270. CFO 4.0 Revisited: The Balancing Act: Risks, Ethics, and the Lessons Learnt from Failing with Shaun Hayes

For this CFO 4.0 Revisited episode, Hannah Munro is joined by Shaun Hayes, author of The Gray Choice, to explore the realities of leadership, resilience, and decision-making in high-pressure environments. 

What’s covered in this episode

•  Why taking calculated risks is essential for long-term success 
•  Lessons learned from major setbacks and how to recover stronger 
•  The importance of building a trusted circle of advisors and mentors 
•  Why happiness and fulfilment do not always come from constant growth 
•  The role discipline and standards play in financial leadership 
•  Insights from Shaun’s book The Gray Choice and his leadership philosophy

Links referenced in this episode:

• Shaun Hayes LinkedIn
• Visit Shaun’s Website
• Shaun’s YouTube Channel
•  Shaun’s Book: The Gray Choice

• Explore other CFO 4.0 Podcast episodes here.
• Subscribe to our Podcast!

Transcript

Welcome To CFO 4.0

SPEAKER_03 0:00

Welcome to CFO 4.0, the future of finance. The CFO role is changing rapidly. Moving from cost controller to strategic visionary. And with every change comes opportunity. We are here to help you take advantage of this transition. To win at work, drive a career forward, and lead with confidence. Join Hannah Monroe, Managing Director of iTest, a financial transformation consultancy, and she interviews key experts to give you real-world advice and guidance on how to transform your processes, people, and data. Welcome to CFO 4.0, the future of finance.

SPEAKER_04 0:49

Hello everybody, and welcome to this episode of CFO 4.0. As usual, I'm your host, Hannah Munro, and with me today is an interesting guest to talk about a topic we haven't actually covered on the podcast before. So with me today is Sean Hayes, the author of Grey Choice. And so thank you, Sean, for joining me on the show today.

SPEAKER_02 1:10

Hannah, thank you for having me. I look forward to our conversation.

SPEAKER_04 1:13

So the topic of uh ethics has come up a lot in the news recently. Um, particularly there's some some interesting news articles about um key lead uh leaders and making choices as they go um go through their careers. Um and then, you know, some of them getting caught, I think is the theme that's um come up quite a bit. But before we get into that, and in you know, you've got a unique perspective and I guess on um business ethics, I would like to understand a little bit about your story. Do you want to talk us through sort of how how did you end up writing the book and what was your journey um through?

