233 - Embracing Change: Why Organizations Must Shift from Efficiency to Experimentation with Apollo 21's Danny Nathan

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Danny Nathan, you are the founder of Apollo 21, founded Apollo21.io, and I am really excited to learn about you and your work as a leader. Welcome to the show.

Thank you. I'm really excited to be here. I appreciate you having me.

So I, I'm gonna ask you the same question I asked you just a moment ago, which is what does Apollo 21 do? I went to the website and I said, scratching my head saying, wow.

Yeah, there's a lot going on on our website. It, it covers the gamut. I like to tell people, Doug, that we are a combination of a management consultancy, a product design studio, and a venture studio. And what I mean by that is we help companies solve complex problems using technology, often products that we design, usually in the digital space. So technology products. And then we also help companies launch new products of their own, launch new ventures. And we do the same for ourselves and work with some founders to help them launch early-stage ventures as well. So really boils down to we build digital products and we build companies that make and launch those products.

Wow.

That's playful.

So it is a plateful, but it's a ton of fun.

How'd you get there? What's your backstory?

It's been a rollercoaster. I, I started my career in advertising of all places, and within a couple of years of running down that path, very quickly realized that the most fun I was ever going to have doing advertising, it already happened in school. And so I, I took it upon myself to create a crash course in all things brand and market and technology, and eventually found myself moving on from advertising. I spent about 5 years helping to build out an innovation consultancy here in New York, and then that kind of gave me the introduction to the world of startups, the world of entrepreneurship, and thinking far more carefully about what opportunities technology brings to bear in terms of how businesses learn from service and interact with their customers. And since that point, I have founded a couple of companies of my own. I've served as head of product and design for a number of startups and then launched Apollo 21 about 3 years ago.

Wow.

So is there any particular vertical that you specialize in?

No, we don't. We are industry agnostic and basically we've worked with companies across a full range of industries and verticals ranging from remote guarding and like video security to financial services. We spent about a year and change working with a big client in the rodeo space, which was a lot of fun learning about and thinking about how technology can play a role in rodeos.

Wow. Yeah. Yeah.

That was an interesting one. That one always gets people's attention too.

Well, I live, I live in rodeo land, so.

Yeah. I grew up in rodeo land, but was never involved. And that year of work ended up being a rather interesting kind of crash course into everything that I missed out on as a kid. And gave me a chance to learn about what happens in rodeo and why people are such fans.

Wow. That's really cool and exciting. And so today you're. You're the founder and I presume CEO of Apollo 21.

Yes.

Are you guys, do you guys operate remote? Are you hybrid? Are you in, in office?

No, we are fully remote. We have been since day one. We operate as what's called a ROW, so a results-oriented or results-only work environment, which I really like because it gives our team a lot of flexibility to determine how they want to accomplish work, when they can best accomplish work. Our head of engineering, for example, is one of those 2 AM lights on, fingers on the keyboard kind of guys, whereas I am not personally, but I I love being able to give him the freedom to work whenever he feels like it.

And you've been doing this for 3 years. You've had this company out for 3 years. What's the kind of typical client engagement that people will bring to you?

Usually our clients come to us or are referred to us because they have some sort of problem. And it's often a problem that they have an inkling that technology can help to solve for them. But most of our clients are not inherently in the technology space. So as I mentioned, Rodeo Financial Services, none of these are really inherently technology businesses. And folks come to us usually with a problem that they want to solve. And often what happens is we find that the problem that they have come to us with is actually more of a symptom than the kind of defining problem. So to give you an example, our financial services client came to us and their original ask was, we're drowning in email, can you help? And what we found through our discovery process was that they were drowning in email because they actually didn't really have defined processes for how work moved through their kind of internal operations and workflows. And so when somebody started, they were told that when they needed X to email Bob and when they needed Y to email Jane. And so you can imagine Bob and Jane's emails were overflowing from the get-go.

And so your job was to figure out how to fix that.

