#299: David Dorman, Former CEO, AT&T – See around corners

23:54Yes. But they're not there to do management work. And I think it's particularly hard for guys like me who've been CEOs to avoid the pitfalls of, you know, sort of asserting yourself in a way that's sort of saying you're questioning the judgment of management. I would do it this way. I'd do it that way. You're a colleague in a room, and when the CEO's not there, you're having frank conversations about performance, about direction, about people. And that's really important, but you're not running the company. I've been the non-executive chairman now for Motorola, CVS, PayPal. I was chair and CEO at AT &T and Pacific Bell.

24:34And being a chairman, I analogize it's like being a grandfather. You really do love the kids, and you enjoy being around them, and you like going to meetings and having the intellectual stimulation. But when that's over, you go home, right? And the CEO is there running the business. And so you've got to stay in your lane. As a chairman, I tried to be the counselor for the CEO to say, hey, if there are things you want to talk about, you just want to bounce ideas off of it. And, you know, I'm not going to thank less of you for sharing because some guys are like, well, gee, I don't know if I want to admit this to them.

25:13You've got to develop a trusting relationship. Now, Larry Merlo and I, the CEO at CVS, for the 11 years that I was chairman, Larry was the CEO. He succeeded Tom Ryan, who was chair and CEO, created these two. We basically separated the chair and the CEO job. He and I had, I think, a fabulous relationship. You know, he'd call me with, you know, you're not going to believe this. We were communicating freely and candidly and frankly. And occasionally, Larry's Italian. He'd get a little out there and get, you know, during the pandemic, for example, you know, our government was not the most efficient thing to deal with with respect to distributing vaccinations for people who are trying their best to give them to as many people as possible.

26:02And I remember after a meeting, I had to say, Larry, I don't blame you. I would be really pissed off as well. But you're not going to make it any better by yelling at the government guys. We've got to find another way to get our point across. But that was a really rare instance.

26:24David Novak:And, you know, you talk about the importance of building trust to have these conversations, to get the telephone calls, to admit that, you know, you don't know something that maybe someone might think you should know. I mean, you know, do you have a secret sauce for developing that kind of trust? I'd like to think that I have a personality that allows me to get along with most people, especially when I'm focused on it. I'm at my worst when I'm not paying attention. My wife reminds me of that, you know, frequently because I'm off on some other planet thinking about AI or whatever it is. But I think when you're focused and your objective is to make sure you hear every word and you're communicating, but there's a trust between you that the person knows I got their back.

27:10That's the most important thing that I can tell the CEOs. I got your back. I'll be there. And if there are things, you know, let's just say there's some event the company needs to be represented in and it can't be in two places at once. I'll go trot the chairman out and And he can, you know, not going to embarrass you and say a few words. And, you know, after being on the board 16 years, I learned a little something about health care. So that was helpful.

27:35David Novak:How long does it take you in a new situation to say, I got your back? It depends on the relationship. And like I said before, they're all different. I mean, some people are suspicious. And trust is really hard to build. Karen Lynch, who succeeded Larry at CVS, was, you know, I don't think I ever got there with her in two years that I was chairman before, you know, leaving the board. I'd been on it a very long time. And I think that was to her detriment that, you know, she wasn't willing to kind of let me in and say, gee, there's some things here I could have done better. You know, where do we go from here?

28:20She rather kept it to herself. And I think it ended up affecting her ability to be effective.

28:29David Novak:Hello, friends. I hope you're loving this conversation. Be sure to stay tuned to the very end of the episode. As always, David and I are going to debrief some of the concepts that he talks about with this week's guest. So stay tuned to the very end, and I will see you soon. You know, I want to shift gears for a second and take you back, Dave. What's a story from your childhood that shaped the kind of leader you are today? I enjoyed getting recognition for whatever it may be, whether it was doing well on a test, performing an athletic skill of some kind. But I realized I really was a recognition junkie.

29:09I needed it. I needed to be reinforced that I'm okay. I was this goofy little country boy, kind of gawky, but bright enough to kind of get ahead. And I'd have to say that was learning that you're not always going to get a trophy. You're not going to get a pat on the head. And you shouldn't expect it. Do your job, and doing your job meant something. It wasn't like the soccer kids, like, oh, we're giving a participation trophy. You know, that's not reality. So was there something in your childhood that happened that forced that recognition or desire for it or this aha? Well, like your father had a unique job.

