I recently interviewed Morningstar CEO Kunal Kapoor on my podcast, Thirty Minute Mentors. Here is a transcript of our interview:

Adam: Our guest today is the leader of one of the most influential companies in the world of investing. Kunal Kapoor is the CEO of Morningstar, where he leads a multibillion-dollar business and 12,000 employees across 32 countries, responsible for covering more than 600,000 investments and managing nearly a quarter of a trillion dollars. Kunal, thank you for joining us.

Kunal: Thanks for having me, Adam.

Adam: You grew up in India, where at an early age, you were very interested in numbers and patterns. And you moved to the US to go to college. You went to Monmouth College in Illinois, where you studied econ and environmental policy. Can you take listeners back to your early days? What early experiences and lessons most significantly shaped your worldview and shaped the trajectory of your success?

Kunal: Yeah, I mean, there's definitely many moments in life, obviously, that end up shaping you. But going back to an early age, I always had an interest in numbers. And I actually, at a very young age, used to read the pages in the newspaper back in those days to short all the data around the horse races. And one year, I told my dad to put some money on a horse – I remember its name was Robinhood – because I liked the name. And my dad did that, and that horse did really well. So I sort of was smitten a little bit and I continued with my strategy of picking horses with good names. And it only lasted that long, you find out very quickly that you're not going to make any money at the horse races. And what I'd say is, though, that it left me with an interest in numbers. And even in those days, I used to actually write it all out and I had notebooks where I'd compare things and, it’s crazy when I look back on it, but that's what got me interested. And then my father was interested in investing, I'd say, but not necessarily someone who spent all his time thinking about it. But it was enough for me to have an interest. And he allowed me to buy a couple of stocks, or I’d say he bought them on my behalf. And that got me going. And interestingly, even after I moved to the US I had a pretty deep interest in investing. And I found Morningstar because I was earning money in college. I was working as an RA, a resident assistant, and I wanted to put that money to work and I decided to invest in some mutual funds. And I found Morningstar. And even back in college, I invested in two funds, T. Rowe Price Equity Income Fund and Janus Overseas. This was back in the mid-1990s. So the journey continued: I found Morningstar, the voice really appealed to me, the independence. Even as a young adult, I really liked the Morningstar voice which basically allowed analysts to call things as they saw them. And to this day, we've adhered to that. And so obviously, I learned lots of other investing lessons along the way. I've made a lot of mistakes and probably the most important lesson I've learned over time when it comes to investing include not trying to do too much, and really letting things like saving and compounding work for you over and above getting caught up in the day-to-day of what's gonna go up or down in the next two weeks or what have you.

Adam: Your first job right out of college working at Morningstar. Today, you're the CEO of Morningstar. You've spent the past two decades rising within Morningstar. Very rare that someone spends their entire career today at one company, even rarer that someone spends their career rising to become the CEO of that company. What were the keys to rising within Morningstar and rising within your career? And what advice do you have for anyone listening on how to rise within their career?

Kunal: Yeah, well, let's start by saying one piece of advice is not to listen to my advice when it comes to career choices. So with that caveat out there, the one thing I would say that's important – you’re right, it's not common for people to spend their entire career at one firm. But I'd argue Morningstar has been 20 to 30 different firms in the time that I've been there. And what I mean by that is, the firm has changed and evolved so much. The job I was doing when I started doesn't even exist today. Within Morningstar, some of the products and services that are the largest part of Morningstar today didn't exist even 10 years ago. And so that level of evolution is important. And I always like to say that growth creates unexpected opportunities. And I think that's been the case at Morningstar for me and many others. Because if I look at the arc of my career, I probably ended up doing a bunch of things along the way that I wouldn't have guessed I would have targeted. But because of the need of the hour, the way the firm was growing, and all hands on deck nature of a firm that's growing as fast as we have in certain periods, means you wear many hats. And that's what makes it exciting. And so when it comes to career advice, if there are common themes I give people, one is to not become too rigid too quickly about what you want to do. I thought I wanted to be an analyst all my life. And I still enjoy being an analyst when I have free time. I read company reports, and I read mutual fund reports as well. And I love that part of it. But I always thought that that's all I wanted to do. But instead I was encouraged to try the operating side of the business, I was given the opportunity to try a few different things. And thank God I did, because it opened things up pretty substantially for me in terms of how I grew. And I think the second piece of advice that's really important is that whatever you're doing, make sure you’re actually growing professionally. That's the critical part of it, that you're intellectually stimulated. And then of course, there's the very obvious thing, which is you should give it your all, no matter what the job is. I always thought I'm always in line to work for my next job and to think about what I want to do next. And so doing a great job in that context is incredibly important no matter how small, the job might seem.

