialist magazines. But if we were right about this, this was something that would become mainstream America, mainstream Europe. This would be something that everybody would enjoy. And so it was a risk, but it was a necessary risk because either way, you were not going to do well.

28:02You were not going to do well as a niche player. And if this failed, you wouldn't do well. But this was really the only way that you could become a meaningful competitor in the vacation business. And of course, as you know, it's been very successful.

28:16David Novak:Yeah, absolutely. But when you think of visionaries, visionaries often, like yourself, you're out there before other people many times can get there. How do you bring people with you so that they can see what you see and see the possibilities that the people that helped you develop this idea had and the board supported? How do you bring people? What's the key to bringing people along so that everybody says, yeah, we really need to build this megaship? Or is that something you even try to do? You do need to bring everybody along, but everybody needs to bring you along. And it really is a symbiotic relationship.

28:58ship. And we pondered this. We really focused on it. And also, when we did things, we learned from them. So the first megaship was 72 ,000 tons. That at the time was an unheard of scale of ship. But today, our newest ship is 258 ,000 tons. It's bigger than two aircraft carriers. There will be 10 ,000 people on board this one ship. So it's quite a change from the early days. But we didn't get there in one big step. It was a series of steps, each of which proved the previous one and gave us confidence to go to the next one. I'm actually surprised more others didn't look at what we had done and said, oh, that worked.

29:48But I think how do we get the confidence to do it? We talked about it. We had huge discussions and we ran scared. I actually think I'm going to mention that. At every point we were terrified. And so we overcompensated by studying it more. So we would look at something and say, wow, that's terrific. But is it good enough? It's good. But is it good enough? Is it UFP to come back to your earlier comment? uh and so and that and by the way it is interesting being able to say is that ufb that helps galvanize people and gets them to say well i better check this so it was that fear factor that actually drove us to be over cautious i always love learning from great leaders and

30:41David Novak:going to companies and picking up something i guarantee you if i would have heard ufb i guarantee we would have been using that all over Yum Brands and Taco Bell and KFC and Pizza. I love it. And, you know, I mentioned at the top that, you know, you've written this book about wows and it's called Delivering the Wow. You know, take me back to the moment that that phrase was born in your mind and why it became a rallying cry for your company. Actually, the evolution of it was rather prosaic. we wanted uh we had decided that we were going to give a series i i do believe in the power of words i do believe in the power of symbolism so having words having this project names etc and we really wanted to have a coherent set of guidelines and thought processes for our crew uh and we decided we were going to call it gold anchor standards.

31:37And we had a gold being an acronym. And we had a G, we had an O, we had an L, but we couldn't come up with the D. And we needed a D if we were going to have gold. So we're sitting there and we're arguing and discussing, can you come up with a D? And nobody's really making much progress. And then all of a sudden, one of the people in the room said, what about deliver the wow? And we all just kind of looked at each other and said, my God, that's just what we do. That's exactly what we do. And it's so descriptive. It's one of those phrases that everybody knows what it means, but nobody can define it.

32:21And it is that indefinable je ne sais quoi that just brings you to a level of excellence in performance. and it's delivering the wow. And it's not, it's the crew member that goes above and beyond, but it's the accountant that really comes up with a new way of doing things. It's the revenue manager that works on things. And so that name, it wasn't that we were going to do it. It's what we did, but it described it well.

32:50David Novak:I love it. And, you know, you said it already a few times. It's a people, it's a people, it's a people. And that's the people-driven culture that you drove across your over 100 ,000 employees around the world. And I know, David, I do have to say, I know that I'm speaking to the choir here because you are famous for that approach. Well, I think you put me to shame, to be honest with you. But I have to tell you, you know, when you do that, you know, it's a challenge, you know, to spread that around the globe, you know, with so many diverse people. You know, what do you think was your key in being able to not just talk it, but really make it happen?

33:33Well, I think it's a challenge. It's a constant challenge. And it's acknowledging that it is a challenge and you'll never get it right. You'll never be perfect at this. I mean, that is key. but it's something that you understand is essential to your success. So you keep working at it. And you keep this concept of continuous improvement. I'm always going to be better and I'm going to be better on the culture. But it's also trying to get everybody to make sure that everybody understands where you're going. What is your North Star? And it really needs to be tangible. Everybody talks about having a long-term vision.

