INBOUND 2016: Bob Gower "Adopting Agile Leadership Without Compromising Collaboration"

All right. Good morning, everybody. Thank you so much for being here. I've been talking to some people ahead of time. Whenever I come to a conference, I'm always, like, worried, like, are people going to show up? So I feel very personally validated. So thank you, really, for that. Just the. And I hope you'll, you know, maybe stay till the end, too. That would. That would validate me further. But if you have something. If you have better things to do, I understand. So, yeah. My name's Bob. I am an organizational designer. And what that means is that people hire me and the folks that I work with in order to make their organizations function better. Better being in the eye of the beholder. Often we work a lot about on speed. We work on innovation. Often we work on things about management culture. And what I have found over the years is that it's a very holistic kind of thing. So today we're going to talk about kind of the leadership component. But in order to talk about the leadership component, I need to set a little bit of context. As with all behavior, context really, really matters. Context is incredibly important, as is our personal intent, as is our personal mindset. And so we're going to start off kind of broad in general, and then we're going to narrow down. And by the end of this talk, I want to give you. I think I've got. I think what survived in the deck were four very, very specific tools that I want you to be able to use. So my intent is, one, to sort of change your minds a little bit about the nature of organizations, and then two, to give you some tools that will hopefully help you function. Because it's interesting times, right? We live in kind of interesting, volatile times. So a little bit more about how I come to this work. So I come to this work as a student of business. I have an MBA in green and sustainable business. I also come to this as a. My undergrad is in philosoph. Really. My mom was so happy and so proud when I chose that. And also a student of anthropology, a student of sociology, most recently a student of positive psychology. And I've always really cared about, hopefully making the world a somewhat better place, leaving it a little bit better than I found it. And I've also always really cared about collaboration, about people coming together. And what I've noticed over the years, which is really fascinating to me, is that organizations are a kind of human superpower. All of the good stuff that humans do, we do when we come together. And also even just surviving, we don't do that very well by ourselves. Humans don't. And if you study anthropology, if you study sociology and you look at the history of humanity, you realize that our ability to organize in a variety of different formats, but very, very tightly knitted formats is one of the keys to our survival and our thriving and frankly, our dominance as a species on the planet. Highly recommend looking at the book called the Social Conquest of Earth by evolutionary biologist named E.O. wilson, who will kind of go more into that. But I hope you can agree with me, like, organizations are really, really important to people, right? They're really important to humans. There's a dark side to all of this as well, that organizations, all the kind of the bad. It's hard not to swear here. I'm going to try not to swear today. Don't swear, Bob. That all of the bad stuff that we do as people, whether it's war, whether it's pollution, whether it's, well, we won't get political, but we do as a group, right? So we come together and we do bad stuff as a group and we do good stuff as a group. And the outcomes are kind of. Anyway, groups are important. That's all I really want you to get from those first couple of slides. What's interesting is that there's some stuff about us this makes us kind of unique because groups are so important to us. Oh, good, the animation works. So this is going to loop and you'll get the joke as it goes. There's a guy named Solomon Asch. Back in the 1950s, he ran a series of studies that have come to be known as the Asch conformity experiments. This is one of the more famous ones. It's the elevator experiment, where an unsuspecting dupe is in an elevator and a bunch of people get in facing the wrong direction. And what does he do? He looks a little uncomfortable and then he faces the wrong direction as well. This is conformity. This is built into us. Groups are so important to our individual survival, our survival as a species, that we are hardwired to conform. Now, many of you are going to look at this as I would and say, that's not me. I wouldn't do that. I would just be defiant. But as you were defiant, you would be burning cognitive ability. If your amygdala, if the part of your brain that feels empathy, that connects with other people is functioning, meaning if you're not a sociopath or a psychopath, you will at least feel uncomfortable in this situation. If you don't turn around, you'll at least Feel uncomfortable and it will cause cognitive load, which will, you know, if you've read Roy Baumeister's work on willpower, you know that it will lower your ability to do other things later. Like you'll eat a piece of cake later because you feel uncomfortable. You felt uncomfortable here. And so this means that organizations win. When there's a conflict between an individual and the will of an organization, when we're part of that organization, the organization is almost always going to win. Many of you, myself