Hey there folks, welcome to the Jason Rice Show. Today is a fantastic episode. You know, sometimes I just consider myself one of the luckiest guys in the world just because of this podcast, because I get to meet really cool, smart people like today's guest, Sebastian Page. He is the author of the new book, The Psychology of Leadership. And in this conversation, Sebastian and I talk about what it means to have the mindset of a leader, some of the physical things that you need to do to keep your body prime and ready to be a good leader, and then just kind of the overall philosophy of things such as how resistance and not always having everything perfect and having to struggle also leads to sharpening your saw and becoming a better leader. He is a cool, smart, brilliant guy that I'm so fortunate to have been able to have on the show. Here's just a little bit more about Sebastian's background. He's the head of global multi-asset and chief investment officer at T. Rowe Price, where he oversees over 500 billion. That's billion with a B in assets. A recognized expert in asset allocation, and he's also the author of beyond diversification, in addition to The Psychology of Leadership. Page has held key leadership roles at PIMCO and State Street Global Markets, as well as T. Rowe Price. And I got to tell you, sometimes you just have good chemistry with your guests. I think that was definitely the case with Sebastian, and so I hope you enjoy this interview. If you are watching this on the YouTube channel, please click like or subscribe and leave some comments. If you're listening to this on Apple Podcasts or Spotify, please consider leaving a five-star rating and sending this to someone who might find it useful. And then finally, please consider picking up Sebastian's new book, The Psychology of Leadership. One of the things that we talk about in this podcast is that leadership is a skill that can be developed. I've told you guys many times I'm a recovering fixed mindset kind of guy. There were certain things that I just used to think that you're either born good at or you're not. There were a lot of things that I decided I was just not born good at. But as I've gotten older I realized I may never be a master class type guy in certain skill sets, but that doesn't mean I can't get a little better and improve to make myself optimal for the performance the task at hand. So we talk a lot about that. Hope you enjoy the show. Thanks for listening. Sebastian, welcome to the show. I am so glad to visit with you today, sir.
Jason, I have generally been looking forward to this. I'm fired up because I've been listening to your podcast and I was just listening to you talk about brain health and how you should treat it like physical health. Anyways, I'm an instant fan. So I've generally been looking forward to this.
Well, you're very kind and that's one of the things that it's interesting that you bring that up because one of the things I wanted to discuss with you and looking back on my own research and some of the previous interviews that you've done and things that you've said, I'm curious. Have you ever done any research or read any of Jim Loehr's work on energy management and leadership? I'm just curious.
I have not. I have thought a lot about energy management in my own life. Daniel Pink, in his book about timing, I think the title is When, he likes one-word books. But he talks about how you use your most productive hours to do the toughest work. Jeff Bezos famously says that as well. And then when you're not productive at different times of the day you use that to do more routine work. So I'm a huge fan of the concept if that's what you're referring to.
It basically is. So a book that I think that you would really enjoy is The Power of Full Engagement. And like I said, it's just a lot of the things that I've heard you say on previous interviews that I listened to before this, it seems like you've got that down. But before we even get there, let's talk a little bit about you. I mean, first of all, you know, I'm just going to say that as a leader, it's kind of mind-boggling to think about what you have to do. The finances that you steward in your day job as a money manager, I mean, we're talking if I'm not mistaken around 500 billion dollars under management. Okay. So, that in and of itself requires a certain level of mindset, of thinking, of just a toolkit within you that few people can really understand and you can't do it all yourself. You have to have very trusted people that are going to be able to execute and steward the resources of the money that you're managing. So, kind of give this audience an understanding of some of the tools and traits in the leadership that you developed along the way that got you to this point where you are at the top of your game. I mean, when you're not on the Jason Rice Show, which is, you know, you're on CNBC, you're talking to huge audiences about things that matter in their lives with regard to their finances. But before you got there, where were you and take us kind of on the trajectory of your journey to being one of the top financial leaders in not just the country, but in the world for that matter.
