Colin Kelton (Vanguard) | Building a Lifetime Career

23:46You have 50 million customers or something. So you're a big brand. You've been around 50 years, but I'm not sure they all appreciate how much of a disruptor you have been and continue to be. So I'd like you to talk a bit about not just the history of that, although it's important starting with your founder, but how you keep that going. Yeah. You know, it's an important part of your legacy. Right. Right. Right. And it's one thing to start it, but to keep disrupting for 50 years and to keep that in the culture, that's, you know, that's delicate. And Jack Bogle, who started the firm, was actually fired from his job.

24:16He was working, he was the head of Wellington, he was fired. We're very close. Vanguard and Wellington are kind of, you know, we worked very close together, but he was, he was fired in a bit of a, uh, hustle at the boardroom. And he basically came back and said, you know, what if I distributed your products? I'll start a small company. And no one thought there was any power in that. It's like short, you know, I'm short changing a lot of things. And he started the small company called Vanguard. But one of the things, and he wrote his college thesis about this is the cost of investments really hurts the investor.

24:47And in 1976, he started the first index fund. And that was one of the first disruptors that Vanguard did. And Jack would say, don't bother searching for the needle in the haystack, buy the haystack. That's what he would say. And it fit with, you could do it low cost, you could be diversified. It fit with a lot of the things that he pushed. And so, you know, that was the first disruptor. That's obviously, you know, and many people probably have index funds in their 401k. They don't really know exactly what they've got. Everyone's got indexed enough funds in the 401k. And that's all because of Jack, what Jack did.

25:25That plus the cost. So Jack and his successors, Jack Brennan, Bill McNabb, Tim Buckley, they all have done work to really push down the cost of investing. That was another big disruptor. We went no load. So therefore, no commissions. That was another big disruption. We moved all our fixed income in-house. I'm getting a little wonky here. That was a disruptor. So there was all these disruptors that came along. I'd say others were doing it as well, but our website was disrupted. And I remember, you know, it's like, you know, we should have a website and be like, I guess, you know, back then you didn't know.

26:02Or a mobile site, you know, and many others were doing it as well. But, you know, anytime then a company as big as Vanguard's doing something, you're almost disrupting as soon as you did something. And so there's been several of those, you know, across the board. And one of the latest, although we've been at it for since I guess 2015, is really disrupting the advice industry. And we have two things at Vanguard. One is we serve individual investment advisors outside of the company, and we work really hard and we're dedicated to them. But we also have an in-house advice function, and we lower the cost of advice because that was a place where it was incredibly expensive to get advice.

26:48And one of the main things we saw at the time was, why did someone leave Vanguard? And so one was they died. It's like, okay, we can't do too much about that. We should worry about their kids. But another was like, we didn't give advice. And someone one day opened up their 401k statement and like, wow, that's a heck of a lot of money. I better not screw this up. I need advice. And they go get advice, but we didn't give it. And we started giving advice. So we've disrupted there as well. You have lots of frenemies, right? Yeah, for sure. Frenemies. And also like, look, you know, Jack Brennan would say this a lot, like you don't want to be the best house on a condemned block.

27:22Like you want strong competitors and you want the investment industry to be really respected. And, you know, so, you know, we, we work closely with, you know, some of our competitors on things like cybersecurity and other things or legislation to, you know, to kind of bolster things for, for investors. Yeah. Yeah. So how do you feel about, or how do you think about benchmarking? You know, how do you know your marketing is working best for you? You know, how do you feel about your competitive set? I mean, how do you just think about that? We don't set dollar targets. People do vote with their money, but we don't have any, any targets.

28:00Like we need to bring in, you know, X number of dollars, like go after that and do whatever you can. You know, we have to set certain budgets and, and, you know, growth is one of those things we're probably, you know, it's, incredibly important. But when we sit here and look at things such as what's our customer satisfaction, how are our funds and investments doing, how easy are we to work with, do we have most of what people want? Although we don't offer everything, there's things that we will not do because we don't think that they're good investments. You're not going to find the triple leveraged gold fund.

28:35And so we are a bit territorial in what we will. will offer. And those are a bit the benchmarks. Those are KPIs. Yeah. From a high level.

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30:00I think your company purpose is pretty amazing. And I think it's obviously linked into your culture. So I just want to read it. It's very simple. to take a stand. It's a very strong statement for our investors to treat them fairly and to give them the best chance for investment success. So talk about that and how people internalize that, how they activate it. What's the role of it in daily life at Vanguard? Each of those things, and it's funny, I'll hire people and you're hiring someone and you're kind of salesy while you're hiring them, right? And I always bring people back in X number of months later and say, is it real?