included, we join organizations thinking we're going to change this organization. Right? Has anybody ever thought that I'm going to change an organization? Right? We can, we do. But more likely than not, the organization is going to change you as well. Hopefully you'll change the organization some. There's always, but there's a conversation between the individual and the organization. The organization almost always wins, and largely because leaving groups actually feels life threatening to us. Because in many ways it is, at least historically to be rejected by your tribe, to be rejected by your family, to be rejected by your parents, to be rejected by the people that you depend on means that you are going to be in a life threatening situation. And so groups are going to win. So what this all means is that groups and the groups we associate with the groups we create exert a very, very powerful influence on our world, both individually. So there's a wonderful book called Connected by Nicholas Gustakis, who is a researcher down at Yale. He runs something called the Human Nature Lab. And what he's demonstrated is that if your friend's friend gets divorced, your likelihood of getting divorced increases whether or not you even know of that friend's friend's, that person's existence. The same is true if that person becomes suddenly healthy, like gets in good shape, your likelihood of getting healthy and coming, getting in good shape also increases. The same is true of wealth. The same is true of a wide variety of human traits, characteristics and outcomes. And so these things travel along social networks. So the people you hang out with is really important. So everybody's kind of looking around, do I want to be like these people? Right? But the people we spend time with exert a powerful influence on how we, how the individual outcomes we experience in life. So one thing, you know, if you take away nothing else from this, I want you to think about when you take a job, look around and ask yourself, do I want to be like these people? Do I want what these people have? Is this important to me? Because it's more likely that you will become like them than they will become like you. And it's highly likely there will be some kind of, you know, discussion, a conversation, like almost a physical, non verbal conversation happening between groups of people. It happens all the time. The other thing is that environments, the natural environment and society is also profoundly, profoundly influenced by the organizations that we have that we create. The institutions that we have in this world really exert a powerful influence. And what I've noticed over the years, and I've been in the sustainability game a long time, and I've thought about the social performance, the environmental performance of organizations and what I've noticed is that organizations that do bad stuff are not full of bad people. They're full of mostly decent, good people. This includes the leadership. Sometimes you get again psychopaths or sociopaths at the top. They seem to be more commonly CEO in the CEO population. Psychopathy is a higher percentage of the CEO population than it is of the general population. That's just true. But it's still not that significant. I mean it's not that high. It's like 6% potentially. Right? So there are a lot of big organizations out there that are doing some kind of terrible things in the world that are full of mostly good people. And so context matters. And I think when we're going to talk about leadership, I really wanted to start here because the context that leadership exists in matters and often I think the role of a leader today is to create a new context. And we're going to talk a lot about what that context is and how that functions inside of organizations. But let me just sort of kind of bookmark, bookend this particular part of the talk with. I believe we need leaders who are able to create organizations that are able to bring out the best in humanity. And I think we're at a really, really fascinating and interesting time in history when the needs of the individual worker and supporting the individual worker actually support the creation of better business metrics. Right. We're in a knowledge work or we need creativity, we need motivation, we need a lot of what I get hired to work on is the culture of the organization that allows them to attract and retain better talent. This is a. The struggle is real. I also believe that as we do this, as we empower individuals to be more engaged, to be more, have more agency, have more autonomy inside of organizations. We are also able to create organizations that do have a sort of better value structure and create better outcomes for the environment and for society. I think this is a really, really unique time. I think 100 years ago, 150 years ago, at the dawn of the industrial age, the goal of the individual worker, the happiness and health of the individual worker, was actually at odds with the business metrics at that time. But today we exist in a time when we need to support the people inside of our organizations to be better people. And that's what creates better business metrics. And my hope is this is my kind of life's mission. This is what I really focus on, is that that will then create organizations that essentially operate more morally and are kind of like better global citizens. And I think this is a really, really worthy goal. I hope you do as well. So let's talk about these kinds of organizations. So when I think about organizations, so I come from