What are the qualities of great entrepreneurial leaders and how can you build a culture of trust? Joel Peterson, JetBlue Chairman, teaches business at Stanford University, shares lessons from his new book, titled Entrepreneurial Leadership: The Art of Launching New Ventures, Inspiring Others, and Running Stuff.

The conversation focuses on leadership and management emphasizing the importance of “solving for fairness,” team building, and communication skills, all qualities of good leaders.

Joel Peterson is the Chairman of the Board of Overseers at the Hoover Institution at Stanford, as well as the Chairman of the Board at JetBlue Airways. He has served on more than three dozen boards over the past 45 years, most notable among them being The Dallas Market Center, Texas Commerce Bank (Dallas), and Asurion. He currently serves on the boards of Franklin Covey and Packsize.

Joel is also the Founding Partner and Chairman of Peterson Partners, a Salt Lake City-based investment management firm with $1 billion under management. Prior to Stanford Business School and founding Peterson Partners, Joel was CEO of Trammell Crow Company, then the world’s largest private commercial real estate development firm.

Transcript

This transcript was lightly edited.

Introduction

Michael Krigsman: Leadership is an important topic that we speak often about on CXOTalk. Joel Peterson is the chairman of JetBlue and he's a written a book called Entrepreneurial Leadership. Joel, tell us about the things you do. You've got your hands in all kinds of interesting things.

Joel Peterson: Besides teaching at Stanford, writing books, and being a JetBlue, I've been the chairman of the Hoover Institution Board of Overseers for a while. I've invested in about 250 companies. I've served on 35 boards. I was the CEO of a large real estate company and I was probably one of the original members of the gig economy.

Impact of COVID-19 on JetBlue and the Airline Industry

Michael Krigsman: You're chairman of JetBlue and, of course, this whole global health crisis situation has affected the airlines tremendously. As an insider, can you share your thoughts or observations?

Joel Peterson: It's been brutal. Our revenues have dropped between 90% and 95%. We've grounded about 170 planes. It's a very difficult operating environment, as you can imagine. We've never furloughed anybody and, of course, this time we have the help of the government to cover salaries for people through the end of September, at which time we hope the travel industry will come back. There's a lot of pent-up demand and there are changes that we're making to accommodate travelers in the future.

Michael Krigsman: Can I ask what kinds of changes are you referring to?

Joel Peterson: Well, the kinds of things that, you know, safety is our number one value at JetBlue and air travel is the safest form of travel. The air in the fuselage is the cleanest air on the planet. The filtration systems are phenomenal, but we'll probably be taking people's temperatures or having people wear masks. We're not selling tickets for the center seat, so we're just taking every precaution so that everything is safe.

Michael Krigsman: I know revenues, as you mentioned, have taken a huge hit. What do you see as the pathway forward?

Joel Peterson: At some point, travel has to come back at some level for there really to be a path forward. I think it's a pretty draconian outcome to say nobody will ever travel again, Jet travel will be off forever.

People want to be with family and friends, hold business meetings. People like to travel and it is such a safe form of travel. It's much safer than any other form.

I think there are a lot of reasons that it'll come back. People just have to feel absolutely safe, and so we're working, doing everything we can to do that.

About Entrepreneurial Leadership

Michael Krigsman: Joel, why did you write this new book called Entrepreneurial Leadership?

Joel Peterson: I've worked with leaders now for almost a half a century and I've noticed that some are fundamentally presiders. Some are managers. They deal with complexity extraordinarily well. Others are administrators. They understand policy and its implications and second and third-order consequences.

Others are entrepreneurs. They light fires, they innovate, but they can't keep them burning.

Finally, there are politicians who understand power, who manage through fear and reward. Reward friends, punish enemies and get things done that way.

Really, to knit them all together in the entrepreneurial leader who is somebody who can create durable change is relatively rare. We need more of them in the world.

Particularly, at the time of this crisis, everybody is going to have to become an entrepreneurial leader. No more just presiding. No more just being a politician. People are going to have to reimagine their businesses and really be entrepreneurial leaders.

What is a ‘Durable Leader’?

Michael Krigsman: You mentioned the concept of being a durable leader. Everybody needs to be an entrepreneur. When you talk about being a durable leader, what does that mean?

Joel Peterson: Well, it means creating an organization that is durable, that lasts through thick and thin. We are now in thin times and people have to figure out how do we survive these kinds of moments?

The first thing that people have to do is preserve cash. If there is no short-run, there'll be no long-run, so people have to figure out how to extend the runway.

Then they have to think about the brand that they would like to emerge with. I think reimaging businesses and how do you satisfy customers and employees?

Then I think they're going to have to figure out the mindsets that they want to radiate in order to get through these tough times. Every entrepreneur has to face difficult circumstances at some point or another.

Michael Krigsman: You're talking not so much about the mechanics of running a company. You're talking about the entrepreneur's relationship, mental relationship, really, to the business. Is that correct?

Joel Peterson: I'm talking about both. There's a set of mindsets that you have to have. You have to really be oriented the right way but then there's really almost a series of checklists.

I've written ten things that I think every entrepreneur runs into. What are the checklists for selling, negotiating, raising capital, running a board effectively, dealing with adversity, making decisions under conditions of uncertainty, et cetera? Those are very much actionable, running the business kinds of things. It deals with both.

Building a Culture of Trust in Business

Michael Krigsman: Your book begins with trust, the concept of trust. Why is trust so important? It's one of these terms that pretty much every business tosses around, you know, "Trust is our currency." Tell us about trust.

Joel Peterson: People think of trust as this fuzzy, feel-good thing. It's a word that is not well defined and it's not really clearly thought through.

I wrote a book a couple of years ago called The Ten Laws of Trust in which I tried to factor analyze: What makes up a high trust organization? Are there things you can do? Can you be intentional about building a high trust organization?

I came to the conclusion that there really are, that people can overcome betrayal, and that high trust organizations outperform low trust organizations. They make decisions faster, they're more flexible, they innovate and people have more fun.

Michael Krigsman: The challenge with building trust, I think, for many leaders, for many organizations is, we have conflicting sets of goals and priorities. How do you navigate these conflicting goals and emerge on the other side building trust?

Joel Peterson: The second foundation of becoming an entrepreneurial leader is to have a clear mission, to not have conflicting goals and priorities. People need to work those through. I think trust does suffer if people are climbing different peaks. We really need to all be belayed to climbing the same peak. That's one of the ways that you do that.

You should expect that there'll be disappointments. There will be betrayals. You have to fix those. You have to fix them right away.

Trust and Leadership

Michael Krigsman: We have a comment from Arsalan Khan on Twitter, which I think captures an important point. He talks about culture and organizational politics. Trust can be sacrificed on the altar, so to speak, of trust and organizational politics. Again, how do we manage that?

