The Customer Isn't Always Right

This podcast is brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com. How do you move beyond fear and embrace a world of exponentially expanding opportunity that will not just help you as an individual, but will also help your company, our institutions, and society to grow in ways that benefit everyone? Hi everyone. I'm business coach Steve Sandusky for Barron's Advisor, and welcome to Actionable Intelligence. My guest today is John Hagel. John has spent over 40 years in Silicon Valley, and he recently retired as a partner at Deloitte. He also worked with McKinsey and Company, Boston Consulting Group, Atari Inc., and is the founder of two Silicon Valley startups. On top of that, he's written 8 books, including his latest, The Journey Beyond Fear. In today's conversation, we challenge conventional thinking about what it takes to succeed in today's rapidly changing world., you are really going to enjoy and benefit from this conversation. So let's get started with John Hagel. I'd like to start at the 30,000-foot level here. So you've written a new book called The Journey Beyond Fear, and I'd love for you to set some context for why this book and why now.

I described two catalysts for the book. One is that most of my business career has been in strategy. I was taught to believe that strategy is everything. If you have the right strategy, you win. And over the years, I've actually come to realize that it's less about strategy and much more about psychology. That if we don't understand the emotions that are shaping our choices and actions, the best strategy is just going to sit on a shelf somewhere. And so I've become more and more focused on understanding the emotional context and the implications of that. And the, the second catalyst— and I started writing the book 3 years ago, so this was well before the current pandemic— and travel around the world as part of my work, and I was struck that everywhere I went, the dominant emotion that I was encountering was fear. At the highest levels in the organizations, at the front lines, out in the communities, fear was the dominant emotion. And while I think it's understandable, I think there are reasons for fear, I also view fear as a very limiting emotion. And so it was a catalyst for me to write this book to hope that I can help people to make the journey beyond fear.

Yeah, and I think in the book, you talk about this idea of narrative, passion, and platforms. Could you just briefly explain what those three things are and how that plays into this idea of fear fear being a limiting factor?

Yeah, there— and again, the book that I wrote is partly a personal memoir. I talk about my own journey beyond fear from childhood, and then it's partly based on research that I've done for decades now related to these topics. So it's a combination, and I've come up with these three pillars, as I call them, that I think can be very helpful on the journey. And the challenge for me is that I define the terms very differently than most people. So The first pillar is narrative. Well, everybody knows what a narrative is. It's the same thing as a story, synonymous. I actually believe there's this big distinction that can and should be made between stories and narratives. So briefly, I guess stories, the way I think about them, are self-contained. They have a beginning, a middle, and an end to them. And then they're about the storyteller, or they're about some other people, real or imagined. They're not about you. You can use your imagination, figure out what you would have done, but not about you. In contrast, for me, a narrative has no end yet. There's something out in the future, a big threat or opportunity, not clear whether it's going to be achieved or not. And the resolution of the narrative hinges on you. It's a call to action to say your choices, your actions are going to help determine how this narrative resolves. And so I think it can be a very powerful motivator for people and draw out emotions. And the challenge that I see is increasingly around the world, we are being dominated with, uh, threat-based narratives. It's all about how the world's coming to an end and we're all going to die and we need to mobilize now. And again, I think at some level it's understandable, but another level it just feeds the fear versus if we're going to make the journey beyond fear, we need to find some inspiring opportunity out in the future that could motivate us to move beyond the fear, to take action and have impact that's meaningful to us. And that's what I think we're missing.

Could a positive narrative be similar to an inspiring vision?

Could be an inspiring vision. Again, I think that to me, the key is excitement. I will say too that when I talk about narrative, I, I talk about it at multiple levels. I think we as individuals have a personal narrative that's driving our lives, shaping our lives. I believe companies can and should have corporate narratives. I believe geographies can and should have narratives, and then movements as well. So narratives can occur at many different levels. And to me, it's again getting to that emotion of excitement, not just, you know, inspiring, but really that will excite people and will motivate them to act, not just say the words and give talks and speeches, but really act on it.

Now, I'm someone who likes to get granular. So if I get too much into the weeds here, just stop me. But when we talk about, say, a corporate narrative, Can you describe how a company would go about crafting this corporate narrative? Is it something from the C-suite? Is it something that develops over time? How do you think about the development of a corporate narrative?

Well, it starts with, first of all, again, distinguishing, because when I talk to executives about corporate narratives, they say, oh, we have a narrative. You know, we began in a garage, we faced extraordinary obstacles, we overcame them. We accomplished amazing things. That's our narrative.

That's our origin story, right?

