Why Coachability Beats Talent (And It Costs Your Promotions) | Nationwide former CEO Joe Garner

0:00Hi everyone, I'm Hayaatun and welcome to What We Don't Know, all about better leadership in a truly chaotic world. Thank you for joining us for today's episode. Today we're going to hear about how you can lead a national institution that millions of people trust with their savings. We're going to hear about what performance sport can teach us around being a great leader. we're going to explore whether you have rocks or sponges in your brain yep I kid you not and we're going to spend some time hanging out with the wolves because wolves it turns out have a lot to teach us about leadership are you up for this I'm up for this come and join us so this is what we know about Joe Garner who was formerly the CEO of Nationwide I started again this is what we know about Joe Garner, former CEO of Nationwide Building Society.

0:54As CEO of Nationwide, Joe led one of the UK's largest and most trusted mutual financial institutions, serving millions of members across the country. And he did that through a period of enormous change and challenge. Joe, it's fair to say in his leadership roles at Nationwide and then previously at OpenReach and HSBC, did not have a quiet time in leadership. He lived through COVID and Brexit and the financial crisis. And that meant that he spent a lot of time thinking about how we make decisions. And that in turn drove the second part of his career, which is as a trusted advisor to other CEOs.

1:32And because Joe's done a lot of the hard graft in thinking about the lessons that he's learnt, we're going to have a great time hearing some of those lessons from Joe that we can all take into our own lives. Joe, a very warm welcome. Thank you so much for joining us on What We Don't know. Thank you. Thank you for inviting me. It's an absolute pleasure. So we like to start with giving our listeners and our viewers a little bit of a sense of what our guests are currently doing. So tell us about your professional portfolio at the moment. Right. OK. So I am working as an advisor to leaders in general, chief executives in private sector, in public sector and in the royal household.

2:13And it's a great privilege because I spend my time having sort of fireside chats with leaders about the issues that are on their minds and trying to help them in whatever ways that I can. So that's the main thing I'm doing. I have some other bits and pieces around the sides, but that's the main thing. Sounds like fun. And you have a very good platform in that you yourself were a chief executive for many years. So tell us a bit about maybe your last big job at Nationwide. So my last CEO role was a CEO of Nationwide Building Society, which I did for six and a half plus years. And it was just fantastic for a whole number of reasons.

2:49But the number one was the alignment of values. Nationwide is a mutual organization owned and run for the benefit of its members that were also its customers. And the values of that mutual organization aligned really strongly with where I had ended up in terms of my beliefs. It was my third go at running a large scale business. And so, you know, I'd made mistakes, I'd learned a bit. And it was great to just you know have a have the opportunity to run such a fantastic organization tough times Brexit Covid all of that but it was it was wonderful. Well we definitely need to spend some time hearing more about those lessons you learned and those tough times as well but for now that's given us a bit of a sense of really why you're in the chair so let's now rewind the clock.

3:33I want to know a bit more about the person behind the job title so take us back to say I don't know 11 year old Joe Oh, you picked a good year. Okay, good, good. I got lucky. Tell us, what would we find if we met 11-year-old Joe Garner? So my wife laughs and I say, everything seemed to have happened when I was 11 years old, right? So my parents had moved around a lot. And when I was 11 years old, split up spectacularly. When one of our neighbours came to beat our door down at three in the morning because it turned out my father had been having an affair with his wife. and honestly it was like everything fell apart we had to move out of there it was thing and and it was it was probably you know the most formative event of my you know my childhood was that and you know lots of people have different experiences of these you know I'm not the only person to have been through these sorts of things but it was fairly it was it was a very messy time.

4:36But the one thing my father did do was continue to pay the school fees. And so what I really benefited from through all of that carnage was I had a stable and high quality education. And for that, I'm very grateful. Gosh, that does sound like I zoned in on... You picked the most formative way. But then the other thing that happened was I stopped growing. I completely stopped growing. So by the time I was 13, 14, I mean, people just, you know, I was a joke. And as a result, they put me in the back of a boat and I started coxing because I was small and lightweight. And actually it was sport changed the whole trajectory of my life and has done and continued to throughout.

