Andrew Berlin talks about recruiting for character
Tim Leman: Have you ever felt like you're on the edge of something great? You put in the work, you've done the hard stuff most people aren't willing to do, and now you can just sense a magical run lies ahead. This season, we'll talk to leaders across a wide variety of industries to learn what it's like to ride the edge and own it. We'll hear what separates those special teams from the more ordinary experiences. The kind, if we're lucky, we get to be a part of maybe three or four times in our life. Join me, Tim Leman, Chairman and CEO of Gibson, as we discuss leading on the edge. Welcome to The Edge Podcast. I'm your host, Tim Leman. On this episode, we have Andrew Berlin. Andrew is Chairman and Owner of the South Bend Cubs, partner and shareholder of the Chicago Cubs Major League Baseball team, and Managing Director of Shield AI. I'm excited to have you on the show today Andrew, welcome.
Andrew Berlin: Thank you very much. Glad to be here.
Tim Leman: Oh man, I got to tell you, I just don't even know where to start. We've got so many things I want to talk to you about, but why don't we start the here on the now tell us a little bit about your latest venture, Shield AI.
Andrew Berlin: Yeah, it's very exciting. So I retired from Berlin Packaging after 32 and a half years in the Chairman and CEO chair. It was a grand experience, grew into a great big company and then sold it, although kept some stock in it. And I still remain a pretty sizable shareholder there, but I thought I'd give retirement a shot. And Tim, I failed miserably. I was on the sidelines for about a year and a half actually, with almost everybody else during the pandemic. But I was vibrating in my chair, just looking and thinking about doing something new and different. Obviously it had to meet my own kind of personal mission of doing something that does some good for the world, and provides jobs for people that want to work. But I wanted to do something interesting and different than packaging, different than baseball even. And so I was approached by a retired Vice Admiral from the Navy, who reached out to me when he heard I was retired to ask whether or not I'd be interested in becoming an Ambassador to Germany. And after speaking with my family, the post had been opened because the fellow had come back to be the National Security Advisor for the Trump Administration. After speaking with my family, they did not want to move to Berlin, Germany, despite my name being Berlin. But I thought it'd be a nice fit, but not a fit for the family, and so we turned that down. Then they came back to me and asked me if I wanted to join the Navy. I would enter the Navy and would be commissioned as a Commander and a work with the Secretary of the Navy to help improve business processes in the Navy to help them reduce expenses, improve efficiencies, improve the supply chain for an effort to build more ships, to keep parody with China and Russia and their ship building ambitions. And so the long and the short of it is, is I went through all the tests, the fitness tests and all of these things. And as it turns out, the commission was moving forward. But with the election that happened later in 2020, all of these kinds of innovative programs to improve the government got shot down after the election and everything shut down, everything changed. So anything that had been proposed during the prior Administration, as politics, as you know, got shut down for the current Administration. So I was pivoting to another industry, in this whole journey that exposed me to another company called Shield AI, that's the long road to get there. Shield AI is a company that makes autonomous artificial intelligence that can be loaded into a missile or drone, a fighter jet, and it can operate without a pilot on the ground or, it's an unmanned aerial vehicle. And it can work in environments where communications are denied, GPS is denied. The enemy has figured out how to jam all communications and GPS, making it difficult for drones to operate or even fighter jets to operate. But with our artificial intelligence or autonomous AI, we can load that and stack that onto the hardware, onto the vehicles, and we can still navigate and get to the target if we have to. We're supplying the US Military today. There are other countries that are interested in our product. The company is growing rapidly and I'm the Managing Director there, so I work with the entire Executive team to help them improve their process of building a business. I'm not an AI engineer, I'm not a software engineer, but I know how to help companies build and grow. And so that's what my duties are today. I've invested in the company as an owner as well and so I'm off to the races of something completely different.
