Leadership Lessons You Only Learn the Hard Way with Rand Stagen

What if the fastest path to scaling your company isn’t a new strategy—but a new you? In Lessons You Can Only Learn the Hard Way, we sit down with Rand Stagen—entrepreneur, educator, and founder of the Stegen Leadership Academy—to unpack why companies don’t grow; people do.

For decision-makers dealing with stalled growth—and for any leader who’s ever felt alone in tough calls at the top—Rand offers a question-driven lens on development: What part of me is capping the business? What discomfort am I avoiding? What’s not your problem anymore that you’re still carrying?

We dig into the heart of adult development: growth happens where support and challenge meet. Drawing on research and decades of coaching CEOs, Rand shows how the right kind of discomfort rewires habits, expands leadership range, and reduces reactivity. He surfaces the quiet question leaders rarely say aloud—“What if I don’t know?”—and reframes vulnerability as a strategic capability. Context matters. Sometimes armor protects the mission; sometimes taking it off creates the clarity your team needs.

The conversation turns candid when Rand admits how founder heroics kept his company small. Fear of losing soul created a growth “governor,” until trusted peers stepped in—an act of peer-powered disruption that forced reinvention. By codifying first principles and designing constraints that scale beyond personality, his team doubled impact without diluting purpose. It’s a powerful example of learning to run toward the roar instead of managing around it.

We also explore long-term culture building, why short investor horizons sabotage real transformation, and how turning alumni into coaches creates a multiplier effect that outlives any single initiative. Through multiple lenses—self-awareness, accountability, culture, capital, and courage—Rand shows that sustainable growth is less about tactics and more about disciplined inner work.

For anyone ready to challenge their comfort zone, this episode is a reset. Write down your non-negotiables. Own development at the top. Seek rooms that expose blind spots. True friends stab you in the front—invite them in, learn fast, and keep practicing.

Real leaders. Real stories. Real action.
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Transcript

Setting The Stakes: Development Over Division

Rand Stagen 0:00

Uh, and I'm this is going to be crazy to say it to all of our problems on planet Earth. The hyperpolarization, what's going on with you know, in Minneapolis right now, what's going on in the Middle East, the solution, so like James Carville said, it's the economy stupid with Clinton. We say, you know, it's development stupid. Why are we fighting? Because we haven't yet developed to a place where we have anything in us but the fight.

Mike Maddock 0:24

Welcome to the Your Seat at the Table podcast with your hosts, idea monkey Mike Matdock, and ringleader John Tobin. We're two founders, a serial entrepreneur and a billion-dollar operator, who talk to leaders about how, when, and why they made their most pivotal decisions in life. Join us as we share wisdom, mistakes, and a few laughs learning from the brightest minds in business today. Welcome to the Your See to the Table podcast. Uh, it's a great day because today John and I have a very good friend, Rand Stegan, as a guest. Rand, I'm gonna say it. I call you a mentor behind your back. I'm sorry you have to carry that burden with you now. Um, I've learned a ton of things from Rand, as have hundreds of my friends. So you're a leader among leaders, Rand, and it's an honor to have you here.

John Tobin 1:21

Um great to have you, Rand, and uh, I'd say, Mike, for my standpoint, not just me, not just some of my friends, but literally thousands of slalomers have learned because of Rand. So it is uh awesome to have you here.

Rand Stagen 1:35

Well, thank you all for the invitation and uh looking forward to seeing where the conversation takes us.

Mike Maddock 1:40

So, Rand, you're a fellow entrepreneur, you're a starter, and now you're in the middle of finishing stuff. Why don't you give us a little bit of your background um and tell us how you got to where you are today?

Discovering Coaching And Adult Development

Rand Stagen 1:52

Sure. I uh at the at the highest level, I'm I I identify uh uh as an entrepreneur like the two of you. I started out uh with uh founding a publishing company in college at Southern Methodist University in Dallas, where I published a Greek phone directory for the fraternities and sororities and uh and an underground newspaper that I sold ads and um and printed the paper and distributed it. Uh continued doing that after college and started a city paper uh that was uh that was partnered with a national network of alternatives from the Village Voice in New York to the LA Weekly on the West Coast, and uh and basically spent my 20s uh in the publishing business uh with magazines and newspapers. During that period, I uh I had, I was 23 years old. I'd raised my first uh my first round of you know financing with the limited liability you know partnership, and I had no idea what I was doing. And I was just lucky to have met a uh to have met a uh a gentleman who uh told me he was an executive coach. And I was like, you know, this was in the 90s. I was like, what's an executive coach? And he's like, well, I work with entrepreneurs. We meet every two weeks, and I'm a sounding board, and I bring best practices and I help uh unlock the potential of my clients. And I was like, you know, I had I had two million and uh two million dollar payroll. I was in my 20s, I had 35 employees, I was 23, and I was like, sign me up. And so for eight years, every two weeks, I met with this coach, and then uh and then when we sold the media company in 1999, I uh I had the opportunity, I was uh I was just about to turn 30 years old, and I said, you know, what do I ultimately want to do? And I said, I want to get on the other side and help entrepreneurs and business leaders uh level up their game the way that I was uh uh able to receive that. And so in 1999, the Stegan Leadership Academy was founded. And thanks to uh you know clients and partners like both of you, we've had the opportunity over the last 26 years to grow into a uh physical brick and mortar uh facility in Dallas where hundreds of uh senior executives fly in from all over North America to work in cohort-based programs. And then we have uh thousands, as uh as John talked about, uh participants in our programs that are delivered off campus. And so we work uh we work with about three to four thousand leaders every year in practice-based, very intense high accountability programs. So uh that's me in a nutshell.