2008 Losses And The Slippery Slope

SPEAKER_02 1:49

Well, I'll um I'll we'll kind of start at the beginning. I was a um a child of two entrepreneurs, uh World War II veteran, and um I ended up in banking and they were in small business, and they thought I could be anything but a banker because in your small business, other than here, the IRS and the and a bank are the only two governors you have in most small businesses. And um, so I started uh right at the time that banking changed, and banking turned into sales culture. You know, it used to be they were order takers, and my generation was the first one of you went out and sold your services. And I think that was the beginning, by the way, of a big change in ethics. We'll get to that later, but uh I think that was the forerunner. But I started out and uh with a very large bank in the Midwest, and and in about the first week I took a test. They had all the management trainees in, and uh I was in the front row, and uh the proctor looked down at the answer to my first question and said, uh, excuse me, uh, question one, you have to answer yes. And I said, Excuse me, sir, I said, This says, Have you stole anything? And he looked at me and he says, I believe you haven't yet, but you will. And he said, You'll take a pen or a pad of paper. And it was interesting that that was one of the first things I encountered. But uh, I spent seven years with them, rose very quickly in the ranks, and ended up uh running corporate banking in in St. Louis, the largest market that we were in, at 25. And then um at 29, I was a little slow, Hannah. And I figured out that in the last 77 years, the bank had a common name in their CEO, and I didn't have that last name, nor had I married any of the daughters. So I figured out I wasn't going to be CEO. And um, and 34 years later, guess what? They're now 111 years in business with the same last name of the CEO. But uh, so at 29, I bought a bank, and uh, it was an incredible journey. Um, we uh we went public uh when I was 35. Uh, we were the first company in America to sell a public security after 9-11. Um, that was a very interesting period because I had my largest acquisition under contract. And um, when the financial markets, literally the morning of 9-11, I was flying out east to start a roadshow to sell the securities for the acquisition. They had to close at the end of the month. And uh it's a fun story in the book. But if you'll if you'll indulge me for one minute here, I have to tell you my favorite story. We buy this bank, and it's 168 miles from civilization. Um it's it's on the Iowa border, and it had a million one hundred thousand dollars in cash in it. Um years later, I had 38 offices, and we didn't have 50,000 and we had more in the ATMs than we did in the uh in the bank. And my partner and I said, you know, we could take this to the Fed. And in those, in those days, overnight money was about 9%, and we could earn about another five,$6,000 a month. So, Hannah, I loaded, we loaded, three-quarters of a million dollars of cash in the trunk of my car because it was going to cost$250 for brakes to come and get it, and we had to wait a week. And um I drove 168 miles uh in the dark with no um no security, no insurance. And then we got to my house and we unloaded it, and I slept with three-quarters of a million dollars. And then the next morning we loaded it back up, and at about five in the morning at the Federal Reserve Bank of St. Louis, there's all these armored cars in one bread Buick full of cash. So I guarantee you I'm your only guest who's either been crazy enough or stupid enough to carry around um three-quarters of a million dollars. But uh, we had a lot of fun. We grew 80-fold in nine years, and that's in banking. This is not in technology. And uh, you know, most banks, if they grow five, eight, maybe 10% a year, uh, that's something. We were a darling of Wall Street because we had doubled digit earnings growth quarter over quarter the whole time. And uh we were very focused because we were all large shareholders on the bottom line and uh on asset quality, and uh we did a lot of crazy things. The the thing that I talk about sometimes is what I call my biggest failure, and uh that was before my biggest failure. But uh we um I made a mistake in technology. We were being a small company was an advantage. Um we started out probably in 1989 as the 15,000th largest bank in America, and we ended in 2003 as uh as one of the top 100. So that gives you how much uh how much we grew. But along the way, I made an error in technology, and I uh I made three acquisitions in a window, and a woman that looks much like you, who's a brilliant technology person, kept saying, Sean, we can't do this, and I kept saying, Kim, we can. And um, and and that's an interesting period, and it cost us a lot of money, but Wall Street never knew it because her earnings were up 25%. And that's when I learned this lesson that I would pass on to your viewers. It's not an ethic one, but the buck, as Harry Truman would say, always stopped at my desk. And I went for about a week wanting to fire someone. And after about a week, I figured out I should have fired myself because I made those decisions. But that that's the run. We sold out to the seventh largest bank in America, and then um I spent four years with them, and all of a sudden it came became 2008, and they went from a double-A-rated credit bank to failing. Now, people don't fail at that bank size anymore. You know, you merge, you never really fail. Someone buys you, and they disappeared, um, uh a hundred-plus billion dollar bank, and um I lost a tremendous amount of money. I bought another small bank as an investment. I was in real estate, and um, and that was the beginning of uh the climax of my ethical issues. So that's that's a short story.

SPEAKER_04 7:58

And that's uh that's a hell of a story, and I can genuinely say I think you are the only person on this podcast that has driven around with over a million dollars in cash in your boot. So uh you can you can absolutely take that one. So talk to us about um your journey from there. Because we, you know, you mentioned obviously your climb down from the moral ethics high ground. What happened then? How you know, how are you now in a position to talk, you know, honestly and openly about this? What actually happened to you?

