This is a short story about how the former CEO of a very large company completely changed my mind about business. I’ve always thought of a CEO fitting some image of a larger-than-life figure who purposefully maintained an image of an infallible leader. Vulnerability and humility were not options; the CEO had to be rock solid at all times. Sadly, this same mentality seems to have worked its way down from the world’s largest companies all the way down to small companies the world over. Many company leaders take the flawed approach that they need to come across as all powerful, all mighty, and all knowing.
Fortunately though, it’s not always the case.
In 2008, an S&P 500 company called Prologis saw the value of its stock drop over 90%. Investors were panicking, the executive team was in disarray, and the board was left with no other option than to approach a former employee about taking over as CEO.
That employee was Walt Rakowich, and he was no ordinary employee. For one thing, he had worked the majority of his career at Prologis and was previously the president and CFO before resigning. Walt came in and swiftly turned the company around, eventually spearheading a merger with a competitor named AMB in 2012. Prologis is now the largest industrial property owner in the world, and coincidentally the stock price has gone from around $2.00 / share in 2008 to $160 / share at the end of 2021.
I’m keenly interested in industrial real estate and had also recently read Walt’s book, Transfluence, so I asked him if he would be interested in sharing his experience turning the company around. I was ecstatic that he agreed, and in preparation for the interview I read his book a second time.
In addition to studying his book, I’ve also been an avid follower of Prologis (both as a stock holder and a reader of their regular market reports) so I thought I had a good idea on what to expect during the interview. And even though I sensed Walt was not the typical know-it-all corporate executive, I didn’t grasp the full extent of his leadership skills until we had the chance to chat.
First, Walt is humble. Even though he has an MBA from Harvard and led a company from the brink of financial ruin to the top of the real estate world, I saw first hand how Walt walks that walk. By showing humility Walt was able to instil a high level of trust within the company and this was instrumental in changing a damaged culture.
Walt was remarkably gracious with his time and spent a full hour answering my questions as well as a number of other ones that came in from the live event. It is an interview I won’t soon forget.
If you want to see why I’m such a big fan of Walt’s, here’s the link to the full video: