Why Smart Failure Wins feat. Michelle Lewis ’05

[00:00]Brian Jackson: Welcome to Owl Have You Know, a podcast from Rice Business. This episode is part of our Pivot Series, where guests share stories of transformation in their lives and careers.

Michelle Lewis has built a career around transformation of companies, teams, and even her own career. As a seasoned board director, private equity principal and founder, she's led strategic transitions and overseeing $10 billion in acquisitions across 30 countries in the energy and industrial sectors. I sat down with her during the Women and Leadership Conference to talk about the power of soft skills, breaking into board service, and how she went from a bachelor's in fine arts to the C-suite. Plus, she shares one of her secrets to staying organized while juggling it all.

Joining us today is Michelle Lewis. Michelle, thank you for being here.

[00:53]Michelle Lewis: Happy to be here. Thank you for inviting me.

[00:56]Brian Jackson: So, we're here because of the Women in Leadership Conference. I want to know, what are your thoughts?

[01:01]Michelle Lewis: On the conference today? Well, I think it's fabulous. I actually had not realized that it had been around. 25 years is a really long time. And I graduated in ‘05, so I feel like it's, you know, the same conference, but even better, if that makes sense.

[01:22]Brian Jackson: It does. And I mean, things have changed so much every decade.

[01:25]Michelle Lewis: A lot. Well, the university in general.

[01:26]Brian Jackson: Yeah. So, your career is just so interesting. I was looking at your background — fine art to being on board leadership, across industries, across countries (30-plus countries), $10 billion worth of deals. What's driving this? What puts you in these positions to, kind of, take on these challenges?

[01:49]Michelle Lewis: Well, everyone is different, so I think I've just been incredibly lucky, incredibly fortunate, I mean, if you really have to boil it down to that. And that sounds, kind of, like a silly answer, but it really is true. I think I've been in a fortunate position to wherever I am to be, you know, working really hard and trying to do a good job and be a good person, and then, through that, have found that other people have come to me and said, “I see something in you that, maybe, you don't even see in yourself. And we think you can do X,” which might be completely different to what I was doing at the time.

And that's typically been the case throughout my entire career. So, the majority of my career, I was just going along to get along, and then someone else came along and said, “We're going to move you over here,” either a different industry, a different city, a different function, and all, really, through someone else's vision. And it wasn't until 2003 when I joined to go to business school. That was really the first time that I said, “Okay, I am going to make an active choice to do something in my career.”

[03:10]Brian Jackson: Okay. So, then it became this intentional effort to go the next step.

[03:17]Michelle Lewis: Yes.

[03:18]Brian Jackson: Okay, understood. And I mean, when I hear your story of luck, it almost sounds like it's all predicated on a lot of hard work and effort.

[03:24]Michelle Lewis: Yes. I mean, I think I'm a typical Gen-Xer, right? So, I had no idea what I was going to do when I went to college. I had no idea what I was going to do when I left college. And so, I just did a lot of things. I did whatever made sense and whatever people said, “Hey, we think you could do this.” And so, it wasn't until going to business school and then I got recruited to a role at a consulting firm called Alvarez & Marsal, and I went to that role and I loved it, and I fell in love. It was like, “Oh, my god, this must be what my friends experience, because I fell in love with my career.” And I moved from consulting to restructuring while I was there, which was like being a Green Beret in my mind, or an emergency medical, you know, physician at the county hospital, because you are trying to save your patient. And it was 24/7/365, go, go, go, full of adrenaline. And I’ve loved it.

[04:37]Brian Jackson: And you earned your stripes, right?

[04:39]Michelle Lewis: I did. I earned my stripes enough to stay there, until I realized that a lot of people were… either they weren't lasting very long because it is so intense, or they were having challenges with their families. Because you're gone, you're on the road, right? I lived in three different cities while I was with them for a few years. And I was married. And, you know, my husband and I would see each other on weekends when we could. So, that leads to, you know, challenges if you do that, I think, long term.

