Ego Free Leadership

Ending the Unconscious Habits that Hijack Your Business

Brandon Black, Shayne Hughes

• Publisher: Greenleaf Book Group Press
• Year: 2017
• Print ISBN: 9781626343795
• eBook ISBN: 9781626343801
• Topic: Business
• Subtopic: Leadership
• Index: Business

2017 Silver Nautilus Winner
2018 Indie Book Award Finalist
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Take your ego out of the equation, and watch your company thrive!
"I've got a solution, " Encore's CFO tells Brandon, "but it's unorthodox." It's 2005 and Brandon Black has just been promoted to CEO of Encore Capital, a company struggling to navigate an increasingly difficult business environment. Faced with a rapidly declining stock price and low workplace morale, Brandon knows he needs change—and fast. Following his CFO's advice, he and his executive team start working with Learning as Leadership (LaL) and its president, Shayne Hughes. Through their partnership, Encore's executive team learns to root out the unproductive ego habits that undermine collaboration and performance. As they instill these more effective behaviors throughout the organization, Encore begins to solve problems collectively, prioritize resources without infighting, and focus on the initiatives with the greatest strategic value. When the financial crisis of 2008–09 forces 90 percent of its competitors out of business, Encore thrives, with its profits increasing by 300 percent and its stock price by 1200 percent. Told from two lively first-person perspectives, Ego Free Leadership brings readers along for Encore's incredible success story. They'll see a CEO overcome his unconscious resistance to modeling the change he wants in his team and discover a time-tested roadmap for eliminating the destructive effects of the ego in teams and organizations.

CHAPTER 1

THAT VOICE IN YOUR HEAD DOES MORE DAMAGE THAN YOU REALIZE

Our Preoccupation with Self-Worth

BRANDON

I stepped into the blazing August 2005 sunshine of New York City. The temperature was 95 degrees and the humidity hit me like a wave. I was headed to the biggest meeting of my career and had decided to clear my head by walking the ten blocks from my hotel. After a dozen paces, however, I was soaked in sweat.

My boss, Carl Gregory, was retiring as the CEO of Encore Capital Group, and the board of directors had agreed to make me his successor. I was fortunate to achieve a lot of success early in my career: I was managing thousands of people by the time I was twenty-seven, had helped Encore avoid bankruptcy, and was on the Nasdaq stage when we took the company public in 2003. Now, at thirty-seven, I was poised to be its leader. I was on my way to finalize the terms of my agreement with Nelson Peltz, a member of the board and Encore’s largest shareholder. I had worked at Encore for five years, and Nelson and I had a good relationship. He had a reputation for being a ruthless negotiator, though, and several board members offered to advise me on how to handle the meeting. Instead, I did my own homework, even hiring a compensation consultant to benchmark my proposal. My request was fair and well deserved. I was confident I would prevail.

I arrived a few minutes before our scheduled start time of 2:30 pm, which gave me time to wipe the sweat off my face. We were meeting in a restaurant partially owned by Nelson. It was between the lunch and dinner service, and when we sat down, we were the only two people in the place. I laid out my rationale in fine detail.

“Well done, Brandon,” Nelson said when I finished. “But this is a zero-sum game. Every dollar I pay you is a dollar that doesn’t go to the shareholders. As the largest shareholder, I don’t like that.”

“I understand,” I replied, ”but a dollar means a lot more to me than it does to you.”

“No,” he said flatly, “a dollar is a dollar.”

I couldn’t believe his response. I made my arguments again, this time with added emphasis on the salary benchmarking, which was clearly impartial. He didn’t budge and told me that his offer was final. Time to walk out or fold. I stood up, looked at the door—and then shook his hand. Nelson knew all along that there was no way I was going to walk away from this opportunity. He had all the leverage. Never take a knife to a gunfight.

I prided myself on my ability to convince others. I had often been the young executive having to overcome perceptions that I wasn’t up to the challenge. Winning this negotiation was my chance to prove I could roll with the big guys. I couldn’t believe how poorly it went. I got the job, but it still felt like I belonged at the kids’ table.

The air outside was stifling, the heat and humidity mixing with my anger and embarrassment. I felt naive and inexperienced. I was supposed to meet another board member, Alex, for a drink. He had offered to help me negotiate with Nelson, but I refused. As I walked, I racked my brain for any plausible excuse to cancel.

The room at Smith and Wollensky’s was crowded. Alex was at the bar and he waved me over. He raised his glass and toasted my success. I should have been thrilled. Instead, it felt like I had blown my first big opportunity. Should I have held out for more money? If I couldn’t advocate for myself, was I really up to this job? I tried to shove my doubts away on the flight home to San Diego. Dana, my wife of just a few weeks, met me at the airport. We went through the details of the meeting, and she was relieved I hadn’t tested Nelson’s resolve.

Over the weekend we talked about how I planned on handling the challenges facing Encore. It was a period of unprecedented change on all fronts.