29:57My dad as well, for the first 12 years of my life, he was gone six weeks at a time and then would get a week off every six weeks. So my exposure to my dad was this, you know, every, you know, six weeks I'd see him. And, you know, he tried very hard. We'd go fishing and we'd throw a ball in the first yard, but then he's gone. And I was left with this kind of a void. And my mother, no matter how hard she worked, and she was terrific, you know, couldn't fill that void. So I looked for that, you know, sort of father's influence from others. And as a consequence, when I got to be 17, 18 years old, my dad hadn't been around until I was probably a late teenager.

30:42And of course, at that level, I was ready to get out of the house and go do my own thing. And I would say, as I look back on it, I went through undergraduate school at Georgia Tech in three years, graduated with honors. And basically, I can't tell you today why I did that. My friend stayed five years. They had a great time. And I was out of there and working because I wanted to get on with my life.

31:09David Novak:You know, you mentioned earlier the Motorola story, the Razr and then Apple iPhone coming in. You know, what's the leadership lesson there for how, let's just say, an iconic company like Motorola should handle disruption? What happened? I think that it wasn't that Motorola didn't understand that not having a user interface, which the iPhone had, you know, the very first visual user interface or UI, as they say. And we had this, I mean, even to be able to text on the thing, you had to hit, you know, a number key three times to find the letter B or whatever. It was so clunky. The radio, what Motorola knew how to do is make great radios.

31:57So the phone function was superb. It was industry leading. It'd work in the basement. We used to laugh it could work underwater. But it didn't have user interface, which became, as you know, we talked earlier with text and then email and now streaming. You know, it was way, way more important. So Motorola did not invest enough in the operating system and chose to partner. Just a quick vignette. I wasn't in this meeting, but I had first-hand players who were there on both sides when Apple met with Ed Zander and his team to look at something they called the Rocker, R-O-K-R. So it was a candy bar-shaped phone, not a flip phone.

32:39And Steve Jobs was in the meeting with his people, and they said they had a partnership to put Apple's basically music player, MP3 player, what did they call that thing? The iPod. And so you were going to take the iPod's software, put it in a Motorola phone, create this thing called the Rocker. You know, Apple would love it. Motorola would love it. After the meeting was over, purportedly, Steve Jobs picked up the mock-up that Ed Zander had brought in and looked at it. And he said, well, if you can put an iPod in a phone, why can't you put a phone in an iPod? And they all kind of looked at him and said, Well, you probably could.

33:24So go work on that. Well, that was the seed corn for what has become the greatest selling product of all time, you know, with hundreds of billions of sales and an unbelievable ecosystem. But it was that question, you know, Steve looking at it differently and asking that question.

33:45David Novak:You know, people say today in the world of AI, you know, the really smart companies are going to teach their people how to ask really insightful questions so you can get the best out of AI. What's your thinking on that? Well, we were talking a little bit before you came on. I think there's, this thing is going, it's almost like throwing a, you know, a squirt of olive oil on a hot skillet. It's going in every direction all at once. And I think that I'm watching some companies very thoughtfully approach it and say, we're going to do this in a controlled way. We understand there's a lot of power here.

34:19And there are some who are just jumping into the deep end and saying, we're going to rip out Workday tomorrow and put in an agentic AI, HR system or whatever. And I actually think, David, that there is a range of things that we're just learning to do. And basically, I don't know if you personally use AI. I do all the time. I use it every day. And I'm willing to ask myself stuff. I mean, recently we have a mutual friend that you know who was being proposed for a golf hall of fame. I said, I need a resume for this person going back to college, emphasis on athletic accomplishments and business accomplishments.

35:03Well, I got this incredible dossier. That's kind of child's play. But when I shared it with the person, he goes, well, gee, how did you know this? Well, I didn't. I just, I asked ChatGPT for an answer. And he says, well, I don't understand what that is. So I said, well, you can do anything. I said, let's turn this into a poem about your life. How's it do that? You know, within 20 seconds, we had a poem. And watching people wake up, you know, to what the power of this is today is pretty marvelous. And in business, I just saw what I consider to be a pretty significant tell, the earnings announcement of Shopify.