Joel Peterson: Politics can get in the way of a lot of things if people have different agendas. My experience is, establishing the principles at the best idea wins, not the most powerful person.

Trust is all about power. If an organization is driven by power, it will typically be a low trust organization.

Your trust can either derive from the fact that you control people's salaries, you control their bonuses, what office they sit in, or it can come because they enjoy the same objectives you have, that winning for both of you is the same. I think that's a much more powerful way. There's a lot of power that comes from all trusting each other and I think that's the kind of power that endures.

Michael Krigsman: Can you give us an example of trust, the challenges of trust, trust in action?

Joel Peterson: Early on in my career – not so early, but I was actually the CEO of a real estate company that had to do what we call "workouts." We couldn't pay all of our debts. The properties were not leasing up, so we had to renegotiate these loans.

Had we not had high trust among each other, among suppliers, among lenders, investors, we could not have worked it out. It was only because they believed that we would do a better job than anyone else at leasing up space, at paying them back, that they would trust us to take a little bit longer to pay them. That's really what a lot of businesses are going to have to have right now.

By the way, you can't start building that trust in the crisis. Trust is built a layer at a time, a conversation at a time, a molecule at a time.

‘Solving for Fairness’ in Business

Michael Krigsman: When we think about business, we think about winner take all. I want everything. I want the largest share of the pie. Yet, it seems to me that that attitude undermines the creation of trust. Again, I keep coming back to how do you balance these multiple agendas, multiple goals?

Joel Peterson: Well, I think that idea that winner-takes-all is a terrible notion for business. I think you should be solving for fairness. You want other people to win too. I think the idea that you're a fiduciary, you're a fiduciary for your customers, for your communities, for your employees, and you're solving for, all things considered, good outcomes.

You have to grow. You have to have profits to stay in business over the long-run, so you solve for that. But this idea of maximizing quarterly profits, winner take all, is actually a very short-term thing. When you get in conditions of adversity like we're in now, it may fail you.

Michael Krigsman: Please, elaborate on that, solving for fairness. It's such a different way of thinking than many business leaders possess.

Joel Peterson: I think you'll find that you rarely come to an agreement without a bunch of fighting, so agreements happen much faster if you're solving for fairness. I used to try to listen to what would the opposing party like to see happen and then I'd price. In a negotiation, I would say, okay, they want this, that, and the other. Here's how I can provide them what it is they want most. I just price it in a way that works for me too. I'm solving for them having a win in a way that I don't have a loss.

The idea that everything is a zero-sum game, I think, is a flawed concept and makes for what I would call episodic negotiations rather than serial negotiations. I think the wise entrepreneurial business leader is solving for relationships, for serial negotiations, for multiple transactions. It's a much better way to do business than just the episode where you win and go off with your winnings.

Michael Krigsman: On LinkedIn right now, Jennifer Cox points out that trust is earned by clear, honest communication. Constance Woodson makes the comment that clarity is crucial in building trust. Would you talk about the role of communication in establishing trust?

Joel Peterson: Clear communications, transparency, communicating bad news as well as good news before, during, and after an event. You know how people sometimes today spin things. They release information on Friday afternoon or whatever. People are too smart. They'll figure that out. To me, being transparent, if there's a mistake that's been made, admitting it, admitting it upfront.

I think, even more important than communication, is actually delivering on promises. If you deliver on promises, you will build trust. Many times, the communications will take care of themselves at that point in time.

Michael Krigsman: The foundation of trust then is fairness and doing that which you have committed to do, to fulfilling your promises.

Joel Peterson: Yeah, and that's your brand too, Michael. You have a brand. People expect certain things out of companies. They expect certain things out of individuals. If you deliver on that brand, if you deliver on that promise, your trust quotient will go up and people will allow you to make decisions. You'll become predictable.

By the way, if you're predictable, the people that are following you are empowered. They can take decisions knowing that you'll support them.

Why Mission is Important

Michael Krigsman: You've mentioned a couple of times, mission. That's the next point that you cover in your book after trust. Tell us about mission, please.

Joel Peterson: People work for meaning, particularly this next generation of workers. They're really volunteers. They're information workers, and so they want to do something that has meaning to them.

I find that a mission really captures that idea.

A mission is not the same thing as a mission statement. Mission statements are often crafted in the board room or in the corner office and delivered to the organization. A mission is what people really are excited about.

I've found that a mission, if it's crafted by the people who are going to execute it, you don't need to worry about motivating them. It's what they care about. If they're on a winning team working towards a meaningful mission, they are motivated.

Michael Krigsman: When it comes to trust, pretty much every CEO says, "You can trust us," and pretty much every CEO says, "Our mission is ____ that will save the world." Somehow I think you're talking about something a little bit different.

Joel Peterson: What I've often said is that that mission statement that's framed and hung in the boardroom or what the CEO says from the corner office often creates cynicism. It often reduces the trust level of an organization. Why? Because it isn't lived.

Your mission statement should capture your priorities. What do we do when we have to make tradeoffs? If it accurately reflects that and is owned by the people, then it doesn't create cynicism. If it's the other, then I would think that trust levels will actually go down.

Michael Krigsman: Joel, what's the relationship then between the mission and the brand, the company's brand?

Joel Peterson: They're connected. They're related. These are cousins. The idea of vision, mission, tagline, brand, all these things are related concepts but they're all slightly different. They have slightly different audiences.

If they're inconsistent, they will actually destroy trust. If they're consistent, then they can speak a slightly different language to every set of customers.

Building the Right Team

Michael Krigsman: The next topic in your book is securing the team. Where does that fit into the sequence here?

Joel Peterson: Business is a team sport. If you don't have the right team on the field, you're not going to win. By the way, businesses change over time, so the team you start with may not be the right team for how the world has evolved, how competitors have evolved, what's happened with your product, et cetera.

As a leader, you have to always secure the right team on the field. That means changes. It means adding new people. It means demoting some, promoting some, and removing some. Learning how to manage that team process is a really vital element of becoming an entrepreneurial leader.

Michael Krigsman: The most basic discussion of entrepreneurship focuses on you need the right team. What's different here?

Joel Peterson: Well, what's different is, there's a series of checklists and mindsets that you can go into to think about: How do I source the right people? How do I onboard them? How do I do due diligence? What mindset do I have when I've made a mistake and I have to remove somebody? It's really just making sure that this whole process of securing the right team at all times is done well.

Our pilots at JetBlue go through a checklist. Some of them have been flying planes for 25 years. They probably know by heart the checklist but they pull out the checklist every single time and they go through each item and make sure that they're doing it. This book should help the entrepreneurial leader think about all the elements they need to go through to make sure we've got the right team on the field.

Michael Krigsman: Given the fact that building a team is one of the most obvious, foundational parts of creating a new company, what is it that founders tend to do wrong?