34:11Everybody wants to be called a visionary. but it's not just some vague vision that this is going to be wonderful and everything's going to be sugar plums. It's very specific and very specific tangible steps to do that. And so the ice skating rink, which we talked about earlier, was a good example. You demonstrate by example. It isn't just words. We were consistent at it. And when people did come up with new ideas, we didn't just poo-poo them.

34:47David Novak:Absolutely. And, you know, you've mentioned earlier that you're passionate about what you do. And it's obvious. It comes through. And you've talked many times just about how you guys studied things over and over again, just to make sure, you know, that if you were terrified by an idea, you just studied it until you could move forward on it. How do you balance that often conflicting thought of emotion, you know, being emotional about what you want to do, and also then being database and fact-based? How do you balance that? Balance is a very important term here, and I'm glad you raised that because you also have to worry that you can paralysis by analysis.

35:31So you can overthink things. But you really have to be a little bit obsessive. You have to think about that. I'll just give you one example of what I now view as one of my best ideas was when a group came and we were trying to decide what to do with the space. And they said, let's build a rock climbing wall there. It was one of the dumbest ideas I had ever heard of. And I told them so. And what I didn't tell them was that I had actually, I went, I want to try out the idea. I went to a gym and tried it and I proved to my satisfaction that it was a really dumb thing to do. I mean, it was awful and I got scraped and I fell and it was just terrible.

36:17And so I said, you know, that's an awful idea. Go back and come back with the better one and give me three options. And they came back and they said, well, giving you the three options you asked for. but we're reopening the first one because it really is a good idea and you should accept it and I eventually did I still didn't think it was a particularly good idea but it was the best of the four and when we brought the ships out with the rock climbing wall it was an unbelievable success this stupid wall was all people could talk about and it became such a good idea that we decided to retrofit it on all of our ships.

36:57And I now say it's one of my best ideas.

37:02But they were persistent at it. And it isn't just analysis. They think about it. They think about it in the shower. They think about it on their way home. And they care. It's their caring that makes it right.

37:15David Novak:You know, tell me a story that captures what you call your rule of thirds in action. It's interesting. Thank you for raising that because the rule of thirds actually proved to be quite good. So Royal Caribbean started to get a reputation in the industry for innovation, deservedly so. It had come out with some fantastic new ideas. But what started to happen was everybody started to say, well, we're going to revolutionize everything. You don't want to revolutionize everything. A lot of what we did was terrific and should continue to be terrific. So what we said was we were going to divide the ships, every new ship and every new project into three categories, traditional, evolutionary and revolutionary.

37:59One third, one third, one third. So when we look at the ship and, you know, part of the process is you look at every idea on the ship, but then you have to go back and look at it as a cohesive whole. and so you don't want a cohesive new ship that is all revolutionary so what we said was what are we going to do that what do we have that people really love and let's give them that and make sure that we can add other stuff but what they love they're going to get and then we take other stuff that they really love and we're going to make it just a little bit better a little evolutionary and then we're going to throw in some wacko ideas.

38:42The ice skating rink, the surf simulator, the skydiving simulator, the pearl, this amazing circle, the sphere in the middle of the ship, the rural promenade. So we're going to try these things. And if they don't work, there's no harm done because two-thirds of the ship is what they already loved.

39:05David Novak:That makes so much sense. So what a great way to innovate and give your people the freedom to go after it, you know. But then, you know, the world basically stopped for you like almost no other industry when COVID hit. I mean, literally, your revenues dropped to zero seemingly overnight. What did that experience teach you about leading through a crisis? First of all, it wasn't seemingly overnight. It was overnight. It was March 13th of 2020. and it was one day and one event and all of a sudden revenues ceased. Something we had never, you know, we do a lot of analysis of bad times and downside risk.

39:46The idea of zero revenue had never crossed our thought process. So we're faced with running a company on zero revenue. It was traumatic. But again, we fell back on what had worked for us. What are we trying to accomplish? What's our long-term goal here? We had long discussions about it. And there were those who said, well, our goal is to survive this. When we sat around and looked at it, we said, that's a terrible goal. if all we do to survive what are we we need to come out of this strong and it will come out it will we don't know how long it'll last we don't know how terrible it'll be but it will end and if all we do is focus on the short term when we come out of this we will be in trouble so our mantra was our objective here is to come out of this strong and everything we do what we do with our employees, what we do with our ships.

