Bill Kerr: Sports metaphors aren't all that useful in business. But for some individuals experiences in one pursuit can benefit them in the other. Jim Kavanaugh's feet are firmly planted in both worlds. The former professional soccer player is CEO and co-founder of St. Louis-based global IT firm, World Wide Technology. He's also part owner of the St. Louis Blues Hockey Team and the new Major League Soccer franchise, St. Louis City SC. Faced with the coronavirus pandemic and rising national tensions over racial and social issues, World Wide Technology has relied on its inclusive workforce culture to navigate the crisis. Kavanaugh advocates an open and engaged leadership approach, stressing the need to build, entrust and foster collaboration, whether in responding to social issues or innovating in technology and business. Welcome to the Managing the Future of Work podcast from Harvard Business School. I'm your host, Kerr. In 1990 Kavanaugh joined David Steward in starting WWT, which, with over $11 billion in revenue ranked 30th on Forbes 2019 list of the largest private US companies. It's also one of the largest minority-owned businesses in the United States. Jim has overseen WWT's transition from value-added reseller to diversified IT firm offering infrastructure, services, and software development. He joins me to discuss his path from the soccer field to the board room, growing a major tech firm in St. Louis, Covid-19's effects on the IT sector, diversity, inclusion, and also corporate social responsibility. Welcome to the podcast, Jim.

Jim Kavanaugh: Thanks for having me. Great to be here.

Kerr: Jim, we don't typically get too many professional athletes on this podcast, so maybe you can just start by telling us about your background and what brought you to WWT.

Kavanaugh: Sure. I'll give you the condensed tour and description. But grew up, son of a bricklayer. Great parents, but I would say a very middle-class family. Had the good fortune of going to St. Louis University because I got a soccer scholarship. Enjoyed my time there and while there was able to get selected to play with the 1983 Pan-Am team and the 1984 U.S. Olympic team. I would say just from that perspective, just a number of things from soccer and sport that parlayed over into the business side of things. But when I reflect back on being able to travel to almost 30 different countries in 15 months, that just provided me such great insight, that I will be very honest, I had no idea of the benefits and the insights that I was getting at that time. After my years at St. Louis University, I played a couple of years of professional soccer. Then I opted to get into the real world and started with a privately held computer electronics distributor and then started World Wide Technology with Dave Steward and one other individual back in 1990.

Kerr: Yeah. And some of the individuals at World Wide Technology were some of your old teammates. So you've carried the soccer and some of the connections and camaraderie into the business.

Kavanaugh: Absolutely. There's a number of my teammates that are still working with me in a number of different roles. People with just a great work ethic, relentless desire to win, team orientation, all of those things apply on the field and in the office and in the work environment. The President of World Wide is Joe Koenig, who was one of my college teammates and a roommate. Tom Strunk, our CFO, was another teammate of mine on the St. Louis University team. Most of those individuals are still with the company and have been with the company, some of them for 27 years and some of them 20 plus years. So, very fortunate to be able to make those connections because they've been a big part of the success of World Wide.

Kerr: As the CEO of a multi-billion-dollar IT company you've been at the front lines over the last eight months since the coronavirus has wrecked a lot of havoc on our economy. Tell to us a bit about how the IT sector is faring and what are some of the things that your organization's had to do to first make it through the crisis, but also to look for opportunities to even excel in the crisis.

Kavanaugh: Yeah, fortunately, we are doing quite well. Knock on wood. I think through making adjustments early on, leaning into the challenges of Covid and some of the things around social unrest, and making some adjustments with our teams, our frontline workers and our remote workers, we are doing quite well. Overall, I would say the industry is doing quite well. There are some companies that are doing better than others, call it some of the bigger OEMs and technology providers. This will be our best year ever, top line and bottom line. And we feel that we've got pretty good insight into closing out the year and we feel pretty good about next year also, even with a lot of the unknowns relative to Covid and just some of the things from a macroeconomic perspective.

Kerr: One of the things that we hear about consistently is people talking about Covid has brought forward what may have been on a technology roadmap for five or ten years out to becoming something much more, “we need to get on this here and now,” especially around digitization and other forms of contactless connections. There's also, in parallel, the remote work that many of us are engaged in that we traditionally have not. Talk to us about how that's been experienced for an IT company like yours.