35:41They missed their expense budget for the quarter really badly. And their explanation is we spent too much on AI. You know, we've lost control. We've got all these prompts and people are doing what they want to and there's a lot of experimenting, but we're going to get control of it in the next quarter. I think that's going to be a many times repeated story as people follow this journey to where AI is going to take them. And there'll be some huge success stories. Right now, it's about infrastructure. People are getting rewarded for buildings, the fundamental building blocks, the data centers. I think the next wave is what you can do with it.

36:19David Novak:When you were at Motorola, you worked alongside Carl Icahn, the famous activist. What's something about working with Carl you'd only learn if you're actually sitting across the table with him? Carl's kind of a disagreeable cuss. And to him, investing is sport, right? And I think he really does see it as a blood sport. It's how he gets his jollies, is engaging with people and trying to intimidate them. I think we have a president who's like that to a degree as well, to see what their breaking point is and how will they bend. But what I learned about Carl, if you're arguing about something and you're pretty much saying the same thing, if you call Time Out and say, well, Carl, what do you want?

37:14What do you want? Well, you want the stock to go up. Well, we want the stock to go up. So what we're arguing about is how do we get that done? And I tried to put myself on the same side of the table with Carl to say, we're trying to get to the same place. We may disagree on tactics or a person or something. We're trying to get to the same place. So help me help you get where you're going. I don't know. I mean, as I said to someone, it helped that we happened to agree in Motorola and we happened to agree at eBay. that separating PayPal from eBay and separating Motorola Mobility from Motorola was a good path forward.

37:54So then it became about how quickly can we get there versus arguing about, you know, is that the right answer or not? So that's why John Donahoe called me the icon whisperer, which not necessarily a title that I was seeking.

38:14David Novak:When we spun off Yum China in 2016, you helped recruit a Chinese board from scratch. What leadership lesson did you take away from that experience? Well, we had two things. As you know, we had to appoint a CEO. Mickey Pant was the choice for that. And then we had to get a Chinese investor to buy at least 5 % of the company. And Fred Hu and Primavera Capital were standout people. Well, then it came to who has experience in China with a consumer brand and who are they? You know, we, to my surprise, there were quite a few people at that time. We were able to avail ourselves of skill sets. And it was a real diverse board.

38:57So we had to, as you know, the special committee was empowered to go get this done. But the problem is you don't know these folks. They've come from a different walk of life. Maybe they've been in a different country. You only know what's there. It's the search firm has given you, I think, back to AI. AI is making it a lot easier to vet people and a lot harder for people to pretend they're something they're not.

39:22David Novak:You know, you were, as you mentioned earlier, you're the CVS chairman for 16 years. 11 years as chair. 11 as chairman, 16 on the board, right? And what was the biggest challenge you had to work through? Tom Ryan, I always call Tom the CEO from Central Casting. You know, he looks good. He talks good. He knew his business. He started as a pharmacist. I mean, he was a guy that could, you know, basically do it all. He made a very successful strategy about acquiring regional drugstore companies, taking CVS, you know, up to, I think it's peak, 10 ,000 stores, buying Caremark. So Tom had had a, you know, 17-year run that was pretty darn good.

40:04But his number two guy for most of that time was Larry Merlo, who was a pretty quiet operator, went and got it done. When we made Larry CEO, he'd never been on a board. He attended board meetings, obviously, at CVS. And he was much more of a quiet, you know, operator, get it done kind of guy. They had very different personalities, right? So Larry had to get used to not only just the Wall Street interactions, but going to represent the company and being on CNBC. And I have to say, in those 11 years, Larry grew remarkably. And I'd like to think he had somebody he could bounce stuff off of, which was me.

40:47So we were, as I said earlier, simpatico. But it was getting Larry to say, you can do this. In fact, this is a hell of a lot easier than doing what you've been doing, which is making the trains run on time. You just got to find another guy like you to do that part of the job that you shouldn't be doing anymore. What was the toughest era during that tenure that you had to work through? I think when we bought Caremark before Tom had left, it was a very competitive industry, and they had some issues. and I think that we probably stayed with the Caremark team that was there a little bit too long. And, you know, we kind of got talked down a bit of a rabbit trail.