Exactly. So we worked with them to understand and define all of the key internal processes that they were working on. And then we built out a piece of operational software that was designed to run those particular processes for them, automating as much as possible, managing the handoff from person to person, gathering approvals as, uh, requests traveled through the organization, and really moving all of that activity and communication out of their email inbox and into a standardized platform where they could see everything, understand exactly what was going on, kept audit trails and tracking of everything. Given that they were in financial services, there was a lot of money being moved, and so we needed to make sure that everything was tracked and that if something went wrong, we could figure out why.

That's pretty cool. So as you think about it, what is it that gets you up in the morning and gets you excited to go to work?

It really does come down to solving problems for me and building, building new ventures. And I don't mean to harp on those two. I know I've said those two things a lot, but they really are what get me going. The idea of digging in and having somebody come to me and say, we're drowning in email, can you help? And figuring out, going through the process to understand why are you drowning in email? Why are you getting so many emails? Who's sending the emails? And working all the way down the chain to understand, oh, you're getting a ton of emails because that's how you do everything. Let's figure out how to do that better. And the figuring out how to do that better is just a ton of fun.

That's what you enjoy.

Absolutely.

How many people do you have on your team?

Our team is flexible. So I have a core leadership team of about 4 people. And then one of the things that makes us unique is that we scale based on the needs of any given project. And we have partners that we are fortunate have allowed us to spin teams up very quickly. So usually within a week or 2, we can formulate and construct an entire team for any given project. And so that, it really changes over time. We've been as large as 30 and as small as about 10 or 12 at any given time.

That's nice. So you can scale up or down as the business dictates.

Exactly. Exactly. I come from a creative services background, as I mentioned, in the advertising space. And one of the ongoing problems there is agencies win a new client, they hire a bunch of people to service that client, and then inevitably at some point they lose that client or another one, and they're stuck in this situation of, well, we have mouths to feed and now we have to rush in order in order to find work to pay the bills and to pay the people. And that's what leads down the path of taking on projects that you're not as excited or interested in or rushing to get things done. And so I made a conscientious decision from the beginning that I didn't want to get stuck in that cycle. And that is what led to the kind of functional structure that I've described.

I'm curious, where do you think artificial intelligence is going to take us?

Oh man, I think artificial intelligence is going to change anything and everything for the folks who are prepared to utilize and grasp it in the right ways. And I say that because we get a lot of clients that come to us and say, we need AI immediately. Everything is AI. Where is ours? And it's not that it's a bad question or the wrong question by any means, but what a lot of people don't realize is the amount of preparation that goes into creating an AI model, especially one that is bespoke to your business that utilizes your data, the amount of work that goes into structuring and organizing all of that data is potentially overwhelming. And so we approach that in a couple of different ways. One is figuring out where more simple automation can help and play a role. So I described that a moment ago in terms of the, the financial services client, the automation of how workflows move through the organization. And then the other thing that we do is we pay a lot of attention to how we can use relatively simple existing AI tools to give people the operational advantage of querying and understanding their data. While we're going through the process of also helping them understand what kind of foundational efforts we need to do so that we can structure their data and build the models that would make sense for their business in particular.

Wow. And where do you think AI is headed?

That's such a big question. I almost don't know how to answer that. It is, I think it's going to change everything. I don't necessarily think that it's coming for everybody's job as it seems to be the, the, the concern of the day right now, but I think that we will see automation and AI streamlining the way that we get work done very quickly. It will change the focus of what tasks people are focused on. So I think that it will help us get a lot of the lower-level tasks off of our plates and free us up to focus much more on the strategic and creative aspects of whatever job it is you happen to be working on.

Yeah, that's been my experience. I can go into ChatGPT and ask, ask, give it the parameters for a promissory note.

Mm-hmm.

They'll pop it out in 30 seconds, saves me 3 hours worth of work. Right?