Joel Peterson: Several things. One is, they don't realize that this idea of the founder's trap that they may actually become the problem and, in many cases, organizations fail because they've outgrown the founder. The founder is no longer the right person to lead it or might not ever become an entrepreneurial leader is really a serial entrepreneur, an innovator, but not beyond that. That's one.

Another is, people tend to hire themselves over and over and over again. You get these organizations that have a bunch of mini-mes and you don't have the kind of inclusion and diversity that you really need to have a great organization.

Another thing is, with change, jobs outgrow people and you need to add new folks. An organization that builds up deadwood will be an organization that fails over time. You have to keep refreshing and you have to do it in a thoughtful, generous way so you're not just always, everybody's job is on the line every month or every quarter. That would be a brutal place.

People need to be able to live and grow and be part of the team. But everybody needs to understand that they're long as long as they can play that position better than somebody else.

Michael Krigsman: We keep talking about these issues where there are, at least on the surface, conflicts. For example, you mention the need to refresh the team, to be on top of the capabilities of the team as well as your own if you're the CEO. Yet, at the same time, you talk about doing that in a thoughtful way so that it doesn't create a brutal environment. In my observations, there are very few leaders who balance these well.

Joel Peterson: It doesn't mean it shouldn't be done and shouldn't be thought about. I think letting people go generously, thoughtfully, not surprising them.

I just published an article in the Harvard Business Review that talked about gracefully letting somebody go. I think you want to be generous. You made the mistake as well as the person. Maybe it wasn't a mistake. Things just changed.

It's up to you to have a mindset that goes into this wanting that person to have the best opportunity they can possibly have, so you again are a fiduciary for them. You're a fiduciary for the company and you're a fiduciary for the other party. If it was a mistake, it was yours as well as theirs. Going in with that mindset is quite helpful.

“Solving for Fairness”

Michael Krigsman: You mentioned earlier solving for fairness. When you're undertaking these kinds of negotiations, how do you balance the interests of the two sides so that, in fact, you can solve for fairness?

Joel Peterson: It starts with thinking about the individual and helping them. Really, if you think about that, Michael, you are solving for the organization too because the organization is watching. Everybody sees themselves in the role of the person being let go or being talked about or whatever. Being gracious, being thoughtful, giving them extra time, being generous, all those are mindsets that everybody will take into account and will benefit the organization.

Michael Krigsman: What about the situation that happens very often where a company is struggling, there's a cash crunch, what have you, and the CEO wants to solve for fairness but there simply aren't the resources available, whether in actuality or mentally in the CEO's mind?

Joel Peterson: Well, if it's only mentally in the CEO's mind, then I think they need to get more information and really think about it. If in point of fact there are limitations on resources, there are no limitations on kind words, on recommendations, on giving people extra time, office space. There are a lot of things you can do that help people find the next position in life. I think you're obligated to do that.

Establishing a New Corporate Culture

Michael Krigsman: As you teach your classes and as you have been leading businesses—maybe this is an obvious question—what has the reception been to this way of thinking and this way of establishing a culture?

Joel Peterson: I think people are relieved, in a way. I think a lot of the notions around business are that it's a dog-eat-dog world, that it's brutal, all that matters are quarterly profits, and everybody is out for themselves. It's driven by fear and by reward.

I try to convince people that, really, the more powerful motivators are duty and love. If you really care about people, you can build a caring organization.

We found at JetBlue, for example, we've given over a million hours to our communities. These are crew members who volunteer time. Guess what. That helps us hire better people and they want to stay longer because they're doing something that's meaningful. I think you can really create a culture of care, a culture of having more than just quarterly profits that you're working towards.

Michael Krigsman: On LinkedIn, we have a question from Russ Finney. Russ asks, "Do you have a tip for when to keep listening and when to be decisive?"

Joel Peterson: There's always a tension between getting more information and pulling the trigger. Information costs time, it costs money, et cetera.

I think listening is typically not very expensive. I think listening until you've captured the essence of what somebody is saying, until they say, "Okay, you've got it," is typically not expensive and typically builds trust. I'm a big believer that listening is the most important form of communication.

I think if leaders learned to be great listeners, they'll learn to make great decisions and people will support them if they feel heard. Many times, you can disagree with what somebody says, but if you feel that you've been heard, you'll support the decision.

Michael Krigsman: As I talk with business leaders on CXOTalk, responsiveness, agility, and speed are among the key attributes people talk about, business leaders talk about. Isn't there a cost to listening in terms of speed?

Joel Peterson: There can be. In most cases, the cost is dithering. People put it off and they want more information. In fact, a lot of my students won't pull the trigger on a case issue because they say, "Well, I need more information. I can't make the decision without more information." In many cases, that's what's holding them up.

Listening to people, though, I think if you have any idea that there's an open forum that people can submit suggestions, that you'll capture them, and that you feed back to them, "Here's what I've heard." What's frustrating is when people give suggestions and then they never hear back. They don't know what the feedback is. If you'll feed back to them what they've said, it doesn't take much time, money, effort, energy, and it actually gives the organization the sense of connectivity. I don't think there's a huge tradeoff there.

Michael Krigsman: You mean really listening, not just paying lip service and going through the motions.

Joel Peterson: Yeah, there's no other kind of listening other than really listening and capturing. The other is just pausing and being quiet for a minute while you compose your thoughts to jump in and deliver what you think without really listening. We've all sat in conversations where people have done that. [Laughter]

“Solving for Trust”

Michael Krigsman: Moetesum Khurshid asks, "Geographical location of businesses do have an impact on how trust is read and understood or the element of how trust is read. Is there an element of how trust is read that is common across locations and geographies?" I think that they're talking about the common basis of trust.

Joel Peterson: I'm guessing they're talking about cultural differences, not geography. Geography may have slight differences but they really are related to culture, how people have learned to think about things. I think that's a great comment.

I've lived overseas and led things overseas. I've found, over time, that people are people. It may take longer to develop a trust relationship. It may mean inviting them into your home. It may mean more meals. It may mean whatever.

Ultimately, people want interpersonal connections and they want to know that they can believe you. I think that's true across cultures, at least the ones that I've dealt with. It may take longer. It may have a different process.

Michael Krigsman: Would it be accurate to say that if it builds trust, it's pretty darn universal?

Joel Peterson: I think so. It may take longer. It may have a different route to getting there, but I think trust is something that is a human yearning. We want to because it gives you a sense of predictability. It allows you to take action. It makes you less wary. You're happier.

I think it's something to strive for in every culture. It just may take longer and have a different, more circuitous route, but I actually think it's something to solve for in every instance.

Michael Krigsman: Again, solving for trust.

Joel Peterson: Exactly. Exactly. You have to really understand what trust is, though. I think this idea that it's this fuzzy, feel-good notion can actually be naïve and detrimental. You can set yourself up for betrayal.