sort of the Agile software development world, we call it maybe the big A Agile. I am not in that world anymore. The words we use to describe our work these days are things like responsive. If you go to responsive.org, you can see more about that particular movement and join us there, please. But we also talk about organizational agility, we talk about dynamic teaming, dynamic organizations. So when I work with somebody like GE that what we're doing is we're actually trying to create an organization which is able to operate in today's world. I don't know if you guys have noticed, the world seems a little crazy, right? And it's been crazy for a while. I got into business, what, 25, geez, 30 years ago now. And I was in newspapers for a long time. Newspapers were still a viable business when I got into business. So that dates me a little bit. And the way the business world operated in those days, I think, is significantly different to the way the business world is operating today. And there's a wonderful new acronym that I've discovered recently that I think really kind of sums it up. Vuca Volatility, Uncertainty, Complexity and Ambiguity. Right. The world is just more complex. Like everybody's trying to make sense of the world and everybody's looking at the thing that they think makes sense of the world. But the world is so complex. You tug one little thing and you start to find that there's all this other stuff attached to it. Markets are more volatile, our social systems, we're more mobile, our workforce is more mobile. So it just sort of feels like we're all kind of existing. Our strategic plans are kind of obsolete before they ever get enacted. Our organizations are overwhelmed with complexity. We are overwhelmed with email, we're overwhelmed with calendar invites. And it's just sort of a. It's a crazy. Much, much more Dynamic world. And so my goal is to create organizations that are able to operate in this volatile time. And the challenge is that we are stuck with organizations that look like this. Right? This is from what, like 150 years ago? This is Union Pacific. But you could drop this org chart into any modern corporation and people would say, yeah, that's our org chart. Right. That's what my organization looks like. This organization is not really able to operate in these kind of dynamic times. It's just really. It's really challenging. When we think about this, I and my colleagues, we think about there being an operating system for organizations. Organizations like a computer have an operating system. That operating system is often unseen, unacknowledged, unknown, and it dictates everything. It creates all of the outcomes that we create that we have come out of this operating system. The operating system we have is designed for a complicated world, but not the complex world. Right? And so Frederick Taylor, we can talk all about Taylor later. But Frederick Taylor, the founder of Scientific Management, he said, let's separate the thinkers from the doers. This was revolutionary. I don't want to disparage him because I think it worked amazingly well at the time. It created a lot of prosperity for a lot of people. It also created a lot of suffering for a lot of people. And it worked, right. We had a lot of productivity, but now we're in such a complex world that we actually need the thinkers and the doers to be the same person. And if you look at kind of the history of organizations, I believe it all started with kind of lean theory and the Toyota production system, which actually began to ask workers, how do you improve the system? And then it listened to them, and they took over the heavy manufacturing market back in the late 70s, early 80s. Right. So we believe, I believe my colleagues and I believe that the world really needs a new kind of operating system. So I want to kind of describe that operating system to you a little bit. What we believe is we need organizations that work a little more like this. This is, of course, a phenomenon known as murmuration. These are starlings. I like to watch hours of this on YouTube. But really what we have is we have complex, beautiful, valuable behavior. Usually this behavior is the result of they're avoiding a predator. Sometimes they're taking advantage of a food source. It has an evolutionary function, but it's an endless array of sort of dynamic change based on a few very, very, very simple rules. And this is what I believe our organizational operating systems need to kind of move towards. Obviously, we are not starlings we are not birds. But this kind of group, dynamic group behavior is what I think really where agile is going and what the basis of this is. What's interesting about this is that if we're going to move to a more agile, more dynamic way of organizing, we really have to rethink what we think of people. And actually over here at MIT, back in the 1960s, a guy named MacGregor articulated Theory X and Theory Y. So Theory X is scientific management. It's Taylorism. People on the whole dislike work, find it boring, they'll avoid it if they can. Right? This sounds familiar. This is our incentive systems and most organizations are based on this. What's interesting about Taylor's work is that he was basing his work on frankly on slavery. So a lot of his work was based. The first time we began to sort of ask how can we get more out of a human was in a slave environment. And that mindset has traveled over into our modern corporations. I know it's a little disturbing, but there it is, right? But what we know from economics, what we know