5:25out. So it was a very formative time in many ways. Well, I was also very short as a child, but I can tell you that there was no sporting achievement that resulted from my being short, I'm afraid. But I'm glad there was in your case. So we'll talk more about sports. It has been important to you. But looking back then at those, say, teenage years, do you think you saw yourself as a leader or a future leader? I think I was still, I mean, I look back and I was quite lost as a child. But I think the relevance of it, what that did, what those events did, is they put me in that sort of category of absent father, adolescent, really with a point to prove.

6:03And definitely I was really driven as a teenager, as a young adult. Not all of it healthy. I mean, definitely, you know, the search for, and I think anyone who's had an absent or difficult parent, it will have that sort of quest for recognition and achievement, which doesn't always come from a great place but it really drove me on and it got me to university and it got me into employment well thank you for sharing so openly I think it's it's super helpful that we can sort of you know expose the inner workings of our brains sometimes in ways that hopefully will resonate with some people so what would you say were your first concrete experience of leadership was and when you look back on sort of the time before you were in a formal job It was definitely all through sport.

6:50So as a cox of a rowing boat, you know, you're the person who sits at the back, tries to make sure you're pointing in the right direction and tries to motivate everyone to work really hard, which is not a bad analogy for some aspects of leadership. and then as I went on I started you know being the captain of the boat club and trying to you know run the the whole organization and they were definitely my first experiences of a leadership role but if I look back on it now it's what you know I would describe as a sort of you know junior middle management approach where you know you're really pushing hard and and trying to almost control the outcome rather than really lead and grow an organization but that's the great thing about sport and you know other things outside of the school curriculum is that let you give you the chance to practice and hone and learn as you go I'm getting echoes of my conversation with Matt Matt Britton well yes who you of course know well well we met on the river when we were 18 19 years old actually and I still and I dug up some sort of old funny photos of us then oh well I think our producers are looking quite interested we might be able to add those to our feed um so so let's move away from rowing for an hour from from your coxing career um i would like you to talk us through your journey into the world of work and into leadership what were the sort of formative moments along that pathway so when i was finishing university it was 91 which was not a great graduate recruitment time and i was totally focused on getting a job i still had that really you know sort of mad drive to a thing.

8:26And I applied to four companies, I was offered a job with two and rejected by two. And I joined Procter & Gamble, which I then stayed with P &G for over eight years. And I experienced them as a truly principle led organisation. The first few years I was in Newcastle, the next chunk I was in based in Bucharest, Romania, in, you know, covering the Balkan markets. And throughout that time, I think I benefited from a very structured approach trading wise, but more than anything else, the principles. It was absolutely a principle led company. And whether in the developed world or on the frontier, which was Romania in the 90s, I really enjoyed that.

9:09And I think their core philosophy that a purpose of a business, A healthy business works when you motivate your employees to serve your customers and your customers reward you with their loyalty. And it's that that leads to long term profitable growth. And that philosophy is one that has stayed with me throughout my career. I find it interesting the way you talk about companies with a real sense of sort of personal connection to purpose and to mission in a way that lots of people might be a bit cynical about. You know, here are company values, here's our company mission. When you talk about it, it feels personal.

9:45Is that how you feel? Have you always been like that? I think I have. I mean, I'm quite sort of all in on things. Yeah. And the values have to be there. I mean, I've had experiences where it wasn't. I mean, when I left P &G, I joined an internet startup because that's what everyone was doing in 2000. And I don't regret leaving P &G, but the guy running the startup was an ex-Israeli fighter pilot. and he would give me his my orders from his satellite phone base somewhere and so the warning signs were there and after three weeks I went to him and I said look it seems to me that I believe in trust and empowerment and you believe in command and control and he said yes and there's only room for one management style in this company and I kind of respect him for that because it's kind of integrity so yep that's how I am and that's how I'm running it and said okay fine we'll go our separate ways and we did.