Trust, in the end, is a derivative of character, competence, and the authority to deliver on promises. All three must be present for you to trust in a smart way. I think the more that you can factor analyze trust and be smart about it, the more likely you are to have a real trust, a real reciprocal trust and not the pseudo trust that sometimes exists in a contractual world.

Michael Krigsman: Arsalan Khan says, "Listening can also have biases from where the information is coming from and how it is interpreted. Should organizations train their employees in bias training so that they don't make those mistakes?"

Joel Peterson: Well, absolutely. There's no question that there are biases everywhere. I think the fact of listening and reflecting, what I heard you just say is the following: There's really not much downside in that. I don't necessarily have to accept it, but you'll feel differently if I've really correctly captured what it is you're saying. I think that's the starting point for developing a trust relationship. The filter of bias, you know, I need to be able to use to evaluate whether or not I'm going to take action based on it, but it doesn't necessarily filter whether or not I've actually captured what it is you've said to me.

Michael Krigsman: You talk then about delivering results. Why do you bring that up in your book? It seems pretty obvious. That's what we do in business, right? We get stuff done.

Joel Peterson: If only. In a lot of cases, projects don't get done. They don't get done on time. They don't get done on budget. The deliverables aren't what we wanted. The products or services don't work the way we want. Customers are unhappy.

That's, in theory, what we do but, in reality, there are a lot of slipups. Trust is diminished every time there's a slipup and it's increased every time we deliver. If there's a slipup or what I would call a betrayal of trust, the only thing you can do is go in and fix it. Recognizing it as quickly as possible and fixing it as quickly as possible is how you restore trust.

Michael Krigsman: Where does honesty come into play and to what extent should a leader be honest when there is a problem about the causes of the problem and even what's going on?

Joel Peterson: There's kind of no place for dishonesty. A case can be made for not disclosing everything. It might hurt some people to disclose everything. We don't need to assign blame on everything. Some people might call that being dishonest.

My own view is, it's the results we're solving for. Fixing the problem and moving on is really the important thing. I don't think there is a place for dishonesty, but I don't think full disclosure on every item is necessary. It may do more harm than good.

Michael Krigsman: What about the fact that no plan is perfect? The moment we put a plan into place, it's going to change. When you think about delivering results, how do you factor uncertainty and risk into that equation?

Joel Peterson: You always have to take it into account. I think the smart leaders are the ones that are influenced by new information. They don't feel like they have to protect past decisions. They admit mistakes. They admit new information. They change directions. They're disclosive along the way.

I always think of this old story of Mike Tyson who said, "Everybody has a plan until I punch them in the face," and that's kind of what the market does. It punches you in the face and you have to adjust your plan.

Managing Ambiguity

Michael Krigsman: You've seen so many business situations. Can you share with us any examples of managing through the challenges of ambiguity?

Joel Peterson: I think almost every business situation is one of ambiguity. Not only are you entering a field where you don't know where the market is actually going to go—markets are all dynamic—but you don't know how competitors are going to respond.

I remember, early on at JetBlue, we were the low-cost airline and we were trying to service different markets. We decided to fly into Atlanta. At that time, Delta had a low-cost product they called Song.

We were selling flights for $49 apiece from Long Beach to Atlanta and Delta came in at $39 apiece and said, "We're Delta. We can stay at $39 as long as we need to, to keep you out of Atlanta." [Laughter] And so, we adjusted our plan. We got hit in the face. We got punched in the face and we retreated.

It's always adjusting. You adjust to market conditions, to the realities on the ground. If you don't do that, it's a slow route to bankruptcy.

Michael Krigsman: The adaptability but then that requires that you have the pieces in place, right? You need to have people who can adapt to change. You have to have a culture that has the expectations that you will adapt to change. It's easy to talk about, but it seems like there's a lot that must take place under the surface in order to enable that.

Joel Peterson: Well, and that starts with the leaders saying, "Okay, we need to change," or, "I made a decision based on X. Y is now the circumstance. We need to change."

It takes a certain vulnerability and humility with leaders. Actually, one of the items I list under the Laws of Trust is humility.

Leaders, if you want to build a high trust organization, you have to be humble. Humble just doesn't mean that you're self-deprecating. It means that you're learning. You're ever-changing. That's a form of humility that really creates trust.

Michael Krigsman: Joel, you keep saying these things that fly in the face of what we typically or very often see. For example, humility. If we think about some of the brash, the great entrepreneurs of our time, how brash they are, one does not associate, for example, humility with Elon Musk, just as one example.

Joel Peterson: There are some that kind of fly in the face that, on the other hand, my guess is that he's listening to the market. He's changing. His ear is to the ground, so that form of humility. Some people may have a brash envelope around their humility.

If you are absolutely proud and unwilling to listen to things, you will go bankrupt. I think the other thing is, you'll have a hard time getting people to follow you if you steamroll them and don't ever listen to them.

It's more fun to talk about the brash and those who aren't humble. We notice them more than we do the humble leaders, but there are many, many what Jim Collins called Level 5 Leaders who really are humble, who listen, who build great companies. We just don't read about them.

Michael Krigsman: As you said in the case of someone like Elon Musk who, on the surface, obviously is very brash and very arrogant, obviously he is listening very carefully to the market, and so we have to make the distinction then, as you're pointing out, between the personality and the wrapper and the underlying mechanisms that are actually taking place.

Joel Peterson: Exactly.

Michael Krigsman: Any final thoughts, advice that you would like to share? If you can kind of sum up everything that you've learned, what's most important?

Joel Peterson: You know it's a little bit like the question, is food, air, or water most important for life? We die without all of them. In my view, these recipes, these checklists for entrepreneurial leadership are really how you build a great and enduring company.

What I would say, above all, is this notion of being a fiduciary. As a business leader, you are responsible to others. It's not just Wall Street. You are responsible to investors. No question about it.

Peterson Partners, for example, the investment firm I founded, we basically said we're going to help entrepreneurs achieve their dreams. Well, our entrepreneurs are one kind of customer. Our investors or limited partners are another kind of customer. We prioritized our entrepreneurs, and so deciding that we're a fiduciary for those entrepreneurs allows us to then serve all these other customers that we've got.

I think, thinking about that, I think approaching the world as a fiduciary, being kind, in the long-run is much more powerful. Building trust is much more powerful than operating through fear and force. I would encourage entrepreneurial leaders. Particularly in this time as we overcome adversity, reimagine our enterprises, becoming an entrepreneurial leader is vital.

Michael Krigsman: Also, you're advocating being very, very clear about the priorities—what are your goals, what are your priorities—so that you can make tradeoffs based on those priorities as an indisputable reference point.

Joel Peterson: Exactly.

Michael Krigsman: Joel Peterson, Chairman of JetBlue, Professor at Stanford, and lots of other things too, thank you very, very much for sharing your insight and experience with us today.