Tim Leman: Oh, that is so exciting. Well, I think we could unpacked the whole episode just on some of those things you mentioned. So, go back to a couple of those though. I mean, you were sizing up your big anchor tattoo to put on your shoulder.
Andrew Berlin: Yeah, I got the uniforms and everything. They sent me to the PX, to tailor, the tailor got me all fitted with my uniforms. It's it was... Yeah, I was three days away from being commissioned and then the program got shut down, but it all happens for a reason.
Tim Leman: You've said that and implied that this was, this isn't something that's really been done in the past.
Andrew Berlin: Yeah.
Tim Leman: Where they bring in senior business people like yourself, this was a new thing?
Andrew Berlin: It was a new thing, yeah. Sometimes the Navy will bring in older guys like myself, if for example, cardiac surgeons where they don't have a certain specialty that's in the Navy, but they want to bring those skillsets into the Navy. So they'll make exceptions on the age for a special circumstances. This is the first time they had considered a business person as a special circumstance to bring it to the Navy. But yeah, my kids and my wife were very excited for me to wear a Commander's uniform and, but it's okay.
Tim Leman: Yeah, that's plenty but then find your way into Shield AI like that. How is that, being in the defense space? You've had clients in that space, how you go about doing businesses different when you're working directly with Federal Government. Do you want to talk about that a little bit, about comparing and contrasting to your years at Berlin packaging?
Andrew Berlin: Yeah. So, Berlin Packaging sold glass and plastic and metal containers to food, chemical, pharmaceutical, wine, beverage industries, and so our value proposition in a commercial environment was a little simpler. Our customers, our prospects, would do business with us only if we could prove to them that they'd make more net income or EBITDA as a result of doing business with us. So if we did our job right in the packaging business, we helped our customers increase their sales, improve efficiencies and supply chain, or even reduce costs along the way. And you could then quantify all of that. And now you have the value of doing business with Berlin Packaging, a little different than with the military and it's selling to the government. The process is complex and as Byzantine as I can even think to imagine, I couldn't even create a more complex processes if someone asked me to. Selling to the military, selling to the government, there are so many approvals and so many funding channels that are required to complete a sale to the government. It's a very, very long arduous process. It requires connections, it requires a knowledge of the process, it requires real stamina. Thankfully, the company does have a lot of people who have formerly served in the government and in the military, have contacts, but also we have something that the government wants. That's the good news. And there is no other company that has what we have, that's the even better news. So it doesn't require a lot of marketing, although we do attend the trade shows the military attends. We do sit in a position right now where the government is taking as much as we can make, when it comes to our drones and our quadcopters, and even the software for the fighter jets. So that's the good news. The challenges we have is just making more, faster. That's where we find ourselves today. But at the end of the day, people are people, regardless of the position they have. We have to understand what is on their table and what's on their sheet of paper, if you will, to understand what the motivations are of doing business with us. People are still making decisions, not machines. Whether it's a General, or an Admiral, or someone who is in the supply chain, or in the procurement process in the government, they all have specific needs and requirements that we need to understand and respond to. So that customer analysis that we go through, is very similar to what we do in the commercial end of the business, back in packaging days. And even in the baseball, understanding what the specific needs and requirements are of our fans. What are the touch points, how do they feel when we interact with them in various circumstances? We have to do that same analysis in the defense industry as well.
Tim Leman: Well Andrew, you went right there too. We have to talk about baseball a little bit. As summer winds down, the fall begins. Thinking about both of your Cub teams. How did you feel about the season this year?