Yeah, absolutely. And that's one of the beauties of it. And I think that as companies begin to embrace it more and as we begin to see AI becoming more bespoke in relation to the businesses that are utilizing it, we will very quickly see it move beyond the capabilities of what we see in GenAI through something like a ChatGPT and into a world that is far more specific and more customized for your particular business. And so I think that's where things will get really exciting, but I also think it's going to take us a little while to get there still.

Yeah. And we need the electricity to do it. Yes.

There's always the endless amounts of computational power that we need.

That's right. Between electrical EVs and data centers, we're not going to have the power to supply everybody in the next 20 years unless something radical changes.

Hopefully AI can help us figure out how to solve that and then it'll become self-fulfilling.

There you go. Danny, what is it that's unique about you that you bring to the table that has made you successful?

Just so I'm clear, Doug, you're asking me personally and not the business itself?

Yeah, you personally.

Got it. It's a weird combination of, I think, a creatively driven approach to problem solving and a, a tenacity to keep after whatever it is I'm working on until at the very least I'm satisfied with it. And usually that takes longer than satisfying a client, whoever I'm working on it for. There's a little bit of perfectionism that comes into play. And then I have a relatively unique background that spans everything from theater to business to creative ventures and now into the world of technology. And I think that unique mix is part of what sets me apart personally from a lot of other folks in the business.

As I listen to you, what strikes me is that you have a really intense curiosity.

Yes. Yes. I think that is fair. And I do spend a fair bit of my time digging in and trying to understand what's happening in the world around me. And it goes hand in hand with the idea of problem solving and the notion that's what gets me out of bed in the morning is I don't think that you can tenaciously solve problems and want to keep doing that without having that level of curiosity of, like I said, why is this a problem? Where does it come from? How do we solve it? And that kind of drive for figuring things out.

I teach a graduate course at Pepperdine in Malibu, California, Decision Making Under Stress and Uncertainty. So I'm teaching people how to make decisions in suboptimal conditions. How do you help your clients in that, in those, in those difficult, uncertain, stressful situations, help them drive their decisions?

Yeah, absolutely. For me, it comes back to first principles. When somebody is facing a difficult decision in a stressful situation, boiling that decision in that situation down to the, the raw components of what exactly is the problem here? What is the shortest path to a near-term solution? And then how do we want to utilize that near-term solution to springboard into something that is a longer-term solution or a longer-term process that helps avoid that problem from reoccurring in the future? And by breaking things down, I think it helps to make things easier to chew through and go, okay, I need to worry about this particular part first. And from there I can work my way down the chain and figure out what the next highest priority is in the next, et cetera.

So part of the process is prior to prioritize, defining and prioritizing the problem.

Absolutely. Without question.

And then, and as you're looking at the problem to initially work on, you want to say, how can this solution give me the biggest bang for the buck?

Always. I think that's inherent in at least the world that I'm particularly living in around venture building and building products. Everything comes down to what is the core pain point and for whom, and then how can we solve that tomorrow, and how can we do a better job of solving that a year from now and 10 years from now, etc.?

Hewlett-Packard used to have a policy way back in the day when they were working on new inventions that it would be in stages, but at any given stage, if they pulled the plug on the project, they had a marketable product.

Yes, that's brilliant.

So they never wasted time reference. So, so everything has to, you have to have something at every stage that you can take out, you can take to market.

Absolutely. I, that brings to mind, there's a, there's a great little kind of hand-sketched cartoon that a lot of product folks throw around and it's the paths to an MVP. And so the idea is if you're gonna build a car, most people go, oh, okay, I'm gonna build the wheels and then the chassis, and then I'm gonna put the engine in and put the body on top. And yes, ultimately you get to a car, but until you get to the finished product, you don't have a method of transportation. And the alternative view of that is, huh, first I'm going to build a skateboard and then a bicycle and then a motorcycle, and then I'll get to the car because no matter at what step I am along that process, I have some way to get places.