Adam: Have an open mind. Don't be too rigid about what you want to do. Continually make sure that you're pushing yourself, make sure that you're grown professionally.

Kunal: That's right. And I would also just add to that, that sometimes you don't want to chase the shiny toy. For what I mean by that is, there's always a tendency to want to go after the things that seem the shiniest and the brightest, or the hottest at any given moment in time. Some of the best moments in terms of really growing your career and growing professionally are to take on projects that perhaps aren't shiny, that do require a cleanup. And if I look back on my career, some of the contrarian roles I've had that maybe others didn't want at a particular time, and I did those jobs, I found sometimes that I invested the most of myself in those opportunities, and I got the most out of them as well, because you feel the pressure in a very different way than if you're sitting on top of a shiny toy.

Adam: You used the word contrarian, and I know you take great pride in being a contrarian. It's central to how you view investing. It's something that you try to instill as a core principle at Morningstar. 

Kunal: Right. 

Adam: How did you develop the comfort in your own skin to go against the grain as an investor, as a leader? And how do you build a culture that fosters contrarianism?

Kunal: Yeah, well, it's not built in many people. If you look at a lot of the research that's come out in the last decade or last two decades of behavioral research, it shows how much of a tendency we all have to follow the crowd. And you see that everywhere. And I think we're just built as humans to get onto something that has momentum. And I think the way you have to do it is you almost have to force yourself sometimes to step back from a situation that you're in and be able to sleep on something, and put some distance between when you think you should make a decision and when you actually make that decision, because we're naturally as humans attuned to trying to respond to things off the cuff if you will. And one of the skills of being contrarian is to not let that emotion get a hold of you. Putting some distance, looking at some real data, understanding things in that perspective is incredibly helpful. The other thing is trusting the data that you're looking at and making sure you have great data. One thing I learned very early on is, we all bring our biases to certain situations. And I find to this day that people will have certain biases and will come to the table, and even if the data is very good, they just won't believe it. At some point in life, if you've done your homework, and the data is good, you have to let your biases go. Because the data is likely proving to you otherwise. And so, really having good solid sources and processes that allow you to make decisions is really helpful in that context.

Adam: You've spent your entire career working in the world of data. You lead one of the most significant data-driven businesses in the entire financial services industry. What advice do you have for leaders in all industries on how to most effectively navigate a world where the importance of data is only becoming more and more pronounced?

Kunal: It's a good thing, on the one hand, that we all have access to so much data. I mean, it's simple stuff in our personal lives, whether you're measuring how much activity you have, how many steps you're taking, or how you're sleeping. Just think about how that has changed in the last 10 years, and how you suddenly have all this health-related data that you have access to or in our professional lives, where because of just a massive amount of computing power, we're able to gather all this data. And what I would say, when it comes to data, the biggest risk is that you get lost in it all. That’s at a professional level, it's at a personal level, it very easily can be overwhelming. I always tell folks to try to find the one to three things, pieces of data if you will, that matter the most. Identify those, and try to focus on those, so that you don't get lost in the sea of data. So perhaps in your personal life, if it's health-related data, and you care about how many steps you're taking, or how much you're sleeping, like focus on the one to three things that you can make a difference on. And similarly in your professional life, how probably, if you look at all that you're doing, there's probably one to three things that matter the most. And really understanding what those are and focusing on those can be really helpful in terms of what you bring to your professional life.