from sociology, what we know from psychology is that if we really study what motivates people, we know that people need and want to work, that they can self direct, that people like responsibility, that people like taking on work. Right? Everybody in this room probably thinks of themselves as a theory. Why person? And all the idiots they work with as theory X. Right. If you're a boss, I imagine you think of your workers, at least on some level as theory X people. And this is true because again, context matters intensely. We have created context that reinforce Theory X behavior. But we are actually really theory wide people. And so the first thing I want to talk about is a mindset shift, right? Like let's just open our minds up a little bit about the nature of people. What's really cool is that there are a bunch of companies out there that are doing amazing things and I want to go over a couple of them. When I say a couple I actually think I probably have too many slides. But anyway, because I get so excited to talk about them. But we have companies up here. Everything from healthcare to technology to gaming to material science to actually the military is represented up there. JSOC is a aspect of the US government. It's a kind of elite team, elite military team. And let's just talk about a couple. I want to give you a few examples. And by the way, you can have these slides. I'm going to have my email at the end. I annotate things. I like to Share stuff. So anyway, for what it's worth, Ricardo Semler, back in the 1950s, he inherited his company in Brazil from his father. He immediately diversified them and he immediately began to question some very fundamental management practices. One of the things they do, which is really interesting, and they've been doing it for about 30 or 40 years, is they allow people to set their own hours, they allow people to set their own wages. And you know, he said, you only need a couple of things to set your way, set a wage, right? What's the competitive market look like? What's, you know, what, you know, what are the people in the organization getting? What are the gross revenues of the organization? Like, how are we doing? So he's like, let's just give the people that information and then let them choose. And he's been doing it for years and it's worked very well. And you can imagine that it lowers all sorts of management overhead, right? It's cheaper to run an organization where people are, you know, where people are kind of setting their own things. And it creates transparency. I know what my neighbor earns, so I can, you know, like, it creates a more kind of robust social system. By the way, if there's one really revolutionary act you want to do inside your workplace, and again, bosses, you can close your ears. But workers, people who are employed, talk to your co workers about what they earn. Learn what your co workers earn. Be transparent. Lack of transparency will benefit a command and control mindset. It only empowers the workers. It might upset you at first, but it only empowers you. That's my little radical thing for the day. W.L. gore is a company near where I grew up in Pennsylvania and Delaware. They make Gore Tex. You probably have heard of this. But one of the things they do, which is fascinating, is that they. When a business unit gets to be over 150 people, they subdivide that business unit into two business units. The reason for this is Robin Dunbar. He was an anthropologist back in the 90s. He articulated, he started studying human societies and he realized that a Roman legion was about 150 people. An early farming village was about 150 people. And he created this idea that, it seems to me we have a cognitive limit. The amount of faces that we can know is about 150. And so once you go over 150, your need for more sort of structured systems really ramps up. Anybody who's ever been in a startup knows that once you hit 60 people, things change. Once you hit about 200, 150, 200 people, things change. Once you Hit about 600 people, things change. There are these very, very natural inflection points. And Gore Tex has become a very big, very powerful, very wealthy company by exploiting these natural cognitive limits. Bertzorg is a Dutch collection of nurses. They allow the nurses to self organize. They give 10 to 12 nurses, about 50 people. Here are your people, you know, do with them as you will, right? Like you self organize, you tell us what you need. And a nurse and young study found out that they, that actually people are staying with them less time. It takes less total hours in order for them to provide the same level of care. And yet they're providing more hands on care. So a person who might average in another organization staying with them for 3, 3 months will only stay with Birtzorg for about a month and a half. But they'll get much more personalized care because the nurses actually care. Because rather than being treated as sort of numbers and interchangeable parts inside of a large organization, they get more personalized care. I'm going to fast forward for the next three slides because I realize that I'm running out of a little bit of a time here, but actually you know what, I'm not going to, I'm going to talk about Valve. So Valve. But I'm going to go a little bit fast. You guys get the slides and you can do more reading. Valve's handbook is amazing. One of the things they do is they say find something to work on. Like you get hired by Valve. And this is a very, very wealthy company by the way. It's one of the biggest gaming companies