The Ultimate Amplifier of Life Skills is Value Creation with Curt Carlson #11

Hello, everybody. This is David Goldsmith. And welcome to another edition of Redefining Tomorrow. It's here we discuss topics that will help you to redefine your future. We'll take on topics that may help to change how we live on this planet or to redefine any other type of consideration you might have. A quote that I've lived by since I've been young is, you can't fix yesterday. You can only correct tomorrow. And today we're going to be redefining. Tomorrow we're going to be exploring the ultimate amplifier of life skills is value creation. And we have Kurt Carlson on the phone. How are you, Kurt?

I'm great. Great to be with you, David.

Well, Curt and I met, I think about five years ago, something like that. He was the former CEO of SRI International in the Valley between between 1998 to 2014, and during that time he tripled revenue. He's helped create Siri hdtv, Intuit Surgical, and been involved in all sorts of activities which he can go into if he'd like. Our big topic today is to get into this topic of the Ultimate Amplifier. So, Curtis, do you have an outline or bullet points for us?

I do. We're going to talk about why value creation is a lifetime skill that only gets better.

Why value creation is a lifetime skill.

Number two, why it's a problem or an issue or an opportunity. Today, let's call it an opportunity.

Why is it a problem or. Well, it's an issue or opportunity. Yep, opportunity.

The third thing is what's in it for you?

That's important. What's in it for you?

Number four, it's a learning discipline. So we're going to talk about what that means and how you can think about that. So learning.

Learning discipline.

Number five, focus on important needs and. And not ones that are just interesting, important, not interesting. Number six, language and concepts. Shared language and concepts focused on the customer. Customer language, focus on customer. And seven is, I'm going to call it Value Creation Forms. Think of it as kind of an intellectual incubator to help you learn and create fast. So Value Creation forums.

Okay. I think normally I don't know how many bullet points we're going to get. And for those of you listening before we start is I never know what we're going to talk about in advance. We just come up with a title and then the person creates whatever they'd like to create and teach. So, Curtis, let's get into this. Let's start with this. Number one, why, why we created is why value creation is a lifetime skill.

So, David, what is really the job of every professional?

I'm going to probably take a guess. It's value creation.

It is. It is your job. So when somebody hires you, or even if you're on your own, the objective usually is and almost always is to create value for others, for your customers, for your enterprise, and for your other stakeholders. It's basically your fundamental job as a professional. So at the highest level, it's your job. Value creation is your job. Okay, makes sense.

I'm following you. The first thing that came to mind is if this is it, why isn't it taught? If that is.

Oh, we're going to come to that. Okay.

I mean, if you've got something that feeds me, because we're talking. It came to mind now. So you kind of opened up Pandora's box.

Well, we're going to, hopefully we're going to teach you and your audience a few things in this discussion, but that's the first thing. It's a lifetime skill.

Okay? So it's a lifetime skill, and yet we don't identify it as a lifetime skill when we're growing up.

Over time. So the more experience you have, the more valuable you become.

Okay?

And the reason you should want this, you want to know more about this and how to be better at it, is that the people who know how to do this are inevitably the most valuable people in the world. Because it turns out very few people are really good at this. And I'll give you some numbers in a minute, but very few people are good at this. Very few people know how to create value. It's an amazing thing. As you just said, it's not taught.

It's not only not taught. You made a statement, so I'm going to pull back on it. You said that over your lifetime, as you get more experience, you become more valuable. Yet at the same time, we're finding that a lot of the experience that people have which they assume is value creation gets destroyed when we have paradigm shifts, new technology, disruptive thoughts and constructs. So it's. Is it exactly that or is it partially that.

You have a good chance of adapting very quickly and being successful? Now, here's an interesting thing. You know, we hired hundreds and hundreds of straight A PhDs at SRI. None of them came to us knowing how to create value.

Okay?

It's not taught. I mean, these are people from Berkeley and Stanford and Harvard and mit, and it's not taught. So we actually had to teach them. We had to teach them some of the things I'm going to tell you, because the job at SRI is only value creation. That's all we do. There are no jobs that are not focused on creating new products and services. So.

Just. I have my own perceptions of sri. Stanford Research Institute. I have my own background because with Jay Van Zael and with. I can't remember, we had an office in there that we shared, and I can't remember David Norfoss, we shared the office in there. So can you give me your overview, because you and I have never discussed this, of what SRI did, what it does, so. I know.

Let me just tell you a little story about that. So SRI is a technical innovation company. When I left was about 2,500 people. It's got all kinds of different disciplines in it. It's got it. It's got materials, it's got health care, drug development. It's a whole suite of different kinds of technologies. And the. The function of the company is to work for others, for the government, for governments around the world, for companies around the world, and to do research for them. And also we do licenses and ventures. So we spin out two or three ventures every year. So we develop the technology ourselves, we incubate the companies ourselves, we form partnerships, and then we spin them out. We own equity in them. Obviously, we wouldn't do it otherwise. And we give some of that equity to all of our employees. So we got really good at that. As you mentioned, when you do things like Intuitive Surgical, which is a $60 billion company, Nuance, the leading speech company in the world, High Definition Television, and Siri. Siri added over $50 billion to Apple, by the way, that was bought by Steve Jobs two weeks after we put the first product out. Interesting story is that when it came out, he called up our CEO and he said, hi, this is Steve Jobs. And our CEO said, no, you're not. And he put the phone down. One minute later, Steve Jobs calls back and he says, no, this really is Steve Jobs. I want to come over and talk to you. So we did. We didn't want to sell the company. We called up every other big company you can imagine, and we got the kind of thing you get from normal big companies, which is, you can't do that. That's impossible. We're already doing that. Don't think about it. And who would want it? You know, we get all these excuses, and here's Steve Jobs sitting in the lobby wanting to buy our company. That's the difference between Steve Jobs and these other companies. Anyway, that's what SRI does When I went there, it had been failing for 20 years. It was close to bankrupt. The buildings were falling down. We had a huge government, sorry, a good huge bank debt. And everybody basically kind of hated each other because when you're failing for 20 years, you don't like other. You know, you start fights and it's always the other guy's fault. Anyway, it was, it was a pretty sad place with a, with a very famous history. It's the place that invented the computer mouse, windows, hypertext, electronic banking. I mean, it's just an amazing, amazing place. But the way the people were working had become obsolete and they didn't have these value creation skills we're starting to talk about. So when I came here, people asked me, how did you go to such a place that was in such tough shape? And I said I thought the people were terrific. The opportunity obviously is unlimited today. The opportunities for innovation and the location in the middle of Silicon Valley next to Stanford is perfect. So I was convinced, because we've learned these techniques earlier, I was convinced that if we get people to cooperate, we could turn it around and we could become a really powerhouse organization for its size. And I think when I left, we were probably pound for pound, as productive as any research lab has ever been, certainly any lab that I know of. And it was because we changed the way we worked, we changed the way we, the skills that our people had. So if you came date, if you came to sri, we almost immediately put you into a workshop and we would teach you the kinds of things we're going to talk about tonight. That's the way we ran taking a.

Step back because you said it didn't sound like you were at Stanford at the time. So you came from where that you could acknowledge and learn about value creation.