Exactly. It's all about them, and it's about the past. To me, again, the key for a corporate narrative is, first of all, take yourself out of your company. Focus on the customers you're trying to address. Who are the customers you're trying to reach, and what is the big exciting opportunity for them? And what actions do they need to take. And by the way, it's not just buy your product, it's actions they can and should take to address that opportunity. And I'll just— a quick example just to highlight, because I think there are very few corporate narratives the way I define them. One though is Apple in the 1990s, Apple Computer. They had a corporate narrative that was condensed into a slogan which was Think different. But if you unpack the slogan, it was for decades we had digital technology that took away our names, gave us numbers, put us in cubicles. Now for the first time, there's a generation of technology that can allow us to express our unique individuality and potential. But it's not going to happen automatically. You need to think different. Will you think different? It's the reason why for many people, I think Apple became the equivalent of a religion. They were speaking to such a deep aspiration that so many people had. And it wasn't again about Apple. You know, they barely mentioned Apple in communicating the narrative. And I will say again, in my experience, genuine corporate narratives start with the CEO and the leadership of the company, and it has to be authentic. I mean, I think one of the reasons the Apple narrative really resonated with people was if you looked at Steve Jobs and Steve Wozniak, here were two people who every day of their lives thought different. They weren't just giving speeches and talking about it. They were living it and demonstrating the potential. Again, the reaction I get from a lot of executives, oh, I'll just hand this off to my PR agency and they'll Write me a corporate narrative. No.

Yeah, that's not going to cut it.

Yeah.

So we've got the narrative, we've got multiple layers or levels of narratives. We've got corporate narratives, we've got personal narratives, we've got geographic narratives, as you were saying. So that's one. I think you mentioned there's a couple other here. What are two of the other key areas here that you talked about in that book?

So I talk about narratives as a catalyst in the journey beyond fear. It can help start us on the journey. To me, the second pillar is what I call passion. Again, I have a very different definition of passion. In my experience, if I am in a room and I ask people in the room how they define passion, everyone has a different definition of passion. There is no common definition. This is based on research that I've done where I looked at performance in, in very challenging environments. And where there was sustained extreme performance improvement. What I found was that all the participants in those environments had this very specific form of passion. I call it the passion of the explorer, and it has 3 elements to it. One is people have this passion, have a long-term commitment to making an increasing impact in a domain that really excites them. So they're not just in the domain, They're committed to having more and more impact. Second element of this passion is what I call a questing disposition. People who have this passion, when they confront an unexpected challenge, they're excited. This is an opportunity for them to have more impact. And then finally, a third element of this passion is a connecting disposition. When these people are confronted with an unexpected challenge, Their first reaction is, who else can I connect with who can help me get to a better answer faster? And so they're extremely connected. They're constantly reaching out, asking for help to get to more and more impact. And I believe this kind of passion can really provide the fuel to help us move beyond fear and give us the excitement and motivation to really have great impact and increasing.

And I can just hear people listening to this and they're going to say, well, I as the owner, I as the CEO, my executive team, we have that passion, but then how do I get my person on the front lines, the one who might be like opening the new accounts or processing paperwork or, you know, doing more of an entry-level job, how do I get them or do I just like hire people who already have that that disposition, that passion of the explorer? How do we get every person throughout the organization to experience and feel that?

Now, I challenge that first reaction that I get from a lot of executives, which is, I'll just hire more people with this kind of passion. But if you hire them and bring them into an environment that crushes passion, good luck. They're not going to stay or they're going to lose their passion. And to me, it has to do with really rethinking at a fundamental level the work environment and what work we're asking people to do. I'm going to generalize, but I think in most large organizations, the work that's being assigned is routine, tightly specified tasks, and you just do it as specified with reliable, predictable results. Frankly, I believe that kind of work can and should be taken by the technology. Software algorithms are much more efficient at doing tightly specified standardized tasks. And I think we need to shift our human workers to other kind of work. And I, I describe it as basically addressing unseen problems and opportunities to create more value wherever you are. And the example that I like to give, which is— there aren't many, but Toyota in their factories, this was several decades ago, went to their workers and said, look, you have some routine tasks. This is an assembly line, but your real job is to find problems and not just solve the problems, not just find the problems, but solve them. And if you can't solve them, pull a cord, we'll swarm you with a team of people who can help solve that problem. You'll be a hero for having found that problem. Passion levels went way up because now workers were making a difference. They weren't just doing the same tasks that anybody else could do if they were given that assignment. Their job was to see something that nobody else had seen and solve it and create more value for the company. Wow, that was exciting. They were making a difference.

Yeah, and I know we've been hearing for many years now that robots are going to take over all of these human jobs. And like you say, I think in many respects, that's actually a good thing because we want technology to replace all these rote jobs that are just really, you know, tough on the human spirit. But I think what that also does is it should allow us to really double down and triple down on what it is that makes us uniquely human. And so if we can really accelerate and enhance those things that only humans can do and put that into our job and put that into the communication that we have with our fellow colleagues as well as with our clients, I think, you know, that maybe sort of gets to this passion of the explorer as well, is that let's really accentuate what it is that makes us human, and we might get more excited about getting up and going to work in the morning.