40:48So for example, one of the questions on a ship is, it's very common, if you're not using a ship, you lay it up. You simply park it somewhere, leave a couple of people on board to make sure nothing happens and go away. And then come back. And when you come back, your ship has deteriorated because the worst thing for a ship is to just lay idle. So we said, no, we're not going to go into standard cold layup. We're going to go into warm layup. We're going to keep 100, 120 people on every ship just to keep operating the ship. They're going to keep as though there are people on board. And so that when we come out, that ship is in great shape.

41:30We won't have problems that things are breaking down because they've been idle for two years. What we do with our crew, how we help them, our relationships with our travel advisors who are key to our success. um so uh and a big one as as i think you know was the financing um good thing i had a financial background but the temptation was issue equity so that you just have some cash but issuing equity at a low value wasn't going to give us a lot of cash and when we came out it would seriously undermine our profitability. So we took the harder tack of going after more financing, and we were able to raise it because, again, we had had such great relationships with our bankers, and they trusted us.

42:24And so our mantra during the thing was, come out of this strong. And fortunately, we did.

42:30David Novak:You know, the other thing that I love that you did is you didn't say you wanted to recover, you said you used the word restart. You know, there you go. You're going to restart the business. And what did you mean by that exactly? Literally, the business was closed. We weren't operating. I guess you're right about that. Got to start it back up again. Got to start it back up. And we need to bring tens of thousands of crew members. You know, we now have 105 ,000 employees around the world. We needed to bring them back, in some case, retrain. We also needed to provide some help during the period that everybody was suffering.

43:15So it was a restart. And I have to say the restart was one of the more emotional days of my life. We were the first cruise ship and the first cruise line to start up back in the United States in 2021. The first ship to start from an American port was Celebrity Edge. I went to the ship the day before. All the crew were now back. And I walked on the gangway and I expected to sort of meet everybody in the central plaza. And you walk in the crew gangway and then there's an elevator lobby about 30, 40 feet ahead of you. It took me an hour and a half to go from the crew gangway to the elevator lobby.

44:07An hour and a half. Every person, it was just so emotional for them and for us and for me. There wasn't a dry eye there. We probably took eight million selfies. And I heard, and I also played back. I told my stories and I heard their stories. And it was a remarkable time. And the greeting was, we're back. And one person said to me, you know, Richard, actually he said, Mr. Richard, you know, Mr. Richard, when we start operating tomorrow, these people are going to have the best crews in their lives. and that summarized their dedication, their passion. We knew they were going to deliver the wow. It was such an emotional time to be back, to restart, to use your word.

45:08David Novak:You know, that was such a, obviously a high touch moment. And here we are in this big technology boom now where AI is everything that everybody is talking about. How do you see AI impacting Royal Caribbean? You know, I think AI infects every business everywhere. It allows us, and it has blessings and curses. But one of the things it allows us to do is to be more responsive, to understand more about what people want. It allows us to be more efficient of what we're doing and the way we're providing it. It allows us to imagine things that we never would have thought of before. So it's really going to be transformational.

45:56And I know the company is focused on that heavily. And I think we'll all see the impact along with some of the dangers. And I think we have to be careful that we are balancing the word you used earlier, the dangers, the risks with the obvious rewards.

46:17David Novak:What do you see as the biggest danger? Well, I mean, I think it's seductive. Again, I think we learn by thinking things through, by obsessing about them. And so whereas before we would take weeks to think something through, now we tend to put it into AI and get an answer in 72 seconds. But we've lost that personal, in that case, we've lost the personal input. And so does the person lose that hands-on touch, which makes it so special? I don't know. We don't know yet. We're still in such an early day of AI. Right now, we're realizing the benefits, but I think we do need to be careful. Most people are realizing the benefits on the productivity side.

47:11David Novak:Do you see AI really driving your revenue? It does. It clearly helps us understand who's out there. It's clearly from a marketing point of view. It's also, as you say, productivity. It makes us more efficient. It allows us to try out new ideas. You know, if you have an idea, you can ask AI to draw it for you. So there's a lot of advantages that will actually help us make the experience better. We're using AI. So one of the things that we started a while ago is what we call win on waste. And it's a lot of food that gets wasted. We bring out the food. It's not used. And we have to throw it away.

47:56We can't reuse food. for health reasons. So there's a lot of waste there. AI has already been very helpful in helping us refine that, how to manage our food operations better so that there's less of that. So there's some real value there.

