Applying Agile Principles to Transform Management with Hunter Hastings

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue strategies and their 10x ROI B2B growth guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Another episode of the B2B Growth Blueprint podcast. I'm your host, Mark Osborne, and today I am very excited to welcome our guest, Hunter Hastings. Now I'm gonna read his bio to make sure I get it right. So Hunter is the founder of The Value Creators, And that's a business education ecosystem that aims to bring a new perspective on value creation to young professionals and young entrepreneurs operating in the new breed of digitally enabled companies. And we're gonna talk about what that means to be a digitally enabled company. He's an economist who took up a career in corporate marketing and occupied the post of Chief Marketing Officer in a consumer products business, Chief Executive Officer in a Silicon Valley startup, And a senior partner in a consulting company advising Fortune 500s on global branding. So obviously a lot of deep expertise there. As a managing partner in Byala Venture Partners, they're a seed-stage venture capital fund, he's helped to nurture new companies and scale up their business models. He's the author, co-author of 7 different books spanning business and economics and several peer-reviewed economics papers. He holds a master's degree in economics from Cambridge University in the UK. So welcome, Hunter.

Mark, thank you very much. Good to be here.

Yeah, I'm super excited to chat with you. We've had a couple of fun conversations sort of leading up to this. So tell us about what you're working on, on sort of the digitally enabled company space in this sort of education ecosystem that you're building for young professionals and entrepreneurs.

Well, Mark, there's a big transition going on from the old concepts of management to how we're going to scale and run firms in the future. In fact, my next book is going to be called The Post-Managerial Era of Capitalism. Because the whole concept of management, which has been about control or direction or planning or some kind of central group that directs others in the company is going to have to be rethought. It's going to go away. And there's a couple of reasons for that. One is human, and that's because self-management will replace that kind of directed top-down management. We can talk about that. And the other is technological, which we've tried to capture the idea of the digitally enabled corporation. So What that is, is there are entirely different business models in the digital era. The company is directly connected to the customer. So you can think of that just in simple terms as Amazon, but there are plenty of other examples of that. The customer is clicking, is buying, that data is coming straight back to the corporation and—

Yeah.

That's consumer behavior data. It's not opinions. It's not some kind of expression of satisfaction or dissatisfaction. It's buying. It's doing. And so we've got all this behavioral data coming in. And so we need to run that through a data layer. We'll talk about that before the humans get ahold of it. And glean the insights from that, that direct what our company does. So all of a sudden, the customer is really providing the direction to the company. And we've got to figure that out. It certainly won't be through top-down management and command and control. It'll be figuring out how everybody in the company, equally treated and having equal roles, will be able to turn that data and those insights back into innovations and service for the customer. So it's really a whole new world. And we're trying to think through the systems for that, both the human systems and the technology systems and the mindset, which I think that's the big change. What's our mindset going to be in this new era? It used to be, you know, the firm produces things and you push them out.

Yeah.

And now it's the other way around. The customer has needs or desires or unease or dissatisfaction and is going to pull value towards them. How do we organize a company on that basis? That's, that's the kind of research that we're doing now.

That's really interesting. And so it, it seems to be, if I can kind of state it back to make sure I'm capturing it, in a, in sort of a legacy model, the company leadership, management, however you want to define that, would sort of come up with, here's what we want to take to market. And here's, here's the mechanisms that we think will be valuable to take that to market. And then they would sort of manage people in sort of executing against that plan. And then sales would be sort of the acknowledgement of how well that plan worked in the marketplace. Whereas in the new paradigm, there is so much consumer behavior that sort of feeds what people want and need that it can sort of guide what they should be creating and then what they should be taking to market. which then kind of eliminates some of this upper echelon layer of maybe we don't need people to try to infer what the market wants. We can just understand what the market wants through more empirical data and not sort of make bets and more sort of sense and respond to what's actually happening and enable the sort of lower level in that hierarchical framework, the lower level employees to make decisions based on that data. Am I capturing that right?

Yeah, I think you are exactly. And I think of the language, Mark. So management's been with us for a couple of hundred years.

Sure.

