How To Run A Business Where Employees Actually Tell The Truth

I grew up in Pittsburgh, Pennsylvania, in the crash of the US steel industry. My old man was an immigrant Italian steelworker that came to this country with the hope of prosperity and potential for his kids. He picked the wrong place at the wrong time. If any of you know anything about the Midwest and the steel industry crash, it was pretty destitute. It was a tough time. Do you know what it was, what mindset, what set of work styles, what work practices did the Japanese adopt, actually borrowed from the United States academic world, implemented, and was able to invent an entirely new way of working that crashed the US steel industry. Anybody know what that was called? Six Sigma. Six Sigma, TQM, total quality, et cetera. So what's interesting about this is there were a set of principles and practices that allowed this hierarchical, top-down way of working that was traditional to the US steel industry, that allowed them to scale and ramp up a great business in the period of time. But along came the Japanese and took American principles and practices and implemented them. and absolutely upset the US steel industry. The whole idea was frontline workers at the coalface every single day continuously improving and incrementally improving their work. And as a result, they got significantly lower price and higher quality steel, right? And unfortunately, my old man was a part of that. At 10 years of age, I made a commitment. Seriously, as a 10-year-old kid, my parents reminded me of this. I said, someday, I'm going to be I'm going to grow up and I'm going to fix American manufacturing. That was my goal and mission as a kid, and it's remained my goal and mission. Back then, I didn't know exactly how I was going to do it. I didn't know anybody had gone to college. Nobody in my family ever had. And the intention was I was going to be governor of Pennsylvania, and by being governor, I was going to fix Pennsylvania manufacturing. I'm not sure where I thought that correlation occurred, but nonetheless. And then I was going to be president of the United States, and I was going to fix the U.S. manufacturing. That was my goal. So I went on to school, actually got very involved in politics, ran for city council in New Haven when I was there, found a congressional seat afterward, was on my way to do exactly all of that. And my mentor at the time, so he got indicted, and I decided that that might not be the process and path that I was going to take in my life. And thank God that I didn't. pursue that, but I decided to pursue it in another way, through business itself. And all of my life I've had the mission of making sure that ways of working were constantly evaluated and understood. In fact, I felt it very strongly myself personally. Early on, I joined the Deloitte team right out of business school, and we were the lowest of the Big 8. If you put your mind back to the '90s, Deloitte was literally the lowest of the Big 8. And I became Chief Marketing Officer of Deloitte at a stupid young age. I was still in my, my late 20s. When I became chief marketing officer of Deloitte, it's a very ridiculous story. But nonetheless, then I went over to Starwood Hotels, and I was chief marketing officer and head of sales at Starwood. And I watched those two companies over the years evolve. And at Deloitte, we were a bunch of band of brothers and sisters. We were globalizing, taking hills together. We were so excited, and we acted like a like a like a big Italian family wrestling ideas, you know, cutting each other off, just just. Fundamentally, we had a mission and we were not going to let that mission fail, nor were we going to let each other fail. I went over to Starwood and it was very different. Starwood was evisceratingly competitive. It was incredibly siloed, even inside of a hotel business that was really innovating and breaking through. We created the W Hotel chain, the Starwood Preferred Guest program. But here was the point, and I think Marriott's CISO is here, so please talk to me afterward, but But here was the point. The point was that we deserved it because what happened at Starwood was that we ended up having to sell below industry multiples to Marriott. It was absolutely our fault that we didn't learn how to grow and scale that business as we should have. I started to realize as I exited Starwood that while at the time back in the '90s we were studying employee engagement, how individuals and your engagement has to do with your work, What we weren't studying was the impact of high-performing teams and its impact on transformation. And that's when Frozzy Greenlight was started. We created Frozzy Greenlight 26 years ago with the full intention of being a quantitative and rigorous look at how high-performing teams transform collaboration. Now, why is it important today? And we all know this, and I couldn't be more excited to be in front of you. And about 8 years ago, I decided to devote at least 50% of my time Now it's ended up being about 80% of my time just focused on technology. CTOs, CIOs, the technology transformation of large organizations, and startups in the technology world, which is why I moved here to the Bay Area. Because this inflection point that we're at today has fully democratized the world to any specific individual. I was just at the Lowe's Corporation the other day, and I gave a fun talk. Which was to every single employee saying that this is your opportunity as a human to break through, to be a leader of this organization. I mean, we don't need to have leadership titles today to be the agent of change and transformation in your organization. Anybody in the company, I guarantee you, your boss's boss knows less about AI and how to transform the role in the business than the frontline worker does. Everybody who has been given these glorious tools can be the reinventor, can be the evangelist, can be the role model. Everybody has an opportunity to be a leader right now. Now, why did I find myself 50% in the technology space? Because there is nobody better at being the Sherpa of change and transformation of organizations than you in this room. You have the tool acumen, right? You're bringing the marriage of the technology into the business. But now the question is, how are you partnering with the business itself? How are you partnering and elevating HR? Because as we all know, the technology itself is not the point. The point is the human capital transformation. And how are we doing that? And the problem is you're going to have to teach your HR partners something because they do not recognize that their job is shifting radically. All of their time they have been curators of policy of human capital. That's their jobs. Policy of human capital. What will be the transformation tipping point today is process practice. It's the work itself. Who is curating the work itself? Let me tell you why it's so damn easy. This is probably one of the biggest takeaways I want to give you. Culture change is so easy. Let me take you