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David M. Rubenstein, Co-Founder & Co-Executive Chairman of The Carlyle Group, on how private equity deals are evolving and his recent book “How To Lead”.



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The interview discusses:

  • How Zoom and other technologies will change how we conduct business going forward.
  • David’s views on how the pandemic has impacted the global economy.
  • How the private equity world is changing in terms of the types of deals they are doing.
  • Key skills needed to be an effective fundraiser.
  • How The Carlyle Group almost went out of business early in the firm’s existence.
  • The reasons behind writing his latest book: How to Lead: Wisdom from The World Greatest CEOs, Founders And Game Changers.
  • Key qualities of effective leadership from interviews with many of the world’s most accomplished leaders including: Justice Ruth Bader Ginsburg, Dr. Anthony Fauci, Jamie Dimon,  President Bill Clinton, President George W. Bush and more.
  • Which historical figure he would most like to have as a guest on his show and what would he ask.
  • And much more…


About David M. Rubenstein:

David M. Rubenstein is a Co-Founder and Co-Executive Chairman of The Carlyle Group, one of the world’s largest and most successful private investment firms. Mr. Rubenstein co-founded the firm in 1987. Since then, Carlyle has grown into a firm managing $221 billion from 31 offices around the world.

Mr. Rubenstein is Chairman of the Boards of Trustees of the John F. Kennedy Center for the Performing Arts and the Council on Foreign Relations; a Fellow of the Harvard Corporation; a Regent of the Smithsonian Institution; a Trustee of the National Gallery of Art, the University of Chicago, Memorial Sloan-Kettering Cancer Center, Johns Hopkins Medicine, the Institute for Advanced Study, the National Constitution Center, the Brookings Institution, and the World Economic Forum; a Director of the Lincoln Center for the Performing Arts and the American Academy of Arts and Sciences; and President of the Economic Club of Washington.

Mr. Rubenstein is a member of the American Philosophical Society, Business Council, Harvard Global Advisory Council (Chairman), Madison Council of the Library of Congress (Chairman), Board of Dean’s Advisors of the Business School at Harvard, Advisory Board of the School of Economics and Management at Tsinghua University (former Chairman), and Board of the World Economic Forum Global Shapers Community.

Mr. Rubenstein is an original signer of The Giving Pledge, a significant donor to all of the above-mentioned non-profit organizations, and a recipient of the Carnegie Medal of Philanthropy, and the MoMA’s David Rockefeller Award, among other philanthropic awards.

Mr. Rubenstein has been a leader in the area of Patriotic Philanthropy, having made transformative gifts for the restoration or repair of the Washington Monument, Monticello, Montpelier, Mount Vernon, Arlington House, Iwo Jima Memorial, the Kennedy Center, the Smithsonian, the National Archives, the National Zoo, the Library of Congress, and the National Museum of African American History and Culture. Mr. Rubenstein has also provided to the U.S. government long-term loans of his rare copies of the Magna Carta, the Declaration of Independence, the U.S. Constitution, the Bill of Rights, the Emancipation Proclamation, the 13th Amendment, the first map of the U.S. (Abel Buell map), and the first book printed in the U.S. (Bay Psalm Book).

Mr. Rubenstein is the host of The David Rubenstein Show: Peer-to-Peer Conversations on Bloomberg TV and PBS, and Leadership Live with David Rubenstein by Bloomberg Media; and the author of The American Story: Conversations with Master Historians, a book published by Simon & Schuster in October 2019, and How to Lead: Wisdom from the World’s Greatest CEOs, Founders, and Game Changers, a book published by Simon & Schuster in September 2020.


Click Below to Read the Interview Transcript

Transcript of  the Interview With David M. Rubenstein:

[00:00:00] Jonathan Boyar:  Welcome to The World According to Boyar, where we bring top investors, bestselling authors, and business leaders to show you the smartest ways to uncover value in the stock market. I’m your host, Jonathan Boyar. Today’s guest is David Rubenstein, co-founder of the Carlyle Group, a private equity firm that now manages well in excess of $200 billion.

David started his career as an attorney at Paul Weiss but quickly decided the legal world was not for him. He was able to get a job on the Carter campaign. When President Carter took office, David, at the age of 27, became Deputy Assistant to the President for Domestic Policy. After Reagan won, David went back to practice civil law briefly before co-founding the Carlyle Group. David has been quite generous with his success and is an original signer of The Giving Pledge.

