Giving Back Through Public Service, With Yvonne Hao

It’s one thing to attract customers to stay with your company; it’s another to go out into a more public-facing role and attract the very companies into the state. Yvonne Hao is the Secretary for Economic Development of the State of Massachusetts, where she takes the responsibility to create career opportunities and nurture thriving businesses within the state. In this episode, Yvonne joins J.R. Lowry to share her inspiring journey towards public service and leaving a great mark across various sectors. From co-founding venture capital and private equity firms to serving on boards and holding leadership positions, Yvonne’s path has been marked by purpose and innovation. She dives into the nuances of government versus private sector dynamics, sharing insights on decision-making, governance, and metrics. Yvonne also talks about her role in shaping Massachusetts’ economic development plan and ensuring the public can live great lives in the state. Drawing from her rich background, she offers invaluable wisdom on leadership, building high-performance teams, and the importance of embracing opportunities. Don’t miss out on this great conversation for a comprehensive view of Yvonne’s transformative journey, highlighting her pivotal role in propelling economic growth while sharing her profound insights into leadership and personal development.

Check out the full series of “Career Sessions, Career Lessons” podcasts here or visit pathwise.io/podcast/. A full written transcript of this episode is also available at https://pathwise.io/podcasts/yvonne-hao

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Giving Back Through Public Service, With Yvonne Hao

Secretary For Economic Development, State Of Massachusetts

My guest is the Secretary of Economic Development in Massachusetts, Yvonne Hao. Prior to serving in her role, Yvonne was a management consultant, corporate executive, private equity operating partner, venture capitalist, and board member. She’s worked across a range of industries with leadership roles at Honeywell, Denon & Marantz, Gymboree, and PillPack, many of which were during her eight years of working as an operating partner with Bain Capital.

Yvonne also cofounded a venture capital firm and a private equity firm. She has served on the board of directors of CarGurus, Flywire, ZipRecruiter, Virta, and Bose, as well as on the board of Beth Israel Lahey Health. She has served as a Trustee of Williams College and a member of the Commission on Presidential Debates and she is a 2019 Aspen Fellow of Honor. She earned her Bachelor’s degree in Economics and Asian Studies from Williams College and a Master’s in Philosophy and Development and Economics from England’s Cambridge University. Yvonne, welcome. Thanks for joining me.

Thanks for having me.

I’m looking forward to hearing what you’ve been up to. It’s been a long time since we’ve talked and a much longer time since we worked together at McKinsey, so it’s good to reconnect. Let’s start with your current work. Give us an overview of the work you’re doing as Secretary of Economic Development for the State of Massachusetts.

It’s a very unexpected career twist, very much a surprise, an honor, and a privilege. I am the Secretary of Economic Development for the State of Massachusetts. My boss is the governor. I’m a cabinet member. More importantly, I have a responsibility to make sure that all of our 7 million people who live in Massachusetts have great career opportunities and great career paths and can live great lives in Massachusetts. Also, every company can have a chance to start, stay, expand, thrive, and be world leaders here in Massachusetts. That’s the goal. I am learning a ton on the job and also have a lot of work to do. We have real work to go after. I’m very excited to be in this role.

You’d had a very successful business career. You were on boards, you cofounded a venture capital firm and a private equity firm. What was it that prompted the jump into public service?

It’s actually very random. I had not thought I would have a career in the government and randomly received a phone call the week before Christmas on my cell phone. I did not recognize the number. I picked it up and the person on the line said, “It’s Mara Healy.” I literally thought it was a Robodial, like a fundraising thing. I was waiting for it to ask me for money and said, “No, this is Mara Healey. Is this Yvonne?” I was like, “Yes.” This is clearly not a Robodial. She said, “I got elected last month.” I said, “I’m aware. Congratulations. I voted for you. I’m very excited for your new administration.”

She said, “We’re getting inaugurated in early January. I’m trying to build out the team. I want someone with your business background, and your name has come up from several people that I trust. Would you be interested in talking to us about a potential role?” The very next day, I had lunch with her and the lieutenant governor. I got the job offer the first week of January and then I got sworn in on January 17th and here I am.

What’s your experience been so far? What’s surprised you most about working in government relative to the private sector?

There are many things that are the same and then there are some things that are different. Probably the funniest surprise is that I didn’t expect people to call me Secretary all the time. I am still not used to people calling me Secretary Hao or Madam Secretary or Secretary and investing in me like that. That’s quite odd and I’m not sure I’ll ever get used to that.

I also haven’t worn suits since the ‘90s. McKinsey, I think, went business casual. Bain Capital was business casual. I was at a startup, which was jeans, sneakers, and hoodies. This has been a return to my very early days of working and wearing suits again. Those are the funny surprises. I would say that I’ve had some very happy surprises. We have some awesome people.

We’re very lucky in Massachusetts. We have smart, talented, very hardworking young people who don’t get paid very much money and who work because they believe in the mission. That’s been an awesome, happy surprise. I do think a lot of the things are similar in that you’re trying to figure out what success looks like, where we are trying to go, what’s that vision of the North Star, where we are now, what are a couple of things that matter to get us there, how we get a team aligned around that, how we get the right metrics, right accountability, and the right tracking, and how we make sure we execute and communicate what we’re doing.

Those things are all similar. One of the other big differences is that in the private sector, I’m realizing we had the real luxury of having a much simpler governance and decision-making process. You have a board and a CEO, but it’s a much clearer line and easier to figure out who owns the decision. Once you make it, it’s quick and then you can execute, especially in a startup where you’re very nimble and moving all the time.

Here, the decision-making is much more complicated and much more spread out. We have a state legislature. There’s a Senate and a House. There are many other cabinet agencies, my colleagues, and then the governor, and lieutenant governor. You have all the other parts of state government. You have the federal government, and you have the federal delegation, and all the towns, cities, and city councils. It’s a much more complicated and diffuse process.

Yvonne Hao: Compared to the private sector, the decision-making is much more complicated and much more spread out in the government.

The other thing that’s different is that it’s very clear in a company. You’re trying to increase shareholder value. That’s about growing the top line and growing your profit. It’s about making sure you understand your cashflow and ultimately growing your valuation or your market cap. The metrics are pretty clear and pretty simple.

Here, it’s hard to figure out what the right metrics are. It’s probably not one metric. It’s probably a set of metrics. It’s not GDP, although GDP is very important, it’s also things like income inequality and it’s things like people’s quality of life and how is that spread out by region, by different types of humans, or by different types of companies. It’s a much more complex set of things to try to figure out how we measure and how to get good data and good tracking to know that you’re making progress. Some similarities and some differences, but I’m learning a ton.

It’s complicated. I can imagine having never worked in government. You have, as you mentioned, lots of stakeholders and many different types of constituents. It’s a multidimensional thing that you’re solving for as you were saying. It’s not just GDP or GDP growth. It’s also about a number of other factors as well. That makes it, in many ways, a lot more complicated than running a company.

The real reason I took the job was I love businesses, but the things that I’m most proud of in business is how we’ve impacted people’s lives, whether that’s through helping our customers or helping employees gain success and great career paths and working on a team to accomplish something. In a company, you can do that and you do have impact, but it’s on a very limited scale. It’s who your customers are and who your employees are. Here you have a much broader landscape to play with. There are 7 million people and it’s almost $600 billion of GDP. The potential for impact is much broader and bigger. The challenge is that it’s slower and harder to have that impact. If you can make a difference, it’s across a much bigger scope of folks.

What are some of your priorities?

In Massachusetts, we are very lucky. We’re a very well-governed state. We’ve had Republicans and Democrats, but in general, people are reasonable and we have had good governance, a good balance sheet, all of those things. One of the smart things we have in place is that we have a piece of legislation that’s written that once every four years, we have to do a formal state economic development plan. It’s basically like a strategy for the state.

We are in that year now, so we kicked it off. We have an economic development planning council with a broad variety of folks who are on it. We have done nine sessions across the state in every different region open to the public. We’ve had all kinds of folks. Each session has had about 150 people show up. In Boston, we had almost 250 people show up.

We’ve had a lot of people come and give us their ideas and their input. We’ve done sector-specific meetings with people from each of the different sectors, whether small businesses, rural communities, tourism, healthcare and hospitals, financial services, or life sciences. We’ve looked at different sectors. We are midway through the year and deep in the sausage-making of putting that plan together, which will be published by the end of the calendar year. On the back of that, we need to bring it to life with funding, resources, and all that. That’s a big focus for the year. In the meantime, we’re also trying to get a lot of other things done. We’re not waiting for the plan. Other important priorities include things like we are actively working on big federal opportunities.

In the US now, it’s a unique moment in time where our federal government is implementing a concerted national industrial policy. As part of that, there are a lot of federal monies available for states to compete on for different areas. Massachusetts wants to do our part. We’re actively trying to coordinate and make sure we put our best resources forward to help the US in areas like chip to science for semiconductors and defense or areas like ARPA-H for healthcare and many other areas. We are actively working on that.

The other thing is that there are a lot of other near-term initiatives that we are coordinating, including things like making sure our workforce pipeline is mapped to our highest growth industries, including things like working with companies to make sure that they’re getting the help they need to stay here and expand here.

It includes things like partnering with other cabinet members to help shepherd large projects and get those accelerated. There are lots of different other initiatives, things like tourism. We’re celebrating our 250th anniversary of the founding of the country, which started here in Massachusetts, so we’re getting started on the planning of all that. There are a lot of other things we’re doing in the meantime, and then it will culminate with this plan at the end of 2023.

Other than all those sessions and the planning work you’re doing, what are some other ways you spend your time in the role?

