This week continues our special mini series where Matt sits down with the four Arkansas Business Hall of Fame inductees, continuing with George Gleason II. George is chairman and chief executive officer of Bank OZK and an Arkansas Business Hall of Fame Inductee for 2022.
He shares how childhood chores on the farm and in the family business shaped his career and his bank. He learned bookkeeping at age 12, planned his parents’ estate at 16, and then purchased the controlling interest of Bank of the Ozarks (now BANK OZK) at age 25! He also highlights how listening, collaborating and continually improving created alignment in the mission, a better customer experience and more opportunities for employees.
George Gleason 0:00
Whether you're running a business or running a business school, to running a football team or a family, you know, having everybody working the same direction with the same mission in the same goal in the same playbook is is just critically important.
Matt Waller 0:12
Excellence, professionalism, innovation and collegiality. These are the values. The Sam Walton College of Business explores his education, business and the lives of people we meet every day. I'm Matt Waller, Dean of the Walton College and welcome to the be epic podcast. I have with me today. George Gleason, Chairman and Chief Executive Officer of Bank OZK. He has been the company chairman, CEO and/or president since 1979. And in February, he's been inducted into the Arkansas Business Hall of Fame. Thank you so much, George, for joining us today. Really appreciate it.
George Gleason 1:01
Thank you, Matt. It's a pleasure to be with you.
Matt Waller 1:04
You so much deserved in my opinion to be inducted into the Arkansas Business Hall of Fame. What you have accomplished with Bank OZK, is quite remarkable, especially when you think of where you came from. I'm wondering George, you know, at a young age you were working on a farm, you grew up on a farm in Dardanelle, Arkansas. And at the age of seven, you started earning money filling up water troughs for farm animals. And then by the age of 10, you were working long days as a farm laborer. Do you think that that kind of work helped your work ethic and your perspective on the world?
George Gleason 1:49
Absolutely. You know, I had two Depression era parents, my father was a graduate of the University of Arkansas in 1933. And so his last year of high school was 1929, the, you know, Advent Year of the Great Depression. And my mother was a graduate of Hendrix College a year or two later in the mid mid 30s. So they grew up in the Depression when, you know, almost everybody had nothing. And hard work was just essential to getting by and surviving and having enough to eat. From my earliest years as a kid, and the same was true for my three older sisters, working hard was just expected and just part of it, and amazingly, none of us kids resisted that. We embrace that. And my father, and mother were serial entrepreneurs. They were very thrifty, very hard working and had a number of very small but successful businesses. And as a kid, I had the privilege of working in all of those businesses. And as you mentioned, at age seven, I made a quarter a day after school in first grade going out to fill up all the water troughs for all the cattle around the main barn there. By the time I was 12, my dad was taking me into his office at night, teaching me how to keep the books for the various companies. So I began to learn bookkeeping at 12. somewhere probably around age 14, I started working on all the little different business tax returns, that my dad had filed, by the time I was 16, I was becoming sort of proactive and went to my parents and told them that if they didn't take steps to plan for their estate, they were going to have a significant estate tax burden. And my dad in true form of wanting to use every experience as a child to educate me said, you study what we should do, come up with a plan and present it to me, which I did. And then he said you go sit down with family lawyer and tell your plan to the lawyer and if he agrees, then we'll go forward on it. So at you know, 16 I had the rarefied task of helping plan my parents estate. So my father and mother, who was equally involved in businesses with my father, and in some respects and even more potent force in the family businesses than my father. They were both very intent on teaching me as a child, all sorts of experiences so I grew up in a very adult sort of setting.
Matt Waller 4:58
George I'd like to skip ahead a little bit, and talk a little bit about Bank OZK. And I'll, I would like to come back to a few other things about your growing up years. But I certainly would imagine all of that learning about bookkeeping and preparing tax returns and then the estate planning really prepared you for thinking about business in a broad sense. But at the age of 25, you purchased a controlling interest in Bank of the Ozarks in Ozark, Arkansas, in 1979, with a $10,000 downpayment and a $3.6 million loan. Now, I know at that point, you had already been practicing law at the Rose Law Firm, would you talk a little bit about how your experience with the Rose Law Firm may have led you to make this purchase or help you make this purchase?