48:14David Novak:What advice can you give other leaders on how to get up to speed on AI and driving a new force like that, a new force of technology and making it a success in your company? I actually think it's a point that to me is very important and that it is intentionality. You really, I hear so many people say, well, we're still experimenting with it. We're still trying to understand it. We're still learning. It's too late for that. We have to be using it and we have to say we are going to use it because only by using it do you truly understand it. And it's a little bit like we've done with our ships. Only by talking with our guests, only by talking with our crew member do we understand.

49:03And you have to do that with intentionality. It isn't just osmosis. And the same thing with something new like AI. You really have to say, this is going to be an important part of who we are and how we operate. And so you have to really say, I'm going to go at this clearly and with intentionality that I'm going to accomplish these goals, not just let's try and see what happens.

49:31David Novak:You know, looking back, Richard, you know, what do you think is the biggest leadership lesson you wish that you would have learned earlier? I think probably the biggest lesson for me was don't look back. there's no forward progress without screwing up and and I had my share of mistakes and I tried to be as open as anybody can be in the book it's a little hard to be that self-aware but I did try and I think one of the lessons I learned was if you spend time obsessing about your mistakes you won't, you'll become so risk averse that you won't do the things that are necessary to make you successful.

50:23So I think if I had one piece of advice to my earlier self, it was don't look back, only look forward.

50:30David Novak:I love it. You know, this has been so much fun, and I want to have some more with my lightning round of questions. So are you ready for this? All right, I'll go for it. The three words that best describe you? Passionate, loving, insatiable, I guess. If you could be one person for a day besides yourself, who would it be? Colleen Fane, my wife. Your biggest pet peeve? Jumping to conclusions. Who would play you in a movie? Ben Affleck. Okay. The most breathtaking view you've ever had from the deck of a ship? Was definitely from the blimp that nobody has ever had such a view. It was breathtaking. Looking at the coastline, looking at the ship, just amazing.

51:14What's the most expensive bottle of champagne you've ever ordered? That's easy. We had to have a special bottle made called a Sovereign. And we were building the Sovereign of the Seas. It was the biggest cruise ship ever built. Tattinger offered to give us first a Jeroboam and then a Balthazar and then a Methuselah and then a Nebuchadnezzar. And we said they're all too small. And so they made a special bottle of wine that holds sort of this high and holds the equivalent of 25 bottles of champagne. It's almost impossible to lift up.

51:52David Novak:Bagpipes at company events. Where'd the idea come from? I love bagpipes. That's, you know, that's one of the few things I just get to do because I love it. What's a day in the life of a CEO aboard a cruise ship on a workday, not a vacation? Well, it's never a vacation for me on a workday. And I have to say it is thrilling. I see the people. I get to be with them. I get to hug them. I get a lot of requests for selfies. And I am I am blessed every time and I feel complimented every time. It's a wonderful experience. And people tell me their stories. And when you hear these stories, you just have to admire these people so much.

52:43What's the one thing you do just for you? I have a really comfortable, easy chair and I sit in it and I read. And I read trash and I love it.

52:53David Novak:Besides your family and your friends, what's your most prized possession? And maybe that share. Well, that's an interesting one. So from the very first ship that I was involved in, I asked them to, when we had the naming ceremony and we broke the bottle of champagne against the side, I asked them to save the bottle. And then I, and I didn't know what I would do with it. I just asked them to save it. And I've asked them to save every one of the ships we've named since then. and I've just now been working on an art piece that uses all those scraps. But for 35 years, I just kept the bottles without knowing what I would do with them.

53:36And now I'm making use of them and I'm loving it.

53:39David Novak:I love that. You know, if I turn the radio on in your car, what would I hear? Golden oldies. What's something about you few people would know? Oh, I'm not going to tell you that. But I think people know I'm passionate. Maybe people don't realize just how lucky I've been in my family life, in my career. Nobody gets to be as lucky as I've been. And I thank my lucky stars every day. What's one of your daily rituals, something that you never miss? Well, now I do Wordle. There you go. There you go. We're out of the lightning round, Richard. But I love the fact that you've been collecting these bottles.