[05:15]Brian Jackson: So, the part I wanted to focus on, too, you talked about, kind of, these mentors that came in and saw parts of you that you didn't necessarily see yet. You know, as you've become a leader and you have these advisory positions, you know, how are you mentoring other people?

[05:32]Michelle Lewis: So, my mentors and the people that saw things in me, each one really, kind of, taught me something different along the way, right? Unbeknownst to me, sometimes. So, you don't always know in the conversations that you're having what you're going to get out of that conversation or that relationship.

And so, a lot of that came through just conversations. One of the things, I think, that I learned and I do as well is just conversations where I'm asking a lot of questions, not necessarily telling them what the answers are. And it's the same thing in a board and advisory role, right? I'm not there to tell the CEO what to do. I mean, if I'm telling the CEO what to do, we don't need that CEO. I'm there to ask questions.

So, it's the same thing that my mentors did for me — asking questions that may highlight there are different ways, different paths, different answers for me to consider. That's the same thing that I'm doing when I'm in an advisory role or a board role.

[06:42]Brian Jackson: So, the pathway to being on a board, I know that's what you were talking about with today, but what does that look like? And how do you, at the start of your career, actually say, “I want to be on a board,” and then get there?

[06:55]Michelle Lewis: So, first of all, there is no one right path. There is no one path for anybody, right? There is just not. And hindsight is 2020. When I first joined… I mean, I've been on public company boards for, you know, eight years, nonprofit boards for 30, and private boards for seven. So, a long time. When I joined my first board, I really didn't know what I was getting into. I didn't know to ask for D&O or director and officer insurance. I didn't know that it makes sense to set yourself up as an LLC, just, you know, for legal purposes, to ensure that, if the board gets sued, you know, you, kind of, distance yourself from it.

There's a lot of different things. I didn't know to ask those things. I didn't know who my peers were. I didn't know what the networks were. Like, I didn't know. I was somewhat naive. But I hadn't prepared. I didn't know I was going to be a board of a director, right? Someone came to me and said, “You meet all these criteria, you know. We want you.”

So, to go back to your question, well, how do you get there, I mean, today when I am talking to men and women who are interested in board work, I would say, “You know, you can start it a lot earlier in your career, in your thinking, so that you can prepare to be a potential candidate.” There are certain things that are required for every board member, right? You have to understand the role of a fiduciary. You have to understand how to really delve into all the financial statements. You got to know how to read a P&L. You need to understand M&A, you know, from due diligence through integration. You need to understand a lot of different areas of how to run a business, right? The levers that you pull to increase or decrease revenue or margins, or EBITDA.

So, if you're interested in a board, you know, one of the number one things is to make sure that you have that experience or that exposure. It doesn't mean you have to be a CFO or a CPA. You know, you can be in corporate development, right, and get a ton of experience there. You could run a P&L. There's a lot of different ways to get there, but you have to have that, right?

The other thing I would say is second most important, maybe these are actually reversed, is emotional intelligence. So, when you walk into a boardroom, first of all, it's noses in hands out, which means the CEO is the one doing the work. You're just there to ask questions. You're there as a fiduciary for all of the shareholders.

But you're also there as a team member. It's a small group, right? Eight to 12 people. That's a small group to walk into to not ruffle feathers or make waves in the water. So, you have to be able to walk in and become a part of that team, be able to speak with confidence, ask questions with confidence, but not completely upset the apple cart, because if you do, then they are stuck with you for a long time. And no one wants to be in that kind of situation, where they're thinking, “Gosh, I wish we had never asked this person to be on our board.” You don't want to be that person.

[10:15]Brian Jackson: So, how did you learn that lesson?

[10:16]Michelle Lewis: Oh, gosh, that's a really good question. I think, mostly, through observation. At least the first few board meetings… I did actually talk to our chair and just, you know, ask for feedback, like, “How am I doing?” Because I was a new board member. “You know, am I doing this right?” Which sounds so naive today, because now, everyone has so much exposure to conferences like this and different board organizations for networking and there's so much content available and, you know, women, corporate directors and all these different… and NACD. You can take classes. You can go away for a weekend and learn everything you need to know.