People have to be managed, right? People have to be being told what to do. Situations have to be managed. Plans have to be managed. Think of management by objectives. That's the way to manage people, right? We'll give them objectives and then direct them to make them. We need to rethink that. Our best word right now is to replace management by market selection. The customer's going to decide, the customer selects. And this is consistent with all the modern science in complex systems theory, that the system selects the patterns within it that are most useful or most productive or produce the most value. So we've got to stop managing and let the market select and figure out how we align with that.

So I want to sort of probe into this because I'm a big believer in data and technology. And, you know, like, you know, I've had all the certifications, I've done all of the things. And for most of my career, data and technology has really been a driver of sort of success and sort of outcomes, especially in marketing. And you also know, I'm a big believer in, you know, learning as much as we can about the customer. as a way of, you know, then enabling us to add more value to that customer and to better tailor our messaging to them. And, you know, the idea of using data and technology to create one-to-one relationships at scale is something that I've always been passionate about. However, I want to push in a little bit. You know, there's an old saying that, you know, if you'd asked— they asked Henry Ford, or he makes this quote, If I asked my customers what they wanted, they'd say a faster horse because they didn't know the idea of a car existed. And oftentimes in market research, I've seen where if a company doesn't know what to ask, they get the wrong answers to the wrong questions. How would you sort of reconcile the idea that this sort of empirical bottom-up customer-created datasets captures where markets are heading better than, you know, an innovator can?

Yeah, so I love the question. I love the Henry Ford question. And we use it ourselves sometimes in our education. And Steve Jobs felt the same way.

I was gonna say Steve Jobs is another great example of that.

So here's the answer. Don't ask. Because the customer can't tell you what they want. They can't tell you the future. They can't be the inventor. What they can tell you about is things like unease. You know, I wish this was a little bit different, but even that can be misleading. So we're not asking, we're observing. The big secret in the new business models is consumer behavior, not what they think, but what they do. And then you've got to use a deductive method to figure out what are they telling me. So the way AI and machine learning does that is by observing patterns.

Sure.

So a very simple pattern is they used to buy at this frequency, now they're buying at some different frequency. That's a new pattern. What's happened to that? What other patterns does it fit into? How can I deduce from behavioral data what the underlying need is? That's still the human skill. But AI and ML can do the pattern recognition for us. So don't ask the question, look for the behavior, and then deduce from that what implications that has about customer need. And that's still the human part because that is empathy. That is one human understanding why another human is doing what they do.

Right.

Not asking them why, understanding why. We use the term mental models. I've got to understand your mental model. How is Mark Osborne thinking? And then run my proposition through it to see how you'll react in the context of that big system that you're in. Because it's never a one-on-one choice. It's got to fit in to my whole system of behavior. So that's a big change. And, you know, Henry Ford was right and he's still right.

Well, so I wanna keep this dialogue going because I find it really interesting. And certainly, I've seen, you know, like I've witnessed myself where machine learning or artificial intelligence, if you wanna call it that, models can understand the impact of sort of a non-intuitive driver of an outcome. And so it can find things that a human never could because, A, a human couldn't balance all the different variables that exist. And B, a human comes in with a bias of, well, I don't really think weather determines how much people buy of this item, but turns out maybe there is relationship there.

Mhmm.

However, so for infrequent purchase behaviors that you don't have a lot of sequence of behavior where you need to impact that path to purchase, understanding their attitudes that are precursors of the behavior can be very valuable in shaping those attitudes so that when the behavior happens, you are influencing it with your marketing activities, for example.

Yeah.

How does this kind of system replace that? Or, and I think what I heard you say is that the replacement is a human who can empathize enough to understand why this behavior is the outcome. and then understand what the attitude is that leads to that behavior. But why wouldn't you still use questionnaire survey type research to understand some of those attitudes and then use that as an input in a model on how it leads to behavior?

Let me break that down into a couple of elements, Mark. You said, hey, we may have incomplete behavioral data in a specific area. frequency of purchase is not enough. But we always have more data about the bigger pattern, the bigger system.

Okay.