30:38Like we said all this stuff and I've been there for so long now, I think it's real. It's like, is it real? Is it really about the client? And are we really dedicated to you, the employees, or were we just blowing smoke? And like, oh my gosh, it actually is real. And so, you know, it's, you know, I think that that's part of it, but that take a stand does mean to stand up for the investors. And it is all about the investors. Like we are owned by our investors. There's no outside owner. So no one else makes money. Like we get paid, of course, but there's no outside family or outside stockholders.

31:15There's no share price. We're not making money for anybody but the investor. And that was a bit, that's the secret sauce of Vanguard. And I remember talking to Jack Bogle once and he one marveled that no one copied Vanguard, but there's no money in it. There's like no one would still, because there's no money in it. And Jack himself said, you know, he said to me once, it's like, Colin, if I had known how much money was in this, I might've thought about it a little differently. You know, but in the back, you know, you just wouldn't think of that. So, you know, take a stand for that. It's like the investors are the ones that benefit no matter what we do.

31:50You know, give investors the best chance for investment success. Really, you know, it doesn't guarantee investment success because, you know, not everything is in our control, But we worked really hard of having amazing investor professionals that really know their business and take smart risks and stay very true to the actual investment. And so we take all that incredibly seriously. And I would hope most crew members can recite that. It's written all over the place. It's a bit like the Johnson & Johnson pledge type of thing, but within Vanguard. And it has stood the test of time. We haven't come back and said, oh, we got to rewrite that mission statement.

32:28Very powerful. I was interviewed the Apple head of marketing at the Can Lions Festival this year. And he talked about how Steve Jobs was still very much alive at that company. Yeah. People still talk about him. The principles through which he managed are still there. Their brand led leadership. And so talk about Jack and how his spirit kind of is still in the company. Yeah. You know, Jack would say, and we have this award at Vanguard called the Award for Excellence. And he said, even one person can make a difference. It's like single out one person and they can make a difference. And a lot of that still is very, very relevant.

33:05We just celebrated our 50th anniversary. And we did a lot of work. We dug up old footage of Jack Bogle, but also Jack Brennan, who really, it was the two of them partnering. Like Jack Bogle started the firm, but Jack Brennan was the one that really made the firm actually a firm that was going to last. And so those two together are the ones that really, you know, really made the company what it was. So you knew them both. Knew them both. And Jack Brennan was very focused on leadership as well. Like we, you know, and then his successor, Bill McNabb, did a lot on leadership. And, you know, Jack Brennan wrote a book on leadership that is still in the firm.

33:48And, you know, you as an employee and you as a manager, you need to be great at your job, but you also need to be a great boss. And if you're not a great boss, if you're not a great manager, you're only going to last so long and you're not going to make it in the firm. You know, because we said, you know, you can get somebody to do a great job, but, you know, you have to also do a great job for the people who work for you. And you've got to focus on both of those things and those things ring true still to this day. What were they like as leaders? Both very visionary, both very motivational, very different, you know, two very different, very different leaders.

34:24Jack Bogle would be out there very much railing against the industry, as I talked about. And, you know, in the press a fair amount, Jack Brennan was very focused on Vanguard itself and inside, you know, the hiring of people and how important that was. The leadership capabilities, lowering costs, being great. Jack Brennan's the one that really gave Vanguard a taste for IT and technology. And Jack Bogle probably would not have done a website. Of course, it's way back when and you don't know. But back then, it was like, why do you need a website? You shouldn't be trading all day. You should buy and hold.

35:03It's like, well, Jack Brennan's like, people still need to see their assets and whatever. So they were both incredible, incredible leaders for their particular roles. You shared with me before we started that you're retiring. That's right. And your successor hasn't been named or made. And it's public that you said we can talk about this. So what's that been like? Is it weird? Is it nostalgic? I mean, you're still there. I'm still there. And we're working through the succession. It has been a bit weird, but look, 35 years is a long time. By the time I'm done, it'll be 36. It'll be sometime next year.

