James Rhee: The value of kindness at work | TED

Introduction to Goodwill

In this section, the speaker introduces the concept of goodwill and its technical accounting definition.

Definition of Goodwill

• Goodwill is a technical accounting term that refers to an asset created when a buyer pays a purchase price for a company that exceeds the fair value of its net assets. This unexplained differential is called goodwill.

• Accountants use goodwill to balance balance sheets.

Human Definition of Goodwill

• The speaker shares a personal story from their childhood that illustrates the more human definition of goodwill. They received a toy helicopter as a thank you for sharing lunch with a friend who had lost their mother. This act of kindness created real value and turned kindness into a scalable, collectively-owned asset called goodwill.

Kindness and Goodwill in Business

In this section, the speaker reflects on how kindness and goodwill are often overlooked in the world of business and finance.

Lessons from Childhood

• The speaker mentions that as they grew older and pursued careers in investment banking and private equity, they felt that the lessons learned from their childhood experience with goodwill seemed childish and misguided in the business world. Non-revenue-generating investments in people are generally not measured or rewarded in these industries.

A Transformative Experience

• In 2013, the speaker's perspective on kindness and goodwill changed when they became involved with Ashley Stewart, a clothing retail company serving plus-sized, moderate-income Black women. Despite facing challenges such as lack of trust, bugs at headquarters, and demanding vendors, the speaker took on the role of CEO to save the company from bankruptcy. This experience reshaped their understanding of kindness and goodwill in business.

Centering Kindness and Math in Business

In this section, the speaker shares their approach to leading Ashley Stewart with a focus on kindness and math.

Leading with Kindness

• The speaker introduces themselves as an inexperienced CEO but emphasizes their willingness to learn and work together with the employees. They express the importance of centering kindness and math to overcome challenges collectively.

• The speaker mentions their immediate responsibilities, including finding items to sell for funding payroll, highlighting the urgency of the situation.

Timestamps are provided for each section based on available information in the transcript.

The Power of Goodwill

In this section, the speaker discusses how the women employees and customers at Ashley Stewart played a crucial role in solving problems and offered valuable insights. The speaker also emphasizes the importance of kindness and goodwill in driving real value.

Women Stepping Up

• The women employees and customers at Ashley Stewart came forward to solve problems.

• They provided valuable insights and even offered to bring back their clothes hangers to save money.

Rejection Turned Support

• Despite potential reasons for rejection, the ladies of Ashley Stewart embraced the new CEO.

• Store after store welcomed the speaker, showing support and willingness to work together.

Generosity and Kindness

• The generosity and kindness shown by the employees and customers reminded the speaker of past experiences.

• Goodwill is a real asset that can compound independently of financial capital.

Creating Real Value

• Inspired by late nights, the speaker developed a new business plan focused on creating real value.

• The plan included mathematical formulas, operational protocols, and multi-sensory storytelling.

Centering Goodwill

This section highlights three concentric spirals that formed the foundation of Ashley Stewart's business plan. These spirals revolved around establishing a culture of kindness, showcasing goodwill through marketing efforts, and centering people within operations.

Culture of Kindness

• Establishing a culture of kindness was a strategic priority for Ashley Stewart.

• It created a safe environment for innovation, distributed joy in problem-solving, and turned liabilities into assets.

Showcasing Goodwill

• Trusting employees and leveraging smartphones/social media helped scale marketing efforts organically.

• The company merged ecosystems, blurred lines between outsiders and insiders, and created a seat at the table for everyone.

Centering People

• Goodwill led to a reevaluation of financial formulas and reporting.

• Payroll became an investment, internal communications served as training, and vendors became co-investors.

Accountability and Operations

This section emphasizes the importance of measuring goodwill and recognizing that operations, leadership, and culture create it. It also highlights the need for accounting to be accountable and align operations accordingly.

Measuring Goodwill

• Maximizing goodwill requires measuring it.

• Operations, leadership, and culture are responsible for creating goodwill.

Aligning Operations

• The flow of operations should naturally follow suit with maximizing goodwill.

• Financial formulas were adjusted to reflect the investment in payroll and working capital was measured as trust-building.

Holiday Season 2013

The speaker shares a significant moment during the holiday season of 2013 when Ashley Stewart was facing financial difficulties. Despite this, they made decisions that had long-term importance for their efforts.

• A modest holiday party was hosted at a homeless shelter in Brooklyn.

• These decisions reflected the company's commitment to kindness and goodwill even during challenging times.

Together, these two things New Section

The speaker discusses the significance of events and competitions as a way to express gratitude and bid farewell to the local communities that supported the company for 20 years. The positive response from the communities led to increased sales and operationalizing goodwill.

Expressing Gratitude and Goodbye

• Events and competitions were organized as a way to thank and say goodbye to the local neighborhoods.

• The outpouring of support was incredible, with real friendships developed over the years being showcased.

Operationalizing Goodwill

• The newly installed e-commerce platform emphasized connecting people and enhancing humanity.

• Sales experienced significant growth as a result.

• Operationalizing goodwill became part of the internal culture, outbound sales and marketing efforts, and compensation system.

• Measurement of all aspects ensured mutual reinforcement among these three spirals.

CEO Citizenship Award New Section

The speaker introduces the CEO Citizenship Award, a prestigious bonus system that rewarded employees who embodied specific values without considering sales or revenues in their determinations.

CEO Citizenship Award

• The CEO Citizenship Award was introduced as a highly compensated bonus system within the company.

• Recipients were selected based on living out values such as acting like an owner, being a good friend, and being a good mentor.

Evolution of Holiday Party New Section

The speaker explains how the holiday party evolved into "Finding Ashley Stewart," an annual nationwide search for unsung women leaders in communities, culminating in a star-studded concert funded by vendors.

Evolution of the Holiday Party

• The holiday party transformed into "Finding Ashley Stewart," a search for unsung women leaders.

• The event included a nationwide search and culminated in a star-studded concert at the Brooklyn Kings Theater.

• Vendors, including leading tech and financial companies, provided funding for the event.

Staggering Results New Section

The speaker highlights the positive impact of their overall strategy and philosophy, which generated impressive results reflected in financial statements.

Positive Impact

• Tough business decisions were made along the way, resulting in staggering results.

• Financial statements demonstrated significant growth and success.

• Within two years, annual operating profit exceeded the cost of acquiring all company assets.

Recognition and Funding New Section

The speaker discusses how their digital strategy centered around real friendships led to recognition at prestigious business conferences and attracted financial support from investors.

Recognition and Funding

• The digital strategy that emphasized real friendships gained recognition at prestigious business conferences worldwide.

• Leading tech and financial companies became vendors who funded various initiatives.

• Financial community members changed their perception and invested over $100 million in accounting goodwill.

Lessons Learned New Section

The speaker reflects on lessons learned from a childhood experience involving goodwill, emphasizing its value in both personal life and business.

Lessons Learned

• Lessons learned from a childhood experience with goodwill played a crucial role in saving the company, preserving jobs, and contributing to economic productivity.

• The enduring lesson of slowing down and seeing the world through the eyes of a child is emphasized.

• Goodwill creates real value in life and business.