I gave a talk several years ago on how robots can restore our humanity. It's exactly that point that, you know, we've been doing this work that shouldn't be done by humans to begin with. Unfortunately, we didn't have machines who could do it. Now increasingly we do, and I think the opportunity now is for us to really focus on things that are uniquely human. Here I can't resist, one of my favorite quotes is from Pablo Picasso, the painter. This was many decades ago. He made the observation, he said, computers are absolutely useless. All they can do is provide you with the answers. And his point was, what matters are the questions. What are the questions that really matter? And I think that's, again, a uniquely human thing of finding through curiosity questions that haven't even been imagined or asked. And then, you know, using tools like computers and whatever to find the answers. But in any work environment, I think, again, part of my research is what I call the big shift, that we are in a world of accelerating change and that increasingly we're confronted with situations that have never been seen before. And they raise questions about, oh my God, what is this situation? How do I address it? What are the approaches that I can take that will have the most impact and create the most value? It's not in the process manual. The process manual didn't anticipate this situation. So I think again, that's where the uniquely human capabilities of curiosity, imagination, creativity can really be unleashed. And that's a key part. Again, the passion of the explorer really cultivates those capabilities. That's what the passion draws out.

What I love about your work is you talk about, you just touched on this idea of the big shift, and I'm sure throughout our conversation that's going to seep in there, but you're really giving some frameworks here for how people can deal with the accelerating pace of technological change and how we can really enhance the nature of work itself and the value that we deliver to people. So we're going to touch on a few more of these as well, The third one you talk about is platforms. So tell me about platforms.

Oh boy. Okay, well, once again—

We're not talking about Twitter and Facebook, I don't think.

I have a very different view of platforms than most people. I mean, everybody's talking about platforms these days, and most of the plat— well, all the platforms we're talking about today are either what I call aggregation platforms, where they're bringing Participants together for short-term transactions, buying and selling products, retail platforms, classic example, or they are social platforms that are helping people to connect with friends, family, acquaintances, and maintain relationships over time. And I don't want to dismiss the value of those platforms. They can provide a lot of value. The missing element, the, the platform that I don't think has yet been developed and really needs to be, I think there's increasing need for it, is what I call learning platforms. And what I mean by that, I hasten to say, because when I talk about learning platforms, people say, oh, you're talking about video courses and classes. We've got platforms that you can do that. You just sign up and you go to all these classes. No, that's learning in the form of sharing existing knowledge. And in a world that's more rapidly changing, existing knowledge is becoming obsolete at an accelerating rate. The most powerful and valuable form of learning in that kind of environment is learning in the form of creating new knowledge, not sharing existing knowledge. And that requires action and acting together. And what if we created platforms where the primary design goal was to help everyone on the platform learn faster through action by coming together. That would be powerful. I call it an accelerant in the journey beyond fear because it expands our impact exponentially if we can come together with more and more people who are driven to, to learn and have more and more impact.

That leads into another area that I wanted to talk about here. You talk about this idea about making a shift from a scalable efficiency model to a scalable learning model. And you're probably familiar with Peter Senge and his book The Fifth Discipline. So he talked about the learning organization back in the 1990s. How does what you're talking about here with your scalable learning model and creating new knowledge as opposed to training, how does that maybe connect or compare and contrast with what Senge was talking about back in the 1990s?

Yeah, I think Peter was ahead of his time and certainly looking, seeing the need for a different kind of organization. I would say that despite the fact that he wrote decades ago, and again, I tend to generalize, there are some exceptions, but virtually every large organization around the world today is still driven by what I call the scalable efficiency institutional model. It's all about— success is about becoming more and more efficient at scale. Do things faster and cheaper, and that's the key to success. And I think the challenge is that in a rapidly changing world, the approach we've taken to scalable efficiency is actually becoming less and less efficient. And in that kind of world, the organizations and institutions that will succeed are those that adopt a very different institutional model, scalable learning. So the, the focus in a scalable learning institutional model is how to help all the workers in the organization learn faster in the form of creating new knowledge. And that's by redefining the work so that it's addressing unseen problems and opportunities to create more value and creating environments where workers can do that better and faster. By coming together and acting. And it's not just, again, people in research labs or innovation centers. It is everyone in the organization, the janitors in the facility, the factory workers, everyone focusing on how to come up with better and better approaches to have more impact in whatever context they're in. And that's something that I think is largely missing from, from organizations today. Your assignment is to do the job as assigned in same efficient way and with reliable results.