Adam: What are you most focused on as a leader?

Kunal: I would say, one, when it comes to company performance, obviously, I care a lot about our financial performance. And so that is an easy one to be focused on and have a clear set of metrics when it comes to that. I also focus really heavily on ‘Are clients satisfied?’ I care a lot about how we measure that, and the inputs that we receive around that. So try to look at that all the time. And then we manage our business through a system of what are called objectives and key results: OKRs. And I tend to look at our key results very carefully every quarter, to see where we're tracking and how we're doing because it becomes a really easy way to hold ourselves accountable to the work that we're doing. And so rather than trying to set goals that are ‘in one year, we're going to do X or whatever,’ when it comes to what we're trying to do on a day-to-day, we have key results that are spread out over a quarter, we revisit them every quarter. And I use those very much to guide what we're trying to do.

Adam: It's interesting you mentioned that because, from the outside looking in, one of the differentiating qualities of Morningstar, relative to other large public companies, is that you don't really seem to be as focused on winning the quarter as you are on winning the long game, making long term strategic decisions, acquisitions that are going to win in the long term, decisions that you think are right for Morningstar long term rather than short term. But it sounds like you're quite focused on winning the quarter. How do you balance the two?

Kunal: Yeah, I think that's an interesting phrasing. And so what I would say is, I'm very focused on the delivery of what we have promised our clients, of what we've promised each other. And so the work that's getting done needs to be measured in real-time, right? It's very hard to say that we're going to work on a project that's going to take, let's say, 18 months to complete, and there's no steps to measure it along the way. That's not the case, we simply need to do that. And similarly, in certain areas, like in sales, there's very clear goals and measuring. What we maybe worry a little bit less about than others is do we need to necessarily, for example, have a certain client spend at a certain level in a quarter. I'd rather look at how we grow that relationship with the client over three years, and try to maximize that. So we certainly try to look at our performance in the context of three and five-year periods, but when it comes to the actual client deliveries in the work we're doing on a day-to-day basis, there's got to be accountability around that and that tends to be a little bit more focused on shorter-term periods.

Adam: What do you believe are the key characteristics of a great leader and what can anyone do to become a better leader?

Kunal: I've come to realize over time that I admire so many leaders. And what's interesting about a lot of them is when I sit down to compare them and find common traits, what I find is that while there are commonalities, the differences often are actually greater. And so what I've learned is that you have to lead in your style, and one great leader can be quite different from another leader. And I want to start with that because one of the important ways to lead is with your style. And authenticity is one of the most important traits of leadership because you don't create followership if you're not that authentic. And so I'll start with that as being incredibly important. To me personally, some of the traits that are important. One is meeting your commitments, being accountable, that's incredibly important for any leader. Two, I would say, is perseverance. There is no doubt that when you're leading, there are periods when you look smarter than you are. And there are periods when you look dumber than you are. And I think you've got to be authentic, you've got to be accountable, and you’ve got to persevere through some of these ups and downs. And you’ve got to do it in a way where you don't come across as perhaps being too emotional about it. And so I think that that's incredibly important. And the final thing that I'll just add as well is just the ability to be strategic and to look past some of the short-term noise that sometimes can be in the system and really make decisions that set an organization on a long-term path. So I think those are important traits and the ones that I try to embody. There are other things that I would point to that I think make good leaders, including things like strong communication, which I think is incredibly important, and clear communication is incredibly important as well. And so sometimes things like that don't get as much play as I believe they ought to. But I point those out as being important.

Adam: I love it. Authenticity, accountability, perseverance, take the long view. Strong, clear communication. Communication, central to your business. What are your best tips on the topic of communication?