Kavanaugh: We have talked and this is the same discussion with the leadership at World Wide, the need to digitize and drive a transformative digital experience in your business today has been accelerated in a significant way because of Covid. If you look at the things that are just going on in regard to remote workers. The movement of video. You look at Zoom. It's just gone through the roof. Cisco's Webex has continued to grow significantly. Other examples would be in health care. You look at health care today, there's a lot of red tape, a lot of bureaucracy. But also, I believe because of Covid, organizations, health care, the policies associated with them, and the technology and the process associated with how patients engage with their caregivers and with doctors and nurses, etc.—that experience is becoming more digital. And that is becoming more of a virtual experience for health care reasons—that they don't want to spread Covid—but also for reasons that you're seeing, that people can get to doctors in a more efficient way doing that virtually. And some of the things that were slowing it down, the red tape around the policy associated. So, to your point, I believe that everyone is being pushed and I believe this is starting at the board level of companies in every industry, that they need to be thinking more aggressively in regard to how they digitize their business and how they change the process and the mindset within their organization to move faster than ever before.

Kerr: And what then do you also see in terms of the workforce and skill trends? Are they moving as fast as these ambitions to digitize? And how do you fit into that as both an employer and a supplier?

Kavanaugh: I don't think the workforce is moving fast enough. And that's a challenge I think that we all have that we're looking at what does the next generation workforce need to look like? And there's a lot that we collectively need to do in regard to ramping that up and making sure that we put, I would say the training in place. We need to look at colleges and universities that better prepare students to come out in specific areas that could work to be around digital transformation, digitizing infrastructures, security, cloud, a number of these things that are really going to be critical and foundational to our collective future. And then I think there's also a huge focus on what we collectively need to do to retrain a lot of our existing workforce in regard to where the market's going.

Kerr: Jim, let's go back and talk also a little bit about the leadership challenges that you mentioned earlier, which, just in the last year would include not only the pandemic, but also the substantial movements towards racial and social justice. How have you as a CEO approached those issues and what's the course that you've tried to set for World Wide Technology?

Kavanaugh: I believe that the leader needs to lean into this, both lean into Covid and be very pragmatic and real about what's going onand also the same around some of the social unrest. We leaned into Covid and really tried to think through and learn as fast as possible in regard to what's happening, what's happening in other parts of the country and the world, that we can learn from. And then, basically, put a plan in place and get in front of our employees and communicate that message in a very transparent, in a very authentic, in a very real way. And I firmly believe your employees know when you're reading from a script and they know when you're talking from the heart and you're being very honest and transparent with them. And that's exactly what we've been doing. And communicating very early and if there's things that we've been wrong about, we'll admit that and we'll make adjustments. So the remote workers that we have today, we very quickly and easily had them all engaged, working virtually in a very effective way. Probably the more significant thing was to get them adjusted relative to their mindset of how they're going to work remotely and how to do that very effectively. And in some cases, I would say we are more effective and more impactful today than we were before working remotely. There are challenges. People working from home with a houseful of kids and isolation and some of those things. So those are very real things. At the same time the frontline workers that we have we leaned in very aggressively in saying, "These are the things that we know today. Our number one priority is your safety and wellbeing." But we also need to balance the essential nature of our business, that we are deemed essential and that we need to keep the business going, but with the number one priority being the safety and wellbeing of our employees. So as we continued to operate we put all the safety protocols in place that we could—isolating different work groups to make sure that they weren't collaborating, face masks, temperature checking—all of the sanitization protocols that we had. And we really, I think, stayed out in front of any spread within our facilities, domestically and globally. And we feel very good about that. And then we've continued to communicate on a very regular basis where I will get in front of our entire company and talk through, “these are the things that we're seeing.” And then really taking live input from those through chat sessions, through surveys and just being very engaged with our employees. And fortunately, the feedback that we have received has been very positive. And that's the process we're going to continue to take as we work through this. And one of the messages I've communicated very early on is that this is a marathon and it's not a sprint. One more thing on that topic that I think is very important, not just because of Covid, that I have been emphasizing within our company for the last several years, is the need for everyone to understand the importance of, not only your physical wellbeing, but your mental health and your mental wellbeing. And I've tried to communicate to our employees the importance to understand that there should not be a black cloud of embarrassment or reluctance to talk about things around anxiety, stress, depression. Those are things that are very real and we need to be very supportive as a leadership team and as fellow employees to make people feel comfortable that we realize these are very real challenges that people—just like someone having a physical injury, breaking a leg or having cancer—the mental side of it is equally or sometimes even more challenging. Because it has made people feel much more comfortable to come forward and to leverage a lot of the services that we put in place. I know it's something we're going to continue to focus on, but I think the world needs to focus on.

