Sept. 21, 2021

Leadership lessons from billionaire philanthropist David Rubenstein | Greater Washington DC DMV Changemaker

Leadership lessons from billionaire philanthropist David Rubenstein | Greater Washington DC DMV Changemaker

In this episode of Partnering Leadership, David Rubenstein, co-founder & co-chairman of Carlyle Group & President of the Economic Club of Washington DC, shares his journey from working at the White House to starting one of the largest private equity investment firms globally. He also talks about his leadership lessons, philanthropy, Peer-to-Peer interviewing for the Economic Club of Washington DC and Bloomberg TV, and the legacy he plans to leave behind. 

Some highlights:

- David Rubenstein’s childhood and how he became an avid reader

- David’s experience at the White House working for former U.S. President Jimmy Carter

- The story behind David Rubenstein helping co-found the Carlyle Group

- On becoming Carlyle Group’s fundraiser and how David increased its visibility 

- David Rubenstein’s leadership practices and values

- ‘Patriotic Philanthropy’ and David Rubenstein’s signing of the giving pledge

- David Rubenstein on the value of family and the importance of raising successful children

- Why David Rubenstein accepted to become the President of The Economic Club of Washington DC and then decided to change the format. 

- Becoming a Peer-to-Peer interviewer: on self-deprecating humor, being a good listener, and more

- Leadership lessons from David Rubenstein’s book, How to Lead

- On his passion for capturing the ‘American experiment’ and his opinion on America today

- David Rubenstein’s desire for impact as he ‘sprints’ to leave a legacy 

- Why David Rubenstein reads over 100 books a year and encourages others to read more

- On moving forward post-COVID with ongoing transformation and change

 

Mentioned in this episode:

-Ted Sorensen, lawyer, and advisor to former President John F. Kennedy

-Birch Bayh, former senator

-Jimmy Carter, 39th U.S. President

-Alfred E. Kahn, economic advisor

-William E. Simon, businessman, philanthropist, and 63rd United States Secretary of the Treasury

-James Baker III, former United States Secretary of State

-George H. W. Bush, 41st U.S. President

-Frank Carlucci, former U.S. Secretary of Defense

-John Major, former Prime Minister of the United Kingdom

-Jacqueline Kennedy Onassis, former First Lady of the United States

-Vernon Jordan, business executive, and civil rights activist

-Oprah Winfrey, talk show host, television producer, actress, author, and philanthropist

-Ruth Bader Ginsburg, former Associate Justice of the Supreme Court of the United States

-Indra Nooyi, CEO of of Pepsico

-Satya Nadella, CEO of Microsoft

-Tim Cook, CEO of Apple

-Marc Andreessen, entrepreneur, investor, and software engineer

-Andrew Grove, businessman, engineer, and former CEO of Intel Corporation


Book Recommendations:
-Patriots of Two Nations by Spencer Critchley 

-How to Lead by David Rubenstein

 

Connect with David Rubenstein:

David Rubenstein Website

The Carlyle Group Website

The David Rubenstein Show: Peer-to-Peer

The Economic Club of Washington D.C. Website

 

Connect with Mahan Tavakoli:

MahanTavakoli.com

 

More information and resources are available at the Partnering Leadership Podcast website: 

PartneringLeadership.com

Transcript

Mahan Tavakoli: 

Welcome to Partnering Leadership. I'm really excited this week to be welcoming David Rubenstein. David is a co-founder and co-chairman of The Carlyle Group, one of the world's largest and most successful private investment firms. He co-founded a firm back in 1987 and since then, Carlyle has grown into a firm managing more than $260 billion from 29 offices around the globe.

But David's success and impact doesn't end with the organization. He has been involved in so many different philanthropic efforts in addition to being one of the original signers of The Giving Pledge, pledging to give a significant portion of his wealth to nonprofit organizations, and recipient of Carnegie Medal of Philanthropy, David Rockefeller Award, many other philanthropic awards, David has also been actively involved serving as chairman of the board of trustees for Duke University, Brookings Institution, the John F. Kennedy Center, so the list goes on and on. I can spend the rest of the hour talking about his philanthropic contributions and his involvement. 

On the philanthropic side, it's great to note that David also established a new category of philanthropy and that's patriotic philanthropy. He's one of the first people to think about giving back by helping renovate the Washington Monument, Monticello, Iwo Jima Memorial, Kennedy Center, Smithsonian, The National Archives. So he has been giving back to celebrate the history of United States as he sees it to be part of his responsibility to give back to the country that has given him so much.

So David, in his business, established the category and was very successful, in my view. In philanthropy, even though patriotic philanthropy is less than about 10% of all of his philanthropic giving, he established a category in doing that. And then he is also president of The Economic Club of Washington DC, an organization I've been member of for more than 20 years, and he established a new category there too - truly transforming The Economic Club by holding peer-to-peer conversations. 

Before David, the CEOs would come read their standard speeches that they've given 429 times before, written by their PR agents. David made it a lot more fun with a peer-to-peer conversation, bringing out a lot more insights. So establishing a new category of conversations, which is why eventually Bloomberg TV also asked him to host Peer-to-Peer conversations on Bloomberg. 