10:40No room for ambiguity there. No ambiguity. But I guess juxtapositioned against this hugely principle-led, quite empowering P &G environment, and it's very different, I guess fairly early on in my career, I reached the conclusion that what really matters when you join an organisation is that there's a reasonable degree of alignment between what you personally believe in and what the organisation is trying to do. I think it's fundamental we spend how much of our lives in a working environment if you don't believe in it that's wasted life 100 so then you you had your little side quest into the internet startup where did you go next um so first of all nowhere because i thought oh great you know i'll just get a job and i remember talking to the headhunters saying yeah well there's quite a few sort of blue chip educated um you know well-trained unemployed failed dot-com people around at the moment um so I wasn't sure I nearly went back to Procter & Gamble and then I was approached for a job with Dixon's and they uh they impressed me so much they interviewed me on the Monday sent me off all the tests on the Tuesday second interview on the Thursday or the Friday and offered me the job on the Saturday morning and I remember thinking this is such a dynamic sort of uh place and and And so I joined Dixon's, still in a marketing role at that point.

12:02But what I loved about Dixon's or Curry's, as they now are, is they had such a sort of street fighter immediacy. P &G is like this great long-term strategic. For a retailer, long-term is like Thursday. You know, maybe. What really matters is tomorrow, but we can wait till Thursday if we have to. And again, it was a really complimentary experience. And that stable produced a cadre of leaders that really went right across the high street and beyond from that period. It was a really, really fantastic time to be there. And then what would you say was your first really big leadership job? So without question, it was when I joined HSBC.

12:46And this was 2004. And it was an unusual move because I moved industry again from retail into financial services. and also upper level at the time. And I had the P &L to what was HSBC in the UK, aged early 30s with no financial services experience. And I benefited from the chief executive who was, you know, he was a risk taker, took a risk on me there. And just a, people talk about empowerment. I'll give you one story of that time when I joined HSBC of empowerment. I'd come from retail. I thought, well, why don't we have a January sale? You know, banks haven't had January sales. And everyone thought, OK, that's kind of mad, but why not?

13:31Let's give it a go. And it was a time we did. So I put the plan together and I'd just joined. And I went up to see the chief executive and I couldn't sign off. I needed his sign off because it was a three million marketing spend. It was out of my authority. So I went up to see him for the first meeting. And I thought, we're never going to get to the signing in the first meeting. So I went there and finally said, OK, let's do it. Where do I sign? And I looked at the form and it was blank because I hadn't filled it in. So I wrote three million pounds at the bottom of this blank form. He grabbed it, signed it, pushed it back to me and said, just don't screw it up.

14:06And how did that make you feel having that kind of response? The most empowered I think I've ever felt. You know, here's someone signing a blank piece of paper to do something we've never done before. and then but not not abdication the just don't screw it up was i'm trusting you but you better deliver on it um and uh off we went so that was that was the bit but the real learning came i think once we hit the financial crisis now you if i don't if you don't mind me saying have had your fair share of crises in your leadership role i think i counted financial crisis covid brexit Is it various cybersecurity incidents?

14:43What have I missed? Time in Romania. And I think in many ways that was the training ground for it because Romania in the 90s was still quite chaotic. So I think you need to talk us through, A, some of those scenarios, but B, why they were so influential in the leader you then became. So it's a really interesting question. And I guess there are some levels to that. I think what crises do is often provoke moments of introspection. So during the financial crisis, there was a moment, quite a precious moment, when the whole world sort of stopped and asked itself some really deep questions like, what the hell are we doing?

15:30How have we let this happen? And it was during that time when I began my journey into understanding really how I make my decisions, how people make their decisions, what are the ethics that guide us? Because throughout the whole financial crisis, all the catastrophes and poor outcomes and desperate outcomes that it led to, I didn't meet a single person who was trying to do the wrong thing. Everyone thought they were doing the right thing, but it's the way that they were deciding what was right that was wrong. And that's where I think it really got interesting for me. Okay, that is fascinating.

16:07And it partly answers a question I wanted to come on to um so I'll just throw it in here which was you've you've this is a very unusual book scenario here because normally people come on podcasts to promote their book because they're trying to sell more copies I'm sitting here with a copy of a book that's not available to the general public um because you've compiled especially for your clients but I could really feel the effort that you've gone to to distill what is usually kind of embodied wisdom from lived experience into things you can share and pass on it was actually quite moving to see the effort you'd gone to and I was wondering whether that was something that you did in real time through your career or whether it's really the space to reflect that being out of the sort of CEO madness has given you because I think it's quite hard to do in real time without almost interfering with your ability to do the job yeah so and I think the answer is all of the above so let me just explain the book why write a book that you're not actually trying to promote to only one.

