Kurt Nelson 0:00 Kurt, welcome to Behavioral Grooves. I'm Kurt Nelson, and I'm Tim Houlihan. So, Tim, today's conversation, it's one of those episodes that starts out feeling like a discussion about organizations and technology, then it subtly turns into a much deeper conversation about what it means to be human at work. Tim Houlihan 0:32 Yeah, because our guest today, Phil Lebrun and Jana Verner, are asking a deceptively simple question, and that question is, why do so many organizations become rigid, bureaucratic, and painfully slow, even when the people inside them are smart, capable, and trying to do good work? Kurt Nelson 0:51 And their answer, I don't know. I think it's kind of fascinating. They argue that many organizations are designed less like living systems and more what they call a tin man organization. These are structures that look efficient on paper, right, but slowly they lose adaptability, responsiveness, creativity, and maybe, maybe even a little bit of that humanity along along the way, there, Tim Tim Houlihan 1:22 Oral can, oil can, all right, Wizard of Oz, man, here you go. Okay, but all of this is is part of what made this conversation so much fun for us, because Phil and Yana, they don't approach this topic from this ivory tower, they've lived Kurt Nelson 1:42 it. Yeah, so Phil is a technology and organizational transformation expert who has spent decades working with large systems, large scale systems, and cybersecurity on entrepreneurial leadership, enterprise leadership. He's also the author of several books exploring complexity, adaptability, and organizational behavior, all in these modern systems. Tim, Tim Houlihan 2:08 yeah, and Jana Verner, she brings a remarkable blend of leadership strategy and organizational design and human-centered transformation work. Now, together, their work helps organizations rethink how work actually gets done, not just how leaders imagine it gets done on PowerPoint slides and org charts. Kurt Nelson 2:27 Yes, I mean, but and I laugh because so many of the like companies that we work with, it is those this should work because it, we laid it out, and look, how beautiful it looks on this PowerPoint, but that's never the case, right? That's not how it works, because, because, Tim Houlihan 2:49 because I laid it out of the PowerPoint, it's that's it, and it's beautiful, and it looks really cool, and you see Kurt Nelson 2:54 how this moves here, and this moves there, but all right, so one of my favorite parts of this discussion is how often they challenge the instinct to over control that we have in organizations, and we see this. I see this quite often, right? That that instinct, it is - it really is instinctual, and we tend to believe that as organizations scale, that as they get larger, that that scaling requires more governance, more standardization, and more oversight, more alignment meetings, more Tim Houlihan 3:30 more dashboards, definitely more dashboards, always more dashboards, Kurt Nelson 3:36 Tim, always, always more dashboards. Tim Houlihan 3:38 Okay, but Phil and Jana argue that organizations often become healthier when leaders stop trying to engineer every interaction from the top down and instead create the conditions, the environment, the context for people to adapt locally and organically. Kurt Nelson 3:55 Yes, and there is a wonderful metaphor that they use in the book, and in this episode around octopuses. Yes, Tim Houlihan 4:05 octopuses. Kurt Nelson 4:07 Yes, that's what I said. I said octopuses, those they use those eight arm sea creatures, which are wonderful, by the way. Have you ever seen, like, oh, anyway, there's like got some great documentaries out there, my teacher, the octopus, or whatever, that I forget what the name of it was, great, great movie. Anyway, these eight armed sea creatures are models for adaptive intelligence, and once you hear it, and you really start to think about the way leadership and coordination and responsiveness might work in complex systems. Well, it just makes sense. Tim Houlihan 4:45 Absolutely. So, plus any episode that gives us a chance to discuss bullshit lingo, The Wizard of Oz, organizational design, and The Beatles in the same conversation honestly feels very behavioral groovesy to me. Kurt Nelson 5:00 Yes, I would have to say all four of those things I think would be right in line with a really Behavioral Grooves type of episode. Yeah, Tim Houlihan 5:11 I want to also say that I appreciated how practical the conversation became. Like, this wasn't just about abstract theory. I mean, the octopus metaphor is cool. We didn't, we didn't just dwell on it all day, but Phil and Jana talk about why duplication is sometimes healthy and why over optimization can backfire, and then lastly, why organizations often kill the very adaptability that they claim to want. Kurt Nelson 5:38 Yeah, so whether you lead teams, work inside a large organization, consult with organizations or clients within organizations, or simply find yourself exhausted by systems that seem designed to slow people down instead of helping them thrive. This episode has a lot to offer for you, Tim Houlihan 6:02 so sit back and relax with your favorite pour, you know, on the go, you know, something to take with you with an octopus themed playlist. May that Kurt Nelson 6:12 be Octopus Garden by the Beatles. Tim Houlihan 6:14 I think we have to start there. Absolutely, Tim Houlihan 6:17 and enjoy our conversation with Phil Lebrun and Jana Verner, Phil Lebrun and Jana Werner. Welcome to Behavioral Grooves. Jana Werner 6:34 Thank you so much for having us. Kurt Nelson 6:35 It is Tim Houlihan 6:36 delightful to have both of you on this morning, or afternoon, from where you guys are coming from, we're going to start with a speed round question, and that is, if you had to spend a year without your mobile phone or your laptop, which would you choose to give up? Jana Werner 6:54 Definitely my laptop, because I want to hear from my kids on my phone. That's a good answer, Kurt Nelson 7:01 that's a good answer. Jana Werner 7:03 Focus on the kids. Phil LeBrun 7:05 Yeah, I think I think I'd give up my mobile phone, because I can always call for my laptop. Tim Houlihan 7:11 Okay, technologists with totally different answers. I love Jana Werner 7:17 it together. Then, between us, we have one phone and one level, Kurt Nelson 7:22 yeah. there you go. It's like, and then we'll collaborate together and work on this. All right. Second of our speed round questions, this is the one that we ask most. Are you, and I'm.. this will be an interesting question, because we have had people who answer this differently, living in England, and Yana, I don't think you're originally from there. So, coffee drinkers or tea drinkers, Yana, I'm gonna go with you first, because I saw Phil's like his face just did this crazy thing. Jana Werner 7:58 I drink herbal teas, but he's, he's pulled me over to the dark side, so he can answer next. Oh, Kurt Nelson 8:06 he's pulled you over, all right, Phil. Phil LeBrun 8:09 And it's, it's an amazing experience in Jana and Kathleen Britain. Me wants to say tea, because that's the cultural answer, but no, definitely coffee. You don't want to, Kurt Nelson 8:22 I like, I like how you have the, like, all right. I want to, but I just can't. Are you a particular type of coffee? Does it have to be brewed a certain way, a certain style? Are you? Phil LeBrun 8:38 It just needs to be strong, coffee machine in the kitchen, and you just push it until you can't get any more caffeine. Kurt Nelson 8:46 Well, I have my coffee here, and I know it's later in the afternoon for you, so we'll, we'll go there. All right, okay. Tim Houlihan 8:55 Third speed round question in the story of The Wizard of Oz, the Tin Man is a beloved figure looking for his heart, is the Tin Man a model that we all, as leaders, should be striving for? Jana Werner 9:10 No Tim Houlihan 9:11 good answer, that's good, because Kurt Nelson 9:17 otherwise we might - our questions are wrong on Jana Werner 9:20 podcast, over Tim Houlihan 9:22 podcast over well, we will, Kurt Nelson 9:25 we will dig into that, because I think that's one of the premises of the book, and we'll talk about that as we get in, but we do have one final, one final speed round question for you guys, and Jana, since you answered the last one, I'm gonna ask this one for Phil, Bingo is a beloved game, but is the best version of bingo bullshit. Bingo, Phil LeBrun 9:47 100% We actually, we were with 200 people this week, where we introduced that concept to them. So, yeah, okay. Kurt Nelson 9:56 Just for our listeners, we have to before we get into. The real meat of this, but what is bullshit bingo? Phil LeBrun 10:03 So, if you take all of those corporate words we love to use, like we're going to leverage our synergies to become a customer platform-based organization that utilizes AI in an agentic fashion, bingo, yeah, bingo, Kurt