227: Gary Hamel — Making Organizations as Resilient as Its People

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Hello everyone and welcome again to the Scaling Up Business Podcast. I'm your host and scaling coach, Bill Gallagher. I'm in the Oakland Hills today and I'm joined by Gary Hamill, who is across the bay, south of the city, on the edges of Silicon Valley in a lovely place, Los Gatos, and it looks great there. The chair, the library, background. So we're going to learn a little bit more. I was really excited. Gary was one of our top speakers yesterday in the summit with Vern and the others, and I thought it'd be great to have a deeper conversation today and go a little bit longer into some of the things that he talked about that I think are really, really great and so important to so many of our companies. And many of them in Scaling up aren't sure at what point it relates. It's really easy to see it in some of the big companies. We're going to try to break it down and bring it back home, if you don't know already. Gary is one of the world's most influential speakers in the world of management and leadership. He's been on the faculty of the London School of business for 30 years now and has written over a dozen articles for the Harvard Business Review, and his books have been translated in many languages. The Future of Management what Matters Now Many of you will have read these. We know we have lots of readers in our world. Learners, right? People who don't give up and don't stop. And we're gonna talk about that future of learning and what matters and how it relates to this particular time. And I don't know what more I could say. I mean, you're just a huge icon in the world of management leadership. And I'm so glad to have you on the show. Thanks for joining us.

Yeah, Bill, it's A pleasure to be here and to talk to all these people who care about building great businesses and succeeding and doing it the right way. So it's my honor, for sure.

You know, one of the things that keeps coming back, I think right now, we had Tom Peters on, I don't know, about a month ago, and he's also very passionate about the world of people and that kind of thing. And, you know, I think that so many of our leaders felt under the gun about, like, managing people and there was such a shortage of people. It's been a leading topic, but now with companies in a different place and there's more an abundance of people, then we're, we're. We're still, though, in that whole paradigm, seeing people as a commodity. Can I get them? Can I not get them? And your whole thing, I think, is really refreshing about that. So before we get into. So, his new book is Humanocracy, and we'll talk more about that. We'll share some of the online resources after. But if you would give us a little bit of your, like, how do you get to writing this book? You've done others. And why this one? Why now? What leads you to this? Maybe give us that background.

So it's a great question. I won't go back too far. I've had a pretty long career. But, but this book in particular.

Sorry, I was born in South Bend.

Yeah, exactly. So. So, you know, what struck me because I've had the chance to work with a lot of organizations around the world and, you know, and, and a decade or two ago, I was really writing about strategy. That's been my passion forever. I wrote a book in 2000 called Leading the Revolution. It was all about, you know, business model innovation and reinventing industries and reinventing the customer experience and teaching yourself how to be a, you know, think like a game changer. And what occurred to me as I worked with organizations around the world was that many of them were struggling with innovation. Not a few of them, most of them. And, and, and often they were struggling to keep pace with change, that they often found themselves on the back foot. Things were changing the world. Technology, customer expectations. And so it really hit me that pretty much every organization I knew was struggling with the same set of disabilities that they tended to be inertial. Change was hard to kind of make happen. It was, you know, innovation, when it happened, happened, like, almost despite the system rather than because of it. And then when I dug deeper into the data, Bill, it was clear that, you know, most organizations are not very Good at turning on the capabilities of their people. There's a huge amount of data. I shared a little bit of that yesterday. But it's all summarized in kind of the Gallup finding that globally only 15% of people are engaged in their work. So when you see this, not in one country, one company, but when you see these disabilities across the board, you pretty much know there's something deeper going on here, right? If everybody's suffering from the same malady, there's probably a DNA kind of level problem. So I went back in management history and the question I was asking is if you look at the way we run our companies, right, and you don't have to be a big company, by the time you have a couple of hundred people in an organization, you're going to have a few layers, you're going to have a staff group, you're going to have an HR and CFO and your IT function and so on. And so the question was if, if you think about these structures and systems by which we run our companies, what problem were they built to solve? And you know, because most of us, if you think about how we run our companies, we inherited all this stuff. We didn't make positive choices on how we're going to organize and so on and how we're going to do compensation. We had some experts come in or we hired people who used to work for a bigger company and they came and told us this is how we did it there. So you know, most companies, if you look at their management model, it's something we inherited. It was like built by long dead CEOs and consultants and so on. So we went back and said like, okay, where did this come from anyway? And of course what you find out is that the basic, the basic a management system has its roots in bureaucracy, which was invented, I don't know, 130 or 40 years ago, but it was invented for the purpose of turning human beings into robots. And Max Weber, the famous German sociologist who was a big student of management and organization back in the early 20th century, he said, this system, bureaucracy is perfected the more it is dehumanized. So we work to make our organizations as structured, as disciplined, as, as aligned, as controlled as possible. And that's not all bad. But we ended up building structures that were very brittle, that didn't get the best out of people. And, and, and so, you know, we said, gee, how is it, how is it that every organization in the world is working to reinvent their business model and yet we all just kind of Blindly are stuck with that century and a half old management model. And you know, it was, it was, it was a product of its time. Bureaucracy is a product of its time. If you go back to the late 19th century, the average employee was illiterate. They needed managers to tell them what to do. Information was very expensive to move. And the best way of doing that was, you know, have 10 people report up to a manager and they'd consolidate those inputs and then, you know, report up again, up through the chain of command. That was how you managed information. And in that world, it really was the people at the top, they were the only ones who had the big picture. Well, that's not true anymore. We have well educated employees now. We can move information almost instantly. And yet kind of unthinkingly, we're still running with that old management model. And we just know it wedges people in narrow roles. It values conformance over originality. It tends to be insular, conservative, just is no longer fit for the time. So that was the evolution, just seeing again and again. Because we do a lot of work in organizations, Bill, and I have to say we, we've created billions of dollars of market value. It's not theoretical work, but what I could see. So often we'd come into an organization, we'd help them innovate, we build out their pipeline, we get this huge spurt of growth and we'd come back in a couple of years and it was all gone. It was like the status quo was back again. And I started to feel, I guess the analogy was I felt I was trying to train a dog to walk on its hind legs. And you'd go in, you'd get a project team, you'd get them all excited, you get a budget, you choose the best people, you give them some training, you, you know, do all this exciting work. And it was kind of like, you know, if you get a dog and you get its attention and you get a biscuit and hold it up, you can get that dog to take a few steps. But when you turn your back and walk away, the dog doesn't like, keep walking. It doesn't say like, holy crap, this is so cool. Like, thank you. Who knew? The dog is back on all fours. It goes like, well, you're kind of an idiot, right? What was that all about? And so it was just clear that we have a DNA level problem that needs to be fixed. And that means radically rethinking how we lead, manage and organize in a way that is as. It's different from the managerial Status quo, as Netflix or YouTube is from the old television status quo. So that was the thinking, that was the logic behind it.