Yeah, and I think this is such an important point because in the financial services industry in particular, I'm going to say maybe over the past decade or so, there's been a huge emphasis on trying to scale the business. And so they talk about putting in technology and putting in procedures and systems and that sort of thing and using software to enable, say, an advisory firm to be able to work with a lot more clients, to do it more efficiently. And so, you know, I always challenge advisors. I like, sure, absolutely, we've gotta be efficient in our business. We need to have systems. I'm 100% on board with that. But I say, let me see a show of hands. How many of you have ever met a client who said, I want to be scaled? So it's like, no client wants to be scaled, but advisors wanna scale their business and work with more clients. So I think we have to think about this very point of scalable efficiency versus a scalable learning model versus even maybe a scalable, you know, personal service model or personalized service model. So I think we can't take the human out of the equation because we lose so much of the value that, let's say, a financial professional in particular delivers. So that's one of the— I really love this idea of we have to strike this balance in here And it's about learning and about how we can even deliver a better, I think, experience for the clients.

Yeah, I have to say that I cringe these days because virtually every company that I know has what they call a digital transformation program. And when I probe to find out what that program is, it's applying digital technology to do what we've always done faster and cheaper at scale. They're not questioning in any fundamental way what the— activities or business should be. It's all about doing it faster and cheaper. And the metaphor I like to use is the caterpillar to the butterfly. If you're just making the caterpillar walk faster, that may be helpful to the caterpillar, but it is not transformation. Please don't use that word unless the result is so unrecognizable that it is transformative. I think part of the learning process, a key part increasingly, Part of this big shift world that we're in, I believe, is one where customers are becoming more and more powerful and demanding. They're not willing to settle for what I call the industrial bargain, which was, you know, we can make things affordable for you, products and services affordable for you, but they're going to have to be standardized mass market products and services. That's the bargain. And increasingly, as customers, we're saying no, we're not willing to accept that. We want products and services that are tailored to our specific needs and will evolve as our needs evolve. That requires learning. It requires deep insight into the context of every individual customer, what their needs are and how those needs are evolving. And that's something, again, the scalable efficiency world is just not even paying attention to.

And related to that, another thing that's very popular in the financial services industry, and really, I think just in business in general, is this idea of best practices. So, I do business coaching and I talk to advisors. It's like, well, what are the best practices? What are the other advisors doing that makes them so successful? And what I say to them, I said, look, sure, there's some best practices, there's some fundamentals that we've got to do, we have to execute on that. But I said, look, if I told you exactly what this other advisor who's super successful, if I told you every single thing that they did down to the weight of the paper that they used to send out postcards to invite people to seminars, I said, you still wouldn't get the results that they got because things change and their circumstances are different than your circumstances. So, where do you fall in this idea of companies looking at best practices in their industry Is that a good thing? Is that sort of a good thing? Is there a different way to think about it than just trying to, quote, copy best practices?

Yes, again, I have a different view of practice than most traditional companies do. Again, to your point, practices in their mind are tightly specified tasks. Here are the things that lead to success and just do it in the manual the way it's specified. A key part of my research was the shift in business from— for decades, the big thrust was business process re-engineering. We need to tightly design end-to-end processes, connect everything in the most efficient way possible. I believe increasingly, again, in a rapidly changing world, we need to focus on what I call business practice redesign, not process, practice. And here, what I'm focused on, and this is another big theme in my work, is if you're really serious about learning faster, no matter how smart and talented you are as an individual, you're going to learn a lot faster as part of a small group. I call them impact groups, and they're typically anywhere between 3 to 15 people, no more. Small groups where people form deep trust-based relationships with each other. And cultivate a set of practices within that group that will help them to learn faster and have more and more impact together. But these are high-level kind of practices. I'll just give you a set of them that I'm particularly fond of. It's what I call productive friction. In these small groups, the participants are constantly challenging each other, but they're doing it with mutual respect. Because they share a commitment to getting more and more impact in whatever environment they're in. And they realize they're not going to get there faster if they don't challenge each other. So they're doing it with respect. I think in today's environments, business environments, if you're challenging somebody, it's with the objective of putting them down and advancing your own agenda. No, in these small groups, they're excited about being challenged because it's going to help them all get to better results faster. But it doesn't go into the detail of exactly how to challenge and what format and what sequence or whatever. It just focuses on finding ways to challenge each other.

Yeah, and I think another great point there, and that's something that took me a while to learn, is in an executive team, is that it's actually a good thing if there's disagreement, if there's respectful disagreement, as you talk about, because you have other people on your team who are talented, who come from different perspectives and have diverse voices. And so you need to hear things, they can point out blind spots that you don't even know that you have. And so, by having people that might challenge your assumptions, challenge your premises, you're ultimately gonna hopefully get to the best answer. It may not be what you initially thought, but when you have a group of talented people together who are gonna challenge each other to get to the best outcome, do it respectfully, disagree, and then ultimately commit and move forward, I think you're gonna get the best outcome there. Is that essentially what you're saying here?