I would say this job is it’s interesting. There are a lot of parts of this job that are very externally facing, probably more so than in a company role. I do spend a lot of time going out to communities and meeting with Chambers of Commerce and regional economic development teams going to all kinds of industry association meetings. It’s a chance for me to hear directly from communities on their issues and what feedback they have, and then for me to share with them how we’re thinking about things.

I do a bunch of things that are public with the press and media, again, for similar reasons. I spent a lot of time trying to meet one-on-one with CEOs of small companies and big companies. I work by collaborating with my cabinet members and then with my own team to make sure that we’re making progress in all of our different programs. A mix of different things, but probably compared to a private sector job, this is a little more public-facing than most CEO, COO, or CFO jobs.

That is understandable. Essentially, you’re trying to attract business and keep business in the state. There are heavy components. It’s a sales-type role if you want to think about it.

I always say that. The thing that is important for us to always remember, and I say this a lot here within the state, is that I have no experience in state government, but I have a lot of years in business. When you’re running a business, you wake up every day and you’re maniacally focused on your customers, products, employees, shareholders, and your technology. That’s what you should be doing. You don’t wake up every day in your job if you’re here and say, “What am I going to do today to help Massachusetts? How am I going to help the state today?”

That’s not your job as the CEO and it shouldn’t be. Our job in the state is to figure out how we make sure we do all the right things to create the right environment and support systems so that these companies want to stay here and they want to expand here and it’s the right thing for them to do, and we help them succeed here. That’s our job. I view all of the companies and all of the talent in our state as our customers and I am selling to them. I’m trying to make sure we put the best case forward and do all the right things with our resources and how to make sure they can be successful if they’re successful, our state’s successful.

Yvonne Hao: Our job in the state is to figure out how we make sure we do all the right things to create the right environment and support systems so that these companies want to stay and expand here, that it’s the right thing for them to do, and that we help them succeed.

Let’s go back to the beginning of your career. You went to Williams, an undergrad, then you went to Cambridge. How did you end up in management consulting at McKinsey in particular?

As a classic Liberal Arts student, I didn’t know what I wanted to do. I won a scholarship to England. I thought, “I’m going to go to become an academic. I’m going to become a professor. I know what they do and I love my teachers and this will be great.” I went and did my Master’s degree on this awesome fellowship. I do love economics, but I realized that being an academic actually is quite lonely and isolating in a lot of ways.

I’m a big team sports person. I was a very short walk-on rower at Williams College. I’ve learned some of my best memories and so much of what I’ve learned about life through being in a team sport. I realized academia is hard. It’s very lonely in a lot of ways. Also, I learned about myself that I’m pretty impatient. I like to do something and then see the impact. That’s the instant gratification reward. In academia, you do have an impact, but it’s much longer. You write a paper, you present the paper, and maybe someone will do something with the paper. It’s a much less direct impact.

I finished my Master’s and McKinsey had been recruiting me when I was at Williams and had kept in touch with me when I was at Cambridge. I thought, “Let me take a break. Before I go back and finish the Doctorate, I’ll take a break, earn some money, try out this business thing, and then go back in a couple of years or something.”

I tried McKinsey and then I realized I actually love business because it’s the ultimate team sport. You’re working with people trying to accomplish something bigger than yourself and it does have the benefit of having this much more direct correlation and instant impact. We make a decision, we try something out and then you can see if it works or not. Did sales increase? Did profits increase? Did we get more customers? You can see the direct line between your work and what’s happening in real life. That’s very satisfying.

You’ve done a lot of different things and we’ll get to that, but how did McKinsey prepare you for those subsequent roles?

McKinsey is an amazing education in broad business skills. I don’t have an MBA. I went to get my Master’s in economics, so I don’t have an MBA and because McKinsey’s only product is its people, they invest so much in training and development. I did a mini MBA course for a month before I even started. As you know, McKinsey does a ton of training even after you start. We had an orientation and training and you get training for a year for a week and then you get training for two years as you become an EM or Engagement Manager, associate partner, and partner. I learned a ton from the training programs.

You then learn a ton from being on the job. You get a crash course because you see multiple companies, problems, and situations in a very short amount of time. You’re doing this quick 3 or 6-month studies and you get exposed to a lot. You learn a ton on the job because the whole culture of McKinsey is all about feedback. It’s about getting exposure and pushing yourself. It’s a meritocracy and then getting lots and lots of feedback. You’re constantly improving. I learned a ton about business from McKinsey.

The other thing is it’s an incredible network of people. I’m still in touch with all kinds of people from McKinsey, including you. Most people don’t stay at McKinsey. Everyone goes in knowing that most likely, they’re going to leave but then the friendships and the relationships you make last a lifetime in business. To me, it’s been a huge gift that I started my career there.