Well, thank you, Jason. That's kind. It is a stressful job. As I've climbed the ladder in leadership, I've realized that a lot of leadership is not what we think it is. And I'm proud to say that in The Psychology of Leadership, the book I published, I flip a lot of concepts on their head, and it took me years to realize some of this. Let me give you an example. Typical leadership advice is to work on your communication skills. That's hugely important. But then, over the last few years, I've realized the top leadership skill is not communication, is not how well you present and inspire. It's listening. And that's a rare skill, even at the highest levels. So, it's counterintuitive that way. We think the leader needs to be, you know, very resilient and never give up. And you know what's hardest in business? Is quitting. And if you're managing money, what's hardest is selling something at the right time. There's actually research that shows that portfolio managers have the hardest time with their sell decision. Annie Duke wrote an entire book on this titled Quit. But the rare skill, Jason, is not that, you know, not giving up. That's it. We all have it in us when we get to a high level. It's knowing what to quit. The project that you've invested a ton in that you have to quit because you know it's not going to be profitable. Netflix mailing DVDs successfully and then realizing, uh-oh, the world's going to go to streaming. We've got this massive infrastructure to mail DVDs. We got to stop that and invest fully into streaming. Those decisions are harder. And one more thing, this idea that the leader's always resilient and doesn't feel stress, I disagree with it now. We all feel stress. These jobs are hard. In money management, you're going to lose money for your clients. Over time, you hope to do well, but you're not going to win. No one has a crystal ball. You're not going to win all the time. So, you actually are going to feel stress. I talk about this in The Psychology of Leadership, but you need to learn to use stress as fuel for performance. And there's sports psychology behind it. Because sports psychologists help athletes with the stress. Athletes are quite stressed even at the highest level. I could go on and on, but there are all these things that are counterintuitive. Make quick decisions. No, the hardest part is strategic patience. Knowing when you need to wait it out. That's harder. So, you have to learn to adjust.
I could not agree more. You know, and I guess what is I don't know whether Annie talks about it in her book. I've read it. But it's just basically the sunken cost fallacy, right? It's like we think that we've made this investment and so therefore you just got to ride the thing out. And a good book along those lines too, and by the way, I am so excited to read The Psychology of Leadership. I haven't been able to get my hands on it yet, but I can't wait. And so I've kind of got the... That's a cool thing about having a podcast, get to talk to really cool smart people like you is I get to meet the author. Then I get to go read the book. And so I can't wait. And one of the things that, you know, another I think is important to kind of double click on a little bit is this idea of strategic quitting. Seth Godin wrote the book The Dip where it's one of these things that it's hard especially for, and let's face it in your line of work where you're literally investing resources. And if they're spiraling down and you're trying to tell somebody to be patient, be calm. But then when you pull the plug, you've got to be able to convey the mindset that hey, I know what I'm doing here. I know this looks like a loss, but all we're doing is we're freeing up resources to go take them and grow them again somewhere else where they're more profitable. How do you, what is as a leader, how do you get those around you to stay calm and to start following your leadership principles because one of the things that I'm witnessing this right now. I sit on the board of a holding company and I'm watching so and so there's eight different organizations under our umbrella. And one of the toughest thing Sebastian is watching poor leadership at work. And essentially and you know, you can see this is a person that's in the wrong seat on the bus. They don't have the skill set and therefore it's impacting every single other person that reports to them. And it can be lack of motivation, lack of purpose, lack of autonomy, all the things that we know that make for good employees and good followers. They're just not stewarding that. So, what are some of the tools and tactics that you cognitively try to map out for your team to make sure that they're willing to execute on those things either whenever the boss says, 'Guys, we're cutting our losses.' without them getting shaky. How do you keep them motivated to pushing towards your vision that you've set out for the team?