Mike Maddock 4:27

That's uh that's awesome. I didn't realize that um you went to SMU. I'd forgotten that. And now you have a professor in the house. I understand.

Rand Stagen 4:35

Now I'm married to a professor. My wife is a professor at SMU law school, and as Mike knows, I'm very jealous because she has a nameplate. They call her Professor Stegan, and um she's got her JD, so she can uh she's earned that. But I I don't yet have the uh the moniker, Professor Stegan.

John Tobin 4:52

So yeah, you were you're you've been trying to buy your way in, basically.

Rand Stagen 4:55

I have been trying to, whatever it takes, I've been trying to figure out how to how to make that happen. I'm I'm still uh still in pursuit. I believe in your dream too.

John Tobin 5:04

Who was the executive coach that that sort of mentored you and or uh gave you the inspiration there?

Rand Stagen 5:10

Yeah, so his name is Brett Thomas, and he uh and he ended up coming in for all intents and purposes as a co-founder within the first 18 months of the business, and he brought uh of the Stegan Leadership Academy because we were so close. And I said, Brett, I can sell, I can market, I can package because I have that background. Yeah uh but I didn't have curriculum design, I didn't have an understanding of adult developmental theory. And so he came in and uh as an incredible compliment to me and was uh was a partner in the business for the first 10 years, and uh we're still very close friends, uh, but chose to go and do more creative pursuits. Um, but uh yeah, Brett and I, uh, you know, we're we're the origin of uh of what is now uh Stegan.

Practice, Rituals, And Staying In The Dojo

John Tobin 5:51

So um, you know, those of you might not know that that are listening, uh as Rand said, it's uh very practice-based. And I think when you think of that, there's many different modules and many different things that are very concrete and very distinct about how you go about learning these different um these different practices, and then you go through a ritual and and and do them. So uh two questions. Number one, what are what are some of the I guess the practices that you've uh learned and then taught to others that really stick with you the most? I know I have mine in my head. Um and then uh I I think the the other one, the other question is do you still do it? Like, do you still do some of the rituals, journaling, things like that? And if you like in a very good, all the Stegan alumni are gonna hear this.

Support And Challenge: How Adults Grow

Rand Stagen 6:53

So those tens of thousands of people out there that are on the edge of their seats wondering. So the uh the the joke in the uh in the community, let's call myself a practitioner, exactly we teach what we most need to learn, right? And so the answer would be I'm I'm constantly in my practice because the more I'm practicing, the more aware I become, and the more aware I become, the more I realize how far I still have to go. And so um if you want to uh if you want to know how much practice I still have left, you know, talk to my wife and talk to my daughters, and they'll tell you because they're like, no, he's definitely got a long way to go. And uh it it was, I was talking to a CEO this morning before this call, and uh and we've been deploying some 360s to his senior executives, and he said, you know, our CFO is going through the 360 process. Um, you know, what's the best practice for whether we should have our board, which the CEO reports to uh to the board uh for board updates and board presentations, uh, should we have our board give feedback on this uh on this executive? And I said, uh absolutely not. You don't want 360 feedback for those that don't know three or 360. This is just doing an online survey to ask people, you know, Mike's had them done, John's had them done, you know, how would you experience your leader? How do you experience your uh your colleague? It could be a peer version of feedback, it could be from the tops, uh, from supervisors, or it could be from uh those that are underneath you. And so that 360 view gives us a uh a sense of how people are experiencing us. And I said, the the problem with the uh with the C any CFO in a board is that the CFO is is always working to uh to to bring the his best self for the board. So the board sees the best of the CFO. The board doesn't see the true CFO. And so I was saying to the to the to my client, you know, we want to be around people who will bring out the worst in us, which seems completely counterintuitive. Why would you want to be around people that bring out the worst in you? Well, when you're around people that you find yourself frustrated, irritated, um, and uh defensive, reactive, that's feedback that you have no other way to be in relationship to that moment with that person than to be reactive. That's and so I'm I'm all about John staying in the dojo and continuing to work. And I am I am looking to find uh to find relationships and to find situations where I'm out over my skis because that's my edge, that's my growth edge.

Mike Maddock 9:47

That's uh that's the paradox, isn't it? Like you we have these executive teams and we have these peer groups, and if everybody, if you like what you hear from all of them, it's probably the wrong group because they're not holding up a mirror to your flaws, they're not calling your baby ugly. And so it's this it's just a really difficult challenge for leaders. They build teams, and just when they're happy with their team, it's time to change it again because everybody's become really close and they've developed their and reinforced blind spots. What do you think about that, Rand? Does that sound familiar?