Well, you know, I hear two things immediately in that, and what comes to mind are some of the conversations with our CEOs and leaderships of the scaling companies. The first one I hear is like the history of like a military structure in addition to the bureaucracy. Like, we have to control people and we can only manage so many people at one time. So you develop those layers. Because I'm only going to manage 10 or 12 people and you're going to manage. So then I need 10 people of the organization. You just get these massive layers of stuff. And, and then, and then the manager's job then within that is just to fight the change, fight the innovation, shut up and do your job and let me write out my career. And that kind of thing stifles all of that. But it is about control and we still see that in government bureaucracy. And then I also think about scaling businesses. If you think about, like, I'm sure you've, you know, the story, at least if you haven't seen the movie, the Founder, right. About the development of and scaling of McDonald's and their speedy service system and. Right. So much of our stuff, I mean, we are interested in developing processes and leaning them out and making them so that they're repeatable, so that any moron could do them. But then of course, it leaves you to hiring any moron and even if you didn't hire anymore, on treating everyone like they're a moron. Right. Rather than having people create. And I know you're going to share about Nucor and you're going to share about Haier and some of the stories we'll get into in just a minute. But we build these systems, then we put people and we even hire consultants to fix them. Never so much engaging our people to create and refine the systems that they're using, the processes and so on. So it's like rather than having those two things work together, they work at odds with each other. That's the thing that I hear most.

Yeah, I think it's true. Now, there is paradox at the heart of this because obviously if you're running any business, you need to be able to do some difficult things over and over again with pretty much perfect replicability. One of my favorite examples, if you look at the next iPhone coming out probably next month, the 12 that's going to be built, the system on the chip inside it, I think it's going to be the A14 chip, I can't remember. But that chip bill is going to be built at 5 nanometer tolerances by TSMC. 5 nanometers is what your fingernails will grow in the next 5 seconds. So you want to ask how much control do you need over how many variables to do something with that level of precision? Right. I have no problem with control, but what I would do is I would make a distinction between control and compliance and perhaps a couple of distinctions. First is you need a distinguish between where you really need that kind of precision and control and where you don't, you don't need it everywhere. One of the examples I relate in the book, our listeners, they'll remember, I think it was a couple of years ago, United Airlines have this PR disaster when they drug some passenger off the plane and bloodied them up. And it was all over social media. So they did their after action review. And, you know, and what was, what was clear is the people at the gate that day, the United staff there did not have the freedom to come up with a creative solution. Right. They couldn't offer people, they, maybe they offered them $800 to take a later flight. They couldn't offer them $1,000. They couldn't, you know, so, so what was very interesting, a couple months later, the CEO, Oscar Muniz was being interviewed and, and somebody said, Oscar, like, what went wrong? How did this happen? And what he said was so telling. I'll, I'll paraphrase it, I think with about 90 accuracy. He said, we realized we hadn't given people the procedures, the manuals, the instructions, the standards so they could exercise their judgment. I went, wait, no, no, no. Rules, manuals, procedures. That's the opposite of using people's judgment. So the United employee manual is 60 pages. The one for Southwest is five. Right. And so I think for many. And so, yes, there are times you need absolute, you know, something has to be done the right way. There's only, you know, you gotta get the information and the safing briefing out, right? That's just like a legal requirement. But I think so often, you know, this ideology of controlism, it kind of slips the moorings of common sense. And then you end up with an organization where an employee can't buy a $300 office chair without getting somebody's permission or has to go through a travel department to book a $500 trip. I mean, it's just, you know, it's kind of nonsense. And so it's not about, it's not about chaos. It's not Saying, you know, we don't need a lot of precision, alignment, control, but it's being very careful and making sure that that's only happening where we need it. And as you said, right, Fe Bill, not. Not seeing the goal as trying to deskill work to the point that any moron could do it. You know, the companies that we profile in the book, all of them pay their employees above industry average, everyone. And they do it not because they're generous. They do it because those people are creating extraordinary value, because they're enthusiastic, they feel like entrepreneurs. They're bringing their best thinking to work every day. They're experimenting, they're trying new things. And so they're constantly leveling up the organization. And you simply don't. You know, all of us in our own lives, we, you know, we. We've probably been in a job or we've been in a relationship where you know what it's like to feel like. Like an instrument. Right. When somebody's treating you, you know, if. If you're married or spouse, partner, significant other, and they look at you as really the person that washes the car, gets the groceries, picks the kids up after school, whatever it is, like, that's not going to be a very healthy relationship, and you're not going to bring your best. Right. And yet, so often at work, that's how we see people, and it's. It's betrayed in phrases like human resources or human capital, which I think is pretty dangerous.

Yes. So, you know, I. We see this starting even at like, 50 people. You get 50 people in. In an org, and we start to see the layers of bureaucracy and that kind of thing going on. And where we tend to do battle with it is in teaching values and developing coaching styles of management. So if we teach and ingrain the values, we say, right, if they are in fact, representative values that describe how you do things, you can teach people to think from the values. Oh, great. How would you handle that? Given our values, which value applies? Et cetera, et cetera. And that coaching style then develops that. But the piece that I think is often missing is compensating people for that. And there's always this fear, like, I'm going to pay people too much and they're going to get lazy, then they're not going to do anything, and then they're going to, you know, and I'm going to overpay them, then I'm not going to be competitive and like that. And I think that. And you spoke a little bit about, you've got Some of that, in some of the examples, maybe one of them seems more relevant than the other. So there's autonomy, there's compensation or participation in the winning of the company, right? Yeah.