I was asked to give a talk at the McKinsey Values Day here in Boston, which was crazy because when I was at McKinsey, the whole firm was a couple thousand people, the entire global firm. The Boston office by itself is like 1,300 or 1,400 people. They were asking me about some of the things that stuck with me. I said, “Not a week goes by that I don’t refer to something from McKinsey,” like an application to descent. I said in a meeting that I wanted to see this framework you’re using, MECE, like Mutually Exclusive, Collectively Exhaustive. The things that you get that get beaten into your brain at McKinsey stay with you, like some of the basic concepts and frameworks. It’s very funny.

It’s very true. I haven’t used the expression MECE in a long time because nobody knows what it is typically, other than the consultants, but there are a lot of those things as you say that were beat into our heads as we were coming up through the ranks. I know you went to Honeywell. How did that all come to be?

I got promoted to be an engagement manager and loved it. It felt like it was so much fun to be running a team and in the action of trying to solve the problem, work with the clients, and make things happen. I got promoted to associate partner and I realized that as you become more senior at McKinsey, less of your time is spent doing the problem-solving and working with the clients and more time is spent on developing new business. I found that to be less fun.

The other thing is that, for me, I got so excited about the impact we could have and then the minute it got interesting, we would hand it off and we would leave and go to the next client. You never got to see the project through. The other thing on the personal front is that, at McKinsey, we traveled every single week and I was getting married and my then fiancé and I were trying to figure out how are we going to have a lifestyle where I’m gone Monday through Thursday every week. Is that the kind of married life we want to have?

About that time, I got a phone call from a headhunter about Honeywell and I thought, “I’ll go interview for fun.” I ended up interviewing with the CEO of all of Honeywell. I was 27 years old and the CEO was running this $30 billion company. He had been a very senior executive at General Electric. He pitched me on an opportunity to say, “If you come to join me at Honeywell, you’re going to be working with me and the senior team. You’ll learn a ton about what a real business is like because you’ll have real exposure and you’ll get to see through all of your strategies and see if you can implement them. You’ll stay in one place. You don’t have to travel.” That was a very appealing value proposition. I left McKinsey to join Honeywell and it was an awesome decision. I learned a ton from my time at Honeywell.

That headhunter call. As you say, you were 27. You get to work closely with the CEO of a big company. Not many 27-year-olds get that chance.

I look back now and the thing that was amazing about Honeywell is he was very true to his word. When I joined Honeywell, he was only maybe 6 or 9 before me. He was new there and leading a turnaround. When I joined Honeywell, the stock price was in the twenties. It was tanked and not doing great. When I left five years later, it was in the 70s and now it’s been like in the 200s. It’s been a dramatic, impressive turnaround. I was there on the ground floor of that.

I learned from him and saw how he led that company. He was very true to his word, he gave me an opportunity to go out into a division. At a very young age, I was running an almost $2 billion P&L. That was my first experience of having full accountability and being like a mini-CEO of a division at a super young age. I look back now and I’m like, “How do they think I could possibly do that?” I can’t believe they trusted me to it. I loved that job and I learned a ton and I’m still very close to my colleagues from that period.

That’s an amazing opportunity to get when you’re relatively young and in a company that had that GE linkage. The diaspora of General Electric was happening back in the ‘90s and early 2000s of people out to other industrial companies and a massive network that they had too.

I learned so much about the day-to-day operations of how you lead and influence people and get folks aligned, and how you drive change through organizations. I spent a ton of time visiting manufacturing plants. We made a lot of acquisitions. How do you do integrations? We expanded into China and into Europe, the global piece of things, and then figured out how to manage a P&L and make sure you hit your numbers. There’s a ton, especially in a public company setting. I learned so much from my time at Honeywell.

How did you end up at Bain Capital?

I’d been at Honeywell for a while, loved my job, and randomly got a recruiter call again. I said, “No, I’m not interested. I love my job at Honeywell. Thank you so much.” I don’t even know what Bain Capital is. I don’t know what this private equity stuff is, but not interested. The recruiter said, “You should at least talk to them. I promise you, you’ll find these people to be so smart and interesting and you’re going to get a whole another skillset.”

I said no. One of the Bain Capital guys was going to be coincidentally in New York for a board meeting and asked if I could have dinner with him to learn more about Bain Capital. Sure, I’ll have dinner with someone. That’s fine. I remember we ate at this fancy restaurant, Eleven Madison Park. We were the first table at 5:30 PM and then we were the last table to leave at midnight. He was thoughtful and smart and explained to me how private equity works and what the Bain Capital role would be like.

The things that were appealing to me about it, number one is that I loved being at Honeywell and I loved the rigor and discipline of being in a public company, but you live and die by your quarterly earnings. In many ways, it’s very short-term. The appealing thing about going to Bain Capital is you have a company that you buy out and it’s no longer public. You now have a 3 to 5-year timeframe to think about what the things we need to do to make this worth much more when we exit.

Yvonne Hao: The appealing thing about going to Bain Capital is you have a company that you buy out and it’s no longer public.