Our core business was under tremendous pressure. While the financial crisis of 2008 was still three years away, our industry had begun its own recession. Encore Capital acquires unpaid consumer debts, mainly credit cards, from banks and other large financial institutions. The company becomes the de facto creditor, and we work to collect money from those consumers who regain their ability to pay. On average, 80 percent of the consumer accounts we acquire pay us nothing. The other 20 percent pay us approximately sixty-six cents on the dollar. The critical variables that determine our profitability are the purchase price for portfolios of unpaid debt, the total dollars we collect, and the operating costs required to generate those collections. Between December 2004 and January 2005, the prices for portfolios increased by almost 100 percent, making new investments largely unprofitable. Prior years of very profitable investments had given us a small window of time to adjust our operating model. It was up to me to figure out how to adapt.

We hadn’t anticipated such a dramatic shift and had no contingency plans. So, during the first eight months of 2005, we reacted by launching a variety of strategic initiatives designed to offset the price increases and diversify our revenue. Sort of like throwing spaghetti against the wall. We acquired the largest portfolio of unpaid receivables in the company’s history, along with an operating site of 200 people; hired an experienced management team to create a new business vertical focused on a different asset class; acquired a company outside our core business; and opened our first international site in India. Bold moves for a company our size. The big question was whether my newly formed executive team had the leadership and business skills to make the moves pay off.

During the prior five years, as COO, I had worked closely with Carl and the company’s CFO, Barry Barkley. It took time to build our leadership rapport, but the three of us found a solid working rhythm. I learned invaluable lessons from both of them. Now that era was ending.

Barry had retired in June, and Carl was stepping away in October. The new CFO, Paul Grinberg, had a world of experience and was one of the smartest people I’d ever met. But the two of us approached problems very differently. He came up with all the reasons why initiatives wouldn’t work, while I could only see the finish line. I couldn’t figure him out. Weren’t we supposed to identify ways to grow the company? Why was he always so negative? If we were going to navigate our way through these challenging times, our relationship had to work, but we weren’t clicking.

Paul wasn’t the only new member on the leadership team. We had hired an Operations executive to replace me and added two leaders to oversee our new business ventures. All three were experienced, but new to our industry. I saw early on that they were struggling, but I needed to concentrate on my transition. They’d have to figure it out on their own.

As I talked this over with Dana, she was concerned that I wasn’t being honest with myself. She thought I was overcommitted and wasn’t organized enough to take care of all my new responsibilities. I told her I was perfectly capable of handling everything—and suggested she “focus on herself” instead.

“Now you’re dismissing my feelings,” she told me straight up.

From the beginning of our relationship, Dana refused to put up with my bullshit. Given that both of us were previously married, she insisted that we meet with a therapist to ensure we built a strong foundation for our relationship. She was always pushing me to be more authentic with her and with my six-year-old son, Trevor. I trusted her advice when it came to our family, but I was a different person at work.

“It’ll be fine,” I said, hoping to end the conversation. “I just need time to focus and work with the team. We’ll get there.”

“Really? I’ve heard that before. I think you should get some help.”

I nodded but didn’t respond. The job would be a challenge, but I was confident. I needed to learn more about managing balance sheets and dealing with shareholders, analysts, and regulators. But my leadership capabilities were strong. I’d been successful so far, right? Besides, my team needed to see I was in control and had the answers.

I was glad to get back in the office on Monday to focus on our key initiatives. Late morning, I had a meeting with Paul to talk about our acquisition.

“We’ll close on time,” he said, “but I don’t know how we’ll fit culturally. It can be hard for founders to take direction. Getting their management team to operate with our rigor is going to be difficult. When I tried to talk to them about metrics, they kept telling me not to worry, that they knew their business.”

“Do I need to fly there?” I asked.

“I’d say ‘yes,’ but there are too many issues here.”

“What are you talking about?”

“It seems like all I do is listen to people complain about project delays and who’s to blame for missed projections. The new guy, Dave, doesn’t understand our business. I was babysitting while you were gone the last couple of weeks.”

“OK, I can fix that.”

“While you’re at it, can you deal with the Technology team? They keep fighting with Operations about why critical software enhancements are more than sixty days behind schedule. When we get in a room, IT blames Operations for constantly changing the scope of the project, while the Ops guys see the IT team as rigid and incompetent.” He sighed. “I’ve got five more examples like that.”

Paul could be a glass-half-empty guy, but this time I sensed real frustration. When I had tried to address similar concerns with the executive team several weeks prior, I got polite pushback and silence. Apparently, they still hadn’t gotten the message. We were in a tough spot, and this team didn’t seem to have the skills or maturity to understand the magnitude of the problem. Maybe Dana was right; they did need help. I asked Paul if he had any ideas.

“I’ve got a solution, but it’s unorthodox,” he said. “The focus is on identifying unproductive leadership behaviors and involves several week-long training sessions over a year. The organization is called Learning as Leadership, and the seminar...

Table of contents

• Cover Page
• Title
• Copyright
• Contents
• Prologue
• Chapter 1 That Voice in your head does more Damage than you Realize
• Chapter 2 No, It’s Not Just Your Personality
• Chapter 3 Workplace Politics are your Fault Too
• Chapter 4 Stop Pretending You’re Not Vulnerable
• Chapter 5 You’re not Really Listening, are you?
• Chapter 6 Your Ego Loves An Enemy
• Chapter 7 We Can’T talk about “That” (Meet Amy Anuk)
• Chapter 8 “Those” People Have Something Important To Teach You
• Chapter 9 Tell me again, what gets you up in the Morning?
• Chapter 10 Why it all Matters
• Acknowledgments
• Index
• About The Authors