41:32Once we figured it out, and I think this was kind of during the transition with Tom and Larry, you know, we made changes and, you know, we went out and found basically the guy who invented the PBM business, a guy named Per Lofberg, who had been at Medco, and he did a terrific job. He knew exactly what buttons to push, making that critical, really knowledgeable hire who's done it before. And, you know, Per being a, what I'd consider to be task return, few words, Swedish guy, no BS, let's get it done. It was a fabulous hire.

42:10David Novak:And you've been on the Dell Technologies Board since 2016 and you've probably had a closer view of Michael Dell as a leader than almost anyone outside the company. What does he do better than any leader you've ever seen? This has been a remarkable 10 years, and you probably don't follow it this closely, but Dell hit another all-time high today. Stock's gone from when they took it private and then took it back out again. I'll get the numbers close, but something like$12 or$13 a share to over$300 a share now. And that, by the way, doesn't count the fact that they owned 82 % of VMware, which they spun off, and then a Vago bought in a massive transaction shortly after the spin for almost$100 billion.

43:01So the value creation around Dell in this 10 years has been remarkable. And I'd say that two things. Michael Dell had an intellectual soulmate, an Egon Durbin from Silver Lake, who sort of laid out, if we go private, we sell assets, we use very low cost debt, we pay the debt back with cash flow, we go out and acquire other companies. They bought EMC to get VMware. They worked together. And it took Michael being able to trust Egon and Egon to be right for this sort of magic to happen. During that time, Michael has looked for a longer-term successor, which has been a struggle. How do you take a founder?

43:47I mean, he's 41 years in the business from being a 20-year-old making PCs in his dorm room at UT to a 61-year-old guy worth, I don't know, somewhere north of$100 billion. Who knows? I watched him when the supply chain crisis happened, and Dell had basically sourced chips and the end assembly of PCs. In Shenzhen, China, there was almost like a Dell city that took each of these things, put it together, put it in a box, put it on a boat, and shipped it to the U.S. Until one day, you know, with the pandemic and other issues, it stopped. And, you know, there was a lot of, I won't say panic, but there was a lot of concern.

44:35What the heck are we going to do? And Michael sat at the end of the table and he listened to everyone talk about, you know, this problem and that problem. We haven't figured it out. And he just said, OK, we're not doing this again. You know, we're going to diversify our supply chain. We're going to, where can we move, you know, what can we move and how quickly can we move it? and Dell sort of literally midstream transformed, moved things to Vietnam, Malaysia, built its first, which is kind of hard to believe being in Texas, their first factory in Mexico. And within two years, they basically had completely de-risked their China situation.

45:15And it was because he just said, we're going north. And everybody believed that if Michael said we're going north, north must be a good place to go. Let's go north.

45:27David Novak:You know, I know this about you, Dave, because I've seen it up close. You're a deeply analytical leader. What's a moment when your instincts were screaming one direction and the data was telling you another? There are things that you want to be true, and there are things that are true. And earlier we talked about my AT &T experience, which was, God, I really don't want to give this job up. I love this job. It's what I was sort of trained for. but realizing I'm not going to come out of this, you know, running the company. You know, we're going to do a deal. Someone's going to buy us and I'm going to be, you know, I'll go figure out what's next.

46:05And I had to make that decision pretty quickly in order to make it happen. In other words, I didn't have two years to think about this because it may have been too late. And we had had a very near miss with Bell South as an acquired. And as you know, I grew up in Atlanta. For me, that would have been a really desirable outcome from a lot of different perspectives. I could have probably held out a little longer, hoping that that transaction would work, when in fact Southwestern Bell and Ed Whitaker were ready to go. And I didn't want to be the guy who basically 275 ,000 AT &T employees and dependents said, that's a knucklehead that bankrupted our company or drove it into a ditch and cost us all our futures.

46:56That was not something I was willing to risk.

46:59David Novak:We talked a little bit about AI earlier. You led a dot-com company at one point, and you lived through the dot-com crash. How do you think the dot-com revolution compares to what's going on with AI, the AI revolution right now? I think Chairman Greenspan called it rational exuberance. talking about the market as a whole. The dot-com bubble was characterized by a lot of the same things that we see today, but the bar has gotten higher. What I'm talking about is taking companies public. You know, back in 2000, you know, you kind of maybe had a couple of quarters of positive revenue, but the bar was really low.