You have the luxury of thinking much bigger. Having the ability to make change was very appealing. The other thing was that I did not have an MBA. I knew a lot about strategy and marketing but wasn’t a finance expert. The idea of going to Bain Capital and learning about capital structure and balance sheet and how to think through liquidity and exits and having a board and an investor perspective is different than being heads down in a division running a business. I thought I could learn a lot.

The other thing is that the diversity, like what McKinsey has, at Bain Capital, I’d be working across multiple companies and industries. When you’re running a business at Honeywell, you are hands down 100% in one siloed industry. It’s very different. On the personal front, at Honeywell, I didn’t travel every week, but it became clear that the career path at Honeywell would be that I was running this division that was about almost $2 billion, but my next promotion would be running a division that was $4 billion.

That might be in Arizona or it might be in Minnesota. It might be in Europe or it might be in Asia. After that, I’d run a $6 billion division and that’d be somewhere else. My husband and I went to high school together. I’d given birth to two girls. With the idea of moving every couple of years, I looked at the people ahead of me at Honeywell, very few of them had working spouses and they did move around a lot. We wanted to make sure we both had careers and that we could have a stable family life. At Bain Capital, I knew I’d travel a lot, but at least our family would be in one place. Boston is a great place for my husband’s career. In a lot of ways, it made sense personally as well.

Were you an operating partner the whole time there or did you start on the investing side?

No, I was an operating partner. At Bain Capital, you have people who mostly do investments, are driving, sourcing new deals, ding them, and then closing them. You have folks who are more on the operating side, which is involved in the diligence a lot of times, but then responsible for the companies once you close a deal.

The two work hand in hand. I was on the operating partner side and what was unusual is that in two cases, we had companies that got into some trouble and we needed to make some changes at this leadership level. I went in as CEO of one of our companies for almost two years and then I went in as COO for one of our companies for almost a year. In those cases, I was back in the operating world of running a company and then came back to Bain Capital after that was done. We hired permanent leadership.

Did you have an agreement with Bain Capital that you would only do things that were local to Boston?

No. I traveled. One of the companies I was CEO of was in Japan. I go quarterly to Tokyo. That was a lot of travel. That was very difficult. When I was COO of that company, one of the other companies was based in San Francisco, so a lot of red eyes. I traveled, but the difference is that at Bain Capital, we owned the companies and so I traveled to visit the companies, but I had some semblance of control over when and how I traveled.

At the end of the day, too, you’re responsible for the companies, but there’s a CEO and a team there. Not every crisis is hitting your phone first. It’s usually going through the company first. McKinsey’s tough because you’re traveling every week and it’s client service. When the client wants you there, you don’t have the same control. It’s a little bit different. Yes, I did travel. I’ve traveled a lot in my life.

As you say, you have a little bit more control than you do when you’re at McKinsey and the client’s mercy. I also think the internal pressure that existed at McKinsey to be on-site, to be available all the time, was also a factor as well. You worked in a lot of different industries. I’m sure the McKinsey training helped you, but what else did you do to come up to speed when you parachute it into one of these situations?

I always talk about how my Liberal Arts education at Williams has come in handy because when you go to a Liberal Arts school, you are not an expert in anything. People ask me, “Are you an expert in finance, accounting, or marketing?” I’m not an expert in anything. What you learn in liberal arts and also what you learn at McKinsey and at Bain Capital is you learn the important skills. You learn how to learn. You learn what things matter and what things are noise. You learn how to communicate, prioritize, and analyze. Those are the important ones. You learn how to listen and you learn how to work together on things.

Those are all the things that you learn. That helps you get up to speed quickly. I’ve seen so many different companies, industries, and situations. I have a lot of pattern recognition. I am good at connecting the dots and saying, “This seems like these three other things I’ve seen. I know how this movie’s going to play out. Here are things that we should be thinking about.”

Pattern recognition is very helpful. Whenever I go into a new situation, which I do all the time, I tend to focus on three main areas. One is I try to spend time with people, because the folks who are there already, they’re the ones who are living in that world day to day. You’re coming into the movie halfway through. They’ve been there since the beginning, oftentimes. You can learn a lot from talking to them about what things they care about and what things they think are issues.

1) I spend a lot of time with the team. 2) I spend a lot of time understanding the business model. What are the numbers? How do they work? What things matter? What things are sensitive in the model? If you do this, that’s going to have a big impact. What things don’t have as much impact? Understanding the actual, like, “How do we make money? What does this business look like? What’s the profile of their financials?” 3) I try to get as close as possible to the customers because every business and organization exists to serve a customer.

Who are those customers? What are their problems? What do they care about? What do they like about you? What do they not like about you? Who are the other people they’re using instead of you? The closer you get to them, the better you understand how to make decisions and have a true North of why you exist. Those are the three things I do to try to get up to speak quickly in new situations.

You then went off to PillPack. That was not part of Bain Capital. That was separate.