It's difficult. In business, you need to stop looking backwards and start looking at the future and ask yourself the tough question. What is going to work going forward? Because the world always changes. This is not Jason advice about just quit early on everything. But owning your quitting skills is critical and having a vision of where the organization is going. This sounds trite, but what's the role of the leader? To set the goals. That's your job. If you don't set the goals, no one else will. Now, the problem, and this relates to strategic quitting, is that in high-performing organizations, we have plenty of goals. In money management, we know we need to beat the index. It's measurable. And we actually suffer from the opposite, which I describe in The Psychology of Leadership as goal-induced blindness. That's the problem, and it relates to strategic quitting. If you look at the research on Mount Everest, it's fascinating. I've never climbed Everest, I never will. And I'll tell you why. If you want to reach the summit of Everest, you have a 4% chance of dying. That 4% is not small. You know, if it's dying. Like, would you take a Russian roulette with 100 chambers and four of them? Would you do that? No. And the problem with goal-induced blindness on Everest is that people get so obsessed with the summit that psychologists have studied this, they sacrifice their own safety. Now, there is someone, he's a Sherpa. I don't recall his name. He's got over 30 summits. World record holder. He's excellent at quitting, though. He famously knows when to turn around. That's the skill you need to have. That's the harder skill. I don't pick stocks. I'm an asset allocator, but you know what Elon just did, and this is not a comment on the company or anything, but he just came out and said we're going to stop making the Tesla Model S, stop making the Tesla Model X, we're going to double down on the Model Y, and we're going to do robotics and artificial intelligence, and these types of decisions are extremely difficult. I realize I'm not answering your question directly because you're asking like, how do you help your team be more resilient? And it's about looking forward, not backward, and reassessing the fact, keeping an open mind. But also, Jason, I'll just end my answer with this. I was just listening to your podcast where you talked about resilience. And you said that brain health is as important as physical health. There are many daily habits that we neglect that are important for brain health. You talked about reading. I love reading. I think you used the expression it's like doing push-ups for your brain. If you do a lot of that, if you build brain health, mental health into your daily routine, you're going to be calmer, less emotional, and ultimately make better decisions, including quitting decisions.
I think that and I appreciate that very much and you're right. I mean I have become the older I get and the further I go into my role as leader, I realize understanding how to tame, control, and strategically allocate the resources of our brain power and brain energy is one of the single key most components to being a good leader. So, and you know, we're talking a lot about like for example, the people that are going to pick up your book are going to be people that are trying to sharpen their saw as leaders. So, I want to ask you as someone who has reached the pinnacle of leadership and you're there. You are the proverbial leader. Do you think that leadership leaders are born? Are they made? And even if they're not a natural leader, how much do you think the skill set of a good leader, training the psychology, training that gut instinct, training that ability to get those to charge the mountain with you? What is your take as you studied this and I got to believe that you didn't just draw from your own experiences. You probably, like again, looking at your past interviews, you've obviously researched and executed that knowledge on the topic of leadership. How much can be learned and developed as a leader in this space?
I read hundreds of research articles for the book. I worked with a PhD sports psychologist as an advisor. I learned a lot myself. If you ask me, Jason, how important is the psychology aspect in a leadership job? You're asking the author of the book The Psychology of Leadership. What do you think I'm going to say? It's hugely important. But I'm saying that tongue-in-cheek. When you study this, you realize it's much more acquired than this idea that you're born with it. You can build those skills. We all have different styles. We can play to our strengths. But there are general personality traits that correlate with leadership success. Whether you acquired those personality traits, by the way, this is counterintuitive, but you can actually evolve your own personality. Happy to talk about that. Or whether you're born with them, there are three personality traits that have about 30% correlation which is somewhat meaningful with leadership success. Extroversion. Now, this is controversial because the literature now is big on introverts because they tend to be more thoughtful. But empirically, extroversion is a good skill to have to climb the leadership ladder. Conscientiousness. About 30% correlation. All three that I'm about to name. Conscientiousness. Are you on time? Are you disciplined? You talk about discipline in your podcast as well. And openness. Openness to experience is how it's defined in the psychology literature, but also I define it a bit more generally in the book as openness to new ideas. Those three personality traits are positively correlated. You know what's negatively correlated? And if anyone picks up the book, they'll see because I show my own personality tests, is neuroticism. Now, I actually have fairly high neuroticism. So, this means you tend to get anxious about things you don't know the outcome of. You know, you're waiting for an outcome that might make you anxious. So, that's actually negatively correlated. But, if you learn to manage it as we were saying earlier, stress can be fuel for performance. And that works for athletes and it works for executives. But, broadly speaking, Jason, the bottom line is these personality traits, you know, these correlations, they're not that high. There are lots of other factors beyond your personality. You know what's fascinating? It's not IQ necessarily, either. I was asked to speak to a student group recently, and I wanted to get their attention. I started by saying your grades, basically, your academic intelligence, after controlling for grit and personality, are going to account for 1 to 2% of your future success. Your grades, after controlling for grit and personality, are going to explain almost nothing of your future success, and there's some empirical research to say that. So, my short answer, Jason, is you can absolutely develop those skills, right? And you're asking an author who's written a book about how to develop those skills.