Well, particularly I think in startups, and I've started three companies and I think particularly in startups, there's a tendency to see the CEO as like the font of all wisdom. If you're a founder, you know, it's your ambition, it's your vision, you're driving this thing. And it's quite easy for the organization around you to kind of get intellectual late, intellectually lazy and start to rely on you. And you know, they'll figure it out. And I think you have to work very, very hard right from the beginning in a startup to make it clear that we need everybody's wisdom. We need their imagination, we need them to be thinking about the business as a whole. And I would agree, Bill, part of that is your leadership style. Part of that is really actively every day saying, what does it mean to be a mentor? And in fact, in our book, I think we have 21 different mentors, like tips on how to constantly give your, how to give your authority away, how to empower others, how to help them grow. So I think that's very critical on compensation. You know, let me share a little example from Higher. Now that's a huge company. It's 80,000 employees. But. But you could do this in 10 employees. It doesn't matter. What they've basically done is they've tied everybody's compensation to what they do for customers. So they've divided this big company into 4,000 little micro enterprises. So everyone has just 10 to 15 people. And some of those are selling products into the marketplace, but many of them are selling services to each other. So you know what, what happens as organizations grow? A greater and greater percentage of employees are no longer selling their services. They're internal providers, they're in hr, they're in it, they're whatever else. And so they are relieved from that market pressure. They're relieved from accountability to the customers. So what Haier has done, by the way Zappos is on, is on a similar journey now part of Amazon, the online shoe retailer. So what they're doing is they're dividing their organization into small units. And some of these sell to customers, some of these sell internally. But everyone, your compensation depends on the willingness of other people to buy your service. And at higher, they have quite ambitious targets. Every unit is trying to grow faster than the industry. But if you can't find Willing buyers, you will go out of business and a big part of your compensation is tied. So let me give you an example. Imagine at hire, there's a little business making three door refrigerators and you're selling those into the marketplace. To do that, you've contracted for internal services, you've gotten some design help from R and D, you've gotten some HR help to add some more people to your team. Every one of those is a contract. So your contract with R and D, with it, with whatever it is, every internal contract has a performance clause. And the people that are providing you services internally only get paid the full whack if the product does well in the marketplace. So everyone's compensation is at risk depending on what customers do. And so the chairman of Higher, Zhang Ru Min, and he's exaggerating only slightly, he says we don't pay our people anymore. He said our customers pay them. In fact, the base pay and hire for many people is little above minimum wage. But you can multiply that four or five times over. Every employee in that little micro enterprise, you can invest in that little business, you get a dividend even though you're part of this big company. So I think to the extent more and more we make, in fact the whole hire model, they have this Chinese word called ren and high. And what it really means is employees paid by users, not by the company. And so they work very hard to link compensation to the value you're creating for customers. When you do that, most of the debate about compensation disappears. If you create more value, you're going to get paid more. If you don't, you're not.

This is I think a really useful thing to underscore as our companies go from. And you know, I worked with one company in the Valley here just in the last couple of years and we started with about 30 people and there are about 400 now. And as we've gone through the growth, they've ended up with these little fiefdoms controlling their turf and their workload and their deliverables and that kind of thing. Now there is pride in connection to the overall bhag, the near term goals for the company. But, but there isn't that notion of an internal customer. Yes, we develop the tools, yes, we operate the servers, the environment, we keep the physical offices working or the IT infrastructure for like that notion of internal customers and having those things be competitive and then everybody participating in the big wins as their big wins. And a lot of times I think there's a, in some cases there's almost a stinginess, like, ah, like, oh, should we really dole it out very quickly and how fast and like that kind of thing.

Yeah, I think, boy, I see that all the time and I see that here in the Valley as well. Two quick comments, Bill. One is, you know, it's interesting. I, you know, I think internal functions just have taken for granted this idea that we're kind of monopolies. I read, you know, Harvard Business Review did a big cover series a couple of years back on reinventing hr, and there's several articles in that thing. And I read the whole thing and you know, not once this like, the future of hr. Not once did somebody use the word customer. Like, what the heck? Like, what, what are we? Just like some bureaucratic, you know, whatever. And so, you know, now obviously sometimes when you talk to internal functions, they'll talk about their internal customers, but my question is, well, can they fire you? No. Okay, let's not pretend this is a customer. A customer can fire you.

So I think that. Use that department so they can. Whatever they want.

Yeah, yeah. And you know what? I also find it's interesting because I've lived in Silicon Valley now for almost 30 years, and, you know, in some ways companies are very enlightened here, but some ways not. You know, I know a lot of young people are doing extraordinary work in startups, in AI and robotics, and so like, just like the smartest kids in the world doing like, crazy stuff. And when I get them together and I talk to them like, here's the common question, Bill. The common question is like, okay, we're creating all the value. We're at the bleeding edge. We have some of the most unique skills in the world. Why are a bunch of managers telling us what to do? They don't understand the technology. They don't. And so I see these kids go from company to company, they get pissed off, their skills are not valued, they get nickeled and dime over compensation and benefits, and they say like, screw it, and they leave. And, you know, and I think a lot of people are making this assumption that, well, young people are not so loyal anymore. They really don't want to work for one company. They're just trying to, you know, accumulate these experiences. That is, I don't think that's the truth at all. Because when I talk to these folks, like, there's no great. They don't want to start over again. They're not trying to jump. That's like, hugely disruptive. It's not very fun. But what, what, what? But in These companies, they're saying, listen, we grew up on the web. This is our reality today. On the Web, you are a leader only if people are willing to follow you. Influence trickles up. It does not trickle down on the Web, if you have an idea, you get to put it out there. You don't have to ask somebody's permission to have a point of view. On the Web, nobody asks you, what school did you go to. They say, like, are you doing some interesting work? And so what they tell me anyway is we go into these organizations, they have the hierarchy, we spend a whole bunch of time sucking up to the manager. They don't understand the value they're creating. They treat us like a commodity. And at some point we just get pissed off. We say, well, maybe there's a better, you know, and usually there isn't, but they kind of head for greener pastures. So, yeah, I think in the way we treat people, there's a lot of false economy, right? There's, I mean, let me give you an example. Right now, Southwest Airlines made a decision that they are not going to have any forced layoffs in the worst economic downturn in history for the airline industry. Like, what kind of, like, courage do you need to do that? But if you go back and, and, and you listen to their founder now passed away. But Herb Kelleher, he said again and again, he said, we will cut every possible cost except wages and benefits. Because he said, once you start to lay people off, you kill your culture forever. Now, can Southwest sustain this? You know, nobody's going to blame them if they can't in these circumstances. But yeah, I think just a lot of times, as you were kind of intimating there, you know, we, we take a very transactional short term view when we think about the cost of our people. And I tell you what, that will come back and bite you in the ass every single time.