54:25David Novak:Talk a little bit about the bottle tradition that you have for ships. Well, it's actually a tradition of the shipping business for literally thousands of years. And to have a woman of some accomplishment give the ship her blessing and break a bottle of champagne. The French have been good about getting champagne into the act. And so it's a tradition to break this bottle of champagne. We've had great godmothers. In fact, more recently, we had a godfather with Messi. We've had President Carter's wife, Rosalind Carter. We've had Malala was a godmother. We've had such wonderful— Whoopi Goldberg was a terrific godmother, one of our funniest and most gracious.

55:09We just had so many wonderful people do it. And it's just an honor. It's just a way of saying thank you to them, but also imbue the ship, hopefully, with some of their expertise and their successes. Mariners are a superstitious lot, and having the godmother give her blessing to the ship and rub off some of her expertise and her success is always good, and we've been very proud to carry on this tradition.

55:41David Novak:You know, you've mentioned the fact that you feel lucky, that you feel blessed. You know, how do you feel about just the privilege of being a leader? It is such a privilege. And people focus on the fact that I'm leading such a large organization. I've had just as much of a thrill in some of the smaller organizations that I've been involved in. I just get such personal satisfaction, such personal feeling of being blessed to be involved in almost anything that's successful. And so while most people focus on my career at Royal Caribbean, I think I and I think my family would say I get just as much satisfaction and pride from some of the smaller things that I've been involved in.

56:33David Novak:You know, you mentioned, you know, people taking selfies with you and, you know, everybody wanting to shake your hand, that magic moment day when you restarted after COVID. There's so much adulation that you get as a leader, you know, and being that person. How do you handle it and still stay grounded? Well, I think part of the problem is that it's a little bit frustrating because you don't always feel that I've earned it. And people are very gracious and people have been just incredibly kind to me over the time. But I am self-conscious of the fact that I happen to be in the right place at the right time.

57:23I've been blessed by being surrounded by imaginative and creative and hardworking and thoughtful people. And so I actually, I guess part of it is I feel overwhelmed by it. And I feel that I have to work a little harder to try and earn at least part of it.

57:46David Novak:What do you see, Richard, as your unfinished business now? Watching and applauding my successor, Jason Liberty, has taken the reins. This is my pride and joy. Jason and I have worked together for 20 years. It's more than a friendship. It is, in fact, a love affair. But to see him thrive and take the company to yet higher levels, to see him continuing the concept of continuous improvement and continually making it better, I couldn't ask for anything better. And I see the same thing, by the way, with my children. Like my children, Jason keeps making mistakes, but they're his mistakes, just as my children's mistakes are their mistakes.

58:30Fortunately, they get it more right than wrong. And that makes Jason and that makes my children really extraordinary.

58:39David Novak:Last question here. What's one piece of advice you'd give to anyone who wants to be a better leader? I wish I could narrow it down to one piece of advice, but love what you do or don't do it. Perfect. Perfect. Richard, you obviously love what you do and you are doing it and you're doing it. unlike anybody who's ever done it in your business. And you're a great example of a leader who cares about people and knows that's the magic that you gotta have to do big things. So thank you so much for being on this show. David, thank you. You've been an inspiration. Your books and your own career are inspiration to a lot of potential leaders.

59:22So thank you for that. And thank you for doing this interview with me.

59:30David Novak:David, I have to admit that I have never been one to think that I was a cruise girl. Like that's never just, that's not really been my vibe. However, this interview with Richard Fane has changed my heart in a significant way. And I'm ready to book a Royal Caribbean cruise. Oh man, it sounds like you really are going to rough it. I loved this episode. Richard was at Royal Caribbean for over 30 years. And I love how freaking passionate he is about the cruise business. I mean, for a finance guy, this man's got a ton of passion and excitement around what it is he gets to do. Well, I mean, his roots were in finance, but he quickly became, you know, a people leader.

1:00:12David Novak:I mean, everything that he talked about is how people do this and people do that. And they wouldn't have been able to do this if it hadn't been for the people. And, you know, he's a culture driver and a big believer that you can only make big things happen if you can take people with you. And he's got a lot of people who are really fired up to get big things done at Royal Caribbean. Well, David, we're going to debrief this conversation and give the listeners a couple of tangible takeaways from this conversation that they can apply to their leadership, to their life and to their work. And I'm so excited to talk about this first theme because it's a part of the episode that's going to stick with me for a very long time.

1:00:52David Novak:And it is Richard's phrase, UFB.