Well, that's another interesting part of it. I used to work for rca. I had the two leading projects in the company. One was high definition television and the other would have been the first Internet company in the world. My partners were Cinecore and 9X. I spent lots of money. And then one day GE bought RCA. And so I was inside of GE for two years. I got to know Jack Welch and all the key folks there. That was interesting. And one day we learned that the laboratory I was at, which is in Princeton, New Jersey had been sold to sri. So my best friend Norman Winarsky came in and told me this and I asked him if he thought it was good or bad. And he said, well, the technical folks all like it. They think SRI will be a great Opportunity. And I said to Norman, Norman, I think that's, that's really good. I'm happy. The technical guys are happy. But I think rca, they gave us tens of millions of dollars to spend every year. And I think at sri, they expect us to earn tens of millions of dollars a year. And I think that's going to be different. And Norman, who graduated first in his class in pure math at the University of Chicago and went on to the institute in Princeton, a super, super smart guy. Norman said the word, the one word that changed our eyes. He said, it's like everything else, we just have to learn. We have to learn. And that became our kind of key insight in what to do. And we went on a campaign to learn how to become value creators. We read every book. None of them helped. We tried everything you can think of didn't help. And we met every other Monday night from 5 o' clock until 9 o' clock with my core team. Imagine 17 or 18 people. And over pizza and Coke, over four hours, we all stood up, talked about what we were doing, shared something we learned, and we had a discussion. And so that was. We had a forum to try things out, and they all failed. But bit by bit, we began to discover things that worked. And for 18 months we had no success. I was thrown out of basically every meeting I went to because I had no value to offer. But we began to learn. And then we started growing. We started to grow over 20% per year. And bit by bit, we basically were taking over that part of SRI in Princeton, New Jersey. And finally they decided they better get me out of there, and they promoted me to be the CEO of sri. So I brought this experience to me and I was convinced because it works so well. It's called the Sarnoff Corporation in Princeton now because it works so well. If we could get the people at SRI to do this, we could be equally successful or more. Because the problem was never with the people at sri. It's almost never the problem with the people in any company. It's always the problem with management people like me. And so that was my risky part of this. You know, could we really turn the place around fast enough? Because if we lost money for another year or two, the place would have gone bankrupt. They were already selling off the land, the buildings were about to fall down, so we didn't have much time and obviously we succeeded.

The word value creation, do you remember when you came, you came upon that word and said, this is it. It's not profits, it's not roi. It's not. It's not. It's not. Because there had to be a moment that you said to yourself or a period. It's really about value creation.

Correct.

When?

Well, you know, it's kind of fuzzy because I knew so little for the first couple of years. Again, big companies don't teach you this stuff. I would say it took us several years. I'm not sure we used value creation so much. In the beginning. We used the word innovation mostly. We didn't really understand the distinction between value creation, innovation, and entrepreneurship. Those were confusing terms.

They are. They're very confusing. And you don't know about this about me, but my partner, my first partner and the first business I founded while I was at university, he was the first person in the United States to get an entrepreneurial degree. And he had to fight for it because no one wanted to give it to him. And people were confused with, well, you could be innovative but not be entrepreneurship. That was the intrapreneurship. So there was always a different word. And at that time, the word innovation was more important than this word value creation. So that's why I asked if you knew.

Yes.

Okay.

So it finally hit upon us. In the beginning, we didn't know why so many of the methodologies were failing. But I think we do know now why they've been failing. And so what is it? Let me just give the definitions here. So value creation is the process of developing solutions to unmet needs, opportunities with solutions that are better than any alternative and that potentially could provide value to stakeholders, all the stakeholders. So it's the process of developing them. An innovation is something that gets into the marketplace with a viable business model. If the business model is not there, it goes away. It stops being an innovation. So I'll give you an example of that. There are about 5,000 Mousetrap patents, David. How many of those are actually used? Out of those 5,000, what do you think?

I'm taking a guess. I'm gonna say 11.

I think that's pretty good. I mean, it's hard to say, but it's a couple dozen right out of the 5,000. So then the question is, well, what are those other 4990 a day innovations? No, people don't want them. Right. They're inventions.

They're inventions. Yeah.

Correct. Yeah. They got a patent, Right. So they're new, they're novel, they didn't break the law. You can build them. So it satisfied the criteria for being a patent, but because nobody wants them other than for entertainment value, I Mean, some of them are. You know, there's every kind of mousetrap patent you can think of. You know, ones that glue the mouse down, that hangs them, that ballistically launches them across the room, that shoots them with a. With a rifle. I mean, it's just. It's endless. But those are not. Those are not innovations.

My father used to tell. They had one in there. My father was. They had 4,5000 chickens besides other things. And what they would do is they put their foot. He'd put his. Someone would put their foot near the exit, and then they would take a shotgun and they would shoot at all the mice or the rats. Is that, Would that qualify?

Well, I would say individual level, of course, that qualifies. But I wouldn't recommend it as a product to be sold. That probably would not be legal. So you wouldn't be able to get a patent for that one.

All right, that's true. It's the patentability. I forgot about that.

So we've got three definitions. Value creation is the process of creating innovations. Inventions are novel things that you can get a patent for. It's not an innovation until it gets into the marketplace and people use it. And of course, if there's no business model, it goes away and then it stops being an innovation. And the last category is what is entrepreneurship. Entrepreneurs are people who put all the pieces together, raise the resources, form the team, sometimes take their own form of risk, and form a new venture of some sort. So it can be inside of a company, it can be outside of a company, it doesn't matter. But they're the people who basically package it up and bring it into the marketplace. So those four things. So if you look at the literature, there's an enormous amount of focus placed on entrepreneurs, a little bit on innovation, but I would say a lot of it's confused and very little of it. On the value creation part, that's the first part. That's how you get started. Now, of course, if you're going to be an entrepreneur, either you create the value or somebody else does. But somebody has to create the value first. So one of the things we realized is the problems we were seeing were not at the entrepreneurial level. They weren't really even at the innovation level. They weren't ready to be innovations. The problem that we are seeing around the world is at the value creation part of it. So it's very perceptive of you to ask me that question, because that was really an epiphany for us, I would say. It took us years to really realize why so much we were seeing was failing. Let me just give you a little data about that. So basically every university has an incubator. They call it a tech transfer organization. A really terrible, stupid name. They basically all lose money. There are 1600 incubators in America. They basically all lose money. There are 6,000 people who teach this material. It's hard to believe.

No, it's not.

It's endless.

It's not. Because, you know, I taught at nyu, a course on innovation and new product and service development. So it was a combination. It was not just about innovation, but it was creating something that would go to market and it wasn't supposed to be an entrepreneurial class. We did touch on some of that. Yet when I ask people who are running accelerators or incubators, how are they making these models work? And they have this formula and you've heard it, it's almost like throwing enough items at the wall and hoping one of them sticks.

What is a. That's such a terrible thing to do?

It is because it's. I was on stage with Dave McClure who started 500 Startups, and Norm Vogelsman. And one of the challenges that I have on these startup and competitions is that most people are getting up on stage, are never going to give the get the advice that they need to move forward. They're going to get criticism about what doesn't work.

That's true.

And I have a policy. It is my policy. If I'm going to open my mouth and say something doesn't work, I'm also going to give them a solution that will work. And that's when I think about incubators and I've seen many of them fail. It's because they'll tell individuals this doesn't work, don't do that, or this. They really don't know how to bring that to, as you're saying, to the value creation side.

Well, I'm going to give them three tips tonight.

Give me the three tips. I want to be better. I want to be better. Help me.

I'm going to argue if you do these three things, your chances of success go way, way up.

Okay.