back to what the Japanese did. The Japanese adopted a set of different practices and processes in manufacturing. That fundamentally transformed the culture of their business. They went from hierarchical culture of command and control in the United States. They started realizing that small work teams at the coalface with a process of daily continuous improvement would transform the manufacturing process. Do you get that? Process and practice changed culture. Culture change only boils down to process and practice. It's fundamentally easy. The question is, who are the process engineers of new ways of working today? We don't have a job for it. The engineers of manufacturing re-engineered manufacturing culture. The engineers of software, software engineers came up with a better way, faster way to engineer software. It was engineers that engineered agile. Who are our engineers of new ways of working today? During the pandemic, we had all of a sudden these virtual work teams. What did we do? We threw it over to HR. And what did HR do? HR put new policy in place on how many days we should be in the office. God bless them. That's, that's what they do. Their job is policy. Whose job was it to reinvent collaboration in a virtual and hybrid world? It was nobody's. And that's why I turned to you. I turned to you a number of years ago because I thought, who are the engineers of organizations today who will be in every part of the company because of the technology that you're bringing? But I need to awaken you to realize it is your job to re-engineer the work. Your job to partner. You need to be the Sherpas of transformation inside of your organizations by bringing the methodologies. You haven't traditionally thought of your job as the creation of work re-engineering methodologies, but that is your job because nobody else will do it. There are no work engineers in HR. There are no work engineers in the business. It is your job to be the re-engineers of zero-based workflow redesign. I think the biggest unlock that we will have— look, AI has 3 fundamental components we all know in terms of its transformation. One of them is a tool adoption. And I appreciate the fact that we can celebrate tool adoption, but we can also celebrate the fact that we're spending a hell of a lot too much for tool adoption and we're not necessarily getting an ROI. So let's not just measure tool adoption. Where we're going to get the real breakthroughs is when people use the tools to reinvent their work. But who's given them the methodology for that? Have you? Your job is to give people a methodology for the reinvention of the work itself. And it's about a partner, and I believe that that is what we've been developing in Teamship. And I'm gonna go through that with you today, and what is Teamship, and how do we begin to awaken to the realization that teams are fundamentally different than they ever have been before. And they are actually, just like in TQM, just like in Agile, if you think about it, it is the team that is the agent of change. Does that make sense to you? It really is. Small work teams, it's Six Sigma. Agile work teams, it's the teams. We have to begin to think about teams, not org charts. And teams aligned to goals is how we should be organizing our companies. So I spent 26 years researching this topic, and this recent book that you have on your tables, and there's more downstairs, and I'm happy to sign them afterward if you're interested, is exactly the workbook that we use to train our coaches. at Ferrazzi Greenlight. It's fully open source to you. This is how you would re-engineer how your teams work at each level to re-engineer the organization. So let me give you the first awakening, and that is that I want to focus more on leadership and what its mindset is, and I want to start gearing you more towards something I call teamship. Let me explain the difference. When we talk about leadership, leaders stand on a podium and they're taking care of people and they're And they're helping organizations change and they're navigating change. But what I want you to do is expect more from your teams. Now, when I say expect more from your teams, most of us would say, okay, you know, you have the same amount of resources, give me more. That's not what I'm saying. That's what people are saying to you, but that's not what I'm saying for you to say to your teams. What I'm saying for you to say to your team is I want you to say to your team, hey, would you please meet me in leadership? It's one thing for a leader to give feedback. I want you as a leader to make sure that your teams are giving each other feedback. Think about this for a second. Are you engineering your teams to give each other feedback? It's one thing for you to hold your team accountable. Are you engineering your team to hold each other accountable? It's important during this volatility that we're going through that, that you engineer energy into your teams. Do your teams have each other's back? Are they taking care of each other's energy? That idea of asking your team to step up and meet you in leadership by holding each other accountable, by giving each other feedback, by securing each other's energy, that is an unmatched current set of leadership. And it's one that we should be asking our teams to do. Do you see that distinction? And I want to give you a couple of examples where it really works. So e.l.f. Beauty, the best way I can describe it is somebody out here could easily go into their pocketbook and pull out a lipstick and say, this is $50. And they pull out another lipstick and they say, this is 4, and I kind of like this one better. That's e.l.f. Beauty. And they have a higher net promoter score. Their cycle times for new product development are months versus years at the L'Oréals, Estée Lauder, etc. And what's powerful about this is this. When you get hired at e.l.f., before you come on board, and I want you to think about whether or not this is how you're hiring. Before you come on board, the leadership looks at you and says, okay, here's the deal. For the next 3 years that you're here, you're going to grow further and faster than anywhere else you could possibly work. What a beautiful promise. Anywhere else you could work, this is the place you will grow further and faster than anywhere else. I promise you that. But the social contract— and I'm going to come back to that word social contract. I like it better than culture, and I'll explain why. The social contract is If you're going to go further and faster than anywhere else you could possibly work, then you've got to not be defensive. You've got to be willing to constantly receive and give feedback every single day. Now, how many of you know Ray Dalio's work, Principles? Yeah, I mean, it's— I know Ray pretty well, and I— first time I met him, I'm like, Ray, you know, this is a guy at a hedge fund that has come up with a philosophy that every time you're finished with a meeting, a private app allows you to grade everybody else's performance in that meeting. It's a pretty