Rand Stagen 10:22

Well, I mean, that's the that's the that's the big uh the big critique of uh of Chat GPT and AI is that it tells us, as we all know, it's like it tells us what we want to hear. It tells us how great we are, it tells us what a smart question that was. It tells us, that's a really good question, Rand. Like, let's talk about that. And then we keep talking if I'm using the uh the the audio version, and I find myself like building this great rapport because all it's doing is playing back how great I am.

Speaker 4 10:54

Yeah.

Purpose, Media, And Building Stegen

Rand Stagen 10:54

And and part of what what we know about about adults and adult development, because you know, this is a little bit academic, but our our work, people say, what do you do? Well, we help leaders grow so those leaders can grow their businesses, right? Our philosophy, our theory of change is that companies don't change, companies don't grow. People change and grow. So if you want to see a business transform, you gotta you gotta actually create the conditions for the people leading and operating that business to transform. So that's our that's our simple logic. And when we think about, well, how does growth happen? And this is the beauty of the of the of the research. We we draw upon the research from Harvard from Robert Keegan, who ran the adult development department there for 40 years, and we've been fortunate to interact directly with him, and we have faculty that have worked uh you know for and around Keegan for decades. And uh and Keegan has said that growth happens because of two things. Because there's a condition where there's support, that's more of a feminine coaching energy, and there's challenge, that's more of a masculine energy. And so it's through the skillful combination of support and challenge. You don't want to have too much support because then if if you were like a pressure cooker, you don't want to have uh you don't want to have the temperature down too low or the or it doesn't, whatever's in the pressure cooker doesn't cook, but you also don't want too much challenge because then it could overcook. And so it's the it's as parents, this is what we try to do. We try to create the conditions for that optimal discomfort, for that productive growth. We go to the gym, you know, John, you're asking about practices. You go to the gym and work out. You want to work out to the point where your muscles are a little sore because you're actually growing. But if you push too hard, you can injure yourself. But if you don't push enough, you're not gonna get the growth. You're gonna stay in uh in the comfort zone. And so support and challenge are the key. And the last piece on this, because you know you guys know I love quotes, it's one of my hobbies. Uh, the old the old Oscar Wilde quote around Mike, what you said that true friends, you talk about a seat at the table, and you talk around being with people who have different perspectives, but also people who have perspectives that they're willing to share in service of your growth, even if it requires being unpopular. And uh, and hence the Oscar Wilde quote: true friends stab you in the front. True friends stab you in the front. It is sometimes an act of love to tell someone what they don't want to hear, but what they need to hear. And and that's that's that's hard in uh in the dynamic that we all live in when you want to get along and go along, but that's not where the growth is.

Mike Maddock 13:42

You know, your what you just said reminds me of something one of your mentors said to me one day, uh Rick Foran, who is the uh chairperson of Stegan, yeah.

Rand Stagen 13:54

Is that his He's the chairman, he's the Jedi, he's my he's my mentor, and you know, I'm just I'm doing my best to try to bring the bits and pieces of his wisdom into this conversation.

Mike Maddock 14:03

So here's the quote. He he and I'll do I'll channel my Rick Foran. He's like, Mike, I hear you complaining. In my experience, when I hear leaders like you complaining, only two things are gonna make them change. Either you have a vision of the future that is so compelling, I mean so compelling, that nothing, I mean nothing is gonna keep you from reaching that vision, or you're tired of suffering. So I have a question for you, Mike. Do you have a vision that's gonna pull you forward or are you through suffering? Because you could if you unless you can answer yes to one of those questions, ain't nothing gonna change. And I'm like, Yeah.

Rand Stagen 14:44

Being confronted with with timeless wisdom is is of often very um uncomfortable.

Mike Maddock 14:51

No, he's so great. Uh as are you.

John Tobin 14:54

With that, Rand, I think that might be an interesting thing to talk about your business, like as you started. So you had some successful papers that it doesn't seem like a trivial thing to uh to get going, although maybe for you it it it just sort of naturally flowed from college to a city and whatnot. But like starting the business, where did you how did you get people um to to do this? And was that what was the year again and and and was leadership development like popular at that point? Like it it became very, very popular, I suppose. But um maybe just bring us back to like the beginning stages and were you ever nervous about it or boy, did it just flow? And I kind of know some of the answer to you know, some of the how the pipeline kind of got in a little bit, but maybe for everybody, and then and then I I eventually want to talk to like some of the big plateaus, like maybe you hit a plateau. I know you and I spend a lot of time like either over drinks or coffee and me challenging you a little bit on growth. Yeah, oh yeah, I'm a member. I I I want I want to talk a little bit about your business and just how you started and and how did that go to to to to start anyway?