Nelson 10:17 and so you play that in when a corporate meeting, or some other kind of components that you're going about to kind of pull out this identity of, like, hey, we're speaking in a whole bunch of BS lingo here, is that correct? People Phil LeBrun 10:33 don't realize they're doing it, they, you know, we end up leveraging our synergies, which just sounds extremely painful, and it doesn't actually mean anything, but people, you throw out these words without consciously thinking about them, so it just makes people more conscious about what they're saying. Tim Houlihan 10:47 Yeah, but Jana Werner 10:49 we need to know, please, Tim Houlihan 10:50 please, Jana, go ahead. Jana Werner 10:51 We need to be a bit empathetic here, because Phil, I think you and I can't be on a high horse. We have used a lot of corporal teas ourselves. It's. it becomes shorthand, you get used to it sometimes. It's a little more comfortable to hide behind it than to say the actual strong words of the truth. It feels like softening when you use this shorthand. So I think we have to be kind to people, to most people. There are some people who just Phil LeBrun 11:19 be honest. I mean, part of the reason we wrote the book is we made most of these mistakes ourselves. Jana Werner 11:24 Yeah, Tim Houlihan 11:25 fair enough. Fair enough. We are talking to Phil and Jana about, about their new book, The Octopus Organization. Now, in the speed round, we teed up this idea of the Tin Man. What? Let's, before we get to the Tin Man, what the hell is an Octopus Organization? oh, good, nice, nicely played. That's one Kurt Nelson 11:50 of the entries in here, is casting Jana Werner 11:56 last is one of our standards. Phil LeBrun 12:00 I think this is the leader throws someone under the bus, so that's a different anti-pattern. The octopus is this incredible animal. I mean, it's got three hearts, it's got a brain in neuro clusters in all of its arms, so they can work independently. It can change its RNA, so it can adapt to its local conditions. It doesn't have a suit of armor on, and yet it can defend itself by being agile. It grows up without parents and learns through learns about its environment, so it's this incredible, incredibly adaptive creature, which is what we believe most organizations actually aspire to be. Tim Houlihan 12:46 Yeah, it is. It absolutely is something that they aspire to be. But they get caught up in the Tin Man thing. Jana, can you tell us about what is the problem? I thought the Tin Man was this beloved character. Jana Werner 12:59 I know, maybe we're doing the poor guy disservice Kurt Nelson 13:09 here, very, you know, caring today. So, yeah, Jana Werner 13:14 today, well, the point is that basically we use Tin Man again as a short and as a summary of people to easily understand that most organizations today are still factory factories, and it's a bit of a resting construct, it's this model that's built on standardization, on specialization, on performance compliance, predictable outcomes, but all of that creates a foundation of permission and permission to innovate, permission to speak up, and that's a real challenge. It might de-risk what you do, but it doesn't leave space for quickly adapting, for being curious, and certainly not for the kind of trust that you have to build nowadays with your customers, with your employee employees, with your stakeholders. We need to switch this, and work is so much more, so much less transactional, and much more cross-discipline. So, the idea of working like this doesn't really function anymore. And with the introduction of technology change becoming faster and faster, AI, the cycles of change increase in weeks and months. Now, this top-down work doesn't work anymore. People can't, at the top, have points of views and plans, five year plans, and just decision at the top. We need to go to something where we push more agency into the organization and away from this permission idea, and that's the octopus, because it has all these neurons in its arms, and they can operate separately, Kurt Nelson 14:39 and yet they can be synergetic as well, right? They can all work together when they need to, and I think that's it's a wonderful analogy when we look at this, this idea of all right, this metal, rusty, you know, potentially heartless type of machinery moving forward versus this very agile, flexible, you know. Is Phil, as you mentioned, one of the things that I really loved about the book is you, you, you bring in basically these 35 entries, as you call them, these 35 anti patterns that have been identified, and you start each of those with this, here's the tin man kind of way that it looks at, and here's the octopus way, but you identify these as being remarkably predictable, these 36 so if they're so predictable, why do we still do them? Why is our organization still falling into these traps of these these negative patterns that we're doing. I'll leave it up to whoever wants to take that answer. Okay. Podcast over. There was the career-ending podcast question by me. Phil LeBrun 15:59 We think of anti-patterns as habitual conditioned responses to challenges, and they've sort of been deeply ingrained in leaders over the years, because they sort of worked before. So, if you're a multinational company and your GNA is too high, the natural conditioned response is to say we're going to do things once, and to do things, once we're going to centralize things, we're going to standardize our business processes, we're going to have a single payroll system across every country, a single financial system across every country, because how hard can it be? And the reality is, obviously, there's lots of different nuances in different countries with payroll and with finance and the such light, but it just feels right, doesn't it? If you do things once, that's going to be more efficient, and you've just created this massive bottleneck. So, from a purely logical point of view, and also from a historical perspective, it makes sense when you're churning out 1000 cars an hour, and you do the same thing time and time and time again. Efficiency was always the thing to optimize for. Now a lot of what we do is novel, it's never been done before. If you're introducing agentic AI into your organization to fundamentally change your business processes, leadership doesn't know how to do that. It's brand new to us all, so this idea of centralisation is efficient maybe, but often it creates a bottleneck. It certainly isn't effective when it comes to truly driving transformation and innovation in an organization. Tim Houlihan 17:28 Jana, do you want to? You want to jump in on that as well? Jana Werner 17:31 Yeah, I am. I've worked, and we both worked in Tin Man organizations, and you go to work, and it kind of, you know, it's not quite right, but it somehow works, and so it's often easier to go with what exists, and by easier, I don't mean easier, you just go along with it, because it's how it's been done, how people around you do it, how you, as a greeter leader, grew up in organizations in your career, and you learned to maneuver these organizations somehow, and wrestle the tin man every day, and it takes extreme courage to try and do something different. It usually feels very strange and uncomfortable. Those around you might just wait for you to fail. It's usually what I learned in the English language as career limiting to try something different, especially if you have a low failure culture. So it's scary, and of course you have to unlearn yourself things you do. We know that more senior leaders tend to still feel they've grown up with having to have answers, so even when they use new tools like AI, they say something where they have the answer and get confirmation, whereas children are learned, have learned to ask questions, and we train it out of them, and when children use AI, they will ask the AI, How should I solve this? How would you think I should design a dinosaur on the back that of which I can sit and look cool, instead of saying, Please do this, please design the dinosaurs. Just the senior leader told me the story. So it's normal. We tend to train, have answers, and I have a lot of empathy with anyone going through and living in this condition. Kurt Nelson 19:06 Yeah, Jana, you said something at the beginning of that that I thought was really caught my attention is this idea that you know it works to a certain degree, right? I mean, there is that has produced this component, and Tim and I have both worked in organizations very similar to you, and we've, we've actually studied things around incentives, and we'll talk about some of those later, but one of the things we've seen in incentives is we often use a certain type of incentive, because that's what we've done in the past, and it works, we're not open to others, when we actually research it, we go, oh, the other type of incentive works a whole lot better than