Kunal: The first tip I give is, you have to work at it. I think I've become a fairly decent communicator over time and I would say that it's been an evolution, I didn't wake up one day and say, I'm a great communicator. It takes work and effort. And I remember in the early days of Morningstar, when we were a much smaller firm, I would go around to even libraries, and present to groups of 10 to 12. I’d go to Atlantic City and attend conferences in small rooms. And I was not the greatest presenter, but I found opportunities to grow those skills. And so I think that's an incredibly important thing is that you have to work at being a great communicator. The second thing I think about just being a great communicator is to understand that you have to repeat yourself. It's been written over and over again, that as a leader, you have to repeat yourself to get your message out there. And I have to say, sometimes, I find myself questioning why I'm repeating myself from time to time, but the value is very clear. As a leader, you have to really learn to do that. And the third thing when it comes to communication is to be open to feedback and to pay attention to it. So I do try when I do speeches, or presentations, to get feedback, and oftentimes, it takes a little effort to get people to give you unvarnished feedback. But I do take that very seriously. And I also go watch videos of myself presenting from time to time, for example, and make notes about where I could be better. And so I think it's something you just work at. And you have to be prepared, I have to add that too. You can't show up unprepared and be a good communicator.

Adam: Such great advice and just to pick up on the last two points you shared: feedback, essential to everything we do in life. As someone who speaks professionally, I can tell you that I seek feedback anytime I give a talk. Preparation, essential. John Wooden one of my favorite quotes of all time: “failing to prepare is preparing to fail.” You could apply that to anything you do whether you're talking about giving a talk, whether you're talking about devising an investing strategy.

Kunal: That's right. And you never know when you need it most. A few years ago – we have an annual conference called Morningstar Investment Conference and I do the opening keynote here at McCormick Place in Chicago – and I'll never forget a few years ago, in a room of about 2000ish people, I get on stage and the first thing that happens is the confidence monitors go out. And I had a couple of moments where I was totally stunned and I did gather myself a little bit, but because we practiced so hard and done things, I just rolled with the presentation without the confidence monitors. And it was a good lesson that you got to get to that type of spot. And it turned out pretty well. And today, I often find that when I'm speaking, I actually don't like a fully typed-out format. I just like bullet points because I prepare. And then I can ad-lib and do things as needed.

Adam: The more command you have of your material, the more mastery you have over whatever it is that you're going to be communicating, the more effective you're going to be communicating it.

Kunal: That's right, you have to believe in your material.

Adam: And that ultimately comes down to preparation, however you want to define it, whether you want to define preparation as studying or whether you want to define preparation as deeply understanding, learning, developing the mastery of whatever it is that you're going to be ultimately speaking about. 

Kunal: That's right. That's right. 

Adam: Kunal, I want to go back to a topic that we spoke about earlier on, which was, how you got to where you are. Your path, again, unusual. Not too often that someone comes right out of college, works for one company, spends 20 years at that company and then becomes CEO. How did you differentiate yourself along the way? You shared a couple of things that you were focused on. But were there any particular things that stand out to you where you can say, I did this differently, I did that differently. What did you do to stand out?