There you go. It sounds like you're a strong adherent of the lean method, MVP, minimally viable product.

I am a huge fanatic around lean principles. And I think that I've been digging into it a lot, even of late and revisiting all of the foundational thought processes that go into what we do and just educating and reminding myself what my roots were. And so I've been heavily focused on not only Lean methodology, but also Lean customer development and reading through a bunch of different books and perspectives on how companies, and particularly how corporations, can foster innovation and rekindle that entrepreneurial spirit that presumably they started with when were a startup themselves.

And that's a huge challenge because as companies grow, they become more bureaucratic and there are more and more layers of decision-making, more and more layers of authority. And once you get that sort of stuff going, now you have people protecting their position, privilege, and power.

Yes.

And they get, people get siloed and it takes a really strong leadership team to keep that from happening.

It does. And I'm glad you pointed that out because I, I am a firm believer in the theory that if you are looking to build or recreate a, an innovative organization, that edict has to come from the top down.

That's right.

There has to be permission to try and experiment and ultimately to fail without the fear of repercussions for the people that are doing those experiments.

I, that's absolutely correct. I, I think that part of the problem is that so many companies, CEOs are driven to quarterly, quarterly, quarterly earnings.

Yes.

That they can't tolerate a drop in earnings because somebody made a mistake. To conservatism rather than to innovation.

Yes, that's exactly right. 100%. And I, I've been, as I said, I've been doing a ton of research and part of what I find really interesting is there's a lot of documentation that supports exactly what you're pointing out, that as companies grow, they ultimately optimize around efficiency and conservation of capital, which inherently limits the ability for those teams to innovate, because innovation is inherently in some manner wasteful. In order to learn and to try and figure out what's new, you have to be willing to, quote unquote, waste a bit of money or a bit of capital in the pursuit of that learning. And so that's— that is one of the problems that we deal with as we work with companies that are looking for innovation.

What's the advice that you give to leadership teams when they contact you as a client? They're coming in, they've got a problem that you've got to do some innovation here. What's the advice you give them to, or how do you lead them into the idea of being risk takers as opposed to—

I have a conversation that is often not unlike the one that we're having right now where I try to help them understand that while their business as an established organization and established company that is scaled and found product market fit, that they're in a beautiful position to be able to protect what they have, but that if they want to be prepared for the future, it requires experimentation and it requires a willingness to get away from the level of efficiency and the values that have driven them to where they are today. And when we work with particularly corporate clients who are looking for that type of change, we actually put, for lack of better terms, a contract in front of them that, that says, We're going to do this and it's going to be scary and you're going to have to commit to this and this. And if they can't commit to it, then to be frank, that's a, a big red flag for us in terms of whether that's a client that we want to continue working with or that we want to take on, or whether we feel like they're just not prepared for the realities of what they're asking for.

And I would say that it sounds like your practice is the same as mine. In fact, I get called into a corporate organization to help them deal with chaos and conflict and dysfunction, which is one of the things that I do, usually it's HR that brings me in. Right? And let's talk to your CEO about this. I need, I need to talk to the CEO. I'm not, unless I got buy-in at the top. And that's probably what you have to do too. Right?

Exactly. Exactly.

And, and if the company's big enough, it might even be get some board members involved too to make sure that at the very top, everybody's committed to the change. Yes.

Absolutely. And it's when you're talking about change, especially for, large organizations and the amount of capital that they're usually kicking around and the idea that they have shareholders to appease, you really do have to get that buy-in at the highest level.

That's right. That's right. I wanna shift a little bit and talk about listening. First of all, leadership empathy, you strike me as being somebody who probably has pretty good leadership empathy. In other words, you're able to understand what other people are feeling and respond to them at an appropriate level to make them feel like they've been heard. Is that a fair assessment?