evisceratingly challenging place to work. It's an absolute challenge culture. And I once said to Ray, I said, Ray, I'm trying to do what you're trying to do, you know, with delicate, normal people. And you get the opportunity, you just hire assholes. So that's easy for you. And he didn't really laugh. But that said, that's exactly what we're trying to do. So at Elf, what they did Is they said, "The reason I'm gonna challenge you is because I love you. I'm not gonna let you fail. I care about you. We care about each other. We're gonna push each other higher." And so I created a word for it as I was watching these high-performing teams. I called it co-elevation. Co-elevation when a group of people are committed to a shared mission, but they're committed to each other. They're committed to pushing each other higher. Like like my days back at Deloitte, a band of brothers and sisters. Wrestling ideas together, not letting each other fail, squeezing the juice out of every single individual capable and pushing people to their highest level of capabilities. That's what we need today. We need that co-elevation. And so e.l.f. has had that and they've crushed it from a financial performance. And I write about it in the book. The book is organized by 10 different chapters, 10 different shifts that we need to make. in our success as leaders. And each one of these little boxes is a shift, but basically that's organized in 3 different tiers, and I wanna talk to you about it. The most powerful one that I'm gonna talk to you about today is the challenge culture. You have to have a challenge culture. You have to have a culture where everything is on the table, not conflict avoidant, where every conversation that you have, if you have a meeting after a meeting, if you have the talk down walking down a hallway, any of those conflict avoidant nature of and it's stealing from shareholders, full stop. And yet it's exactly how we run our businesses. You never see it in a high-performing team. In 26 years of studying teams like early Jeff Bezos's team at Amazon or Jamie Dimon's team, I've had the blessing of both coaching these teams and sitting in their rooms and observing them. For 26 years, we've, we've observed thousands and thousands of high-performing teams, and I see one consistent thing: they are a challenge. What is the challenge? Culture. Anything less than that, you will be less in terms of your outcomes. And that kind of candor and peer-to-peer growth where you're coaching each other, I'm going to give you some simple practices today. We're an applied research institute. We don't, we don't research trends. We only research best practices. So what you'll see in our work and what you'll see in the book is 32 simple practices, and I'll give you a few of them today that you can start to use immediately to be able to shift from the standard kind of teams that we have and run to a high-performing team. Because once again, it's the process and practice change that changes culture. I would never expect to stand on stage and preach at you that you should have a challenge culture and then send you back into a room of 12 people in your standard meeting format, because I know that in a room of 12 people, in any given conversation, our data shows that only 4 people are heard. In a room of 12 people, just think about an average meeting of 12 people sitting in a room. You're going to have people who are conflict avoidant. You're going to have introverts. You're going to have people that are political that know that if they— they'd rather not put their point of view out in the open because they'd rather lobby behind the scenes to have their point of view heard by the decision maker, not put it on the open where it can be scrutinized. This happens all the time. Now, if I change your process where before the meeting, everybody has to fill in an asynchronous document on this topic that says, what is your opinion on this particular topic? What is— what is— what do you believe is the real problem? What do you believe is a bold solution? And everybody were to read that before you show up in the room, then you show up in the room and in one meeting you land the plane with the answer. Such a simple process shift actually allows you to now to have 10 out of 12 people feel that they're fully heard. And our data shows 10 out of 12 people feel they're fully heard. And more importantly, cycle time of change. You have all of the information in advance. You show up, you land the plane in one meeting versus you start the conversation, you have multiple meetings afterward. That's a simple process change called meeting shifting, chapter 6. So once again, and by the way, your, your candor levels 85% higher psychological safety when you're asked thoughtfully to fill in a form before a meeting than among 12 people you're asked to be boisterous and challenge your peers in, in a room. Even if you used breakout rooms during a conversation, that improves psychological safety by 85%. So if we really want to have an inclusive culture where we get diverse opinions on the table, you change your process. I can promise you that in less than 3 months, your culture will change if you change your process. of collaboration. Not a problem. Culture change is not difficult, but we keep clinging to old broken process and practice of collaboration. Now you can do it like Amazon does or other people do in that middle challenge culture, but I would rather do it like e.l.f. Beauty where you do it from the basis of a strong relationship, where we do it because we care, where we do it because we're empathetic, where we do it because we have made a social contract that we have each other's back. Let me riff on this idea of a social contract. A social contract is my way of talking about culture. Because I'm an engineer, manufacturing engineering, industrial engineering by background, I've placed an engineering mindset around behavior change and leadership. So I want to engineer your culture of collaboration by virtue of engineering process and practice. It means that we have to have a different contract with each other. If the contract was, I would never challenge you in the room, that's throwing you under the bus. I get that contract. It's what most of us have. There's another contract that says, of course I'm gonna challenge you in the room. I would never let you fail. Do you see that difference of contract? Whose job is it as a leader to set that contract among your team? It's yours. It is yours. So I want you to start to think about the contract that you have set in your team. Modi and I were talking about yesterday relative to His way of thinking about social contract, and he's an artist on this. He does it naturally and organically. We've just codified it by observing. Like he in his team meetings will stop people and say, have you two corroborated on this before or not? I mean, you're coming in here divisive on something. Why haven't you talked to each other? How much time have you talked? And all of a sudden, after Modi does that 2 or 