SPEAKER_02 8:30

Uh and in the in the in the um intro to the book, I say that um I was fly I I don't I didn't fly. I flew, but I'd never flown a plane. And I used to have an investment in a healthcare company, and um one day I had to fly a plane. I said, we fly so much, you need to know how to operate this plane. And Hannah, I will tell you that I'm not afraid of flying, but I was afraid of uh being the pilot. And I thought I was in perfect line with where we were going. He let me fly for a period of time, and then all of a sudden he said, Sean, I'm gonna take over. And I was tremendously relieved. And he said, in a couple more minutes, we would have been in restricted airspace, and they would have scrambled F-15s. And the lesson is if you leave LA headed for Washington, D.C., and you're off by one degree, given the time you're in the air and the speed you're flying, you're gonna end up in New York City. And that's what happened to me. I think that there's certainly a small percentage of population that are that have the criminal mind that want to do the wrong thing right now. But most of us, it's one little decision at a time. And um, I mentioned my first week in um in in banking, and the question was, you're going to steal something. Well, eventually you do take a pen home or a pad of paper, and you do things like that. And over time, you slowly move, and that's why the book's called The Great Choice. Uh, the world is a lot of gray and a little white and a little black. And it's easy to get into the gray, and then it's not that hard over time. And when I tell you what I did and how I got there, it'll even it'll even make more sense. It doesn't justify it. I committed a crime and I knew it when I did it. But you don't just wake up and do it, or I didn't. And one of the lessons I learned that that I always like to stop and say is we used to spend a lot of times in meetings talking about what was an appropriate gift level for an employee to accept from a client. And having been what I've been through, I would tell every executive zero is the appropriate amount because your judgment is slowly clouded. And if that happens over many years, what starts out to be a harmless, de minimis amount of a gift gets a little grayer and a little grayer and a little grayer, and it clouds that individual's decision-making ability. And what happened to me was I believed that in business, most as in life, most decisions are based upon fear or greed. And when 2008 hit and I was losing millions of dollars a week, fear was definitely there. And then an opportunity came along that was completely legal, that I had done in smaller versions hundreds of times, and I'd watched a man that had been a mentor do in very large versions of buying debt at a big discount and reaping the wards of the liquidation of the debt. And the transaction that um that I compromised my ethics, and it cost me my family, my freedom, my friends, and my fortune was in a debt transaction where we were buying debt of a real estate developer from three different banks, and I had lined up friends of his who were very creditworthy because we wouldn't lend him money. But his job was to liquidate the real estate, which would have had my bank make a gain, those individuals would have had a gain, and he would have made money and he would have gotten rid of tens of millions of dollars in debt. At the 11th hour, um, one of the banks, I was a partner with him in a development that was going to have a target store on it. It was a performing loan. There was nothing wrong with it, but they didn't want his name in their bank. And so what they did was they said, you have to include this in the package. Well, it was August 31st, 2009, and it had to close that day. We've been working on it for months. And I believed, since I wasn't taking any money, that was my justification, Hannah. And I knew the moment that I said, okay, we'll put it in the package, I'd committed a crime. There was no doubt. I could look myself in the mirror because as we say over on this side of the pond, um, when you rob a 7-Eleven, they call the police immediately. When you're involved in a financial crime, I wasn't indicted for six and a half years. So it isn't like, you know, you you do something, it happens. And I and I was able to get myself to do that because I didn't take any money. What happened was is that once this transaction closed, this man literally, we eventually committed suicide, but he he he just literally didn't do anything. And he stuck his friends in a bad situation. He put the bank in a bad situation, and because the one asset that I was involved with was in that group of hundreds of loans, um, I committed a felony. And uh and I didn't just wake up one day and think I was gonna do it. As you can tell, um, it took a long time to get there, and um, and I did it.

How Grey Choices Grow Quietly

SPEAKER_04 13:57

Yeah, and I think that's that's kind of what we're talking about today, isn't it? That slippery slope of of going down the wrong hill. And you don't actually kind of realize how far down that slope you are until you suddenly stop and look back. And you know, for those that are, I guess, in in positions of authority and you know, are and I guess finance directors like they're seen as the ultimate integrity holders for a business. You know, on the flip side, you know, how hard do you think it is to maintain that that ethical standard? Because there isn't that much holding you to it, is it? A lot of it's about your personal ethics.

SPEAKER_02 14:36

It is. And and I I um I was on a uh a TV show several months ago, and I and the man who was grilling me, um uh uh I know him and I know his wife very well, but he was murder, he was just on me. And I kept saying, uh one, I can't argue with you, but you're telling me that there are perfect humans. And as I went through this journey, there's a book written by an attorney that says every business person commits at least one felony a day. Because no, you know, it's that thing of um white lie. You know, what's the difference between a little lie and a big lie? And um, and uh, and in and fraud is a very bad term and a very big term. And there's a lot of things done in business that are not necessarily fraudulent, but they're illegal. You know, they didn't go into them with that thing. So I'm not saying that everyone does it, but I would say it's a much higher percentage. And over I had uh dinner with some people the other night. When I was in the banking business, we had a lot of people who committed fraud, but we didn't turn them over to the authorities for this reason. It was very selfish. If I turned that person over to the authorities, I was going to lose a lot of money. If I used them to work through my problem, I might not lose any money. And since those of us who sat around the table owned over a third of the company, and I owned 5%, I wanted my money back. And so what we did was we made a we made a business decision of we're gonna look around their their bank fraud and we're gonna get our money back, but we never chose to do business with them again. And that was a different kind of situation. So I think you'd find it's more prevalent than um than people want to admit. And I think it goes back several thousand years um when the question was asked, he who's without sin cast the first stone. And no one did. So it's um that doesn't make my my my fraud any better, my crime any better, but um it's far more prevalent than you realize.