47:44And it was a form of financing, you know, sort of, I don't want to say greater fool theory per se, but let's just say you were taking advantage of a public who was willing to invest in speculative public companies, much less private companies. Today, this is bigger dimensionally than the dot-com bubble, because the amount of real investment that has taken place is unprecedented. You know, hundreds and hundreds of billions of dollars are being poured in the data centers with the idea, build it and they will come. And the telecom part of the dot-com, we put fiber optic cable in the cities and between cities and the oceans, and we deployed all this fiber and it made Lucent and Nortel, each of those companies, you know, grew dramatically and were worth like a half a trillion dollars.

48:40Cisco was over half a trillion dollars. They were all part of that infrastructure bubble. Well, I would bring your attention that Nortel went bankrupt over 15 years ago now, gone. It was sold for scrap. And Lucent and Alcatel merged. I don't even know if they're still around, but the two leading infrastructure players at the time, gone. Cisco lived to fight another day because they had some other businesses. And I just noticed, I sent Chuck Robbins' note about this. they are right at a trillion dollars of market cap now. They're maybe 920 billion or something. That's pretty remarkable to sort of have where, but it's been 20 years.

49:22I am sure there are going to be winners and there are going to be losers in this current battle. How many LLMs do we need? How many data centers do we need? How many faster, smarter NVIDIA GPU chips do we need? I don't know. But I have a feeling we're buying more right now than we're going to need for a while.

49:47David Novak:How do you, you know, what separates leaders who survive disruption from leaders who become a victim of it? I think sometimes you get so bought into a strategy and you're so trained to put on a positive face and be an exuberant leader and an effective cheerleader that you sometimes maybe get ahead of the situation. So I think you've got to balance it. And I think some people, as you suggest, who get too far out there on limb, don't come back. I mean, they're either embarrassed or in a state of shock, and so it's hard for them to sort of repot themselves and come back as a different person. I think the pragmatists are the ones that go, hmm, didn't get that right.

50:34What did I miss? I probably got out over my skis a little bit. but I maybe have been better to go a little bit slower. I mean, I always remember from growing up, my mother used to say, measure twice, cut once. And the tendency for youthful people is, I know this, it's close enough, cut right here. And I think there's a lot of cut right here going on right now because let's face it, you can throw a dart. I mean, I met a young guy in Palm Beach about three months ago who was referred to me by a venture capitalist. I have a lot of respect for him. He said, this guy's unbelievable. He's got a couple of master's degrees from Princeton.

51:15He's 28 years old. He's working on his PhD in theoretical physics. He's brilliant. He's going to change the world. But I've convinced him that he should pursue his dream to start a company and pursue an AI application company. So, okay, all right, great. What makes him different? You know, we sat down, we talked. And there were so many things I loved about this guy. He's saying, you know, these guys that have done Anthropic are making all this money in building companies. I want to build a really durable, important company. I don't want to sell it. I want it to be successful. I said, oh, you want to be Bill Gates or Larry Ellison or Michael Dell?

51:53Well, not exactly. You know, I said, well, you know, they did. And in their cases, I mean, Michael's 41 years, you know, at this. He's kind of the dean of that era because Gates has gone off. I mean, Larry Ellison, I guess, is still sort of working. But I ask him to really think through. Everything's going right for you right now. You're raising money at ever-increasing rates. You've got customer acceptance. People are not just eating the dog food. They're ripping the dog food off the shelves and tearing the bags and eating it right in the store. They're just so enthusiastic about this guy's product.

52:26Like, where do you want to be in three years, in five years? Who do you want to have around you? And what do you want people to say about you? And it was kind of like he hadn't really thought about any of that. And he was saying, well, don't I have time to do that later? Well, there may not be a later. You should think about it now. And I wasn't trying to, you know, burst his bubble. But I was just kind of saying, you've got to be thoughtful and realistic about it. You've been given an incredible opportunity.

52:59David Novak:Yeah, questions that everybody should ask themselves, you know, when you're embarking on your career or you're trying to build a company. You know, this has been so much fun, David, and I want to have some more with my lightning round of questions. Are you ready for this? You bet. The three words that best describe you? Persistent, optimistic, and honest. If you could be one person for a day beside yourself, who would it be? Gee, I'd hate to say this, but probably Greg Maddox. Your biggest pet peeve? People who basically try to BS you and are BSing themselves. Who would play you in a movie? I'd like to say Tom Selleck, but probably not.