3 times, Guess what? The team starts talking to each other before they come into the meeting and you have much shorter, better meetings. He's, he's got a process and a practice that he's applied, right? And so I thought that was a beautiful example, but it's exactly what you as a leader need to start to think to do, codifying the process and practice. And the more you actually write it on a piece of paper like we've done and say, these are the social contracts, the more the team will understand what you're doing. And then they'll start cascading and adopting the process in the organization yourself. Let's have some fun. I want to see where you are in your teamship. So go ahead and do this with me, and I'm going to do it with you along the way. I'm going to give you 10 questions. Here's the thing: you're going to answer this not about your team; you're answering this about the team that you sit on. Think about your boss having a staff meeting. And you're on that team. So now the question, and just do the answer these with me, I'm gonna do them along the way. Does every team member in that room directly challenge one another even when it's risky to do so, or the topic is outside their swim lane or area of expertise? Is this a challenge culture? Does everybody speak their mind in the room boldly and bravely? This is the team you sit on. Number 2, does every team member actively hold each other accountable for each other's commitments and outcomes? Are the— is the team holding each other accountable? If someone's falling short of performance, are they all comfortable saying in the room, hey, you're disappointing right now, you need to up your game? Is the team allowed to hold each other accountable? Just go ahead, push next. Relationships. Now this is important because it's not— we're redefining team here. Does every team member proactively deepen and improve their relationships with the network of those they need to turn— of those critical to our success in turning associates important to the team into real advocates? Is everybody on that team good at building the relationships outside of the team with everybody they need to build the relationships with to achieve success? Is this team realized team has nothing to do with org chart, it has to do with who we need to work with? Go ahead and push next. Does every team member on 4, does every team member feel responsible to lift up each other's energy? Does that team have a contract to care about each other? By the way, does that mean they know what's draining each other's energy? Does that team care enough about each other they know what's personally and professionally draining each other's energy? Number 3 of number 5, the team creates significant tangible value Because it's a team from the interdependencies that exist between us. Is that team stress testing each other? Is that team coming to each other for the most important ideas? Are we finding value in the interdependencies? Are meetings welcome and are they productive because we use them sparingly as a complement with the most modern collaboration and AI tools that save us time and make us engage inclusively? I'll tell you, you're here in the Bay Area. If you go and visit some of the Y Combinator kids who are starting new businesses and you were to say to them, hey, we have a problem, let's have a meeting on that. They'll look at you and say, how can we have a meeting on that? We haven't collaborated yet. They use the software to collaborate. They use AI tools as an integral part of their collaboration. They don't just throw problems into meetings and lethargically go through meeting after meeting and cycle times of change that last months instead of days, right? Is that how you are? Number 7, are we inclusive? Do, do, are people gluttonous for input? Are we inclusive and do we invite the broadest, most diverse set of opinions to find the most innovative solutions? Are people excited about other people's opinions? And the olden days when we used to think that the only way to get input from people was meetings, we avoided it because we couldn't afford all of these meetings with thousands of people or hundreds of people or 20 people or whatever it was. But today we have tools that we can be gluttonous of other people's opinions and make bold decisions on broader input quickly. But we still think that by getting broad input, we're gonna be slowed down. That's just not true. That's not the way the highest performing teams work. Push next. 2 more questions. We adopt agile principles in our work. Does your team, are they agile? Do they iteratively prioritize? Do they adapt to new information? Are they constantly pivoting? Reallocating. Are they working in agile as a team? This is the executive team you sit on. How about celebratory? Are they— are you— is this team putting gas in each other's tank? Do all team members encourage and celebrate one another's success? Are we high-fiving? Are we energized? Are we giving each other fuel? Last question. Are we achieving our full potential as a team? Now, if you want your— you can just leave it at that because I wanted you to walk through those questions. It's one of actually 22 questions that we typically do, but I wanted you to ask yourself how high-performing is your team. We are also happy to show you where your scores are against the norms in here if you want that feedback. Go ahead and give us your email. So these are the norms that we're talking about that adhere to those 10 critical chapters. We break down silos. We We speak courageously, we lift each other up. Now what I want to do is give you some of these practices in the last half of an hour that I have that I think will be very prescriptive. And the most important thing, this is the biggest, so the first big idea is to realize that you need to renegotiate your social contract, put new processes in place, and that's your shortcut to changing culture that will allow you to become a transformational agent, full stop. The next question is, who's your team? Of course, this is the easiest fix, the easiest fix. If we start to teach our teams that first of all, broader, more diverse inputs will make our change decision-making better. Now, you might think that the process— your immediate mind goes to, well, the process of getting broad inputs is going to slow us down. Put that aside for a second. I can fix that. In the meantime, but if I said to you, if you're launching a new initiative, wouldn't it be better to get broader input so you're aware of downstream impact of your change, so you're aware that somebody else has data that realizes why what you're suggesting might not work or whatever it is. So if we can just acknowledge that more input is better, now the next question is how do we change the process to get more input and not slow us down? The biggest thing, and this is really important, the biggest thing you can do is realize that when you're getting input, you're not getting directives. I think one of the greatest sticking points of why we don't get a lot of input is