Building An Accountability Circle

SPEAKER_04 16:48

So that that statement's quite, I guess, not scary is probably the word, is that I think we're all more vulnerable to to to m the gray than we realize, and potentially people that we're working with are maybe working more in the gray than we realize. So how do you, you know, like looking back, what would you have done differently? You know, apart from not making that decision, but is there anything that you would have done differently in the lead up to that, to that, what that point?

SPEAKER_02 17:18

That that that's a great question. And here's what it was for 15 years, I had, and I stress this to people, and we read it and you hear it, but a whole lot of us don't do it. For 15 years, I had three men and a woman in my life that helped me unbelievably accountable. And um, I uh I was actually telling stories about Virginia last night. She was just the most, she was the best director you could ever had, and what a mentor. But those four people, we met once a week, at least once a week for 15 years, and I had an accountability circle. And when I sold out and I became one of the top 35 people of a company that had 36,000 employees, I did not have that kind of group around me. And then when I went back out on my own, given the time that it happened and the age of those people, when you're 29 and you buy your first bank, most of the people you're dealing with are 30 plus years older. And so they were now retired, or as I say, dead. And I didn't recircle myself with people. So I always challenge people find three or four or five people that are gonna hold you accountable. And I had lunch with a gentleman on Monday who's one of those people now that I have hold me accountable because um uh my nephew, I have two nephews, one um has won the FedEx Cup, been on several rider cups, is quite a golfer. I only had one sibling, and the other one's a better golfer, and in the book he cost me$10 million, but he now has an unbelievably successful Inc. 500 companies that uh uh he started on um on my experience. But he wrote me this beautiful letter. Um, I got it the week before I was sentenced. He said, Shaw, Uncle Sean is what it was. He said, um, everybody loves the rise of a person, but they really like the fall. But there's nothing like the comeback. And Hannah, I've been so fortunate, and since this has been over, the comeback has been a lot of fun, and it isn't just a book. It's business and other things, and it's helping people change their lives. But I now have four men around me who hold me accountable. And um, and that's that difference. And that's hard to do in a big company because in a large company, my opinion of large companies and the government is you don't have to do a lot right, but God forbid you don't do one thing wrong. But the further you go up that organizational chart, it's really hard to have one or two people to hold you accountable. And maybe the the man or woman at the top has a board like I have. But between them and the and the and the customer-facing people, there's a lot of people who can make really bad, poor, unethical decisions. And not that they're bad people, but they're just not one of those places where people hold them accountable. So that's why I tell people is find some people who are going to be tough on you. Because uh that's a challenge for all of us. We don't like criticism in general.

SPEAKER_04 20:18

And I guess it's finding, like you say, the right people. So what are you talked about people that would be tough on you? What are the key sort of characteristics that you look for in that circle?

SPEAKER_02 20:31

Well, they have to have the same, when I say goals, I don't mean that the same goals, but they have to be driven. If you're driven and you want to be successful, they they have to have those things. If you're an engineer, you need to have someone with engineering, you know, because there's if you know, uh there's a terrible story here many years ago of a structural engineering company where someone made the wrong choice and many people died. So you have to have somebody that understands what you do, but also understands where you want to go. And then as hard as it is, and I think this is something, again, in relationships that makes for good relationships, um, but it's hard for us to accept is people who are different. You don't want people who think like I'm extroverted, as you can tell. So a good introvert around me is a good balance. It's those, you know, anything in um um in moderation is good. And so having people that are opposites, and I um I say, uh, in fact, I'm writing another book now. And when I was in college, it's based on one of the few things I felt like benefited me college. Really, all I learned was how to learn. But um, it talked about partnerships. And I've seen some unbelievably successful partnerships, and I've seen some horrible ones. And the most successful ones were where the people were almost opposites. You know, you had the salesperson and the engineer, the salesperson and the accountant, where you had someone that was totally different that was watching, and and it went both ways. And so the The people around you can't be clones of you. And we tend to like to birds of a feather flock together. And that tends to make for weak accountability partners. And so it's hard for people to want that because at the same time they're trying to raise a family or they're in a relationship and they're balancing those things. But in your career, um, it isn't just who you work for or who works for you or who you work with, it's who's going to hold you accountable. And I think that I read a study about 30 years ago, it was on octagenarians. Um, and one of the things that they said that they didn't realize they'd live so long. And I think we all hear this, but it's hard to take um seriously until you get older, as I am. Life isn't a sprint, it's a marathon. And sometimes we forget that and we think we're making long-term decisions, and we make a short-term decision as I did, which I made a lot of good ones and a lot of bad ones, but the critical one that unfortunately defines me today, I don't believe it'll define me by the time I leave this world, is um is one that uh I made thinking of a sprint, not a marathon. Because in reality, I I knew that when that decision I'd done it wrong, I thought, one, I wouldn't get caught, and two, I justified it, and three, that it might buy me a year. Well, uh it bought me about a year, but it cost me 10, certainly three 37 months in federal penitentiary. So um I wasn't thinking long then, and that's that's another thing. You have to always look at the long-term goal. What's the and you're going to fail, and that was a hard word for me um uh to accept, but failure is an event. And um I just ended up having to fail really big so that I would uh would understand it better. And uh, but I don't want your listeners um to experience that. And that's what I get out and tell people is uh push yourself, yes, but challenge yourself even more. And um and and and the game's fun. I love the game.