I’ve been at Bain Capital for a long time, like eight and a half years, and it’s an incredible place. I learned so much. I talk about networks. I am still such close friends and very much in touch with so many people from Bain Capital. I was on the panel with the head of Bain Capital. It’s an incredible place. I learned a lot. However, I’ve been there for a long time. I started to think about how I hit midlife. My mother-in-law had been diagnosed with Alzheimer’s, which was very difficult. We were dealing with all her medications. You start to wonder like, “If I stay here, this is an amazing place and I’m learning so much, I’m so lucky to be there, but should I be thinking bigger about the impact I want to have?”

A friend introduced me to PillPack, to the CEO. It was this tiny little startup that no one ever heard of. Coincidentally, when I went to meet with the CEO, he told me, “We sort people’s medications so that they can take them on time and we deliver them to their house.” I thought, “I need this for my mother-in-law right now. I don’t want to join your company. Why would I leave Bain Capital to join this tiny little startup? Let me sign up my mother-in-law.”

We signed her up and it was a life-changing service that was so obvious and made our lives so much better to not have to worry about her pills. The more I talked to the CEO, the more impressed I was with him and this business. It’s a massive market that has not had a lot of innovations at all. I truly believe in the mission because I personally was a beneficiary. Over the course of many months of getting to know the company, I finally decided to make the leap. I left Bain Capital, which is a very well-established, very prestigious place, to go to a tiny startup no one ever heard of.

I took a very large cut in my cash comp, and created it for equity, which luckily turned out to be a good decision. I went to work for a CEO who was a decade younger than me and a pharmacist and I joined as a COO and CFO. It didn’t make a lot of sense on paper necessarily, but for me, it made a ton of sense because I believed in the team. I believed in the mission.

I knew I would learn a ton. I’d never done a startup before. I’d never done healthcare before and knew I could contribute because they were growing 300% a year and needed help figuring out how to scale a business. I’d worked in much bigger companies. It was an amazing decision. I had such an incredible experience at PillPack. It was a special thing. Luckily for us, we could pull a rabbit out of a hat, have this amazing outcome, and sell to Amazon. It was an amazing decision.

Sometimes these conversations lead very slowly to something. It turns out to be, in the long run, a great decision and a great outcome for you personally.

It was awesome. Most importantly, every single day I was at PillPack, I was a COO and CFO, talking about customers. We would get feedback from customers. A lot of it was you’d get notes from the call center. You’d also see the written email feedback and people wrote in every day about, “I’m alive because of PillPack. I never took my medicines on time before and now, for the first time, I am feeling healthy.” That makes a big difference.

The other thing is, for us, every one of our employees had equity. When we sold to Amazon, we had people who had taken a lot of risks to join PillPack and some of them had high school degrees and had been working at Walmart or McDonald’s and they joined us. They were making $12 an hour to start, but they got some equity. When we sold to Amazon, people were able to do well. They were able to buy cars, pay off debt, or go on honeymoon. It was a big deal that for all of our employees, we could share in this value creation and reward them for all of their incredible work. It was an awesome experience.

You started serving on boards around that time as well.

I was on boards. I got very lucky. My first board was a nonprofit board. I got asked to join the Williams board when I was 30. That was a crazy experience because it was like all these CEOs of these major companies and organizations and then me. I learned a ton from them. At Bain Capital, I joined the boards of many of our portfolio companies and in some cases, we took them public. I got to be a public board member. I started joining boards separate from Bain Capital and then had now been on a bunch of poll company boards, private company boards, and many other nonprofit boards.

Having been an executive and a board member, how would you contrast the role of a board member relative to being a C-level leader?

As with many things, being intentional is very helpful. If you’ve been a CEO, COO, CFO, or a senior-level executive, you are used to running things. You’re used to making decisions, calling the shots, being in the details, being front and center. When you’re doing a board, that is not the job of a good board member. If you aren’t careful when you fall into the trap of being an operator, you’ll probably then be a bad board member.

It requires intentionality and you have to learn how to be a good board member. It took me a while to adjust to it. Being a good board member is being a partner to the CEO and the company. You have to hold them accountable and you have to challenge them. Ultimately, you’re responsible for the company, but ultimately, you’re there to support the company and the CEO and partner for them.

The conversation I always have with CEOs is, “You have to have a board anyway. You can’t not have a board.” I find if you’re a CEO, you’re usually a pretty ambitious person and you are always going to be trying to have the best customers, products, and employees. Why would you settle for a mediocre board? If you have to have one anyway, why not make it awesome?

To make something awesome requires work and intentionality. Thinking through how you get the most out of your board is important. As a board member, if you’re joining a board to make money, you shouldn’t be on a board. You should be joining a board because you want to contribute and be helpful. Thinking through, as a board member, what does this company need and how can I best work with them in a way that’s supportive and helpful? That takes real work but it’s very rewarding. I’ve loved being on boards and getting to partner with so many different CEOs and also with fellow board colleagues. It’s rewarding. It’s another version of a team sport

How did it round out your skillset?