Joel Peterson: My pleasure, Michael. Thank you.

Michael Krigsman: Everybody, thank you for watching. Before you go, please, please subscribe on YouTube and subscribe to our website. Click the subscribe button at the top of our website. We have amazing guests coming up.

Next week, there's no show. The week after that, we have the President of Technology for UPS. That's going to be a very interesting conversation. Check out CXOTalk.com. There's a lot there.

Thanks so much, everybody. I hope you have a great day. To the people who asked questions, a huge thank you to you. Bye-bye. Stay safe.

This transcript was lightly edited.

Introduction

Michael Krigsman: Leadership is an important topic that we speak often about on CXOTalk. Joel Peterson is the chairman of JetBlue and he's a written a book called Entrepreneurial Leadership. Joel, tell us about the things you do. You've got your hands in all kinds of interesting things.

Joel Peterson: Besides teaching at Stanford, writing books, and being a JetBlue, I've been the chairman of the Hoover Institution Board of Overseers for a while. I've invested in about 250 companies. I've served on 35 boards. I was the CEO of a large real estate company and I was probably one of the original members of the gig economy.

Impact of COVID-19 on JetBlue and the Airline Industry

Michael Krigsman: You're chairman of JetBlue and, of course, this whole global health crisis situation has affected the airlines tremendously. As an insider, can you share your thoughts or observations?

Joel Peterson: It's been brutal. Our revenues have dropped between 90% and 95%. We've grounded about 170 planes. It's a very difficult operating environment, as you can imagine. We've never furloughed anybody and, of course, this time we have the help of the government to cover salaries for people through the end of September, at which time we hope the travel industry will come back. There's a lot of pent-up demand and there are changes that we're making to accommodate travelers in the future.

Michael Krigsman: Can I ask what kinds of changes are you referring to?

Joel Peterson: Well, the kinds of things that, you know, safety is our number one value at JetBlue and air travel is the safest form of travel. The air in the fuselage is the cleanest air on the planet. The filtration systems are phenomenal, but we'll probably be taking people's temperatures or having people wear masks. We're not selling tickets for the center seat, so we're just taking every precaution so that everything is safe.

Michael Krigsman: I know revenues, as you mentioned, have taken a huge hit. What do you see as the pathway forward?

Joel Peterson: At some point, travel has to come back at some level for there really to be a path forward. I think it's a pretty draconian outcome to say nobody will ever travel again, Jet travel will be off forever.

People want to be with family and friends, hold business meetings. People like to travel and it is such a safe form of travel. It's much safer than any other form.

I think there are a lot of reasons that it'll come back. People just have to feel absolutely safe, and so we're working, doing everything we can to do that.

About Entrepreneurial Leadership

Michael Krigsman: Joel, why did you write this new book called Entrepreneurial Leadership?

Joel Peterson: I've worked with leaders now for almost a half a century and I've noticed that some are fundamentally presiders. Some are managers. They deal with complexity extraordinarily well. Others are administrators. They understand policy and its implications and second and third-order consequences.

Others are entrepreneurs. They light fires, they innovate, but they can't keep them burning.

Finally, there are politicians who understand power, who manage through fear and reward. Reward friends, punish enemies and get things done that way.

Really, to knit them all together in the entrepreneurial leader who is somebody who can create durable change is relatively rare. We need more of them in the world.

Particularly, at the time of this crisis, everybody is going to have to become an entrepreneurial leader. No more just presiding. No more just being a politician. People are going to have to reimagine their businesses and really be entrepreneurial leaders.

What is a ‘Durable Leader’?

Michael Krigsman: You mentioned the concept of being a durable leader. Everybody needs to be an entrepreneur. When you talk about being a durable leader, what does that mean?

Joel Peterson: Well, it means creating an organization that is durable, that lasts through thick and thin. We are now in thin times and people have to figure out how do we survive these kinds of moments?

The first thing that people have to do is preserve cash. If there is no short-run, there'll be no long-run, so people have to figure out how to extend the runway.

Then they have to think about the brand that they would like to emerge with. I think reimaging businesses and how do you satisfy customers and employees?

Then I think they're going to have to figure out the mindsets that they want to radiate in order to get through these tough times. Every entrepreneur has to face difficult circumstances at some point or another.

Michael Krigsman: You're talking not so much about the mechanics of running a company. You're talking about the entrepreneur's relationship, mental relationship, really, to the business. Is that correct?

Joel Peterson: I'm talking about both. There's a set of mindsets that you have to have. You have to really be oriented the right way but then there's really almost a series of checklists.

I've written ten things that I think every entrepreneur runs into. What are the checklists for selling, negotiating, raising capital, running a board effectively, dealing with adversity, making decisions under conditions of uncertainty, et cetera? Those are very much actionable, running the business kinds of things. It deals with both.

Building a Culture of Trust in Business

Michael Krigsman: Your book begins with trust, the concept of trust. Why is trust so important? It's one of these terms that pretty much every business tosses around, you know, "Trust is our currency." Tell us about trust.

Joel Peterson: People think of trust as this fuzzy, feel-good thing. It's a word that is not well defined and it's not really clearly thought through.

I wrote a book a couple of years ago called The Ten Laws of Trust in which I tried to factor analyze: What makes up a high trust organization? Are there things you can do? Can you be intentional about building a high trust organization?

I came to the conclusion that there really are, that people can overcome betrayal, and that high trust organizations outperform low trust organizations. They make decisions faster, they're more flexible, they innovate and people have more fun.

Michael Krigsman: The challenge with building trust, I think, for many leaders, for many organizations is, we have conflicting sets of goals and priorities. How do you navigate these conflicting goals and emerge on the other side building trust?

Joel Peterson: The second foundation of becoming an entrepreneurial leader is to have a clear mission, to not have conflicting goals and priorities. People need to work those through. I think trust does suffer if people are climbing different peaks. We really need to all be belayed to climbing the same peak. That's one of the ways that you do that.

You should expect that there'll be disappointments. There will be betrayals. You have to fix those. You have to fix them right away.

Trust and Leadership

Michael Krigsman: We have a comment from Arsalan Khan on Twitter, which I think captures an important point. He talks about culture and organizational politics. Trust can be sacrificed on the altar, so to speak, of trust and organizational politics. Again, how do we manage that?

Joel Peterson: Politics can get in the way of a lot of things if people have different agendas. My experience is, establishing the principles at the best idea wins, not the most powerful person.

Trust is all about power. If an organization is driven by power, it will typically be a low trust organization.

Your trust can either derive from the fact that you control people's salaries, you control their bonuses, what office they sit in, or it can come because they enjoy the same objectives you have, that winning for both of you is the same. I think that's a much more powerful way. There's a lot of power that comes from all trusting each other and I think that's the kind of power that endures.

Michael Krigsman: Can you give us an example of trust, the challenges of trust, trust in action?