SPEAKER_04 24:14

Yeah, and I love I loved your comment about uh you know people that are different to you. Because I think there is some we I've talked about this on the podcast before, the importance of diversity. And for me, diversity isn't just the colour of somebody's skin or whether they're male or female. I think it comes into, like you say, personality, um personality traits, their background, their experiences, um, where they're from, you know, in the world. I think there is something powerful about diversity, and I I love the fact that you've incorporated that into your concept of that accountability circle.

SPEAKER_02 24:50

Well, and I and I one, well, thank you. And two, I will go back to one other thing about diversity of color and um and sex. When we bought our first bank, we had, and it was in North Missouri, we put a woman on the board. When I bought my second bank, I put women's and African Americans on the board. And people in St. Louis today, actually, I had a meeting yesterday with the the head of the African-American Chamber of Commerce, and he said, How do you know everyone in St. Louis? I said, Because I bought a bank in a 99% African-American area. And day one, we put people in the African-American community on the board, and you have to know your world. And uh, being a white male, I can't relate to being a white female or a black male or female, or um, you know, whether you're Asian or whatever. And I think that diversity of people and race and ideas makes really good things. And I I believe that committees don't make good decisions, but input from committee members to one person making that decisions makes great decisions because none of us are an island.

SPEAKER_04 26:00

No, I love that. And I think that's something for us all to think on in terms of how we increase the diversity of thinking and, like you say, experiences from different aspects as well. So you talked about being on a slippery slope, and um that sounds like there, you know, there was a almost a realization moment where you came to think, oh, I've gone, I've kind of gone too far here. Like as you went down that slope, was there a self-awareness that you were slipping, or was it all of a sudden a realization?

Recognising Drift In High Pressure Work

SPEAKER_02 26:34

I think in my case, and I can't speak for others, I always push the I would go, um, I use the largest law firm in Missouri, and uh I would go to them and I would say, Hannah, don't ever tell me I can't do something. Tell me how I can do it legally, and then I'll decide if it's worth the effort. And the example I would use is I want to go to Chicago. And for my office, that's literally uh one street down, and I can go I-44 to 55 and drive there, or I can go north to the airport and fly. But the example I would use in their case is, well, Sean, you have to take the train to Kansas City, you have to rent a car and drive to Des Moines, you have to hitchhike to Minneapolis, and then you can get a plane. Well, that probably doesn't fit what I want to do. So when you constantly have that issue of pushing that envelope, it's very hard to tell when you cross the slope. Because we were constantly, there's a chapter in the book called Pushing, Pushing, Pushing. Uh, we were literally overdrawn at the Fed, which, you know, individuals do that frequently, but we were a bank, I think we're overdrawn seven days in a row. They don't like that. But we, you know, and it wasn't intentional, it was that we were fighting a liquidity battle. And um, you know, and you've watched in the in the last few months, quite a few banks in the U.S. and uh and credit suisse really fail over liquidity. And so we pushed, when you push the envelope everywhere, it's hard to tell when you really hit that that really slippery part of the slope. Because in business, again, there's a whole lot of gray that's not illegal and certainly not morally wrong, where there's really margin. And we're near an industry as banking was, which is in a long-term cyclical decline. It's consolidating. When I got in it 40 years ago, there were 30,000 in this country. Now there's 5,000. You all have not had that problem for centuries. But um you have to do things that are out of the box. I didn't say illegal, but you have to put you have to have a niche. And so since we were always searching for a niche, we tended to operate in the gray. And um uh so you get out there and it's uh it's like walking around the dark. You think you know where you're going and you're very confident, and then you fall right over the cliff.

