127: How Good Leaders Make Better Choices, with Kevin McCarthy

Have you ever wondered why good people sometimes make terrible decisions? 

Kevin McCarthy lived this question when he unwittingly became involved in what turned out to be Washington state's largest fraud case—an experience that landed him in federal prison for 33 months despite having no knowledge of the crime. Rather than becoming bitter, Kevin transformed this devastating setback into profound insight about human blind spots and leadership.

In this thought-provoking conversation, Kevin shares his journey from successful entrepreneur to federal inmate to leadership development pioneer. He explains how blind spots—our unconscious biases, thinking errors, and limiting beliefs—affect even the most well-intentioned people, especially as they rise to positions of greater authority.

Kevin discusses the fundamental flaw in leadership development: we promote technical experts without equipping them with essential people skills. While organizations invest heavily in teaching processes and methodologies, they neglect to help leaders understand themselves and others. The consequences are severe—with Gallup research showing only 23% of the global workforce is engaged, while a staggering 18% actively sabotages their organizations.

Kevin's metaphor of prison life brilliantly captures the challenge we all face: we can choose the wide, easy path of remaining unchanged, or the narrower, more challenging path of growth and self-improvement. "I challenge every leader to choose the narrow path and decide to proactively become a better version of yourself," he urges. "We can all learn to think better, be better, and do better."

Whether you're a seasoned executive, an aspiring leader, or simply interested in understanding the human factors that influence decision-making, this episode offers invaluable insights on developing self-awareness, emotional intelligence, and compassion in leadership. Listen now to discover how Kevin's assessment tools and training programs are helping organizations build better leaders and healthier workplaces worldwide.

Kevin McCarthy is a consultant, leadership development coach, and author of the bestselling book, BlindSpots – Why Good People Make Bad Choices. You c

You can learn more about Kevin on his website or connect with him on LinkedIn. 

Go to https://betterhelp.com/resilience or click Notes on Resilience during sign up for 10% off your first month of therapy with my sponsor BetterHelp.

Chapters

• 0:00 The Greatest Leadership Development Problem
• 3:29 Kevin's Journey from Prison to Purpose
• 10:12 Understanding Our Leadership Blind Spots
• 13:50 The Expert Fallacy in Leadership
• 20:13 The Manager's Impact on Engagement
• 27:05 Choosing the Narrow Path to Growth

Transcript

Kevin McCarthy: 1:15

What is the biggest problem in leadership development? I'd say it's again this lack of developing aspiring and middle-level managers and helping them be able to first of all, see themselves clearly and see others clearly and learn how to connect with their people and not just let's call it boss them around.

Manya Chylinski: 1:38

Hello and welcome to Notes on Resilience. I'm your host, manya Chylinski. My guest today is Kevin McCarthy. He is the author of the bestselling book Blind Spots why Good People Make Bad Choices, and he and his team empower leaders to uncover their blind spots, harness their innate talents and drive peak performance through enhanced self-awareness and emotional intelligence. And that's what he and I talked about compassion, self-awareness, emotional intelligence and why it's important to recognize that you have blind spots and how to work around them. You're really going to enjoy this episode, kevin. I'm so excited to talk to you today. Thank you for being here.

Kevin McCarthy: 2:26

Thank you, manya, I'm pleased to be here as well.

Manya Chylinski: 2:29

The first question I start with everyone this year is what is the one thing you've done in any area of your life that you never thought you would do?

Kevin McCarthy: 2:39

That's a loaded question. Are you ready for the answer?

Manya Chylinski: 2:43

I'm ready.

Kevin McCarthy: 2:44

I spent 33 months in a federal prison for a crime I didn't knowingly commit. Okay, never thought that would happen.

Manya Chylinski: 2:52

Yes, I hope that you hadn't planned on spending time in a federal prison, and that is the story that I want to get into, because it really ties into who you are today and the work that you're doing with leaders today. So, can you, are you willing to share a little bit about your story?

Kevin McCarthy: 3:11

Yeah, absolutely, and all the details are in my bestselling book Blind Spots why Good People Make Bad Choices, available on Amazon. So I won't go into a lot of the details. But the high level is I was at the pinnacle of my career. I had sold a company, became a president of a publicly held company that purchased my company and thought I was on top of the world. So everything I had worked for all of my entrepreneurial life had come to a culmination in that moment. And then, of course, you probably remember, the dot-com bubble burst back in 2000.