Yeah, well, and I agree with you. I love that because and that's the message I want this audience to take away, and it's, you know, the whole motto of my show, improve always and all ways. And I say this as someone who is and you'll hear this throughout my episodes, I fully confess that I am a recovering fixed mindset sufferer. You know, I don't know if you've done the research on Carol Dweck's work on fixed versus growth mindset. I grew up in my early years as the typical fixed mindset person. It was all about performance. My identity was tied to things like grades and success or failure. I looked at everything with a zero-sum game mentality. In your business, I would have been one of the guys that was like probably in Bobby Axelrod's office on Billions that my whole identity was tied to either getting the deal done or not and to hell with all the consequences. You kind of look like him a little bit.
Oh, come on now. Come on now.
So, but what I finally learned was when you can develop the skill sets of just getting better instead of not tying your identity to these things and make life not a game sort of but also a game of learning and improvement. And that doesn't mean, you know, whenever I say that I had somebody challenge me on the podcast one time because I was talking about my improve always and all ways mantra. They were like, well, you know, sometimes you are good enough and you don't need to always be... they took it as striving. And I clarify by saying no, what it means is that little three-letter word yet. Like for me, I'm not good at say mathematics yet. But that doesn't mean I can't get better. I may never be a savant. I may never be, you know, a prodigy of any kind, but I can always get better and that's one of the things that I have learned through almost any task that I struggle with, Sebastian, is that there's always room for improvement even in developing leadership skills. And so that's why I wanted to open that up for you to give this audience encouragement because I don't think anybody's either full or growth mindset. I think we all suffer with a little bit of this fixed mindset. It just kind of depends on what situation we may find ourselves in. And even if it looks like an insurmountable task, that doesn't mean we can't get at least a 1% improvement, and I think that's really important.
You know the most famous experiment by Carol Dweck, who's the founder if you will of the growth mindset theory, was when they praised kids for the results versus praising kids for the effort. In subsequent testing, they got completely different results, and I think about this with my kids. Those that were praised for the effort were motivated to continue. Those that were praised for the results got a bit nervous and performed poorly. So that's an illustration of the growth mindset, but you know, I just had an awesome discussion with Brad Stulberg. He is a best-selling author. His book is out right now, The Way of Excellence. In our discussion on Monday, Jason, I read the entire book the week before. It's outstanding. Brad's point was exactly what you just said. He doesn't define excellence as the peak of the mountain, and on the cover of the book there's a mountain. He defines excellence as the process and embracing the process of continuous improvement. That's how he frames excellence. Sports psychologists do something similar to coach athletes. They talk about mastery versus ego. And the example I like to use is two golf players. One golf player gets really motivated by the scoreboard and bragging about their handicap. By the way, for the record, I can't play golf to save my life. However, bear with me. Sports psychologists are super interested in golf because it is a mental game. The mastery-oriented player, yes, they care, look, we all have both orientations. They care about the score. But, when she gets home, she's going to brag to her husband that she's improved her swing today. And they're extremely excited. Oh my god, my swing has gotten better. This is awesome. This is how Stulberg defines excellence. This is how you just defined it. And for business leaders, this is how we have to define it. We can't be too obsessed with the measurable goals. They're there. They're potent. They're important. But, we need to have process goals. Are we getting better at doing research? Are we getting better at running meetings? Isn't that exciting? Even though it's not measurable in terms of quarterly revenues.