So if my customer is an office manager and they're not coming to my website as much, they're not buying my service as much, but what are they doing? They're doing something else. And so what's the bigger pattern? What are they shifting to? What is going on in the office system that is different than it used to be? So the The behavioral data gathering has to be pretty broad.

Yeah. And then potentially that's not feasible. So let's use this example. Let's say we sell like office machines. It could be server racks, it could be, yeah, I guess people don't use Xerox machines much anymore, but, you know, sort of big office machines. So if I'm IBM, a company that makes big office machines, And I notice, well, my customers aren't coming to me as much. I don't know where they're going necessarily because I don't have infinite access to what they're doing. And in fact, with the sort of recoiling from privacy, consumers are, you know, whether they're B2B consumers or not, those decision makers are less and less forthcoming with what they are doing with their behavior. And so there's a gap in building that model just because data availability. How would you solve that?

No, that's right. And so the data's there, right? In this digitally enabled world and everything being connected, everything being measured, the data's there. So it's gonna be available. We're gonna have to decide, well, how are we gonna tap into this bigger data set? One would be to buy it. There's just enormous numbers of data services are available on everything you can think of. So that's one possibility. The second is ask the customer, so can you share your data in some other areas? And so yeah, it may never be incomplete, and that's why we've got to understand the system. And then there is a legitimate narrowing action, you know, a kind of Bayesian logic that says, well, let me try and think of the most important driver in my area, even though I do fully recognize the much larger system. So yeah, there can be some narrowing and some focusing. And then what we do is very, very fast iterative testing, right?

Gotcha.

The most valuable experiments, we call them. And so what does that do? It gets you data. Did they like this? Did they do this? But a long time ago, You talked about survey. When I was in that world in marketing, Mark, we used to call one of our survey data points definitely would buy. So I showed them a proposition, I give them a 5-point scale and they score a 5, definitely would buy this, which it was kind of an indicator, but it was never very accurate. What we've got in this modern world is definitely did buy. There's no dispute, there's no attitude, there's no misunderstanding. They definitely did buy.

Right.

They may have a new feeling afterwards. We've got to assess their experience of that. So that's the other point I would make. I think attitude is really, really a difficult concept. We've lived it in market research for a long time, but now we have experience and we can measure experience. Did you like that? Did you not? Did it meet your expectations, which is the key variable?

Sure.

It did or it didn't. Why didn't it? So those are kind of attitudinal questions, but not really. They're experiential questions. I did this behavior, and here was my experience. That's emotional. That's a feeling. So that's fine. But it's not an attitude. It's an experience after the fact. So that's another difference in how we measure customer input.

Interesting. Well, in all of the sort of idea of customer input, really sort of takes me back to this idea of kind of design thinking or agile business models that talk a lot about, you know, get out of the building, go talk to your customers. And oftentimes one of the things that I've even sort of found challenging with some of that theory in sort of business management or business design is you're sort of biasing the sample because you're talking to the customers that you're able to get access to. And you're potentially not structuring the questions in a way that really elicits unbiased feedback. And it's almost definitely a fairly small sample size just because it's untenable to get too large. However, this sort of digitally enabled business that you're talking about really has the potential to use those same principles of, you know, sort of business design thinking and some kind of agile business development. where you get that input from the customer, but at a much larger scale, and at a scale that's actually more indicative of the marketplace and can do a better job of guiding the actual business behaviors.

Yeah, so I think that's still relevant, although talking to the customer, I don't think, is a really, really good metaphor. I mean, we should obviously talk to them. We should know them. We should like them. But let the customer give their input in other ways. Again, going back a few years, think of bug fixing. So we sell the customer some software, we've tested it the best we can, but there's always some bugs in it. The customer points out the bug, gets ahold of one of our engineers, the engineer has to fix it and send it back to the customer. The new way of doing it is the customer fixes the bug. And so And they're perfectly happy doing that, right? They're smart engineers. They get quite delighted when they find a bug and they can fix it, and then they post it back to the board, and then everybody in the ecosystem gets to benefit from that bug fix. And so these new systems are generative, which, you know, it's a bit of an ugly word, but if you can get the customer to do a lot of the work, point out a lot of the flaws, fix them, Send in ideas. You know, I was looking at one of these no-code websites the other day and there's all kinds of plugins and pieces of advice. They all come from the customers. Hey, I use this feature and it wasn't quite right. So I built this plugin. Here it is. Everybody can have it. Those are generative. So more and more people are gonna come to that site. More and more people are gonna share information. More and more people are gonna elevate the quality of the technology. And, you know, there's not a lot of talking to the customer there. There's a lot of interaction with the customer and customers interacting with each other and interacting with the firm. So yeah, by all means, leave the building. But I think, again, in this new world, it's interactivity that is free and open more than open-ended conversations.