George Gleason 5:57
Yes, well, I'm happy to do that. I would also tell you at the at the outset that purchasing controlling interest in a bank with a large amount of borrowed money at 25 is probably not the wisest strategy, it worked well for me. But I tell people all the time that if I'd been 28, instead of 25, I would have been mature enough to know it was crazy. If I had been married, instead of single, I would have had a wife who said honey that you've lost your mind, don't do that. And if I had been female instead of male, I just would have had the innate good sense to realize that, that that was a crazy thing to do. But you know, a single 25 year old male, it seemed like a reasonable thing to, to try today. So fortunately, it worked out. But the the key to that working out for me was was the background that I had. And that included having the work ethic that my parents had instilled in me and having worked in all of those different family businesses. I knew something about the poultry business. I knew something about the cattle business. I knew something about the grocery business and hardware and dragging business because I worked in all those businesses that my parents had, and had done the books on those businesses. So that was great preparation. And then I went to Hendrix College and got a very heavy dose of accounting and economics. I took every accounting and economics course they had and also went to Arkansas Tech University, the summer right after my high school career and picked up a couple of accounting courses and a couple econ courses, and then went to Oklahoma State University between my first and second year of college and picked up some accounting and finance courses there. So and I graduated from Hendrix in two years. So I was 25, was a little more advanced for me than most kids who are 25 because most kids have spent four years going to college and I did it in in two years. And then I had a law degree from the University of Arkansas there in Fayetteville, which was was great experience and then worked at the Rose Firm. So I had accounting background and economic background, a law background and practice in a commercial space and in the legal practice at Rose Firm for about a year and a half before I bought the bank, so I was unusually well equipped. Having really started in my family's businesses at a very early age to step in to a role as Chairman CEO of a small bank. And and the reality of that Matt is being the Chairman CEO of a small bank is a bit of a business laboratory anyway, because you're in a community your bank is the economic lifeblood of that community. You you have in a small town interaction with all the business people in that community. So it's an opportunity to learn everything on a relatively small scale before your career and your company advances to be a major player on the national or world stage.
Matt Waller 9:39
You also took on 28 employees, two locations. That's a lot of responsibility. All of a sudden, I know you had been working, growing up in your parents' small businesses, but jumping to 28 employees, that's a big jump. Was the transition difficult or do you feel like you were really prepared for that?
George Gleason 10:04
Well, I probably wasn't as well prepared for it as I should have been. But, you know, it's it's a product of being 25 years old and, and doing that job. And it's interesting, the things that you learn serendipitously early in your career. I arrived that morning after closing the transaction late night the night before I arrived at the bank. And I'd called a meeting for my new staff at 7:30, to introduce myself and meet them and, and I gave them a little speech. And as part of that speech, I said we will probably never be the largest bank in Arkansas, but if we all work hard, and we strive for excellence in everything we do, and that striving for excellence has been a hallmark of our company for my 42 year career, and that working hard has been a hallmark of the company for that 42 year career. I challenged them that we could become the best bank in Arkansas, and that quality was more important than quantity. Another really interesting thing that's just been a core tenet of our company happened about 30 minutes after I finished that speech. I went to my office and I was thinking, gosh, I wonder what the Chairman CEO of a bank does at 8:30 on the morning? I really didn't know what to do next. So I was sitting in my office or playing with the paper clips and my little paperclip tray there and thinking what what should I do next? And several officers appeared outside of my office and two men and a woman and went to my office door and invited the lady in and said ladies first come on in and she sat down, I said, what, what is on your mind? And she said, well, we've got this opportunity and I want to talk to you about it and explain it to me, and I want you to tell me what you want me to do, how you want me to handle this? I listened to her for a minute and I said, well, okay, I'll do that. I will tell you what I want you to do. But before I do that, I want you to tell me what you think the answer to your question is. And I want you to explain to me why you think that's the right answer. I, of course, realized that she knew a lot more about banking than I did. And and I was very interested in, in her thoughts and opinions. So she recoiled at that, because the fellow who had bought buying