53:39David Novak:Your most memorable round of golf from the past year? Well, I made six birdies in a round at Cypress Point. I shot 72, so you know there was some other mess along with those six birdies. but that was pretty good for me. Yeah, it's good for anybody. What's more motivating to you, the fear of failure or thrill of winning? I'd have to say at various times both, but I probably would say the thrill of winning is pretty important. What's something you've been curious about lately that has absolutely nothing to do with work or anything you're working on? I'm fascinated with the application of analytics to sports.

54:19You know, watching guys on the sidelines with iPads and they're looking at plays and the linebacker moved this way or a pitcher threw a curveball and, you know, bit to, I mean, analytics is taking over sports. And it's just fascinating watching these, you know, giant men talk about blocking technique and they're, you know, the coaches say, here, this is what I want you to look at. The one thing you do just for you. I read a lot of stuff almost every day. I'm a consumer of information, and I love the fact that it's getting more efficient.

54:56David Novak:Besides your family and friends, what's your most prized possession? I'd just say health. If we don't have health, what do we got? If I turned on the radio in your car, what would I hear?

55:13SiriusXM, because it sort of dates me into my past.

55:17David Novak:What's something about you few people would know? I am the baby of two babies who are basically, my mother is a family of nine kids, my dad 13 kids. They were the last on each side, and then me, and I'm the youngest in my family. So I have a grand, my grandfather was born in 1860. Think about that. It seems impossible. It does. I am going to have to think about that one. What's one of your daily rituals, something that you never miss? I miss pretty boring, but I have to say, you know, starting with that first cup of coffee and reading the Wall Street Journal online. All right, we're out of the lightning round.

56:02David Novak:Good job. Now, you and your wife, Susan, have three kids, Lindsay, Andrew, and Tyler. How have you thought about leading at home over the years, Dave? And I know they're all out of the household now, but how did you think about that? I look back and say, probably in things that I regret, not having more time at home. You know, I was building my career. I traveled a lot. And I later, you know, realized what remarkable job Susan did with three kids by herself a lot of the time. You know, I'm in Denver. I'm going here. I'm going to Louisville. I'm going over there. And I come home on Friday exhausted.

56:39and it was like, here, you take these three kids. But she didn't do that very often. I would say that being present and participating and realizing they just want you and they don't want you kind of half the time or distracted, and I'm still distracted even today, but I try with my grandchildren to enjoy being with them and create environments where I can be with them because I want them to remember me. I want them to go, oh, yeah, we share a grandfather name. And I want them to remember Ogo. And, you know, where was he when I did stuff? And that would be, to me, an accomplishment.

57:19David Novak:Absolutely. And, you know, you mentioned earlier that you really, early on, you craved recognition. You've had enough success now that you don't need any kind of external validation. So what still drives you? I'd have to say making a difference now in people's lives, being able to do things that can turn someone from despair or lack of hope or sort of a feeling of hopelessness, let's say, into saying with the right hand up, a lot of people, it's not a handout, it's a hand up, but people can go on to accomplish really great things. To me, nothing would make me happier to find that person who just needs a break, who just needs a little bit of encouragement and make a difference in their lives.

58:10All right.

58:11David Novak:Last question here, Dave. What's the one piece of advice you'd give to anyone who wants to be a better leader? Be introspective. Learn from your own mistakes and recognize mistakes when they've made and have a mentor, someone who is your advocate that you can go to when you've got a tough situation, someone you can really trust. Well, David, as a good friend and as a great board member, you're a guy I could always trust and always count on. And you're a guy who walks the talk on that front. And I want to congratulate you on all the success that you've had. And most importantly, the difference you've made in so many people's lives.

58:53David Novak:So good job, my friend. Thank you for having me, David.

59:02David Novak:Well, David, my phone decided to go to the graveyard last week. So I spent about two hours at the AT &T store last week getting this new cell phone. And I know that Dave's not the CEO of AT &T anymore, but I must say I had an excellent experience at the AT &T store on Gallatin Avenue in East Nashville. So Kristen, if you're listening, thank you so much for helping me out. And I'm sure that a lot of what she's learned at her job at AT &T has come from Dave's leadership. Well, you know, Dave has taught a lot of people a lot about leadership. And he's one of the wisest counselors that I've ever had.

