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12: Is Culture more important than Strategy? · Rittener Reflections

• Ken (00:00) I believe, based on my years of experience in management, that culture is more important than strategy. And the reason I say that is because culture emanates from the CEO and from the management team. And strategy often is not. People hire consultants to come in, like McKenzie or others, to help them with strategy. culture, you can't have a consultant creating your culture for you. It emanates from you. It's based on your beliefs, your values, your behavior, and how you talk to people, how you treat people in the organization, and how you treat outside constituencies. Jeff (00:52) Welcome to episode 12 of Written Reflections, a forum for addressing the dynamic, complex, and essential nature of cross-border trade in our ever-changing world. It was 1983 that the Silicon Valley Bank was established as a state chartered bank. During the 90s and 2000s, it expanded internationally, supporting tech and life sciences from firms. In 2021 Silicon Valley banks assets peaked at 218 billion ranking it as the sixth largest bank in the United States. Unfortunately, in March of 2023, a bank run led to its collapse. Marking the second largest bank failure in US history at the time. On March 27th of 2023, First Citizens Bank acquired Silicon Valley banks assets and customer deposits. I share this with you because today I have the privilege of meeting with Ken Wilcox, who was CEO of Silicon Valley Bank during its glory years from 2001 to 2011. Ken then became the CEO of Silicon Valley Bank's joint venture with the Shanghai Pudong Development Bank in Shanghai until 2015. And that was followed then by four years as its vice chairman. Jeff (02:24) Ken is the author of two books. The first published in 2020 is Leading Through Culture, How Real Leaders Create Cultures That Motivate People to Achieve Great Things. And his second book was published in 2024 and it is called The China Business Conundrum. Ensure that win-win doesn't mean Western companies lose twice. In this first segment of episode 12, Ken and I will explore his perspective that culture takes precedence over strategy. And we will discuss several key leadership practices that inspire individuals to achieve exceptional results. In the second segment, which will be released soon, Ken will share insights drawn from his four years of experience working in and with China. he will offer candid, timely, and vital guidance on conducting business in China, covering aspects that are not commonly addressed. Jeff (03:28) Thank you, Ken, for joining me today for episode 12 of Written Reflections. I am really honored and very excited to spend these brief moments with you. Ken (03:31) Yes. Jeff (03:40) So you and I, just to kind of bring some context, Ken, you and I met through our joint participation in the Asia Society. And I think we've probably attended a handful of discussions together on all sorts of various topics over the past year, maybe two. And every time I get a chance at one of these gatherings, I get a chance to pull you aside and talk to you. I always come away with just a deeper appreciation of some of the the big issues that are going on in our world today, sometimes in the area of geopolitics and sometimes in the area of Asia and China in particular. these insights, I realize they come from your experience as a CEO, the time you spent in China and just some of the experiences I think give you a lot to share. So I'm really looking forward to today. and this brief time we have. think what we'll do, Ken, is I think we'll focus on three areas, leadership and culture, on the China business conundrum, and then on 2025, which I call the year of uncertainty, if we get a chance to get there. So, but maybe first to start, Ken, I'll let you go ahead and just introduce yourself, anything that you want to share with the audience about you, and maybe just to make it interesting, maybe one kind of interesting fact or story about yourself that few people know. Ken (04:56) All right, I'll start with the interesting or maybe not so interesting fact about myself that few people know and that is that I'm a career changer. I started out my life in academe and of all things I was teaching at Indiana University and then subsequently at University of North Carolina in Chapel Hill in an area that has virtually nothing to do with what I do today and that was German studies and German history. I soon grew tired of that though and went back to school again to get my MBA and started working in banking. I've been involved in banking for about 40 years now and there's a certain consistency to my banking career. It's almost all been devoted to providing debt. to early stage venture-backed technology companies, which is pretty unusual. There aren't very many people in the world who could make that claim. The only other thing I'd say is I was CEO of Silicon Valley Bank from 2001 through 2010. Please note that was 15 years ago, so I was not