So I really enjoyed this conversation, have learned a lot from David, both in reading his books and watching him in action at The Economic Club of DC. I know you will also learn a lot from this conversation, and urge you to read his books. There is a lot to learn in there. And at the end of the day, someone as successful as David reads a hundred books a year, so we can all live up to making ourselves more effective and better by reading more, starting out with some of David's own books on both US history and on leadership.

Now, I also love hearing from you. Keep your comments coming,  mahan@mahantavakoli.com. Don't forget, there's a microphone icon on PartneringLeadership.com. You can leave voice messages for me there. I love getting those voice messages. I know you appreciate these conversations on Tuesdays with magnificent Changemakers in the greater Washington DC region.

Many of them having global impact like David Rubenstein and then on Thursdays, primarily with authors of leadership books whose insights I believe can be transformative in the way we end up leading ourselves, our teams, and our organizations, having a greater impact on our community. Now here's my conversation with David Rubenstein.

Mahan Tavakoli: 

David Rubenstein, welcome to Partnering Leadership. I am thrilled to have you in this conversation with me.

David Rubenstein: 

My pleasure to be here. Thank you for inviting me.

Mahan Tavakoli: 

Well, it is also a challenge for me knowing that you are among many things, a master interviewer. So we will see how this goes. Now, David, you grew up in what you refer to as a 'Jewish ghetto' in Baltimore. How could there be a ghetto in a major US city when you were growing up?

David Rubenstein: 

In 1948, in the United States Supreme court of Shelley v. Kraemer, it was ruled that mortgages could not forbid you to sell to a black or a Jew, but many mortgages had previously done so, but nonetheless, even though it was illegal, I think people in Baltimore didn't really change the practice. 

So if you were Jewish, you really couldn't buy a home in the non-Jewish area and if you were black, you really couldn't buy a home in the white area. So the people who were Jewish in Baltimore tended to live in Northwest Baltimore, and it was virtually nobody was not Jewish was there, but everybody who was Jewish was there, that's the way it worked.

Mahan Tavakoli: 

Both of your parents had not graduated from school, but one of the things I know about you is you got really into reading books. What was it that got you hooked on reading so many books so early in your life?

David Rubenstein: 

When I got my library card at six years old, you could take out 12 books a week and I would read them all on the first day and I had to wait a week to get more books. But I really, it showed me a whole different world. I was in a relatively cloistered blue collar Jewish world, and I was starting to read books about things outside that world and that just gave me more knowledge and appetite to learn more about the world. I guess that was it..

Mahan Tavakoli: 

But what was it about you, David? There are lots of different kids. I don't think I've run into too many kids that at that young age would  check out and read so many books. Was it something your parents said or what was it with you?

David Rubenstein: 

Well, it was either that I was pleasing my parents by reading. Every kid wants their parents' approval or I was so bad at everything else that by comparison, I was good at reading. So I realized that if I was not a good athlete, I wasn't great at other things that this was something I was good at. I guess maybe that's why I gravitated to it.

Mahan Tavakoli: 

So how come a Jewish kid growing up in Baltimore, reading all those books, ends up at Duke University?

David Rubenstein: 

I applied to a number of colleges and Duke was not one that I expected to go to. It had a crucifix in the university seal. It didn't seem like it was something that I would probably say it was that welcoming to people who are Jewish. But the night before applications were due, somebody gave me the application to Duke and he was not going to send it, he decided not to apply. So I decided I would apply, fill it out. I didn't have a typewriter, I filled that in longhand, didn't think they could read my writing, but I got in and I went there because they gave me the biggest scholarship of all the schools I got into.

Mahan Tavakoli: 

And then eventually after law school, you end up practicing law. How did you end up in the Carter administration?

David Rubenstein: 

Like most things in life, it's by serendipity. I had wanted to work in the White House. I was interested in politics. I went to work for Ted Sorensen, the practicing law. He was at a firm in New York and he had been John Kennedy's white house advisor, and so after two years of that, I asked him if he would help me get a job with somebody who might be president someday so I could be like him working in the White House. 

And he got me an interview with, and I got a job with Birch Bayh who was running for president in 1976, but Bayh dropped out about a month after I joined, which shows my political acumen wasn't so good. So I, somehow I, people knew that I was interested in working in a political campaign and going to the White House.

So I got an interview for somebody named Jimmy Carter, who was a peanut farmer from Georgia, but I decided to take the interview and got the job. And I went to work there and then all of a sudden, we won. So when you win a campaign, you get a job usually at the White House. And I got the job of being the Deputy Domestic Policy Advisor with an office in the west wing. I wasn't qualified, a lot of people weren't qualified, so I didn't think I stood out that much.

 Mahan Tavakoli: 

Now, you've got a lot of great stories during that era, but I've also heard you talk about referring to recessions as bananas. Is that true?

David Rubenstein: 

Yes. There was a inflation advisor, Fred Kahn, who was the inflation advisor to Carter, and he said, "I think we're going into a recession" one day. And all of a sudden, the press beat him up and Carter was upset because he didn't want it to look like we're going to recession when we're going into a re-election campaign.