First Clients, Early Stumbles, Relentless Selling

Rand Stagen 16:07

Yeah, and I I I was at uh I my started the the publishing company in for all intents and purposes, let's call it 1990, 1991, 1992. That was your my sort of sophomore junior and senior years in college. I graduated in 92 and then continued doing the uh the the university publications at one other college uh called University of North Texas uh here in uh the region near SNU. And then during a couple of years of uh continuing post-college publishing, I was raising money. And so I was 21 years old. I went to a lawyer and I said, I want to raise money. And he said, Well, you're gonna need to put together a memorandum. I was like, why do I need to do that? Like, I got people I can just like can I just like get money from them and put it in the bank? And he taught me about securities law, and I was like so naive, I had no idea what I was doing. I would say that I was uh I was relentless, John. I was relentless. I had a a level of uh of energy, excitement, and enthusiasm for um for the for the college papers and just just dealt with failure and dealt with uh rejection from advertisers, and I just powered through. I don't I don't know how to explain what was driving me in college, but I can tell you what drove me to build the city newspaper and raise all that money. When I came from uh the East Coast, from Connecticut uh to SMU, I was uh struck by the entrepreneurial spirit of uh of Dallas, by the can-do attitude. There was a there was a there was a there was an energy in this part of the country that lit me up because it was filled with possibilities and innovation and and it's very can-do kind of attitude, which has a little bit of a southern sort of flair flavor to it compared to the East Coast. And uh, and it was also so welcoming, like welcome to Dallas, like you're now part of what we um are building, and we want you to to feel that you're a part of something bigger than yourself. It was a very like unusually uh unusually uh, you know, uh collaborative cultural experience, right? Yeah and uh and so the Dallas Observer, which uh was a local paper that was an alternative paper that I looked up to because I was doing the college papers and they were the alternative city paper, they were purchased by a company out of Phoenix called New Times. And New Times was rolling up these papers, and they brought a form of journalism to their papers that they called, their their owners would call this kneecap journalism. So they would, their, their, their winning formula, their playbook was come into the city and then kneecap the politicians and build, you know, what bleeds leads and all the stuff that you now see on the algorithms of social media. Um, but this was in print. And I was so uh impacted by what happened when that paper shifted its tone that I wrote a letter to the um to the letter to the editor when I still had my college papers, thanking them for uh for like cynically, thank you so much for buying this paper, and then turning it into um a basically nothing but blood on the covers and and politics and how horrible everything is. Now I know how horrible Dallas is because of you, and it was all like cynical. I got so motivated to uh to you have a good enemy sometimes. I saw them as the enemy of entrepreneurship, the enemy of goodness, and the enemy of the city of Dallas. And I was like, I am going to raise money and start a paper to compete with them and to offer the market an alternative. And so it was there was a there was like this almost righteous purpose. I didn't know the conscious capitalism movement because it didn't exist, but I became a purpose-based business. And I believe that the reason that I continue at 55, and I feel like I'm more lit up, more inspired about the work we're doing in the world today than I ever have been. And I believe what fuels me today is purpose and meaning and impact.

John Tobin 20:18

And so that's that's uh that's from then to now. So you start you start Stegan Leadership Academy, and do you do where do you how did you get people to go to it? Was it uh did Brett have a clientele? Did you have like from the news newspaper, or um, I know you were associated with like YPO. Maybe just talk about that those early days of starting that particular business and how you how you got the word out.

The Quiet Question CEOs Won’t Ask

Rand Stagen 20:47

Well, I mean, I think this, and this is not just my story, I think this is our story. Anyone who is able to build a successful business uh has to start close in. Yeah. Right? I was in a group called Young Entrepreneurs Organization, which Mike is also a member of. It's now called EO Entrepreneurs Organization. And I was fortunate to uh have gotten involved in that local chapter for many years when I had the newspaper and I was on the board and I was the you know chairman of the of the local chapter. And so I went to my uh to my buddies who were who had small businesses, and I said, I've sold the newspaper and I'm going to now get into this kind of leadership culture space, very inspired by Stephen Covey. You know, Mike, you said, was leadership big back then? No, it was Tony Robbins, it was Stephen Covey, there wasn't executive coaching. There was it, it was a very, it was a very different time. And uh and I and my friends were the ones who gave me the opportunity to practice and to make mistakes and to learn. And you know, our dear friend Rick Sapia, which we lost to cancer a little over a year ago, he uh he was the first client. And it's uh and it's a story I've told many times. People say, Well, you know, how did you get your first you know, first client? I went to Rick and said, Rick, you have this mutual fund company. You've got 80 employees. And we were on the board of EO together. And I said, I'm now going to start, I'm going to start with speaking. And he said, okay, well, I'll be your first client. And I said, Great. He goes, What do you want? I go, I want two hours to do like a team building, rah-rah, Tony Robbins kind of thing. And he looked at me, he goes, Okay, I'm going to give you my 80 employees for two hours. Um, how much are you going to charge me? And I took a I was super nervous. I took a big deep breath. Okay. And I, and I go, how about $50? And he said, Done. And uh so he gave me, he gave me a $49 check and a dollar bill, which he and which he signed and wrote a note on, which sits in my uh where I'm at home right now, but at the Leadership Academy in my office. And that was how we got into the game, John. And we uh and I and I did my best and I carried the book, Jim Collins' book, built to last with me everywhere I went. And whenever I got lost, I would um I would I would go there for inspiration and I just spoke and then I started doing consulting, and then I started, then we started building a leadership program. And um, and I'll tell you one story with Brett that is like super funny that he was in awe of. I I was able to sell. So I had a uh I there was there was a guy in uh Chicago who was referred to me by someone who needed uh who needed an event for about a hundred employees, and I I went and did the event. His name was Tor Solberg at Solberg International. And you might know him, Mike. Yeah, I think that's uh and so Tor had no idea that he was hiring a completely incompetent, completely inexperienced facilitator. There's no need for him to know that today retreat. Like I have no, I have no business doing this retreat. So what would happen is Brett, who was really experienced, Brett was at home in Texas. We had we had like landlines, okay? And uh, and I would put the group into an exercise, and then I would get to the end of my capability. I didn't know what to do. And so then I'd be like, I want everyone to now take another few minutes and debrief the experience you just had. And then I'd run over to the phone, I'd call Brett and I'd say, okay, this is what happened. What do I do? And he goes, Well, then do this, this, and this. I'd run back in and I would call Brett every hour, every 30 minutes. And for two days, he basically told me what to do. And I was like a total puppet. I had no idea. And he was like laughing. He goes, You are so willing to just take risk and just like put yourself out there. And I was like, Yeah, but back to the growth. That's how I grew. And I did that for 10,000 hours, and you know, I'm slowly learning how to do what we do uh, you know, with with with integrity, I hope, right now. So I'm still I'm still a work in progress.