this does, but we never get there because this works well enough, and in you could be so much better. Is that I'm kind of hearing that's that's part of it. It's the status quo bias that we have, variety of others. Right, Tim Houlihan 19:54 Phil? I'd like to just ask you, in doing some research here, we discovered that. You, as a technologist and very data-driven guy, somehow got seduced by the dark side. You got interested in psychology. What, what happened to you? Well, how did.. how did that.. what.. what was this, this, this moment that takes you, because, because the book is certainly full of what Kurt and I see as sort of behavioral sciencey kind of, you know, observations that it's more of a behavioral science lens than it is the Homo economicus, you know, rational man kind of observations. So, yeah, so what drew you into psychology? Phil LeBrun 20:40 I was an engineer, I lost all my neurons and became a psychologist. I worked for McDonald's Corporation for many years, and there were some really, really, really smart technologists there. They were really smart about the technology, but the end result you're looking for in an organization as big as McDonald's or any organization is business outcomes. So, it's great to come up with the best technology in the world, or the best marketing plan in the world, or you know, the best real estate plan. But if people don't buy into it, you've just wasted a ton of time. And how do you get people to buy into it? You make them part of the solution, you talk to them, you empathize with them, you understand their point of view. You are curious, you ask, "Why isn't this going to work? rather than go out there and just give the answers. I've researched the latest platform in agentic AI, and here it is. And then, of course, if change is being done to you, not with you, the natural response as a human being is to say no, you don't like it, you're not part of it, you're not being asked for your insights. And again, it goes back to distributed intelligence. We had 120 countries, we're dealing with, we had a lot of folks in those countries who knew their customers way better than I was ever going to know. So, why wouldn't you tap into those individuals, their intellect, their knowledge, and the such like. So it's to me, any leader needs to be a good psychologist now, regardless of their discipline. Because ultimately, what we're talking about here is getting people to change their behavior, and that doesn't start with the technology Tim Houlihan 22:17 to use that 120 countries. We happen to have a listeners in more than 120 countries as well, like we've got a very global audience, and Jana, your very global background is also influential in this. I'm curious, from your perspective, Jana, to what degree do you see Tin Man in all these other countries, especially countries that you've worked in, Jana Werner 22:42 I think every country has their versions of Tin Man and different, different parts of what they're focusing on, based on their culture, and I would never standardize people or culture or single by country, so that, of course, every human is different, but you see certain things, certainly, I found it really funny. I told my children the story when, and I love my children traveling, because you learn and see that people solve problems in different ways, and you think when you grow up in one country, there's this one way, and the more countries you visit, you realize there are many ways, and there's not a right or wrong way. The coolest example I've seen is this little practical thing. I stood, I stand at many airports, so I stood at a German airport where your luggage gets distributed when you arrive, and in Germany, there's this beautiful, perfect carousel, stainless steel, marble floors, and there is a, there's a light sensor that, where the, when the, when the suitcases appear at the top to be thrown on the carousel, there's a light sensor, and every time there's a suitcase driving past at the bottom, the light sensor will stop new suitcases to fall down, so that they don't fall in a pile. So, you have a neat row of suitcases, and the next one only comes down when there's a gap. Then I go to another country and there's nothing, none such thing, just all come out, fall over each other, and people just run up and catch them, and you're like, so both systems kind of work, one is maybe even over designed and over engineered in Germany, and it's not necessary, but it's very elegant, so, and this culture of being an engineer for suitcases might carry into much bigger engineering problems, because it sits in the culture and will solve real problems. So, what I'm trying to say is, you have this culture, and in a Tin Man, in a Tin Man German organization, you might over design things, you solve things in a big way, which could just be solved with a pair of nail scissors, but on the other hand, it gives you a chance to learn big, and in other places you try and you iterate, and you do, you let all your suitcases fall on the pile, and you learn faster, scrappier, and make more progress, so yeah. Kurt Nelson 25:00 Is the Jana Werner 25:00 learning Kurt Nelson 25:02 well that brings up this idea that you bring up in the book, that there's a difference between a complicated organization and a complex one. So, can you, for our listeners, can you explain what that difference is, and why it's important to be thinking about the difference between complicated versus complex. Phil LeBrun 25:22 Yeah, complicated. Anything that's complicated can be decomposed, decomposed into smaller parts, as one of those parts can be exchanged, and then everything's reassembled. So it's a bit like a bicycle, you take the wheel off, you plug another wheel. It's been like organizational change. You unplug a department, you just plug another one in. Kurt Nelson 25:42 I don't know what corporations never heard Tim Houlihan 25:46 of that before. Phil LeBrun 25:47 That's how we create a lot of transformations. That's why they fail. It's just like people are interchangeable components that we can just rebrand, replace, which sort of in the Taylor days, the Taylorism days of factories sort of worked, but a complex organization is more like an organism. It's if I change one part of the system, something probably unpredictable is going to change. There's going to be a second, third, fourth, fifth order effect. If I change how I hire someone, how I hire people, or how I promote them, or how I incentivize them, it's going to have a knock on effect, you know. The typical Tin Man approach will be to try and map out every single consequence, and you'll spend years doing that and still be caught by surprise when you go and execute the plan. So complex organizations emerge, so you have to go through this continual cycle of changing something, observing what happens, changing something else, observing what happens, rather than this or decomposition, rather than treating an organization as if it's truly represented by that org chart you got on a PowerPoint slide. Tim Houlihan 26:54 Yeah, Jana Werner 26:55 I, yeah, we see this again and again, that the traditional transformation methodologies mirror the structures they try to overhaul, so we take a complicated approach to change by trying to rip things out or adding new technology, instead of thinking about the idea that you're operating in a system, you can't change the system, and maybe that feels scary, so you try to, but you can work with or in the system, and you can try things. You can apply levers or leverage points, like Donella Meadows shared with us famously, systems thinker. And then behavior follows. We, we always look at this thing. There's mindsets. The mindsets define what, how you, how you think about the world, what, what, what you amplify this is like your assumptions, your beliefs out of them, your behaviors emerge, and they are kind of representative, real-life visible things that come from your mindset, and out of that you can create artifacts in your organization, your structure, your policies, all of these good things, and mostly the change that people do in a complicated mindset is changing the artifacts, hoping that behavior and mindset shift, of course, that really works. You need to start on the mindset side that then trickles into behaviors and artifacts. So we say read a book from left to right, not right to left, Kurt Nelson 28:20 you this is Kurt, and we want to say thanks for listening to Behavioral Grooves, and we hope that you're enjoying this episode, but it feels a little bit one-sided. You're hearing from us, but we're not hearing from you. Tim Houlihan 28:36 This is Tim, and we have two suggestions to remedy that. The first is, join our Facebook page and engage with us. Kurt Nelson 28:43 We want to talk with you. We want to hear your perspectives, and hopefully our Facebook page might be the place to have some of that interaction. So, please, please