So Carter told him not to use that word anymore. And he said, "Well, what am I supposed to do? I'm an honest guy." He said, "Just don't use the word recession." So from then on, Fred Kahn would say, we're going into a banana. And obviously the reporters wouldn't write a headline saying Carter's inflation advisor says we're going into a banana. So they kind of let him get away with it.

Mahan Tavakoli: 

David, when Carter wasn't re-elected, what happened for you then?

David Rubenstein: 

It's an interesting experience. Everybody told me how smart I was, how talented I was, hardworking. So everybody wanted to hire me when Carter was president. When I called them up, after we lost the election, nobody wanted to hire me, because Carter was out of power. So I struggled for a while to get a job because although I practice law, I had only done it for two years and I really wasn't, I didn't have any skillset that was useful to law firms. 

So I didn't want to tell my mother that I couldn't get a job so I told her I had so many offers, I didn't know which one to take. Eventually after six months, she said, "You want to take some offer." And I finally got an offer to start more or less at the bottom at a law firm. And I practiced law for a number of years, but my clients didn't think I was that great so I realized I had to do something different.

Mahan Tavakoli: 

And where did the idea for Carlyle come from? 

David Rubenstein: 

Will Simon had been the Secretary of the Treasury under president Ford and after he left, and Carter went to the office, he did a, something called a leveraged buyout where he put it on, I think about a million dollars and he made something like $80 million in about 18 months. And I read about it, I said, I don't know what that leveraged buyout is, but it's better than practicing law. So I decided to talk to some of my friends and said, I think we can form a leveraged buyout operation in Washington DC. Eventually, we did.

Mahan Tavakoli: 

You had experience in practicing law, you had experience in the administration. Why did you choose to focus your efforts on fundraising? You have no background or training or schooling in fundraising?

David Rubenstein: 

I had none, of course, and I didn't really know much about the skill of raising money and it is a skill, but I didn't have an MBA. My partners in starting Carlyle had MBAs and they had invested money, not in buyouts, but they had invested money. So I thought they could really figure out the buyout business, learn how to do that and I would have to do what was left over and what was left over was the thing nobody else wanted to do, which was raise the money, so I took on that skill.

Mahan Tavakoli: 

And David, one of the unique things about you is that I think you are a leader in category design and we'll touch on that later. Carlyle ended up being a first in DC, first globally, and you also chose to bring people like Jim Baker and George Bush to be associated with the organization.

David Rubenstein: 

That's correct. Early on nobody knew who David Rubenstein was, and maybe they don't know now either, but they certainly didn't know then. And I thought, how can we get more visibility? Well, Frank Carlucci, who'd been Secretary of Defense under president Reagan, he was looking for a perch more or less, he wasn't a lawyer so he couldn't join a law firm in those days. 

And he was looking for a place to kind of be a base for him as he went on a lot of corporate boards and we were told about it, and so we asked if he'd join us, he did. And he did a really good job of opening doors we couldn't have opened for ourselves. And I figured when four years later, Jim Baker was stepping down as Secretary of State, he would be even more visible. So we brought him in and then he said, "Would you like to bring my friend in, George Herbert Walker Bush?" We said, "Okay." And then he said, "Would you like to bring my friend John Major in?" And we said, "Okay."

And gradually, we had a lot of famous people who could open doors mostly to make them make our presentations. I mean, they didn't do anything nefarious. They weren't bringing deals in, necessarily. But if you go to Kuwait and you have George Herbert Walker Bush or Jim Baker with you, you could probably get an audience.

Mahan Tavakoli: 

There are a lot of things that you did at Carlyle that set Carlyle apart and made it unique. Another thing I found interesting is that early on, you chose not to invest in tobacco, guns, and alcohol. Where did that decision come from?

David Rubenstein: 

I didn't want to invest in what I call "the sins", and so I'm not an alcohol drinker, so I just figured we would not invest there and not being somewhat controversial area, but other people disagreed with that. Firearms, I didn't see any reason why we'd want to do that, that was very controversial. Obviously, I'm not a smoker, so I didn't think tobacco would be good. And I also didn't want to do gambling. 

In hindsight, I was maybe too prudish about these things because gambling isn't seen as so nefarious compared to what I had thought. Many people invest in alcohol and don't seem to be punished for it. And we actually have bought a wine company in recent years in Australia. Firearms, I still think that's not a good thing to invest in, and I'm glad we didn't. And I just felt there were certain things that were not going to be what we would like to do. And I don't know that we've got any real political credit or investors patted us on the back for that as much as I would have thought.

Mahan Tavakoli: 

It has become a lot more important over the years. And especially over the past couple of years. Now, you had a lot of success with Carlyle and I know you are a student of leadership, which we'll get to your book, How to Lead, but when you reflect on your own success at Carlyle, what were the leadership practices that helped you succeed and make Carlyle the successful organization that it became?

David Rubenstein: 

I say in my book and I also believe that focus is very important. So we focused on fundraising and building the firm. Persistence, not taking "no" for an answer. Also, trying to share the credit, so if I did something good, I wouldn't say "I did it" and I would try to share the credit with my partners or vice versa, they did the same with me. I also think that we had a vision of where we wanted to go and we were working toward, that vision was to build a global private equity firm, which hadn't really existed before, and that was our mission, and that was what we were trying to.