because people, all of our lives when we grew up, input was a directive. I have 6 boys, and I promise you that none of those boys ever thought they were getting input from Pops. They got directives. Sit up straight, don't eat that way, don't do that to your brother, whatever, right? My boys got directives. Then they went to school and their teachers and their coaches gave them directives. And then they got their first jobs and their bosses gave them directives. Input meant directives. In this new culture, in the teams that I see that are highest performing, input isn't a directive. Nobody ever is so arrogant to think that my input to a peer is a directive. It is input. It is radical input so that you— I'm giving you data and you can do what you want to with it, but what I owe you is strong data. I do not have the arrogance to believe that I'm giving you a directive because that's not my job. You get the difference? That is a big unlock. Once you start to teach your teams that what we owe each other is radical input, not directive, then they start to get a little bit more calm about accepting it and giving it. Otherwise, if they thought it was directives, they get defensive. I don't want 12 people's input. What the hell am I going to do with 12 people's input? Because I think I got to do something with all 12, and then I get to consensus. Many of you think that broad input leads to mushy consensus. It doesn't have to. The second thing is recognizing this, which is— this is such a simple work re-engineering process. You teach everybody that you've given a project to that they have to build a relationship action plan. Every initiative that you have launched, ask your team, show me your RAP. Show me your relationship action plan. A relationship action plan is you have an initiative, and I want you to list the 10 most critical A-priority people that are critical to this particular initiative. Then list the next 20, and then if need be, list the next 50. That's perfectly fine. But I want you to have a defined relationship action plan. Next to every name, I want you to put a number. I want you to put a number next to the name relative to your initiative. Are they a -1? Are they fighting it? Are they a 0? They don't care. Are they a 1, passively aware? Are they a 2 that kind of show up every once in a while? 3, they're working with you. 4, they're actually engaged. 5, they're under the tent with you like a soldier in the same responsibility as you are. Now, once you do that, now you have a measurable device, a simple measurable device to work across the matrix. We don't do this. We talk about working across the matrix, but in the absence of this with quantified relationship action plan on every key initiative, you will fail. Now you look at the weighted average, the A's, the B's, and the C's, and you'll start to see a single score of what the relationship score is of your critical constituents against your initiative. And then if you really want to do it, and we did this at General Motors when we were coaching the transformation there, is we went in and we surveyed all of those 60 people, 70 people every quarter and said, just what is your current relationship with this initiative? Are you against it? Are you aware of it? Are you up to date? Are you co-creating? Are you finally, are you number 5? Are you, you, uh, ambassador of it? So that we actually get third-party advice on the net promoter score of your initiative. Boom, you've just easily worked across the matrix. Process change. Does that make sense? So easy, but we don't do it, right? So once we do that, then the next question is, how do you get candor unleashed among those people? So now we have a team aligned around an initiative. We know where people are in the spectrum of their adoption of that. Now the next question is, how do you actually get candor? Because our traditional cultures— I can't wait to see your scores. But by the way, 1.9, shameful. This is the thing. When I talk to executive teams of major corporations and we do this diagnostic and we sit there and it shows that we are 1.9 in terms of our candor, I look to the CEO, I'm like, what you going to do? Because the reality is this is the, this is the responsibility of the leader. The leader determines whether or not the team has a 1.9 or 4.5. And we don't have data. This is why I started this idea of a team-based diagnostic. We have employee engagement scores. We don't have these team metrics. We need team metrics to understand. And then these team metrics can be applied to an interdependent group. So the 60 individuals that are working together on a key initiative, you apply it to them about the initiative, right? So the diagnostic of how a team works together doesn't have to be an org chart. It could be an initiative. And what is the social contract around the initiative? And candor has to be one of them. This is some of the data. I've already talked about this already. And let me give you an idea. So I want you to all imagine one critical initiative that you're trying to launch this year. You got it? Some critical initiative that's important to your organization's success. You got it? Got it? What's yours? What's it called? Yeah. Okay. So that's why I wanted to— so one idea was educating the executive team about what AI is. possible and able to do. All right, let's use that. Has anybody given me another one that might be more of a critical launch initiative, maybe a technology initiative? Give me a name of one. What's that? Are you being spun out? All right, so it's about getting the systems and the processes ready to— great, that's good. Either of those are good. What I want you all to think, if we're an agile organization, we're going to take critical initiatives like that and we're going to break them down into monthly sprints. Maybe if the velocity of change is so fast, we break them down into 2-month sprints. So now the question is, what are we doing in the next month? What are we doing in the next 2 weeks to achieve this success? At the end of every sprint, you should be asking to do a stress test. So there's a difference. We all do report-outs. A report-out is when we have an initiative like the education of the executive team, somebody stands in front and says, here's the things we've been doing to educate the executive team. And you're talking to a group of 12 people, and at the end of that, one person chimes in and says something. That is our social— that's our current social contract around an initiative update. Does that make sense? You have these report-outs, you go through 20 pages, blah, blah, blah. Now, I want to give you a different way to think about your, in a sense, your standup on a critical initiative at the end of an Agile sprint. I want you to do something called a stress test. So a stress test is when you stand up in front of— what's your name, ma'am? Sue. Sue. So Sue stands up in front of her team and she says, here's what I've prepared on this initiative of educating the executive team. Here's everything we've achieved so