Yeah, I mean, it has many different dimensions, but I joke that when I go into a new company and walk the halls, if I look into conference rooms and see people sitting around the table smiling and nodding at each other, I know it's a very dysfunctional company. On the other hand, if they're sitting around the table arguing and pounding the table with each other, now there's hope. They're challenging each other. And I think I'll tie it back to a topic that's getting a lot of attention today is diversity. And one of the key themes in my work around small groups is to make the group as diverse as possible. I mean, if you get everybody from the same background, same gender, same age, same ethnic, you're not going to learn as fast as if you have people from very different backgrounds. But the challenge is, and here I again worry with large companies because they all have embraced diversity, and they get a diverse group of people around the table. And then the message to all the people around the table is, follow the leader. Do what the leader does, and that's the key to success. And the leader is typically an older white guy. So all this diversity around the table, you're telling them to become as much of an older white guy as they can. And again, you lose the benefit of all that diversity. The diversity is to drive learning, to drive better and better impact, and that's gone.

I heard someone describe it as the, like, the multiple strands of a rope. It's the multiple strands that make the rope really strong, and tie those together and you've got a really strong rope. Now, continuing with this idea, talking about the, the scalable learning, I've heard you talk about this idea of shifting from stocks to flows. When it comes to knowledge and intellectual property. Tell me a little bit more about that.

Wow. I wrote a whole book about it called The Power of Pull. It basically, again, generalizing, but I think the businesses that we have today are focused on knowledge stocks. Develop some proprietary knowledge and then aggressively protect that knowledge, make sure nobody else has access to it, and as efficiently as possible, extract the value from that knowledge. And deliver it to the marketplace. The challenge again in a rapidly changing world is those stocks of knowledge are becoming obsolete at an accelerating rate. So if all you do is hold on and protect your existing knowledge, good luck. You're protecting a diminishing asset. And in that kind of world, the key to success, business success, is focusing on knowledge flows. How can I connect with a broader range of more diverse knowledge flows so that I can learn faster? And the challenge again is I talk to many executives who say, oh yeah, we want, we want to learn and find other people who have knowledge and we'll have meetings. But in those meetings, all they do is ask for the other person to tell them what they know. And they say, I can't tell you what I know because That's proprietary knowledge. I can't share that. I'm losing my competitive advantage. Well, how long do those meetings last? If all you're doing is trying to pull the knowledge from others and not sharing your knowledge, good luck. Knowledge flows require reciprocity. It requires you sharing your knowledge, asking hard questions, and then sharing knowledge with each other and learning together.

Now, with technology speeding along so fast, do you think that the value of intellectual property is not as big of a deal? So I think it was Tesla, for example, didn't they just like publicly make available all of their patents and stuff as it relates to their electric battery or some of their technology? Because they said, hey, if we just put all this stuff out there, it's gonna make the marketplace grow faster, we're gonna make the pie bigger, We're going to get probably our unfair share of it because we're definitely one of the leaders. So should we think about intellectual property in a different way based on what you're describing here?

Yeah, I think, again, I don't view it as an either/or in the sense of one or the other. I think there's ultimately a blend of the two. But at the end of the day, just focusing on intellectual property and protecting what you know at the moment is, I think, a losing proposition. I think the challenge is finding ways to connect with an expanding number of other participants where you can learn faster together, and that requires sharing some of your existing knowledge. So being clear about what you can share and how you can learn through that sharing is critical. Don't just throw it out there and say, job done. It's no, I'm throwing it out there because I want to learn faster and we're going to work together to, to achieve that.. And I think that that's challenging for, again, the cultures and mindsets that we have of traditional companies is very much resistant to that, that kind of learning.

Well, I think you're really good at challenging our conventional thinking. So I want to switch gears here with another idea that you talk about that I think will challenge some of the conventional thinking, and that's this idea of zoom out, zoom in. And I really like this framework because I think it helps us take some of these concepts that you're talking about here and put it into a planning framework that will enable us to just really be thoughtful about these ideas and how we might apply them in our businesses on different time frames. So, tell me what Zoom Out Zoom In means.