Mahan Tavakoli: 

One of the things I've noticed about you, David, and seeing you in some of the interactions with the economic club in DC is you are definitely one of those people that walks in a room and is the smartest person in the room, but you don't come across as being the smartest person in the room. How were you able to surround yourself with people that reduced your blind spots as leaders move up in organizations, their blind spots end up growing, you, that wasn't the case for. How were you able to resist that?

David Rubenstein: 

I have a view that I'm not that smart and therefore, I've always wanted to associate with people who are smarter than me. So I would always try to recruit people that had great academic records or were really smart in my observation. And so that was one thing that was helpful. I think also, a certain degree of humility always helps.

So the point you're making is I didn't try to say, well, I've done some things that are pretty good and look how great I am. That wasn't my style. My style is to be somewhat self-deprecating and to be humble. And I think humility is a virtue, I think arrogance is not, and I tried to avoid arrogance to the extent that's possible.

Mahan Tavakoli: 

And you've also set the path with respect to philanthropy in that you were one of the first 40 people to sign The Giving Pledge. And again, category design. You started something that is a small part of your philanthropic giving called 'patriotic philanthropy.'

David Rubenstein: 

Yes. What that is is I happened to buy the Magna Carta. It wasn't something that I really set out to do, but I realized it was going to be stuff for sale and it was going to probably leave the country, and I wanted to have at least one Magna Carta in private hands in the United States. So I bought it and I put it on display at the National Archives and I realized people thought, it's nice to not put it in your closet or put it in a bank vault, but let other people see it.

So I began the idea of buying other historic documents, put them on display so that people could see them, be inspired to learn more about the documents, and maybe become a more informed citizen, which is what we need, represented democracy depends on informed citizens. And then I decided to, when the Washington monument had its earthquake damage, I asked the head of the park service how long it would take to get the money to fix it and he said forever cause I had to deal with Congress. So I said, I'll put up the money. 

And then I realized, if you can fix some historic things, people will visit them, and maybe make them better. So the monument was fixed. Jefferson Memorial is now being fixed, Lincoln Memorial, Monticello, Montpelier. We just opened up Custis-Lee Mansion at the top of Arlington. So those are some small things. It's probably 5 or 10% of my philanthropic giving, but it's 99% of the attention that it gets.

Mahan Tavakoli: 

Because it is a new category. It is category designed the same way, to a certain extent that Carlyle was, which is magnificent. It is really appreciated by people that take pride in this country. I know the next book you are going to be writing is about what it is to be an American. So this is a source of pride and a new category of philanthropy that you've said.

David Rubenstein: 

Yeah, I wanted to be realistic about it. I can't say that my colleagues in The Giving Pledge arena think it's this something that's so wonderful that they've rushed to do the same. I haven't been proselytizing that much about others doing it, I hope others do. But for the time being, I get more attention than I deserve because many other people aren't doing it.

It also gets attention because people say, "Why fix up the Washington Monument? The government will do that" or "Why fix up the Lincoln Memorial? The government will do that." And I have to try to tell people the government doesn't do everything that it should do and don't have the money, and if I can prod it along, maybe it'll help the government do some things it should do.

Mahan Tavakoli: 

And the stories are a big part of what holds this country together. Any country, most especially this country, without having a racial, ethnic, or religious identity that is shared, those stories and what you're doing with that philanthropic effort really helps bond the country together. 

David Rubenstein: 

I don't want to overstate what it does, but there's no doubt that people feel pride in their country as a general rule. Almost everybody in whatever country they're in, feel some pride in it. In the United States, people show that pride in many different ways, through a flag or through parades on the 4th of July or other kinds of things.

And this is just one way for me to show pride in it. And I wish I had done more of and I hope to do more of it, and I wish I had done earlier. For example, my father was a Marine and it just never occurred to me to fix up the IWO Jima Memorial until he had already passed away, and then somebody told me it was falling apart or needed a lot of repairs so I put up the money to fix it in his honor. 

And I tried to do similar things for my mother. And I just think, as I like to remind people all the time, it's easier to honor your mother and father when they're alive. And so for everybody listening, try to think about how can you honor your parents for what they've done for you and try to not to wait till they're gone.

Mahan Tavakoli: 

That honoring your parents is important. You also keep mentioning that you don't have to be wealthy to be philanthropic.

David Rubenstein: 

Yes. Philanthropy is derived from an ancient Greek word that means loving humanity, doesn't mean rich people writing checks. So you can be philanthropic with your time, your energy, your ideas as well as your money, but we've bastardized the word philanthropy into meaning only money, but I think the most valuable thing anybody has is their time. You can always make more money if you're inclined to do so, you can't make more time. So when people volunteer for things, so they give their time, that's extremely valuable. 

Mahan Tavakoli: 

David, you grew up in a working class family. Your kids didn't grow up in a working class family. Now you're committed, not just to give 50% of your wealth away, all of it away. So, how did you make sure that your kids grew up balanced and effective in separation from the identity of their father?