in the states. They're based up in Seattle and they say when you join Valve, find something to work on and find other great people to work here. Those are the only two directives you have. So they have this very open allocation plan. So imagine being a product manager at Valve where you've got a product but people aren't being ordered to work for you. Instead they're being told to find something interesting to work on. All of a sudden you have to now make your project look kind of interesting. W.L. gore does a similar thing. They articulate followership rather than leadership. So you become a leader at Gore by attracting people rather than by being placed above them. Right. It completely inverts the kind of social. It goes from theory X to theory Y really, really effectively and really in a really, really fascinating way. And then finally, whoops. Morningstar, the largest, I believe they're the largest tomato processor in the states. They have no line Managers, they have, again, kind of an open allocation system. They have a very, very interesting thing. I have the highlight here and a link to it, the colleague letter of understanding. So when I work with somebody, I tell them, we create a kind of contract with each other. This is what you can count on me for. And then they say, this is what you can count on me for. And we kind of sign it. Like we work together to understand what do we need from each other. The bosses aren't even there to really tell you what your job is. Instead, we all know that we have this outcome that we're trying to generate, and we try to generate it together. It's really, really fascinating. You can also look now, I specifically avoided companies that I think we probably read a lot about, but I do encourage you to read a lot about them. Things like companies like goog, companies like Netflix. Spotify does a really amazing model as well. I think all these tech, the big tech companies have really caught onto this stuff a while ago. But I also wanted to demonstrate that this kind of thinking doesn't just operate inside the tech world. It can operate almost anywhere. And I think we really, we need it. And you can imagine these people are probably a whole heck of a lot happier than people working in another kind of organization where they're being ordered around and told what to do. Right. There's more agency, there's more autonomy. It turns out that's one of the things that humans really like. We don't like being told what to do. At least, I especially don't like being told what to do. So if we're going to lead in this environment, one is we need to be thinking about leading towards these kinds of this kind of context. We need to be creating a different kind of organization, not just showing up in a different way. Right. We need to actually be behaviorally, structurally changing our organizations to operate in a different kind of way. But it also requires different things of a leader. The reason I chose this picture is because, and I'm stealing this from General Stanley McChrystal, who wrote an amazing book called Team of Teams. But he talks about the move being away from like a chess master who knows all the moves and who's commanding all the troops to more of a farmer, someone who's in charge of nurturing a system, nurturing a healthy system, and then letting that system create the sort of the bounty, if you will. Right. So as a leader, I think our responsibility is to nurture a system, to create a healthy system, and to create an environment where people can show up and do the best work of their lives. So couple of things about this. Am I advanced? Ah, there we go. So this is a, you know, essentially we're moving from like the command and control to the leader kind of pulling the wet, you know, doing. I think as leaders we actually need to be doing the work, not just, you know, not just telling other people. I advise a lot of projects, but I also get my hands dirty. I do hands on coaching and I think I always will. And this is because I don't want to be separate from the work. And I work side by side with people who are just starting out in their career, to people who have been in their career for a very long time. And I learn from everybody. And I think being a part of a team, there's nothing that feels better than that. And as leaders, we need to not just be managers, but also to be doers. I think that's super important when it comes to organizational agility. I think there are a couple of big shifts that we need to make. We need to shift from a focus on personal success or personal achievement to group outcomes. Right. So rather than, you know, focusing on. And this can go into compensation systems. Right. So I helped, actually, I can't say the name of the company. It was kind of a secret project. Anyway. A very large company rework their executive compensation system a few years ago and one of the things we kept talking about was how do we move it towards a group outcome rather than just the individual, a focus on the individual success. And I think they did a pretty good job of it, of reworking this program from controlling to coaching. Right. Coaching is bringing out the best in people. Coaching is getting in tune with what people want. Right. Henry Ford very famously said, how do I, what is it? Why is it every time I need a pair of hands I have to hire a human being? And so that was a very controlling, a very narrow mindset. Today we actually need the whole human being. We can't just get by with a pair of hands because the pair of hands need intelligence