far. Here's everything we're struggling with still. We're still struggling with this. Here's everything we're planning to do in the next 2 weeks or whatever the next sprint is. You would do the same thing. It's like relative to our systems, Extraction from this organization. Here's what we've achieved. Here's where we're struggling. Here's where we're going. But here's the difference. Unlike a report out where you would now move on to the next report out, or a couple of people might comment, we're changing the social contract because while the people are listening to you, they know that they now have responsibility when they're done listening to come back to you with the following questions. So as people are listening, they're writing the answer to the following 3 questions. They're listening to the report out and they're saying, Kevin, here's what I think you're missing. Here's challenges you might not see. Here's risks that you might not see. Kevin, here's an idea. Here's a bold idea for you, Kevin. And they're writing it down. And lastly, Kevin, call me. I think I can help here. Just by putting this second process step on a report out, you have transformed the culture of your team. The culture of your team used to be passive listening, maybe even checking out, not literally paying attention. But now that they know they have to challenge you when you're done, now that they know that they have to give you a bold idea when you're done, now that they know that they have to think about offering you help and support, you've instantly changed the process and you've changed the culture. You now have a challenge culture, you have a curiosity culture, you have a supportive culture by just adding a stress test on the end of any critical initiative. Does that make sense to you? If you start practicing stress testing, After three months, your candor scores are going to go from the low twos, high ones into the threes after only three months. Because what's happened? You've turned on a prescription of challenging each other. You've just turned it on. You turned it into assignment. Even in foreign cultures, which are very deferential, the Japanese culture tends to be very deferential. When we adopt stress testing in Japan or in Korea. They do it because they're acquiescent as cultures. They might be deferential. They would never challenge each other. Think about, like I always said to my team early on when we were doing our research, never expect to work against gravity. Gravity is gravity. If you preach to somebody because of some book about, you know, Crucial Conversations that we should be courageous and challenge each other in the room, bullshit. It's not gonna happen. You're working against gravity. I've spent 20, 30 years of my life being conflict avoidant and being deferential and saluting authority and not throwing my friends under the bus. Just because some speaker tells you about being courageous, you're going to do it? No, it's not going to happen. But go into breakout rooms of 3, in a small breakout room of 3, ask what do you disagree with? Write it down. Write it down before the meeting. You've instantly created a challenge culture through process change. You haven't expected miraculously to change a mindset. There's a wonderful phrase that I learned when I was researching high-performing small groups of people that wouldn't let each other fail, like you all. You are a small— your chapters are small. Hopefully your chapters are co-elevating, committed to not let each other fail. Sort of like what YPO Forum does. And what I learned is you don't think your way to a new way of acting. You act your way to a new way of thinking. Culture change, and this is the problem, I apologize, with HR. They're not process-oriented. So they think that preaching concepts to you will change your mindset. That doesn't work. But giving you a new process can change your behavior, which will eventually catch up to you and change your mindset. As soon as you do a stress test and we— and the person comes back and says, yeah, thank you, I like that feedback. I don't like that feedback and here's why. But remember, the person doesn't have to take the feedback. The person just has to receive it. And maybe I'm going to go study this. Soon as you cycle through one loop of this, the team is like, holy cow, Jane didn't freak out when I told her what she's missing. Joe didn't get defensive. Joe just took the information and said yes, no, maybe to us. All of a sudden, your mindset starts to shift and you start to be able to adopt culture change that you wouldn't have been able to adopt before. Does that make sense to you? So rudimentary. So simple. Culture change is not tough. Now let's talk about that layer down below. This is one of the most beautiful aspects that I think, which is I want you to have teams that have each other's back. I want you to have teams that care about each other. By the way, I want you to have chapters that have each other's back. I want you to have chapters that care about each other. If your chapter members— so I was talking to one chapter leader this morning at breakfast, Jay, and I said, Jay, how many chapter members do you have? He's like, 90. It's like, wow. If you're a chapter leader, give up the ghost. There's no way you're going to take care of 90 people. There's no way you can take care of 90 people. No way you can coach, elevate, support, you know, all, you know, care about, know about 90 people. But what if you made 90 people's job to take care of each other? What if that was our social contract in our chapters where we show up and we know that our job is to take care of each other? Now, what would be some of the process or practice changes in a team or in a chapter that could help us lean in and care about each other? Well, first of all, if I was— if I had a social contract to have each other's back, I would probably need to know what was draining your energy. So in a team, does your team know what's draining each other's energy? Well, the way to do that— remember during the pandemic? I love during the pandemic. I mean, I didn't love the pandemic, But I love during the pandemic when people would show up at meetings and the first thing they would say is, hey, is everybody okay? When's the last time you had a meeting that everybody stood up and said, hey, is everybody okay? Not lately. And, but we could once a month do an energy check with your team. Once a month, go around and say on a scale of 0 to 5, what is your energy and what's bringing it down? I do want to focus. You could do a roses and thorns. What's lovely in your life? What's difficult in your life? I get that, but I really want to know in a short period of time what's draining your energy. Because if I know that, then we can have each other's back. Sometimes it's stuff that I can't do anything about, but I could be empathetic and I could reach out to you and say, how's your son? Or it could be something that I know it's going to be occupying your time and I can say, do you need some time? Can I give you