You get a different perspective. When you’re a board member, you start to realize you’re coming in once every couple of months. You’re not in the day-to-day. You can pull up from all of the minutiae and all the daily crisis firefighting and start to see the forest for the trees of what things matter. That’s an incredibly helpful perspective to have when you’re an operator, to be able to pull back and say, “Put aside all the craziness. What are the things that matter for this company that we should be focused on?” Oftentimes, it’s the things that are the most important but not the most urgent. Having that perspective is hugely helpful.

The other thing is, as a board member, and especially if you serve on multiple boards, you get a lot of different perspectives on how different companies do things. You start to, again, see patterns and best practices that are super helpful. If you’re only ever in one company, you never realize, “Why don’t we do our talent assessment like that? How do we think about doing our budgeting process?” Many of these things are transferable; once you have more data points, you can start to see what works and what doesn’t.

You’ve been a leader, a board member, a venture capitalist, and a private equity operating partner. You’ve seen leadership from a lot of different dimensions. What’s your definition of leadership?

I think less about leadership and I think more about team. I always tell people my job as a leader is that I do some emails, sit in meetings, go to board things, whatever, but I’m not the one doing the hardest work every day. The people who are the most important to any organization or any business are the ones who are on the front line serving the customers every day. At PillPack, those were our pharmacists, our technicians, and our fulfillment center people on the front lines of making the business happen. I would say to them, “You’re my customer. My job as COO or CFO or now here as Secretary of Economic Development is to support you to make sure you do your jobs well and that you can be successful.”

It’s a servant leadership model. It’s around how we make sure everyone feels empowered, everyone feels recognized, valued, and rewarded. Everybody understands where the business is in the context, how they fit into it, and what our goals are. How do you make sure everyone feels like they’re part of something worthwhile that’s bigger than themselves and that’s going to make a difference in the world? How do you make people excited to be part of that? That’s the job of a leader.

At the end of the day, I always say the CEO’s job sounds simple, and it is simple, but then doing it is hard. As I said in the beginning, how do you figure out where we want to go? How do you figure out where we are now and what are the couple of things that are going to help get us there? How do we decide on that vision and that path and then how do we make sure we get the right people to go execute on that and have ownership? How do we make sure we communicate and get alignment around metrics and then execute? It sounds simple, but the actual doing of that is much harder, of course.

You’ve described servant leadership and talked about the team at multiple points in the conversation. What have you done to create high-performance teams?

This is all I focus on because I’ve realized now over many different situations that the best way to be successful and the most fun is to have people around you who are awesome, talented, smarter than me, and diverse. You want people who are different from yourself. Having a more diverse team requires, again, intentionality. It doesn’t happen on its own. You’re left to your own devices. You get people who are like you.

If you work to get diverse perspectives, it is much harder. You have more miscommunications and misunderstandings, but it’s way more productive to have different ideas and opinions and get better outcomes when you’re challenged. Also, it’s way more fun. I find I learn so much more and I enjoy it so much more.

Getting great teams together, that’s the magic. If you have a great senior team working together well, then everything cascades from that. The best teams are the ones where everyone brings something to the table. You all know what your skills are and you all know where you need help. You trust each other and you disagree and you can fight. You get aligned and you are and you’re having fun together. You want to see each other win.

Yvonne Hao: The best teams are the ones where everyone brings something to the table. You all know what your skills are and you all know where you need help.

I always say it’s like when you can pass the ball without even looking and know that this will get the ball. It’s incredible and as a rower, you can have all the best rowers in the world, but if you’re not rowing in the same direction at the same time, it’s very painful in a boat. You’re hitting each other. The boat’s not moving. You could have less good rowers individually, but if you’re in the boat rowing at the same time, at the same speed, the boat flies and it feels effortless and you’re moving so fast. That’s what you aspire for in a team. A huge part of my job is figuring out how to create that team and having the right people in the right places working together in the right way. That’s where the magic happens.

When you look back on your career, what are the strengths that you’ve drawn on again and again?

I am a very deeply curious person. That’s helpful because I’m always trying to learn and improve. I try hard not to think I know the answer because most of the time I don’t know the answer because most of the time I’m in a new situation. Curiosity is very helpful, asking questions, and being open to learning. I love being on teams and figuring out how to work together well. I am a continuous improvement machine, so I always want direct and direct feedback.

In almost every meeting I have, at the end of the meeting, I always say to people, “What can I do better? What can I do differently? What feedback do you have from me on how I can help you?” I’m always taking notes and every day is a new day to try to be a slightly better version of myself today than I was yesterday. There’s always work to do. I’m like everybody else. I’m a deeply flawed human. There are some things I do well, but there are lots of things I want to get better at. That’s part of the fun and the journey.

What are the things that you’ve worked on developing?