Kunal: Yeah, I mean, I think there are certain things that I could say that probably are very cliched, and there's some truth to them. But I won't spend time on a lot of those other than to say that when I had different opportunities, I took them seriously, no matter the size of the opportunity along the way. But probably the most important thing I would say is just as Morningstar has evolved, I had to evolve in my leadership style, and recognize that I had to be different. And even today, when I think about the size of the firm we are, I don't wake up and think about how to lead a $2B firm, I'm thinking about how I can lead a $5B firm, because you have to be thinking ahead in that context. But one of the things that I learned very early on, as I mentioned earlier, I trained as an analyst early in my career. And one of the things you learn as an analyst is to really do all the work on what could go wrong in a situation. And we have many analysts today at Morningstar. And they were really good at telling me about everything that can go wrong. And so it's very good to have them because they're all naturally skeptical. I have learned along the way, though, that to be an effective leader, you also have to really think about what can go right. And when you think about that, you have to figure out how to make that happen. And so I've had to change my mindset from always thinking about the downside, and I can still very effectively think about the downside of just about any situation, to thinking about what it's going to take to make certain things happen. And often when I find myself in meetings, and we're trying to do something new or something bigger, or something that seems really challenging and different for us, rather than sitting in the room, with my natural tendency, here are the 10 things that can go wrong, I really trained myself to get everyone focused on ‘Okay, how are we going to make it happen?’ And I've tried to change my leadership style to one that's really focused on that essential question, and turning ‘What can go wrong?’ to ‘How do we make it happen?’ And it's been a very significant evolution. And I do try to lead very much in that style. And so when you ask what I've had to do, that's a big part of it. The other thing that you learn as a leader is you need to have great people around you, who are going to share in your successes, and sometimes your failures. And I took a lot of risks with some hires 10-15 years ago, tried to hire people who were more senior than I was, even though I was leading certain businesses because I saw an opportunity to try to grow those businesses and I thought we needed external help. And I made some really poor hiring decisions at that time because I essentially was trying to hire people who, I'd say, had hero status, that they were gonna do something for us that perhaps we or I didn't feel capable of doing. Our culture spat them out. And they also just couldn't ever adapt to our culture. Today, we hire a lot of heroes. And they're really amazing but we bring them in with clear expectations and with a mentality that they're going to be additive and they're going to improve the whole as opposed to just being standalone contributors. And I think we've become so much better at both growing our talent internally, as well as bringing in some of those really strong external hires. And that's true of our leadership team at Morningstar in general. And so that's how I've evolved as a leader. Plenty of other examples, but those are two that I point to: How I build teams and also this real mentality of focusing on what it's going to take to get things done.

Adam: Kunal, really important points that you share. So much of it comes down to that shift in mindset. How can I make it happen? We can spend all day focusing on what can go wrong. There are always plenty of things that can go wrong. But if your mind is focused on, what can I do to reach my goals, what can I do to help those around me reach our organizational goals? That's a complete shift. 

Kunal: Yeah, I completely agree. And I think it boils down to the fact that we're all empowered at some level to make things happen. And it's very easy, especially as organizations get larger for people to feel less empowered because there's more structure in the organization. But I always encourage folks to try to make things happen. And I think at places like Morningstar, we've tried to create a culture and an organization that allows that to happen. And when you ask how I've grown my career, one of the ways I've done that is because I tried to make things happen no matter what level I was at.

Adam: In your experience, what are the keys to building a winning organizational culture?

Kunal: That's a really important question and I think it separates one firm from another. I’d start by saying that you need to have a clear mission. And the mission is something that unifies the culture, I would say, and from the mission then flows the values. At Morningstar, we have a clear mission of empowering investor success. If you're gonna work here, you need to be excited that that's what we're about. And underneath that we have our values. And I think those values are really the things that people need to embody and live by. And I have been in so many companies that when you walk in, you see the values and the mission written on the walls and the reality is people don't live by them. At Morningstar, sometimes you walk in, and you don't necessarily see the mission on the walls, and you don't see the values on the walls everywhere, but people are living by them. That's the hallmark of a great corporate culture, is when people take the things that you put on paper, and they internalize them into action, and belief. And they pass it on over time. And that's one of the key ingredients that we have. And by the way, one of our values is around great people. We spend a lot of time in our recruiting efforts and ensure that when people are coming in, they have the right expectations, that they understand that they're joining something special, and even I participate in undergrad recruiting. And it's partly because I enjoy it. It's also partly to send a strong message that it matters at every level of the organization who we're bringing in.

Adam: Leadership starts at the top, lead by example. A topic that we haven't talked about, but is central to this podcast, mentorship. How did you cultivate a mentor-mentee relationship with Joe Mansueto, the founder of Morningstar? And what are your best tips on how to find a great mentor and how to optimize a mentor-mentee relationship?