David has made significant donations to organizations too numerous to name. He’s best known for being a leader in the area of Patriotic Philanthropy and has made transformative gifts for the restoration of the Washington Monument, Monticello, Mount Vernon, and the Kennedy Center among others. David has also provided, to the US government, long-term loans that his copies of the Magna Carta, the Declaration of Independence, the US Constitution, the Bill of Rights, and the Emancipation Proclamation.

David has recently published a fantastic book called How to Lead: Wisdom From the World’s Greatest CEOs, Founders, and Game Changers. On a more personal note. David has a show that airs Bloomberg, which was a major inspiration for starting The World According to Boyar. David, welcome to the program.

[00:01:53] David Rubenstein: Thank you very much for having me.

[00:01:54] Jonathan: I certainly want to talk about your latest book, How to Lead, but first I wanted to discuss your career as well and hear your thoughts on the current business climate. You’re a self-described workaholic. I heard you mentioned in a speech that in a normal year, you’re on the road about 240 days out of the year. During COVID, I imagine like most people, you’ve been spending a lot of time at home. What has that experience been like for you? Have you realized you like your house? Are you itching to get back on the road?

[00:02:22] David: Well, it’s an eyeopening kind of situation because I was spending 240 days a year on the road for such a long time. Now I’m not doing that. I’m wondering whether I wasted 30 years traveling that much or whether I could’ve done everything just the way I’m doing it now by Zoom. Now, of course, Zoom wasn’t quite invented 30 years ago, but it has given me a chance to actually do more than before because now I can do four or five, six Zooms a day in parts of the world that I otherwise could not be in, in one place.

In many ways it’s different. On the other hand, human contact, civilization has shown over many millenniums, is a plus. Having human contact would probably be better than just doing this forever on Zoom. I’m happy to have rested a little bit, happy to learn the Zoom technology, but I would like to go back on the road a bit, maybe not 240 days a year but maybe a lot more than I’m doing now, which is 0.

[00:03:16] Jonathan: You led right into my next question is, will things change forever as a result of the pandemic and with the Zoom technology? How much do you think, I know you said you were going to probably travel less, but the typical person in your organization, are they going to be traveling as much as they did pre-pandemic or you think a lot will be accomplished via Zoom?

[00:03:38] David: It’s always dangerous to say because something happened in the last month, two months, three months, one year, that the world will change because of that because, often, the world reverts to the mean and goes back to what it’s been doing for a long time. On the other hand, I do think, in this case, this is a transformative way that people will conduct themselves for at least 5 or 10 years, which is to say, I don’t think people will travel quite as much.

I don’t think that people will go out to eat quite as much. I don’t think they will go to movies quite as much. It will take time for people to ease back into what they did before. I do think that we will change the way we work, which is to say a lot more people will work remotely. A lot more people will feel that they don’t need to go into the office more than maybe one or two days a week. Things will change.

The interesting thing about this is that when you think about how the world changed through the industrial revolution, it took about a hundred years where the industrial revolution had its impact on the way people conducted their lives. The internet probably took about 20 years or so before people really changed the way they live and act and transact business. This has taken about a year or less. Think about it. Last January, we were doing business the way we always have been doing it. When this came along, we, all of a sudden, learned Zoom technology. We, all of a sudden, learned the value of working at home and the way you can do it. People, I think have found it’s a lot easier in many ways. I think we will change the way we live and work for the future. I can’t say 20, 30 years from now, something won’t change it back, but on this, at least the next 4 or 5 years or so, I do think things are going to change.

[00:05:16] Jonathan: Do you think if this happened five years ago, the economic ramifications would have been much more severe because we didn’t have this technology?

[00:05:25] David: Absolutely. Well, let’s say 20 years ago, there was no internet to speak of. It would have been much more disastrous then. Five years ago, there was internet, not quite Zoom technology, but you probably could have done some things orally. There was a lot of teleconferencing, just not video teleconferencing. Video teleconferencing, which is, in fact, what Zoom is, makes things a lot better.

I just think about it 20 years ago if we’d had this or 30 years ago, I do not think we had teleconferencing that worked all that well, so it would have been  much more difficult thing to survive. The result would have been one of two things: people would have gone back to work sooner and maybe been injured more because of the virus, or the economy would have gone down even more than it went down this time because people would not have been able to conduct business the way they’re able to do so now.