But I don't know if it didn't exist or I just didn't have it available to me at the time. So, it meant I had to read a lot, sign up for every magazine that I could related to boards, private boards, public boards. I joined every single organization. I do remember my husband being like, “Oh, my god, how much money are you spending on all these board organizations?” I have to learn, right?

[11:23]Brian Jackson: Yeah. So, Michelle, I'd love to know, you know, there's a pretty substantial pivot in your career from fine arts to private equity, you know, can you tell me about the moment where this came to? And what was the deciding factor?

[11:37]Michelle Lewis: Well, did you guys hire your fact-checkers? Are you sure? No, I'm just kidding. 

[11:44]Brian Jackson: Just kidding. We're going to have words.

[11:47]Michelle Lewis: I mean, it's unbelievable to me. That's why I say that. That is totally true. Really, the first part of my career was, after art school, I went into advertising and marketing. That was, kind of, what made sense at that time, at least in my career.

And my first job was $19,000 a year, which I hear today and I'm like, “Insane.” And I thought I had hit the jackpot, by the way. That was crazy, ain’t that right? From that point, as I said, you know, I took, you know, any opportunity that, kind of, came along. I was just like, “Why not? I'm going to try everything. I'm young. I can do anything, right?”

So, that took me largely into what I would call the soft skills. So, executive recruiting, facilitation, leadership development. And my mind was pretty blown by the fact that there were organizations that were teaching people how to be leaders, how to run a meeting, how to facilitate a conversation, how to coach a difficult conversation. All of that language was really mind-blowing to me.

So, I went from that organization and was recruited to another organization called Alvarez & Marsal when I was in business school. So, I took all these soft skills that I had learned for many years and said, “Okay, you know what? It's time to go learn some of the hard skills,” because at the time, I was watching a lot of my friends who had graduated in accounting and who were investment bankers. And they were really successful. And I was, in my mind, successful, but it was a different level in the game.

So, I felt like I had to pivot. I had to go back to business school in order to, kind of, get into a different lane. And so, I did. And so, business school led me to Alvarez & Marsal. And that was really very financially heavy, very financially laden, meaning that, when we were doing restructuring, a lot of it was looking at how we can take… it was cost-cutting, right? I mean, how do you take $200 million out of a budget? How do you take $2 billion out of a budget? Which meant really poring through the financials, looking at what you can cut that won't negatively impact the operations of whatever it is that you were trying to cut.

So, that was really the pivot for me into what I would call finance. And I joke that I left there and eventually ended up working for the president of a division whom I met, actually, at Rice Business School, doing M&A. And he said it's really very similar. And it sounds silly to say that, but when you're looking at how to cut costs in an organization, it's the same documents, right? You're looking for income statements. You're looking at your balance sheet. You're looking at your cash flows. Where are you spending the most money, right?

[14:53]Brian Jackson: Yeah.

[14:54]Michelle Lewis: And then when you're looking at a deal, when you're looking at analyzing whether or not you want to buy a company, yes, you're looking at their operations; yes, you're looking at their people; you know, what differentiates them; what are the products, et cetera. But you're also looking at their financials? And are they healthy? Are they not healthy, right? Am I willing to pay what the multiple is in the market for the last three years of EBITDA, on average, right?

So, it's a lot of the same documents. And so, when he looked at me and said, “I think you could do this job,” he based that on what I had been doing. And that was really, you know, another key pivot for me. Then, I'd spent several years with him growing that business from $600 million to close to $6 billion when we went public. And we did a ton of acquisitions. That's at NOV, National Oilwell Varco, and then DistributionNOW, which was a phenomenal playing ground for me to learn a lot, not just in M&A, but how to work with a team, how to build a team to work with you because you can't do it all, how to learn to be more efficient so that you can do more with less, whether it's through technology, whether it's through people, how to work globally, you know, how to hire people in other countries, how to make sure that, when you're doing a deal in another country, in another language, you know, things don't go south.