Well, I picked the name well before the current Zoom technology. You're pressuring me. I want to clarify. This is not about Zoom technology. It comes from my experience. Again, I've been in Silicon Valley for many decades and I've worked with some of the most successful technology companies. And what I found is they have a very different approach to strategy than most traditional companies. For most traditional companies, strategy is the 5-year plan, right? Year 1, year 2, year 3, year 4, year 5. That's our strategy. These companies have a very different approach. I've come to call it zoom out, zoom in. And it focuses on two different time horizons. One time horizon, 10 to 20 years. And on that horizon, the questions are, what is our relevant market or industry going to look like 10 to 20 years from now? And what are the implications for the big opportunities that we could be addressing 10 to 20 years from now? That's the zoom out. Zoom in, very different time horizon. 6 to 12 months. And on that horizon, the questions are, what are the 2 or 3 initiatives, no more, 2 or 3 that we could pursue in the next 6 to 12 months that would have the greatest impact in accelerating our movement towards that longer-term opportunity? And do we have a critical mass of resource against those 2 or 3 initiatives in the next 6 to 12 months? And then how would we measure success? How would we measure our progress? And I think, again, two very different horizons. What's missing is 1 to 5 years. They spend virtually no time on 1 to 5 years. Their view is if they get the 10 to 20 year view right and the 6 to 12 month initiatives right, they're going to make it through. And I came at this initially as a strategist, but I have to say, again, as part of my journey, I've come to realize that this has very powerful ways of, of shaping emotions as well. Because in the zoom-out frame of 10 to 20 years, if you can frame a really exciting and inspiring opportunity, it can start to help people overcome their fear because there's something really worth pursuing out there. And then the 6 to 12 month zoom-in initiatives, if you can start to show real tangible progress and impact in the short term, you can overcome the natural skepticism that a lot of people are going to have who are afraid, who are going to say, well, that opportunity is just a fantasy, that's never achievable. No, we're actually making progress now. Come and join us. And so I think it has a powerful way of helping people to overcome fear and cultivate that excitement that's really going to motivate them to take action together.

Well, I can see the challenge with that, though, is how can I look 10 to 20 years out into the future and project what my business or my industry might look like? So how do you respond to that?

It's not easy. I certainly don't want to imply this is a simple thing, but I think it forces people to really focus on what are the trends that are reasonably predictable in an uncertain world. Most companies are not public about their zoom out, zoom in approach to strategy. One company that's been written about is a small startup back in the mid-1970s up in Redmond, Washington. It's called Microsoft. Bill Gates had a zoom out view of the computer industry that could be summarized in two sentences. One is computing is moving from centralized mainframes to the desktop. And the second was, if you want to be a leader in the computer industry, you have to be a leader on the desktop. Now, today, looking back, we say, well, of course, that was simple. At the time, that was highly controversial. I mean, he was questioning the core beliefs of the computer industry. But he was focused on two trends that were reasonably predictable. One was that technology, digital technology, was exponentially improving. So you could have more and more processing power in smaller and smaller units. And secondly, he was focusing on the increasing frustration of workers who were having to stand in line waiting to get the mainframe to process their particular problem or issue, and they wanted to have something that they could use themselves. And so based on that, two reasonably predictable trends, he was able to project— and he didn't have a detailed blueprint of what the computer industry was going to look like, but enough detail that he could focus on the actions that he should take in the short term to become a leader on the desktop.

Now, since we're looking 10 to 20 years into the future, do you think that these are the kinds of trends that are pretty much going to affect like all businesses? And let me give you an example. So Bitcoin, of course, has been in the news here in recent years. So like, what does Bitcoin do? Well, it's a trend toward decentralization. Toward permissionless type of activity. So would that be an example, the idea of decentralization, would that be like an example of maybe a longer-term trend that we're starting to see some things develop in that area, but they might actually apply to more businesses at large?

No, I think it's a good example. And again, it ties back to this notion of people wanting to have more control and power over their, particular environments and contexts. And so decentralization, I think, becomes a pretty significant long-term trend that's going to increasingly drive how business performs and how it organizes and operates, because they're going to have to be really focused on the individual and their particular needs and the evolution of those needs in a very rapid way.

And maybe another example is another company out in Seattle called Amazon. And I remember Read something. Yeah, you've heard of them. I think we all have. But I think one of the things that Jeff Bezos said a number of years ago was in the early days as he was building Amazon, and I think he might be another great example of this 10 to 20-year thinking because he said, one thing that we did was we tried to identify what are some of the things that we could look out 10 years from now and we can say we're highly, highly confident that those things are not going to change over the next 10 years, that people will still want those things. And so if we have at least that 10-year time horizon, we can be confident that we can really devote a lot of financial and human resources into building out those particular things. And the 3 things that he talked about were low prices, speed of delivery, and vast selection. And so he said, we're confident that people are going to continue to demand those 3 things over the next 10 years. Of course, what do they do with speed of delivery? They put in all these warehouses all over the country. They created their own fleet of airplanes and their own delivery trucks, low prices. They got their flywheel in motion and so on and so forth. I thought that was like, okay, that makes great sense. If we only would have picked up on that back in 2000, it's like we could have all bought the stock and we'd be in Tahiti right now. Is that maybe another example of this idea of zooming out with the 10 to 20-year time horizon of some trends that we think we could really invest in over the long term?