responsible for the meltdown. Jeff (06:11) Yes. Ken (06:13) And the other thing I would mention is that I did spend, I spent about 25 years now directly or indirectly doing business in China. Four of those years were on the ground. wife and I moved to... China in 2011, at beginning of 2011, we were there for four years and I was working on a building, creating and building a joint venture bank with the Chinese Communist Party as my partner, in a manner of speaking, because my partner was the other side of the joint venture was the Shanghai Pudong Development Bank, and all banks in China are owned by the government. de facto that I was partnering with the Chinese government. Jeff (07:01) Wow. Well, we're going to get into that a little bit later, Ken. One of the things I learned about you not long ago is that you wrote two books that I find fascinating. And so I want to spend some time a little bit on those topics. mean, the first topic is this book you wrote that's called Leading Through Culture, How Real Leaders Create Cultures That Motivate People to Achieve Great Things. And, you know, I love that topic. I I'm very interested in leadership. So I've spent myself 34 years at Intel in leadership roles. And so it's very near and dear to my heart. I'm really interested in what you have to say. So much so, Ken, that I went out this weekend and I ordered the book and it was delivered. I like to have the hard copy book. I could have got it online and read it, but I wanted the book. So I got the book yesterday and I'm already well into chapter two. It's fascinating. One of the interesting facts though, you'll note is that on the back of the book, there's a barcode and above the barcode it says, made in USA, Las Vegas, 23rd of May, 2025. I received the book on the 26th of May. So it's true that I have your book hot off the press. But even better, but even better is I have you here with me today. So let's talk about this book for a second. Maybe you could kind of intro the book and maybe the real question is why did you write it? Ken (08:29) Yes, I wrote that book for a couple of different reasons. Number one is I've got a habit. I'm not saying it's a good habit. I'm not saying it's a bad one, but I tend to journal. I have most of my life. That's not the same as keeping a diary. It's not what I ate for lunch today. it's keeping track on paper. on a regular basis, not every day, but every several days, of what challenges I'm facing in my professional life and how I'm choosing to deal with them. And then periodically, I go back through that and take a look at what I decided to do and ask myself, was it a smart thing to do, or was it a bad thing to do, or a dumb thing to do? So I'm constantly reevaluating where I'm going and how I'm trying to get there. By the time I quit being CEO of Silicon Valley Bank back in 2010, at the end of 2010, I had a huge stack of papers. And I thought I'm gonna do something with these some day. when I quote unquote, retired in 2019, I decided that I would work on this book. My major motivations, I would say, were two things. Number one is... I believe, based on my years of experience in management, that culture is more important than strategy. And the reason I say that is because culture emanates from the CEO and from the management team. And strategy often is not. People hire consultants to come in, like McKenzie or others, to help them with strategy. culture, you can't have a consultant creating your culture for you. It emanates from you. It's based on your beliefs, your values, your behavior, and how you talk to people, how you treat people in the organization, and how you treat outside constituencies. So I wanted to talk about that in this book. And then the other thing is that when I think about... The three points of the triangle in a sense, meaning on the one hand the employees, on the other hand the shareholders, and on the third hand the customers. I think a lot of companies get that wrong. think customer service, particularly today, tends to be borderline terrible. I think people focus on shareholders to, in some sense, to the exclusion of the other two. I think that they often as not don't treat their employees well enough. My own belief is if you start by treating your employees well, that they will in turn treat your customers or your clients well and that that in turn will result in a profit for your shareholders. And if you do it the other way around, I think things get up. And I think we're there today. Jeff (11:25) Yeah, no, I really appreciate that Ken. One of the things that I, when I was at Intel, one of the things I used to have is kind of my key points of leadership. the point number two for me was, number one was integrity, but number two was people first. That's what I always kind of, that was my model, people first. And I felt like if I focused on the people, those that, you know, they're under me, then we will succeed, right? Ken (11:41) Yeah. Well, and I think you could easily put integrity first and not violate my own principles. In my experience, most