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Roy Spence, Jr.: Leadership Lessons from the Wal-Marts of the World

Roy Spence, Jr.: Leadership Lessons from the Wal-Marts of the World

Roy Spence, Jr. and his partners founded GSD&M Advertising in 1971. Based in Austin, Texas, the company work with clients such as Krispy Kreme, Wal-Mart, Fannie Mae, and Southwest Airlines. Here is a rough transcript of his remarks at RealTime:

Good morning. Thank you, Alan. It's an interesting thing when you build something like Alan and Bill and Polly have, and there comes a time to pass the torch to another generation of leaders. When you build a company from scratch like they did and you look up "visionary" in the dictionary, it says that they created something that didn't exist before. You created something that didn't exist: Fast Company. You created RealTime.

In 1970, we did the same thing. We all got together and decided to form our first company. I love the thought about optimism. I loved the thought about choosing to choose until I saw The Matrix Reloaded. I'm a little concerned about choice now. But you have to choose every day. Look at the world and say you can make a difference here. I like to think it's RealTime. And it's about time.

I was riding in a Pinto with Sam Walton in 1997. Sam Walton was so cheap that he would fly into these little marketplaces, and he wouldn't rent a car. He would go to a used car lot and see if he could get a car for $10 for the day. He had just hired us. He said to us, "We're about to go into the big city. Do you think our model will work in the big city?" I said, "Sam, I think big city people like little prices. I think big city people like the fact that when they are looking for something, it's in stock and there." He said, "I hope so."

Then I was driving around with Herb Kelleher of Southwest Airlines. He said, "Roy, do you think these people on the west coast will like what we have to offer?" I said, "The people out here seem to like the idea of low fares. They like that you have lots of flights going everywhere. They like that when they get on the plane, you say hello." He said, "I hope so."

The point I'm trying to make is the power of purpose. In the 1990s we saw the rising tide. The changing tides test the strength of your anchor and the power of your purpose. If everyone's selling the same thing, what's going to be the tie breaker? The first question we have when we do purpose based branding is "What business are you in?" We do not create the purpose of an organization. We make it visible and integrate it with the leadership language.

Southwest Airlines isn't in the transportation business. It's in the freedom business. Herb Kelleher wanted to democratize the skies. Sam Walton didn't want to crush Sears. He wanted to help normal people buy the things that rich people buy. But in addition to the low prices, he's really in the trust business. Likewise, Fannie Mae's in the American dream business. Associates who work there have pictures of families on their desk. And they're not their own families. Krispy Kreme isn't in the nutritional business. They're in the magic moment business. Chili's in the good time every time business. The PGA Tour: Behind every lie, there's a moment of truth. Behind every swing there's a story. The power of purpose.

If you're running a business right now, the first thing you've got to do is figure out what business you're in -- the higher calling business. If you went out of business today, would anybody miss you? Great companies transform themselves. Would anybody miss you besides your banker if you ceased to exist?

Every purpose-based company has got to have purpose-based leaders. You can't have a purpose-based company if you have a leader who's deceitful or manipulates. Let me tell you some of what I've learned about purpose-based leadership.

The No. 1 thing a leader has to do is do the right thing. That sounds pretty trite. How do you know what the right thing is? The Golden Rule. Purpose-based leaders treat people like they want to be treated. We could do away with all the employee handbooks and all of the lawsuits if we sat down and said purpose-based leaders follow the Golden Rule.

The second thing is Zen leadership. Zen is real time. It was written 10,000 years ago, but it's real time. Great purpose-based leaders have clarity and courage. Justice trumps fairness. Fairness is sometimes passive, but justice takes a brave heart. People follow just people. And finally, the most invisible characteristic is the most visible characteristic: Courtesy. Common courtesy.

People have taken a look at the Art of War and corrupted it. I'm not an expert on this, but I've been studying and practicing it for 25 years. The No. 1 thing a leader must do is protect his troops -- not be in wars, but protect the troops. All this macho stuff that goes on in corporate America is a tragedy. If you look at the corporate scandals, the leaders put themselves ahead of their people, and their people got slaughtered. Always put your people in your company in a position where they're destined to win. The skillful warrior wins first. Then he fights. Know they enemy. Know thy terrain. Know your competitor. Know your customer.

Next, purpose-based leaders practice Good to Great. Remember Level 5 leadership? The Level 5 leader is the leader who always puts the good of the company and the good of the employees ahead of their own agenda. Finally, you add the ingredient of Built to Last. The best companies have core values that will outlast their business activities.

When you practice this, it's hard. You've got to think about these things. They're common sense, but you get enlightened as a leader. It doesn't happen over night. Purpose-based leaders crave the truth. I don't want to be right if I'm wrong.

Purpose-based brands at some point need to have purpose-based advertising. We're uninvited guests in people's homes. We want to be invited guests. You need to intrigue people. You need to entertain them and reward them. And you need to explain to them that what you offer is of value and from a company of values.

That's what we do. It's fun to laugh. You talk about the sense of optimism. And if you look at the purpose-based brands, they're all upbeat. They don't all look the same. We try to find the piercing insight that transcends a brand's purpose.

We only get one chance to do this. "Kind of" is a very kind of word. Passion. Purpose. You've got to get up a little earlier. You've got to stay up a little later. You've got to listen a little harder. You've got walk underneath the legs of the giants. What a thrill. It's a thrill to be here.

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