Kerr: Great, Jim. Let me also now take you back and have you help us think about the challenges of the racial and social unrest. And being positioned in St. Louis you're at the front lines of some of these more difficult moments.

Kavanaugh: I've really tried to think through this personally, how we're dealing with this, and the quick reaction is you just have to be authentic again. But you can't expect perfection out of yourself and out of everyone in regard to how you're communicating your feelings or how we're moving forward. You need to create a foundation of trust within your organization so that people truly believe that your intentions are sincere, to create an organization and a culture that embraces, supports and celebrates inclusion of people, of thought, of different people with different inputs, different people from different backgrounds, that will make your organization better. At the same time, with some of the very, very, I would say challenging—and just ugly situations that have happened with some of the social unrest and the killings of individuals—that we know are just completely unacceptable, and that racism is completely unacceptable. With that being said, this is a very challenging topic. Someone's going to say something that may not seem exactly right. Well, we're all learning. And if everybody within the organization knows we're all learning, and that's part of one of the things that we've done and has been very effective, is creating these listening tours, to really go out and talk to our diverse workforce and get input from different employee resource groups about their feelings—Black, minorities, it could be gay, lesbian, different broad-based…veterans that we have. Different work groups all throughout the organization that we're talking to and with that mindset of understanding that we're all learning. But our overall intent is to create a great place to work for all. And with that I think you need to create that foundation of trust, that people know that we're working together and are not looking for mistakes, but they're looking for a way to move things forward in a very positive way. And that's what we're trying to do is to play our part in eliminating racism along with a number of others.

Kerr: Continuing on that line, Jim, you have a quite diverse workforce and leadership, and you have been involved in a variety of training programs to help that management team be more diverse, be more inclusive to the workforce. Talk to us a little bit about that additional line of approach or attack towards making change about this important issue.

Kavanaugh: Well one, we have specifically moved someone that has been with the company for a couple of years now, but Bob Ferrell, who is Black. He was a three-star General that now works for World Wide Technology. Great guy, great experiences of working with very diverse groups. So, we have moved him into the [position of] VP of Diversity and Inclusion for World Wide. And with that, working collaboratively—Bob was already part of the executive management team—but we have now created a process where Bob is leading with the executives, being intimately involved in somewhat of an eight-step process and, moving forward, plan around being a more diverse organization. And that includes our listening tours and how the executives are involved. Along with that we also have a storytelling process that we're using to gather stories and videos from our employees that have had diverse experiences globally, and sharing those to educate our workforce on what people are feeling and seeing. And things that you're just not thinking about until it's brought to light. And then we have an Integrated Management and Leadership curriculum that we have custom built about 15 or 17 years ago. And one of the modules in that training curriculum is a D&I module that we are finalizing right now that we will roll out. And every manager and leader within the company going into next year will be trained on that module on how to educate and train our employees around the D&I efforts that we have that will cascade throughout our company. And that, and these eight building blocks will be part of the DNA of our business, just like our Integrated Management and Leadership curriculum is foundational to how we train and develop our managers, our leaders and our employees around our values, our behaviors and our management practices.

Kerr: Jim, as we talk about this, it's very clear how the internal excellence of World Wide Technology will be improved by these initiatives. Is there also an external-facing part of this, something linked into the business plan as to how you will take this to the customers that you're serving and the broader IT sector that you're a big part of?