of your employees want to have a leader that demonstrates integrity. That's something they desire. Jeff (11:53) Yeah. Yeah. Yeah. Yeah. Yep. Yep. Yeah, no, I think that's true. so when I was thinking about the, especially some of the things I've already read in your book, and I'm thinking, you you were CEO at SVB, I'll say Silicon Valley Bank during some difficult times. I mean, I was doing the history there and there were some challenges. How did you help the team you led, the company, how did you help them navigate through those difficult times? Ken (12:29) Yeah, and your statement that I went through some difficult times is a bit of an understatement. In retrospect, I was able to figure out that the recession in the United States that began with the so-called dot com debacle in roughly 2000, 2001, that that more or less began in exactly the same month that I became CEO. So every quarter, the numbers were worse than in the prior quarter. It was quite a crisis. Jeff (12:47) Mm-hmm. Mm-hmm. Mm-hmm. Ken (13:01) I think that when you're leading a company that the most important thing that you can do during a crisis is to stay in communication with all of your constituencies, but most particularly with your employees. I think just a couple of weeks ago, I was flying into Newark and we... reached the point where we should be landing, but we weren't landing. And the plane was going around in circles and this went on for over an hour. And the captain didn't get on the speaker in order to tell us what was happening. That was such an uncomfortable feeling. And I think during a crisis, people don't expect you to solve it instantaneously for them, but they want to know what's going on. And keeping in contact will help calm people. Jeff (13:36) you Ken (13:48) and stills, I think, a certain amount of confidence in their future, if you keep talking. Jeff (13:54) That's funny that you mentioned that Ken, because that is the birth of this podcast, Written Reflections. So in 2020, I was leading a team of about 250 people and we entered into the pandemic. And in March, forget what day it was, mid-March, everybody was told, you're locked out of the buildings, you got to stay home. And people freaked out. I mean, this was unusual. I go to the office to do my work. I don't do my work at home. And there were lots of challenges with that. And people really were... wondering what's going to happen, you know, and there was talk about shutting down the factories and blah, blah. And so I realized right away to your point that people need to hear from me. They need to know what's going on. And so I started two times a week. I did a memo to the entire team. Here's what I know. Here's what's happening and so on. And then eventually it got it to got to once a week. And then I carried on for five years. Every two weeks, I did written reflections. It was it was. Ken (14:47) See you soon. Jeff (14:48) It was a simple, simple memo at first. then towards the end there, I started doing more video because we had the ability to do that. But to your point, mean, people going through that, it was a crisis moment and they wanted information all the time from leadership. And so I quickly realized that was a huge learning for me at that point. so I carried on. That's why I'm not that we're in a crisis, but well, I guess maybe there are some crises going on. anyway, I'm doing this for that very same reason to keep people kind of informed. Ken (15:15) Now people are really resilient as long as they have the feeling that they're in communication with the people that are leading to the extent that leading is even possible. Jeff (15:28) Yeah. No, one of the things I'd love to get your thoughts, Ken, is when someone takes over a leader in a leadership role and it is during kind of an uncertain time and so on, what sort of advice do you give that leader to help change the culture, to kind of help move it in a way that it would be healthy and productive? Ken (15:51) Well, once again, communication is a large part of it. I think it's really important that leaders learn to regularly articulate their values to their constituencies, in particular their employees. I think a lot of leaders make assumptions. They assume, for example, that people already know, or they assume that I told them that once before. They'll remember it. And I remember there was one guy who was reporting to me years ago. And he used to say, because he was so lacking in communications, he used to say, now, when I married my wife 30 years ago, I told her on the day we got married, I loved her. And if anything changed, I would tell her. I couldn't figure out why she kept asking me year after year after year, honey, do you still love me? And that's because people need consistent and recurring encouragement and reminders about the nature of your relationship with them, where you're taking them, why you're taking them there, and how it's gonna be better for them once you get there. I think the most important thing, once again, is articulating your values. And the