Andrew Berlin: Well, I'm so happy. We didn't go through another season like 2020. I mean, at least we had a decent schedule to work with. We had fans back in the stadium, and in that we do play baseball outside rather than inside, there are people who felt more comfortable coming to our stadiums than let's say to a basketball arena. Having said that though, certainly the vaccine administered to many of our fans last spring helped a great deal. So I wouldn't say that we were back to pre pandemic levels, but it was certainly better than 2020 and is trending better. I mean, as far as the performance on the field, you're not talking to a Scouting Director, you're not talking to someone who is involved with skill development and training specifically. Obviously, Chicago Cubs did disappoint, but we're in a phase where we're rebuilding, that horrible'R' word that we use sometimes. The South Bend Cubs, we got a lot of new prospects from our trades mid- summer, so it was great having that new talent. But then again, in the Minor Leagues, we're at Single- A and if they're doing really well, they pull them and move them to Double- A. So it's a constant change of rosters throughout the summer. The good news, at least for the South Bend Cubs, is that we're selling more of an experience, a customer experience than we are wins and losses. I've heard it said that 85% of the fans, after they leave our stadium can't even remember the score of the game but they do remember whether or not they had a good time.
Tim Leman: I can vouch for a lot of our employees here that take their families out there and our regulars, and that's absolutely true. It's like the greatest outdoor movie theater, if there's entertainment going on, it's fun, the kids love it. There's nothing like getting all jacked up about hot dog night and all that, so I think you guys are continuing to crush it from that standpoint. Thinking about the Chicago Cubs and leading into team discussion and team dynamics, there was that 2016 team, it's so special and saying goodbye to some of those great players, and so on. You've been a part of loads of sports teams, business teams, over your career. What are the ingredients of a great team from your perspective?
Andrew Berlin: Well, baseball teams like companies have a bias when they're recruiting. So every company is different. I'm not saying there's a right or wrong answer here, but I will say that of the companies that I've been involved with, including the Cubs, there are a lot of different biases one can consider. So for example, in a baseball context, is someone fast on the bases? Are they young? Are they a grizzled veteran, can they lead in the clubhouse? Can they pitch, can they hit? Every team in Major League Baseball has a specific bias. And I will tell you that for the Cubs, the number one attribute we look for young or old, fast or slow, is character. Clearly the Cubs have had a team full of young men who have had extraordinary character. Now there may be a few mistakes here and there, every company has it. I won't mention names, but some of those names are, publicly have brought the appearance of some impropriety that affects the discussion about character. But overall, the heroes of the 2016 team for example, these were young men with character. Because we feel that it's not just the skillsets, but it's the traits, the personality traits that really make a great team. And the same in your business and mine, even outside the context of baseball, is that the traits that make us up as a person were learned at very formative years, from the ages of three to 10 years old. The sense of integrity, the sense of work ethic, that sense of creativity, imagination, being clever, having a sense of humor, being playful, willing to learn. These are attributes and traits that you learn as a little kid and I can't train that to an adult. All I can really do is recruit it and I can enhance it with training, absolutely, but I can't treat someone who has a warm heart and a spirit for kindness. I can't... I can turn that person into a packaging sales person, but I can't take a packaging salesperson and teach them how to be kind. So, I always have a bias for character and I think the Cubs did that, and I think every great business does. That's my argument. Now there are other businesses that will hire for brains. I want all my people to have graduated from Dartmouth, Harvard, Princeton, Yale, Stanford, and so I'm building a company full of pedigrees. Well, I've seen that, I've seen that strategy too, and I don't think it always works. Show me someone who is creative, and imaginative, and interesting, and delights in serving on a team. Those kinds of attributes, I think, are far more important just simply than the resume or the state into where they went to school.
Tim Leman: Andrew, what's the greatest team you've ever been on?
Andrew Berlin: I guess the biggest impact was the Berlin Packaging team that I was on. I'm new to Shield AI, it's an investment I made several months ago. So it's a new experience for me. It's a great bunch of folks, but I have to say building Berlin Packaging from a$ 500,000 investment in 1988 and taking it to over$ 4 billion, over$ 4 billion now. That journey of organic growth and some acquisitions, but mostly organic growth, created relationships with my sisters and brothers in that organization that I will never forget. Tim, I have to say it wasn't just good marketing and it wasn't just pretty bottles. The fact that we recruited for character, we recruited for traits, and we ended up with people who saw a lot of themselves and others in the company because we did recruit well. And as a consequence, something that we measured along the way, unintentionally, is how many marriages actually came out of Berlin Packaging. Because we hired people who liked other people, we were hiring similar people. The number of marriage... In one year we had in our headquarters, I think we had five marriages in one year, and the headquarter is full of about 150 people. And it was, it's pretty good, it's a pretty good statistic but it meant that we were recruiting well, too. So I'd say that Berlin Packaging team, I have to say it was the most gratifying.