from was was a much older gentleman, and he was a very experienced, knowledgeable businessman. So he he knew all the answers. So the staff was just accustomed to asking Carl the questions and Carl giving them the answers. And this very collaborative sort of approach was new to her. But she thought for a minute and she said, well here's what I think we ought to do. And here's why I think that's what we ought to do. And I asked her several questions, we agreed upon a plan of action and she left. And then the next guy came in and he said we've got this problem, I need you to tell me how to handle and I thought well it work well once, why don't I just try that again? And I did that all morning long with everyone that came in my office, explained to me what you think the right answer to your question is and and tell me why you think that's the best solution we can come up with. And I realized at lunch that, purely by accident, I'd stumbled on to the reality that if we harnessed the good ideas, and the the attitude, the wisdom, the experience of every single employee in the company, and we made the decisions, not based on what one man at the top thought, but what really was a accumulation of wisdom and attitude from the staff that we could make some really good decisions and do some very powerful things. And I tell my managers every day that some person on your team knows something about our business, our customers, our properties, whatever, that nobody else on your team knows. Even the newest members of your team, who may be first time employees, just starting their career, have some sort of knowledge or information that if you can ferret it out and harness that and and weave that into the collective tapestry of thinking of our company will be a better company for it.
Matt Waller 14:53
Well, you know that story, the fact that you figured that out at such a young age 25 is quite remarkable. But it also struck me, I, I think a lot about leadership, I know that building trust is really important, and for a leader to be successful. And you know, a lot of the research says there's three key things to build trust. One is you got to be competent, people want to know that you know, what you're doing. Two, the person has to know that you have their best interests in mind. And three, they've got to be confident that you really are interested in them. And I think that in some ways, you're questioning them early on, what solution do you have, really draws all those out in a person, because it shows very clearly that you do care about them, you're interested in them. They're important. But the other thing I thought of that's on the one hand, so it builds trust. The other thing it does is sometimes when we, we might know it, the answer to a question, but actually articulating it to someone else, helps us think it through more clearly, and start forming a mental model of whatever it is we're talking about. But also, the other thing, I think that it probably does, one challenge for all leaders is gaining alignment amongst people getting people going in the same direction. This certainly does that. And I think I think a lot of people know that that's a good idea. A lot of people in practice, don't do it. Because there's a temptation to take a shortcut, and just give the answer.
George Gleason 16:50
I think you're right. And clearly, having the entire team on the same page is, is just essential. And that, you know, whether you're running a business or running a business school, ot running a football team or a family, you know, having everybody working the same direction with the same mission in the same goal in the same playbook is is just critically important. And as a company grows, and as a company evolves, it gets harder and harder to do that. And for example, in our company from 2010, through 2016, we made 15 acquisitions, seven failed banks that we acquired from the FDIC, and then eight more traditional m&a transactions that followed that several of banks that were stressed from the Great Recession and continued to have lingering problems and several very healthy banks. So we had this mixture of different cultures and experiences in the company. And it was not harmonizing to a great, consistent experience in the way we performed operations and and dealt with our customers on the retail side of our company. So I challenged our team to fix that. And I took a leadership role in that and saying I was going to visit with every office and talk with every employee in the company. So over an 11 month period of time, I visited every one of our almost 260 offices at the time. I spoke for about five minutes thanking and recognizing each office on some particular thing they had excelled in and accomplished really well. Of course, we had all the metrics on all the performance of all the offices. And then I tell them, I said I'm here really to listen to you. And I want to ask you two questions. What are we doing or not doing that is impeding impairing your ability to deliver an extraordinary experience every day to every customer? And what are we doing or not doing that is making your job more difficult, less enjoyable, less fun, than it otherwise has to be? And I said, be honest, don't worry about hurting my feelings. I'm here to understand the truth and hear the truth. And if we're doing stuff wrong, I want to know about it. So 11 months later, I had a list the team and I who were doing