come and join us. The Tim Houlihan 28:54 other recommendation we have for you is to leave us a quick rating, you know, the little five-star thing at the bottom of your app, or a short review, just leave us a few words about what you like about behavioral groups. We very much appreciate it. Kurt Nelson 29:07 Thanks. And we now return you to our regularly scheduled programming. Phil, I want to just double down on you joked about this plug and play of an organizational change, but I mean, in my work, I've actually seen where companies actually, they kind of take that approach. I worked with a $2 billion company, biotech company, that thought it was a very nimble company, which I'm sitting there still going, "you're 2 billion plus dollars, but they got acquired by a $70 billion company, and relative to that $70 billion company, they were, they could do all these different things, but the way that that $70 billion company had, like, over the course of the past 20 years, that every year had, you know, integrated multi, you know, smaller different companies into it, and they just had a plug and play model of how it worked, and when we're working with. This group that was doing it, that plug and play model didn't fit, and everybody in the lower levels of the organization knew that, and yet it was still kind of brought on by that upper, like this is the process that we use, here's the here are the 17 different steps that we're going through, and people are going, but that's not how this works in the real life. I mean, is that what you're, we're talking about from that complexity component? Phil LeBrun 30:27 Yeah, absolutely, that's component of it. It's easy to, you can see why it's easy to put a project plan around it. There's a five stage integration process, and we're going to do it over two years, and step one is this, and after we finish step two, we'll do step one, we'll do step two, and then step three, and step four, and it's a bit like we compare it to photocopying someone's personality. It's going to be really interesting to try and see what actually comes out of that. So, and also, the interesting thing with acquisitions too is normally requiring that organization because they have some sort of secret sauce, they may be producing a great product, but they're producing a great product because they're close to the customer, and they're listening to the customer, and they're iterating quickly, so this is always a bit of a challenge for Tin Man organizations, where you actually want some of this, a lot of the decision making to be devolved close to the customer, it sort of feels like it could be anarchy, but there's a way of approaching that, which is things like, you know, having a commander's intent, a clear purpose. If everyone's aligned to the purpose, and you are presumably hiring good, intelligent, motivated people, then have them understand the purpose, understand the priorities and let them have the freedom to figure out how to achieve the goals they've been set, rather than trying to tell them here's a standardized process to follow. Tim Houlihan 31:49 I want to start this question with Jana. We love a lot of these 36 entries that you've got here, or these anti patterns. One that is really near and dear to our hearts is, is the mismanaging of incentives, because Kurt and I have spent a lot of time in the world of incentives, and you guys hit some things just really that are just spot on, really align well with with our observations, and and I was wondering if you could just talk, because I want to, I want to get, we've been kind of beating up the Tin Man organization, but we, but I think we should just focus a little more on what are the virtues of the Octopus organization, and when it comes to incentives, what are things that leaders can do to think about, I'm, I really want to improve my organization, I think incentives and rewards are possibly a way to go. How should they be framing, and how do you think they should be thinking about applying some of this octopus style methodology to to incentives? Jana Werner 32:54 Thank you. That's an awesome question. I do believe that incentives and rewards are some of the strongest levers that exist for helping people understand what's truly valued and what's important, especially incentives. Who gets what bonus? What kind of promotions? These are strong signals, but what we have seen is there's a bit of a catch, because leaders often conflate the idea of incentives with the, or the concept of incentives with the concept of rewards. Incentives are forward leading things, but like a carrot. I don't know how a carrot fits with the octopus, but that's later. Fair enough. Things like sales bonuses, they can, they can have the risk of feeling coercive, they can promote short-termism, they can even trigger unethical gaming. You've all heard this idea, Peter Drucker said, when you give someone a target, they will achieve this, even at the detriment of the company. So we love the idea of thinking more about something retrospective, like rewards, they are trophies, they reinforce ownership. So, we encourage leaders to think about these. You don't want people to just do a task for a payout for an incentive. You want people to own something, to own a mission, and that is about deep intrinsic ownership, which doesn't just - you can't create this from an incentive. If you pay someone, the next person wants to be paid more and more and more, and in fact, you will know if you've researched this. There's lots of research that says pay is like a hygiene factor, you can't keep raising pay to get someone to be intrinsically motivated. And so we talk about thinking about what rewards can there be for people, and people, different people respond to different rewards. Some people love to, we have engineers that love to stand, stand on stage, and say, I have solved this problem like this. I'm now teaching the engineering community and sharing my wisdom. This makes me feel good. And to Daniel Pink's point, I'm showing off my mastery what he wrote about on Drive. Then there are people who would love to register patents. Then there are people that are just. I'm happy about having shared and coached a person or mentored someone, and seeing them thrive. Phil, you do a lot of mentoring, seeing your mentees or your sponges thrive in a new role and enjoying the new job. So, it can be there, can be a lot of different types of reward. There's an endless number of rewards, and they can come between people, so you can share them, like in Slack, that there's plugins where you can share Slack points. It can be from leaders to leaders between other people. So I encourage leaders to dive into the endless ocean of rewards and explore what's possible, peer recognition, budgets, all kinds of things. Yeah, Phil LeBrun 35:40 and the beauty of all of this is you can try many of what Jana's points, you can take one, try it, see what works, see what doesn't work, see what the consequences are. So, when we talk about Tin Men and Octopus Organizations, it's not binary, it's not you're a Tin Man, you're an Octopus, because even if you achieve this Nirvana of being an Octopus Organization, if you stopped changing, you'd go backwards and start rusting. Kurt Nelson 36:03 I love that. Let's dig into one more of these anti-patterns, and you have one that you number 20 in the book - it's Seeking Perfect Decisions, and you bring up some research by one of our favorite people, Annie Duke, who's been guest on the show multiple times, and talking about thinking in bets and a variety of other things. So, maybe Phil, do you want to take this idea of, like, so what is the issue first off of seeking perfect decisions, and then what's the remedy, and how do you think about this from an octopus type organization? Phil LeBrun 36:39 And he was brilliant. We had the opportunity to interview her, and for any anyone listening who doesn't know, Annie, I mean, she's one of the most successful female poker players. She has a lot of money in the bank, which is always a good thing, but she also has a doctorate in decision science, and and it's interesting you play some of the poker thinking to how you think about decisions in the workplace, the problem today in most organizations is they try and take decisions at the point of least information, normally at the start of an initiative, they plan, plan, plan, plan, plan, and we know what happens to plans, they never survive contact with the enemy or customers, because there's too many variables, especially if you truly believe organizations are complex, as we talked about earlier. You can't possibly come up with every scenario. You will be in analysis paralysis. So, what we see organizations do well, who master this, are a number of things. You know, a few are firstly make a decision and test it, come up with a hypothesis, so it's not about Phil's decision, which is always then hard