35:40And at some point in time, as much as I love the place, it's like, maybe go do some different things. Give it to the next person. At some point in time, I still walk around the halls and feel like I'm 21 years old, but I'm not. People look at me as like, who's this guy? He's been here forever. And so it's actually pretty liberating. And look, you feel great about the company. You feel great about the work. And so that feels great as well. Like, you know, to, to leave it in that, you know, in the state it's in feels, feels just great. And, you know, I've been there now for, you know, 35 of the 50 years and there's only been one or two years where there were rough years.

36:21And it's more because the market was really rough. There wasn't a Vanguard part that was rough. It was, you know, the market was just, you know, 2008 was a rough year. Yeah. And so, you know, it's, you get a couple of those, but other than that, it's been, you know, it's been quite a trajectory and quite a ride. How are you thinking about life post Vanguard? You know, I have many thoughts. I have lots of people now. It's like, oh, you know, you should do this, you should do that, you know. Be careful. Well, yeah. Yeah. And so look, I'm not going to do nothing for sure. You know, I've only ever worked in a private company.

36:54I have no corporate company experience. So, you know, maybe a corporate board, I'd love to, you know, that would be a great experience. I've been there 35 years. I think, you know, someone would want me to help them on something, you know, some consulting work for sure. And, you know, I've learned the whole, and I guess, you know, everybody who's in the stage, you know, uses this word. It's like, what's your portfolio going to look like? It's okay. Right. So, you know, what's that portfolio life? But, you know, while I'm retiring from Vanguard, I'm certainly not done. I'm not going to work full time anywhere, but, you know, I feel like I've got a lot to offer.

37:24And after, you know, this much time at that company, I feel like I, you know, I have some stuff that I can off for some people. So I'm looking forward to it. Well, good for you. I did notice that you're super involved in lots of organizations in the Philly area. So I'm sure this will give you some freedom to spend a little more time on some of those things. But this sense of civic commitment and involvement, where does it come from? Is it from your family? Is it from Jack? It's actually from Vanguard. It's from Jack. It's actually more from Jack Brennan. So Vanguard was very involved at the time when I first started.

37:58No longer we do our own thing with United Way. And, you know, giving back was always part of being an employee at Vanguard and really inculcated that. And, you know, so now after 35 years, it's like, yes, you absolutely do. So we do, we do a big fundraiser every year in the firm and we have our own foundation that we give money. And, you know, for me, it's also personal as well. It's very education-based and, you know, know, I'm a really big believer in education. My mom was a teacher. My sister's a teacher. I took those tests in high school and it's like, Colin, you're going to be a teacher. It's like, I'm not going to be a teacher, but it's like, you know, teaching is incredibly important.

38:33And, you know, I think education is the big, you know, a big change agent, obviously. And so I do a lot around education, but it really came from Vanguard saying like, we're incredibly successful. We're incredibly fortunate. We can give back. And we, we talk about that constantly. Very strong culture. Very strong. Yeah. Yeah. Very strong. But yet, you know, one of the benefits that we get is when you hire people from the outside, you know, they come in, they change it a little bit, they add some stuff to it, but they're also attracted to the culture. You know, it's why, you know, they appreciate - I suspect your attention's higher than the industry.

39:05Yeah. I would think it's pretty high for sure. So when you were at Penn State, what was your dream back then? Did you have any idea you wanted to be in financial services? I had no clue. I didn't know. I said my mom was a teacher. My dad was a cop, although he had retired from the police force soon after I was born, and he just did some odd jobs. And so we had no investments as a family. We were lower middle class. There was nothing. My dad would sometimes, my friends know this story, my dad would get a bill in the mail, and he'd remail it back to himself. He'd drive somewhere on the way to work and remail it because he didn't want to see it sitting on his desk.

39:43So it's like, if you put it back in the mail system, it would five more days to get back to the house before you have to pay the bill. I had no idea what I wanted to do. And even when I got to Vanguard, I really didn't know what I wanted to do. I think kids these days are so much better off. There's so much more information out there. And you can do so much more work to figure out what you want to be from a business perspective. Yeah. How did Penn State change you? Four years there? Four years at Penn State, it was a great place. It was, you know, it's a bit like heaven on earth. And, and I was actually a, I was actually an engineering major when I started, which, you know, for some people at Penn State is like pre-business because engineering is, you know, there was a, I didn't do so well and I had to, I had to change my major and I worked really hard to graduate on time.