You said it, not me, but I certainly won't disagree. And I think that it's inherent to, again, it's inherent to the product role that has been a through line in my career, especially for the last 10, 12 years, which is you have to have empathy and you have to listen to people and understand what they're going through. In order to build a solution to that problem, in order to help them understand what you're creating, and in order to help them feel safe in the idea that you are working on solving that problem for them and making their life easier, and that you need them to be open about what led to the problem in the first place and what they're willing to do in terms of solving that problem.

You mentioned the word safety, which is, I think, is a key component to all this work, creating emotional safety. Empathy. How do you learn? You weren't taught this stuff. I, I, I pretty much know that.

No, this isn't really something that comes up in most college classes.

Yeah. I've gotta say I'm the only one that has a formalized way of learning these skills to, to my knowledge. I, I might be mistaken, but I've surveyed around and I don't think anybody's teaching people how to listen and how to build leadership empathy. And it's a skillset to be learned and it can be learned very quickly. But most people like you, figure it out. And what I'm curious about is how did you figure it out?

Um, I, this is gonna be a little bit of a weird one, but I have to point back to you. I spent the first 20 years of my life as an actor and literally up through college. And the idea of listening becomes second nature in that regard because in order to stand on a stage and create a character and tell a story in a way that people can respond to, and when I say people respond to, both both the actors that are across from you and then also the audience in whom you want to elicit a response, it requires that level of listening and you, you have to put yourself into that mentality. And so I was fortunate enough to establish it early on and then to just find myself in opportunities where I had to carry that forward and really listen to and understand client needs so that I could help them figure out how to address those needs for their customers. And That then led me to education in user experience design, which is very similar. You have to put yourself in somebody else's shoes to understand how they're going to approach the thing that you're creating. And so all along the way, I've had these moments of, huh, I need to listen. I need to pay attention. I need to figure out how to view this activity, this action, this need through the eyes of somebody else. And I think just after years of doing that in various ways throughout both education and career, it has become. Second nature.

I can tell. What advice would you give to somebody who's in a high leadership position who wants to develop this ability to be able to listen and have empathy? Not empathy in a soft way, but empathy in a way of understanding. Stephen Covey talked listening to understand, and chapter 5 of his book. But the, but, but I'm always focused on the how. If somebody were to come to you and say, hey Danny, man, you are have some incredible empathy skills. How do you do it? What would you tell them?

That's a really tough question.

It's an implicit second nature practice with you. Exactly. Yeah.

It's not one of those things that I think about that much. So it makes it a challenging but very interesting question. We're starting to hear a lot more and more the phrase active listening, for example, and it's starting to crop up in conversation.

I don't like that.

I have to admit, Doug, I don't particularly like it either because it implies inherently that people, an assumption that people aren't listening to begin with, which is what I don't like about it. But if somebody comes to you with the question of how do I formulate empathy and how do I hear those needs more carefully, for better or worse, I feel like it does have a place because a lot of—

how about if you use this term, reflective listening?

Interesting. How do you differentiate that from active listening?

So active listening was a, a term coined by Thomas Gordon in 1956.

And oh wow, I didn't know that.

Most people don't. In a chapter of a book that Carl Rogers' last book. Carl Rogers was the great humanist psychologist of the 20th century. And in his last book, a chapter was written by Thomas Gordon, who happened to be a, he was a psychologist and he had gotten his PhD under Rogers. And Rogers wasn't too interested in listening. He was more interested in therapeutic outcome, but he got his therapeutic outcome by listening. And Gordon studied what he did and recognized that listening is really the key. So he coined the term active listening, but it got perverted into this, what I hear you saying is X, right? Which is right, does not work. Okay, that's fair. So that's active listening. Reflective listening would be to say something like, what you just said was XYZ, or Wow, Danny, you're really pissed and you're frustrated and you're angry and you feel completely disrespected. So I'm reflecting back your, what you're saying, what you're communicating, the content and your emotional experience at the same time.

Interesting.

And that's called reflective listening. Very different than active listening.

