Why the CEO of Pencils of Promise Wants to Build a Team of Rule-Breakers

Michael Dougherty gives us a glimpse into his unique strategies as a leader.

In this series, Leader Board, we speak with CEOs, managers, founders and others who lead organizations to learn what makes them tick, what they look for in new hires and even where they eat lunch.

Imagine if the person interviewing you for a potential job asks: “When’s the last time you broke the rules?” You're likely to think it’s a trick question. But Pencils of Promise’s CEO Michael Dougherty wants to know the truth -- and to join his team, he wants to hear that you’re willing to break the rules. That's how he’s built his team of 125-plus employees at offices in New York, Guatemala, Ghana and Laos.

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In 2015, Dougherty joined Pencils of Promise, a nonprofit “for purpose” organization that builds schools, trains teachers and provides scholarships to students around the world. The organization's mission is help nearly 250 million illiterate kids learn to read and write.

“Seeing kids prosper from our work never ceases to energize us, and it's really what renews us,” Dougherty shared with Entrepreneur.

It takes vision, urgency and humility to accomplish Pencils of Promise's goals, Dougherty says. However, these qualities took time for him to develop. For most of his working life, Dougherty was in a completely different industry -- sales. With an MBA from Stanford, Dougherty went on to work for consulting firm Bain & Company, then held various leadership and executive positions at for-profit companies. By the end of 1996, he became chairman and CEO of music company Kindermusik International for 17 years.

Early on in his career, Dougherty describes himself as more aggressive, analytical and intense, while today, at Pencils of Promise, he says he's "become more relational, more patient and more willing to lead from behind.”

There’s much to learn from Dougherty and his 25-plus years as a leader. From working in sales to leading a nonprofit organization that has built 418 schools across the world, affecting more than 72,000 students and counting -- he's developed a diverse set of skills that have made him a successful leader.

From 25-minute meetings to building authentic relationships, we caught up with Dougherty to learn his secrets to successful leadership.

On the most important leadership traits:

“Leadership comes in a lot of different packages. My particular package is vision, urgency, doing things well -- some people would say excellence -- and humility. I think you have to have an inspiring view of the long term that solves the question 'why' -- why are we doing this together? Why are we working 80 hours a week? Why are we bringing our life energy to this work? I think the leader's role is to put words around that and to create emotion that keeps us together and gives us a unique sense of purpose.”

On leadership style:

“I think it's evolved -- early on I was more aggressive, analytical, intense. It was my training -- I grew up on the sales side of work and then [got an] MBA at Stanford and worked at Bain and Company. So pretty intense environments. But I've become more relational, more patient and more willing to lead from behind. I aspire to be what I would call true servant leadership.”

On habits that help him lead:

We do a morning huddle at 9:45 with my direct reports -- our senior leadership team. I think it's a really important way to just share our work, connect with what our goals are, where we're stuck and remind ourselves we're a team. Fifteen minutes, relatively informal, but a great way to launch the day.”

On challenges:

I think it's about how to build authentic relationships with each employee, with each team member. We don't call them employees.

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“When I was starting my career, it was more about how do you communicate to your workforce -- thinking of the ‘workforce’ as a singular entity. And now I think what's most effective is having truly customized relationships with each individual -- understanding their life situation, their family, what's important to them, what they're trying to achieve in the workplace -- and really spending the time to invest in that. It's challenging because there are a lot of people, there's a lot of other kind of work, [so] putting each individual personal relationship first is the thing I'm working on hardest.

“About a month before I started [as CEO], I came into our New York office and spent one half hour with each person and just said, 'Tell me about you and I'll tell you about me.' Hopefully there was a strong message in that, which is: ‘I care about you first as a person, not as a means of getting something done.’”

On the toughest business decision:

“In [September] 2001, we were in the process of selling the company that I was running at the time called Kindermusik to a private equity firm. 9/11 happened and literally the value of the sale dropped overnight -- I mean the world was stunned, much more uncertainty, much more risk.

“I decided to pull the deal and instead create an employee stock ownership plan, basically sell the company to employees. It was the best decision we ever made because we put our employees and the future of the company first.”

On the most important traits in a new hire:

“The first is raw energy level -- how much energy somebody conveys in the interview process. And the other is a willingness to break the rules. I see that as creativity, courage. And that's what it takes to solve big problems like 250 million kids who can't read. Generally I'm after people that ask for forgiveness rather than wait for permission.”

On recognizing employees:

“We do a 'Wednesday Win,' a global e-blast that calls out work that's going on, [and] gives recognition to our wins. In addition to that, personalized feedback in the moment I think is the most important thing -- giving people specific, timely recognition of what works so they know how to do it again. And then just saying thank you.

“Also connecting the wins to the why. Inspiration, vision, the 'why' that we're doing things -- great that we won but how is that connected to us actually being more effective in why we exist.”

On team-building:

We do them at the local level. Each country has a series of retreats [and] team exercises that are customized for that country. Here in New York we do them each quarter: we take about two-thirds of a day each quarter, meet as a team, reflect on the last quarter's goals [and] how we did.”

On unique office rituals:

“We do town hall meetings each month, which are basically an ‘Ask Anybody Anything’ approach -- think of a true New England town hall meeting that brings people together in the community.

“We also have waffles on Friday where once every month or two we literally make waffles [in the office].”

On managing meetings:

“I like the 25-minute meeting. That's my staple. It gives me five minutes to transition to the next meeting. I'm very focused on the cost of a meeting, meaning if we have a lot of people in the room it's a really costly thing because there's no other individual work being done. So we make it as short as possible and with as specific outcomes as possible.”

On scheduling:

“I tend to do donor meetings at lunch and late -- those are a first priority for me. I usually have staff meetings morning and early afternoon. I do email first thing, at lunch, last thing, as opposed to throughout the day.”

On office setup:

There are no offices, there are pods of about six people each. I sit in one of those pods, across from my COO. I used to be in an office but I felt like I was missing a lot of organic conversation.”

On a strong company culture:

Trust -- care for the individual top down but also among peers. We care about each other as people. [And] I would say [a] collective purpose.”

On cultural mistakes:

“Getting into solutions and the work too quickly as opposed to putting people first. I am, by nature, a problem-solver. And when I came in as CEO, I jumped right into the work and wanted to start solving problems. I think culturally it would have been more important to continue investing in people to build trust. So now I’m trying to balance those much more effectively, and recognizing that you really can't move forward until you have trust in place.“Stephen Covey used to say, ‘If you want to go fast with people, start slow.’ And I think it's really valuable.”

On his biggest cultural win:

“Seeing kids prosper from our work. That never ceases to energize us and it's really what renews us. This is really hard work, [and] what renews us is seeing a new school open and kids screaming to get in and wanting to be in control of their lives.”

Related: Why This CEO Plans Out Every Minute of His Day -- Even Time to Think

On his role models:

Churchill. He said, 'The darkest hour is just before the dawn,' which teaches me that when things are the toughest it's actually just before things brighten.

“And one is a little known leader, he was my high school English teacher, Arthur Naething. He ended every single class the exact same way, with the words, 'Go forth and spread beauty and light.' I think of those words almost every day that I come to work.”

On his favorite leadership books:

Long Walk to Freedom [by] Nelson Mandela. Here's a man who dedicated every soul of his being to helping others.”

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