17:05Well, it's not there. Actually, there are 200 copies of it. And I wrote it for two reasons. Reason number one, which is the primary one, which is it was just kind of bursting out of me. And reason number two was what I do now is work as an advisor to chief executives. And in the process of getting to know them, it's a thing to say, hey, look, have a look at this. If nothing else, it will give you an idea of what I'm what I'm like. But I sort of think we're living in a world where, you know, we are absolutely overwhelmed by things to consume. And so I'm not out there sort of pushing it on people.

17:36But I think, to be fair to our viewers and listeners, we ought to share at least one of the 52 lessons with them. So is there anything that jumps to mind as something you think is a pretty universal lesson that all of us could benefit from thinking more about? OK, well, we touched on one of them, which was the, you know, that empowerment bit. Every leader talked to or everyone in the middle of organisation says, why won't they just empower us? Why won't they get on with it? I think a couple of threads that run through it. One of the things I think I believe really strongly, and I haven't expressed it this way in the book, but it's probably clearer to it like this, is the gap between what science knows about human behavior and what business does.

18:17what the gap between what science knows and business does we know that if you want to motivate people the most powerful ways you motivate them as you've already highlighted number one purpose how are we going to change the world why is this meaningful sort of work secondly potential in the process of doing it you're going to get better and you're going to learn and you're going to accumulate experience and play having some playfulness around it you can't say fun because as soon as you say fun, it stops being fun, but some playfulness around how you do things. So that's how you motivate people.

18:50And we know that. And it's been proven in a million sort of scientific ways. Often how business tries to motivate people is through financial incentives, i.e. if you do this, we'll give you that, or fear of punishment. And if you don't deliver, we're going to sanction you. And both of those narrow someone's focus. You know, for want of a better word, one is talking to greed and the other is talking to fear. And in both those scenarios, people turn to the question, not what's best for the organization or what's the right outcome, but what is in my own personal interest. And I'm an outlier on this.

19:26And I know that when I joined Nationwide, the first one of the first things I did was remove all variable personal personal incentives that I could. All, all of them that I could. Did you have to struggle to get people to accept that? I was a new chief exec. When you're a new chief exec, the board will sort of shuffle nervously and go, OK, well, you know, we'll, you know, etc. But the window of opportunity is open when you're brand new. I knew that because it wasn't my first go at this. So one of the things I made some other decisions, for example, I knew we had to also tackle pension arrangements.

19:56I thought, well, Let's not do those at the same time. Let's do personal incentives now. And then we'll come back to that. And lots of people said, oh, people will leave and so on. And the comment is always, but if someone can't influence their bonus, then it's a waste of money. And I would say if someone can influence their bonus, I'm terrified because they will. I don't want anyone making a decision to maximize their personal bonus. I want them making a decision because it's aligned to the purpose, aligned to their values. And I have never seen a set of metrics that can really capture that. There's no number that can capture the full scope of outcome that a business delivers.

20:37So why do you think it's still so prevalent that those two frames of incentives are used in the context of business, bearing in mind everything you've just said? It works in the short term. Yeah, it's very easy to get, you know, you can get 10 % results, etc. So I think it is effective in the short term. but then in my experience it costs you more in the long term and there are a number of stories in there from you know whether you take from ppi onwards where yes you can it will deliver short term but it will cost you in the long term i think there might be a deeper answer which comes back to 11 year old me which is that many people are motivated by the desire for recognition money power etc and therefore will lean towards sort of incentives as a way because it motivates them they think it will motivate others there is but that I think is is inherently limiting and dangerous there is a much higher motivation a better motivation to sort of say well how what's the how good could we be how can we make a positive difference etc and what's the best example you've come across of people appealing to those higher motivations, not just projecting the kind of base interests into the way an organisation is incentivised?

22:03Have you got good examples beyond what you have tried yourself? I think there have been periods of time when the world has moved that way, just prior to the financial crisis. You remember M &S with their Plan A, and there was a big, you know, the ecology was very much coming to the fore. But then what happens is the financial crisis and the financial imperatives then meant that economy once again moves ahead of ecology. And then we saw with COVID a really interesting resurgence. COVID was a time when what was different about COVID as a crisis is all through the financial crisis, I could go to bed at night and say, look, at the end of the day, it is only money.