And you're. But you're absolutely right. You know, you see these people and most of them don't have a chance and you feel bad for them because you wish they were exposed to a better. Some better ideas and with a more thoughtful approach.

Anyway, I could jump in there, I think. Let me. Because that's an important point and it's something that I'd like your to comment on what I'm saying when the Global Technology Symposium, I think you know that one. I've been, I was a head judge for many years, for five years Covid and everything. The level of delivery of pitches if you want to call that in Silicon Valley and a few other cities around the world does not even. That is. It's such a high standard when you go to a place and I won't pick on a country per se, but I in Europe or Asia or South America and you hear the presentations you're almost as if, oh my God, I wish I could just help you because this is so far away from being what it needs to have to be successful that it's, it's sad just the way you said it and I felt that it's sad because the constructs are missing, the understanding of the mechanisms are missing.

That's absolutely true. You know, you can imagine I've also listened to thousands of venture pictures over my career. In fact, just here's an example. I was a judge in Sweden a year ago to they down selected to the 10 best ventures in all of Sweden to come to America. So I'm on the panel with two other people and we're listening to these presentations and the truth is David, I couldn't tell who to pick because none of them answered the questions that I was looking for to be able to judge them. They were all great people. That wasn't the problem. It was just they weren't answering the questions to have us as judges know really who to pick. So we did the best we could. But you're right, so I see that everywhere. So here's an interesting data. Yeah, we've done workshops, two day workshops, three day workshops with over 500 teams. How many of those teams could present a three minute value proposition for what they were working on?

What do you think before they started?

Well, when they come in the door.

When they come in, when they come.

In and we say you've been working on this stuff for years, a three.

Minute pitch, I would say if out of 500 I'm going to say you're going to get, you're going to be lucky if you can get 150 David. Yeah, okay.

There hasn't been one so far. So in our workshop our goal is to get them from there to a better state. Obviously you're not going to do the research in a workshop but you can help people develop a better value proposition which I'll describe in a second by the way. And by the time we're done with this, typically only a quarter of their most important ventures would have any value even if they completed them.

I was just thinking, no matter what you did with most of these, the it needs to be reconstructed and they need to come back in a year with a whole new approach and a whole new way of doing whatever they were thinking.

So when I look at what's going on in the world, innovative performance is basically pretty bleak. It reminds me of product quality and cost before total quality management. You know that well and you know that transformed the world in the 60s and the 70s because the Japanese adopted it and they transformed the manufacturing. We didn't, of course, so we lost, we lost millions of jobs. But we finally woke up and now everybody does that. So that was an innovation in a process and that transformed the world. Probably one of the biggest value creation initiatives. It's an innovation the world has ever seen. When you think of the value that comes from the kind of profound improvements we've had in quality and cost of products, it's astounding what that did. Anyway, when I look at value creation, innovation performance today, I think of it the same way. I think it's really like back in the 1950s with product quality. And the numbers we've given indicate that to me. I mean, they're just terrible numbers, right? I mean, think of the waste.

Give me a number that's off the top of your head.

How much could we improve it?

No, you said the numbers are terrible. So if you give me an example of something that would be the numbers are terrible that you've seen.

Well, for example, there are over. There are 220 university tech transfer organizations. And the only way they make anything of value is if they have a license for a drug. There are only a few exceptions for that. There are only a few incubators, by the way, who do the things we're about to describe. There are only a few incubators that stick to the fundamentals and know how to make that be successful. I mentioned there are 1600 incubators in the world or the United States, sorry.

U.S. yeah, it was in America.

U.S. and again, there's only a handful that actually do it profitably.

And I would wonder if you took, if you took that individual and didn't have them or that that organization and didn't have them in the incubator, how many of these would have gotten to where they're getting to by default anyway? So you'd have to, you'd have to skim off a certain percentage that were able to figure it out on their own that maybe the incubator didn't help either. They just happened to be in it. I lost your sound.

You're there.

Okay. I don't know if you heard what I said. Is that I wonder what percentage of companies in incubators that if we use this number of a quarter, whatever that number is, is those companies would have made it whether they were in the incubator or not because they had some of what you might be describing anyway, or they would have figured it out. So you have to skim that off the top too. These are companies that are going to succeed because of who they are or what they know or what they're capable of creating. I don't. I think you could still hear me.

Some of the incubators probably help a little bit because they introduce people to others and they help them navigate, but they're not real incubators. They're not really helping them improve their company's prospects that much for some fundamental reasons. Let me. Okay, let me. Let me. If we can accept the fact that performance is not great, certainly. I mean, a typical VC will get 100 deals to find one. Right? I mean, that's. So there's a lot of churn, a lot of activity out there, but it's very hard. And I would claim it's because a lot of these folks just never been exposed to the ideas about how to think about it.

Okay.

So as I mentioned, at sri, we had to train everybody we were here. We're hiring some of the best people the world has. You know, people from all over the world, straight A students, you know, just amazing people. But they had no idea how to do these things anyway. So we decided we. The only way for us to be competitive was. Or a great way to be competitive was to train our people. So we did. Okay, so if we accept a couple premises here, first, the big one is. Well, first one is it's your job to create value. Whatever it is, whatever your job is. The second is today's performance is certainly not very good, no matter how you look at it. I think it's bad, actually. But some people would disagree with me. I think there's at least a factor of two improvement. If people had the right skills. A factor of two would be like doubling the research in America. You know, I mean, it's like. It's like huge.

It's huge anytime. And that you could use just the COVID numbers with the flu and Covid 1 point x and 2 point x. 1 point x is 50 over a period of 10 generations. And 2 point x is 10,000 or some ridiculous number. So yeah, it's a significant. A 2x improvement is phenomenal.

And I actually think the number is bigger, but it's hard to prove. And the reason I say that is, at sri, we improved our research performance by a factor of more than 2, but we also created economic value of almost $100 billion. I mean, how do you put that into an equation? Right. And the reason is because we were now spending money productively and we were going after things that really mattered as opposed to just working on things that people are interested in. Okay, so we, I think we agree, you and I agree, that performance, if we could improve it even a little bit, it would have a huge impact on society.

Absolutely. And yes, I've written about this too. So I 100%, I 100%.

Yeah. So we've both seen this upfront and personal.

Yes.

So the next point is, I mentioned that value creation is a learning discipline. It's about learning, creating and improving basically faster than the competition. So as soon as you say it's a learning, and by the way, it's a learning activity, you can think about it as all innovations create new knowledge. It's a knowledge creation activity. And so almost by definition, that makes it a learning, creating and improving activity. So as soon as you say that, the next question ought to be, how do you learn the best? What are the mental models that allow people to learn best? Now, there's a. There are a couple conditions, and I'm sure you've written about this extensively. There are a couple things about what we do when we innovate. It's a complicated activity. It's not a complex. I'm sorry, it's a complex activity. It's not a complicated activity. Complicated activities are like building a new house. You know, you can get blueprints and there's a lot of things. There are thousands of things to do when you build the house, but it's pretty well known what you need to do. There's some creativity, yes, but it's not. You're not taking a big risk when you do that. You know that if you can build the house, you're going to be able to. You're going to be able to sell it, and people will be able to live in it. Complex activities are ones that, where there are a lot of moving parts and you don't know how they all interact with each other. When you get started, it's a very noisy environment too. You know, you're Trying to find faint signals out of a, out of a noisy environment. So not only is it a learning activity, it's a learning activity in a complex environment. And that puts real constraints on which kind of learning methods you ought to use. And it turns out there's a discipline for this. It's called active learning. It's a whole field of the educational disciplines. And active learning is things like you have to do continuously. Do you have to iterate like crazy? It's experiential. You don't, you don't get it out of a book. You need to have constant feedback from many different points of view, from people with different knowledge. You need to focus on the big ideas. You don't want to get lost in the details. You want to have mentors, not just teachers. You want people who can really help you facilitate the problems of going, you know, trying to solve a really complex problem. And you can go through. There are about 10 things I could list that are part of active learning. And one of the most important is that it needs to be part of a complete system. If you leave a couple of them out, you're probably not going to be that effective. And we see that most places. So I know that's kind of an abstract set of ideas, but that really is the guiding principles for us. I just wrote a Harvard Business Review article about that, about the convergence between active learning and value creation, innovation. I think it's the first time that's ever been talked about, but it really defines to us what you want to do and the kind of process, practice, practices you ought to have.