Kevin McCarthy: 3:50

And so here I am, having gained it all and then quickly lost it all, because most of my stock was restricted due to being an insider now on the company and I'm sitting at a coffee table in the Northwest with a buddy of mine from church and he told me about an investment opportunity. And you know I pretty much you know know there's a lot of scams out there, but he was a good friend from my church and I trusted him. He was a good friend from my church and I trusted him and, long story short, I pursued the opportunity. I met with the treasurer of the company, asked a lot of astute questions, felt comfortable enough to write a check and become an investor, thinking that that company was going to go public very soon and that would probably set me back up on my feet.

Kevin McCarthy: 4:35

It wasn't too long before I was an investor, becoming now a consultant for the company. The CEO of that company apparently heard about my business development background. He asked through the daisy chain. My buddy got ahold of me and said hey, lawrence, wants to talk to you about doing some consulting work temporarily. Long short, again flash forward. I took a 30-day consulting contract with this company that I'm an investor in, thinking it's going to go public, that 30 days turned into 15 months working as a contractor and never once saw prison coming because I had blind spots well.

Manya Chylinski: 5:16

thank you for that. It's so impressive that you've taken that experience and you've got your book and you've got your work and you're helping people understand their own blind spots. And that aligns with the kind of work I think about and do about, because we're talking about self-awareness and emotional intelligence and leadership development awareness and emotional intelligence and leadership development. So, as we get started, I'd love to hear just your thoughts on compassion and how that fits in compassion in a leadership role and how that fits in with the work that you do Absolutely.

Kevin McCarthy: 5:52

And before I touch on that, let me just put a capstone on the story so we don't leave the listeners hanging. First of all, I want everybody to know that I was guilty. I just didn't know.

Manya Chylinski: 6:02

I was guilty.

Kevin McCarthy: 6:03

I didn't know I was helping my boss commit a crime. So after I became aware talking about self-awareness, situationally aware that my attorney explained how I was an unwitting accomplice, I accepted that fact and I ended up taking my plea bargain and the CEO of the company ended up with a 20-year plea bargain and spent 16 and a half years behind or in prison as a result.

Kevin McCarthy: 6:29

of his fraud basically Turned out it was the largest fraud in the history of the state of Washington and, according to the FBI agents I spoke with, they said that my boss was the most cunning con man that they had encountered in the history of the Seattle office of the FBI. He took over 93 million dollars from 5,000 investors over seven years and I came in as a contractor in the last year of that seven-year period. So that's it kind of puts the caps down again. The rest of the story, even the smoking gun, is in, is in the book. I got nothing to hide, so it's all.

Kevin McCarthy: 7:01

I open it up and then try to demonstrate transparency and vulnerability, even in my keynote audiences, whether it's training workshops or keynotes. Is my story, is your story, just different? Right, we all have a story and that's the thing we have to remember when we are working with people in the workplace, when we are leading teams, is. We have to remember, everybody has a story and so we see the world the way we see it, based on our story, and we have to sort of juxtapose that viewpoint and do what's called perspective taking. We have to really try to understand where somebody else is coming from and how they're seeing the world, so that we can have more compassion and patience and empathy, and the list goes on right yes, it can be so difficult to put ourselves in someone else's shoes, even for someone who is actively wanting to do that it.

Manya Chylinski: 8:10

We all come from such different perspectives and we all have such different stories. Sometimes it can be really difficult. How do you help leaders get to that point where they can at least be trying to put themselves in someone else's shoes?

Kevin McCarthy: 8:26

So I take a perspective here, hermania, that we're all good people with good intentions. Of course, maybe not the psychopaths and sociopaths, but that's a different story, right? But if you think of that perspective, then we have leaders with good intentions, like you said, even that they want to do, they want to do well, they want to be compassionate, they want to understand the other person's perspective. But we have a lot of barriers, what I call blind spots, that come against us and that hinder us from doing that. Blind spots is sort of an overarching term that encompasses unconscious bias, thinking errors and limiting beliefs, and so the biggest challenge we have in the organizational world whether it's corporate, public, doesn't matter is we take subject matter experts or independent contributors who are doing really?

Kevin McCarthy: 9:24

really good work and we go oh well, we should probably promote them into leadership. Let's make them supervisors, then managers and then senior leaders, and the list goes on right. And we forget that, while they're great at their job and they may be very loyal to the company, we bring these blind spots into that equation and we don't help them learn the people skills, starting with themselves, so that they can lead effectively.