David Rubenstein: 

There's no doubt that growing up, anybody that is a parent knows that the hardest thing in the world to do is raising children. Whether you have money or don't have money, very difficult. And as Jackie Kennedy famously said, "If you mess up raising your children, nothing else in life really matters."

So, it's not easy and if you grow up in a wealthy family, it's much harder because kids tend to be spoiled. And as we have often seen children of wealthy people tend not to be the people that win the Nobel prizes or do great things, there's obviously some exceptions to that, but it's much tougher to grow up in a wealthy setting where things are made easy for you.

Growing up, my kids probably didn't realize the level of my wealth because we didn't live in a very lavish way. We'd lived better than the average person for sure, but we weren't lavish about it. We didn't flaunt our wealth. And until Forbes kind of outed me, they didn't really realize the level of my wealth. And then I keep telling them all along, they got to work hard and they got to get there on their own. So I have provided them a good education, but I haven't given them staggering sums of money or anything like that, because I think it's not going to be to their benefit.

Mahan Tavakoli: 

And their dad must not have been that bad with all of them ending up getting their MBAs and ending in venture capital.

David Rubenstein: 

Yes. They're all, three kids are now in private equity and they all have MBAs. So I either did something right or did something wrong. I have no poets, no struggling artists, no playwrights. So I don't know if that's good or bad, but time will tell.

Mahan Tavakoli: 

Although I have to tell you, with your daughter who is excited about food science with my nutrition background, I really resonate with that and the need for us as a society to take a lot better care of what we eat and the impact it has on our health. Does she get after you for what you eat?

David Rubenstein: 

She does, because for my father's day gift, she sent me this, I'm drinking it right now, it's Kombucha...

Mahan Tavakoli: 

Yes

David Rubenstein: 

And what she tells me, it's going to make me live longer. I don't know if it is or not, but I'm drinking a gallon a day. I hope I live longer.

Mahan Tavakoli: 

You will live longer. Good probiotics. That's fantastic, David. Now, you also took over, became the president of The Economic Club of DC. I was actually part of the group beforehand and these CEOs would come and read their speeches that they had read 189 times in front of other audiences and put the audience to sleep. Why did you become the president of The Economic Club and why did you change things around there?

David Rubenstein: 

The late Vernon Jordan called me to his office one day in New York and said, "I'm locking the door until you agree to become the next president The Economic Club of Washington." I said, "I don't even know what The Economic Club is, I'm not a member." And he explained it to me and he said, "You just have to get four speakers a year."

So I started doing that and I agreed to do it because he's very persuasive, but I realized, as you say, they were very often boring speakers. So I decided I would liven it up by just doing interviews and I interspersed some humor as you probably know and people seem to like it, and then Bloomberg saw it and they gave me a TV show where I interview people and I've been doing that for a while. It's fun, as you know as an interviewer yourself.

Mahan Tavakoli: 

Well, you do a magnificent job with it. And again, in this case, David, it's category design in that you did peer-to-peer interviews of these CEOs, which was very different than what had been done before.

David Rubenstein: 

One of the reasons I can do it's cause my TV show is called Peer-to-Peer, while I may not be a peer of them, I'm not a journalist, I'm not a supplicant, maybe the way some journalists feel when they're talking to a great person. I'm not intimidated by the people I'm interviewing, maybe because I have some financial success myself and I have some confidence in my verbal skills so I don't really feel like I'm going to be tongue tied. And I have a reasonably good sense of humor so it kind of will come out in time and it makes the interview work better. 

So I haven't found anybody that have been asked to be interviewed by me, upset by the interviews. And then I try to make sure that they're never embarrassed, I don't ask people embarrassing questions. I ask them sometimes humorous questions, but not embarrassing, and nobody's ever been upset with it. So it's something I enjoy, it's my substitute for playing golf. Golf is too humiliating, frustrating, time-consuming, so instead of playing golf, I do interviews.

Mahan Tavakoli: 

Yeah and your humor is always self-deprecating, which is magnificent to be part of the audience and see that, it also relaxes the people you're interviewing.

David Rubenstein: 

So self-deprecating humor is the kind of humor that I've always admired. I watched John Kenny's press conferences when I was a boy and he always made self-deprecating jokes. And I later realized, when you have self-confidence, you can do it. Some people that don't have self-confidence, make fun of other people.

And I try not to do that, I try to only make fun of myself or if I'm making fun of somebody else, it's in conjunction with something I've done wrong as well or so I don't think anybody's ever upset with my humor. But self-deprecating humor always works because when you're making fun of yourself, people will generally laugh along with you.

Mahan Tavakoli: 

Yeah and you are also a great listener, David. I wonder if that's a skill you developed or it's something you had from the beginning.

David Rubenstein: 

I've watched interviewers over the years and good interviewers are people that listen to what people say and then take the conversation where those people have begun to take it. If you are an interviewer, and I've seen some on TV, that try to explain how brilliant they are and they ask complicated questions that don't let the interviewee have much chance to say anything, that usually doesn't work. And as Oprah Winfrey told me, when I interviewed her, she's not a good interviewer, she said she's a good listener. She said that's the key to being an interviewer, is listening to what people are saying.