I love that. And you know what, you just convinced me. I meant to pick that book up. I think Michael was on Cal Newport's podcast recently and he was talking about a lot of these things. And one of the things that he mentioned is kind of like what you and I were just talking about is whenever James Clear made this whole 1% improvement every day kind of a almost a religion. And I'll admit it. I started doing it. I started keeping the metrics of 1% improvement, 1% improvement. And then one of the things that Michael brought up was like, 'Well, what if all of a sudden you've reached such you've almost reached mastery and you're not improving 1% a day, then what does that do to you if that 1% improvement is your goal all the time?' And then that's when I think he mentioned I think Cal, who is obviously a world-class researcher as a computer scientist, they said, 'Well, it's like getting better at the thing you do and just being really good and confident. It's not so much about that metric of a 1% improvement, but just mastering the task that it takes to do the things that you want to be good at.' So, that brings that to you, Sebastian Page. What are those, and I can tell you got an aura ring on, you know, I see that. You're obviously someone who is fit personally. How do you on a daily basis do you keep yourself accountable to target those principles of those things that you want to be incredibly good at? It's not all about always shooting towards getting better. But how do you manage yourself as a leader so that then that spills over into leading the people around you? What are some of the things you're doing psychologically? The psychology of leadership. What are those things you're reading? How often are you reading? Let's talk about breath work. Let's talk about meditation. Just those tools that every leader, you know, we've talked about the... I know that Harry Truman said it, but somebody else said it too, that not all readers are leaders, but all leaders are readers. There's certain things that all of us as leaders do. What are you doing to keep yourself sharp and maintaining your abilities as a leader?
I believe in the basics, Jason. There's so much in social media about cold plunges, supplements. Yeah, I take some supplements. About optimization. I believe in the importance of sleep. Why We Sleep is a fantastic book. It influences everything else in your life. By the way, if you sleep only 4 hours and you...
Drive, you're about as impaired as if you're over the limit for alcohol. It's a huge factor in people's lives that we tend to underestimate. Diet, exercise, you need all three. You know, I was asked to speak to students at MIT recently and I thought, what am I going to tell? You know, they're MIT students, financial engineering. Everyone on Wall Street's going to try to hire them. They're A students their entire career. What can I tell them in terms of advice? And I just walked in. I had some remarks maybe about career and it was all scripted and I looked at the class and they all look so tired. And you know, with bags under their eyes and you know, could tell a bunch of them are just eating McDonald's. And I looked at them and I said, 'Okay, got to do these three things and it's going to make the rest of your life better if you do them. And no one does it perfectly. I don't do it perfectly and we shouldn't even try to do it perfectly. I don't think that's healthy either. Sleep, eat a decent diet, and exercise every day.' But then I made the point to them, you can't force one or two without all three. This sounds simple, but if you don't sleep and you go, 'Okay, I'm going to exercise and eat better,' it's not going to work. If you exercise, but you don't eat well, you know, you're going to... We all know that. Anyone who's tried to outrun their diet, it doesn't work. So, the three components reinforce each other. You mentioned breathwork. I wasn't a believer in breathwork. I used to put it together with the optimization, social media, you know, routine, you know, wake up at 4:00, take a cold plunge, do this, do this, take the... But it actually works. And I was on CNBC this morning. You mentioned... This is stressful. You go into a live national audience and people ask about your market views and you need to be up-to-date because it's news and you need all your colleagues are going to watch. So, there's no way around it. It's stressful. But I sit there and I do 4 by 4 breathing. No one sees it. I'm just getting miked. And I inhale for 4 seconds, hold for 4 seconds, exhale for 4 seconds, and hold at the bottom for 4 seconds. I do that two or three times. And then it just lowers my heart rate and I can get in flow when I'm on live TV. I guess I don't know, Jason, none of this is new for our audience. Maybe it's a useful reminder. A lot of self-improvement we all know, but it's good to remind ourselves how important the basics are. This is all about the basics.
Couldn't agree more. And by the way, I use box breathing quite frequently myself. It has become one of those things that is just kind of a... it's in my toolkit and I go to it a lot. I even use it whenever I'm having trouble sleeping because I never sleep well the night before a trip. And so, if I do some box breathing, it will help me go to sleep a little sooner. And so, one of the things that you had mentioned, I want to take it now to kind of the battle of the mind. Because I know one of the things that I heard you talk about was how you think positively and our self-talk, how important it is. And Dr. Michael Gervais, who's as, you know, you probably know is one of the...