That's really interesting, Doug. I really appreciate you sharing that. I love that because it, as you're describing it, forces, not forces, enables you to help the other person understand that you are hearing them, that you are cognizant of what they are feeling, and then perhaps putting them at ease to think about how you can move forward in that conversation, even though you're angry, to pick up on your example. I like that a lot.

I call it listening other people into existence. And that is— That's the topic of my fourth book, De-Escalate: How to Calm an Angry Person in 90 Seconds or Less. And the whole concept is around listening to emotions rather than to words.

Interesting.

Because when people feel validated, they feel like you get them.

Mm-hmm.

They feel, they feel like you get them. Then guess what? You have trust and loyalty. And from that follows connection and collaboration and you end all conflict. That's really— my promise to my clients is you learn these skills and you'll never have a fight or argument again in your life.

Ooh, that's a big promise.

Big fat guarantee.

I like it. That is a big promise. Yeah, that's really interesting as well. We talk about emotion a lot, especially as we're doing research around product development and things like that, because where people are emotional, and I think this kind of aligns to what you're pointing out, Doug, where people are emotional is where you want to probe them to understand what their needs are. And so when somebody gets frustrated using a piece of software, for example, understanding where that frustration is stemming from and why they're getting frustrated in that moment is a great way to, to pick up on opportunity zones.

That's right. But, and, and here, I don't, here's the secret to find out why they're getting frustrated, for example, with the user experience. The first thing you have to do is get rid of the frustration. Oh man, you're really pissed off and frustrated. Yes. About how this is working. You feel like the idiot engineers that did this weren't listening to you or people like you, and you're really worried and concerned because you gotta use this software and yet it's causing you more harm than it is doing good. And the whole thing just really pisses you off. They'll say, yes, you hear me. And now we can dive in to say, all right, yeah, tell me more about what the, what you're experiencing. By labeling their emotions, you get them calmed down. And now you can start to problem solve. You just said, okay, you're frustrated. Why are you frustrated? Tell me why you're frustrated. They're gonna continue.

Because it doesn't work.

Yeah, exactly. You're not gonna get anything from them.

Yeah.

So the, the secret, I think, and this is what I teach, is listen to the emotions, get people de-escalated, get them calm. Then you can dig into what the real problem is.

Nice. I'm gonna have to borrow from that next time. Next time I'm sitting in a user research session and somebody's complaining heavily, I'm gonna have to borrow from that.

Yeah. Or you go out and get my book.

Yeah, absolutely. It sounds like a great read.

One more question and I'll let you go. What's one thing about yourself that we would never guess that we would never know unless you revealed it to us?

Man, I've already given away so many secrets. Most people don't know that I started in acting or advertising for that matter.

Well, you wouldn't, you wouldn't know that I'm a jazz violinist unless I told you.

There you go. I, I am not a jazz violinist or any other type of musician for that matter. Um, for me, I think that it would be just how determined I can be, especially in a group or a social setting. I tend to be a little bit quieter and a little bit more reserved, but if you get me started on something, especially in a work context, I can get pretty fired up and it has taken people by surprise.

You come across as pretty level and even-keeled emotionally, but it sounds like you have a deep passion in yourself, and when you get passionate about it, you really get passionate about it.

Yeah, I definitely do not always hide that aspect of myself. So that definitely crops up occasionally.

Good for you. We've come to the end of our 30 minutes, and I just want to thank you so much for a great conversation, Danny.

Thank you. I've learned a ton, Doug. I've really enjoyed this.

Oh, great.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media? Just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders. I love seeing your posts and guest suggestions. We are regularly putting out new episodes and content. To make sure you don't miss any episodes, go ahead and subscribe. Your thumbs up ratings and reviews go a long way to help promote the show and mean a lot to me and my team. Want to know more? Go to my website, DougNoll.com, or follow me on LinkedIn, Facebook, Facebook and Instagram. That's @DouglasEnoll. Thanks for listening, and we'll see you on the next show.