And so, I think, because I had been there for so long, again, someone else called me and, for two years, you know, took me out to lunch, asked me questions. And I, kind of, was like, “Why are these people taking me to lunch all the time? What's going on?” Well, that ended up being a private equity firm. And eventually, they said, you know, “We want you to come build our origination practice. And can you come do that for us?” And that's how I got there.

[16:46]Brian Jackson: What an interesting career, Michelle.

[16:49]Michelle Lewis: Thanks.

[16:49]Brian Jackson: And what I like about it, it's like…

[16:51]Michelle Lewis: It's just my life. So, it doesn't seem that interesting.

[16:53]Brian Jackson: It's like you're open to the conversation. You sit down with folks. They say, “Oh, yeah, here are the skill sets. This is what we're looking for.” And you're finding, basically, cross-functional uses of things you've already done.

[17:05]Michelle Lewis: I mean, I've never been… you know, I don't know. I guess I, kind of, attribute this to my mom when we were little. We had a farm and she would, like, throw vegetables in this little red wagon and say, “Okay, go down the street and sell the vegetables and see what you can get.” Like, I've never been afraid to knock on the door and say, “Hey, how's it going? You know, I got some eggplants. I got some zucchini.” I've never been afraid to just try something new. I mean, because what can happen, right? You can fail. And what happens when you fail? You learn. You learn more than when you're successful.

You know, I sell all the veggies. And great, I got, you know, some coin in my pocket. But if I don't sell them, I got to try a new way the next day, right?

[17:43]Brian Jackson: Yeah.

[17:43]Michelle Lewis: So, I mean, there are a lot of my mentors who I attribute that to. Like, another woman, same thing in executive recruiting. All you do is just, like, pick up the phone and ask someone. It's an opportunity. Maybe they're interested, maybe they're not. Like, worst case they say, “No, thanks,” right?

[17:59]Brian Jackson: Or, “I don't have time.”

[18:00]Michelle Lewis: Right. But a lot of people are afraid to pick up the phone. I mean, you meet some fascinating people. So, I've just always thought, like, there's no downside to trying. The downside is if I don't try, not if I fail. And I've had amazing mentors who've said, “Failure is what we want you to do. Like, if you don't fail, I'm not investing enough in you. Fail and then come back, because that is the best training class that I could ever give you.”

[18:28]Brian Jackson: That's fantastic advice. So, as a leader, is that what you're telling your team, “Charge out, go forward, and if you need me, I'm here?”

[18:36]Michelle Lewis: Take a risk. Yeah, fail fast. And have a network underneath you. Like, fail smart, though, to be fair, which I haven't always done. But yeah, take a risk and fail. And I'll be here to help you. But let's take a more calculated risk, you know.

[18:57]Brian Jackson: Yeah. You can, from the outset, kind of, take a first shot and go, “Okay, this isn't going to work at all.” But sometimes, those assumptions are wrong. You just got to dive into it.

[19:06]Michelle Lewis: Yes. Now, don't make the same mistake multiple times, especially if it's a very costly one, because that's a different issue. But if you make a mistake and you learn something from it and then you build something even greater the next time, that's great. That's what you want.

[19:23]Brian Jackson: So, looking at your career and then looking at, you know, the next five, 10 years, where do you see yourself going? What strengths of yours are you going to lean on? And what are some things you might work on?

[19:34]Michelle Lewis: So, hopefully, in the next five to 10 years, I'll have a company that I'm running with a couple of my partners, which is what we're looking at right now.

[19:44]Brian Jackson: Fantastic!

[19:44]Michelle Lewis: So, it's an exciting time in the market, depending upon what industry you're in. We're in oil and gas. And so, trying to find the right opportunity. So, knock on wood that we get those opportunities closed and we're off and running and operating them in a few years.