and creativity and engagement behind them in order to be useful in most of our organizations. So we need to help people become the best versions of themselves. And as managers, it's our job to become good coaches. And there's a lot of. And I'm going to kind of go into some of the skills behind coaching in a moment. Knowing to curiosity, management, managers, leaders, please ask more questions. Please don't assume you know all the answers. Don't feel like you have to know all the answers. I think Peter Sengay said that knowledge worker, the definition of a knowledge worker is somebody who knows more about their job than their boss does. And I guarantee you, if you have people working for you today, they know more about their job than you do. And then you should. And you need to let them know more about their job than you. You need to be okay with that. We need to move from a focus on the. I didn't know quite how to phrase this, but from thinking, thinking and doing, kind of being separated to thinking and doing, being together. And I think in every role and every level of the organization, we need to expect people to show up, be creative and be thinkers. And lastly, we move away from risk aversion to more of a safe to try mindset. So the idea before is that we. I'm a, well, I'm not a good mba. I was an mba. But we need to move away from this mindset where we're going to minimize risk all of the time by not doing anything essentially or by consolidating power or consolidating a market position because that's just not a tenable ongoing solution anymore. But instead move to where we want to be action biased, we want to do a lot of stuff. And in order to do that, we need to make smaller bets that are safe to try that aren't going to bring our organization down if they fail. But at the same time that we're doing stuff that we're not just kind of like running down the same old route that we used to. And we've seen this happen, right? If you watch what happened with BlackBerry and with RIM, if you've watched what's happened with a lot of kind of bigger organizations that they keep running down their same old path, they're unable to innovate, they're unable to change with the times. And largely because they are risk averse, they're like, oh, we can't do that because it's dangerous. But not doing anything is really the most dangerous move you can make. So these are kind of organizational shifts. I want to talk about the values that drive an effective leader inside an organization that has made these shifts. And when I talk about values, I always like to juxtapose a value against another value so we know what we're valuing more than that, right? When values are used properly, they help us make decisions. They are razors that help us cut through the confusion and the complexity of our current situation in order to make decisions. So if we value this more than this, then we definitely have to go this direction. So these are some values that I find important and working with my clients that they definitely find important as well. So learning over success. So usually we want the thing to be really successful, right? That feels good. But if we're only prioritizing success, then we're probably not taking risks, we're probably not leaning in to the discomfort, which is something that is really, really essential. So we need to prioritize even. So getting a good no is almost as valuable as getting a really good yes. Right. Because we've learned something we know well, that didn't work. Right. Well, let me try this and let me try this. So if we prioritize learning and growth over success, I believe we'll actually be more successful. What's brilliant about this particular framework is that when you juxtapose two values in this way, you actually end up getting both of them, which is pretty awesome. Right? So we're going to value learning over success, effectiveness over efficiency. Again, I am not a good MBA, because MBAs, we focused on cost out and consistent consolidating measures and trying to take the expense out of something when really it's not the expense that goes into something, it's the success that you might experience on the other side. So it's the value of success. It's not the cost of execution or it's those two things in comparison. But if we only focus on cost and forget about effectiveness and forget about what we're actually trying to accomplish. And sometimes trying to accomplish stuff means like doing weird unnecessary things. You know, my wife is talking about putting like she's putting out a line of supplements right now. She's like, should I put gold leaf on it? You know, and it's more expensive. But she, I don't know, she's really excited about it. I'm like, no, no, do it. You know, like these things that feel good to us I think are hugely important because ultimately we're trying to create really good social systems to hang out in. Right? And so sometimes that means doing things that are kind of weird and unnecessary. And I fully support you in doing the weird and the unnecessary. So systems even over freedom. What I mean by this, and I think it really is summed up in the last sentence. No one owns an organization. You may own the stock of an organization, you may own the revenue of an organization, but you don't own those people. You don't own the social system, you don't own the culture. And that's where your value lies. So if you're a leader. The worst thing you can do is undermine the system based on expediency, right? And just be like, ugh, like this the next one, too. Trust over.