Joel Peterson: Early on in my career – not so early, but I was actually the CEO of a real estate company that had to do what we call "workouts." We couldn't pay all of our debts. The properties were not leasing up, so we had to renegotiate these loans.

Had we not had high trust among each other, among suppliers, among lenders, investors, we could not have worked it out. It was only because they believed that we would do a better job than anyone else at leasing up space, at paying them back, that they would trust us to take a little bit longer to pay them. That's really what a lot of businesses are going to have to have right now.

By the way, you can't start building that trust in the crisis. Trust is built a layer at a time, a conversation at a time, a molecule at a time.

‘Solving for Fairness’ in Business

Michael Krigsman: When we think about business, we think about winner take all. I want everything. I want the largest share of the pie. Yet, it seems to me that that attitude undermines the creation of trust. Again, I keep coming back to how do you balance these multiple agendas, multiple goals?

Joel Peterson: Well, I think that idea that winner-takes-all is a terrible notion for business. I think you should be solving for fairness. You want other people to win too. I think the idea that you're a fiduciary, you're a fiduciary for your customers, for your communities, for your employees, and you're solving for, all things considered, good outcomes.

You have to grow. You have to have profits to stay in business over the long-run, so you solve for that. But this idea of maximizing quarterly profits, winner take all, is actually a very short-term thing. When you get in conditions of adversity like we're in now, it may fail you.

Michael Krigsman: Please, elaborate on that, solving for fairness. It's such a different way of thinking than many business leaders possess.

Joel Peterson: I think you'll find that you rarely come to an agreement without a bunch of fighting, so agreements happen much faster if you're solving for fairness. I used to try to listen to what would the opposing party like to see happen and then I'd price. In a negotiation, I would say, okay, they want this, that, and the other. Here's how I can provide them what it is they want most. I just price it in a way that works for me too. I'm solving for them having a win in a way that I don't have a loss.

The idea that everything is a zero-sum game, I think, is a flawed concept and makes for what I would call episodic negotiations rather than serial negotiations. I think the wise entrepreneurial business leader is solving for relationships, for serial negotiations, for multiple transactions. It's a much better way to do business than just the episode where you win and go off with your winnings.

Michael Krigsman: On LinkedIn right now, Jennifer Cox points out that trust is earned by clear, honest communication. Constance Woodson makes the comment that clarity is crucial in building trust. Would you talk about the role of communication in establishing trust?

Joel Peterson: Clear communications, transparency, communicating bad news as well as good news before, during, and after an event. You know how people sometimes today spin things. They release information on Friday afternoon or whatever. People are too smart. They'll figure that out. To me, being transparent, if there's a mistake that's been made, admitting it, admitting it upfront.

I think, even more important than communication, is actually delivering on promises. If you deliver on promises, you will build trust. Many times, the communications will take care of themselves at that point in time.

Michael Krigsman: The foundation of trust then is fairness and doing that which you have committed to do, to fulfilling your promises.

Joel Peterson: Yeah, and that's your brand too, Michael. You have a brand. People expect certain things out of companies. They expect certain things out of individuals. If you deliver on that brand, if you deliver on that promise, your trust quotient will go up and people will allow you to make decisions. You'll become predictable.

By the way, if you're predictable, the people that are following you are empowered. They can take decisions knowing that you'll support them.

Why Mission is Important

Michael Krigsman: You've mentioned a couple of times, mission. That's the next point that you cover in your book after trust. Tell us about mission, please.

Joel Peterson: People work for meaning, particularly this next generation of workers. They're really volunteers. They're information workers, and so they want to do something that has meaning to them.

I find that a mission really captures that idea.

A mission is not the same thing as a mission statement. Mission statements are often crafted in the board room or in the corner office and delivered to the organization. A mission is what people really are excited about.

I've found that a mission, if it's crafted by the people who are going to execute it, you don't need to worry about motivating them. It's what they care about. If they're on a winning team working towards a meaningful mission, they are motivated.

Michael Krigsman: When it comes to trust, pretty much every CEO says, "You can trust us," and pretty much every CEO says, "Our mission is ____ that will save the world." Somehow I think you're talking about something a little bit different.

Joel Peterson: What I've often said is that that mission statement that's framed and hung in the boardroom or what the CEO says from the corner office often creates cynicism. It often reduces the trust level of an organization. Why? Because it isn't lived.

Your mission statement should capture your priorities. What do we do when we have to make tradeoffs? If it accurately reflects that and is owned by the people, then it doesn't create cynicism. If it's the other, then I would think that trust levels will actually go down.

Michael Krigsman: Joel, what's the relationship then between the mission and the brand, the company's brand?

Joel Peterson: They're connected. They're related. These are cousins. The idea of vision, mission, tagline, brand, all these things are related concepts but they're all slightly different. They have slightly different audiences.

If they're inconsistent, they will actually destroy trust. If they're consistent, then they can speak a slightly different language to every set of customers.

Building the Right Team

Michael Krigsman: The next topic in your book is securing the team. Where does that fit into the sequence here?

Joel Peterson: Business is a team sport. If you don't have the right team on the field, you're not going to win. By the way, businesses change over time, so the team you start with may not be the right team for how the world has evolved, how competitors have evolved, what's happened with your product, et cetera.

As a leader, you have to always secure the right team on the field. That means changes. It means adding new people. It means demoting some, promoting some, and removing some. Learning how to manage that team process is a really vital element of becoming an entrepreneurial leader.

Michael Krigsman: The most basic discussion of entrepreneurship focuses on you need the right team. What's different here?

Joel Peterson: Well, what's different is, there's a series of checklists and mindsets that you can go into to think about: How do I source the right people? How do I onboard them? How do I do due diligence? What mindset do I have when I've made a mistake and I have to remove somebody? It's really just making sure that this whole process of securing the right team at all times is done well.

Our pilots at JetBlue go through a checklist. Some of them have been flying planes for 25 years. They probably know by heart the checklist but they pull out the checklist every single time and they go through each item and make sure that they're doing it. This book should help the entrepreneurial leader think about all the elements they need to go through to make sure we've got the right team on the field.

Michael Krigsman: Given the fact that building a team is one of the most obvious, foundational parts of creating a new company, what is it that founders tend to do wrong?

Joel Peterson: Several things. One is, they don't realize that this idea of the founder's trap that they may actually become the problem and, in many cases, organizations fail because they've outgrown the founder. The founder is no longer the right person to lead it or might not ever become an entrepreneurial leader is really a serial entrepreneur, an innovator, but not beyond that. That's one.

Another is, people tend to hire themselves over and over and over again. You get these organizations that have a bunch of mini-mes and you don't have the kind of inclusion and diversity that you really need to have a great organization.