Right now, people in your business and my business, which is the financial business, are basically operating as if this wasn’t really happening all that much because everything is done online. Everything can be done through phone conferences, video conferences. The financial world hasn’t been so adversely impacted, honestly, it’s the other parts of our economy that have been adversely impacted, people in the restaurant business, the entertainment business, the cruise shippers, the hotel business. Those have been dramatically impacted and will take many, many years to recover.

[00:06:42] Jonathan: You have an interesting perspective on that because Carlyle owns over 250 companies in a variety of industries, and through those companies you employ, I guess, roughly a million people. You have a real insight into the state of global business. The US stock market is close to all-time highs. That’s really reflective of how a small number of technology stocks are doing. In your opinion, how is the real economy holding up?

[00:07:06] David: You’re correct in pointing out that the stock market has done well, in part because the gigantic tech companies have done so well, they’ve dragged everything up in effect, or at least the industries, I should say. The real economy is in a much more difficult shape. Let’s suppose you own or work at a food truck, let’s suppose you own or work at a 10-person restaurant, let’s suppose you own or work at a small car delivery service or something like that, transporting people around like Uber’s, all those businesses been adversely affected and dramatically so.

Let’s suppose you work at a hotel or you work at a sports and entertainment venue. Those businesses have really been hurt and hurt to the point that we haven’t quite recognized it fully. Let me explain what I mean, we’ve had $3 trillion come from the federal government to support the economy. The fed has put in somewhere between $1 and $6 trillion. We don’t really know yet exactly how much they put in, but let’s say $1 or $2 trillion, for sure.

Congress recognizes that this money is beginning to wear off. If Congress doesn’t pass another trillion or $2-trillion package at some point in the near future, you’re going to see the economy going back to where it would be without all the support. As a result, I think we are probably going to have to do something, probably after the election. After the election when the politics are a bit out of it, I think Congress will pass something. Without that and until there’s a vaccine that makes people feel safe, this economy, it has to be propped up a fair bit. I don’t think there’s any way around it.

[00:08:38] Jonathan: How is Carlyle evaluating acquisition activities during COVID? Are there industries you would historically invest in that now you are taking a wait-and-see approach? How do you value companies amid all this uncertainty, not just COVID, what’s happening with China and all the other geopolitical uncertainties? It’s really difficult.

[00:08:59] David: The deals process works the way it did before in the sense that we have young people who do all the due diligence after getting some direction from more senior people, they come up with the analysis, we have more senior people provide their experience. We look at the deals, and we are looking at things that we think will do better in the post-COVID environment then than things that won’t, but you can’t know for certain.

Of course, there’s always the thought that you can buy something that’s been hurt by COVID and will come back in time and if you get a big enough discount on the price, you might buy it. On the whole, we’ve been investing pretty steadily, prices have not come down all that much in the buyout world. The growth capital world is even more expensive. The venture capital world, in certain areas, is even more expensive than that. You either have to say, “Look, I’m going to pay double-digit EBITDA multiples, or I’m just not going to be in the business of investing in private equity or venture capital or growth capital because the prices are not cheap.”

[00:09:54] Jonathan: Even in the non-technology world, you’re not seeing multiples go down or sellers have unrealistic expectations or–

[00:10:01] David: Well, as a general rule of thumb, sellers always have expectations that are unrealistic, except when we’re the seller, then we have realistic ones and then, unfortunately, sometimes people don’t meet them. I would say that as a general rule of thumb, people in the financial services world are saying, “Well, wait a second, why should we discount prices right now?

“The economy has gone through what presumably is the worst of it, the vaccine is not too far down the road, we buy these companies for four and five years horizons, so in four, five years, things will be back to normal.” Financing is so cheap that if you’re doing a buyout and you’re using some borrowed capital, you can basically get it for very, very modest amounts of money. I don’t really see that prices are coming down all that much. Sure, there’s something that’s in extremis and falling apart, yes, you might be able to buy it, but it’s not really that much of a discount, but it’s not going to be that much different because of COVID or not.

[00:10:54] Jonathan: You said in an interview if you look at the Forbes 400, the people who made it on their own acumen. Virtually, no one is on that list because they bought things at a discount in an area they did not know about in the recession. They generally shore up what they already had or make investments in areas they know a lot about. Is Carlyle following your advice now, or are you doubling up in areas that you have great expertise in?

[00:11:17] David: As a general rule of thumb, people in our firm and elsewhere tend to be buying things in areas they know well. Occasionally, you might take a flyer or somebody might– Carlyle doesn’t tend to do this in areas we don’t know much about, but the price is just so low. My point in the quote that you are referring to is that you always hear about a dumb luck story where somebody bought something out of bankruptcy, didn’t know anything about it, and it just turned around because of good management, but that’s rare.