to backtrack from, because it's sort of a second. If I say my decision was wrong, it feels painful and shameful. If I say the hypothesis didn't work out, I've learned something, I'm going to move in a different direction, that's very, that's very, very different thinking. Bets to still one of Annie's ideas as well. This idea that let me talk about how we do this on Amazon, we take decisions when we have 70% of the information we wish we have, because we know if we wait for 90% of the information, we're moving too slowly, so you can consider that a bit of a bet, but we also train leaders to be right a lot, and by that what we mean is we continue to seek disconfirming information, so we place out there, we think we this, this is the right direction, but as we go down the path of building this product or service, we'll actually actively seek information that may say our decision was wrong, and if it was wrong, we're prepared to change our mind. Most Tin Man organizations seek or overvalue information that confirms their decision, and we are hardwired to avoid to avoid loss, so this notion of loss aversion, even the scientists who study loss aversion prone to loss aversion. So, Danny said that, Kurt Nelson 39:13 right? So, Phil LeBrun 39:14 yeah, so, and you know, some of the advice we found was define your quick criteria when you make a decision, because that's the best time to, it's really hard. If I make a decision, and then six months later someone says, "Is it the right decision? I'm probably going to say yes. If I've said up front, if these conditions are met, then I'm going to shut this down. It actually makes it much more socially acceptable to say we're shutting it down, because we all agreed right up front that that's what we were going to do. Tim Houlihan 39:42 Well, and yet, getting back to Yana's earlier comment about incentives and rewards, leaders are not just trained, they are rewarded for being right, they are rewarded for saying, I bet on this and see how it turned out, and if it doesn't turn out, it just gets buried. I mean, I spent my most recent part of my career in financial services and big companies that are driving lots of money, and very conservative, very tin man-like, you know, in their behaviors, because it's all about betting on what I already think is going to work, what we already sort of intuitively knew was going to work, because it worked last time, we're basically just it's old wine in a new package to a large degree. Jana, am I barking up the wrong tree there? Jana Werner 40:29 Oh, you're so right, and I've been to spend a lot of time in financial services where culture goes to die. I've worked in with a lot of amazing people in financial services, but that's why a lot of fintech startups come just sideways and overtake and do things, because a lot of financial services companies still feel this divine right to exist, and, and that I think will change. It will change, and it's already changing if we see what's happening with fintechs and challenger banks, neo banks doing things that large organizations don't dare to try, so I think there's already proof in the world that there are other ways that are working, even in financial services, and I think one big thing I wanted to say about all of this is that in financial services, and to Phil's point about trying and betting and things, none of this works if there isn't psychological safety. It, you can't, you can't try these things unless there is a culture where it's okay to try things and go, man, that that doesn't work out, and where you can speak up and where you can argue with each other safely. Tim Houlihan 41:43 Were you, were you both at Google when Project Aristotle was done? We're Phil LeBrun 41:49 familiar with Aristotle and the profound implications it had in terms of how people think and innovate in the such like, and we also had this wonderful opportunity to talk to Astro Teller, who's the CEO of their parent company, Alphabets Moonshot X Lab. They should come up with self-driving cars and all sorts of weird and wonderful ideas. So we took a lot of inspiration away from him too, in terms of how do you think big but then solve the really hard problems first, Jana Werner 42:21 and he actually rewards people for failing. He talks about hacks, standing ovations on stage, bonuses. So, because the faster he says, the faster you get to know, the faster you know you should focus on something else and free up your resources. Don't bark up the wrong tree. Phil LeBrun 42:37 Can I tell the monkey story? Jana Werner 42:39 Yes, Kurt Nelson 42:40 please monkey story. Yeah, Phil LeBrun 42:43 we've got a lot of animals in the book. It wasn't planned like that, except my favorite, which was a tardigrap, which I wasn't allowed to keep. Yeah, and pigs and chickens, but he told us great story, which is, if you want to get a monkey to sit on a 10 foot pedestal and recite Shakespeare. What would you do first? And we ask a lot of enterprise executives this, and the answer is inevitably, let's go find a monkey, let's build a pedestal, so you can say, hey boss, come see my pedestal, it's the bestest pedestal ever. We've spent all of this time building it, don't you think it's wonderful, we're making progress. Of course, the real question is, is the monkey ever going to recite Shakespeare, and it goes back to that idea of, you know, think big, but solve that really, really hard problem first, and then if you, as an individual or as a team leader, come back and say, boss, it's not possible, the monkey's never going to talk, this is where what Jana was saying comes into play, is a really powerful signal when when leadership say thank you so much, you've done the right thing effectively. Kurt Nelson 43:46 Yeah, as opposed to just going again, we've spent all this money on the pedestal, we've gone out, we've, we've got the best monkey money could buy, we spent all this money, now we just have to continue to try to train this monkey over and over and over, and it's never going to happen, and you're wasting all that time, energy, money, everything else as you're going through that. Phil LeBrun 44:06 Absolutely, and the reason people buy the pedestal is they want to show progress, but it's artificial progress. Kurt Nelson 44:11 It's a great pedestal. I mean, come on, it's the best pedestal you could ever make. I mean, don't I get rewarded for that? Awesome. At towards the end of the book, you introduce these three mantras, three kind of components that you do, and one is do change with people, not to them. Two is entwine learning and impact, and three do less to achieve more. So help us understand what you mean by each of those. I mean, they're pretty apparent by their names, but like, why should an organization, why should a leader be taking these on, and what does that do for them? Jana Werner 44:50 So, the first one changed with, not to, is because I find it, and probably most of us had change rolled out onto us, I mean, who wants something rolled or. And then also in these organizations they put the power of interpretation in the hands of very few, their leaders believe it's their job to create a plan to push it onto the organization, but of course the real way of doing this is just for leaders to create the space for immersion solutions for switching on all these smart people that you have hired, instead of telling them what to do, tapping into their motivation, their curiosity, their excitement. You don't want them to live their excitement just out in their family life and their chess club and whatever hobby step. You want them to bring this to work and, and, and solve problems for customers, instead of just switching them off and telling them what to do. It's also way more fun as a leader when you can, you know, feel people come with you on a journey. And when I swan pool, I think it was, if I, if I remember right, of a traditional mining company, he called it Light 1000 Fires, and then the learning and impact is Tin Man often mistake activity for progress, like the pedestal. See, octopus really thinks about value and learning, and not just doing something separately, having transformation outside of desk as a separate program, but putting it into your daily role. And we talked to an SVP at Airbus, and he helped people learn and try things while they were working on their projects, inside their projects, not separately, and then you will always get learning, you might not always get success, but you'll always get learning, and then value comes, and the last one, doing less to achieve more, we always think we have to leave, we have to put something on, we have to buy something, build something, introduce something, actually it's really good to think about, yes, you might want to add friction when people do silly stuff, but you might often want to remove friction. What can you take away? What process? What sign off? What duplication of activities of