No, absolutely. I think it's— again, I highlighted 3 specific trends that to me, that's part of a broader trend, which is this notion of customers becoming more and more demanding. They want things faster at lower price and more selection in terms of what really meets their individual needs. So yes, he, I think, anticipated that trend and built his business around it. And I think that it's led to huge success, but I think it's also an interesting example because he started with selling books online. You know, that was the zoom in, was I'm not going to do everything for everybody all at once. I'm going to start with a very specific product category and expand out from there, learn from that experience, and, you know, over time, obviously expanded dramatically, but it was start with a very specific short-term initiative. And I know Jeff, and I know that the reason he picked Amazon as the name of his company is he didn't want to be known as a bookseller or even a retailer. He had much bigger aspirations in terms of what he could provide.

It took me a few years before I finally picked up on their logo that says, you know, it starts with A, You know, it's got the Z in there, and then there's an arrow that goes underneath the A all the way to the Z. It's like A to Z.

It's like, oh, I get it, everything.

Smart guy, that Jeff Bezos. So we've got the zoom out, we're talking 10 to 20 years. Is there a connection between the 10 to 20 years in the zoom out and this narrative, this corporate narrative that you were talking about? How do those relate or not relate?

No, totally. And one of, one of the key things that I focus on when I work with companies around zoom out, zoom in is there's a tendency when, when they do zoom out to focus on their company and their industry and just, you know, inward looking to what's our company going to look like 10 to 20 years from now versus starting with the customer and asking the key question of, first of all, who is your customer going to be 10 to 20 years from now? It might not be the same customer as you have today. What are their needs and aspirations going to be? What's the big opportunity for them that they're going to be striving for in the next 10 to 20 years? And again, that ties back to the corporate narrative. If you've got clarity around that, you can frame a corporate narrative, but you can also start to do the zoom out, zoom in to say, okay, what are the implications for the opportunity for us as a company? And what are the things we need to be doing now to start to address that opportunity today.

And just one final thing here on the zoom out, zoom in before I go to the final question that I want to ask you, or the final topic area. So we have the zoom out, we've got these 10 to 20 years we're looking out into the future, and then we've got the 6 to 12 months where we're trying to take more tactical steps, I'll say, toward that direction. So how often do we revisit these 10 to 20-year trends? Is that something that just is kind of an ongoing thing as things develop, or how do we think about— we thought this was going to happen, but now we're starting to realize that maybe that is not a trend that's going to continue. So how do we continue to evaluate the longer-term trends?

Now, one thing I emphasize is the companies that pursue this kind of strategy have very much a learning mindset. They realize that their view of the future is not cast in stone. And that the actions they're taking today are not necessarily the best actions. But it's learning from the actions, both in terms of what's the— what really is that big opportunity, refining the opportunity as you go, and maybe you ultimately have to cast it aside and say that just didn't work, but at least refining the sense of what the opportunity really is and learning how to have more impact through the approaches you're taking in the short term. I'd say that in companies that pursue this, virtually every senior leadership meeting, part of the meeting is about the zoom out, you know, what have we learned about that longer-term opportunity? And part of it's about what are we learning from the short-term initiatives and how can we refine as we go versus just saying, you know, we're going to do this every year or every 2 years, we'll, you know, figure this out and then just follow the plan. No, they're learning and evolving every day.

So is it sort of like an airplane and a pilot where you've got this, you know, we're going this direction and we need to recalibrate, you know? So if we get, you know, 1 degree off and we continue with that 1 degree off for a long time, we're— instead of ending up in LA, we're going to end up in Seattle, for example. So maybe just kind of a constant recalibration over time. And sometimes we may decide we start out wanting to go to LA, but then over time we realize, well, we really do want to go to Seattle because the environment changed. So is maybe that another way to think about it?

I think it's a good analogy. And, you know, the wind changes and, you know, we have to change course as a result of the weather or whatever. So yeah, it's constantly being aware of the environment you're in and the impact you're achieving and evolving as you go.

Excellent. All right. The final area that I want to touch on here is you've talked about this idea of being a trusted advisor, and that is certainly something that's near and dear to the hearts of financial advisors because they want to be the trusted advisor to their clients. So how do you think about this idea of being a trusted advisor going forward to the future?