And the strength to draw on, I think, are that host of skills from the soft skills and the harder skills and everything in between. At this point, I've run almost every function except for finance, accounting, legal, and operations. But I mean, everything from facilities, like, you know, build to building, build to campus, without ever having done that before, you know, IT, IS, SAP, implementations on a global basis, you know, corporate development, investor relations, HR, you name it. So, it's taking the amalgamation of all of those skills and then putting them into use to run a company.

[20:46]Brian Jackson: So, this partnership, you know, when you look for partners to work with and to take on a venture, it's a lot of trust.

[20:53]Michelle Lewis: Tremendous amount of trust.

[20:54]Brian Jackson: When you're trying to build that and get to that next step, what are your red flags, so to speak?

[21:02]Michelle Lewis: In my partners or in the business?

[21:04]Brian Jackson: In your partners.

[21:04]Michelle Lewis: Oh. Well, I've been through a couple partners. And, you know, one is, when they expect you to do all the work but they want to be there to take the glory. Learned that one. That one didn't work out. My partners today are people who I know. And to be fair, I didn't know that person very well. And I probably should have invested more time. My partners today are people I've known since business school. And they're like my brothers. I've known them that long. And we were a very tight team. You know, we go to each other's kids' weddings and, you know, grandparents’ or, you know, parents' events. So, we are really, really close. I know them just as well professionally as I do in terms of family. Those are people I trust all day, up and down, you know, morning, night to do anything. I know they have my back, and they know I have theirs.

[22:02]Brian Jackson: They'll be in the trenches with you working just as hard.

[22:05]Michelle Lewis: Absolutely. Yeah, for sure.

[22:06]Brian Jackson: So, we've talked a bit about soft skills and how they've, you know, come up in your career. You know, which ones have you seen are really the most valuable?

[22:15]Michelle Lewis: So, the soft skills is a big button for me, and probably, not for the reason that you're thinking. I wasn't sure that I valued my soft skills. It was almost like I was embarrassed, you know, that I had all this experience and soft stuff, because all my investment banking friends, you know, they didn't have the soft skills. To be fair, that's not totally true of all investment bankers. So, if you're an investment banker, you know, understand. It was just more that I thought, you know, maybe it's not soft skills that you need, because that's not where people who are, you know, making a ton of money, they're not soft skills. They're all in finance, right. So, that was part of my, “I got to pivot.”

And it wasn't until a little bit later in my career that I realized, “Oh, my god, they are both so important. Soft skills actually might be more important.” And it took me a while to realize that and value those skills and then to really begin to dig in and to use them again. There was certainly a portion of my career. And my feedback from my peers and my bosses would tell you where I needed to work on my soft skills. And some of that feedback really helped me to realize how important that stuff was. And you hear a lot about, in the boardroom, one of the most important skills is, you know, being able to be a part of the team. Well, there was certainly a part of my career and, you know, mid-career, I was a part of the team but I felt like I needed to prove that I was better than everybody on the team, working harder than everybody on the team.

[23:59]Brian Jackson: Deserve to be there.

[24:00]Michelle Lewis: Yes, that I deserve to be there. And a classic example, my former boss, the CEO of DNOW, will tell you is, you know, I don't know, it was, like, three or four days after I'd had my first child and I was at the office. And he was like, “What are you doing here?” And I said, “You can't make me leave.” And he'll tell you, like, today, he still remembers the quote, because I was like, “I have to show you I am dedicated, right?” How stupid. It was silly, silly thing for me to do, but I was not going to let anyone prove that they were better than me, including as a mom. I mean, as a, you know, C-suite employee. So silly. Would never tell anyone to do that today.

So, now, looking back, I realize, soft skills are so incredibly important. The, you know, willingness to be vulnerable, willingness to be the person that you are, be authentic, not have to bring that, kind of, ego into the room, or, “I have to prove that I'm better than everybody else.” But it took a long time to actually be okay with that.

[25:08]Brian Jackson: Have a bit of humility and maybe be receptive to feedback?

[25:12]Michelle Lewis: Oh, my god, yes.

[25:13]Brian Jackson: Without personalizing it.