structures can you take away? It's just counterintuitive. So we wanted to remind people, you don't just have to add, Tim Houlihan 47:02 yeah. Reminds us of Lighty Klotz's work at, you know, on the subtraction concept, so so valuable to his five year old son taught him this group lesson Jana Werner 47:15 story. Yeah, we learned. I wish we had, and we would have put it in the book. Absolutely. Tim Houlihan 47:21 Well, lighty is always a fantastic conversation. Just reach out to him, because he's fantastic. But along those lines, Jana, and I'm going to turn this question over to Phil. What about scaling? I mean, how can we be thinking about reduction when organizations are about scaling, getting bigger, bigger, badder, better, bestest, you know, all that. Phil LeBrun 47:44 Yeah, I think we, we often find a solution to a particular problem in a corner of the organization, and then everyone gloms onto it, says, right, the next thing we need to do is take that solution and spread it out everywhere. Kurt Nelson 47:57 It Phil LeBrun 47:58 actually achieves two bad outcomes. Firstly, it robs everyone of agency. It goes back to this change, doing change to people, not with people. Here we go. Here's a solution to your problem. And there was an interesting HBR study years ago that said the average manager knows no more than about 40% of the work that his or her people do. So you're taking this thing from over here and saying this is going to solve your problem, or maybe the 40% I know about, but I don't. The other thing is, it lacks nuance. The yes, Japan and the US and Brazil and the UK all have payroll systems, but there's a lot of nuances to how people get paid, regularity, tax, and the such like, so there's this assumption. It's a bit of a hammer in search of nails. There's assumption that everything is uniform across your organization, so you can just impose a solution, and it is counter. It's back to what Jana was saying about subtractive mindset. It is counterintuitive. It goes back to this Tin Man approach that doing things once is efficient, as opposed to what we want to be is effective and efficient to a degree. So this idea that we have it in a formula in Amazon, we say two is greater than zero. We prefer to see two organizations or two teams do something that looks vaguely similar to serve a customer needs, then none of them doing the right thing, because they're waiting for governance oversight and such like. So that too is counterintuitive, because there is a certain degree of duplication, but the overhead of trying to eliminate all duplication in an organization leads to just this creaking tin man construct again. Kurt Nelson 49:46 Yeah, go ahead, Jana. Jana Werner 49:48 We had a.. we're working with an awesome colleague, Mark Schwartz. He was the CAO CIO under the Obama-Obama administration, and he taught us something super simple that I love. He said, "You're only. Ever scale, what makes your organization faster? Things like technology that people can use if they so wish to. For example, everything else you don't scale, you let people develop and spread, and see what naturally spreads. And as it spreads through the organization, it spreads because it has value. It doesn't rob people of their ownership, it keeps the ownership, and the value mutates and changes depending on which part of the organization it spreads to. It's much more elegant concept. Kurt Nelson 50:30 I love that it's an organic way of having that what works and how that then moves throughout the organization organically, as opposed to top down, as you guys were talking about. Great, one Jana Werner 50:41 of my favorite books ever. Kurt Nelson 50:46 I think Tim is itching to talk about music. I don't know if we warned you guys about this at the beginning, but Tim always asks a music question at the end. Tim Houlihan 50:55 It's, it's this is not a go to your grave kind of a question, by the way. This is, it's not, this is a low key, just if you happen to be stranded on a desert island, and you had a listening device, and it's kind Kurt Nelson 51:07 of like going to my grave kind of thing. If I'm stranded on a desert island, all of a sudden Tim Houlihan 51:11 it got a lot more specific here, but you've got a listening device, and you've got two musical artists on that listening device. Now you get their whole catalog and everything that they've ever recorded, ever created, but which two artists would you take with you? And Jana has the most far off gaze, so I'm going to pick on Phil first. Phil LeBrun 51:37 I'll give you one to start with. I was a Beatles fan growing up, and obviously I'd have to pick the octopuses garden. Oh, well, you can take all of the Kurt Nelson 51:50 Beatles at the entire brilliant. Phil LeBrun 51:54 Okay, Beatles will give Kurt Nelson 51:57 you a trick, you could say like John Lennon or Paul McCartney, and get all of the Beatles, plus all of their other stuff afterwards. That's a little trick of the trade here. Phil LeBrun 52:09 I completely miss that, Tim Houlihan 52:14 you're it. Looks like you've got a pretty strong idea going. You've got energy in your face. Jana Werner 52:19 Well, first of all, I would love to turn it on you guys, because we want to create an octopus soundtrack, and the first song is, of course, Underwater Love. The second song will be Octopus Garden, and we would love to hear a couple of songs you would add to that. And then I will happily share whatever. Tim Houlihan 52:40 Oh, okay, so this is on the octopus on on the octopus theme on Jana Werner 52:47 the organizing, don't go with changes, that's not Tim Houlihan 52:55 that would be number one, but actually number two would be shot day with not an ordinary love. How about how about that? Kurt Nelson 53:06 I'm just letting Tim answer for both of us. Oh, come on, Kurt, didn't the cure create something frozen with? Like, Tim Houlihan 53:15 I'm gonna, I'm gonna have to get some, some thought to, because changes was the first thing that came to mind. The boat would be perfect for that. Okay, but I think I think we're actually gonna have to end it there. They would have to, I'm gonna, since it's our show, we get to actually end the music discussion when we want to end the damn music discussion, but So, but we are happy to email you more ideas if you promise to email us some ideas, because maybe we should put together a playlist for this for this particular episode, and it could be pretty fun. Thank you, Jana Verner and Phil Lebrun. Thank you so much for being guests on behavior grooves today. Thank you for having us. Jana Werner 54:03 Thank you. That was awesome. Kurt Nelson 54:13 Welcome to our grooving session, where Tim and I share ideas on what we learned from our discussion with Phil and Jana, have a free flowing conversation and groove on whatever else comes into our many tentacled brains. Tim Houlihan 54:26 Ooh, getting into that octopus metaphor. Yes, Kurt Nelson 54:31 I love the octopus metaphor. I did, so I just watched Brilliant Creatures. I don't know if you have seen that, it's on Netflix. It was, you know, that's narrated by an octopus, as Sally Fields in it. Octopuses in an aquarium, anyway. It's very interesting, and the octopus talks about how smart it is, and how dumb people are, and I think there's some truth there, right? So, Tim Houlihan 54:58 okay, is it animated? No, it's Kurt Nelson 55:00 an, it's an actual, it's an actual Tim Houlihan 55:03 talking octopus. Kurt Nelson 55:04 Yeah. Well, it's a voice over from the octopus. Yes, I mean, he doesn't have a microphone, he's underwater. Come on. Well, sometimes he gets, he crawls out of his aquarium all the time to eat the good food. So, you know, Tim Houlihan 55:19 okay, I'm totally Kurt Nelson 55:20 fascinated at this point. It's a fantastic, I recommend it to everybody. So, there you go. Okay, so Tim Houlihan 55:28 our conversation with Phil and Jana, what.. what struck you? Let's just get started on what.. what do you think was sort of the key thing that that you wanted to spend some time. So, you and I Kurt Nelson 55:40 have seen this, right? I think we've seen what they are talking about with the work that we do, when brilliant execution Tim Houlihan 55:49 of strategies and organizations. Kurt Nelson 55:51 Well, no, I'm talking about the these organizations that become overly centralized that have a command and control control structure that are large bureaucratic and not necessarily adaptive. Tim Houlihan 56:16 Yeah, Kurt Nelson 56:17 and we work with them and they plot along, and oftentimes they plot along, okay? Right, Tim Houlihan 56:24 that that's the thing they do. Kurt Nelson 56:26 They, they, they have a system, they have processes, they have methods for doing things, they have some momentum, because they might be one of the larger organizations in a, in an industry, they have people that are just going through and doing the daily things, and what I think is really