Well, other topic, and I think one that's really a huge opportunity. I don't believe we have a lot of trusted advisors. I think people say, you know, we're trusted advisors, but one of the things we're seeing in the business world is that trust is eroding. In all of our institutions. You know, everybody nods their head and says, yeah, I've seen those, those surveys. I know that's happening. Very few people are asking why and what can we do about it to rebuild trust. And in my mind, that's where the role of a trusted advisor becomes really critical, is this notion of really investing the time and effort to get to know that other client or individual as deeply as possible. And one of the key elements, I believe, in a trusted advisor relationship is the willingness to challenge the client. Many companies where they talk about trusted advisors, they wait for the client to call and say, I need this. And their whole objective is to move as quickly as possible to provide that. No. Well, what if the client's asking for the wrong thing? Would you be willing to challenge the client? And say no. And by the way, if the client's asking for something that your company can't provide, would you be willing to recommend your competitor or some other company to provide that service and product? Because that's key to building trust. If the client just sees every time they have a need or request, you're trying to sell one of your own products and services, trust is going to go down. They know what you're doing. You're just trying to sell more of your products and services. "Good luck," versus, "No, I'm really committed to serving your needs, and I will connect you with whatever resources, wherever they are, to meet those needs." I think that's a very different kind of trusted advisor and something that's, again, in a world of more rapid change and eroding trust and fear, if you can build that trust, you've got a significant competitive advantage relative to anyone else.

Yeah. And I can, See how this connects to your idea of platforms as well. So if I want to position myself as the trusted advisor, and maybe I've got a hammer and I've got some nails and I've got a tape measure, but I don't have everything in my toolkit, that if I'm connected to these other platforms, these other networks of people, that I can refer you to other organizations so that I can be that trusted advisor And I think I heard you say on another show that a trusted advisor may not sell any services. They just may be that nexus, that connection to everything else. And they come to you just because they know you're not there to sell them something or to be biased. You're there for one reason only, which is to be that trusted advisor and to only do what's in the client's best interest.

Yeah, I've done a lot of research around what I call unbundling of the corporation. In my view, somewhat provocative, is that our existing companies are going to have to make fundamental choices about what business are we in. And I think at one level, the two business types, one is a product and service business where you're making and selling products and services, and the other is this trusted advisor business. And the challenge is, how do you connect those two? Because unless you're willing to recommend your competitor's product and service, if that's what the client really needs, you're not a trusted advisor. And if you're making and selling your own products and services, you naturally want to just focus on yours and you're never going to recommend your competitors. Why would you do that? So again, I think the companies that will ultimately become the true trusted advisors are going to be those that just focus on building that deep understanding and to your point, creating platforms or networks where they can connect with whatever products and services are most relevant to the client at that point.

Well, John, this has been fantastic. I think we'll wrap it up there. So I want to give you one final opportunity here. Is there anything else that you want to mention? Any closing comments here as we wrap up?

I guess the one that I, I'd like to come back to is I talked about this big shift, and one of the ways the big shift is evolving is creating mounting performance pressure on all of us. Which is generating the fear, the emotion of fear. At the same time, the forces shaping the big shift are creating exponentially expanding opportunity. We have the ability to create far more value with far less resource far more quickly than we ever could have a decade or two ago. The challenge is if we're driven by fear, we don't even see those opportunities, much less have the motivation to pursue them. And so in my mind, that's the key to moving from mounting performance pressure to exponentially expanding opportunity. It's recognizing the fear and moving beyond it.

Well, John, you've also got a great website with a tremendous amount of blog posts and other resources. So what's the best way for people to connect with you if they want to continue to learn more about your work?

Well, certainly my website, johnhagel.com, has a lot of stuff. I'm also very active on social media, Twitter, Facebook, LinkedIn, so people can connect with me there. I'm very active in terms of posting things that I find interesting and sharing them with other people, and it's a great way to reach out and connect with me as well. So I look forward to that for sure. Excellent.

All right, well, thank you, John, and a fantastic body of work that you've created over several decades here, and, and look forward to all the, the great things that you're working on right now as well.

Thank you, appreciate it.

My key takeaway from my conversation with John Hagel is this idea of zoom out, zoom in, and that is to zoom out 10 to 20 years and identify the big trends and opportunities that you can passionately drive toward, and then zoom in on a 6 to 12 month time frame and pursue the 2 to 3 key initiatives that would have the greatest impact in accelerating accelerating your movement towards that longer-term opportunity that you've identified. Zoom out, zoom in. It's a great way to frame your business planning strategy. All right, that's all for today. Make sure you like and share this podcast through your favorite social platforms. And for more great podcasts, visit us at barons.com/podcast. Take care and be safe. This podcast was brought to you by Wells Fargo Advisors. Looking for a firm your clients can't outgrow? Wells Fargo Advisors offers financial advisors full balance sheet solutions with wealth planning, investment products, banking, and lending that meet the needs of affluent to ultra-high net worth clients. Build your practice your way and on your schedule with independent and employee model options designed to meet your needs today and tomorrow. Learn more at joinwfadvisors.com.