As a general rule of thumb, if you look at the people in the Forbes 400, they got there by having an expertise in one area and pursuing it, pursuing it, and pursuing it, not by stumbling into something they didn’t know anything about. Now, there’s luck, of course, involved, and a lot of people in the Forbes 400 got lucky, including me, but generally, it’s a result of spending a lot of time on something and not just having something pop along that you didn’t know anything about and you bought at a discount, all of a sudden, the world went in your favor.

[00:12:11] Jonathan: Thus far, there’s $1.6, I believe, trillion of PE capital on the sidelines, financing is unbelievably cheap, there really haven’t been PE, it really hasn’t been that active. What do you think it’s going to take for private equity to really get back in the ballgame?

[00:12:29] David: Well, private equity is in the ballgame, it’s just doing it somewhat differently. For example, it used to be thought that private equity was synonymous with buyouts and that venture capital and growth capital were minority-stake transactions, but if you lump it all as private equity or private investments, you’re seeing an enormous amount of private investment activity, but sometimes, the big buyouts are not getting done as much as they used to, but you’re seeing a lot of mid-sized buyouts with a lot of growth capital.

In Carlyle’s case, we bought a lot of companies, let’s say in China, it’s very hard to do a control buyout deal in China. A lot of our investments in China and India are minority-stake transactions. We’ve bought a lot of stakes in large companies that we own a minority stake even though we put in a fair amount of money. I would say private equity people are putting out a fair amount of money, they are, they’re just maybe doing it not in control buyouts that are very large.

[00:13:20] Jonathan: In 1987, you co-founded Carlyle. Initially, as you said, in How to Lead, your latest book, which we’ll get to very shortly, you said your main focus was essentially to fundraise. How did you master that skill?

[00:13:34] David: It’s an interesting phenomenon when you think about it, many people spend a large part of their life being asked for money or asking people for money, either political contributions, philanthropic contributions, or business investments. When I make this speech to people, I often ask people, how many people have asked people for money in one of those categories or been asked over the last month or so?

Of course, almost everybody raises their hand, but interestingly, there are very few courses in college or graduate school in fundraising, it’s just considered something you learn, you don’t take a course in it. I did what everybody else does, I learned by doing it on the job, I didn’t even know a course in it and I did use my personality, such that it was, to get in to see people and try to make it interesting and try to make it a polite meeting with people

The trick in fundraising is knowing what you’re talking about, having something reasonably good to sell, following up, being polite, being attentive, listening what people say, and of course, if you have good performance, it makes it easier the next time around.

[00:14:34] Jonathan: You mentioned the word “polite,” how do you learn to balance the line between persistence, which is extremely important, and you mentioned that in your book, and polite follow-up?

[00:14:42] David: Yes, it’s a complicated thing because I’m often, now, the recipient of many requests, and still, I’m heading a lot of capital campaigns myself, so it’s a tough balance. If somebody says no to you at the outset, and they say no way in the world, I think probably persisting is probably not a good idea. If somebody says, “Well, let me think about it,” or “Send me something,” that means maybe they might be interested and then you can follow up at an appropriate time. Eventually, you have to read the tea leaves, and you have to figure out whether it’s a waste of your time and you, ultimately, will get nothing. I have been reasonably persistent in times, and our biggest individual investor for a long time was somebody who turned me down nine times.

Every time I went back to see him in this European city, I would stop in and see him and gently suggest he might look at something we’re doing. Finally, he got worn down and said, “Okay, I’ll try it” and then he ultimately liked what we were doing. It’s a difference between being impolite and being polite, and just like anything in life, if you are too persistent or too arrogant about it, you’re not going to get very far.

[00:15:44] Jonathan: When you started your firm, interest rates, as measured by the 10-year– roughly 11% down from 15% in ’81, and they have gone down significantly since then. Do you think PE would have had the returns that it did had borrowing costs stayed high?

[00:16:00] David: Remember when interest rates were high, inflation was also high, and therefore, it inflated the value of certain things too. No doubt, with interest rates low and borrowing costs low, it’s made it easier to finance things, and it’s also made it easier to get good rates of return. I suspect if interest rates had stayed high and inflation was normal, probably the returns would not have been as good.