Tim Leman: Oh, that's cool. You need to add Dr. Love to your bio Andrew, one more unique thing there. When you think about that and that team, it's been said that it's tough to have this sustained level of this special run, at certain points in time calls for a new coach or the players get swapped out or whatever, and Chicago Cubs are a good example of that here recently. What's your take on that? Are there seasons and times when everything's just all in sync and or can that be sustained perpetually forever? What do you think?
Andrew Berlin: No, I don't know about forever, but I do know that well, thankfully, first of all, the difference between baseball and commerce is that, you're over the hill when you're 31 years old baseball. And I think as long as you can think clearly and come to work, I think you'd probably worked well into your seventies, eighties, maybe nineties. But I think that the difference is, is leadership. If leadership changes in a company, I think to just a watch out... Just need to make sure that the next leader, if you have a founder or a CEO that built this great company, the next person, the successor needs to embrace that same culture and the things that worked. When I see it fails, it's usually because the leadership has changed and has changed the approach to the people end of it. Again, it's... I've said this many, many times, but every company has good ideas, Tim. Every company has got some form of strategy documents sitting in a desk somewhere, a list of tactical initiatives they want to get done and just overall good ideas. But a lot of those companies failed to recruit or train the right kind of people to lift that strategy off the paper. And if they don't pay attention to recruiting the right people, offering training and skill development, and actually having retention strategies as well, keeping those intellectual assets like wisdom and experience in the company, then you're going to fail to really execute and lift those good ideas off the paper, lift the strategy off the paper into action. And that's why to me, whether you call it a people operations, people department, human resources, you really, really need to focus on those three great attributes of HR and that is recruiting, skill development, training and retention. Companies with high retention, high loyalty... Is uncontroverted studies have been done, the correlation between loyalty and higher earnings. And so I think it's keeping that wisdom and experience in the company over time that's a big, big part of growing through your people too.
Tim Leman: Amen on that. So what would you say has been your edge in life, Andrew?
Andrew Berlin: Well, it's a great question. I just had a conversation with a friend about this. Because he was wondering why after hitting a certain magic number of what you want to be worth, why not sit back and smoke a few great cigars, drink some great scotch, read some great books, and hang out with your friends? That all sounds like fun, but I have to say what's more fun is building great organizations, where you can provide jobs, the opportunity to create wealth for people and their families, to put kids through college, to get the home that you want, to live comfortably and safely, and have the right kind of health provider. Providing that to families... In my case, I've been lucky enough to be involved with tens of thousands of families throughout my career. God, that just feels like a great mission in life and I love it, and that's why I don't think I want to stop anytime soon.
Tim Leman: How do you compare and contrast that to Andrew today versus say, younger Andrew, when you got going in? Have you always been that dedicated to the purpose and so on, or is that something that changes or shifts over time?
Andrew Berlin: I think it shifts with a little bit of perspective that comes with age. The space is that the older we get, the more successes and the more failures we have in life. None of us are without flaws, none of us are without disappointments, but understanding one's flaws and experiencing one's disappointments, I think also brings us some humility. It's an opportunity to learn to get better. Folks that don't embrace their flaws or don't embrace their disappointments are, I think, are not going to learn as quickly as the rest of us. So, age does bring that, bring a little bit of wisdom to the noble mission, if you will. I will say when I started out, I practiced law for 23 months. I did not make it to two years. The law firm I was working for was selling off of a troubled packaging company. And to be honest, my mission at that time was to fix up that packaging company for a couple of years and then flip it and try to make some money. I didn't get around to flipping it though. Although I did sell it off 30 years-
Tim Leman: Just 30 years later, yeah.