Mahan Tavakoli: 

Now, you know a lot of these guests that you're interviewing, David. In the conversations you have had with them, are there things that you have learned about leadership that have stood out to you?

David Rubenstein: 

Yes. Most of the people I interviewed are people I do know, and that maybe facilitates the friendliness of the conversation. But generally, all came from modest circumstances or not wealthy circumstances, they all had some failures in their life, they all persisted, they all didn't think they'd get to be where they are, they're all trying to give back to society in some way, they all know how to share the credit, and in the end, I think they all don't take themselves so seriously as to make themselves seem pompous.

Mahan Tavakoli: 

I wonder if any of the guests including Ruth Bader Ginsburg intimidated you, David.

David Rubenstein: 

I wouldn't say they intimidated me because I generally have met these people before. I've known her from the Kennedy Center and she came to all the operas and so forth, so I wouldn't say I'm intimidated but I'm impressed with her. If you meet somebody the first time, when the first time you meet a president of the United States, you might be intimidated. If you've met five or six of them and you realize they put their pants on one leg at a time, or they maybe they'll put their skirt the same way that everybody else puts their skirt on.

It doesn't intimidate you, because I'm sure, there's some people, I am sure if I met Queen Elizabeth, I haven't really met her, maybe the current Pope, I haven't met him, maybe I would be intimidated. But in the end,  I reached a point in life where I'm not that intimidated and not overwhelmed, but I don't say that in a bragging way. It's just that I realize everybody's a human, everybody has their flaws, everybody has their insecurities and they're as insecure as I am about some things. 

Mahan Tavakoli: 

And you share a lot of those stories in How to Lead: Wisdom from the World's Greatest CEOs, Founders, and Game Changers. So I wonder, and this is a question you had also posed to Indra Nooyi, whether you believe it's harder to be a CEO and a leader today than it has been before, based on all the different requests, requirements, stakeholder interests, and other burdens that are put on CEOs and leaders.

David Rubenstein: 

I think it's much harder today because today, you have not just your board you have to worry about, which is usually what CEOs did and not just the shareholders, which was the secondary concern perhaps, keeping the board happy and keeping the shareholders happy was one thing. Now you have enormous amounts of stakeholders, employees, customers, communities that you have to be sensitive to. 

You also have everybody watching your social media and so many other forms of communication, tell everybody everything you're doing. So it's much more challenging than before. And the indexes that measure your performance are so much more refined that if you're not doing well, people know about it all over the world pretty quickly. So I think it is harder that's why the average CEO of a publicly traded company is probably the CEO for somewhere between three to four years.

Mahan Tavakoli: 

You share lots of these different examples in the book and I love the fact that it's 13 traits. It shows you didn't have the traits ahead of time, you didn't come up with an easy 10 number, 13 traits. So as you look at these different traits, David, what do you find lacking the most in leadership today? 

David Rubenstein: 

The willingness to be courageous and be willing to stand up when it's really called for. Right now, for example, I don't find as many CEOs standing up to obviously, the lies that we've seen in about certain things that happen in government in recent years or so. I don't see CEOs standing up as much on what's going on in terms of suppressing voting rights in some parts of the countries. 

And I think CEOs, they tend to be, when you work your way up a system, you tend not to be as courageous as if you started your own company. When you started your own company, you tend to be able to go through walls and you are much more persistent. When you work your way up a system, the person that gets to the top may not be quite as courageous as the person who built his own company or her own company. But as a general rule, it's a difficult job being a CEO and I don't want to minimize how complicated it is today. I've done it and I wouldn't say it's easy or fun.

Mahan Tavakoli: 

It is really hard, leadership at all levels, but it does require sticking by values and principles, and values and principles that are really important in the American experiment also, that's what you are writing next about. What is the passion about capturing what this country is all about? That American experiment?

David Rubenstein: 

America was created as an experiment, whether you could create out of a whole cloth a representative democracy, which had never been done before in quite this way. And so people recognize it probably wouldn't survive. In fact, Thomas Jefferson thought it would last maybe 20 years at the most and I think Benjamin Franklin wasn't sure it would last.

Many people didn't think it would last, but it's now lasted 230 years and we've obviously amended the constitution 27 times, 10 of them were the Bill of Rights, but I do think that the experiment has generally worked, but it wasn't a perfect experiment because when they put the experiment together, we had to agree to have slavery, continue slavery. So that was a  birth defect that we haven't overcome. We also treated women as second class citizens, we've had to overcome that. And we still don't really live up to the rhetoric of the declaration of independence or the Gettysburg address in quite the ways we should. We've made progress, but we haven't quite gotten to where we should be.

Mahan Tavakoli: 

At this point, David, a lot of people are questioning whether the country can come together. Lots of different books, Patriots of Two Nations, is an example of one talking about the separation that's happening between the two segments within this country. As you research and think about this American experiment, do you believe that the country can come back together and what will it take to bring everyone back together?