On the other hand, in the early days of private equity, the business was largely one of leverage and basically quickly taking advantage of buying something at a reasonably cheap price. People, the sellers were selling things more cheaply then. You used a lot of leverage, you quickly fixed some costs, got rid of some costs, I should say and then you exited the deal. Today, you have a lot of management teams and management experts who work at these private equity firms.

They really go in and really help the company. It’s not just a leverage game. In the old days, think about this. The RJR deal, in 1989, was 5% equity and 95% debt. That was not considered unusual. Today, a buyout might be 40% or 50% equity. The deals are much better structured. The returns have stayed reasonably good although they’ve come down. In part, the returns are good because you have much more expertise in building these companies, the private equity firms are much more knowledgeable about what they do, and also, the interest rate charges are so much lower that the cost of leverage is just relatively de minimis.

[00:17:21] Jonathan: You referenced the KKR deal. You were an innovator. KKR at the time, they just had funds, not to belittle the business. It was an unbelievable business at the time, but you were the first person to make private equity into a real business, basically, the Fidelity of the PE world. How’d you get that idea?

[00:17:39] David: Well, I don’t really know that there was one moment where I was in bed, and all of a sudden, a light bulb went off. After we raised our second buyout fund, which was about a billion dollars, our first one was holding $100 million, and then we co-invested $600 million. I was saying, we raised, we invested $700, and we were able to get a billion for the second fund, but then it dawned on me that why couldn’t we do like that in another area?

We were doing buyouts, why not do a growth capital fund, why not do a real estate fund, or why not do a Europe fund or Asia fund? Since I was not the investor per se, I had the time to think of new products, and I could go recruit people and raise the money. I had the luxury of doing that. It seems in hindsight that it was an obvious idea, but to be honest, while some people have done it better than we have done it, nobody else had yet gone out and said, “Okay, I’m going to build a Fidelity of private equity.” We went in that direction. We made some mistakes, some things I wish we had done better, but we pursued that approach. I think there are now four or five firms around the world that are now doing that.

[00:18:42] Jonathan: I hope you’ve been enjoying the interview with David Rubinstein. To be sure to never miss another World According to Boyar episode, please follow us on Twitter @BoyarValue. Now back to the show. Now let’s talk about your latest book, How to Lead, a book I personally enjoyed and would highly recommend. In typical Rubinstein fashion, all proceeds from the sale of the book are going to John Hopkins.

How to Lead is a compilation and commentary of the interviews you’ve done with leaders in their respective fields conducted as President of the Economic Club of Washington and through your Bloomberg television show. The book interviews, a wide range of people from Oprah to Jeff Bezos, to Warren Buffett, Jamie Dimon, Phil Knight. You certainly have a lot on your plate. Why write this book?

[00:19:29] David: Well, one, I’d already done the interviews, so it wasn’t that hard to take the interviews I had and then edit them down. Two, it kept me out of trouble. I spent a couple of hours working on it a week and didn’t get in trouble doing anything as a result. Three, I do think I would like people to read the interviews and hopefully, the younger people, particularly, already might be inspired because I realized my TV show, even when it goes on social media, isn’t watched by that many people relative to 60 minutes or something. A book can last for a long time. I guess as I’ve gotten older, I keep saying, “What is my legacy going to be?” I’d like to have something that I could leave behind, and leaving behind a couple of books is something I’d like to do. I say to myself though, “What was I doing in my 20s, 30s, 40s, and 50s, and 60s? Why wasn’t I writing books?” I’m now trying to do one a year, why couldn’t do that when I was younger? Life is that way, so I’m glad I had the life I had, but I would like to do a couple of books.

I think people like the interview format, which is to say, it’s easier to pick up and read it because you don’t have to read the whole thing start to finish to get the point, you can read one interview at a time and put it down and go back and go and read another interview, and they’re not necessarily related. I think people seem to like it.

[00:20:39] Jonathan: In the book, you discuss the common attributes of successful leaders, and there are many, but the one that seemed to be the most common are luck, desire to succeed, hard work, long hours, focus, and experiencing failure. You wrote, in your book, your failure was losing the status and upward career trajectory after Carter lost and Reagan took over. Well, that might have stung. I don’t think his loss was directly attributable to you. Can you give an example of failures you had when trying to get Carlyle off the ground, or was it really smooth sailing?

[00:21:10] David: Sure. When we first started our first buyout deal, we finally got a company, we bought a company. About two or three days after we bought it, we realized we dramatically overpaid, it was a publicly-traded company. We didn’t have the opportunity to do as much due diligence as you would have as a private company. We realized pretty quickly, we grossly overpaid, and it took us years to get our money back. That was complicated.