Kunal: Yeah, I wouldn't say that I ever formally went to Joe, and said, “Hey, Joe, can you be my mentor?” But it's happened very naturally over time. And even to this day, I'd say that he's the person I rely on most. When I have something I'm trying to solve, I will always go to him and get his opinion. And a lot of it has to do with trust. But a lot of it also just has to do with knowing that he's got good judgment, he's going to give me his unvarnished opinion. And also that he cares about the outcomes just as much as I do. And so we've built that relationship over time, because we've been open with each other, sharing good news and bad news. And I think that's really important with a mentor, not just to go to a mentor and share good news, you go and you share the bad news as well, so that you have absolute transparency and trust in that relationship. And you try to solve things together. And you build on that over time. And a few years ago, we had a speaker come to Morningstar. And the speaker really talked about this concept, but having your own personal board. And I really liked that concept. Because, for me, my personal board is stacked with my mentors, and obviously Joe's a big part of it. But I think on all our personal boards, if you step back and think about it, you have some close family members who would be on it. And for me, that would include and I think for many people, it would include spouse, parents, probably your kids. And then you have professional mentors as well who probably go on that board, a couple of them people who've had a very noticeable impact on your life. And then maybe one or two other mentors who aren't in the professional or family category, but for whatever reason, a close friend, Professor, I point to a couple of professors who had a very significant impact on me early in my career who to this day, I think of as mentors. And you build that. And I think that's important too: who's on that board? Because when it comes to mentors, too, you benefit from having people with different experiences and different perspectives about you, and what you're doing to that. And so that maybe I've answered the question a little bit more broadly than you asked. But I think it's important to have good mentors, but also have a good set of mentors.

Adam: I think that's great advice, something that I share with audiences that I speak to. I think it's really important to have a great mentor, much in the way that you have had this great mentor in Joe. It's equally important, if not more important to have what I call mini mentors, someone who maybe you talk to once a year, maybe you talk to once every 10 years, maybe you only talk to once, but that one interaction, can be a complete game changer, can completely change your perspective, can change the trajectory of your career, can change the trajectory of your life. And it's a pretty similar way of looking at things to the way that you approach mentorship to the way that you've been able to create this board where you have all of these different perspectives, all of these people who you could turn to, and help you get to that next level that you want to get to, whether it's that next level professionally or that next level personally.

Kunal: That's right, completely agreed.

Adam: Kunal, what can anyone listening to this conversation do to become more successful, personally and professionally?

Kunal: I think we've covered a lot of things. But if I had to summarize it into one thing: run your own race. You don't need to run someone else's race. I often see, especially among a lot of our younger employees, in newer hires these days there's a tendency to want to point to someone else and say, “I want to run that race exactly that way.” The path to success is actually finding the path you want to go on and running your race on that one. And I said earlier, that leadership comes in many different sizes and shapes. And that means that there are many paths to success, as well. And it's important to find the one that you want to run on.

Adam: Kunal, thank you for all the great advice and thank you for being a part of Thirty Minute Mentors. 

Kunal: Thanks for having me.


Adam Mendler is an entrepreneur, writer, speaker, educator, and nationally-recognized authority on leadership. Adam is the creator and host of the business and leadership podcast Thirty Minute Mentors, where he goes one on one with America's most successful people - Fortune 500 CEOs, founders of household name companies, Hall of Fame and Olympic gold medal-winning athletes, political and military leaders - for intimate half-hour conversations each week. A top leadership speaker, Adam draws upon his insights building and leading businesses and interviewing hundreds of America's top leaders as a top keynote speaker to businesses, universities, and non-profit organizations. Adam has written extensively on leadership and related topics, having authored over 70 articles published in major media outlets including Forbes, Inc. and HuffPost, and has conducted more than 500 one on one interviews with America’s top leaders through his collective media projects. Adam teaches graduate-level courses on leadership at UCLA and is an advisor to numerous companies and leaders. A Los Angeles native, Adam is a lifelong Angels fan and an avid backgammon player.

Follow Adam on Instagram and Twitter at @adammendler and on LinkedIn and listen and subscribe to Thirty Minute Mentors on your favorite podcasting app.