40:29And a couple of years later, I realized like, what the heck was I thinking? Like take another year. I should have taken another year. I should have taken another semester. Like that was, that was crazy. But, you know, I think that college and all colleges, and I, you know, I've, I have one kid that just graduated and other who's, who's in school. And it's like, you just do a lot of growing up and out of your parents' home and different people. And, you know, Penn state is obviously a huge place and you get exposed to a wide variety of things with an amazing football team. So that didn't hurt.

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42:05You know, we're here at DU. This is an incredible training experience all these next-gen CMOs are going through. Can you think about your career? Was there something that you went to or experienced that had an outsized impact on you? I think probably getting my MBA. So I got my MBA from Drexel University, which is in, as you would know, it's in Philly. And I did at night. And I know a lot of people eventually figure this out, but when you go back to graduate school, you just have a different perspective. You know, when you're an undergrad, you know, you might get a B in something and feel like nailed it.

42:39And it's like, all right, time to go out. When you're in grad school, you just relish the information and really like, you know, I took classes and you get truly, truly interested in what that information is. It's just different than undergrad. And so I think that that was really, you know, that was probably the thing to answer your question that was really a bit - Why did you do the MBA? I did the MBA, not curiosity. Like I did the MBA, it was pretty selfish to start, you know, and some - Salary increase. Well, not just salary increase, but someone said to me, look, if you're going, and this is still true, if you're going for a job and you're in a dead heat with somebody, but they have their MBA and you don't.

43:20And that's the reason. Do you want that to happen? And it's like, no, I don't want that to happen. So that was it. And then I got there and it's like, oh, I actually am learning a lot of different things. I'm getting exposed to this. I was a liberal arts econ major. I never had a finance class at Penn State, but obviously in Drexel, I had plenty of finance classes. So you get to learn that much more. And when you're at a firm like Vanguard and other firms as well, and you spent all your time with people from Vanguard. It was great to go somewhere and speak to people at different organizations.

43:51It gave me an appreciation for Vanguard, but I also learned about different orgs. You get the same thing here at DU when you've got somebody who working for Nissan sitting next to somebody who's working at a fiber optics company that you never heard of. It's in the B2B business next to someone who's from State Street. And it's like, it's just an amazing, it's just an amazing couple of days where you can kind of make some great contacts and learn different things. First brand you remember making an impact on you as a young boy? Well, the first brand I remember distinctly is Tang. So, I didn't drink Tang.

44:23My little sisters love Tang. And, you know, for those of you who are like, what the heck is that? So, it was - Remember that? It was the orange juice, the astronauts. Yeah. So, it was a powdered form of orange juice. No, we had it too. Yeah. So, I remember my sister is drinking Tang and loving it. And I wanted regular orange juice. Personally, Nike was probably the one. You know, a kid in the 70s and it's like, I wanted that swoosh and it made me faster when I was eight years old, right? You put on that new pair of, you know, Nikes and like, I remember running down the sidewalk after I was like, oh my gosh, I'm that much faster, you know?

45:00What was your sport back then? Actually, I swam. I swam as a kid. When I got to high school, I played soccer and lacrosse as well. so I did three sports but swimming was the one that I did you know since I was uh since I was were you good enough to do it in college I was not good enough to do it in college you still swim so I still swim yeah swimming is one of those things now you figure it's like you know it's easy on the knees it's easy and it's one of those sports you can do I ride a lot I run a lot I was doing tries there for a while but you know I like the I like the variety but swimming is one of those things where it's like I love jumping in the pool and yeah that's great yeah who's been the most influential mentor of yours at Vanguard over these years?

45:39It's hard to pinpoint one person, Jim. I've been close to a number of the CEOs at Vanguard just over time. Jack Brennan made a big impression on me. Bill McNabb left a big impression on me. Tim Buckley, who's a close friend of mine and was the CEO for eight years, left a big impression on me. But there's been a number of leaders that have impacted me. So, it's really hard to input one person. And I, you know, I think that that's a bit the, that's Vanguard. That's the culture. You don't have to find the one single person who's going to be it for you because there's actually a lot of people that are going to impact you.

46:19And I also think, I don't know if you've seen this experience, had this experience, like, you know, there's different mentors for different times and different mentors for different experiences. And, you know, it's okay to have a mentor who's, you know, very important for a period of time and maybe not forever. And, you know, somebody else is going to mentor you, you know, from then on, but you need, you need that person to go to somewhere. So who's been the most inspiring person in your life? I mentioned him earlier. I think the high school economics teacher, lacrosse coach, he was also a history teacher.