22:44COVID, it genuinely was life and death. It was a distinctly human crisis. And I think it made people reflect a lot on what was the human impact of their decisions. And I don't think it's coincidental that it was also spawned a lot of the positive progress around inclusion and diversity in the true sense. But then once again, we've got a resurgence of, you know, the economic imperatives and guess what the other things sort of go to the back so the real examples that we should be looking for is not you know it's easy to be high integrity and make great decisions when you share prices up and you're ahead of your objectives what what really matters is can you stay true to those values when the pressure's really on that's very interesting I think there's a there's like a personalized equivalent of that as a CEO or as a leader whereby sometimes in a crisis you're able to show your best self but equally you become the shock absorber for the organisation and there is a limit to how much any one individual can continue to absorb.

23:53So when you look back at some of the really intense crises you lived through how do you reflect on your experience as a leader and what did you find most difficult through those periods? It's so let me give you an example of one of the things where, you know, I got it very evidently wrong. This is sort of in the territory of to what degree do you flow with the mood and where as a leader do you need to be what I would say call counter mood? So in the depths of crisis, we were running an incident. so every day the silver team would do the the work and then at the end of the day they would come to the gold team and we'd have a discussion about their recommendations of the day and so on and I remember just this was every night through COVID for however many months etc years I think and I remember one day they came along and I had been a bit concerned about the risk of the situation spilling over into civil disobedience yeah on the streets and so on and in that meeting I remember saying, well, what's our contingency if we start to see civil disobedience?

25:03This is when you were at Nationwide. When I was at Nationwide, yes. So you've got branches. Branches, et cetera. Yes, in the middle of COVID. And we had the discussion. And then afterwards, one of the team called me up, you know, about 9.30 at night and said, look, do you think this is really going to happen? And I'm like, what? And what I had done is take an already strung out and stretched organisation and scare the life out of it. and actually I think some of the learning from and partly because I was a bit strung out because we were all all were and what's why I think the learning from that is that first of all there's a bit about how do you stay in balance how do you stay what I call self-levelling through all the sort of pressures that come up to you because sometimes you need to be counter mood and when everyone is getting very down sometimes it's the role of the leader to kind of put on the mask of command and and and with a bit of hope and envisioning and also the other way when everyone's like wow this is amazing doing fantastically well well hang on let's see in a few years time whether those decisions do turn out to have been the right decisions or not it's fascinating are you a subscriber to the what doesn't kill you makes you stronger school of thought no there are a number of expressions i really don't like um uh that's one of them uh why don't i like it well it's nonsensical what doesn't kill you can leave you mortally wounded or or very damaged do i believe that we can learn from our experience and strengthen it yes but i often hear people say that sometimes in a sporting context there's a sort of justification for just inflicting pain it's not an excuse no the other one that annoys me as well is doing the same thing over and over expecting different results is madness because that that this is a tangent but that's fine like We can get all of your least favourite expressions.

26:46People say that and they say it's an Einstein quote and it was an Einstein quote. But Einstein said it in the context of scientific experiments. If you do the same molecular kind of thing, you're going to get the same results. It's misleading in a human context. If you go to the gym over and over and over, you will get different results. You'll get improvement. And I hear people often use it as an argument to kind of give up on things where you should actually keep going. Would you have some favourite expressions? Oh, yeah. Well, we just touched on it. I love wolf expressions. OK, right. This is a rich theme.