Manya Chylinski: 9:51

And I think, as you're thinking about blind spots, when we're moving people from being an individual contributor and a subject matter expert into leadership, we're putting them in a spot where we're adding to their blind spots. It feels like Because we've talked about this in so many other podcast episodes how we take people who are excellent at their jobs and give them this new job, often without any of the underpinnings to support them.

Kevin McCarthy: 10:20

Absolutely.

Kevin McCarthy: 10:20

In fact, I think part of the problem is we, we being organizational.

Kevin McCarthy: 10:26

Leadership is we give them the skill training that they need, but we forget there's a whole other element that's super important In fact, according to all the Gallup studies, it's probably the most important which is giving them again the people skills to lead effectively. And when I talk in terms of people skills, I don't just mean good communication. That's a big part of it, but we have to start with being a little bit more introspective, and nobody wants to really go there. In other words, it's like there's this weird mindset shift that takes place in many SMEs subject matter experts and independent contributors that get into their first level of management or leadership, and that mindset shift is well, now I'm the boss, so I got to act like a boss, right. And for some reason we have and I dealt with it too when I was younger For some reason we just have this difficulty of realizing that, yes, I'm a boss and now I have to lead, but I don't have to do it from a command and authority type of basis. I can lead by connecting with my people.

Manya Chylinski: 11:41

I have been thinking a lot about this topic and we expect adults we're talking about adults here in this work world to just sort of understand the people side of almost everything. We will train on the subject matter, we will train on the tasks, and somehow we just expect that everybody knows how to do all the rest and I find that fascinating, and I had one guest talks about that. We're going all the way back to your childhood in terms of things that you've learned or not learned how to do. But if we're thinking about how do we develop leaders, what are the things we need to be thinking about in formal leadership training, like MBA programs, to the kinds of training we give to these individual contributors when we promote them to become managers?

Kevin McCarthy: 12:34

Well, again, I think it goes back to whether it's an MBA program or an internal leadership development track or whatever it is. We spend a lot of focus on the hows, on the processes, on this leadership styles, so to speak, and we just don't spend enough time on developing the person and helping them become a better version of them and then helping them understand the different types of people that they will be leading Right. So, which is you know? So, in 2016, I, with some smart people, developed the blind spot assessment. For that very reason is that as a tool to demonstrate to my audiences how we are all wired very differently, and yet there's not one good or one bad temperament. It's just that's who we are, but we need to understand that. So we first need to understand ourselves, then we need to understand others. Right?

Manya Chylinski: 13:33

All of those can be a lot of work, depending on who the person is that we're talking about.

Kevin McCarthy: 13:39

Well, sure, and it can be scary. It can be scary to look in the proverbial mirror, which is what the very first thing I had to do when I got into the federal prison camp which, by the way, is the lowest level of security in the federal system. There's no bars on the windows, no locks on the doors, dormitory style living, right. But I had to spend time and reflect and go. You know, I feel like I'm smarter than the average bear.

Kevin McCarthy: 14:05

How did I not know my boss was committing a crime? And then the questions of what's wrong with me. You know it's. How am I so broken? I didn't see this, and so I had to face the reality that something was amiss in my thinking processes. And that's a scary thing for a lot of us, because of our insecurities or because we want to see ourselves as better than we are and it doesn't mean we're bad, we're all. We all have room for improvement. And I had to come to that realization and say, hey, it's okay, I missed some things. And now I understand better how to process that, how to think about things, how to challenge, you know, events or situations right.

Manya Chylinski: 14:47

Yes, and I love that you're helping. You're working to help people figure that out without having to stand in the in the dormitory of the federal prison camp, right? You're hoping to help people before it gets to that point, right? As we were talking about leadership development, it occurred to me that there's a major blind spot in how we think about how to develop leaders. Spot in how we think about how to develop leaders and obviously I didn't make that term up, but I we have individual blind spots, and then we have that systemic, organizational blind spot.

Kevin McCarthy: 15:30

I'm just curious your thoughts on that. Let me let me make sure I understand the the thought process there from a systemic organizational blind spot Organizations. I may be misunderstanding your question, but organizations themselves don't have a life of their own without the humans that are running them right.

Kevin McCarthy: 15:48

So the humans put those blind spots in. Now I'll get this quote wrong at this moment because my memory is not quite what it used to be, but I believe it was the author of Emotional Intelligence 2.0, and Bradbury's last name his first name is escaping my memory and he makes a comment that the emotional intelligence of CEOs goes downhill faster than a downhill skier. Right, so let me equate it a little bit more plain English, if you will, as I've looked at it and done the research. The higher up we get in our career, the bigger the title, the more responsibility, the more seasoned we become, we actually develop more blind spots, and it's I call it, the expert fallacy. It's because you know, it's almost to the degree that I've been there, done that, seen it all.