59:43David Novak:He did a great job on the YUM board. But as we just heard, you know, he's influenced a lot of CEOs and helped a lot of companies deal with a lot of tough issues. So there are a lot of leaders that are very thankful for Dave Dorman. Well, David, as we do in every episode, we're going to debrief some of the main themes that stood out from this conversation with David. The first one was actually really interesting. He talks about how his dream job was being the CEO of AT &T. So he gets his dream job, he gets into the job, only to soon discover that there are certain realities in the business that meant he couldn't really run the strategy that he wanted to.

1:00:24David Novak:So he has this big, exciting moment where he gets his dream job, and then he couldn't actually do what he wanted to do. If you have a big kind of professional, call it disappointment like that, how do you keep going without letting that affect the way you lead and hold you back? Well, I think that the first responsibility of every leader is to define reality. And I think Dave did a great job in this episode really defining the reality that he faced at AT &T, which basically told him that he was not going to be able to take this company and put it into a massive growth mode, that he was going to have to find another option.

1:01:02David Novak:But he dealt with that reality and came up with the best possible solution. And that's what I think leaders do. You know, sometimes people hang on to something because they finally got this big job that everybody wanted. You know, it takes a lot of humility to say, hey, I'm going to put the company ahead of myself. I'm going to do what's right for the company, what's right for all the people. And I think Dave has always done that in his career. And that's why I feel like he's respected so well. It's so interesting to think about expectations versus reality. I heard someone say once that unspoken expectations are resentments in the making.

1:01:48David Novak:And so there's a lot of work that you have to do, I think, in your own self-awareness to deal with that gap between your current reality and what you thought the expectation was. And where I feel like I get stuck in my own life and where a lot of leaders get stuck is that they can't ever bridge that gap. They can't ever get over the fact that it's not what they expected it to be. And to your point, I think that one of the many reasons that David was so successful and is so successful is because he had the humility to bridge that gap and to realize that what he thought wasn't the case. And let's go in a different direction.

1:02:23David Novak:I think it's important to have high expectations. It's important to do everything you can to make sure that you achieve those expectations and that you give it your all. But at times, you know, there are headwinds out there that force you to face the reality and come up with different solutions. And I think that's the best way to manage your expectations is go after them with 1 ,000%, you know, vigor and energy. But if you get new data or new learnings that tell you you got to take another path and go down that path. And David did that. The second concept that I want your take on, David, is this idea of being future-minded.

1:03:11David Novak:It's clear in this conversation that David is a big picture guy and he knows how to see around corners, really in all of the industries that he's worked in. But I think a lot of leaders struggle with this, either because they're not wired that way or maybe they just have too much on their plate to take the time and actually think about what's around the corner. So from your perspective, how do you develop that skill of being able to see the big picture and mine for what's coming next? The day you start working or the day you start learning and, you know, in education, you know, whatever level you're at, curiosity is it.

1:03:50David Novak:You just got to be curious. You have to be curious about what's going on around you. If you're going to see around corners. You got to be on top of what's happening in the world and then do, you know, pattern recognition. You know, I always talk about the importance of pattern thinking. You know, if you see all these things happening that have some sort of convergence, there's some real meaning there, okay? And if you can pick up those patterns early, you're going to be first in terms of seeing around the corner. So I would really, really encourage everybody just to be curious as hell. Read whatever you can read.

1:04:33David Novak:Learn from whoever you can learn from. Watch what's going on. And then figure out how you can get ahead of, or at least be on trend and hopefully ahead of it. One of the things when I was in the marketing business that I did every week. There was this trade publication. And, you know, many times, there wasn't a whole lot of great things in it. But I read that cover to cover, you know. And then I always would ask myself, if this is going on in the world in marketing, you know, what should we be thinking about? You know, where should we be headed? And that's just one example. But everybody has publications they can read, books they can read, people they can see that can help them open their eyes to the future.