There are so many. I am a very impatient person. I love to see things happen. Learning how to be more patient is not easy for me. That’s something I’m always working on. Maybe broaden my style a little bit. I’m a let’s move quickly, think big. There are people who want to be much methodical and sometimes we need that. I’m thinking through all the different ways that I can round myself out more and have a broader skillset. There are lots and lots of things.

What do you do to recharge your batteries?

I believe in this concept of the corporate athlete. If you’re going to be an Olympian, again, it requires intentionality. You don’t wake up and become an Olympian. You have natural skills and assets but want to be intentional. I have a whole system. This is probably one of my biggest strengths. I reflect a lot on when I feel good, when do I not feel good, what gives me energy, and what sucks my will to live. I’m always reflecting and trying to learn more about myself and the world.

I train. This job I’m in now requires a ton of energy and stamina, so I always try to sleep seven hours a night. I know for myself that there’s a Maslow’s hierarchy. If I don’t sleep enough, then I am going to be grumpy and short and unpleasant and not my best self. I always try to exercise every day, especially in this job because I’m physically out and about and meeting people all the time and I need to keep my energy up.

I exercise almost every morning, even if it’s a short amount of exercise. It also mentally helps me to not think about work and to clean my brain a little bit to focus on something else. I also try to have time with family and friends and have time by myself reading. All of those things are important to have a system. I think a lot about oscillating. You train super hard, but then you have a rest day.

Having this oscillation where we work hard and we have a crazy week, everybody should take the weekend off and mellow out. Recover, rest, recharge, and come back Monday ready to go at it again. You can’t go 100% every day. No Olympian does that because you’re going to burn out. You’re going to get an injury. Thinking through your system is important.

Last question, if you could give your younger self a piece of advice in terms of careers and how to manage the world of work, what would it be?

There’s this concept that I loved in Amazon that I had thought about before, but they coined an easy way to describe it, which is that some things are one-way doors. When you go through the door, you can’t come back. Those are very big life decisions and you need to spend time because the stakes are very high, but the vast majority of decisions are two-way doors. You go through the door and if you don’t like it, you can come right back.

The mistake I made as a younger person, amongst many other mistakes, is that when you’re leaving McKinsey, Honeywell, or Bain Capital, you think of every career decision as like, “The world’s going to end. If I make the wrong decision, I’ll never get another job again.” You realize once you get older and you see how big the world is, most career decisions are two-way doors. If you leave McKinsey and you go to Honeywell and, for some reason, it sucked, I’ll probably go back to McKinsey or I can go back and get another job. If I left Honeywell to go to Bain Capital and it sucked, I go back to Honeywell and go up and get another job.

Most career decisions are two-way doors. I stress way too much over them as one-way doors. The only things in life that are one-way doors are things that are irreversible. I don’t have any real work regrets, but I have personal regrets. I should have spent more time with my dad before he passed away. I should have spent more time with both of my grandmothers before they passed away. Those are one-way doors that you can’t get back and those are things I wish I’d spent more time on.

Thank you for doing this. I was thinking as we’ve been talking, in a way, since you and I first met each other, you’ve come full circle because we worked on the spin-out of Skyworks. Every time I’m back in Massachusetts and past Skyworks, I think about our project. You are contributing to the economic development of the state even back then.

I totally forgot that. That’s so funny. Yes, that’s so true. I love it. I’m excited about this project. Hopefully, it helps other folks as they think about their careers. I’m looking forward to staying in touch on all of this.

I’m trying to do a better job of staying in touch with people than I have over the last many years. You know where to find me and I know where to find you, which is all good. Thank you so much.

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It was great having Yvonne on the show and I appreciate her time. It’s interesting to hear about her current work in public service for the State of Massachusetts, her broader career journey, which has had many stops and twists and turns along the way, and her thoughts on leadership. Thank you again to Yvonne.

Important Links

• Yvonne Hao
• LinkedIn – PathWise.io
• Twitter – PathWise.io
• Facebook – PathWise.io
• YouTube – PathWise.io

About Yvonne Hao

Yvonne Hao is the Secretary for Economic Development in Massachusetts. Prior to serving in her current role, Yvonne was a management consultant, corporate executive, private equity operating partner, venture capitalist, and board member. She has worked across a range of industries, with leadership roles at Honeywell, Denon and Marantz, Gymboree, and PillPack, many of which were during her 8 years of working as an operating partner at Bain Capital.

Yvonne also co-founded a venture capital firm and private equity firm. She has served on the Board of Directors of CarGurus, Flywire, ZipRecruiter, Virta, and Bose, as well as on the Board of Beth Israel Lahey Health. She has also served as a Trustee at Williams College and a member of the Commission on Presidential Debates. And she is a 2019 Aspen Fellow.

Yvonne earned her Bachelor’s Degree in Economics and Asian Studies from Williams College, and a Master of Philosophy in Development and Economics from England’s Cambridge University.