this had a list of over 1300 recommended enhancements to the way we did business and a daunting list. And by the time we visited the 260 of office, we had already implemented probably six or seven hundreds of those checks throughout the company, and have continued to work on the list and the ensuing years. And you've probably made well over 1000, maybe as many as 1100 of those enhancements throughout the company. The other things are things that require major core system, reprogramming, and are fairly heavy lift things to implement. But a lot of those things are in the future. The result of all that has been, we've achieved, to your point, great alignment, and consistency in our operations, which has massively improved the experience for our customers, and also given our employees a clear career path, an opportunity path and a consistent level of training experience and policies and procedures. It was a major undertaking, in 2019 I was at 173 cities and nine countries on business and on the road, 153 days. And the biggest part of that was this, what we referred to as Back to the Future tour. We had to go back to the roots of our company to our branches and our employees in order to design the future of our company. And that was a transformational thing. You know, we built a great company, and we were among the most profitable banks in the United States. But the goal was to figure out how to be the next great company, that what we had done up to that point was was wonderful. But we were just we felt like we were just getting started. And we wanted to know how to build a great company.
Matt Waller 22:03
I love that story. I mean, you know that, that idea of going out to everybody and getting input, just the act of that. You know, there's there's a, there's a phrase procedural justice that's used in business, not in the legal sense, but in the in the business sense, meaning that procedural justice means that by the process of doing something, people feel that it's fair. And it turns out, there's a lot of research that shows that when you involve other people in a transformation, like you're talking about, really getting their voice, even if you do the opposite of what they're saying, they feel it was a more fair process. But in your case, where you implemented all of these, a bunch of these ideas to create the next iteration of your company. That's very powerful. We were talking about earlier about getting people aligned and how you're getting your employees to give you the answer does help get alignment, for sure. But this sort of thing also generates a lot of motivation in people because they start feeling like they're owners, they're they they're really this is a part of who they are, as well.
George Gleason 23:38
Well, you're exactly right. And that was that was a huge upside to it, allow our team to understand that they were valued. It was important to senior management to come out and see them and hear what they had to say and their opinions, or values. So yes, you're, you're you're right. You know, sometimes when you lead a company, you have to lead from the front. And that's the way most people think about leading, you're the guy out front, you're leading the charge, and you're the foremost person exerting energy and effort and aptitude on on everything. But sometimes, you can actually get more energy leading alongside it. I realized that after about 10 meetings, I was first astounded at how much constructive comment and criticism we were getting. And then I realized that if if I would take a role shoulder to shoulder side by side with these team members that they were going to take us to a higher level of performance. So I started telling everybody when I would walk in, and the manager would introduce me, this is Mr. Gleason. I said, it's not Mr. Gleason anymore, we're all teammates. We're all in this together. I'm George, you're Susie, you're Bob, whatever. And so I had all of our team members throughout the company began to call me George, instead of Mr. Gleason. And, you know it, it created that extra level of buy in an extra level of camaraderie. And we really are in this together. And it it, it leveled the playing field, so that the quality of input, openness greatly improved. And, you know, I've also learned over the years, and particularly now, as I'm trying to advance more and more team members to higher level so that when I retire in 15, or 20 or 30 years, there's going to be leadership in this company to carry on that sometimes you have to lead from the rear. And you have to put people on the point and help those guys make great decisions and, and be there to back them up if they need back up and give them a little coaching if they need coaching. But you have to lead from rear so it's it's the hardest to do, but it's most important.
Matt Waller 26:29
Well, you've taken Bank OZK, to an incredible level of market cap of over almost 6 billion over 250 offices. You're in Arkansas, Georgia, Florida, North Carolina, Texas, South Carolina, California, New York and Mississippi. You I may have missed one, I hope I didn't. But you've really taken this company to an amazing level. And I would like to know, I know you've done some very. So we've been talking a lot about leadership. I'd like to move to strategy a little bit. And I know you had a particular strategy that really drove a lot of your growth. Would you mind speaking to that a little bit?