second most important thing is displaying them, meaning walking the talk. The minute you start not walking the talk, in other words, the minute there's a discrepancy between what you profess to be your values and the way you behave, people will notice, cynicism will set in, and then you're worse off than you were at the get-go. Jeff (17:25) Right. Right. Yeah, that's a super important point. One of my first learnings when I began to lead was I never really understood how much people watch you. They watch your every move, they listen to everything you say, and then they go off and talk about it. Did you hear what Rittner said? I think he might've meant this. And so I became aware of that. like, my gosh, everything I do they're watching. So it was kind of a good reminder to Ken (17:39) ever. Yeah! Exactly! Jeff (17:56) as you said, walk the talk, right? To live out what you say. Ken (17:59) yeah. I also think that, you know, I have a bad habit of thinking a lot when I'm walking. And there were days when I'd be walking the halls and to the if I didn't see anybody quickly enough and engage them in some sort of conversation, I'd be just thinking. when I think my brow furrows up, and I would find out the next day that somebody saw me and did you see Ken? Jeff (18:07) Mmm. Ken (18:25) He looked really upset. And one or two theories would almost always emanate from that experience. One is, he must be bad at being, or the other one is, it must be the company's in trouble. So you've even got to watch the expression on your face. And a lot of the observation is subconscious, meaning, People aren't even aware of the fact that they're watching you or thinking about you or in many cases copying you. A good example I think would be if you start coming in early every morning, I will almost guarantee that people will start coming in early every morning too. And if you show up late every day, I will almost guarantee that most people show up late every day and they don't even necessarily think about it. It's just, well, that's when we're supposed to be there. Jeff (19:13) Right. That's a really valuable insight. I saw that play out in my own career many times. know, Ken, thinking about leadership, you know, there's probably a lot of folks listening here that maybe might be new at leading. What advice would you give a new leader, someone who's just taken over a role and they're now responsible for a team? I know in your book, you talk a lot about the transition from, you know, doing everything yourself to you know, to actually working through a team. what advice would you give someone who's, you know, beginning to do that? Ken (19:43) Well, would first of all differentiate between new leaders who you just hired into the corporation, into the company from somewhere else. And on the other hand, new leaders who just got promoted into their position. So let's deal with those separately. When it's a question of you have just been hired into another company, so you're a new leader in that company. Jeff (19:57) OK, yes. Ken (20:09) My strong advice would be spend a few months observing and learning before you start making your declarations and trying to have your imprint because you really have to know what's going on and what people believe and their approaches to work and their approaches to working with each other before you start espousing your own values. And I think too many people come into a corporation and say, well, I've got, you I've got to make changes and I've got to make them within the first hundred days. And then if they do it too quickly, they invariably are, rue that afterwards and have to undo some of what they did. You have to learn the place. And you also have to forget what you knew before because just because you're successful at one corporation. doesn't mean you're gonna be successful using the same methodology. And at the next place, you've got to learn what their belief system is and operate within the context of their belief system. On the other point about a new leader, somebody who's been promoted up, I think a lot of people don't realize that there's a huge difference between being an expert in a subject matter on the one hand and being a leader on the other hand. And they seem to think that if I was in, let's say I was on the accounting team and the head of the accounting team retired or went someplace else and they needed a new head of the accounting team and they picked me perhaps wrongly because I was the best accountant. And then I am elevated into that position. And I think that the way to, the way to succeed here is to double down on what I did before. I was an expert accountant, so I'll be a really expert accountant. And that's not what's needed. Leading a team is totally different from being an expert in the subject matter of that team. And what you really have to do is, figure out what the job is about. And it's not being an expert accountant, it's leading accountants. And hopefully there are a lot of experts in the group you're leading. And I think people miss that often. And