SPEAKER_04 29:06

So is that something you tell people to look out for? Is almost if you feel like you're being constantly pushed into maybe the darker gray area versus the lighter gray area, perhaps you need to take a pause and think, or kind of what are the if we go back to self-awareness, what are the signs people can look for to go actually, I just need to just check myself. I need to make sure that I am comfortable with where I am sitting right now.

SPEAKER_02 29:31

And that's why I talk about those those three men and that one woman where literally once a week we talked about these things.

SPEAKER_01 29:36

Right.

SPEAKER_02 29:37

And and and I had, and they were all successful in their own right and uh in diverse industries, none other, none of them were in banking, and we didn't look at I talk about this a lot in the book. If someone asked me why do we do this, if I ever said that's because the way we always did it, that usually meant we ended up changing it. And so when you have people that push you in that way every way, when you're talking about these things, you you you find a comfort zone and what which you you classified as the light gray, where there's margin, but you also have a natural barrier of people of we're not gonna cross that line. Because you think about the decision I made. If I would have run that by any one of those four, I wouldn't have done it. But they weren't around. And again, I could say, Sean, you're not taking money and bingo, I took the step. But there's no way that would have happened with those men, with those three men and that woman around me. And that's why it's so important. And that I just can't stress enough. And by the way, it your significant other, your partner, your spouse is probably not one of those four people because you know in relationships there's always a little, if not a lot, of manipulation. And as well as that person knows you, that's probably not always going to be the person who tells you no. I didn't say never, but I said not always. And so they need to be four people that are truly um have um diverse backgrounds, diverse experiences, and uh and like-minded goals, though.

SPEAKER_04 31:13

Absolutely. And I think, does it worry you that in business there are so many opportunities for gray? So if we think about a lot of the conversations, some of the stuff that I read about coming out in terms of, you know, um the you know, the the newest and greatest unicorn that's coming out of Silicon Valley and how they've got there and what they've done. It's almost like this expectations of massive success is actually driving issues and more pressure to go into that gray versus l living in the white, the white space.

SPEAKER_02 31:47

See, here's what I believe. I believe that Gray's always I I have five children, and and they're my second son is very similar to me. And I always tell him, Brooks, there hasn't been a new idea in 10,000 years.

SPEAKER_01 31:59

It's just love that.

SPEAKER_02 32:02

So I would say, I would say, Hannah, all those things are out there, but because information and and really power and money is made and controlled with information, is that before there wasn't that information, and so we didn't know it or see it. And I think that probably uh why know what I did, if I would have done it 50 years before, would have never been figured out because it was that complex. But I think so many things in generations before were totally dark gray, if not wrong, but the information didn't get out. And I think if you look back at history, um a lot I was I was talking to Manuel, Winston Churchill's one of my favorite characters in history. I think that he and Franklin Roosevelt are the greatest people of the 20th century, and I have to do this because of where your show originates. My favorite quote in the history of mankind is this never in the history of mankind have so many owed so much to so few. But I was talking to, I'm involved in a in a in a ghost kitchen business here we're launching, and that the CEOs had two successful tech businesses, and he's a bright young man. But my opinion is younger people today, 36, they are not students of history. And so I challenge, said, You need to read about Churchill, you need to read about business, you need to understand these things. And I said, Did you realize that Winston Churchill was almost broke for a long time? Forget that he was out of favor as a politician, but you know, if he hadn't written certain articles, he literally did that to buy alcohol and tobacco and eat. And he was like, and his opinion was well, he was Lord Winston and he was wealthy. And, you know, there wasn't even. I said, No, I said, you don't understand. People had all kinds of challenges that you don't know because you don't study history. Well, all that information wasn't there, where today it's on the forefront. So I think that uh there were just as many challenges before, they were just different. And and today um it's more prevalent because you see it more. But I have to say, in the last few months, we saw First Republic Bank fail. And I look at what I did, and and one person interviewed me, and they said, you know, you're the only person from my financial crisis that was a CEO who went to prison. And I said, that's probably true. But the men on that board that paid them, they were all men, that paid themselves obscene bonuses belong in jail because I know the business they were in, and I've been out 10 years, and 20 years ago, we could have predicted they were going to have a huge problem in the next year, yet a few months before they failed, they paid themselves tens of millions of dollars in bonuses. And 50 years ago, you would have never known that. Today, I'll be shocked if something, if the if the Justice Department doesn't do something. And that's Jen, again, information and timing of uh the way time way speed of information is.

Culture Versus Rules And Zero Tolerance

SPEAKER_04 35:02

And there is a difference, isn't there, between what is legally wrong and what is morally wrong. And how do you what's your perspective on that, particularly in the business world at the moment?