 David Rubenstein: 

Well, If there was an invasion from Mars and we had to defend ourselves, maybe that would bring everybody together. But to be serious about it, right now, the country is divided pretty much down the middle, Congress reflects that. And some people are just red state people and some people are blue state fleet people, and the only way we're going to probably change that is if there's some national crisis of some type that brings people together, a 9-11 type event, which we don't want, but something that makes people feel that it's more important to support the country and not worry about political benefits or challenges.

But I think it's going to be a while. I think that the influence of money and politics, the growth of the social media, and the fact that so many politicians are determined to get re-elected even though they don't get paid very much, it's not a job that people respect that much, but people seem to love the job when they have it, so they're afraid to exercise what I'll call 'profiles and courage' and stand up for what I think is right and they know is right, but they think it's going to hurt their re-election chances.

Mahan Tavakoli: 

Well, telling the stories of these profiles encourage, helps more leaders to want to be courageous. You also are a voracious reader, reading a hundred books a year. I thought I read a lot, but I don't come close to hundred. I try to be at 50-60. So with all of your reading of these books, have you changed your mind about anything substantial over the past couple of years, David?

David Rubenstein: 

I read a lot of books because I'm often, I have a trick which is I'm interviewing authors and so I think as a courtesy, you have to read the book, and so that's one of the reasons I'm able to read a lot of books. Also, I don't read certain types of books. If I had to read a science textbook, I'd probably get through one a year, but I'm reading books that are basically things I know something about: biographies, business, politics, history. Those are subjects I know reasonably well. So it doesn't take me that long to get through them. 

And then, because I know I'm going to have to interview the person, I do tend to read relatively quickly to get to the point and be prepared for the interview. I'd say, what have I learned? I've learned how little I know, I learned how little people know generally, and that you can have a lot of influence if you write a book that people read. And so I've been amazed that the influence of let's say podcasts or television shows or books. 

So for example, I have a television show on Bloomberg, Peer-to-Peer, and it's something I do, but Bloomberg is not CBS. It's not, I don't think, seen by millions of people, but it is all over the world because of the way Bloomberg works. And so I've been amazed, sometimes I'll go in foreign countries and people come up to me and ask for a selfie or an autograph, and I wonder whether they really liked private equity that much. 

They don't know I'm in the private equity. They think I'm just a television person full time. It's just, it's amazing. When you write a book, it's amazing how many people, if they don't read the whole book, they read parts of it and they can talk to you about it, so I am impressed with how much the social media, the books, television actually gets to people and I wish I had done a lot of this earlier.

Mahan Tavakoli: 

Well, you started late, David, at 70 writing the books. So in this sprints, what is the legacy you want to leave with the sprints part of your journey?

David Rubenstein: 

What you're referring to is I've said I'm sprinting to the finish line because I am trying to get things done before my brain collapses or my body collapses. And at my age, obviously one of them is going to collapse, sooner rather than later.

Mahan Tavakoli: 

Not with the Kombucha, David.

David Rubenstein: 

I'm drinking gallons a day. Hopefully, I'll live a lot longer, but  you just don't know. So, I'm trying to give away my money in sensible, intelligent ways. I'm trying to make sure my children have a good beginning in life though I'm not going to give them tons of money, but I am trying to help them get their businesses off the ground a bit, to the extent I can. 

I'm also trying to write some books and leave other things that'll be legacies maybe for my grandchildren. And I'm also trying to feel like I'm doing something that gives back to the country that made it possible for me to be successful, so those are the kinds of things I'm racing to do and I wish I was slowing down the way most people who are at my age are, but I'm speeding up.

So, I'm happy though and happiness is the hardest thing in life to attain. As you probably know, most people seem to go through life and they're not all that happy. Rich people are often not very happy. I'm pretty happy, but happiness is nice, very elusive, and so keeping busy and doing these things makes me happy.

Mahan Tavakoli: 

And your giving spirit is a big part of what keeps you happy. Now, with all the books that you read, David, are there any go-to books that you typically recommend to leaders as resources they should go to in addition to your great interviews, both in the book, and Bloomberg, and The Economic Club of DC?

David Rubenstein: 

I recommend that people read biographies of people they admire or people they want to know more about, Abraham Lincoln would be somebody that would be a great biography, there are very good books about him or other presidents. But read books about subjects that you don't know as well. I don't do that as much as I should. I try to read in the areas I know something about so I can get through the books reasonably quickly, but I'm always looking for something in an area that I know something about but don't know the specifics of somebody or some event, so just experiment. 

Sadly, about half the people in this country who graduated in college, never read another book after they graduate from college. It's called ' aliteracy', not illiteracy - and I don't think that's a good thing. When you go to a college and you have a graduation, they call it a commencement which means the beginning not the end, but many people think it's the end of exercising your brain. It's really the beginning and I try to tell people when I give a commencement speech, start reading much more, exercise your brain, and you've got to keep exercising it throughout the rest of your life or you'll lose it in the end. 

Mahan Tavakoli: 

That's a great recommendation, David, I'm a big passionate reader myself. And what you do is exactly what Satya Nadella, one of the people that you interviewed says, "Be a learn it all rather than know it all", and this fast pace of change in the world around us requires even more of that 'learn it all' attitude.