Kevin McCarthy: 16:47

Nothing surprised the statements, even though we don't say the statements necessarily. There's that underpinning mindset. And so if you're thinking in terms of organizational blind spots, it may just simply be because the organization is led by a lot of leaders at the senior level, the executive level, who again didn't get the people skills training and the self-awareness and emotional intelligence training early in, early career, so they just carried what they know how to do best to the top, and it got them there. So they think it's okay for everybody to stay on that course.

Manya Chylinski: 17:24

Okay, I see what you're saying. You don't know what you don't know, and I personally feel that I'm of two minds. When I learned something important, some important fact, that I just never realized about myself, on one hand, I'm of two minds when I learn something important, some important fact, that I just never realized about myself. On one hand, I'm glad that I learned it and okay, now I'm moving forward, I've got this new information, and on the other hand, there's a piece of me that thinks how come I couldn't have figured this out six months, six years, 60, or not quite 60 years ago? I get so frustrated. So what do you think is the greatest failure of our leadership development programs in this regard?

Kevin McCarthy: 18:30

If I can draw on nearly 80 years of Gallup research amongst Korn Ferry and other research organizations out there. Gallup had a great quote, other research organizations out there. Gallup had a great quote and I think it was a book called it's the Manager and again I'll get it slightly wrong here, but it basically boils down to, they said, of over 80 years of research, the most startling fact that they have uncovered is that in team engagement is 70%, I should say, of team engagement is directly attributed to the manager, right? So what is the biggest problem in leadership development? I'd say it's again this lack of developing aspiring and middle level managers and helping them be able to first of all see themselves clearly and see others clearly and learn how to connect with their people and not just, let's call it, boss them around, if you will.

Manya Chylinski: 19:29

Right, yeah, I can see that, and you may have also heard this quote that an individual's manager has a bigger impact on that person's mental health than a therapist or a doctor an equivalent to that person's spouse. So when you add those two facts together, we see why many people are dissatisfied in their jobs.

Kevin McCarthy: 19:53

Oh, absolutely, and you know more of the Gallup studies. I mean, it's what is the latest report, I think it was only 23% of the workforce is actually engaged, which means that they're making a conscious effort to give you their best energy. Most of the workforce, that's in the 50% range of the workforce, is disengaged, meaning that they're pretty much always looking for another job and they're just doing the get by. And then the worst than that is about 18% of the workforce and this is a global study 18% of the workforce is actively sabotaging the organization, meaning that they're poisoning the minds of the good people, their bad thing manager, as they're on their way out. Right. So it's back to again. If I'm an employee and my boss is not connecting with me and all I see is my boss as absentee, not really giving me the time I need to develop fully, or just I see that person as sort of abrupt and a jerk, because all they do is kind of bark orders and I'm being a little exaggerating here but if I'm not connected with my boss, then I'm not enjoying my job.

Kevin McCarthy: 21:09

Yeah, and it goes back to that. We can fix this. It's a very fixable problem. We just need to help the bosses of the world. Let's call them the managers. We need to help them understand who they are, who others are and how to bridge that, what I call the perception gap. How to bridge that gap so that the way I see the world is different than the way you see the world. How can we bridge the gap on those two different perspectives, if you will, so that you and I can connect and I can help you develop into a great leader when you're ready for that? Right?

Manya Chylinski: 21:44

Well, some of those statistics I had not heard, some I was aware of. There's clearly a foundational problem with the way we work or the way we've set up the world of work, if that many people are dissatisfied and which makes the kinds of work that you do and the kinds of work leadership consultants are doing to build compassion and build that self-awareness and identify the blind spots so much more important. But it a little bit feels like trying to hold back a wave.

Kevin McCarthy: 22:21

Yeah, I see what you're saying. It's going to take time. I'm seeing a shift and I think most of my colleagues would agree that there is a shift happening where executives are recognizing the value and, frankly, the ROI of investing in the middle, whereas previous generations didn't recognize that. First of all, the previous generations weren't anywhere near as if I could use the word enlightened in the sense of learning about and understanding self-awareness and emotional intelligence. Right, these are all, over the last several decades, you know, more developed constructs, and so it's going to take time and it is maybe holding back a wave.