Vulnerability, Armor, And When To Share

Mike Maddock 24:59

Yeah, God has not finished with any of us yet. It reminds me, I once came in after presenting to a board at like 27. No, not no, he's like 24. And my at the time, the guy I was renting space from is an old ad guy. He goes, Michael, I want to talk to you. You know how I know you're gonna be successful? And I go, how's that, Tommy?

Rand Stagen 25:22

And he goes, because you're too goddamn stupid to realize you shouldn't be doing what you're doing.

Mike Maddock 25:28

And I'm like, thanks. That that naivete, like, I'll figure it out. That's a young entrepreneur. So I have some CEO questions because I feel like you've spoken you've literally interacted with tens of thousands now of people running companies. And this is such a rare treat. So uh here's a what's a um what's a quiet question that today's CEOs are asking but rarely saying out loud? Like in a question that's a quiet question that they say privately, but they rarely say out loud, even to their teams.

Speaker 3 26:08

Yeah, the that's a big question.

Rand Stagen 26:10

I I I think that one of the questions that many of the CEOs that I'm interacting with right now, and this is just that this is this goes back to this the pattern that doesn't change, is and back to the uh the the experience of taking risk and just putting ourselves out there is CEOs and leaders, not just CEOs, often feel like they should know the answer. And the idea of saying to their own employees, I actually don't know is terrifying. And so instead of being authentic and transparent in the right setting, okay, uh vulnerability in the right setting can be a strength, vulnerable strength. Like I don't know. Vulnerability and transparency can also be unskillful in the wrong setting, right? So people say, well, Rand, shouldn't leaders always be authentic? No. Why not? Well, if authenticity is defined as to just be transparent at all times, because that's authentic, I can't make payroll. Let's go back to when I had the newspaper. The lowest point of my professional career, I was 24, I'd raised $250,000, 37 investors, we published our first uh six months of newspapers, we ran out of money. I couldn't make payroll. ADP was our payroll provider. Um, we didn't have the money. We were literally gonna go, like, it's one thing to like go out of business, it's another thing to not be able to pay people who had worked. Okay. Like that's a whole nother level of like moral dilemma. I was under my desk at three o'clock in the morning uh crying in a ball. It was the first and only time that I was able to understand why people kill themselves. Now I wasn't contemplating killing myself, but I was at such a low point that I was like, this is what it must feel like. Like, that's how intense this was.

Mike Maddock 28:25

So what did you do?

Founder Heroics And The Growth Governor

Rand Stagen 28:26

And and the only reason that payroll got made is because ADP had a policy, which I did not know about, that when they go in to pull your payroll, if there wasn't enough payroll, they would uh they would cover the payroll and they would allow you to do that twice, and then they would go back the next week and try to pull it again. And so I was, they were like my banker, which is why I'm like so grateful all these years later for for their the way they deal with small businesses. And so so that that that story, here's why it's important about authenticity. I didn't say to my employees that morning, transparently I can't make payroll. That would have been the transparent thing to do, right? Go to my employees and tell them that I couldn't make payroll. That would be unkind and unskillful because payroll actually did get made. And they never knew about that. And we never lost a beat and we had momentum. But that's an example of where transparency isn't helpful or skillful. And then there are other times when we're with our executive team or our leadership team or with a small group, when being able to say out loud, I don't know how to solve this, I'm struggling and inviting other people into that uh problem solving, that's where the that's where the vulnerable strength is. But vulnerability can be a weakness too. And this is why it's sort of like if I'm working with a tennis player, and you guys have heard me say this before, and and he or she, and if I'm a coach, well, what what what do I do? Is the forehand or the backhand? Like what's the better? It's like where's the ball? Like we want to have the range of motion as a leader to be able to go where the situation is. And sometimes we armor up because we don't want to, um, we don't want to scare people or be uh or be ineffective in our leadership. And sometimes we need to take the armor down and just be real. But but what happens is in my experience with leaders, they they assume they always need to be armored. That's not the case. That's not the case.