Interesting. So let's put a sort of an application for this. So a lot of the folks listening to, you know, this podcast are sort of in early stage, but not necessarily startup companies. So, you know, they've got, they've moved beyond their founder team, but they don't have a huge team. They've got, you know, some customers, but not infinite numbers of customers. They're probably not a market leader yet. They might not even be sort of like a market challenger yet. So they're still kind of you know, maybe bootstrapping or Series A, but resources are finite. Let's say they buy into this idea, but they don't have all the resources to, you know, to do the massaging of data, to buy all the data that's available and accessible to them. How can they start to integrate these principles in the way that they design their business and run their business so that they are kind of future forward?

Yeah, and I think this idea of generativity, Mark, points us in a good direction. If we can create a place where customers will come, whether or not it's our existing customers or potential new customers, if I can make that relevant to them and say, come and try this, or come and give me your opinion, or we've got this experiment going, we'd like you to comment on it. And I think the The webinars and the digital marketing outreach and so on is still very valuable. But this idea of if we can get the customer to come to us as opposed to us always reaching out to the customer. But again, in my old days, we used to call the advertising model interrupt and annoy, which is exactly what it does, right? And we don't want that. We want to attract and delight. So if you can find a way to do that through one of these generative sites, I mean, the perfect example is going back in time, obviously, is Google. They didn't provide a lot of bells and whistles to the customer. What they provided was the opportunity to come to the site and find some knowledge. I'm not gonna tell you the knowledge, you're gonna find it yourself, but here's a little tool for you to do it. If you can find that way to get flow, and it may be a free offer. It may be a test that you want them to participate in, but pull them to you and get them to do the work. And then they start getting committed. They've got emotional skin in the game and it goes from there.

So let me say that back because I think you hit on some really great things there. But to kind of give, you know, a takeaway and some action items for our listeners that are sort of buying into this and want to know how to implement it in their business. The idea is, again, don't come with a view that you know exactly what the customer needs. Instead, create a framework where the customer can tell you more of what they need so that you can then engage with that and then take your business in that direction. So philosophically, very much aligned with, you know, sort of design thinking and agile business models. And then the way that sort of early-stage companies that don't have infinite resources can take advantage of this is by creating a forum where customers can engage with either prototypes or talk about complaints that they have with, you know, current solutions in the marketplace. And you can start to iterate on that input that you're getting from those customers. And the better you can do at passively tracking that input and capturing data from that, the the better, or the more that you have to rely on them giving you feedback, not necessarily based on their attitude, but on their experience of working with either competitors or with prototypes, the better you can bring in that insight into what you're building and how you're iterating on what you're building while continuing to keep this sort of open dialogue as core to your process and how you build and innovate the product and take it to market. Am I capturing that right?

Yeah, and I think the design process that you talk about in, you know, the standard agile design process does that very well. As long as we switch from the old concept of MVP, I build a product, you know, it's not quite finished yet, but try it. You're guaranteeing a bad customer experience, right? Because, you know, the that the product's not perfect. But the most valuable experiment, if it engages the customer right, says, hey, I've listened to you. Here's my proposition, or here's my prototype, or here's my first idea. Tell me how well I did. How much did I approach it? What other ideas does it give to you? So you're not asking them to experience a product and have a bad experience. You're asking them to use your word, engage in a process. And most customers love to do that so long as they think it's driving towards their need. And, you know, one more thing I'll say about that, that we try to capture, Mark, is, you know, there's a lot of language about problem solving, which is not inherently bad in itself. If there's a problem, then let's fix it and that will help our customers. But a need is not a problem. A need is much something much bigger. It's not a short-term barrier to performance. It's some bigger, more pervasive unease that they have about wanting to perform better or wanting to do better. So getting that need, which is usually emotional, you know, I feel like I'm constrained or I feel like I've got something that I can't do as opposed to I've got this problem to solve. It's a subtle difference, but it's really important.