You know, it's an interesting thing. You, you talked earlier about United Airlines and I used to fly a lot of United Airlines. But if you were based in the San Francisco Bay area and you traveled around the world, United was going to probably be your choice because that's the carrier that was hubbed out of here and that you could fly and there was legacy there. But you talk about the most bitter flight personnel and just burnt out, angry, bitter, like that kind of thing. Bracing under stuff and their rules and their ways of operating. And then you talk about the planes like you'd go on these planes that just look beat to hell and you're wondering where's it all going, why does this work so poorly? And then you get on some other foreign flag carrier. Now, the flag carriers might have some advantage, but you could also see innovative other carriers that would come along and do stuff and create a great experience. We opened yesterday with Richard Branson, right, who hasn't really innovated any industry, but it hasn't actually created a new industry in the way that some would in the Valley, but made each one of them better. Said we could make a better airline that isn't so nasty with people. And I flew about 50, 55 flights with Southwest last year. And the difference. And I don't totally love their schmaltzy safety briefing raps or poems, whatever they do, but I don't hate them either. And I love that there's some heart and soul there. And I think so often, like especially the ultimate leader, the founder, the innovator of a business, you have an idea for something that you're really passionate about, solving a problem in the world, a better mousetrap, like whatever it is that you think needs to be realized and brought into the world. And so you start off this thing and then you end up many times forgetting your love of people, misplacing it, or loving people in every other realm of your life except in business. And I see it again and again when I have side conversations with senior leaders in companies and they're like, oh God. And if we do that, then it'll just get totally out of hand. And so one of the tool sets we use is the Gallup Strengths tools. Right? Let's start to learn and appreciate what there is unique and beautiful about each person, what their superpowers are. Let's start to leverage and invite them to use those more and stop having them try to be the people they're not be. Right. I think that's the thing. Like, you know, humanocracy is human centered. And I think that, like, at the end of the day, you're not going to do anything big or world changing on your own. You're going to need to figure out how to work with people. Right? And that's what I hear is like figuring out how to love, appreciate, empower people and then take advantage of their true strengths, have them contribute to the cause.

Yeah, again, 100% agree. Bill, I'd add a couple things. One is, you know, I think there are ethical reasons, there are deeply human reasons for, for building a human centered organization. Having said that, you know, and that dawned on me, I have to say, kind of slowly, because I Got into this because I was saying we need more capable organizations. And, and what I could see is, you know, the people I know, Bill, they are resilient, right? I. I know people in their 50s who went back to school and got another degree. I know people who've moved continents to, to take a better job for their family, you know, who've taken. I mean, the people I meet, they're resilient and they're daring and they're creative. And yet, and yet the organization so often aren't. So what was clear to me was that our organizations needed exactly the capabilities that I see in the people around me, and they don't have them. Because, you know, as organizations grow, there's less and less a space for intuition, for artistry, for love, for all the things that make us human. But my, you know, I started with this. Not kind of like this soft hearted, like, let's create a wonderful place to work. I started by saying, listen, you got to build an organization that can change as fast as the world around you. You have to build one where creativity is happening all the time. And that meant you got to create an organization where people are willing to bring the gifts of their passion and creativity to work every day. Because those are gifts. They cannot be commanded. And we know from the data that most people leave those things behind. The second thing, though, that, that I think is so important for any of your listeners and people who are building companies. You know, there's, there's such a big emphasis today on what's your strategy, what's your business model, you know, where are you going to disrupt? And I get that. I wrote a book, you know, 20 years ago, leading the Revolution. That was all theory was. The whole thing was how to reinvent an industry. Having said that, I will tell you, here's my view today, Bill. If you want to build a company that lasts, I can tell you your business model is going to go away. Right? You're going to have to reinvent that three, four times as your company grows. That's like, those are not very permanent anymore. But, but if you look at the companies that have really lasted, like Southwest, that have scaled up, those are companies where the founders had their view of people, and their view of how to lead and manage and motivate was more unique than their management model. Right? Herb Kelleher's view at Southwest, you know, you go back and you listen to how that guy talked. He said people can buy the same planes, they can fly the same routes. What they cannot reproduce is a culture of Love. I mean, I like you to think about Bill. You do all this consulting, you talk to all these people building companies. How many of your clients over the last year have used the word love? And on the bottom of every Southwest plain is a giant freaking heart. Right? And so, and so it's like crazy to me that the things that are most important to us, I mean, I, you know, this hit me first. The first time this hit me, I was talking to John Mackey, who founded Whole Foods, right. And sold out to Amazon. I don't know what happened after that. But anyway, he built this obviously unbelievable business. Yeah, I said, I said to John, what was the secret of doing this? Like organic. That wasn't a new idea. Building, like what, what was really. He said, we decided we build a company based on love instead of fear. That was what made them different from Safeway, whatever. And I tell you, and I know because I grew up as a strategy professor, I'm sitting, it's like pretty much horse crap. You know, we spent all this time like, how's your business model different and how are you going to market different and where are you? Okay, those are all good questions, I get it. But I tell you, the most important question for a leader is do you have a view of how you lead, manage and organize that is at least as differentiated as your view on how you go to market? How do you add value? What's the customer proposition? Because if you don't, you will not build a business that lasts.

Let's bring it to life a little more. There's a couple of follow up questions I want to ask, but, but I'd rather first like talk about a couple more. So tell us about Bortar or Nucor.

And I'll give you a quick thumbnail of each. Because they're, they're different and what's cool about them, they're so different in industry. But yet you see certain, certain again, the values you were talking about earlier, Bill, you said you start with values. That's what you see in these organizations, right? So we went, spent some time in Nucor. They're America's largest steel company, by far the most profitable, the most innovative. And, and what's crazy there is, first you go to a head office of a $20 billion company. They have 100 people and they have no other than finance, no central staff functions. You know, so there's this incredibly innovative company, no R D department. And I asked the ex, he just actually just retired as CEO. Jim Fariola. I said, Jim, like you guys are so innovative. Like you must have a great R D department. He said, yeah, we do, but it's 20,000 people strong. And so what they've done, back to what we were talking about earlier, Bill, they, they, they run their organization. They have about 70, 75 plants across the United States. Everyone is its own business with its own P and L with no corporate cost allocations. Within those businesses, every single team, you, we think of them as blue collar. But that's like, that's an insult. Every one of their teams has, is, is running their own little business. And every, every team can tell you what is their return on assets, how productive they are. If they, if they increase asset productivity, you get a bonus in like next week's paycheck. So again, a little bit like higher. Their base pay is less than industry average. But what you'll find is their return on capital is about 2x the industry norm. And all it is is by turning on frontline people. Teaching them like a Southwest. They teach every single employee how to think like a business person. They know how to read the P and L. They know what the balance sheet is. They think this way they have a substantial financial upside if they improve the business. Like right now, right away in my pocketbook. And so they are just unleashing more of that talent. So you look at them and you see these people on the front lines doing hundreds, thousands of experiments a year to improve the business. You have blue collar employees going to talk to customers, not sales, not marketing people, not blue collar employees out there talking to Toyota, talking to Ford. How do we do better steel? What else can we do? For if you have a growth shortfall, it's every employee who swarms that and is thinking about what else you can do. So it's no magical recipe, but what was interesting, one of the more senior people and they have about a third the number of managers that their competitors would have per capita. But I remember one person saying at Nucor, being a manager is the least noble work. That is our people create all the value. And so you see these teams, if they, if they have some technical problem they can't solve, it's a frontline team that will hire a PhD meddler just to help them figure it out. So, so, so that's, you know, and, and, and I can tell you, talking to their, to their leadership there, they believe that if that's how every manufacturing company the United States was run, there's no de industrialization. We are not worrying about competition from anywhere. We can take on all comers Right. Birds are kind of interesting. Completely different industry. This is a Dutch company, it's largest provider of home before.