Mike Maddock 30:33

What about heroics? So I know we've talked about how heroics very rarely scales from a leadership point of view. And um uh you're a hero, you're a rainmaker, you save the day, you you you know, you go kill the whale and bring it back, and then the whales get bigger and bigger and bigger, and you realize I can't kill any more whales. So you've had your own struggle, I know, with being the hero of your business. What have you learned? What would you tell someone who's like this charismatic founder that wants to grow their business bigger and bigger and bigger? How do you what do you tell them?

Rand Stagen 31:14

Well, I have to go back to the to the painful conversations John used to have with me. And he would sit with me and say, you know, Slalom started, we started in '99 at Steg, and you guys started four years later. What time did you what year did you start?

John Tobin 31:27

2001.

Rand Stagen 31:28

Yeah. So you guys started after us, and we are we're now about maybe 75, 80 people, and you guys are 10,000 plus.

Mike Maddock 31:36

You're just a jerk, John.

Rand Stagen 31:38

Okay. Okay, well wait.

Mike Maddock 31:39

This gets going on, Rand.

Rand Stagen 31:41

Well, community it was kind.

John Tobin 31:44

It was meant to be kind.

Rand Stagen 31:45

It was kind. It was actually, it was a it was a John, you were a uh were a really important teacher to me. You didn't realize it because you weren't being uh you weren't being uh persecuting. You said to me, Rand, this is when we had like 15 employees.

John Tobin 32:02

Yeah.

Designing Principles To Scale Soulfully

Rand Stagen 32:02

You said, Rand, how are you doing it? And I go, what do you mean? And you go, you have you and your team have created in a world-class curriculum in technology and a methodology, and yet you're a boutique. That that that we were a boutique. And you have you're staying a boutique. Like, how do you rationalize not bringing more of this to the world because it's really good? Like you were complimenting me, and you were in awe that I was actually, for all intents and purposes, playing small. And here's why, in retrospect, I was playing small. I was afraid. All right. And here was how here's what I was afraid of. I was afraid that if we were to grow beyond the boutique that I heroically could control, that we would become really big and soulless, that we would lose our soul on the journey. And so I had this calculus in my mind that I was unconscious, that if let's if I were a restaurant, and the two of you are my uh favorite custom, you're you're you're my favorite customers. I you love the restaurant, you would come in all the time, and you said, Rant, you got the best restaurant in Seattle, the best restaurant in Chicago, wherever we live. And uh, and I've been like the named the best restaurant in town year after year after year, and I got a waiting list. You're like, you should open up not just two, but three, before you could open up a chain, I'll even give you the money, open up a chain all over the country. And I and I I have this assumption, which I was wrong at the time, that if I were to grow Stegan as a business, that we would become really big and we would be Olive Garden. And if I could be Olive Garden or the hippest, coolest restaurant in Seattle that had a line out the door, I'd rather stay small as opposed to losing my soul and selling my soul. That was a limiting belief that I did not get on the other side of, back to the hero question, until six, about six years ago, our chairman Rick Voren and some inner circle clients staged, for all intents or purposes, an intervention. And the intervention was, Rand, we love you. We love your passion, we love how much you care about the business, uh, but the business is bigger than you now. And you have a talented group of people who've been with you for many years. It's time to let go. And it's time to um stop keeping this governor on this business. And I basically, at the in control of the business, I said, no, too bad. I'm not gonna do that.

Mike Maddock 34:39

I'm sure they were swearing.

Rand Stagen 34:41

And there was a lot of swearing, a lot of emotion, a lot of crying. It was like a full-on intervention. And they didn't stop. Christopher Crow is a dear friend and a client to this day. Um, he was part of it. And he was like, they were just hammering me for months. And I finally realized that I had assumed that the mojo, the magic, the thing that made us special wasn't actually about me or the heroics, but rather it was about a set of principles. When I heard Elon Musk talk about first principles, I'm like, what's that? And then I heard someone talk about design thinking. I was like, what's that? And I just got enough context to be able to say, what if we reverse engineered our mojo and what if we stripped it down to first principles? Could we actually write down on a piece of paper these are the boundary conditions of our product and service offerings? And if I could do that, I wouldn't need to be the heroic protector anymore. I could actually build a team around me that was able to operate off of a set of principles, not off of the direction from the heroic founder, which is what we've done. And as a result, we took the governor off and we are in a growth mode. The businesses in the last four years has doubled uh in uh in revenue and doubled in impact, more than doubled in impact. And we're on our way to another doubling, and we, for the first time in the history of the business since 1999, are actually on a growth trajectory. The very trajectory that John 15 years ago is like, why aren't you on a growth trajectory? Because we are liberated by design thinking and design principles, and it's no longer about the heroics.

Mike Maddock 36:24

So, where are you in the seven-step process personally? Where am I where? In the seven-step process. You went to, you're obviously uh a member now of Heroics Anonymous. I need to work with where are the meetings? I'd like to come. And like just personally, it you know, I I believe you. I saw you get up in front of um uh uh, you know, hundreds of alumni of the program and say, hey, this is this is what we're doing now. I've I've had a moment. And you've told that story, which was is amazing. But what you just said, we're we're all working on ourselves. How how what are you still working on? Like what uh what do you how do you still get in your own way as a leader? I guess as as someone who has the ability to get on stage, grab a mic, and take over a room. Where are you?