Another thing is, with change, jobs outgrow people and you need to add new folks. An organization that builds up deadwood will be an organization that fails over time. You have to keep refreshing and you have to do it in a thoughtful, generous way so you're not just always, everybody's job is on the line every month or every quarter. That would be a brutal place.

People need to be able to live and grow and be part of the team. But everybody needs to understand that they're long as long as they can play that position better than somebody else.

Michael Krigsman: We keep talking about these issues where there are, at least on the surface, conflicts. For example, you mention the need to refresh the team, to be on top of the capabilities of the team as well as your own if you're the CEO. Yet, at the same time, you talk about doing that in a thoughtful way so that it doesn't create a brutal environment. In my observations, there are very few leaders who balance these well.

Joel Peterson: It doesn't mean it shouldn't be done and shouldn't be thought about. I think letting people go generously, thoughtfully, not surprising them.

I just published an article in the Harvard Business Review that talked about gracefully letting somebody go. I think you want to be generous. You made the mistake as well as the person. Maybe it wasn't a mistake. Things just changed.

It's up to you to have a mindset that goes into this wanting that person to have the best opportunity they can possibly have, so you again are a fiduciary for them. You're a fiduciary for the company and you're a fiduciary for the other party. If it was a mistake, it was yours as well as theirs. Going in with that mindset is quite helpful.

“Solving for Fairness”

Michael Krigsman: You mentioned earlier solving for fairness. When you're undertaking these kinds of negotiations, how do you balance the interests of the two sides so that, in fact, you can solve for fairness?

Joel Peterson: It starts with thinking about the individual and helping them. Really, if you think about that, Michael, you are solving for the organization too because the organization is watching. Everybody sees themselves in the role of the person being let go or being talked about or whatever. Being gracious, being thoughtful, giving them extra time, being generous, all those are mindsets that everybody will take into account and will benefit the organization.

Michael Krigsman: What about the situation that happens very often where a company is struggling, there's a cash crunch, what have you, and the CEO wants to solve for fairness but there simply aren't the resources available, whether in actuality or mentally in the CEO's mind?

Joel Peterson: Well, if it's only mentally in the CEO's mind, then I think they need to get more information and really think about it. If in point of fact there are limitations on resources, there are no limitations on kind words, on recommendations, on giving people extra time, office space. There are a lot of things you can do that help people find the next position in life. I think you're obligated to do that.

Establishing a New Corporate Culture

Michael Krigsman: As you teach your classes and as you have been leading businesses—maybe this is an obvious question—what has the reception been to this way of thinking and this way of establishing a culture?

Joel Peterson: I think people are relieved, in a way. I think a lot of the notions around business are that it's a dog-eat-dog world, that it's brutal, all that matters are quarterly profits, and everybody is out for themselves. It's driven by fear and by reward.

I try to convince people that, really, the more powerful motivators are duty and love. If you really care about people, you can build a caring organization.

We found at JetBlue, for example, we've given over a million hours to our communities. These are crew members who volunteer time. Guess what. That helps us hire better people and they want to stay longer because they're doing something that's meaningful. I think you can really create a culture of care, a culture of having more than just quarterly profits that you're working towards.

Michael Krigsman: On LinkedIn, we have a question from Russ Finney. Russ asks, "Do you have a tip for when to keep listening and when to be decisive?"

Joel Peterson: There's always a tension between getting more information and pulling the trigger. Information costs time, it costs money, et cetera.

I think listening is typically not very expensive. I think listening until you've captured the essence of what somebody is saying, until they say, "Okay, you've got it," is typically not expensive and typically builds trust. I'm a big believer that listening is the most important form of communication.

I think if leaders learned to be great listeners, they'll learn to make great decisions and people will support them if they feel heard. Many times, you can disagree with what somebody says, but if you feel that you've been heard, you'll support the decision.

Michael Krigsman: As I talk with business leaders on CXOTalk, responsiveness, agility, and speed are among the key attributes people talk about, business leaders talk about. Isn't there a cost to listening in terms of speed?

Joel Peterson: There can be. In most cases, the cost is dithering. People put it off and they want more information. In fact, a lot of my students won't pull the trigger on a case issue because they say, "Well, I need more information. I can't make the decision without more information." In many cases, that's what's holding them up.

Listening to people, though, I think if you have any idea that there's an open forum that people can submit suggestions, that you'll capture them, and that you feed back to them, "Here's what I've heard." What's frustrating is when people give suggestions and then they never hear back. They don't know what the feedback is. If you'll feed back to them what they've said, it doesn't take much time, money, effort, energy, and it actually gives the organization the sense of connectivity. I don't think there's a huge tradeoff there.

Michael Krigsman: You mean really listening, not just paying lip service and going through the motions.

Joel Peterson: Yeah, there's no other kind of listening other than really listening and capturing. The other is just pausing and being quiet for a minute while you compose your thoughts to jump in and deliver what you think without really listening. We've all sat in conversations where people have done that. [Laughter]

“Solving for Trust”

Michael Krigsman: Moetesum Khurshid asks, "Geographical location of businesses do have an impact on how trust is read and understood or the element of how trust is read. Is there an element of how trust is read that is common across locations and geographies?" I think that they're talking about the common basis of trust.

Joel Peterson: I'm guessing they're talking about cultural differences, not geography. Geography may have slight differences but they really are related to culture, how people have learned to think about things. I think that's a great comment.

I've lived overseas and led things overseas. I've found, over time, that people are people. It may take longer to develop a trust relationship. It may mean inviting them into your home. It may mean more meals. It may mean whatever.

Ultimately, people want interpersonal connections and they want to know that they can believe you. I think that's true across cultures, at least the ones that I've dealt with. It may take longer. It may have a different process.

Michael Krigsman: Would it be accurate to say that if it builds trust, it's pretty darn universal?

Joel Peterson: I think so. It may take longer. It may have a different route to getting there, but I think trust is something that is a human yearning. We want to because it gives you a sense of predictability. It allows you to take action. It makes you less wary. You're happier.

I think it's something to strive for in every culture. It just may take longer and have a different, more circuitous route, but I actually think it's something to solve for in every instance.

Michael Krigsman: Again, solving for trust.

Joel Peterson: Exactly. Exactly. You have to really understand what trust is, though. I think this idea that it's this fuzzy, feel-good notion can actually be naïve and detrimental. You can set yourself up for betrayal.

Trust, in the end, is a derivative of character, competence, and the authority to deliver on promises. All three must be present for you to trust in a smart way. I think the more that you can factor analyze trust and be smart about it, the more likely you are to have a real trust, a real reciprocal trust and not the pseudo trust that sometimes exists in a contractual world.

Michael Krigsman: Arsalan Khan says, "Listening can also have biases from where the information is coming from and how it is interpreted. Should organizations train their employees in bias training so that they don't make those mistakes?"