Kevin McCarthy: 23:02

But there are organizations out there that senior leaders, top executives, are realizing. You know what. Let's really spend money and time and effort to take our aspiring leaders it doesn't matter what the age is, just somebody who's really good at their job. Firing leaders, it doesn't matter what the age is, just somebody who's really good at their job. They're pro-company and they can be elevated into leadership. But we need to train them properly so that they can deal with I'm going to say deal with their demons, because we all have them.

Kevin McCarthy: 23:31

But that's limiting beliefs I was talking about earlier, or the unconscious biases, things that interfere with our thinking process and we don't even realize, or just simply the thinking errors that we all make occasionally. But how do we deal with that so that we can deal with others? Triggers is a big one. For example, managers don't realize because we're not showing them and teaching them and helping them recognize what the triggers are. But they have people that work for them that trigger them all the time and then there's this rift that gets brought into that relationship and then so there's this dissatisfaction, disengagement, everything else. And if we just help them recognize those triggers and then give them the tools they need to just deal with the triggers or they react, it'll be much smoother communication absolutely, and better for the organization, better for the bottom line oh, 100.

Kevin McCarthy: 24:27

yeah, there's multiple studies that have actually tested this concept that self-aware teams will actually outproduce teams that are made up of less self-aware people and, by the way, statistically, most of us think we're self-aware.

Manya Chylinski: 24:44

Yes.

Kevin McCarthy: 24:49

I mean, I love Tasha Urich. You know her book Insights and the work that she does at the University of Colorado as a researcher and professor. But the reality is, from all of the studies, only about 10 to 15% of us actually are self-aware.

Manya Chylinski: 25:01

So we all think we're above average, and only some of us are right when we think that oh, kevin, I so appreciate getting your perspective and what is giving you hope right now?

Kevin McCarthy: 25:15

What is giving me hope is probably the organizations that have that awareness and step up and say yes. For example, one of my recent customers is the American Board of Radiology big organization and they're now using the blind spot assessment and they're embedding it within a leadership development program that they're designing specifically for that aspiring leader level. I get super encouraged when I see an organization that's aware and actually doing something to make sure that they're developing their leaders with not just the skills the technical skills but also the soft skills you might say.

Manya Chylinski: 26:00

Right, absolutely. Oh, thank you for that. And, as we wrap up, please share a little bit about your work and what you do and how people can reach you.

Kevin McCarthy: 26:09

Absolutely. First of all, you can go to blindspotscom and from there you can actually find the assessment company as well, and what we do is we basically provide an assessment tool that's unlimited use for a flat fee. That's really reasonable. So organizations can do just what the American Board of Radiology is doing embed that into their training, because it helps create more self-awareness and it's phenomenal in its communication. So it helps really build great communication. And then what we? I've got coaches all over the world that actually in trainers that actually can step in. And if some organization says, hey, we love the assessment, we also would love some help developing a program, or you can license our program and just use it with internally within your organization. So that's what we do to help organizations build the middle.

Manya Chylinski: 27:04

Excellent and I so appreciate that you took your experience and now you're helping others build better businesses and build better people.

Kevin McCarthy: 27:13

Absolutely. What came out of prison for me was, first of all, I'll leave you with this metaphor, manya and all of your leaders Imagine this prison camp. It's like a community college campus. So you walk through these double doors of an administrative building and you're now facing a courtyard, a beautiful courtyard in the Northwest grass trees, flowers, you name it and to your left are two dormitories. Now, in the dormitories you can pretty much do anything you want to do, as long as you don't get caught. You can gamble, you can.

Kevin McCarthy: 27:47

You know, the people were making pruno, which is like fermented fruit, turning it into alcohol, all kinds of silliness and craziness. You can stay up all night and watch TV if you want in the TV rooms. You can stay up all night and play pool. You can stay up all night and read fiction books, so it's like there's no limits. So, basically, you can be the same person on the inside that you were on the outside.

Kevin McCarthy: 28:12

But to the right there's a more narrow sidewalk that leads to the weight lifting and the exercise rooms, the chapel, the computer labs to learn computing, all the educational information so you can become a better person. The sad thing is, what I've observed is most of the men take the wide sidewalk to the left so that they can be the same person they were on the outside. On the inside, very few chose the narrow path to become a better version of them. So I challenge every loser to choose the narrow path and decide to proactively become a better version of yourself. I think we can all be better. We can all learn to think better, be better and do better.

Manya Chylinski: 29:06

That's the perfect way to end, kevin. Thank you so much, and to our listeners, thank you for listening to Notes on Resilience and we will see you next time.

Kevin McCarthy: 29:15

Thank you, Manya. Thanks for having me as a guest today.