Kavanaugh: First of all our focus is to create a high performing organization. I'd say there's two things that we look at to drive that high performing organization. One is, building out a world class culture that involves your people, your values, your behaviors, and really figuring out how do you create that within a methodology and approach that you can cascade and proliferate throughout your organization and is something that can work in perpetuity as you move forward. But there's got to be a level of discipline and rigor around it. The other piece is just the business side of it. That's your strategy and your vision and your ability to execute and grow and do that with a level of discipline and rigor. So, when you bring those two pieces together and you integrate those two, I think you have the ability to create a high performing organization that has the ability to impact and drive sustainable growth and success within the organization. The thing that we have looked at at World Wide over the last almost 20 to 25 years, if you look at really the growth, we have had a focus every 5 years our plan has been to double our top line and double our bottom line. This year we'll probably close out a little over 13 billion dollars, if my calculations are correct as we move through the next few months here in 2020.And if you think about our mission, it's like three legs of the stool. It's very simple. To be a profitable, one, growth company that's a great place to work. And we looked at profitability as critical to drive the investment back in your business, in your health care, in your people, in innovation and growth, facilities, etc. One of the things we have not increased—we have a very, very, I would say, generous health care benefits package for our employees. We have not increased our pricing to our employees in 18 years—18 or 19 years. So when we look at it to be a profitable growth company, it's a great place to work—we say a great place to work for all. And that brings those two things, the business and the culture side of things together. Along with that, 99.9 percent of everything that we have done at World Wide has been organic growth. So, we've had a few small, very small boutique acquisitions, but relative to our revenue it's 99.9 percent is organic growth. But to do that we are very different. We are a very different company than we were 10 years ago, and an extremely different company than we were 15 and 20 years ago. And so, we have really had to focus on looking at how do we think different? How do we innovate? We've spent over the last 8 to 10 years, really building out one thing, an innovation ecosystem, which is our advanced technology center. It is an ecosystem of now—it used to be a few racks of equipment, of technology equipment, that now is an entire campus of multiple buildings of data centers that we have a plethora of technology equipment from just about every OEM main tier. One OEM, whether it's Cisco or HP or Dell EMC, VMWare, Microsoft, to emerging technology providers around security, cloud, networking, that are all in our labs and we use this to train and develop our engineers. But we also use this to test, evaluate, and integrate products into very complex integrated architectures, helping our customers decide on what products and architectures and transformational business solutions they're going to implement into their environment. Jersey Mikes, is a customer of ours, and the business impact we've had on their organization has put them in a differentiated position to lean into Covid from a business standpoint, to be able to provide a different experience for their customers that they wouldn't have had if we didn't work collaboratively together. So I would just say that there have been a lot of things through the evolution of World Wide that we are a very different company, and that's something that we're going to need to continue to do. And I think other organizations will need to do the same as the market changes faster and faster.

Kerr: Jim, that's an incredible track record and if that 18 years of no health care price hikes is scalable, I'd like to suggest you guys next think about entering into a space in that industry and maybe can help us all out on that rising costs. Let me draw with you on one more topic. On this podcast we look at a lot of spatial questions—talent clusters. And then there's the heartland and then there's, of course, global dimensions as well. If I picked up my typical listener and said we're going to have a conversation with World Wide Technology, if they didn't already know you, they're probably thinking I'm about to have a CEO from Silicon Valley join us on the podcast. Talk to us about building this business in St. Louis. Tell me the strengths and also the challenges.

Kavanaugh: It's been very interesting— fun, challenging—growing the business. But it's also been incredibly rewarding to live here in St. Louis, really start and develop the company with my co-founder here, Dave Steward. Whether you're from St. Louis or you're from the Valley, or you're from Singapore or parts of Asia or Europe, or New York City, we look for good people. And we look for people that we believe have the core values and the behaviors that we would enjoy working with. And so, with that, we believe we also have a very humble culture. And we believe humility can be a very, very important and a positive motivator or a growing organization. But we look at it as being humble, but also being very confident. And being confident, but not cocky. We have somewhat coined “World Wide Silicon Valley in St. Louis.” And through our actions and through the things we're doing from an innovation perspective, we have earned the respect of leaders all over the world that are in technology. And I feel very fortunate and very blessed to know that I've got friends like Chuck Robbins with Cisco, CEO and Chairman, Michael Dell, Pat Gelsinger with VMWare, John Chambers, Carl Eschenbach with Sequoia. So, a lot of them are out in the Valley and we know them personally. I know them personally, our teams. And these are great individuals that, for the most part, lead very large organizations. And I just feel very fortunate to be in a position here that I will communicate to our team that we should never take for granted the position that we're in today with our customers, with our employees, and with our partners. But at the same time, we've got to push each other to never get complacent and to be humble, but to be incredibly aggressive. And that's a bit of the Midwest, I would say, upbringing that a number of us have. But it's not just the Midwest, it can be proliferated all around the globe. And that's the thing that I'm very proud of and very excited that we have people from all walks of life working for World Wide. And whether you work in a warehouse or you're a senior executive working in New York City, we treat you all the same, with a high level of respect. But, also, we hold everybody accountable and expect a lot of things out of you. So that's where I think we try to take the best of the Midwest upbringing and then scale that out, but also take inputs from people all over the world to make World Wide just a very global company that is very inclusive and a great place to work for all.

Kerr: Jim Kavanaugh's the co-founder and CEO of World Wide Technology. Jim, thanks so much for joining us today.

Kavanaugh: Thank you. I really appreciate you having me.

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