Joel Peterson: Well, absolutely. There's no question that there are biases everywhere. I think the fact of listening and reflecting, what I heard you just say is the following: There's really not much downside in that. I don't necessarily have to accept it, but you'll feel differently if I've really correctly captured what it is you're saying. I think that's the starting point for developing a trust relationship. The filter of bias, you know, I need to be able to use to evaluate whether or not I'm going to take action based on it, but it doesn't necessarily filter whether or not I've actually captured what it is you've said to me.

Michael Krigsman: You talk then about delivering results. Why do you bring that up in your book? It seems pretty obvious. That's what we do in business, right? We get stuff done.

Joel Peterson: If only. In a lot of cases, projects don't get done. They don't get done on time. They don't get done on budget. The deliverables aren't what we wanted. The products or services don't work the way we want. Customers are unhappy.

That's, in theory, what we do but, in reality, there are a lot of slipups. Trust is diminished every time there's a slipup and it's increased every time we deliver. If there's a slipup or what I would call a betrayal of trust, the only thing you can do is go in and fix it. Recognizing it as quickly as possible and fixing it as quickly as possible is how you restore trust.

Michael Krigsman: Where does honesty come into play and to what extent should a leader be honest when there is a problem about the causes of the problem and even what's going on?

Joel Peterson: There's kind of no place for dishonesty. A case can be made for not disclosing everything. It might hurt some people to disclose everything. We don't need to assign blame on everything. Some people might call that being dishonest.

My own view is, it's the results we're solving for. Fixing the problem and moving on is really the important thing. I don't think there is a place for dishonesty, but I don't think full disclosure on every item is necessary. It may do more harm than good.

Michael Krigsman: What about the fact that no plan is perfect? The moment we put a plan into place, it's going to change. When you think about delivering results, how do you factor uncertainty and risk into that equation?

Joel Peterson: You always have to take it into account. I think the smart leaders are the ones that are influenced by new information. They don't feel like they have to protect past decisions. They admit mistakes. They admit new information. They change directions. They're disclosive along the way.

I always think of this old story of Mike Tyson who said, "Everybody has a plan until I punch them in the face," and that's kind of what the market does. It punches you in the face and you have to adjust your plan.

Managing Ambiguity

Michael Krigsman: You've seen so many business situations. Can you share with us any examples of managing through the challenges of ambiguity?

Joel Peterson: I think almost every business situation is one of ambiguity. Not only are you entering a field where you don't know where the market is actually going to go—markets are all dynamic—but you don't know how competitors are going to respond.

I remember, early on at JetBlue, we were the low-cost airline and we were trying to service different markets. We decided to fly into Atlanta. At that time, Delta had a low-cost product they called Song.

We were selling flights for $49 apiece from Long Beach to Atlanta and Delta came in at $39 apiece and said, "We're Delta. We can stay at $39 as long as we need to, to keep you out of Atlanta." [Laughter] And so, we adjusted our plan. We got hit in the face. We got punched in the face and we retreated.

It's always adjusting. You adjust to market conditions, to the realities on the ground. If you don't do that, it's a slow route to bankruptcy.

Michael Krigsman: The adaptability but then that requires that you have the pieces in place, right? You need to have people who can adapt to change. You have to have a culture that has the expectations that you will adapt to change. It's easy to talk about, but it seems like there's a lot that must take place under the surface in order to enable that.

Joel Peterson: Well, and that starts with the leaders saying, "Okay, we need to change," or, "I made a decision based on X. Y is now the circumstance. We need to change."

It takes a certain vulnerability and humility with leaders. Actually, one of the items I list under the Laws of Trust is humility.

Leaders, if you want to build a high trust organization, you have to be humble. Humble just doesn't mean that you're self-deprecating. It means that you're learning. You're ever-changing. That's a form of humility that really creates trust.

Michael Krigsman: Joel, you keep saying these things that fly in the face of what we typically or very often see. For example, humility. If we think about some of the brash, the great entrepreneurs of our time, how brash they are, one does not associate, for example, humility with Elon Musk, just as one example.

Joel Peterson: There are some that kind of fly in the face that, on the other hand, my guess is that he's listening to the market. He's changing. His ear is to the ground, so that form of humility. Some people may have a brash envelope around their humility.

If you are absolutely proud and unwilling to listen to things, you will go bankrupt. I think the other thing is, you'll have a hard time getting people to follow you if you steamroll them and don't ever listen to them.

It's more fun to talk about the brash and those who aren't humble. We notice them more than we do the humble leaders, but there are many, many what Jim Collins called Level 5 Leaders who really are humble, who listen, who build great companies. We just don't read about them.

Michael Krigsman: As you said in the case of someone like Elon Musk who, on the surface, obviously is very brash and very arrogant, obviously he is listening very carefully to the market, and so we have to make the distinction then, as you're pointing out, between the personality and the wrapper and the underlying mechanisms that are actually taking place.

Joel Peterson: Exactly.

Michael Krigsman: Any final thoughts, advice that you would like to share? If you can kind of sum up everything that you've learned, what's most important?

Joel Peterson: You know it's a little bit like the question, is food, air, or water most important for life? We die without all of them. In my view, these recipes, these checklists for entrepreneurial leadership are really how you build a great and enduring company.

What I would say, above all, is this notion of being a fiduciary. As a business leader, you are responsible to others. It's not just Wall Street. You are responsible to investors. No question about it.

Peterson Partners, for example, the investment firm I founded, we basically said we're going to help entrepreneurs achieve their dreams. Well, our entrepreneurs are one kind of customer. Our investors or limited partners are another kind of customer. We prioritized our entrepreneurs, and so deciding that we're a fiduciary for those entrepreneurs allows us to then serve all these other customers that we've got.

I think, thinking about that, I think approaching the world as a fiduciary, being kind, in the long-run is much more powerful. Building trust is much more powerful than operating through fear and force. I would encourage entrepreneurial leaders. Particularly in this time as we overcome adversity, reimagine our enterprises, becoming an entrepreneurial leader is vital.

Michael Krigsman: Also, you're advocating being very, very clear about the priorities—what are your goals, what are your priorities—so that you can make tradeoffs based on those priorities as an indisputable reference point.

Joel Peterson: Exactly.

Michael Krigsman: Joel Peterson, Chairman of JetBlue, Professor at Stanford, and lots of other things too, thank you very, very much for sharing your insight and experience with us today.

Joel Peterson: My pleasure, Michael. Thank you.

Michael Krigsman: Everybody, thank you for watching. Before you go, please, please subscribe on YouTube and subscribe to our website. Click the subscribe button at the top of our website. We have amazing guests coming up.

Next week, there's no show. The week after that, we have the President of Technology for UPS. That's going to be a very interesting conversation. Check out CXOTalk.com. There's a lot there.

Thanks so much, everybody. I hope you have a great day. To the people who asked questions, a huge thank you to you. Bye-bye. Stay safe.