1:01:01David Novak:Un-effing believable. I love that because, you know, I love the fact that, you know, internally they said, is this UFB? You know, un-freaking-believable. I mean, that's the use of words. You know, words have such power. You know, if you can pick the right words, you know, they stand out, they break through the clutter, and it basically says, this is what we do. And to be able to say, is it UFB or not? It's so fun. I love it. It's such a great criteria to have for how you look at ideas and processes or whatever you're working on. Is it UFB? And I think that that's so powerful. Because I always talk about in culture, you know, people a lot of times they'll come up with these words like, we want to be transformational.

1:01:59David Novak:It's like, oh, you know. Well, I mean, that's so boring. I mean, transformational. So, yeah, it's a nice thing to be, but does that really stand out as language? UFB, that stands out. Stands out. You know, and I think when you're thinking about the cultural behaviors that you want to drive in your company, the more you can put it in language that breaks through the clutter, the better. You know, for example, when I was at YUM, we wanted to be customer focused. Now, what company in the world doesn't want to be customer focused? I mean, that was boring as hell, okay? And then I said, you know what?

1:02:35David Novak:We're not being customer-focused enough. So I changed the cultural value to be we wanted to be customer maniacs. People said, you want me to be a maniac around customers? I said, yeah, I do. Okay? But the word made people think, well, how can you be a customer maniac? You know, how can you go above and beyond? What's really – how do you show your mania for making customers happy? But it was much more powerful than just customer-focused. So I think people really need to think very hard about what behaviors they want to drive in their culture and look for very powerful language that drives it home.

1:03:10David Novak:And UFB may be one of the best examples I've ever heard. It's so good. It's so good. I feel like this is an exercise that I did at a company I used to work for, but we looked at our core values and cultural values and circled all of the kind of descriptor words of what they were. So similar to what you did, customer focused, excellent quality, those sorts of things. And we asked ourselves, do these words ignite action? And the answer was no. And so that exercise of going through and saying, okay, this is the value we want, but people are just going to forget about being customer focused or having excellent quality, but they won't forget about being maniacal about satisfying customers.

1:03:54David Novak:And you just can't underestimate the power of words. Or let's just say one word. You know, I remember RAID. I think they still have this. You know, RAID had this thing. You know, what their functional purpose was is they kill bugs. They came up with this advertising line was, RAID kills bugs dead. Well, that one extra word, RAID kills bugs dead, That's like, that means those bugs, they get killed. They get dead. But the power of that one word, no pun intended, is extremely powerful. And so I just think leaders need to think about language and the words they use to break through the clutter and really make sure people understand that they're serious about this behavior that they're trying to drive.

1:04:42David Novak:It's just, it's so memorable, too. It's like no one's going to forget. Un-effing believable. Yeah. And by the way, the other thing I love about that, it took a little courage. You know, I mean, to say UFB, you know, that takes courage. But it takes courage to stand out. It takes courage to break through the clutter. It takes courage to break through the rules. It takes courage to get out of your comfort zone. And that's what I loved about UFB. Being a risk taker and being bold and courageous is something that clearly marked Richard's tenure at Royal Caribbean Cruises. I mean, he put a rock climbing wall in most of his ships.

1:05:15David Novak:He doubled the size of the largest cruise ship ever. And you ask him in the episode, you know, how do you get the conviction to go after these risks when, you know, if it doesn't work, you're kind of screwed. And he said, David, that was easy for me. It was the people. I had belief in my people. And I knew that they were going to be the ones to execute it well and bring that vision to life. So I knew we weren't going to lose and I wouldn't get embarrassed. What else can leaders do to build that conviction within themselves when they know that they're about to make a pretty risky decision for their business?

1:05:48David Novak:Well, I think you got to understand what the risk is. You know, I think in this particular case, one of the things that he talked about was the rock climbing wall. He didn't even know what a rock climbing wall was, but then he went and he observed it and he saw the fun that people had doing it. And he listened to his people and he thought it was crazy idea at the beginning. And, you know, he got a little little bit more knowledge and they kept pushing back. And then finally he did it. And it was one of the best decisions that he made. But he also knows that, you know, if it doesn't work, you can take it down.