George Gleason 27:23
Well, we've we've had different strategies in different areas of the company. But what has really put Bank OZK on on a national map as a as a national leader, is the expertise that we built in construction and development lending. So you mentioned all the places we have offices, but you know, from time to time, year to year, we're the largest construction development lender in New York, Miami, Los Angeles. You know, a few years ago, they're the top 10 real estate projects done in Los Angeles, we had the first third, fifth, seventh and eighth largest projects in Los Angeles. So we were we were just a dominant player in the market that year. And we spent, like, X and all over the country, you know, our businesses truly national. And, and we're at the top of that business, whether you're in New York, or Miami, or LA or Phoenix, or Chicago or Seattle, year to year, we're not there every year. But in all those studies, we've been number one in one year or another.
Matt Waller 28:43
So this is really good for the listeners to think about a minute. We have a company that started as acquisition of Bank of Ozark in 1979, by a 25 year old Arkansan who grew up on a farm. And now when it comes to, you know, construction and development lending that they are incredible. They're in many more places than I listed in terms of offices. And as, as George said, you know, they're the largest construction development lender in New York, Miami, Los Angeles, depending on the year, they've been on top of the same the construction and development lending in Los Angeles. They've been first, third, fifth, seventh, eighth largest projects in Los Angeles. And this is a company that's in Arkansas. We have other Arkansas based companies that have done amazing things as well, but I feel like a lot of times students in particular aren't as aware of this accomplishment. So that's why I wanted to pause and highlight what you were saying it's, it's quite remarkable what you've accomplished there.
George Gleason 30:08
You know, we Arkansans sometimes I think tend to have a bit of an inferiority complex that is unjustified. And you know if you look at Arkansas companies and Arkansas is a small state, I'll give you that but there's there's nothing deficient about the aptitude, the intellect and the capabilities of our our people here. You have a company that has been at times the largest retailer in the world in Walmart. You have a company that has been the largest protein producer in the world in Tyson's. You have one of the most innovative transportation and logistics companies in the in JB Hunt. And you could go down the line at other companies, list other companies that are regional or national leaders in Arkansas. And we've managed to carve out that national space in construction and development lending by building expertise, that allows us to be the lender of choice on the most complex and biggest construction and development projects in the company, the bigger the project is, and the more complicated it is, the more likely we're going to be the bank of choice or the lender of choice for that project. Because we built expertise. So as your students are, are thinking about my story and our company's story, hard work, a focus on education, putting all the tools in your toolbox from an educational and experiential ability, those have been key and then just setting your goals on being being the smartest, being the most focused on excellence, your your aptitude, your energy, your ability, are going to determine your limitations. It doesn't matter whether you're based in New York, or Los Angeles, or or Little Rock, our Dallas, what ultimately is going to determine your limitations is your work ethic and your aptitude and your ability and your willingness to put in the hours and, and make the priority choices about what you want to do with your life. So your your students who are listening to this, and I'm so thankful that we have such a great business school in Arkansas we have in Fayetteville, so thank you for that. But everything that your students need to be great is in that scope. And is within them.
Matt Waller 33:07
Well, George, thank you for taking time to visit with me today about this, I think the students will learn a lot from the center view. So we really appreciate you and we're proud of you for what you've accomplished and and once again, congratulations on being inducted into the Arkansas Business Hall of Fame in February.
George Gleason 33:29
Well, thank you, Matt, and thank you for what you guys are doing. You know, we are employing high caliber people all the time. And we are so thankful for the work that you and the rest of the team at university are doing producing the team members who are going to lead our company to a higher and higher level in the years and decades to come. So thank you. It's great to be with you today.
Matt Waller 33:56
On behalf of the Sam Walton College of Business I want to thank everyone for spending time with us for another engaging conversation. You can subscribe by going to your favorite podcast service and searching. Be epic BE EPIC