So just to jump in for a moment because it's, it's a common challenge. So I'm bringing it up and with different, different cultures in mind, different thoughts in mind when. I meet a lot of people like you. So I'm not saying I'm any different. And while people will, individuals will say they're always learning. They might be reading, they might be trying, but they're not learning. And so how do you, from a. How do you help someone see the difference between. Yes, you read a book. Yes. You came up with a new concept. Yes. You went to a conference. Yes, you told your team to do it. As compared to really being an active learner?

That is such a fundamental question. Thank you for that. So, David, did you ever play a musical instrument?

Yes, I did when I was younger.

Okay. Can you play? What did you play?

I started off with saxophone, but my mom didn't like it, so I played the piano and the guitar.

Okay, let's take the piano because a lot of people play the piano. So David, can you learn to play the piano by reading a book?

No, of course not.

How about going?

Well, actually you can learn some things, but you cannot learn to play the piano to actually do it.

So you, so you can learn scales, you can, you know, you can memorize the scales. That helps. Right. But if you don't practice, can you play the piano?

You have to practice.

Right. And why is that? It turns out that music is really complicated. Right. All the parts have to fit together. You have to know a lot of things if you're going to get to Carnegie hall and be one of the top musicians in the world.

I tried violin, by the way, but I didn't go very far.

Well, I was actually a professional violinist at 15. I was in the rhododendron harmonic when I was younger. Really? Yeah.

My senior year at university I took because I finished both majors in three and a half years. So I took human sex, violin and horseback riding as my senior semester. So I thought I was really expanding my horizons. But I took the violin because it's to me it was the most difficult instrument in the world to learn. And, and I took it so that I could learn humility. That while I can learn things quickly, having to learn something new that's so difficult taught me to always remember that other people need. It's not always going to come to them like some things come to me. So that's the reason I took it well.

So that's actually a perfect example because David, do you think that being a successful innovator is any easier than playing the violin? No, it's not. Right. It's the same thing. If you want to have a really high quality life as a musician, you have to be one of the best kids in America in the world every. You know, because it's so competitive. You're competing with everybody and you're out there in front of. And the same thing is true of innovation. Eventually you're competing with everybody if you're doing something of significance. And so yeah, it's at least as hard as being a world class A Jascha Heifetz or Yitzhak Perlman. It's just as hard to being one of the top value creators, innovators, entrepreneurs as those activities.

So it's complicated. And I was going to give another example, but I'll jump to another one. I had 50 CEO, 50 CEOs, 50 executives of a very large company in a room and something didn't make sense. And you know that feeling, Kurt, when you just, there's just something not right in the room. I said, can I ask everybody a question here? And it was a U shaped table. And they said, sure. I said, let me ask, who in this room is new to the business? Mean you haven't been here for more than two years, so you are new blood. Nobody raised their hand. I said, okay, so how many of you have read a book in the last six months on how to improve your performance? And to give a book that we. Some might know, I'm trying to think of a. I don't want, I'll use an old book, someone like the one minute manager. So something that was bigger, that had contact and there were two or three people who read a book. And I said, how do you plan on growing if you have no new blood and no new information coming into this room?

So that's absolutely correct because again, it's about when you think about it being learning and it's directive learning. It's learning in the purpose, with the purpose of creating value for customers, right?

Yeah.

So again, that's your job. Your job, your only job is to create value for your customers. So you need new ideas, you need new signals, you need new data, you need new all kinds of things. And you should be using every means at your disposal to gather that information. So we're going to come back to that. You're absolutely right. But for the purposes of, of this, if it's a complex problem where there are many, many variables, many of them are unknown. When you start, you better have a process. When you graduate from college, you know, you're going out into a very competitive world and you probably think you're going to become the Itzhak Perlman of technology, but the truth is you still haven't practiced enough. You still don't have the skills you need to compete at the level, you know, you look at Steve Jobs or Musk or Jack Ma, I mean, all these people spent years before they figured out how to be successful innovators. It's not, it's really a hard thing to do. So we just established a couple of the principles. One of them is you have to practice. So let me give you a little framework now. I want to give you a framework of three quick ideas. And if you do these three things, it'll change your life. Okay?

Yeah.

Because it'll make you a more effective value creator. The first thing is focus on important problems, not ones that are just interesting. Most people only work on things that are interesting to Them, but the truth is they wouldn't make any impact even if they completed them. That's one of the biggest mistakes we see in all these companies. We go into so important problems, not ones that are just interesting. I'll come back to these as you want in a second. The second principle is shared language and concepts for value creation. So here's a little experiment we often do. You go into. You can do this, David. This would be fun. You go into a company, you give the 20 executives in the room, post it notes, and you say, write down the definitions for innovation, for customer value, and for a value proposition, write those three terms down. You must use them all the time. They'll go, yeah, we use those all the time. Good, write them down. Now put them on the wall. Put them on the wall. They all put them on the wall. And then we have them go up to the wall and then sit down and say, well, what did you see? And they said, we don't agree on any of them. And that's always true. It's always been true. The most important three concepts you can imagine. Your job is to create innovations, be a value creator. Number two is, what's the definition of customer value? That seems pretty important. And the third is the value proposition. Because everything needs a value proposition. So what it's like is a little bit of a Tower of Babel inside of most companies. When you go into them, it doesn't stop them. It just makes them very inefficient and ineffective. So that's the second thing, shared language. And I'm going to argue in a second that the value proposition is the most important of all. The third is, how are you going to learn faster than your competition? So, David, you're a really smart guy. I know you're a really smart guy. The truth is, you're not smart enough. I'm sorry, I hate to be the one to break this to you, but if we were to do some new innovation together, even though both of us have had a lot of experience, we'd have to go find some other really smart people to add things that we don't know. Of course, everything today is interdisciplinary, even beyond multidisciplinary, interdisciplinary. So then that says, well, how can I learn fast enough from all those other people I need to get information from? So the way we did that, if we were at sri, you and I would stand up every two to four weeks and we present the value proposition for what we're doing, three to five minutes max, and then we stand there and be quiet. And our teammates would give us feedback what was good, what could be improved. Eyes of the customer, eyes of the investor. All positive, no negatives.

Yeah, I love that. That does not happen. It's part of mine too.