it has really negative side effects. Because then the team feels like you're competing against them. Like you're just trying to show them up by proving that you're the best. And that's not your job. Your job is motivating them and directing them. Jeff (22:44) Yeah, one of the challenges I had with that whole progression of being less of an expert and more of an actual leader, helping the experts, is the farther time went on, the less I was an expert. I began to lose because I couldn't spend as much time. I work in a compliance regulatory field. so if you don't keep up with the regulations after a while, you begin to say, or like the system that was used after a while, Ken (23:01) Right. Jeff (23:11) I began to forget how it was used, you know? And so that's one of the, but I think I found it was okay because I had experts below me that knew all that. As long as they were doing that, then we were fine. Ken (23:20) That's exactly right. And that's the problem. People don't realize that that's okay. And in fact, maybe it's even better. Jeff (23:28) Right, exactly. Before we leave this topic, one thing I just wanted to kind of ask you, you know, I know that every company has its own culture. I know at Intel, Intel was known for notorious for culture. And I'm just curious, what sort of cultural attributes are absolutely essential no matter what the company? Which ones would you say? It doesn't matter which company. It may have its own culture, but which ones really are critical that you want to see or you want to move towards? Ken (23:55) Well, have firm beliefs with respect to the answer to that question, but I will say I'm sure that not everybody's going to agree with me. But I believe that most companies today are operating in highly complex arenas. In other words, their subject matter, their industry, and the way in which they go about helping their clients succeed. is typically very complicated and it requires a team. You can't expect a single person to do a good job creating and delivering solutions to people that have very complex problems. You need to have a team and I don't think, I think a lot of corporations don't focus enough on that. They pretend that they do. They talk about teamwork all day long. but they have systems that are designed to create internal competition as opposed to teamwork. And if you can eliminate internal competition, you can have even stronger teams. I think trying to figure out how to build genuine teams where people are as interested in helping their teammates deliver great solutions to clients as they would be in creating and delivering great solutions to their clients on their own so that they can get all the praise. That's really a tricky thing to do. And I think a lot of corporations end up working at cross purposes with themselves because they inadvertently through the reward system, they inadvertently create internal competition where people are subconsciously hoping that their teammates fail so that they can look even better than their teammates. And that is, think, that I think applies to almost every corporation that I can think of. Jeff (25:59) I like that a lot. That's something that I aspire to in my leadership was always creating this sense of team that we succeed together and we set goals together and we do things together so that it becomes a team sport, if you will. So I totally, 100 % agree with that. Makes sense. Ken (26:16) And if you were to ask me for one more, there are probably several, but if you were to ask me for one more, I think it's creating a learning environment. In other words, dealing with failure, dealing with errors in a way that's productive as opposed to destructive. people in variability are going to make mistakes, there's no doubt about it. Either mistakes in judgment or mistakes in execution. Jeff (26:18) Yeah, sure. Yeah. Yeah. Mmm. Mm-hmm. Mm-hmm. Ken (26:43) If you punish those mistakes, what you're telling people is don't take any risks anymore. Always ask me before you decide what to do or how to do it, because I know the answer and you're likely to screw it up. But you don't want that. You want people who can operate more or less independently of you. And in order to achieve that, you have to deal with failure. Jeff (26:57) Right. Ken (27:08) appropriately. And the best way to deal with failure appropriately, I think, is to help people to understand, to analyze with you what went wrong, why it went wrong, how we could do it better the next time, but without shame. And if people really do deserve to be shamed because they were malicious in their actions, then I think you just have to eliminate them. Jeff (27:21) Yep. All right. Yeah, right, No, fantastic insights into into I would call that risk taking and learning from from mistakes. Ken (27:35) and move on. Jeff (27:45) You have been listening to part one of episode 12 of Written Reflections, a fantastic discussion on leadership. Please join Ken and I next time when we focus our discussion on China and the win-win illusion. Until then, we'll talk to you soon.