Long-Game Change And Who We Serve

Rand Stagen 37:16

Are you asking yourself this question, or are you asking me this question? Oh, right. Don't don't do the don't do the over the clear.

Mike Maddock 37:23

Yeah, don't do the you know, hold on a second. This one, I you get the I I promise stag and black belt.

Rand Stagen 37:30

That's right. Right. Rob did not get a black belt, but it did get a diploma. Okay.

Mike Maddock 37:39

So it is the um I feel compelled to give an infomercial for Rand um at this point. I I looked at my LinkedIn account this morning, and we have uh a couple hundred connections, and I started looking at those connections, and they are some of the best people I know. And Rand, your company has gone from uh working on individual leaders to working on teams. So if you are listening to this and you are running a $500 million company scaling to a billion or a billion dollar organization scale scaling to two billion, I could not endorse what Rand is doing for those leaders and those leadership teams and the leadership teams under those leaders more. You are having such an incredible impact. I mean, your legacy is secure. Um, just by the people I know, you know, your memory is such a is going to be such a blessing because you've had that impact. I hope you take a moment once in a while to notice that the ripples and the poor are coming back to you.

Investing In People That Compound

Rand Stagen 38:45

You know, more and I and I want to thank you for that uh you know, really thoughtful reflection on the on the impact of our work, our team's work and our principles. And thank you, John, for uh all the support that slalom has given us and the learning we've gotten uh at working with the size of the business that you've become, kind of, you know, being in the journey with you as as you've scaled and grown. And to Mike's point, we continue to work with lots of organizations that are sort of lower mid-market. They might be 50 employees, they might be 200 employees. Uh, and now we're working with a lot more businesses that are 1,000 or 2,000 or 3,000 employees. And these are all private businesses. They're uh they have indefinite time horizons. We don't work with private equity or public companies because the nature of what the three of us care about, which is true sustaining practice-based change, um, it requires one thing, time. And when you only have three months or an artificial private equity three years, it's really, really uh hard, even for well-intentioned people, to uh to play the long game. And we're playing the long game. And uh, and and it and it's really not even about legacy for me or for us. We really do operate with this uh orientation that it's not the legacy that we're trying to have. It's the contribution that we're that we're trying to make in partnership with our clients to uh to just to, and I know it's a cliche, but just to contribute in some way and to leave this place a little bit better. And and we believe that development, you know, leadership development, adult development, organizational development, just development, we believe that uh that's the key, uh, and I'm this is gonna be crazy to say it, to all of our problems on planet Earth. The hyperpolarization, what's going on with you know in Minneapolis right now, what's going on in the Middle East, the solution, so like James Carville said, it's the economy stupid with Clinton, we say, you know, it's development stupid. Why are we fighting? Because we haven't yet developed to a place where we have anything in us but the fight. Why are we, why are we not able to solve some of these most complex and intractable problems globally because we haven't developed the complexity and the capacity to actually solve those yet. So, like development, we believe is at the core of unlocking an organization, unlocking a team, unlocking a person, but even unlocking a country and even unlocking a global marketplace. And so is it. It's all about how can we play the game, which you guys are both big players in this game too, because you've always cared about your people and you've always seen, and I want to ask John a question. Well, you you've always seen the correlation that if you invest in your people, and it's not about Stegan. Stegan's one of the many ways you invest, but if you invest in your people and you create the conditions for them to grow and quote develop, these that that magical things happen. And and John, you know, a lot of your competitors that are big global companies, they it's lip service. They don't really, they don't really, you know, walk that. They talk it, but they don't really walk it. How do you think about the role of investing in leaders and developing? How has that helped drive the economic engine and therefore the purpose of Slalom?

Leaders Go First And Become Multipliers

John Tobin 42:05

Well, I think the time part of that, what you said, like we're where organizations, if you give it enough time, that um that's where you get the payback. And I think that's I think that's what happens with um some of the people that have to do so many, like for quarterly earnings and things like that, that you do forget that the real growth, the real um advancement happens over a time, over a year, years, and and and and whatnot. And so for us, I think that um a lot of people that went through those programs, those immersive programs, it it was a year-long journey, but then it kept going. And then the way we had it structured, where after you finished, you were then a coach, effectively, or you know, you basically that like the gift keeps on giving. And so um I I I think that um when when I look back on it, I'd say, like, how were we like my my why on what we started it? And again, meeting you and I forget who else was there from your team. We were having coffee, and I'm like, I just I want we we have something good with our company, and a lot of it is purpose about a purpose, about our culture, about our values. How do I codify it? How do I make it real? And I think it's I had an idea that I thought it was through leadership development that that helped it endure. So so because we invested that time, it took a lot of the goodness, a lot of the uniqueness actually of our consulting company, and then galvanized it and made it real for so many people. And Rand, I want to admit something to you that over the last three years, as we struggled a bit, um, you know, all services industries have have struggled, I think we've gotten away from it a little bit. And we we we are reinvesting actually in our people now. Like like we finally, it's almost like we hit rock bottom and now we're we're coming, emerging back out of it. And and the the what I experienced in I think it was 2011 when I went to Stegan was this a little bit of this arrogance, like I don't need to change. I think I'm pretty good. You convinced me to come because leaders have to go first on leadership development. And it totally changed my my mindset. And like you said like you said at the beginning sometimes you have to relearn stuff. And I'm re we're I think we as a company are relearning some of those things that we have to invest back in our people. We have to invest and make it a time-based thing that's going to sustain. And so we're actually after about three years of di dabbling a little bit yeah we're now reinvesting in it. And so um I think you just have to see that bigger picture. And then the last thing just Mike to your point with Rand and just to give him a lot of props I it's like you've had tons of impact on companies but I've I think you've had even more impact on the individuals which is super interesting that you're able to play at both levels there. And me like me as an individual human um you you've had such a big impact on me and my family and how I treat others and you know even uh sitting around with my friends me asking them deeper questions and them kind of be like Dr. John take it easy and and but but you've had such an big impact and I I think it is like that that rock that dropped in the ocean and or in the a bucket of water and the ripples that you created because of that is just really cool. So um I'm a living I'm living it our people are living it but our company's living it and you you you have to invest that time and eventually it it does really pay back. Sorry that was a little that was beautiful I just mixed stuff there.