So two things I hear there that I want to plug for deeper stuff as well. Beyond the book itself of course, humanocracy, but Ron Lovett outrageous empowerment. One of our own success stories in the world of scaling up, I don't know, 1800 or something in their company across Canada security business really about empowering the teams. And then the other one is Paul Akers who's also been a speaker, been a guest of the show. We've done shows and had them as guests at our summits. Speakers at our summits as well. So Paul Akers talks about Lean, his first book, two second Lean. Paul Akers thing is about building not so much like programs of Lean, but building a culture and tradition and practices of Lean. Like the regular things simplified, not made into complex corporate. So if you're in a Toyota or whatever, it's going to be both very programmatic but as, as well as cultural. But starting in small companies, just making it kind of part of the fiber of the way we do things. Cleaning things and sorting things and standardizing things and like and then having every employee, employee to that. Not a lean czar who's going to bring in a program to that and that. Those two ideas I hear both in that.

So you know, if, if you give Frontline teams a real P L, you give them a real financial upside, I can tell you they will think lean. You don't have to argue, you don't have to have a program, you don't have a for to force this. They're going to, they understand, right, that if we want to get paid well, we gotta be hyper efficient and they will figure out how to do that. Right? And you know, I think, I think, you know, some of this stuff is actually quite simple in a way because what happens is, you know, when, if people have a real P and L, you know, we talk, we talk also in the book about Svenska Handelsbanken. It's the most profitable bank in Europe. They have beaten their European peer group bill every year for 49 years. Right? Like what other company in the world has beat their peers for a half century? And they organize every branch as its own standalone business with its own P and L. Those local branches decide on staffing, they decide how to price deposits, how to price loans. If they make a loan, it stays on that local balance sheet until maturity. So you don't have any incentive to make stupid loans. So they've outgrown their competitors, they have like 2/3 less central cost, make a.

Bad loan and sell it.

Giving people a real P and L.

Totally a hundred percent. So tell the boards are story.

Yeah, you know this is, there's some things in life that you can't unsee and you're like holy crap, like what happened there? So I got, you know, the company has an amazing founder. I will tell anybody listening. Go, go learn from this guy. There's a lot of online resources. The name is a little funky if you're you know in English it's Bert Bull. B U U R T Z O R G Bert Zorg. So he, you know, he was looking at healthcare which you know that's like his bureaucratic, regulated, huge mass, very inefficient. And so he started a company in 2006. So not so long ago, 14 years. They now have 16,000 nurses and caregivers in the Netherlands delivering home care to people recovering from surgery or aged people and so on. So what makes it very cool is they divided this 16,000 person company into teams of 12 people. So obviously mostly nurses. And in this little team, every team is responsible for finding their office space, recruiting team members, finding clients, improving their service. It is run like a little standalone business. These teams are tied together by a social platform called WeLink. And so if you have a question locally and you're wondering how do I provide this sort of service, you can ask 16,000 people what is your experience? And of course it's all archived, it's all searchable. So every person has access to the collective intelligence of this entire network. Every team is measured on some typical performance parameters and all of that data is visible to every team across the network. So wherever you are, you know exactly how your team is doing. Within those teams they do have kind of managerial roles. There's somebody in that team that is a mentor, that's there to onboard and train new people. There's somebody who's a controller, who's the finance person, there's a commercial person. But these are just part time roles that these nurses do when they spend most of their day helping patients. So as to, in many of these organizations, Bill, they've taken the work of managers and they distributed that, they've disaggregated, distributed that out to frontline people. So here's the, here's the cool thing though. So in this company of 16,000 people, they have about 36 on demand coaches. If you really have a big problem, you can call somebody and get some help. They have a Back office staff, mostly it of 50 people. And they have two managers, one of the founder, founder and one other. So you have a span of control of 1 to 8,000. And so their overhead costs are two thirds the industry average. They outperform on every single measure of staff utilization, patient satisfaction. And so you go like, wow, if you can run an organization with 16,000 people with two managers, that's kind of interesting. Like now the burden is on you to tell me why you need like 150 of these people. Because you don't. So I think a highly regulated industry delivering a complex service that requires highly trained and competent individuals, you know, so I think, you know, that's again, what I see is as companies scale up, particularly as my experience here in Silicon Valley is, you know, they have a cool business model, but as they scale up, they start to hire people who've worked in big bureaucratic organizations who tell them this is the way you get disciplined, this is the way you manage complexity. This is the way you put insistent. And so pretty soon you have a company that looks like every other company. And what we know from our research, Bill, and I'd be interested in your experience on this. But when a company gets to about 200 people, we know that bureaucracy starts growing faster than the company itself. More layers, more process, more staff groups. Employees now start to feel kind of disempowered and so on. And then that continues as far you know that that continues forever. Bureaucracy will outgrow the top line until you're $100 billion company. And it's a topic for another, another day, I'm sure. But one of the things we got very interested in is as you look at big companies, if you believe that bureaucracy is this, is this tax on human effort, how are these big companies affording it? Why haven't they had, you know, because my experience is managers are fans of everything lean except lean management. And so we do tackle this problem in the book of like, gee, if there's all these advantages to getting rid of bureaucracy, like why haven't more companies done it? And we can talk about that if you like, but it certainly is possible, as Berzorg shows so well, that's a.