David Rubenstein: 

People may not know who Satya Nadella is, let me just explain. He is an immigrant from India. He had a difficult birth of his first child who was born with, who was quadriplegic more or less, but he raised him with his wife in their home. They had another child with some learning issues. They raised that child as well, and they had a third child, and he got an MBA at the University of Chicago at night or weekends while he was working at a little company called Microsoft. 

And he's now the CEO of Microsoft. When he took over as a CEO, maybe 6, 7 years ago or so, the company's market cap was roughly 350 billion. Today, it hit 2 trillion. He has increased the value of that company by more than the value- no other CEO has increased the value of his company as much as he has done, not counting baby entrepreneurs who started like Jeff Bezos, but I mean, it's incredible what he's done. Very modest, unassuming, very likable. What he did to transform Microsoft - it's just staggering.

Mahan Tavakoli: 

Actually, Satya Nadella is the CEO I use repeatedly as an example because of his true authenticity and the vulnerability he shows in connecting with his people among his many strengths. Now, you mentioned Nadella, the $2 trillion company, there's a rumor you also turned around to another CEO of a $2 trillion company and asked them for tech support for your iPhone.

David Rubenstein: 

Oh, yes. I've been in a conference in China. It's in China that I was the chair of the board of and that Tim Cook was on, he's now the chair of it, advices the Tsinghua Business School. And I couldn't get my iPhone to work and I asked him if he could help me, and he said, "David, I don't usually do tech support, but for you I'll do it." So he flicks the iPhone and it worked.

Mahan Tavakoli: 

That's fantastic. So David Rubenstein, as I mentioned, I can speak with you for hours because of your business success, your personal humility, the impact you've had on patriotic philanthropy, The Economic Club of DC, the magnificent books you've written. The one thought I wanted to share though is there's been a lot of brilliance and category design in terms of whether Carlyle being DC-based, global buyouts and investments, The Economic Club, those fun and humorous Peer-to-Peer conversations with  high profile guests, patriotic philanthropy - so you have a way of figuring something that is different and makes a difference.

David Rubenstein: 

Well, I try to think of something different that won't be boring for people but I recognize that the best ideas come from younger people. So I'm often trying to consult with younger people and you're a younger person, so you have any good ideas for me at The Economic Club of Washington, what we can do to make it better?

Mahan Tavakoli: 

I think the conversations are very engaging. Now, what's going to happen with all of our events post-COVID, David, is people are always going to ask themselves, "Could I have just as easily watched this on Zoom?" Therefore, the experiences need to be different and much more interactive in person, taking advantage of the in person factor.

David Rubenstein: 

That's a very good point. For a new TV show I'm starting on investing, I'm meeting, interviewing great investors. Earlier this week, I interviewed Marc Andreessen who is a great venture capitalist and he said that the past year, because we went to Zoom and other kinds of things like Zoom, we changed the way we live and had greater impact on our lives than the entire internet has had on our lives. Think about how the internet has changed our lives, but he thought this one year, because we now are willing to do things remotely, we were going to change the way we live forever. 

And I think he's probably right. There's no doubt that the social interaction you get by meeting with people, having lunch or dinner with them is different than just seeing them on a Zoom screen, but I think Zoom screens can make you more productive, so I can do events in India, I can do them in Asia, in Middle East, Europe in the same day in Zoom. 

And also, remember, Zoom is the first inning of Zoom. We will soon have virtual reality Zoom, we'll have 3D Zoom, we'll have other things that will make the Zoom experience almost the same as being in person. And so there's nothing quite like being in person, but I do think that many people will, going forward, they'll do partial Zoom and they'll do partial in person, and the balancing act is going to be complicated, but we'll have to see how that sorts out.

Mahan Tavakoli: 

And the fact that you asked that question, David, shows that you are a learn it all, and as Andy Grove said, "Only the paranoid survive." We need to be paranoid and constantly reinvent, that's the only way to stay ahead of all of these changes.

David Rubenstein: 

I agree. And so the challenge you have when you get to be older is your mind isn't quite as supple and you're not as willing to make changes and adapt new things, so when you want to start revolutions, you don't start with 70-year-olds, you usually start with 20 and 30-year-olds. When you want to know what the world is going to be like in the future, you don't talk to 70-year-olds, you talk to 20 and 30-year-olds. 

So one of the best ways investors figure out where the latest trends are going to be is seeing what their children who are in their twenties or thirties are doing. And that's a pretty good idea because often your children will tell you things you didn't know about, and that maybe they'll be good investment ideas.

Mahan Tavakoli: 

And combine that with the wisdom of the ages, which throughout history, people have gathered around fires and listened to the wisdom of people that have experienced different things in the past. So I really appreciate the wisdom that you have shared both in this conversation, David, you share in your books and in the shows that you host yourself. Truly appreciate you joining this conversation, David Rubenstein.

David Rubenstein: 

My pleasure. Thank you very much for inviting me. 

You've been listening to Partnering Leadership with your host Mahan Tavakoli. For additional leadership insights and bonus content, visit us at PartneringLeadership.com.