some resources? Can I support you in some way? Can I give you some break? Or it could be something that's like, I know that person that you consider a pain in the ass right now. Let me see if I can help. But if we don't have a social contract where we can share what's draining each other's energy, how do we help? So one of the things you as chapter chairs could do is every time you meet, spend 15 minutes where everybody goes around in small groups. What's draining your energy the most? I mean, I appreciate the check-in which says, what are you most proud of? But why not share what we're draining our energy? Because then what's going to happen if we have a social contract to have each other's back? Then you're going to say, hey, wait, I can help you there. I've had that same problem. I can do this. Or can I check— at least can I check in and let you know how you're doing? That simple energy check. All of these. So we have in the book, we have 32 high-return practices that have been measured. We've extracted them from teams and then we measured their efficacy when reapplied sequentially. And we know that these will increase your scores, these diagnostic scores. I'll give you mine. These are my boys. I said I had 6 sons. These are my sons. And as you can see, this family resemblance. Yeah, none of them are related to each other and none of them are blood relatives to me. They're all through foster care and adoption. The one in the bottom right is my youngest boy. My biggest challenge is he has been in recovery, addictive recovery now, For many years, and unfortunately, um, he just dropped out again. And we have a social contract among us as a family that if he's not in recovery, he doesn't have our financial support. And that is very challenging with me because one of the things I struggle with is there's got to be a mental illness component of this. And yet, while the social workers are telling me that you need to create boundaries, I'm like, but for God's sakes, what if he just can't? Be fixed. And I don't know, it's, it's struggling for me. And I know some folks— I mentioned it yesterday— I know some folks who have suffered with addiction in your own families, and I've appreciated you coming up and giving me your thoughts as well. But, but my team knows about this, of course. And when I say, hey, I got a text from Daniel, I got a something from— they know what that means. It means that's what I need to go take care of. Um, one of our members of our team is going through breast cancer right now, and And we're there for her. We have her back. And the energy check is real for her on a daily basis. And she wants to continue to work. And we're supportive of her. And we need to make sure that we're a team supportive of her. Or it just could be that one of my team members is dealing with some client that's challenging. And that's part of the struggle too. Whatever it is, we should be able at lunch today, right? Why don't you do an energy check? I don't mean to hijack your agenda. But you know, you could do an energy check. You could sit at a table and just say, hey, let's do an energy check. What are we struggling with? With the assumed intent that once we hear, we have each other's back. Empathy, understanding, mutual problem solving. Okay, I wanted to spend just a moment talking a little bit about how this applies specifically in the AI world. So first of all, your AI should be a separate executive team transformation meeting on a monthly basis. The company should be going through an AI transformation meeting with every critical individual, business, technology, et cetera, in a room, and you should be working on monthly sprints. Every critical re-engineering of a workflow, re-engineering supply chain, re-engineering finance, re-engineering HR, they should show up and be stress tested on a regular basis. It might not be every one of them every month, but at least on cycles of every 2 months right now, the HR person should show up and say, here's what I've achieved in re-engineering HR with Here's where I'm struggling. Here's where I'm going next month. And they should be stress tested. The team should break into small groups and say, here's what I think you're missing. Here's what, you know, here's a bold idea I just heard at a conference, et cetera. There's no question we should be running monthly agile sprints for AI at the executive level of your company, full stop. Now, separate from that, and by the way, and that's gonna force a certain methodology around zero-based workflow redesign that's critical as a part of that. Second is we should be building movements. Now, I was talking to a gentleman last night, and he's done a really good job of building 90% adoption of tools, etc. And I loved what he's doing around peer-to-peer coaching, etc. I went back, and just to give you a quick idea, I went back and I dusted off the old manual of Six Sigma. Do you remember black belts? I was a black belt of Six Sigma. We should be thinking about black belts of AI. Let's make this a celebratory opportunity, just like e.l.f. Beauty, where every one of you can grow faster and further than anybody. And by starting the early— right now, most of us are yellow belts, to be honest, because we're measuring whether they've got the tools, whether they're using the tools. That's a yellow belt. A brown belt means you're actually getting some results. Now, what's interesting is you start to take those yellow belts, put them into small peer-to-peer coaching groups. Make them a team, a coaching team. Their job is, if I want to be a yellow belt and use the tools, put them in the small coaching teams to coach each other on how they're using the tools best in their role. And then you put a brown belt on top of them. So 1 brown belt and 5 yellow belts together accelerating their use of the tools, coaching each other. And then when you go up to brown belt, now you've gone up to brown belt because you've started to show bona fide ROI. ROI is where you're at the brown belt level for the tools that you're using. And then the same thing, brown belts are coaching each other with a black belt there. What happens to be a black belt? It means you're actually re-engineering workflows. And each one, you'd volunteer to be a coach of the next level. So this is what is building a movement of change. Start thinking of AI as a movement, right? And movements of change are not built by you or HR giving training. Movements of change are built by of change are built down at the coalface of evangelization, of ambassadorship, and giving them the power and badging individuals to be prideful and standing up on the podium and saying, I'm becoming a black belt of AI. That's where you get a movement to be created. It's the evangelists that build the movement, not the central hierarchy. Okay. And these coaching circles are so simple. Throw a bunch of people together and, and you just say, I'm showing up and I'm sharing a best practice for 3 minutes. People pepper you with questions for 3 minutes. They give you advice for 3 minutes, on to the next person. This is a structured format of how to do peer-to-peer coaching in small groups that doesn't require a leader to be in the room. You give them a process on how they coach each other, make it really simple, and you don't have to have leadership. You don't have to have outside coaches doing this kind of thing. What I can promise you is that your, your scores will be significant and differentiated. You'll have a 79% increase in candor in a short period of time. You have much faster collaboration when you adopt these practices and principles. 