That does not happen in almost any incubator I know of. And it turns out to be extremely powerful for a moment, for a reason I'm about to tell you. So those three things focus on important things, because if you don't do important things, you're not going to make a difference. You need to have shared language to be able to effectively collaborate. And you need a way to learn fast where you can tap into the genius of other colleagues. So, and by the way, these meetings, these we call these value creation forums, these meetings again are ongoing. So it instantiates the principle that value creation is an experiential activity, like playing the violin. You got to come in and do it again, and do it again and do it again. It never stops. Yo Yo Ma, the world's greatest cellist today still has a violin coach because he still has trouble diagnosing all of his own problems. He needs somebody else to help him with that. So they never stop. Okay, now I'm going to tell you something that happens that's magical if you do the right thing. So you're doing these three things and I mentioned the definition for a value proposition. So, David, that's something you've word I'm sure you've used 10,000 times or maybe a million times.

I'm not that old. I started thinking of timelines.

Okay, okay. Well, I'm just, you know, we're having fun. What do you think the definition of a value proposition is?

I immediately came to mind different variables into that same equation. So it's not as simplistic as in my mind as just one singular definition. But if I had to nail it for this, I would say a value proposition is some exchange for the creation that you've identified that is even a fractional above what you had when you originated.

Well, that's very good. So that's really good. And if we did this for five or ten minutes, we could converge on something that's a little more specific.

I'm sure you put me on the spot, so I apologize for not being.

That's the whole idea. Right? So I think. So we've tried every definition you could imagine. I mean, I've read every book you can imagine. Again, I always go and I look at the definition for this. Most of them don't have one, by the way, just so you know, so. And we tried them in the group when I was learning this stuff, and we discovered that they were either incomplete or too complicated. So there's kind of a sweet spot in between here. You know, you can only think about three or four things that at one time. So once you get beyond three or four things, you really can't hold it in your head. So that was, that was one of the. That's an active learning principle. So we, we decided you needed to answer every time for anything you do, at least four things. So it turns out we tried every permutation of value propositions you could imagine, and we came down to four fundamental questions. These are four questions you must answer for anything you do. The first is, what's the customer need? That has to be there, right? Because that's your job. That has to be, number one. What's the important customer need? The need. The second is what's your approach for addressing it? The approach has two parts. It has the offering, the product, the service, and the business model. We've already established that you're not going to have an innovation if you don't have a business model. The third thing, which we didn't describe, but this is the definition, this third part is what's the customer value? And customer value is defined by benefits over costs, benefits over costs. Those are only determined by the customer. They determine the value of your benefits and the value of your. The disadvantage of your cost. And the fourth thing is how does that compare, as you correctly said, to the alternatives or the competition? So what you want to do all the time is work on things that are important to your customers and to your enterprise, where you have a compelling, defensible approach with a business model that provides superior benefits per cost or value when compared to the competition or the alternatives. Four questions. Need. Approach. Benefits per cost. Competition. Those four questions. Now, if we were in a workshop, we'd have a discussion for a half an hour about those four questions. Fundamental. And after people think about it for a while, they go, yeah, I have to always answer those four questions. If I don't have a need, obviously I don't know what I'm doing. If I don't know why I'm better than the competition, I don't know what I'm doing. So you go through that kind of drill. So, David, we think the most important definition is that of the value proposition. We've tried every combination you can imagine, short ones, big ones, and we've figured out that we think there are at least four questions you must Always answer no matter what you're doing. Those four are, what's the need? What's the customer need? What's your approach for addressing it with a business model? What are the benefits for cost? That's the definition of customer value. And how does that compare to the competition or the alternatives? Just four questions. The need approach, benefits for cost, competition. So the point I was making is that they're iterative. They interact with each other. So if you change one, you often change all of them. So, for example, if the need changes, it changes a lot. Your approach is going to change. Benefits to the customer are going to change, and the competition's going to change. Or if the competition changes, so they're recursive, they interact with each other.

And I'll go jump in here because I have disagreements with people during, for example, modeling, financial or business modeling, because they saw a spreadsheet and they say, well, what? We're going to change this here? And I say, okay, so you just changed that. What happened that you changed that? How did the organization react differently? Did the market change? You can't just change something in a spreadsheet unless you have a logic behind it. And oftentimes it is, why don't we fix one of these but not realize that all four of them have to be modified?

Exactly right. So I was asking you, David, you've done lots of different things, hundreds of different kinds of projects, and so you're a smart guy, but when you get started, do you know all the answers?

I never know the answers.

Exactly. So our little joke, and when we do a workshop is we watch somebody say nothing. Because basically when you start, when you think about how much you need to know, it really is nothing. All you have is a hunch, you have an insight, you have something that gets you going, but then you have to figure it out. So these four questions, in the beginning, if you imagine it, imagine it was a spreadsheet with 20 things in it, and all 20 of those things have. If you change one of them, the other 20 would also change.

Yeah, they always have to.

Would that make sense to use a model like that?

That if. Does it make sense to use a model that when you change one thing, the others change?

No. That makes sense. Okay. In the Beginning, you've got 20 variables on your spreadsheet.

Yep.

You don't understand really any of them, but you do know one thing. If you change any number of them, they're all going to change.

Yeah.

That's a really complicated problem.

Oh, It's a. It's a 20 factorial? Yeah, I mean, that's, that's the. What is 20 factorial? What, what, what Trillions or quadrillions or whatever is 20 factorial?

So that doesn't work in the beginning. You want to keep. It's. This is a basic principle of active learning and complexity analysis is that when you start, you want to keep your frameworks focused on the most important things and as simple as possible. Because again, if it's a complex system like value creation, they're all interacting with each other. By the way, that's true when you play the violin too. When the violin teacher tells you to hold your bow in a different way, all of a sudden. Yeah, yeah, it's.

It's moving. It's moving your elbow.

Yeah.

One quarter of a centimeter and you end up saying, wow, I didn't realize I could play that.

Or if it's not a good teacher, they just did damage to you. Right?

Yes, that also happens. So the.

So we start answering. We ask people to answer these four fundamental questions because they all interact with each other and if you have too many of the variables, it just becomes a confusing.

You're calling these four variables. And yet in my mind, each question is a rabbit hole.

Well, it can be a rabbit hole. I mean, answering any one of these questions is really hard.

Right. That's why my point is there. You have to. You have to find a reasonable answer for each one of them. And then they also have to be conjoined at the hip so that there's a correlation between the fact that there is a customer need and identifying what is the alternative to the competition in the competitive landscape. And I don't know about you, but I hate SWOT analysis because they're so poorly done. And they. It's almost. This is a justification of a cause more than it is really a true competitive analysis.

Correct again. It doesn't answer the questions. By the way, SRI invented SWOT analysis. Kind of interesting. Yeah, but you're.

I just fed that one to you. Okay.

You're absolutely correct. So.

Well, it's original intention was different. I don't think the, as the SWOT analysis used today is anything like the original SWOT analysis. And that's the. Yeah, it's completely different. And that's where that disconnect is. Someone says, I'm going to show a SWOT analysis and it's an x, y axis. No, no. A SWOT analysis is so different.

Yeah. I mean, these are all tools. And the question is, what's the right tool to Use. Right. But I want to build on this. So if we, let's say you had a value proposition definition that didn't include competition, would that make sense.

To me? No, because I couldn't figure in my head it always goes to what else is out there.