1:06:28David Novak:You know, but when you're trying to really delight your customers, create an experience that you can't find anywhere else, you're not going to do that if you just keep doing the same old, same old. So you got to constantly look for ways to change the game. And that's something that he took a lot of delight in doing. UFB, UFB. Pretty UFB. I love how he also doesn't seem like the type of person to take those risks in isolation. He galvanizes his team and really understands how to take people with him and get them fired up to conquer what might be seen as a risky move. Yeah. Well, I think what's really interesting about him, his approach is almost like his people are taking him with them.

1:07:15David Novak:And he says that in the episode too. They took me with them. Yeah. And I love that. And it's like, we just did the conversation with the Bumble CEO and she basically said the same thing. How do you take people with you on AI and different things? And she goes, oh, they're taking me with them. They're ahead of me. But I think it's giving people respect, giving people respect and acknowledgement that, hey, you value what they have to say and that they really count. And, you know, you truly listen to them and recognizing them for showing you things that maybe you wouldn't be able to figure out on your own.

1:07:57David Novak:That's really powerful. I always loved, you know, recognizing people who saved me from my cells, you know, who gave me ideas that I would have never had or showed me something that, you know, there's no way I would have possibly done if it hadn't been for them. And I would scream it from the rooftop. I would tell everybody that I was going down this path until Kula, you know, told me to do this or Tim told me to do that, you know. And, you know, that says, hey, look, you want people's opinions. You value it. And, you know, you're going to change if they got a better idea. And just as importantly, if they have a great idea, you'll recognize and you'll hop all over it.

1:08:37David Novak:David, last point that I want to debrief with you. And I think this is so important. In the episode, you asked Richard, you know, what makes his culture so special? Because he, as we have mentioned in this debrief, is so super committed to his people and just has an excellent, amazing UFB culture at Royal Caribbean. But he says, David, our culture is so amazing because what we do is we talk and we have real arguments that are healthy when things are at odds and when people are at odds. And I just love that he calls that out because a lot of companies, you know, say that they encourage healthy conflict.

1:09:14David Novak:But a lot of times it's usually only the person in charge who is going after other people. A lot of folks might not feel safe to engage in healthy conflict at work. So from your experience, I'm just curious what you would say to leaders who might be having a hard time encouraging healthy debate and healthy conflict in their business. Well, I think you tell everybody that you think that debate is important. That debate is all about collaboration. Collaboration is one of the most important behaviors you can build in any company today. There's no computer that's ever going to take the power of people collaborating together.

1:09:50David Novak:And so when you collaborate well, you always have healthy debate and you get to a healthier decision. We used to coin that phrase at Yum. It's healthy debate, healthy decision. And, you know, I think that it's also fundamental to what I think is a law of leadership, which is no involvement, no commitment. You want to have people feel free that they can speak out and give you their perspective and share their ideas. And when you're able to do that, then you can have commitment to whatever the decision is. But if you're like in the total dark about the decision and why it's being made and you find out about it later when it's an area that maybe you have the potential to impact in, man, that's really, really sapping, really, really frustrating.

1:10:51David Novak:So I think healthy debate, healthy decision gets everybody involved. And that always drives much more commitment. And it always starts with the leader. I mean, they cast the shadow. And if the leader starts engaging in this healthy debate and admits to being wrong, then other people will feel more comfortable doing the same. I think the leader obviously is key to that. But I also think when you're coming up, the way you're really distinguishing yourself is when you have the courage to speak up. And, you know, you have the courage to speak up and step out and say, this is what I think we need to do.

1:11:26And, you know, that's how you can set a mark for yourself.

1:11:30David Novak:I know this doesn't sound too good, but I used to, like, love to be sitting in meetings and my boss would say something that I disagreed with. I just couldn't wait for those moments. So I could tell him that, hey, this is how he should be thinking. but you know that was just you know I enjoyed those moments uh but but I think that demonstrated that I had the courage of conviction the courage to speak up and then I had a point of view and I think as you're an up-and-coming leader I think you want to you want to express your point of view you're not going to get anywhere by being a brown spot on a brown wall I mean you got to step up and step out never heard you say that a brown spot on a brown wall well I love that It's great.

1:12:15David Novak:I love it. Pretty UFB if you ask me. Okay, last question here, David. What Royal Caribbean cruise would you go on if you had to go on one tomorrow? There's nothing like the Amalfi Coast. That's pretty good. I'm sure they do that. Great answer. You know. Great answer. Well, David, another excellent edition of How Leaders Lead. Stay tuned for our next episode and we'll see you next week.

1:12:44You