fascinating, and what Phil and Yana point out is they could be so much better, right, that that organizations become less adaptive, less intelligent when leaders over centralize decision making. Tim Houlihan 57:10 Yeah, and I think that there's this interesting behavioral science theme that goes along with this, because we know that humans need two things: we need novelty, we want variety, as well as we need stability and predictability. We want to sort of, sort of, we thrive in a sense of cover, and everybody has their own balance on that. But organizations need to find what something that works right. They need to find that balance, so that the organization can thrive, and it's, it, I think, that they get leaders get lulled into it's working good enough with all my command and control stuff, that my over centralization, or what I, me as a leader, I might perceive as just appropriate amount of centralization, is working, and, and what I think that they're missing, this is the tough part is that they're missing out on how much better the organization could be if they if they figured out a way to create a structure where people had more autonomy and more and a greater sense of flexibility. Kurt Nelson 58:15 Yeah, and I think again we've seen this, right, there's a need for governance. There's a need for oversight, as long as that doesn't get in the way of actually taking the information that frontline or near frontline employees have about what is happening and being able to apply those changes. Right, I mean, we know behavioral research science research shows that decisions that move too far away from the people closest to the problem, look, your responsiveness slows dramatically. Employees begin to optimize for compliance instead of for outcomes, right? It's like, Tim Houlihan 59:04 right, Kurt Nelson 59:04 and I mean they talk about this, right? So this is the piece where let's get away from, well, we're doing this. I'll give an example right now. I'm working with a company where we're working on their IC, helping develop their incentive compensation philosophy. Tim Houlihan 59:21 Okay, one Kurt Nelson 59:22 of the things is they're going, you know, the people that are designing these incentive compensation plans, you know, it's they have leaders that are doing it, and they have a budget, and you can use a system to design so that you'll always have that budget. It'll never overrun that budget, right? It's a rank kind of plan, but that rank plan doesn't necessarily drive the behaviors that you want inside, in the sales force, in the people. That you're rewarding with the incentive, Tim Houlihan 1:00:02 and why is that? Why, why is why does that fixed budget stack ranking model not optimize for maximum performance across the entire.. you Kurt Nelson 1:00:13 tend to in a stack rank. I'm competing, so if there's 10 people on my team, there's a, you know, $10,000 that we have there. Person number one gets 5000 person number two gets 2003 gets 1004 whatever, you know, whatever that breakdown is, and the people on the bottom get very little or nothing Tim Houlihan 1:00:33 possible, or Kurt Nelson 1:00:34 nothing, right. So, where, where is my focus? If I am a salesperson, do I care if I sell 100 units or if I sell 50? If I sell 100 units, but that 100 units is below you, who's selling 101 right? I'm so.. or if I sell 50 but I'm above you, right? I, my focus is on you and the internal team, and trying to beat the internal team, Tim Houlihan 1:01:10 right, Kurt Nelson 1:01:11 which there's reasons why you do that. They're not saying that that rank plans are totally efficient at the plate, but for the most part, right, when you're thinking about the behaviors that you're driving, those are some of the behaviors. Now, there's other factors in what people are motivated to drive in various things, but the incentive plan is specifically designed to do that. But what it does is it's $10,000 I will never go over that. That will be the budget I spend, right? Tim Houlihan 1:01:38 And that means that me, as an individual contributor, what a salesperson will never earn more than the $5,000 which is the top prize, regardless of how hard I work. All I'm going to try to do, if I'm, if I'm number one right now, is just try to sell enough to stay ahead of number two, Kurt Nelson 1:01:57 right. And now, so, so I can Tim Houlihan 1:01:59 be competitive, but it's really not competitive in a way that maximizes. I'm just trying to just get far ahead enough so that I don't lose my spot, Kurt Nelson 1:02:10 and there might be reasons, because the data is bad, because the you're in a launch situation, you don't have detailed information. The other type of goal, or the other type of program in that, and sorry, we're going off an incentive compensation thing here, but, but the other main type is a goal-based one, and this is where, like, that budget, all right, so everybody gets a goal, your goal might be 100 units, my goal might be 50 units, whatever that would be, but you know it, the incentive plan is designed based upon we think Tim's going to do x and Kurt's going to do y, and we have a budget built around that, but you know what, both of us could blow that out, you could go 300% to goal and all of a sudden you're earning that top number, and I go 300% to goal and I'm earning that top number, so all of a sudden your budget that you had, that $10,000 just blew up to $20,000 or $30,000 right? And so, right, anyway, so, Tim Houlihan 1:03:12 but at the same time, a lot more product was sold. Kurt Nelson 1:03:15 Well, it potentially, I mean, it could also be the other side, you sell, like, you know, 80% to goal, I sell 70% to goal, we are selling much less, and there is, you know, but again, from that perspective, where the company is paying out based upon the, you know, how they did against expected performance, so in the other one, I mean, we could have sold the exact same, you know, brand has a, as a goal, and if it's in a rank plan and we only are doing 80% you're still paying out the entire budget, if you're 150% to plan, you're only paying out that 100% budget, and again, we don't need to go into all of this, but I think the interesting part here is that they're designing that because of compliance, because they get their hands slapped when budget isn't met. There's people above them going, why didn't you, you know, spend your entire budget, or why did you go over budget? Actually, it's more, why did you go over budget? It's usually never. Why didn't you spend your well, Tim Houlihan 1:04:25 but, but there's also the why didn't you spend your whole budget? You know, I mean, I worked in the financial services sector, and if somebody says I'm planning on spending $6 million you know, for my, for my team, and then you only spend, you know, $5 million that's a million dollar gap that the company had allocated. Kurt Nelson 1:04:43 Yeah, Tim Houlihan 1:04:43 for, oh, we thought you were going to use that, and you're like, oh, I'm not going to use it. So, shouldn't I get praised because I'm under budget? And the answer is no. You don't get a big reward for being under budget because we held that money for you that could have been used elsewhere. Kurt Nelson 1:04:57 Yeah, so, Tim Houlihan 1:04:58 so some. Times that all that that structure and that that centralization can get in the way, that's that's really the core story about that. Kurt Nelson 1:05:09 Yeah, and I think again, Phil and Jana talk about that. They also, you know, I think there's other other factors, right? Is, and we saw this in COVID, right, where you know companies are so efficiency bound that it's just in time inventory, there's no redundancy in components or processes or anything, and so this idea that you know we have to run really lean, we have to, you know, be centralized, so that we can do that, as opposed to this arm's doing this and this arm's kind of doing this, and we have some duplication. Then they're their argument is that's not always bad, Tim Houlihan 1:06:00 right? I mean, we've seen this. We actually, I saw it specifically at a financial institution customer client that I had, where, and Kurt, you and I got to talk to this leader, Scott told us that he has a team of programmers that are constantly busy. Right, there's plenty of programming resources, plenty of programming requests to fill the resources, but Scott makes sure that his team is never scheduled for more than 80% of their time. In other words, they only take on projects in the, in the for the foreseeable future that that would force them to operate at 80% Now the reality is that every week Kurt Nelson 1:06:44 that 100% they bill Tim Houlihan 1:06:46 100% of their hours. Yeah, so there's plenty to do, but they allow that tiny little bit of flex time, and this sort of gets to, you know, some tech organizations have said, well, you get, you know, Friday afternoons to do whatever you want, you know, think