Then, we had some other deals early on that we didn’t do that well on, relatively speaking. We always had some stumbles. Everybody has some stumbles, I suppose, but generally, it’s worked out okay. If I could do it all over again, as I may have said in the book, I would have held on to the stock we had an Amazon, and I would have pursued my initial opportunity to invest with Facebook, but I blew both of those.

[00:21:58] Jonathan: Was there ever a point when you were at Carlyle that you didn’t think you were going to make it?

[00:22:02] David: Yes, absolutely. We were pursuing a deal in bankruptcy court to buy an aerospace company out of bankruptcy or part of an aerospace company. We basically spent all our money trying to get this company, and we had no cash reserves, and at the time, I don’t believe we even had a fund. We had a tiny fund. We had no cash left, and all of a sudden, we lost the deal. We were outbid in bankruptcy court. I woke up one night and said, “You know what, we don’t have any cash, and I don’t know what we’re going to do now.” Ultimately, something happened, and we won the deal, so hopefully, things turned out. I did think for a while we weren’t going to make it.

[00:22:37] Jonathan: One of the people you’ve interviewed in the book, who’s truly an American hero, is Dr. Fauci. He’s certainly the definition of a leader. How did you come to know him? I think you tried to hire him at one point, right?

[00:22:51] David: Yes, I hired somebody to head up our Venture Capital Group. His name is Bob Grady. His sister is married to Dr. Fauci. Through Bob Grady, I got to know Dr. Fauci many years ago. When he turned 70, I went out to see him and said, “Look, you’ve done a great job for the country, but I assume at 70, you’re going to retire, why don’t you take your healthcare expertise and become an advisor to a private equity firm? What could be better for you than that, and you can make some money, you’ve never had any money?”

He thought about it for a brief period of time. He said, “David, I don’t really care about money. I borrowed money to send my kids to college, I paid for that. I’m just not interested in making a lot of money. I care about infectious disease and saving lives.” What are you supposed to say to somebody who says that? He’s obviously a man under enormous pressure these days.

I think he will stand the test of time as being a great American. I suspect a year from now and hopefully so behind us, he will win every award you can possibly win for his insights, his courage, and his convictions. He’s the kind of person everybody should want their child to be: dedicated, hardworking, admired by virtually everybody, and focused on the right things: saving lives, not making money.

[00:23:56] Jonathan: You had the opportunity to interview President Bush and President Clinton at the same time. Does it take a special kind of leadership to become president?

[00:24:05] David: Well, being president of the United States, it’s hard to predict who is going to get that job because if you go back and look at these people when they were young, very rarely would somebody have said this young person is going to be president. Now, Bill Clinton was thought to be a potential president when he was very young, but generally, you don’t see that. People get to the presidency by different routes.

Rarely did it seem likely that Jimmy Carter, a peanut farmer, would become president; or Gerald Ford, a lifetime House Member, would become president; or Ronald Reagan, an actor, would become president. You just can’t predict how these things come out. Who would have thought Donald Trump would be elected president, never been in government before? These things are hard to predict. Being president of the United States is a great job.

I’ve often thought a better job is being a former president because everybody tells you how great you were and still are. Nobody is mad at you as much anymore, and you can take life a little bit easier. When I interviewed those two presidents together, they said that actually, they did miss being president because when you are president, you can really help people and change lives. That’s what they missed the most.

[00:25:04] Jonathan: Both, in some ways, are exceptions to some of the characteristics you outlined that most successful leaders share. One of the things you say and one of your arguments you make, and I agree with it, that most people who grew up in privileged circumstances generally don’t achieve the super degree of success that most of the people in your book have. President Bush came from a very well-to-do family, certainly had above-average family connections. What was it about him that you think propelled him to be president? What was the exception?

[00:25:35] David: In George W. Bush’s case, his family was prominent. They weren’t extremely wealthy, but they were prominent. What happened to him is he had a life of not all that much accomplishment, he would certainly say, and then he had a drinking problem, he would admit. Then at 40, he said, “I’m not drinking anymore,” decided to turn his life around, became involved in buying a baseball team that made some money, and he decided to run for governor, largely on the name George Bush.

It worked out. His first campaign, he was extremely underestimated. It worked out quite well. It was something that nobody would’ve predicted. Even his family, his father, his mother never thought he would be elected governor, let alone president of the United States, but sometimes these things happen.