27:20Come on. Well, there's the one I referenced in there, which is, because my wife is Polish, and for some reason, I don't know, she has a lot of wolf expressions. One is, the wolf is no longer hungry and the sheep is still whole. And I like that as a statement of recognition. Of course, you've got the wolf in sheep's clothing. Keep company with a wolf and you will learn how to howl. I think that's a I might need some help unpacking that one but I like it well it's sort of you know the company you keep will influence you in time so well so I'll offer you up a wolf phrase as well because as it happens my mom lived in Russia for a while and the the wolf expression that raises it gets raised in our household is work is not a wolf it will not run away into the forest and I find it very interesting because people interpret it one of two ways depending on their particular predilection so some people think that means that well i have to do my work because it's not just going to disappear and get done itself yes whereas others are like it's the end of the day i can go home it'll still be there tomorrow and i can carry on okay that's good oh one more as well um a wolf remains a wolf even if it has not eaten your sheep as well so anyway you might need a whole wolf related series i'm just oh i'm glad i asked that question um switching topics Am I right in thinking that you set your alarm for 5.14am when you were working in CEO roles, typically?

28:43On a Swindon day, 5.21 on a London day. So can I just pause for a second? Because 5.14 or 5.21 are both very early and very specific. So can you explain to us why those numbers? I think it's reflective of definitely my sort of obsessive, constant optimisation of everything. that I would do in the role. I did use a car a lot because it was very productive. So I would get up, I would meditate, the car would pick me up, and then I'd get to the gym and do the thing and then get at my desk for 8.30. And I learned over time that, you know, that was quite predictable. And if I went at 5.50, I'd be just, you know, squeezing it a little bit tight.

29:29And if I went at 520. Sorry, the other way around. So just from when you do things over and over, I always ask myself the question, well, how can you do it a little bit more efficiently, etc. And that mindset is the mindset of almost most of the CEOs that I work with. Because when you're the chief exec, your diary is planned out the next three months in advance, you know, where you're going to be and what you need to do. And every little bit of time is allocated and optimised. And so it was just a natural extension of doing that. You can't leave things to chance as a CEO. No. Do you think it reduced your cognitive load that you didn't have to make a decision every day about what tomorrow, what time you set your alarm?

30:14Is that also part of it, that it stops you having to think about a thing because it's already pre-planned? Well, it was me that would plan it. and it's just how it works. If you're under those sorts of, you know, the demands on you and the demands on the leader today have never been more extreme. You know, the waterfront that you look across is enormous. Personally, I mean, people do vary on this, you know, like the Myers-Briggs thing. Some people are more last minute. Some people are more planful. Yeah, I definitely know CEOs who don't do this job. Maybe they should, but they don't. And I definitely would run a system in terms of the logistics, the operations.

30:59It was very important to me that anyone who emailed got a response, that the office was responsive, that we kept our commitments. And I think it was... So Dixon's wasn't like that. Dixon's was a bit chaotic. But I think in financial services, you learn the importance of accuracy. Yes, precision and rigor. If Dixon's ran a bank, they'd say, look, there's your account balance. You know, it's roughly right. If it's a bit wrong, we'll fix it tomorrow. You know, you can't really do that in financial services. You have to be so precise and accurate. And I quite like that. I like the discipline of it.

31:34So I was going to ask you, do you think that self-discipline is an absolute sort of necessity if you're going to try to aim for a leadership role? I personally do, actually. I'll take a position on that. that's not to say that you can get quite a long way and there are leaders out there that are not well organized but then the things you hear around them is oh their email's like a black hole or I never hear back on it or they didn't show up or so and I sort of think you know this is really important and I you know I can remember often I would talk with my wife who really understood understood this well but you know if you're on holiday and there's an email and I have to deal with it it's like look you know at Nationwide we look we were looking after 10 percent of the nation's savings you know it actually really is important you can't sort of go well I'll have a look at it tomorrow and see how I feel you know so so I said I did take the view that that the equation of the chief executive is a decision to give it a disproportionate priority in your life yeah I was listening to Emma Greed recently who of course is iconic businesswoman who's behind you know amazing brands like Skims and Good American and her take is very much around you have to take personal responsibility for your life and the choices that you make.

32:48And I feel that this sort of sits in that category. It's not necessarily as a single right way to execute, but you have to take personal responsibility for the decisions that you're taking as a CEO and the consequences of those decisions. So, yeah, I think lots of CEOs would agree with some variant of this. We might all express it differently. And you're not looking for any sympathy there for chief execs or anything like that. It's a choice. On the contrary, yeah. It's a choice, but it does mean, I mean, for my whole time as a CEO at Nationwide, at Openreach and at HSBC, generally speaking, I would be either working, exercising with my family or in the gym.