Great segue to one of the questions that I had beforehand. So it seems to me that somewhere between roughly 500 5,000 employees, there are some CEOs who still try to be Superman or Superwoman. They are highly dominant characters who try to over control everything and people live in fear of them. They send text messages at 3 in the morning asking for things by 9am they, they operate on a few hours of sleep a night for long, long periods of time and they just try to dominate and Superman everything, Superwoman, Superman. And I just like that seems to me to create toxic companies that stall out and that. I mean maybe they consider they continue for a long time, perhaps even generations. But, but there is a cost to the vitality, the health, the innovation of a company like that. And I see it again and again and I see people getting bitter and burnt out and so on. So if that's made better by. And it seems to me that at some point after 5,000 and maybe sooner it's a lot easier and healthier to lead as a more. I don't know what term you would use but like an enlightened leader develop leader who develops leaders who instills and empowers people and is causing a move or leading a movement as a kind of a servant leadership, maybe serving the organization, developing people, guiding the thing, reminding people about the purpose, the values, maybe some very big long term goals, some core principles and then really developing people and leadership and that kind of thing. But then somebody asked me what happens when that person leaves. It seems like you might have a different sense that if you really bake it into an organization it's hard for a new person to come in and really disrupt. Except we do see that there have been like HP had a new leadership came in and just trashed everything that had existed before Governments have new leaders come in in very short period of time can trash in the institutions. So maybe speak to that, the role of that kind of servant or enlightened leader and then what happens when they come and go?

Yeah, so again, just like super important things you're, you're, you're talking about there, Bill. You know, I, it's an ego trip to be a founder, it's an ego trip to be a CEO. Let's like be honest. But the success of your organization depends largely on whether or not you can build an organization that can survive without you. And what I see again so often in startups, and I don't mean 50, I mean I'm watching, you know, because I've been around a long time, I've seen this come and go and I, you know, you see all these young companies that grow and they reach the end of the founder's headlights and then they crash because they never developed an internal capacity to reinvent themselves. Right. You, you weren't giving young people the opportunity to challenge the old guys to move out in new Directions to try new things. And so pretty soon, you know, after you've been in that leadership, that CEO, that founder role for 10 or 15 years, you know, you think you have to defend old decisions. You start to believe that this is the only way to run it. You know, you saw that in spades when you look at, when you looked at Microsoft under, under Steve Ballmer, right? Microsoft had young teams. This is in the, in, you know, in the early 2000s. Late, late, yeah. Microsoft had young teams working on every important issue for the future. On cloud, on mobile, on tablet and so on and again and again. You know, those teams had come forward with these ideas that did not fit the old mental model of the PC centric world and so on. And Bama would shut it down. Like he just, he just blow these things up and said like, no, that's not what we do. We're the Windows company, we do this. So I will tell you, my experience says that the primary reason a successful business ultimately, like, go sideways or fails is because the leaders fail to write off their own depreciating intellectual capital. They have a view of customers of the industry, whatever that is out of date. It got them where they are. They build it, they are in love with it. But it, but it is no longer the future. And yet, and yet they can't admit that because that's, that's their success. That's their baby, you know, And I think it was 99 or 2000 I gave this speech to at Microsoft. Bill Gates every year ran this thing for, they brought in 100 CEOs from around the world. So the front row I got CEO of American Express, CEO of Ford, CEO of Toyota, whatever it is, 100 CEOs, biggest companies in the world. And so I talked about the post PC world and I said, like, at some point the personal computer is no longer the center of the digital universe. It's going to be the network, and so on and so on. So after the talk, some Microsoft executive comes up, obviously a little bit frustrated at me, and he says, gary, at Microsoft, we do not talk about the post PC world. We talk about the PC plus world, right? As if everything is going to be an extrapolation of what we're already doing. And I couldn't really think of what to say, but I finally said this. I said, you know what? The future is surprisingly indifferent to our preferences. You may, you may hope the world turns out that way, but the odds are it doesn't.

And so the rain doesn't care how you feel about getting Wet.

Exactly. It's just got to do it.

And so no matter what, you know.

So that's what so often I see in, in companies is the leaders. I'll give you one other little anecdote. I probably shouldn't share some of these stories. I'll give you other one really quickly. So I and a few of my colleagues, we helped Nokia build their first wireless strategy in the early 1990s. And I won't tell you how we did it, but it was an open strategy effort. We had hundreds of people involved. Motorola was the leader at that time. And at the end of that, we had like this amazingly radical, cool strategy. In fact, I think in their annual report, we boiled this thing all down and this is like 1994 or something. We said, the mobile phone will become the remote control for life. That's 13 years before the iPhone. Okay, so that's, that's pretty good. So anyway, so we're working with this, like, incredible young team building this new business. You know, the average age was 30. Something like incredible leaders. So bold. Let's go kill Motorola. So then what do you see? These guys go from being in their 30s to being in their 40s to being in their 50s. They're now extraordinarily rich. And they figure, like, we invented this thing, like, we're smart people. We now, we now understand this. They never went back and did what they had done at the beginning. They never went back, asked all of their people, guys, how do we reinvent ourselves? How do we disrupt ourselves? What can we do next? So a leader that does not build a capacity for continual strategic renewal and where that, if that depends on the leader to continue to have the next vision, you're, you know you're going to fail. It's just like there are very few leaders you could name them on, less than one hand who've been able to have successive visions about how their industry evolves. It's very interesting. You will never, I'd almost defy you to find any statement, any public statement from Jeff Bezos at Amazon talking about the future of retailing, the future of web services. That's not. What you'll hear him talking about is how do you build a culture where everybody experiments, right? How do you create an organization that can find the future? You know, he talks about building a company that's the best place in the world to fail, right? He's not saying, I'm the smartest guy in the room because I can see the future of this. And I'll tell you, I'll tell you, Bill, it's toxic. It's toxic when leaders start to believe that like they have the crystal ball, you know. And I can tell you a lot of consultants play in this. I'll give you one quote and, but I get, I literally, I could just like give you 10 right now. So Dominic Barton, Dominic Barton recently stepped down or whatever a year or two ago, stepped down as a managing partner. McKinsey. So this is Dominic Barton writing with a couple of other big, big time consultants in a, in a, in a, in a, in a business publication. And I'll get this quote again, 95% right? He said the CEO, the CFO and the CHRO will look into the future at the big picture while everyone else has their head buried in operations. Bill, this is horseshit. Like the idea, like the idea that three people in this incredibly complex, incredibly difficult world, like three people are going to be like understanding the future and plotting the course while everybody else is just grinding out like no way. And in fact, you know this, I know this because we've seen the movie a few times, is that, you know, almost always, you know, the CEO is the problem at some point, right? The world has changed, they haven't changed. And when you have that view that a few people at the top are these super smart, precious, whatever, what you're basically doing is this. You're betting, you're betting the future of your organization on the ability of a very small number of people to unlearn. And you're saying we're going to hope that these people unlearn and relearn faster than the world is changing around them. That is a bad bet because people at the top usually have a lot of emotional equity invested in the past. They are maybe not anymore right out there the bleeding edge of technology with customers. They're insulated by a couple of layers of managers who are there to tell them how smart they are and like, and massage the data so it fits their preconceptions. So, you know, yeah, I would say any leader, one of your primary goals is to make sure that the strategy and organization becomes self renewing and could evolve and doesn't depend on you having the big idea again and again and again. Even if you had the first big.