[00:26:15] Jonathan: President Clinton’s also an outlier for many reasons. One of the things you do in the book is divide people’s lives in thirds, the first thirds of a person’s life are when they’re young and in school and learning. You found that people who are successful early in life, the Rhodes scholars, the student body presidents of the world generally don’t achieve fantastic degrees of success later on in life. What made President Clinton different?

[00:26:40] David: Well, it was said for a while before he was elected president, he was a rare person who was a rising star in three different decades, a rising star in the ’70s, ’80s, and ’90s, and people thought maybe the time had passed him by. He was always a rising star but wasn’t actually going to get there, and he actually wasn’t likely to get there either because the person who was thought to be the most likely nominee in the Democratic Party that year, 1992, was a man named Mario Cuomo.

At the last minute, he decided not to run. Because people thought Cuomo was going to run, a lot of the really good candidates also did not run, so Bill Clinton had a relatively modest field, I think he would admit, that he had to compete against, and he pulled it off, even though he had some challenges during the campaign, but had he not pull it off that time, I don’t think he could’ve run again, for a number of reasons.

He got lucky in some respects, he would admit. He also was aided by the fact that George Herbert Walker Bush had a Ross Perot helping to knock George Herbert Walker Bush down. Had Perot not entered the race, I think that George Herbert Walker Bush might have a pretty good chance of getting reelected.

[00:27:41] Jonathan: Another person you interview is the late great Ruth Bader Ginsburg. You typically don’t think of Supreme Court Justices as leaders. What made her different? What made her special?

[00:27:52] David: Well, she’s special because, in recent years, she became known as The Notorious RBG, in part, because she was seen as having come back from four bouts of cancer. She’s got a workout expert. She’s exercising every day, a diminutive woman, probably weighed 100 pounds, though, 98 of that were her brain, and she just was a person who was seen as having changed the world a fair bit but as an advocate and as a consistent fighter for women’s rights and somebody who was very articulate and easy to get along with.

People liked her, but I think it was her coming back from so many challenges in her life, physical challenges, and also having done so many things early in her life that changed the law that I think made her the only rock star we probably have ever had as Supreme Court Justice.

[00:28:36] Jonathan: Another person in the book, Coach K. You were Chairman of the Board of Trustees at Duke. I’m assuming one of the perks of the job is getting to go to some basketball games. How would you describe Coach K’s leadership style? Why has he been so successful over multiple decades?

[00:28:51] David: Think about it. He was the coach in the Army for a number of years, had a losing record. The first three or four years at Duke, he had a losing record, so he was fortunate that people gave him a chance at Duke, and then when he was at Duke, they didn’t fire him, as he was afraid was going to happen, and people were afraid that he just didn’t have what it took to be a major basketball coach, but in the end, he turned out to be a very good recruiter, which helps.

He also turned out to be somebody who really wanted to work with these young men, and even if they didn’t become pro basketball players, and most of the people he coaches do not become pro baseball players, they felt that he had given them leadership, he had become like a father figure to them, and he made them stronger individuals. Before the one-and-done phenomenon, he insisted that everybody have to graduate from Duke University before they would put a banner or pin it up on the rafters of Cameron.

That’s changed now because of all the ones-and-dones. He still tries to get these individuals to get their college degree if at all possible. He’s just a remarkable person, a great team leader, somebody that the coaches around the country I think really, really admire. I hate to be his successor.

[00:29:54] Jonathan: Yes, absolutely. You picture a lot of coaches being yellers to try and motivate their squads, the team. is Coach K a yeller?

[00:30:05] David: I am told by some players that he does, from time to time, use some words that you wouldn’t use on this podcast, but that’s how you motivate athletes from time to time and showing your emotions. John Wooden, by contrast, who was the greatest coach before Coach K was seen to be somebody that wasn’t a bit of a yeller, and then he was much more soft-spoken, but Coach K knows what it takes to motivate people, and it seems to have worked out, five national championships and three Olympic championships.

[00:30:34] Jonathan: Coach Krzyzewski certainly has made a very good living at Duke. He also has the shoe contracts, et cetera, but it’s not NBA-type money. Why don’t you think he ever made that transition to become a pro basketball coach?

[00:30:47] David: Well, I think he likes molding young men into professional players or into good, young citizens. He liked the university a lot. They were very nice to him. They stayed with him when his record wasn’t so great in the early years, I think pro basketball coaches don’t have the tenure that college basketball coaches often have, you can lose your job relatively quickly.