Correct. Because it's a competitive world. So you better. In fact, having something that's 5% better probably is not going to win. Sri, we were always looking for factors of 10 if we could get them. Siri wasn't a factor of 10%. That was a game changer in terms of how you interacted on certain things. So that's what we were always trying to do. High definition television was a game changer. Robotic surgery is a game changer. So we were looking for things that there was a bigger multiple so we could have a chance not only to create a company that's easy. You know, I'm always struck when people say I formed 4, 500 companies. Well, how many, how many multi billion dollar companies, you know, how many of them are still alive anyway? So we have several principles now. We have the value creation is your job. We have the principle that performance is not good today can be profoundly improved. We have the idea that it's a learning discipline and there are things, there are principles you can use to help you. And we put on the table three techniques, three practices to help you make an impact. One is to focus on things that would make a difference, important problems. The second is having common language for fundamental concepts. The starting point being the value proposition. And the third thing is these value creation forums where you get team feedback so you can improve really, really fast. Now David, I'm going to tell you something even you probably don't know about this idea. I didn't know about it. It's called comparative learning. So David, let me ask you, have you ever bought a car?

Yes.

Did you compare different kinds through the process?

Yes.

Yeah. When you, when you go to a restaurant, do you compare different meals as human beings?

We're always comparing. Yes, of course I'm comparing other meals as options. I'm putting variables and weights on different things that fit my needs. For example, if I didn't like tomatoes and it was a tomato paste or sauce, I would downgrade that. Where it was something that was non tomato would go up. So yeah, I'm always comparing.

So just as you said, that was wonderfully said. You do these little mental calculations about the value of the different options. So you've been a serious researcher. Do you compare data?

Yes.

Yeah. In fact comparison is Everywhere. Right. We compare all kinds of things.

And I think the definition of comparing is a challenge in today's society because we're not comparing about somebody else, but we're comparing to understand the differences in value that one gives over another.

Exactly right. Perfectly said again. Okay, so now I want to put you into these value creation forums. And you're about to give your presentation. You're going to. It's going to include at least those four questions that I mentioned. The need, your approach with this business model, the benefits for cost and the competition. So you're going to give that. You're new. So we're going to give you only three minutes. If you've been around a little bit longer, we might give you five minutes, but we'll give you three minutes. And you give your presentation. Fine. And you get your feedback. The whole thing takes maybe 12 minutes, the presentation and the feedback. And then I stand up and I give my value proposition. Okay, I've been around a little longer, so I have four minutes, and I give my value proposition. And then a third person stands up and they give theirs. And then a fourth person and then a fifth person. And you're sitting there and you're looking at these, and you can see there's a common framework between these four. They're all basically organized in a way. So you can see, oh, have they really talked about the need in a compelling quantitative way? Oh, this person did. This person did not. This person really got to the heart of the issue. This person did not. You're basically doing comparative learning in that workshop in that value creation form.

I'm smiling here. And you can't see it because it's. It's not video. At nyu, what I would do with the students, and I then took this to organizations, is at the end of the semester, they had to get up and they had to give a presentation on three concepts. They learned any three and three tools. They learned any three. And their role when they gave that presentation was to deliver it to the best of their ability. But they weren't being graded on it. The audience was being graded on how they helped you to improve. And I also told the audience, you like something, you can steal it. You like a methodology, you could steal it. If you like the way it looks, you could do your own. But you get to. Your job is to give them only positive suggestions. And then the next week they came in because it takes practice. You normally don't get practice on giving your presentation. You do it to your friends. But they did it in class. And they got my feedback and everybody else's, and they came back the next week and they could pick three others. It didn't make a difference. They could do the whole thing again. It didn't make a difference or improve it. And what I told. What they didn't realize was if we had 20 students, those are 20 times three is 60 different concepts are being gone over and 60 different tools are being gone over in different ways. And we normally add an international audience, probably like your class, your groups. So they actually were teaching each other and they heard it twice and they had to present it twice. So the amount that they learned was astronomical. They just, it was ingrained in them because they had to watch five other people give something similar but different. So I've never heard of the comparative learning, but it sounds like. And I don't say but. And it sounds like that was very similar.

It's. It's somewhat similar, but we would, I would say we boiled it down to fewer concepts.

Well, mine was the course, so it had to cover the course. So, yeah, mine was not about. Educated about this. It was the course. So it fit that narrative. But on comparative learning is what I'm saying.

You were doing comparative learning. I'm just saying the thing we did was we took that and kind of put it on steroids to say, okay, if that's good, what would make it great? Well, the things that make it great is having a simple framework. Nabc, simple but complete. You know, there they are, the key questions. So this wouldn't work if that. If that wasn't true. And it wouldn't work if there were 12 or 15 questions. It has to be a small number so people can actually follow the discussion.

Right, I understand. And in three minutes to go over four is. That's a lot. That's a lot to go over for anyway.

Well, it is. Part of the effectiveness is it's really. It forces people to really focus on the few things that matter. We can come back to that because that's another concept that I think is important. But anyway, so it's a, A basic framework. It's simple enough that everybody can remember it. It allows people to compare one presentation to another. You're in a setting now where you're getting feedback from all these different points of view. Really, really valuable. There was a reason, you know, why did we beat IBM on Siri by five years? Because they don't do this. They don't. They. It's there about 10 different technologies inside of Syri and we had to pull all Those in and over several years that's what happened. The different teams would come in, we say oh, we can't solve this problem. Oh who do we need to add to that? Let's bring them into our meeting. So that's how it worked. So I compare this to a little bit like taking an eye test. So the doctor doesn't give you a pair of glasses, you know, a completed set of glasses and say does this solve your vision problem? No. He has a little eye eye test machine and it goes back and forth ABAB and in 15 minutes you can get a very good prescription. So that, that was something we discovered that this we're actually doing kind of an eye test, but now an eye test based on the worth of a value proposition. And this was the part that confused me about why does our stuff work so, so much better than other stuff? And this is one of the reasons, One reason is of course, by the way, let's tie this back to the early part of our discussion. Why do most incubators fail? Are they doing team feedback like this? No. Do they have a simple framework or are they putting up an entire venture pitch? No. Are these recurring meetings where the people are coming back every couple weeks? No. They're not doing experiential learning, they're not doing active learning. And the result is they don't improve that much and they don't answer the fundamental questions.

But what doesn't it require? Two things to happen and probably more. But I'm going to hit two. One is it requires that the people leading the group have a certain set of skills and two, it requires an understanding of what does customer need, what is the approach or the business model, the offering, what is a customer value, Benefits over cost and what is looking at competition. So you had to have given them a larger suite of capabilities. True?

Yes. So absolutely right. So you've made two great points. One, one is we would put our folks through again a two day workshop before they would where they would do this but where we explain all these ideas and they practice them. So in two days they will have stood up with five or six other teams eight times in two days. So they've iterated this now eight times in two days. So they've been kind of immersed in this and then they're ready to come to these every two to four weeks and it just continues at that point. Now the beauty of this approach is that again you're not going to learn to be a David on a two day workshop and come into these forums a couple Times it takes years to learn all the different pieces you need to know. But because these are ongoing, we can keep on introducing new ideas, which is what we did. So the team is just like you were doing with your teams at the university. Each time there'd be new ideas introduced. So we have, you know, I got a hundred other concepts that over time get introduced to the people who are going through these activities. So they start out with the basic stuff, but eventually, if they stayed with us for, let's say, three years, they were really. They were pretty good. When they got done with them, they were really pretty good.

So just, just for my sake, because this is my learning, or one of my means of learning is can you quickly give me how you look at customer need offering, business model, benefits, cost, and the competition? So just an overview, not that you don't have to go in depth, because I know these could be you and I can have very long conversations about each one. But how would you define, if you were to give me a simplistic view of each one, how I would. How I would answer or how I would identify or how I would use, however you'd like to approach it.