Idea, you know, it seems I do see that a lot and I think that money and power are pretty corrupting. We see it in Wall street, we see it in insane CEO and C SuitePay where it gets really, really out of hand. And we have this notion that it's all up to the leader. Now, I think leaders make an extraordinary difference in powerful leadership, but it's not being the smartest, strongest, most dominant person in the room that necessarily makes you a good leader. That has a place, right? There's a power and value in the Machiavellian. But then even more than that is this notion of servant leadership, of being the leader of a cause that you create, you build the organization, you create that framework, you develop those people. And that's a very different kind of leadership than the one. And I think there's parallels in parenting as well. In the beginning, you have to tell your kids how to tie their shoes and tell them what to do pretty closely and remind them that the stove is hot or teach them that the stove is hot. And then progressively they don't need you to tell them every single step of everything. Same thing. True with our people. You don't keep doing that. And in fact, if you keep doing that, as I did for a little while with my kids, they rebel. Or you see, and it's even possible they don't rebel publicly. But you see, if you're watching that, you begin to crush their spirit, right? And that's a heartbreaking thing if you can see that. But they, they lose and. But ideally they fire you as their manager and then, and then you want to get hired back as the consultant or coach. Right, Exactly.

No, that's a beautiful, that's a beautiful analogy. And I've kind of used that because you know what's interesting, if you go back to the Gallup data, Gallup says that, that, that managers are even less engaged in the people they're managing. Because the reality is none of us really want to be a micromanager, right? That's like, it's not like, you know, and you're right, the parenting analogy is perfect because at some point, the happiest thing for a parent is you can start to move the guardrails out, right? You start to trust them to make great decisions and they grow up and they don't need you in that kind of, you know, route in that way anymore. And yet, and yet, you know, when you have these 300 to 1 pay differentials, like, you gotta, you gotta, you know, how do I justify that? I better be seen to make the. I better be the guy making or gal making the big calls and be seen to be indispensable because otherwise. But here's what I would say, what I see. The most successful CEOs do not see themselves as strategist in chief, decision maker in chief, what they are is they are social architects. What they're asking is, how do we build the values? How do we build a management model that gets the best out of people? And so to use an analogy, you think of Jimmy Wales, who invented Wikipedia. Jimmy Wales never said, I'm the smartest intellect in the world and I'm going to write the whole damn encyclopedia. What he said is, I'm going to build a collaborative platform where everybody in the world can share what they know. And I think, you know, we need people who are CEOs who are more like Jimmy Wales and less like Jack Welch, right. Who says, like, I'm just going to like, beat this organization into submission. So, but that's, it's a different set of skills. And, you know, I've often gone back to Mary Parker Follett. She was, I think, the greatest management guru in history, writing in the early 20th century. She never, she never worked inside of a large organization. She was a community organizer in Boston. And I'd encourage all of your listeners to go and read her. But a couple of the most important things she said, she said, number one, being a leader is about power with, not power over. And what I would ask everybody listening to think about is this. Imagine that in your organization you have no title. You are not the founder. You don't have more shares than anybody else. You don't have a title, you have no power. You can't fire somebody or command somebody. So, so just imagine that's the reality and then ask yourself, what could you get done? Because if you could still do something amazing without the big stick of positional authority, you are a leader. Or you could also ask like if tomorrow, if we were completely flat organization, we everybody had one share in this company. We have no ownership advantage. There's no hierarchy. Like, who would people, who would people naturally follow? Who would they elect to lead them? Would it be me or would it be somebody else? And so I think, you know, that's just a good mental discipline to come back and ask yourself that question every so often. Because particularly with this new generation authority, phobic generation coming to work, you will erode your real leadership capital. If you have to use your positional authority to get something done. It may feel good, may make you feel like the boss, but you are actually eroding your real leadership capital every time you do that.

So I don't know where it probably comes originally from, some Zen or other kind of influence, but I was taught years ago that the opposite, that power and force are two different things. If you have to use force, then you don't have any power. And it probably comes from something like Sun Tzu or like that. Right? That. But I don't. So before we go, and I know there are a couple of takeaways for the kind of company and the kind of leader that you want from the book. We're going to talk about that in just one second. Let me remind folks that we bring a new episode like this every week and increasingly now we'll do them live. So watch for our notices on our live broadcast. We're taking them live now to Facebook, to YouTube, to Periscope. We'll bring them to LinkedIn and so on. So we'll bring the live out and then of course we release them later on audio on itunes. Stitcher like wherever you get your podcast episode. And we're so grateful to have thousands of listeners around the world if you haven't yet. We love it really helps us if you give us a review. If you love the show and share it with somebody else, if you subscribe to the show either on our website or on any one of your outlets, then of course you'll get the notices and you'll never miss an episode. The website is scalingcoach.com if you want to drop us a little feedback. You can send it either in a review or you can send an email to infocalingcoach.com we have at this point, I think over 225 episodes out with great leaders and CEOs and others like Gary Hamill and others and we mentioned some of the other shows in here. So if there's a subject that's of interest to you, you can go find, find that whole back catalog at scalingcoach.com or at wherever you get that. All of the tools, downloads, the show notes, things like that, the special links are in all of the show notes there at the website or wherever you get your podcasts and live streams from. So all of that available. Also in our world, we have about 200 coaches. In the scaling up world, if I can help you find a coach that, that fits your style, your need, your stage of growth, whatever your vibe is, please let us know. We'll match make you, we'll help you find somebody that fits for you. I tend to stay pretty full and have gotten fuller now since the pandemic hit with people needing and wanting to navigate these times. So I'm really grateful for that and for our larger community. But we have a lot of resources for you there. So all of those good things I also want to give special thanks to Verne Harnish, right, for creating the scaling up framework, the original Rockefeller habits, and to Lucy, who's in the background here managing things for the show and also preparing our guests before and after getting the shows in and out. Our producer, Lucy Harnish. Our audio is edited by Albert Burge at Podfly Productions. Our show notes will be compiled after the show by Ein Kudina and then proofread by Tim McGowan. So with all that, like, business out of the way, right, there are a couple things, you've got a couple of, like, main things that companies should do and focus on to become more humanocracy, like that, to be part of that movement, and then some things for leaders. Do you want to help us to call out a few of those key points before we tell people more about the book?