40% greater sense of ownership and accountability. You will change your culture just by changing your process. Okay, 6 minutes. Let me tell a quick story. This is my mom. And this was 15— you can tell from my hair color, this is about 15 years ago. And my mom, had a group of ladies. I was writing a book and studying small groups of people that commit to not letting each other fail. It's one of the books I'm most proud of, and it'd be great for any chapter chair to read it. It's called Who's Got Your Back? I studied dozens of YPO chapters. I studied dozens of, of AA chapters, Weight Watchers chapters— anytime a small group of people committed to be transformative in each other's lives. And it's what the early germination of my teams-based research was. And I remembered my mom had one of these. My mom every month used to go to this thing, and sometimes it would be at her house. And all I knew is Dad and I got kicked out because the ladies who came over didn't want us around. And, and I said, Mom, tell me, tell me about this group that used to come over. She beamed up. She's like, oh, you mean the card club girls? Yeah, tell me about— those are the girls on the left. I devoted that book to them, and that was the— that was my book tour. And when I came to Pittsburgh They all got in a limo and came to Pittsburgh, and they were celebrated at my book tour. They absolutely loved it. I said, Mom, tell me about this. She goes, well, when your dad was unemployed, those ladies cooked extra and would always slip down when your dad was not at the house and give us the food so that I could put it on the, on the stove and pretend that I could stretch a nickel. My mom says very proudly, we never ate welfare cheese. That was what you used to give out when your unemployment insurance ran out. The government gave you welfare cheese. We never ate welfare cheese. She said, "When your aunt was passing away of breast cancer, we sat on her bedside two weeks before she died. We didn't cancel card club. We sat on her bedside and said goodbye and played cards with her one last time." My mom has never; they've never canceled card club in 65 years. Every month for 65 years, they've played together. When my dad passed away, those ladies made sure that my mom got out every single day. For months until she was ready to get out on her own. And my mom's 93 today. Not today, she's 93 in January, but she's 93. She lives on her own. She goes out every day. She drives at 93. Any of you visit Pittsburgh, just don't drive. But she's crushing it. And I guarantee you it has a lot to do with this mindset of co-elevation that this group of ladies had. My mom says there's only 3 of them left now. Unfortunately, my mom says, "You know that every time one of the every time one of us dies, we have to change the card game. One of these days, there'll be one of us playing solitaire, thinking about the rest." I was so blessed when my mother told me this story. I mean, I live across the country. I get home maybe once a quarter. Going home next weekend, and but just to know she had that was amazing. But then I had to pause pretty hard in my shoes and realize I didn't. At the time, I was not in a marriage that was co-elevating. I felt very alone in raising my boys, and I was far, far, far, far from being the leader that was building this in my company. Not even close. Scarcity mindset geared my head more than abundance and more than co-elevation, and it started to make me realize that I was living my life in poverty of relationships. Because if there's any critical relationship in your life, you have the responsibility to make that co-elevating, even in the workplace. So often it's interesting, and we sit in the workplace, and because we're pissed off at somebody for not working with us the way we think they should be working with us, we, we don't work with them as well either. These kids, my kids, taught me something, which was I could never show up and say, you, you know, that I can't make the assumption that I'm your father. I had to earn that right every single day. And, and so many times I had to go 99.9% of the way to be their father, even when they were not acting like my child and not giving anything back. And guess what? That's our job too in the workplace. How dare us believe that, that we have the, the demand that other people should behave in a certain way. We have fiduciary responsibility to make change and transformation happen. Your teams have to make change and and transformation happen. If someone's making it difficult, that just means it's going to be more difficult for us. It doesn't mean that we can abdicate our responsibility to rise above it and continue to work hard to build those relationships to make the change happen. And that's what teamship is. That's what leadership is today. We are the Sherpas of co-elevation inside of our chapters, inside of our teams. But it's a high bar, and anybody can make it in a company, and anybody could be the tipping point of the change and the culture change. And that's why I'm so— that's why I pivoted all my time to spend more with technology execs, because we need to make you the shepherds of change in your organization, that change culture through the process of adopting technology, right? That is our job. And the great news is if we really adopt it, like me, I've started to adopt this, and I got married last year. I'm in love in a way that I've never been in love in my entire life at the age of 60. And I am Oh, thank you. But I had to set the standard. I had to set the standard that Co-Elevation is, is a new standard. It's a bar that I have to— I have to show up. And I still fail all the time with my boys, with my team, with myself, you know, with my spouse. I still fail, but I know what the standard is, and I want us all to step up and adopt that if we can. We can, because it will be the transformation not only of your success. This is one of the mind-blowing win-wins. You can have radical success and joy by adopting new process and practice changes. Life can be so much better. And I, and I can tell you one thing, there is no question to me that you've got the right foundation with Inspire. You've got— you're going to learn it, you're going to grow it, you're going to build it, you're going to practice it here. But you gotta take it, you gotta take what they're trying to give you here, you gotta take that back into your leadership style, right? That becomes the tipping point of the change in your life.