1:05:27David Novak:It's interesting you say that. It brings to mind the answer that a lot of folks we have on the show have to the lightning round question where you ask, what's one of your daily rituals something that you never miss? And I would say probably, I don't know, ballpark, 70 % of the folks answer that question with something like I wake up in the morning, have my coffee, and I read the news. And they have certain publications that they read every single morning. And building that into your routine actually does give you that perspective. I recently started reading these two newsletters every morning from these branding experts that I follow on Substack.

1:06:08David Novak:And it's totally different industries and what we're in. But I found that starting my day that way helps me look at the work that we're doing with a totally different perspective that's informed by what else is working for other people. And it seems so simple and almost like silly a little bit. It's like, oh, I wake up in the morning and I have my coffee and I read the newspaper, but it really does work in terms of informing you about what's going on. It gets you out of your own way so that you can kind of stay relevant and current with what's working. Yeah, the simple things, the obvious things sometimes are the best things.

1:06:44David Novak:And, you know, being externally focused is critical. And what you're doing, I think, makes a heck of a lot of sense. So good on you. Well, the last topic, David, that I know is near and dear to your heart is leadership development. In the episode, David says a bunch of times that the biggest mistake he sees companies make is that they treat leadership development just as lip service, and they don't actually create a structure to develop their top talent. So if someone is listening to the show, David, and they've been wanting to develop their top talent, but they haven't taken that step yet, what is the first thing that they should do?

1:07:22David Novak:What should be their number one priority? Well, I think the number one priority must be to identify the talent. You might be running a small team, a small company, a huge company, but your job as a leader is to understand who you have working for you, who you can influence and understand how much talent they have. And, you know, so if you find someone that really has a lot of talent, a lot of runway, then you got to do everything you can to develop them and help them become the best that they can be. I came up in PepsiCo and then at Yum Brands. But, you know, one of the things that PepsiCo really started was they called their human resource planning process.

1:08:11David Novak:and then I think we took it to the next level at Yum Brands where we called it our people planning process. But we had a process where we reviewed our talent, you know, every year. We identified our very high potential people and then we made sure that we had action plans to help grow them. But we put process and discipline around it. You know, one of the things we know great companies do and great leaders do is they put process and discipline around what really matters. So if developing leaders is important to you and is key to your success in the company, make sure you have a process and discipline around it that you can really put to work to make sure you develop your people.

1:08:56David Novak:It's interesting, too, coming from David's perspective. You know, he's sat on so many boards of some of the greatest companies in the world. And for him to say that that's a mistake that he sees most of these types of companies make, it's kind of shocking to me. But it's just kind of one of those things, I feel like, David, that kind of falls to the wayside if you don't put process and discipline around it. Because really, all it is is time. The other thing, too, Kula, is that it's not only just time. It's having high standards. So, you know, if you have mediocre talent, you will have a mediocre company.

1:09:32David Novak:If you have high standards for the people that you have working in your company and you make sure that the people are very talented and you develop them, you're going to have a great company. And that's just the way it works. It reminds me, David, of something you talk a lot about, which is building an A team because A players want to play with other A players. Yeah. And A teams get A results. and that's the name of the game. So David, as we wrap this episode with David Dorman, what are the main things that you want our listeners to walk away with thinking about? Number one, go after that dream job.

1:10:10David Novak:And then when you get that dream job, make it everything you can possibly be. But at the same time, always be on the lookout for what reality is because your job is to define reality. And sometimes things don't work out in that dream job that you have. And you have to pivot. But pivot because of the reality that you face. And pivot because it's the right thing to do for the company and for the people that you have the privilege of leading. And make sure that you put yourself in the background there. You know, it's not about you. It's about others. And I think that's important. Number two, if you want to see around corners, be curious.

1:10:51David Novak:develop your ways to be curious and identify the patterns that are going on in this world. And then, you know, be on trend and hopefully get ahead of trend. And then the third thing is if you want to develop leaders, identify the leaders you want to develop, develop a plan for them, but have a process and put discipline around it to make sure that developing leaders is something that's really important and everybody on your team knows it. and everybody on your team is expected to develop leaders and people that are better than they are. And perhaps use this podcast as a tool to do so. Well, that's an option.

1:11:33David Novak:Well, David, that does it for another episode of How Leaders Lead. Thanks so much, and thank you to David Dorman for joining us for the show. Of course, thank you to our listeners for tuning in to another episode of How Leaders Lead. Come back next Thursday, and we will see you soon. Well.