Well, so you're. This is a search. So, you know, nobody hands you a complete answer to these things.

I understand.

So let's start with the most famous example probably ever, which is what Steve Jobs did to Nokia. So some of the methodologies that people use because they say, go talk to your customer 100 times and do what they tell you to do. Well, Steve Jobs famously never talked to a customer. I mean, he did, but not the way people think about it. So as you know, at that time, Nokia was number one in the world. They had brilliant people. They had all the money in the world. They had the best manufacturing in the world. They every. And they're producing, you know, great phones with little keypads on them. Okay. So Steve Jobs came along with the touchscreen, and as you also know, he put them out of business in seven years.

Yeah.

So people say, well, you know, what was Steve Jobs doing? He didn't do any surveys. Well, there weren't lots of. Of surveys done at that time. And the surveys all said people wanted better keyboards.

Yes.

And they were saying they wanted better keyboards because that's all they could imagine. Nobody knew what a touchscreen was. That was a crazy thing. So what did Steve Jobs know that Nokia didn't know? Steve Jobs looked at the devices that Nokia was producing and said, they're not convenient and they don't have much functionality that's the key insight into the need. That's it. There's nothing more complicated than that. Then the insight into the solution was a touch screen. Now, of course he had to make the touchscreen work and if it didn't work, they'd have to do something else. But those two things are all you need to know in the rest of it. Not the rest of it, but a lot of it after that becomes execution. Can he build it? Can they come up with a business model? Obviously they were going to sell it directly, so they had a business model. How much better would it be? That was a big question. So he wanted it to be 10 times better at least than a touchscreen. It was, it was 10 times better and in fact more than 10 times better because all of a sudden you can do all these apps and do all this stuff you couldn't possibly do on a Nokia phone. So once you know that the key insight into the need was convenience and functionality and the key insight into the solution was a touchscreen, that's it. That's basically the value proposition. And then you can almost automatically fill in all the other parts of the equation. So that's what we try and do. We try and get people to really think about not what people say necessarily, I mean what they say matters, but really what's going on. So Siri was another example. What's the problem that Siri addressed? Well, here you are, you're a busy executive, David. There you are, you're on the road and your assistant isn't available to you, and yet you need a new hotel or a new plane or whatever. And right now, and we've all been in this situation, you find yourself standing on the side of the road typing numbers, you know, queries into Google to try and find a local hotel or restaurant or whatever. And the key insight was very similar. It's like, well, what if you can just talk to it like your assistant?

So you must have had, in sri, between these meetings, new information that was delivered. Maybe it was because of the environment, maybe it was meaning that you had multiple different types of technologies being formulated at the same time. And I hate this term, but the cross pollination of the cross ideation or the cross visualization or the cross knowledge that allowed an individual to be able to say, oh my God, I've been addressing this the wrong way, let's turn it upside down. Because we have a tool called redefining. And one of the one during, during the process, one person kept on saying something and I said, you can't get there without doing this. And he said, what do you mean? I said, you're bright and you make jumps that no one else can hear. The thing is, we got to slow it down enough so other people can hear it. And I think what happens in between these meetings, these monthly meetings, is they were exposed to a wealth of new. The wealth of different thinking and technologies. Let's just summarize it as that. And the combination of those sparked or triggered innovations which triggered the ability to be able to find new opportunities.

Well, you're absolutely right. So these meetings don't solve the problem. These meetings help you reframe the problem. So people are sitting there, just like you said, and they're helping you reframe it. Reframing is one of the active learning tools that's really so fundamental. So here's another rule. Nobody solves the right problem when they start. I mean, you can almost guarantee it. It's like it's so rare, you can't believe it. It's not that they're wrong. They just needs to be positioned in a different way. So Nokia is the example of that. They weren't. They weren't. You know, these are smart people. They knew people wanted more functionality, but they never reframed the problem in a way that allowed them to open up a new opportunity. So these team meetings allow you to do this? But yes. So in the meeting, somebody's taking notes when all this is going on while the whole team is taking notes. And then they go off and they work for a couple weeks or a month, they go visit customers, they talk to other people, they do all kinds of things to try and gain the information they need. So here comes another concept that's part of this, is if you have a hypothesis for something. So let's say you're in the meeting and you said touch screens to Steve Jobs. You know, a touchscreen might be able to do this. It's an old idea. Scientists have used touchscreens for a long time. So how much money would you build a phone at that point? No, what you do is you take a small team and send them off and say, prove to me that you can actually build this thing. So they would probably do some, some calculations, some back of the envelope stuff. They might then do an experiment. They wouldn't spend much money. They might build, you know, an inch square thing, but they would be working to take the risk out of it. So, you know, that's how it goes. You don't just jump and build the thing. You've got to do that work in between and probably when they came back from the first 12 iterations.

Yes, I was gonna say they didn't come back. They came back after 12 times and found.

Yeah. And they also. I'm sure the concept. If we could have seen the first presentation and the one that Steve Jobs gave in that meeting where he announced it, you know, I bet that would be really exciting because it would be so different.

Well, I just watched the Ridley Scott making a Prometheus, which is 3 hours and 40 minutes. And if you watch their ideation formula, formulaic means by which he created and the iterations they went through. Yeah. The innovating is hard work. Value creation is hard work. And it requires on and on. And you bring in the best people if you can so that you can continually keep on triggering new ideas.

So there you go. You just summarize the whole spirit of what we're doing. If you accept the fact that it's learning and creating an improvement process, then you want to do everything you can to do that. Right? So you bring in the best people. You learn from your colleagues. You use simple frameworks. You don't use complicated ones. You answer the most important questions first. You take risk out before you start spending lots of money and putting together a big team. These are all learning activities. There's nothing about them that isn't a learning activity. And if you stick to those principles, Organizational transparency. How important is that? There is no organizational transparency in most big companies. And the result is they can't bring the people together to be able to solve these kinds of problems fast enough. So if, you know, if a little company, you know, 2500 people, it's not terribly small, but it's not an IBM. How does an SRI without spending almost any money beat an IBM by five years? That's crazy, right? It's crazy.

And I hate the response. It's the people. Because it's not just the people. It's the methodologies behind how they interact. It's the architecture of the building, it's the meeting structure, it's the policy in place and policy demeanors, everything, including that you give suggestions, you don't criticize, and they all formulaically make for faster iterations or improved value creation.

So I'll tell you another magic thing that happens if you run the meetings this way. You just said something really important. You know, it's not. You're not beating people up. You're not criticizing them heavily. You're doing none of that stuff. You're not demanding that people be creative. Or all that kind of stuff. I mean, that's crazy. I mean, imagine. Imagine if I came to you, David, and said, david, you need to change your culture. We need to be more creative. You think, who the hell is this guy? You know?

But if you said it, if you said it, I'd be happy. But it depends on that.

No, you wouldn't. No, you wouldn't. Nobody is. Nobody is. But if I came to you and said, david, I think it'd be really great to work with you. I think we have a big opportunity here. We're going to learned some great new skills. We're going to be introduced to a lot of other great people. What do you say, David? Will you go on that journey with me? Right, of course. And that's the way you approached me the other day about something else.

Yes.

And the magic of the process, I was going to mention the other magical thing is that because people are standing up and they're doing this comparative learning, if things don't make sense, people quit. They move on to something else. It doesn't have to be Kurt, you know, as the CEO, making all these decisions about what to do. That's crazy, right? That's crazy.