Very interesting. So this has been a super interesting discussion. We could chase rabbits around it all day, but You know, for our audience that is interested in this and wants to learn more, are there, you know, some maybe conferences or materials you would suggest they read? I know you've published multiple books. For our audience that wants to engage with these ideas and get involved with this more, how can they engage with you?

Well, thank you. And let me mention a couple of things. I'm a member of a group of of researchers and executives trying to think through these ideas. And we call it the new management paradigm. I think there's a lot of details to be worked out, but that's what we're trying to think through. We have a conference we call the World Management Agility Forum, which is a bunch of words. It used to be the World Agility Forum because we thought agility was a super good model.

Yeah.

But agility tends to be associated somewhat narrowly in the digital and software world. So we put the word management in there. How could we take all this brilliant work that software engineers did in, in the agile movement and apply to management in general? So you can find the World Management Agility Forum on LinkedIn or on the web. We have a conference in Lisbon, September 19th this year. But if you find the website, you'll also see multiple webinars, one or two of which I've done myself, but we have plenty of other people thinking in this vein. And those are great because they present our MVEs and then there's a lot of Q&A from executives saying, well, how do I apply this? What does this mean? So we really like that webinar format. So that's one place. And then thevaluecreators.com, we've got an online course which we'd like to offer to folks, which— it applies economics to this management process. And what I mean by that is it tries to think hard about what is value. So we're all trying to create value. What is value? Well, it's this experience that the customer has which either meets or doesn't meet their expectations. It's a feeling. So it's got nothing to do with price, nothing to do with cost, nothing to do with features. It's whether we generate that experience in the customer. And so how do we get to do that? Well, we've got the number one tool, which is empathy. And we do believe empathy is a business tool, and we do believe we can teach that, and we can help people with that. We've got a number of empathy tools. Then empathy plugs into the design process. which, as you've pointed out, is a backwards movement, right? From the customer to the software and back out to the customer.

That's right.

Then we've got some thoughts about organization, about different ways to think about financial and accounting in this world, and what we call error correction. So knowledge, which you talk about in your book so much, Mark, is the key resource here. And when you say some young businesses may lack resources, what they really lack is knowledge, real deep knowledge about the customer. So how do you build that? And knowledge is always imperfect, right? We never know everything. So you do it through what we call error correction. Let's attack that piece of knowledge, find out what's wrong with it, find out what's missing, see how we can add to it, ask the customer to give input. So we've tried to put together a whole business system of value creation. And if anybody would like to go to thevaluecreators.com, try our course, we'd love the feedback.

Fantastic. So thevaluecreators.com, check out the course, check out the upcoming, if I get this right, the World Management Agility Forum conference.

Correct.

That's coming up. This has been a super interesting discussion, Hunter. Thank you so much for the time.

Well, thank you for the invitation. I really admire what you do. I think your book is very central to these things that we've been talking about. You know, one of the elements of getting this right is not so much addition, it's removal. It's removing the barriers, removing the errors, removing the frictions, removing the elements that stop us from going forward. And that's what I found in your book. You know, you talk a little bit about the I mean, in the title, Are Your Leads Killing Your Business? And that's because a lot of that is error. It's friction, right? There it is. I love the book and I thought that was one of the core elements to it. Just focus and remove all the frictions because what you've got is gonna get you to the place where you wanna be.

Well, thank you for that endorsement, Hunter. It means a lot coming from you. Certainly praise from Caesar. So thank you. Well, thanks so much for joining us today. We'll look forward to getting feedback. From our audience on the Value Creators, uh, and that forum. Thanks again, Hunter.

Thank you, Mark. Talk to you again soon, I hope.

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