I think he didn’t want to– I think the closest he came was going to LA when Kobe Bryant was trying to recruit him, but in the end, Duke did some things that made it more attractive for him to stay. We built the practice arena for him and some other things. I think he’s pretty happy.

[00:31:24] Jonathan: Jamie Dimon, who also is in the book How to Lead, arguably the best bank CEO of all time, I think you refer to him as a once-in-a-generation phenomenon, was famously fired by Sandy Weill. Do you think he would have had the success he had without that happening?

[00:31:41] David: I would say that that was a transformative moment for him in his life. I did talk to him then and tried to recruit him to Carlyle, but I think he wanted to stay in the banking world, which he knew pretty well. Jeff Bezos was trying to recruit them as well. Jamie is as good a banker as has ever existed, just so smart, he knows all the details, motivates people.

I just really admire what he’s done in the banking world. He would be somebody that would like to be president of the United States, as he said publicly, but he recognizes that Democrats are not probably going to nominate the CEO of JP Morgan as their candidate, but Jamie has a lot of great skills. He’d be a good leader in government if he someday he wants to go in the government as, maybe, Secretary of Treasury or Head of the World Bank or something, he’d be great.

[00:32:25] Jonathan: You’re a student of history. If you could get any historical figure as a guest, who would it be, and what would you ask them?

[00:32:31] David: There’s no doubt that in my mind, the greatest American of all time would be Abraham Lincoln, he held the country together when there was a great temptation not to do, obviously, led the way to free slaves, and so forth. I would like to ask them, among other things, was he surprised that he, in the end, freed the slaves with the Emancipation Proclamation and had he done earlier, does he think the war would have ended much sooner because he did it, in part, to help with the war effort?

That was one of the reasons, but had he done earlier, would the war have ended much sooner? It’s an interesting question that you raise, and let me explain that what we’re doing now is what you would call an interview. What I’ve been doing is interviews, the interview format that we are now engaged him is relatively new in the history of mankind. There are no interviews that I’m aware of Plato, or Socrates, or Julius Caesar, Cleopatra, Charlemagne, so forth, and so on.

For whatever reason, this format developed, I would say, maybe in the early ’50s when The Tonight Show had Steve Allen on it and then Jack Parr, and they would bring guests on the interview. It was seen to be not just informative but entertaining and then ultimately, television shows did more and more interview formats, and then it became radio interviews, and podcast interviews, and now books and so forth.

I wish we could go back and interview William Shakespeare and say, “Did you really write these plays?” or ask King Henry VIII, “Why didn’t you just have a prenup instead of chopping the heads off of all these women that you didn’t want to stay with?” or Cleopatra, who was a better lover, or Mark Antony, or Julius Caesar. These are the things people want to know, but we’re not going to know the answers to these things, I think.

[00:34:14] Jonathan: I think it’s hard to respond after that one. You’re a student of history, your knowledge on a breadth of subjects is amazing. Buffett and Charlie Munger spend a lot of their time each day reading and reflecting. How much of the day would you say you spend just reading and thinking?

[00:34:29] David: Always not enough but I am a big believer in reading because, as a young boy, I didn’t come from a well-educated family or wealthy family, we didn’t have a lot of books at home. I’d go to the library and get as many books as I could and really fell in love with the new worlds that I was exposed to. Today, I’m very involved with reading efforts, literacy efforts, and so forth at the Library of Congress and the National Book Festival and so forth.

I try to read as many books as I can, at least one a week if not more. I have a trick, which is I’m often interviewing the authors. If you’re going to interview the author, you got to read the book. I, typically, am reading books on subjects I know something about, so it’s not that complicated for me. If I had to read a physics textbook, I wouldn’t probably get through it, but I do think that it’s a sad situation in this country that 40% of the adults are functionally illiterate, can’t read past the fourth-grade level. If you can’t read, you’re not likely to have a very enjoyable life compared to what you would have if you could read. We need to do much more about that.

[00:35:25] Jonathan: David Rubenstein, thank you so much for being a guest in The World According to Boyar, I loved hearing your insights and learning more about your latest book, How to Lead, thanks again for being on the show.

[00:35:36] David: My pleasure. Thank you for having me.

[00:35:41] Jonathan: I hope you enjoyed the interview with David Rubenstein. To be sure to never miss another World According to Boyar episode, please follow us on Twitter @BoyarValue. Until next time.

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