You Are The Culture: Owner’s Mirror

Rand Stagen 45:55

I was just really appreciating uh how I was feeling in myself just a a sense of gratitude for your attitude and your commitment and you know let's go back to 2009 2010 Mike you introduced me to John I met John I think at like an Ian Ernst and young event or something we met shook hands and he's like hey Mike says great things I'd love to get you to start working with my leaders and I'm like no dude like you're gonna have to do this work yourself and you're like I'm busy I don't have time to go out and like develop myself like but I got leaders that would love this nope and you already said it John leaders go first and here's the thing the the the unit of change in any organization any business is the individual right so like if you want to if if if you're gonna see an organization you know grow and change you gotta you gotta create the conditions for the people in that organization to grow and change. It's all about the individuals it starts there and uh and I just love how you talked about the ripple right and there's a wake behind all of us. You had a wake and I think it was a very positive wake like the wake of a boat because you modeled what it meant to go first with integrity. Like I, John, am going to do my own work as a leader. And in doing that, that's a vulnerability vulnerability move because it's telling your people that you actually know that you got to get better, which inspires them to want to get better, which inspires them to have a week behind them. And this becomes you become a force multiplier as the leader of the business. And then every other leader becomes a force multiplier whether it's a general manager of the Chicago office or the Atlanta office, they then become a force multiplier. And this is the you know back to Mike's question earlier about what um what leaders you know are asking themselves the quiet questions but then there's the thing of what are they not asking themselves? And this is what this is what we see more often than anything they're not asking themselves how are my behaviors shaping my business in ways that are not what I want. You know this is this is the thing. Hey I don't like what's going on in my business and we're like well great well then then why don't you fix it? Well that's why I want to hire Stegan to go and fix it. Well you want us to go and fix your culture yeah go fix our culture. We don't have collaboration we're siloed go fix the collaboration and we're like but you're the root cause of why there's not collaboration because you're actually the very thing that's creating the outcome that you're complaining about. So why don't you step up if I'm talking to a guy, man up and take responsibility that you need to do your work and public company CEOs do not like this conversation.

Rapid Fire: Myths, Words, And Legacy

Mike Maddock 48:49

It's a hard conversation to be on the other side of I've I've been afflicted by that conversation. Rand I I'm watching the time and I we could talk um all day are you up for some rapid fire questions? Let's do it. All right and and before I do I want to you said I introduced you to John well Rick Sapio introduced me to you and I know he is one of your dearest friends. I tell my kids that if you want to know who your friends are, call them at three in the morning tell them to meet you in your driver with a shovel and if they don't ask any questions and they're there, they're a true friend. Rick said you should you should sign up for Stegan and I didn't ask him why I just said okay and I'm so grateful um that you know we have an angel in heaven looking down at us going yay we do because this conversation is happening.

Rand Stagen 49:44

All right um okay let's see uh one word you wish leaders used less me one word you wish leaders used more us um a mentor who shaped you but not in the way he intended John Tobin and how that all right follow up how did he sh how did he already told the story I already told the story he terrorized me and that conversation stuck with me for years years in a really I mean come on we've had this conversation I really really appreciated the pain of that process in the South I've recently learned the phrases be sweet okay um biggest leadership myth that you can outsource your development by having your head of HR or chief people officer be the executive sponsor of development development has to be owned by the leader and leaders it cannot be outsourced and that is the biggest myth and it's not just a myth it's a reality that that happens unfortunately especially in big companies is talk to my you know head of HR talk to my people person they are they own development no the leader of the business owns the development uh it can't be outsourced that's a myth okay you can only pick one legacy is built through consistency or through courage legacy is built through consistency okay um fill in the blank at the end of the day leadership is really about at the end of the day leadership is really about responsibility great okay final question for Rand Stegan mentor friend Yoda entrepreneur dad learner when people talk about you 20 years from now what do you hope they say you protected and what do you hope they say you challenged protected our principles challenged comfort zones and the status quo love you Rand thank you love you guys that was great Rand thank you appreciate your time really amazing