[25:14]Michelle Lewis: Oh, yeah. I mean, there was a period where I had to pop the balloon of my head to go through a door. And once that popped I was like, “Wow, who have I been?” And that was, you know, pretty transformational for me.

[25:30]Brian Jackson: Your story about coming back to work just days after the birth, like, as an example to the women who worked beneath you in the company…

[25:40]Michelle Lewis: I would never let them do that.

[25:42]Brian Jackson: It's almost like you want to be the example of, “It's okay to take time for you.”

[25:46]Michelle Lewis: Absolutely. That's what I mean. Like, it was crazy. I would never have let a male or female. I would say, “You're going to be at home, you know, with your child. You need to be home.” It was a silly thing for me to do. But, you know, [crosstalk 26:02].

[26:01]Brian Jackson: Well, you only recognize that when you've been through it and you can think and have a bit of humility. You've been called an Uber organizer. And this is, I think, in your bio. So, our fact-checkers, this is true. I can't get in trouble.

[26:17]Michelle Lewis: No.

[26:17]Brian Jackson: You've managed a boisterous career, a family. You've got two kids, husband. How do you do it? And what's a key trait or a, I guess, piece of advice you can give for us who aspire to maybe pull more and take on more challenges, too?

[26:35]Michelle Lewis: Well, I mean, the biggest piece of advice is it takes a village. It's hard to do all that alone. The more help you have from family and friends and neighbors and, you know, whether it's carpool… We used to have carpool when I was a kid. Now, it feels like everyone drives their own child. I'm a big fan of carpool.

You know, take all that help. And on the other side, be willing to help, right? I'm the first person to say, “Look, I will drive any of the kids to school on early mornings.” I drive the boys to lacrosse, and they have to be there at 6:00 a.m. I will take that shift because I'm up anyway, you know. So, get as much help as you can. So, that's definitely my first piece of advice.

And on organizing, there's a lot there. I like to be, you know, orderly and neat and stuff like that. So, I started this tradition with my kids that, before any major holiday, if there are to be gifts given at that holiday, and I don't know where I came up with this number, but you have to find 20 things in your room that you are willing to donate to someone before you can have one item. And they do it. And they still do it. And they're 15 and 13. And they still…

[27:48]Brian Jackson: And they're not in a deficit?

[27:49]Michelle Lewis: No. I mean, there's so many tchotchkes and t-shirts. And I will say that… And then we have a box that we keep all of our donations in, and we have different people that we give all of those items to. So, I mean, we gift.

[28:04]Brian Jackson: 20 is large. I could see starting at five.

[28:09]Michelle Lewis: Certainly, one. I mean, the other is, like, when something new comes in, something old goes out. So, if you get a new jacket, then do you need the old one anymore? Big believer of the circular economy.

[28:20]Brian Jackson: These are tough questions that I wouldn't be… I'm not ready to ask these things.

[28:22]Michelle Lewis: Big believe in the circular economy.

[28:25]Brian Jackson: We do want to wrap with, we're here because of WILC. You know, if you could hope that attendees took away one thing from today, what would that be?

[28:38]Michelle Lewis: There's not one path for anyone in your career. And whatever it is that you want to do, just try it. Just go for it. So, there's not a map that's going to get you from point A to point B like you may think there is. You know, if you can go from a BFA to a PE, you can get wherever it is that you want to go. Just keep opening doors, keep going through those doors. And remember, you know, if you don't like what's on the other side, you can always go back out and go through another door. And if you feel like you failed, that's probably a good thing. And what did you learn from it? And then go through another door.

[29:20]Brian Jackson: Well, thank you so much, Michelle. This has been a real pleasure. 

[29:23]Michelle Lewis: Thanks. It's nice to meet you.

[29:24]Brian Jackson: Thanks for listening. This has been Owl Have You Know, a production of Rice Business. You can find more information about our guests, hosts, and announcements on our website, business.rice.edu. Please subscribe and leave a rating wherever you find your favorite podcasts. We'd love to hear what you think. The hosts of Owl Have You Know are myself, Brian Jackson, and Maya Pomroy.