Andrew Berlin: ...Just 30 years later but it was an opportunity to create some wealth. I saw an opportunity and I grabbed it. At some point, if you put three meals on the table and your mortgage is getting paid off, and you're meeting those important needs, then you start thinking about maybe the bigger, the bigger mission. It's not just three squares a day and taking care of the family. If you're able to tick that off, thank God. And to those who hit that position in life, I think that's a great feeling. I think beyond that though, now you have to start thinking about, what else you can do? Do you become philanthropic, do you help the greater society? Do you help those who... And for those who want to help themselves but don't have the resources, how do you get them there, those resources? Because it's not just one company, it's not just one family, it's not just a dozen. But if you have the wealth to help others and you can be creative about it and thoughtful enough... Then it starts feeling good, spreading some of your learnings to others that could take advantage of that.
Tim Leman: Okay, let's shift gears to rapid fire. This is always my favorite part of the show. Well, we'll start with an easy one. What's your favorite color?
Andrew Berlin: Navy blue.
Tim Leman: What was your first car?
Andrew Berlin: My first car was a Dodge Dart.
Tim Leman: All right. Do you remember what year it was?
Andrew Berlin: It was 1976. It was a used Dodge Dart so I can't remember what year it was. It was 1976, yeah.
Tim Leman: Awesome. What's the most memorable concert or performance you've been to?
Andrew Berlin: I saw the concert Boston, that was in 1977 and that's when I first kissed Julie Rosenheim.
Tim Leman: Well done. A little Smoke on the Water, right? What's something about you that very few people know?
Andrew Berlin: I'm a little bit of a clothes horse, but some might suspect that. But other than that greatest joy in life are my children, my family.
Tim Leman: When they cast the movie about you, who do you want to play Andrew Berlin?
Andrew Berlin: Daniel Craig.
Tim Leman: All right.
Andrew Berlin: No hesitation.
Tim Leman: Good to choice. I think some people might mention your name in this list, but who are three people that you'd like to have dinner with?
Andrew Berlin: Well, if I spoke Italian, Julius Caesar, that would have been a fascinating one. I think Abraham Lincoln, I think another fascinating one. And I think FDR, Roosevelt.
Tim Leman: I've read a biography, or I should say, listen to an audio not so long ago and it's really fascinating... His career and the different stages along the way, even with all the disability and everything that he... How he, at that moment in time, how he needed to portray himself to the country and everything was just really incredible. And this one, I think, is a tough for people in your shoes, but because you've already done a lot of it. But what's something big you'd like to do before it's all over?
Andrew Berlin: I still want to be commissioned as a Commander. Crosstalk I haven't given up on the Navy just yet.
Tim Leman: So you're still doing those 6: 00 AM cold swims out in Lake Michigan, just so you're ready, right?
Andrew Berlin: Why not, why not?
Tim Leman: I love it, I love it. Hey Andrew, this was great. Thank you so much for spending time with us in here and I know our audience is going to love it too. And good luck with everything with Shield AI.
Andrew Berlin: I appreciate it, Tim. Thanks for the call, I really enjoyed this.
Tim Leman: Thank you for tuning in today. I'm Tim Leman and remember to own your edge. Subscribe to The Edge podcast on Apple, Google, and Spotify.
In this episode of The Edge, Tim talks with Andrew Berlin about building a great team by recruiting for character. Andrew keeps busy by being the Chairman and Owner of South Bend Cubs, partner and shareholder of the Chicago Cubs, and the Managing Director of Shield AI. Today, he highlights the importance of character and integrity. Andrew shares with us some of the great teams he's been on, and what about that team made it so great. Hint: hiring for a person's character can be more important than what you see on a person's resume. Listen now!