SPEAKER_02 35:14

Um unfortunately, you can't, you can't, morals you just can't do, you know. You try, you have, you know, you have norms, you try to set the best example. My uh, my now former wife was an employment lawyer, and um, she was the one that uh when a woman uh filed a uh uh a harassment suit since she was with a large law firm, she defended the male. And because a woman can go after a woman in court, not a man. And she was a she's a very bright and tough woman, but she was amazed that we never had a discrimination suit. We never had age, sex, race discrimination, we never had sexual harassment, and that was a cultural thing. So on morals, that to me is, and I would say um those years I was CEO, I my title was chief culture carrier. And I set the norm for the culture. And the culture was we treat each, we treat each other with respect and we treat each other like we want to be treated. And that's how I think you regulate morals, because you cannot enforce morals other than by actions. And even then you're going to fail, and that's human nature. On the other hand, when it gets to the legal side, you really back to where I started, you have to have policies that just say this isn't tolerable and it's one strike and you're out. And that's a hard thing to do. And very few companies have the fortitude to do that because they're looking over their shoulder at the earnings or results or the whatever. I have a friend who um has made a fortune consulting large companies, but he's a psychologist. He deals with pornography issues in men, and his but his specialty are large company IT people. And why is that? Because if you're an IT person, you can get through the system where a person like myself, if I put in a bad word and hit enter, you know, I got the email back and it went 20 places. And his business model is based on consulting those people. There's always gonna be people who are gonna figure that out. And large companies would fire you or I for what happened, but IT people are so hard to get, especially cybersecurity, that they figure out a way not to fire them. Well, you're you're just if you're letting them flight here, it's gonna happen over here. And I believe a lot of IT breaches are caused by issues. Well, we you know, we didn't fire them for pornography, but we had this breach of you know, a million of our clients' social security numbers getting out. And there's probably a correlation, and probably in the next 10 or 15 years that'll come out. So you you you you have a zero tolerance policy when it comes to to those things.

SPEAKER_04 37:58

So it's not just about you know dealing with the big stuff, it's actually like you say, it's about dealing with it when it's small and seemingly insignificant, but sticking to your gums at that early stage.

SPEAKER_01 38:13

It's the pencil. You're going to take the pencil one day. And then what are you going to do?

SPEAKER_04 38:19

And I think that's good. And and you know, I think most um like you say, um, a lot of FDs will see the the dangerous side. So they'll they'll feel pressure from either the CEO or the sales and head of sales and revenue to to um or being given things that perhaps they're not comfortable with. How do you, you know, have you got any tips for them in terms of how do they challenge that effectively? How do they stand firm in the prey uh, you know, in in place of the pressure that they might be feeling from other areas of the business? Or would you say it's a walkaway situation?

SPEAKER_02 38:58

Well, I think what I I prefer not to wait, walk away immediately, but you have to quickly. You have to hold your ground. One of the most moral men I've ever been around, one of the most ethical men I've ever been around, said to me, He said, Sean, in business school, the first thing they teach you is lying with statistics 101. How to manipulate the numbers in your favor. And that's where it starts. And you have to say, the numbers are the numbers, and this is how I believe we would present them. And I was going to say, you have to walk away after you've presented your case and you lose. Now, I also tell people, don't quit that job until you've got the next one, but that's the day you start looking. The day you feel compromised is the day you start looking, because if it's one compromise, in another few years it'll be 10, and then you never know where it goes. I got to, uh through this journey, I've gotten to know the guy from Archer Daniels, Midland, who um who, you know, eventually became the witness. Um, Matt Damon played him in the movie. And uh when you really read his book and you meet the man, it's the same story. It started with the little things, and then one day it was, you know, it wasn't, it was as they taught us in banking, you know, you will teach you to lend a thousand and then ten thousand pounds and then a hundred thousand pounds and a million pounds, and before long I could lend you fifty million pounds. But you start out with one and before you know it could be a billion. And um and that's where you end up in in a place you don't want anyone to go. And I certainly don't want anybody to if we if anything out of our of our chat today is if one person changes course, it was all worth it.

SPEAKER_04 40:40

And uh I think one of the the challenges is that there is a huge amount of pressure to succeed, to post these results and to drive growth within the business. What's your perspective on the difference between like risk taking and being smart risk taking and impactful and dangerous decision making? Like how how would you advise somebody to manage that?