Sure, Bill. I mean, you know, I love the work you guys are doing. You know, you're, I guess you're doing kind of growth hacking in a way for these companies. And, you know, my advice to any organization at whatever stage of growth is, is just to continue to hack your management model. And, you know, we, the argument we make in the book is that if you want to build organizations that are more capable, you got to start with new principles. You know, we know the principles we inherited from the past of stratification and standardization and specialization and all of that, those are not all bad principles. But when you look at the vanguard companies, the ones that really are reinventing themselves continuously, that are running bureaucracy free, they're all built around a different set of principles around community, experimentation, ownership, meritocracy. And so our sense is, you know, the organizations that are going to win going into the future are going to be the ones that evolve their management practices and models, their leadership models faster than their competitors in ways that make them more resilient, creative. And that's not like, you know, some big single change. It's like constantly asking yourself, gee, if we want to be more open, if we want to be more experimental, if we want to be more meritocratic and less hierarchical, how do we keep doing that? What do we constantly need to be experimenting with, how we hire, how we promote, how we compensate, how we organize, how we coordinate and so on. And normally we don't think about hacking these processes. Normally it's like, I got to build them out, we're going to put them in, everybody's going to comply. So let me give you just one or two examples of how we think about, like hacking that Old model. So this was. This was something that one of my colleagues was doing with a big pharma company, happened to be a European pharma company. And a bunch of folks there were very frustrated. These were not like, particularly senior people. They were very frustrated at the company's travel policies, which are often like kind of one of those bureaucratic things where you need somebody's permission to take a trip and they tell you which airline you can fly and which class and so on. And they said, like, this is kind of bs. It's like treating us as children. Like, why all this? And then you come back and they do all this auditing. So they ran an experiment. They hacked the travel policy in a simple little way. And there's dozens of these examples in the book, but they hacked a little the travel policy this way. They said, let's just take 50 people, and for the next month, you can fly anywhere you like on any airline. If you want to go first class on Emirates, knock yourself out. When you come back, nobody's going to ask you, like, did you adhere to policy? How much did you spend? You got to give us some receipts for tax. But when you come back, we're going to take all your expenses, we're going to put them online so everybody in the whole company can see what you spent. That was an experiment for 30 days. I think they actually did it. I think the control group was two groups of 50. So 100 people, experiment, one part of the company, 100 days. You don't blow anything up, right? You don't. You don't put the business at risk. And of course, what they found at the end of it, Bill, was travel costs went down for these groups. That that single change made a noticeable improvement in engagement because, like, now you're not treating me like a kid anymore. And so that's like a little hack. And so what you want to imagine is that every year you're running tens, dozens in a large organization, maybe hundreds of these hacks. And the ones that work, you scale them up. The ones that don't, you don't. But I think we have to think of, you know, just like today, in every business, we think about experimentation, we think about rapid prototyping, running sprints. We need to do the same thing as we're thinking about how we evolve that management model. And so, you know, it's not finding the next big super system process, but it's just constantly saying, here's the values that are important to us. How do we embed those deeper in the. In the DNA. And how do we experiment constantly with new approaches to doing this? And you know, I, I, that's a.

Really good point because you gave to way one example of one way to do that. And I could think of a couple others, like right off the top of my head. And I'm sure a bigger group could think of even more ways to bring either transparency or self management to the whole thing. And yet I can also remember running a business a few years ago, going through a growth phase and having new people coming in and seeing people start to spend 1500 and even up to $2000 to fly round trip to New York for a coach seat. And I'm like, what the hell are you doing? You can go there for 350. Like, be smart about it. And so you could, it's not that, just take it off and make it transparent. You could also say, here's the budget or make it a percentage of this or create a game around it or.

Even better, Bill, you know, if you're running a small business and you have a real P and L and your compensation is highly at risk, depending on how successful, you're gonna find a way to be efficient. You know, here's what happened as big companies.

Right?

Yeah, I mean, it's, you know, again, as I said yesterday in your summit, you know, the recipe here is not that complicated. You break big units into small units to get people real PNLs. You get a substantial financial upside in their own success. You teach them how to think like business thinkers. And then there's, there are subtleties in this. You know, what do you do when you, you know, as we talked about with birds, or you have 1100 teams. How do you keep them connected? How do you capture advantages of scale and scope? There's a lot of subtlety that's not going to simplify. You could read the book for that. But, yeah, but, but, but the idea here's, here's the analogy that I, that I often think about. So I've been a skier my entire life. And so once in a while, you know, I'm skiing and I see a blind skier. They wear a special vest. Like, these are the most courageous people you can imagine. Big mountain here going down, it's, can't see a thing. But obviously behind them they have somebody as a coach who's saying, stop. Left, right, slow down. And I think, you know, this is, this is what managers do in our, we have made our employees blind. Right? We don't, we don't give them a real piano. We don't teach them how to think like business people. So now I need a manager yelling hey, you can't spend, you know why? Fifteen hundred dollars to go to New York because like they don't have the information, they don't think like business people. So I think, you know, that's what you see across all of these vanguard companies, small units, people who think like owners, people who have a real financial stake and then you can trust them to do the right thing. And I think, Bill, one of the subtle things here is the difference between compliance and control. So compliance means you are doing it the way I said to do it, you're compliant. I, you know, I don't, I don't want, I don't want any compliance, but I want a lot of control. I want people who are self controlling because they understand this is the way you succeed, this is how the game is won, but where I am not having to get them. And that was back to your analogy about being a parent, right? There's, there's times you kind of demand compliance but at some point you want that kid to have their own self control. They're smart enough to know, you know, hey, just like, no, I'm not going to drink and drive or I'm not going to do whatever because it's stupid.

So I hear four big takeaways. I hear give your people some power, empower them and then reward them when their team, when the company starts to win, let them share in that reward for their initiative that they exercise with the empowerment. Develop the people, train them to think and to operate as you've given them freedom and rewards. Start to develop them and finally be a leader of influence. Influence rather than authority. And that'll transform your organization. Gary Hamill, thanks so much for joining us. It was a fantastic conversation. I was riveted, engaged you the whole time. I hope our listeners are also. Gary Hamill, thanks for joining us. Author of Humanocracy. You'll find more about the book and GaryHumanocracy.com first we'll put the link in the show notes. Gary, have a great rest of your day. Thanks so much for joining us.

Bye for now.

Bye everyone.

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