46:51And so I wound up going to Penn state and I wound up majoring in economics, minoring in history, wishing I was good enough to play lacrosse there. And he was just someone who really was the first person that really talked about character counting and how important that was. And his name was Reed Watson. He was this legendary lacrosse coach. And there's people, there's still Reed's boys. And he really was, he was a tough competitor, but he really held you to a high standard for sure. Teamwork was a big thing with him and he really instilled that. Somebody one day at lacrosse practice, I'll never forget this, somebody really upset him.

47:32I don't know what it was and they must've been showboating. So suddenly it's March. So we're not outside playing lacrosse yet because it's too cold and snowy. And he comes in and he puts a stepladder underneath a basketball hoop and he goes up the ladder, puts a board on top of the basketball hoop, and it puts a bucket of water on that. And he comes down and he's talking about teamwork. And it's like, if any of you and somebody, somebody must've been show, but I think that you're more important to the team. I want you to walk up that step ladder. I want you to put your fist in the pail of water and pull it out.

48:08And the hole that you leave behind is how much I'm going to miss you when you're not on this team. you know i must have been 15 then so i'm a lot older now i still remember that that story of like yeah the hole you leave in the bucket of water is how much i'm gonna miss you right not at all it's very dramatic it's very dramatic very dramatic i don't know who knows where he got that from i'm not sure he made that up in the moment but he was somebody who was you feared him and you respected him and you want to still remember very vividly yeah 100 well will penn state win the national championship in football this year.

48:41They're ranked number two as we record this. Right. Look, Penn State won the national championship in my freshman year. So I was spoiled. Is that the last time? No, they think they won it one year. They won it once after that. I'd see Joe Paterno walking around campus. Everyone had Joe Paterno sightings back then. I don't know. I'm frustrated. I, you know, that inability to win that one big game is just dogging them. But, you know, Drew Aller, like, you know, has been talking with Arch Manning, who's been talking about one of the best quarterbacks in the country. And, you know, we've got some, a couple of amazing running backs.

49:19We'll miss Abdul Carr, who's, you know, playing for the Jets, unfortunately for him. But, you know, but look, look, we also have, you know, we can root for the Eagles as well. And, you know, it's a great thing when you got Saquon. Phillies are good. Yeah. Phillies look good. You know, Saquon, you know, it's great to have those two things. So it's good. What do you think? I hope. This is the year. This has to be the year. And if it doesn't happen, I think there will be repercussions. I think you're right. And you went to Franklin and Marshall, right? Yeah. But I went to Penn State for graduate school.

49:49Oh, is that right? Yeah. And met my wife there. Oh, wow. And met P &G there. Oh, is that right? So I have a lot of loyalty to Penn State. Changed my life. Yeah. It's amazing. And the two big things. Well, But what I, you know, P &G was very defining for me. Obviously my wife. Right, right. 42 years married. Yeah, that's a fantastic place up there. We had a great two years there. Oh yeah, I'm sure you did. It's the best. We have to end this with we are. Penn State? Inside joke, sorry about that. Thank you, Colin. Thank you so much. That was great. That was great, really good. That was my conversation with Colin Kenton.

50:21Three lessons from this one for your business brand and life. First takeaway, Colin is a unique case. having spent his entire career at one company. And his tenure shows how mission and culture should be the key anchors for your professional journey. What really stands out is how much Vanguard's mission shaped Colin's path. Longevity wasn't just about climbing the ladder, it was about staying connected to a purpose bigger than himself. As Colin says, the longer I was there, I figured out the mission orientation of the company. And that's when it really hit, really making a difference in people's lives.

50:56Second takeaway, leadership is much more than achieving business results. At Vanguard, leaders are measured not only by performance, but by how well they develop people, foster mentorship, and carry forward the principles of Jack Bogle and Jack Brennan. Colin put it simply, you have to be great in your job and you also need to be a great boss. If you're not a great manager, you're not going to last very long. And my third takeaway, say yes to new stretching assignments. Colin's story is one of reinvention, whether it was serving as Vanguard's first global CMO or leading operations in Australia.

51:32Each new role gave him a fresh perspective and made the company stronger.

51:40That's it for this week's episode of the CMO Podcast. As always, I would be grateful if you shared our show with your friends, along with subscribing and leaving a review on Apple Podcasts, Spotify, or wherever you listen. The CMO Podcast is a Vive original production. The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of our sponsors or its personnel, nor do our sponsors advocate or endorse any individuals or entities featured on the episodes.