freely, whatever, it's not that folk, it's not that crazy wild thing, it's like, like, all we want to do is schedule most of your time, but not all of it, so that there's some flex, so not everybody feels like they're just constricted and bound up by all the pressures of everything that that they've got booked, that they've been booked for, and that allows for this psychological openness, which allows greater satisfaction. Scott's team gets some of the highest satisfaction scores in the entire company. Yeah, no, 30,000 employees. Kurt Nelson 1:07:33 Well, and to that point, I mean, if, if I'm a senior leader, going, you're only scheduling 80% that's 20% waste, as opposed to understanding how the real work happens, and I think that is exactly the key piece that Yana and Phil are talking about, is real world real work happens at that front line level. Yeah, the people who are closest to it understand it, and if you give them the resources, and they have the knowledge, and there is guidance on what they want them to do, right. And again, I talked about the incentive stuff. What we're trying to build with this incentive philosophy is this guidance system for the organization to say, here's the North Star, here's what we want this incentives to do, and how they need to operate, and then let's put some guardrails out there, anything within there, let's push that down, like within those guardrails, that those decisions push those down to the lowest, you know perspective within the organization that can make those decisions, so it doesn't have to come back up to the larger part of the organization, as long as they're given, hey, here is where we're going, here are the types of things that you can do, and decisions that you get to make, and the more we can push down, the better that's going to be, Tim Houlihan 1:09:02 you know, this just reminded me of how oftentimes we've talked to Annie Duke about decision making, and I think that the metaphor she talks about, how you know, oftentimes strategic leaders think, well, you know, we're playing a game of chess, and so with our competition and with our market, it's about the right move at the right time, and Annie is like, "No, that's not the case. It's more like a card game where we don't know exactly what the competition or the customers are going to do. We don't know exactly how they're going to respond when we play one card and they play a different card. There's a lot of uncertainty in that, and I think that we lose that leaders get into the idea that if we just do this, then this will happen, and this is what, but that's not a really great way of thinking about it. It's much better to think in bets, since it's a, we've got a lot of bets out there, this is a 20% bet, this is a 50% bet, this is a 70% bet, but this is maybe a. 30% bet, but let's try them to understand how good our prediction model is. Let's try to understand how well we actually know the market, and of course that requires engaging people at the front line, and the especially the frontline leaders who are in touch with the people who are on the front line to test those ideas exactly before they go to market Kurt Nelson 1:10:20 exactly, that's that, that being in touch with those frontline leaders, leaders, and even not just leaders, just the front line people, right. And I think you brought up this other really interesting piece with that Annie reference, which is, you know, if you think about a game of chess, there are optimal moves, right? Yeah, so if I go and play a chess game, which I do, I make a move, and the computer will tell me, was that the optimal move or not? You can, you can look at a game afterwards and say, oh, you made this, was a good move, it wasn't the optimal, that was a bad move. This was a blunder, right? All of those things, you can, you can go in there and do that, because there's a set board and various different things, but I still have some creativity within there. But it's not the same as playing cards, it's not. And then you know, because in cards, there's part of this, particularly in Annie's world, it's the ability to understand and to anticipate, but also reading other people, and part of the game is trying to, you know, understand what's going on in that other person's head, not the optimal move, but trying to work with them and get them to do the right thing, which is it's a little bit about like being creative, right? It's a, it's, it's having this little bit about all of this, which, when you think about it from a chess metaphor, it doesn't have that same, and I love chess, and I think that chess is a beautiful game, and there's lots of creativity in it, but it's not the same, right? So Tim Houlihan 1:12:04 it's, it's not absolutely.. Is there anything else that you wanted to cover? Oh, just this Kurt Nelson 1:12:09 idea of the Tin Man organization, and I mean, we talked about this when systems lose their humanity and I think one of the biggest issues that I've seen inside of organizations is that we take the people part of it out, we take the human emotion side of things out, we take the heart out of an organization, and not maliciously, not like we're trying to do this, that this is the intent, it just, it's part of what happens when systems and the complexity of those systems grows, and you get the silos, and you get the governance compliance components, and sure, Christian Hunt would love this conversation, right? So, Christian, if you're listening, you know, throw a, throw a comment in here, but that part of this work, right, that we're doing is making sure that I think what Jana and Phil are saying is, look, don't become that organization, don't lose that sense of heart, don't become the tin man who doesn't have a heart, Tim Houlihan 1:13:36 absolutely, because the trouble is that when you start taking the humanity out of something out of the very community that most people are spending a large portion of their lives worth, it leads to burnout and all kinds of, you know, interpersonal challenges that we lose that sense of when we, when we lose the sense of autonomy or, or psychological safety, for instance, that leads to burnout, that leads to, like, I don't feel safe here, I don't feel trusted here, I don't feel like my contributions are being responded to, and then people don't give their utmost, they're not willing to give their maximum performance, right, Kurt Nelson 1:14:19 and it doesn't even have to be burnout, I mean, you can just have that lack of 100% effort there, and again, nobody really gives 100% effort, but that you're, you're reducing the chances for people to feel engaged with the organization, you're, you're missing out on the chance for people to say I'm going to go above and beyond because I have an emotional connection, yeah, with the people and the organization, and this matters to me, and I matter. Matter to the organization Tim Houlihan 1:15:02 exactly, Kurt Nelson 1:15:03 and without that I'm just showing up and punching the numbers, and again going back to what we started, talked at the beginning, companies plot through, you, you know, you have enough, enough momentum, you know, what was, what was the, that movie, Office, was it Office Space, or whatever, where you know, which Tim Houlihan 1:15:29 was a serious, you know, analysis of the way organizations work, right? But I mean, it was, it was true, Kurt Nelson 1:15:37 it's like, why should I work harder? If I work harder, I just get more work, and, and you know, nobody cares, and I mean, there's anyway. All right, I think that's it. That's what I wanted to wrap on. Yeah. Tim Houlihan 1:15:49 Okay. So, thank you to all of our grooves who listen in, who subscribe to our Substack, who participate, participate in our Facebook behavioral groups community page absolutely love that, because Kurt is out there every damn day with a fantastic question, not every Kurt Nelson 1:16:07 day, most damn days, Tim Houlihan 1:16:09 most damn days, asking, you know, really interesting questions, and you got to get out and check it out and engage, because we absolutely love that kind of interaction, absolutely. Kurt Nelson 1:16:22 Yeah, and Substack again, go out there, subscribe to our Substrat, Substack, if you haven't already. Yeah, we have fantastic insights that go, you know, bring in a different perspective than even the, the interviews and the episodes that we have. There's some different pieces and links to the music and other fun things that you can go, so yeah, Tim Houlihan 1:16:47 yeah, so with that, folks, we hope that you've enjoyed our conversation today, that it prods you to maybe spend 30 seconds of your day to just go out and leave us a review, or just click on the stars, and just let us know how we're doing, and we hope that you can take some of what Jana and Phil had to say today and use it this week as you go out and find your groove, Unknown Speaker 1:17:13 you Transcribed by https://otter.ai