Yeah. It's such a challenge. What we're talking about is so challenging. And there's two issues. One of them is that I think I do salt. I'm not going to talk for other people. I love meeting intelligent people that I can learn from. I mean, even our dialogue to get to this meeting was, you teach me something, I want to learn something from you. You've done amazing things, and that's not easy. And the second part of this whole, where were you going with culture wise? Well, I can't remember the other one, but, yeah, it's not an easy thing to get people to realize that this is how you do it. And I don't know, you can lead people. But it's interesting because leaders like this are few and far between.

Well, so I. Again, I think the point you made before about it's not just about the people. It's about the. We call it the process, but it's, you know, it's these activities you put people in and are they positive? Are they supportive, are they helping people learn faster than they could ever imagine learning any other way? You know, they're all based on respect and trust and integrity. That's the way. You can't. If you're standing up there in a positive environment every two to four weeks, it makes that almost inevitable.

I remember the example. So this Is perfect. Yes. I thank you. You hit on it. I was working with this company who wanted their executives, who were 11 of them, this directive team, they all wanted everybody to be innovative. And yet I went around and asked everybody, why did they leave? If they left because they didn't learn anything, even though they were a great brand. And I asked them, what are the challenges with innovation? And they said, well, these people don't innovate. They don't know how to innovate. They don't know what takes. They don't listen to anything. They. They criticize everything we do. Then I went back to the board and I said, do you want to know why? And they were shocked. And the first thing I did is I said to them, guess what we're going to do? I said, we're going to do a project so you can remember how difficult it is. Well, you can't assign it to anybody. You actually have to do the work to be innovative. And it was a shocker to many of them that something that would take five weeks because they would ask their team to do it in three days.

Well, so we're back to one of our themes, which is learning these skills takes time. And if people have not, even if they've read every book, if they've not actually practiced the piano, in this case, value creation, they're going to have a hard time understanding what to do and why certain things are so valuable. It's very hard. It's. It's not by accident that entrepreneurs who work through this and figure this stuff out, you know, like, even if they're kind of jerky, like musk or jobs, you know, they still get people to do the right things and people stay with them because they get to make a contribution and they learn this stuff. Whereas if in a company, if you find somebody, even if they're a superb person and a great manager, if they haven't been an innovator, this stuff does not come naturally to them. No, it doesn't. There are great pianists who try to play the violin. It's not the same thing.

Anyway, if you saw my body language, you could. You'd really understand. I. My mind is racing. It's always, how do you help people to get to this point? It's not easy.

Well, so here's another musical analogy. If you studied the violin or piano and you went to Juilliard, so you're good enough to get to Juilliard, and basically, that's the kind of people we're talking about. I mean, they're all went to the best schools in the world. So they went to Juilliard, but they're not done yet. They're still, they're still having to practice and be coached. I lost, I lost the theme. Okay.

No, I lost one too. So that's okay. So they were going to, they're going to Juilliard, the top people.

Yeah, so I was going to say. Yeah, I'm sorry. Yeah. The comparison with Juilliard is so, you know, I have good musical friends who studied Juilliard. So you go and you have your private lesson, but you also have a group lesson. So the students come in, they sit around and they take turns and they do basically what we're talking about. So again, you know, these are methods that other places use to help people get over the hump and learn these of kinds skills.

It's. It's surprising how, it's surprising how little these things are taught. And they're designated primarily to the management school. And that makes it even more challenging because in, in theory, every school as part of any discipline, whether it be music or whether it be sports or history or chemistry or biology or engineering, should make an assumptive clause that these individuals want to grow past where they are to do more.

That's absolutely true. So you know, I teach now at two universities at Northeastern where we're actually working with the professors to improve their research. So by the end of this year, basically all of the technical side of the university will be working with us. That's very exciting for us. We're also developing an online version of our material. There's a version on Coursera right now. It's not experiential, it's basically an introduction, but it's free if people want to take it. If you look under value creation in Carlson, you'll find that at Worcester Polytech we're working there to add value creation to projects. So WPI pioneered team projects, student team projects, and they do three of them at wpi. And many of the kids go overseas to do a project. But the goal again of projects is not to do a project. The goal of a teamwork and projects is to create value. So there are only one element of creating value. So we're working there to add. It will be the first university in the world where all the students get a great technical education, do multiple team projects, go abroad to do one and graduate with certificate in value creation. And I think those kids are just going to be dynamite.

Yes.

So David, I think we should wrap up and I just want to mention My key points again, and I'll end with, what's in it for you? Your job is to be a value creator. As a professional, value creation today is not very good. So you can distinguish yourself if you're. If you master it, It's a learning discipline. So you want to use the best learning techniques, and the best ones are based on active learning. When you put those in place, you end up with at least three things. If you do these three things, you'll probably be successful. If you focus on important opportunities, which you have to define important, not interesting, not just interesting. If you have a common language for customer value. We talked about NABC value propositions as being the most important thing. And if you have these recurring team incubation value creation forms that we described so you can learn fast, I can almost guarantee you're going to have a great chance for being successful. And back to why you want to be interested in this, why this is such an essential skill. It's because the world is changing so fast, and it's the one thing that if you master, it will distinguish you for your whole life. And here's. I will end with this. If I were interviewing you at sri, David, I would say the following. David, I think you're a really terrific guy, and I think SRI is the right place, and I hope you come. And if you come, I hope you'll do the following things. You'll find a big important problem that you're passionate about to work on. I hope you learn all the skills we're going to teach you about value creation. We're the only place in the world that does that. And if you do these things, you're obviously going to work really hard. There's no question about that. It's going to take some time. But I can also guarantee you'll work with some really great people and you'll have a lot of fun. Oh, and there's one other thing, David. If you do these things and share our values and learn all these skills, I can guarantee that you'll be able to work for as long as you want to work, not someone else. And when you go to the retirement home, you'd be able to look back and you say, you know what? I lived a really good professional life. I made a difference. If you want those things, David, I think SRI is the only place for you. What do you think you want to come?

I would love to work with you, Kurt. The retirement thing I'm not so sure about because that's too far in the future. But I would Love to work with you.

Well, I'm not retired, that's for sure.

I know that's not even in the cards at this point. I don't think about it at all. So thank you, Kurt. I really do appreciate you taking the time. You've made me think about a few things in different ways. Ways that I can incorporate and change that I will. It's not think, it's. I always add pieces of whatever I learn. It's one of the great things about doing interviews is that I'm learning from all these people all the time and some of the best in the world. So I appreciate you taking the time to share today because it was extremely valuable. So thank you.

Well, it's been a delight being with you, David.

So before you're, before you're done, because I want to make sure, sure. What's the number one way for people to connect with you if they were to connect with you?

Well, I have a website. It's got my email and telephone numbers on it. The website is Practice of Innovation. Practice of Innovation. So if you type in that practiceofinnovation.com.

Or and your emails give it curt.

At Practice of Innovation.

Practice of Innovation. Fantastic. And then for everybody, I appreciate you taking the time to listen in. I hope that you've learned something today that makes a difference in your life and the lives of others. And remember, if you can't fix yesterday, you can only create tomorrow. So a few ways to get ahold of me. Davidavidgoldsmith.com youm can connect with me on Twitter at oldsmith, I'm on LinkedIn at David AllenGoldsmith and Instagram. Mr. David Goldsmith. So for everybody who's taken the time today, I'm David Goldsmith and thank you for listening.