SPEAKER_02 41:03

Well, one, I believe if you're going to be successful, you have to take risks. So I'm the first person to say you have to get up every day and you need to take a lot of risks, you need to be willing to fail. I don't hope hopefully not catastrophically, but you need to again go back to those three or four or five people and say, what do you think of what I'm doing? And as long as they're keeping you good people will say, um, you know, this, these are the boundaries. You're within the boundaries. I might not take this risk, but there's nothing wrong with it. Because you have to look at the downside. And in particular, when you're younger, you don't look at the downside. Maybe when you're older, you look at too much of the downside. That's back to that balance in that group. You need people a little younger than you are at times and people older than you are in that group, but you have to take risks. Because one, uh, that's how if you didn't take a chance, I mean, look at Thomas Edison. We might not have a light today. It took him, you know, 10,000 tries to get a light bulb. And you have to be willing to accept failure. And um, and that was something I couldn't do. I I failure to me wasn't an option. And then once you fail at the catastrophic level I did, then you truly learn it's only an event. And um, and that's something in in risk taking, you have to be willing to fail, or you shouldn't take that risk. And maybe that's where you need to either change what you're doing or say, this is a level I'm comfortable at.

SPEAKER_01 42:30

Because there's nothing wrong with being comfortable at some level in your career, whatever you do.

SPEAKER_04 42:38

I like that. There is um there is this kind of constant pressure, isn't it, to always be better, always be going up the scale. But actually, there is a point where, you know, there's nothing wrong with staying where you are if it's a level that you're happy and comfortable and you can do what you need to do at that level.

SPEAKER_02 42:54

I completely agree.

CFO Toolkit For Ethics And Risk

SPEAKER_04 42:56

Amazing. And so this has uh it's been genuinely fascinating, Sean, to hear your perspective almost having sat on both sides of the fence, led and built a successful company, but also made mistakes that you're able, you know, you're now looking back on. What would you, you know, what are your top tips for for balancing ethics within an organization? You know, to CFOs, listen to this. What are the key things that you want them to take away from today's?

SPEAKER_02 43:21

Well, especially the CFO, um, it all gets down to numbers. So the the quality and the ethics around the numbers have to be near perfect. No one's perfect, but near you can't tolerate anything. So at the level of the CFO, it's a zero tolerance. It's also one of trust but verify. You know, you have to do that. I was um uh given that we were in banking and we had a lot of lenders, I was notorious for asking the audit people to look in their bank accounts and see if they had any even dollar deposits. And my theory was. If somebody was going to bribe you, they might give you$500 or$1,000 in cash. They weren't going to give you a check. And if you put it in, so why would you have a round deposit in your account? But it's those little things that somebody in the CFO's chair that you want to audit the people around you. You cannot make the assumption, and that was one of my errors in my crime, is I made the assumption that this man wanted to solve his problem as bad as I want to solve mine, and that's not always the case. But I'm keeping going to go back to at that level of CFO, have have some friends. One should be a CFO of equal stature in another institution, another organization. One should be someone that has a very technical background, because CFOs do, but somebody should be one, somebody should have a very sales-oriented background because sometimes when you're the counting the numbers, you take for granted what the sales people tell you. And uh it's that diversity of people you surround yourself with. And you need that. And it can't be some fluffy trade group where you get together once a quarter and share um, you know, uh best practices. It needs to be people who will have a cup of coffee or a cup of tea or a beer and look you in the eye and say, Sean, you're going down the wrong path if you do this.

Where To Find Sean Plus Quiz

SPEAKER_04 45:19

Um so that's amazing advice that you've just given us. And I think there is something, like you say, about understanding the perspective of the people that you're dealing with. And I love that tip about um having a salesperson potentially in your circle as an advisor. That's that's a great shout. Um, well, I want to say is thank you so much, Sean, for for being on the podcast with me today and answering all of my questions. Um, if people want to know more about yourself, your background, and about your book, where's the best place to find you and how where can they learn more?

SPEAKER_02 45:51

Um it's seanhayes.com. And by the way, it's I spell my name right, it's it's a s-a-un hayes. So I have to tease people about that.

SPEAKER_04 46:00

Well, my husband would agree with you because that's the exact same way that he spells it. So uh the right way.

SPEAKER_02 46:08

Make good choices, Hannah. I can tell already.

SPEAKER_04 46:12

Well, it's been an absolute pleasure having you on the show, Sean. Um, and thank you so much for sharing sharing your experiences and um helping others um avoid the mistakes that you've made. So it's been a genuine pleasure and and thank you so much for joining me on the show.

SPEAKER_02 46:27

Thank you, and have a wonderful day.

SPEAKER_00 46:34

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