Learning to Lose Powerfully | Don Schmincke | 527

Thought leadership often means challenging the established order and saying, "I think you've got it wrong." And for some people, it's easier to step up and make that claim with confidence. Research, data, and expertise all play a part in challenging the established order. But it goes deeper. Expanding your horizons, noticing what others aren't seeing, and actually investing the time to reevaluate the things that everyone knows. That's why I invited Don Schmincke, researcher and author of Winners and Losers, as well as partner with the Pacific Institute. In today's episode, we'll explore how Don has developed his questioning ability, his ability to notice patterns, and his skill as a teacher and researcher. I'm Bill Sherman, and you're listening to Leveraging Thought Leadership. Ready? Let's begin. Welcome to the show, Dom.

Thanks for having me.

So I want to begin with a question for you. When you were young, say high school or your early 20s, did you envision yourself getting into the world of thought leadership? Or where did you see yourself going?

I didn't see anything like this. I was, uh, uh, I was in a rock band, so I thought, what the hell, I'm gonna do something great. And, um, so, uh, I left the Grateful Dead and put— I'm teasing. I went to— so, um, it was more around— I started getting interested in technology. This is back you know, when computers were, you had to push buttons to enter code. And so I'm dating myself. And so I started getting really interested in science and engineering, and that's kind of where it all began. But before that, I just love learning, but I'm not saying I'm successful at it since I almost dropped outta high school, but I never thought I'd be here doing this.

So let's talk about a little bit of that journey into the research. You said, okay, you started on the computer and the technology side, but you evolved into strategy, leadership, soft skills, which is quite a jump. How did that happen?

I don't know. I, when I left MIT, I went to Hopkins and started doing work in human grouping and how humans organize and administer. And that got me interested in, in looking at humans. And I, I had automated back when I was at MIT, I automated the Harvard MIT Biomedical Lab, ended up getting published in that. And then I did some work at Pfizer Medical System. So I kind of got around exploring humans from a medical physiological perspective. But at Hopkins, I was challenged by some students 'cause I ended up teaching at adjunct at their, the executive MBA program.

And you were teaching strategy and leadership, right?

Yeah. Yeah. I ended up teaching that. It didn't start off that way. I was really looking at, I was experimenting with CEO groups and looking at what was working and what wasn't. And that's when students were saying, hey, look, why is it that we're having such a hard time implementing these bestselling management theories? So as I did more research on the scholarly journals, there, there were millions of papers being published on the failure rates of management theory and no one was publishing that. So I thought, well, why don't I take a look at this? And I started using biology, evolutionary genetics, and ancient studies to see if there were any common patterns. And it was, that's where I started getting involved in, in leadership and culture and what drives higher performance in organizations. Because, you know, I saw a lot of theories and publications out there and I thought they were wonderful, but the CEOs couldn't produce any balance sheet impact. And I'm like, wait a minute, this is, it doesn't matter how great your theory is, you should be able to measure a bottom line balance sheet or P&L impact in application. And they were all coming up short. And I'm thinking, this is not right. Something's missing. So that's what started me on this.

Well, and That leads to the question, right? Is the good idea that's on the shelf not being implemented correctly? Is there a fundamental problem with the idea itself? And so where is the gap in that knowing-doing gap, right?

Yeah, right. Yeah. And I think a lot of it was when we started, this is where the anthropologists on our team really steered me in a different direction because we started looking at 5,000 years of management theory and failure rates of current management theory and started seeing that the, we were getting confused by our tools. And say more on that. Yeah, I was, it was interesting when I did the, when I did High Altitude Leadership with Chris Warner, we were, I met Chris climbing in the Andes. And he was gonna go off to do this NBC special on, on his third attempt at K2, which is the, the death mountain. I mean, the, the death rate's 10 times higher on K2 than Everest. 'Cause it's, it's a, it's a vertical climb. It's not, it's not a hike. But in the process, he had, he had pulled dead climbers off of mountains for many years. And as we were doing this research on, on humans and death zone environments above 8,000 meters, I started noticing that, that the dead climbers were clutching their tools. In other words, there was something about our tools we get very seduced to because I said, Chris, you know, I see dead companies, same thing. You get dead companies are clutching their tools and you know, their systems, their programs, their, the processes they're using, their new software packages, whatever they've got and they're dead. So I said, what is it? What are we missing? And it, What led us to look at tool seduction in a very serious way, which then further research exposed that we get seduced because we think tools will save us. And it's a, it's an issue for safety. In other words, the human instinct, like most animals, want to be safe. So we think we can be safe by controlling the world. And so we use analysis to understand the world so we can control it more. And they develop the tools to help us do that. And that's all really great cuz a lot of tools do help us survive. A lot of tools keep us safe. A lot of tools work, but when we get seduced by them, then we, we forget like, why are we doing this? And so a lot of dead companies weren't really using their tools. The tools were using them. And this led us back to the anthropological dimension to look at what's, why is it that we throw tools at problems? A bunch of books, a bunch of TED Talks, a bunch of trainers, a bunch of coaches. Now at the end of the day, you still get a dead company. And it turned out that until you alter human decision, nothing will really, really change. And throwing tools at a problem doesn't alter human decision. It doesn't alter human behavior. What really alters human behavior is the transitioning of beliefs. In other words, belief management is the missing piece. If we did it from that angle, we have much more success. And that's what we ended up doing.

Well, and I think one of the things that may be hard, but also necessary truth if you're practicing thought leadership is the most brilliant framework, the best 2x2 diagram for, as a consultant, et cetera, isn't going to change the world on its own. You have to cross that gap to get to the people who need it, get them to adopt an idea. And then say, how does this impact and where do I use it effectively? And if you cannot cross that gap and you leave that chasm unfilled, you're not going to create impact. You're not going to, as you said, be measurable on the bottom line in any way.

Yeah. So I think if we— when we started looking at resurrecting failed change programs and redoing how strategy was occurring in a corporation, we started measuring 2 to 3 times sales growth, sometimes 10 times their sales within a few years. So by seeing the sales increase so rapidly and dramatically, we knew that we were onto something. And that's what ended up evolving into, well, you know, what we have today. And we're still learning, we're still experimenting and making mistakes and, but the models are growing well. So today I train about 700 CEOs a year in in the current state of this framework. And, um, and it's good because it's a good testing field. Um, CEOs are cynical and they've seen every, every, they've read every book, seen every speaker. So for them to come up and say, wow, this is different, and, and then see them apply it and call me back and say, here's what happened, it's great. So I'm just having a lot of fun, um, learning more and, um, and teaching it.

So you alluded to a framework that is evolving and growing. What are the key components of that framework and how has it evolved over time?

The components, I think it has to be, uh, has to have a component of being applicable, like, uh, like immediately. In other words, to directly impact a concern or an issue. So if I have an audience of CEOs, I'll say, okay, what are your main issues or What's keeping you awake at night? And, you know, I'll get a dozen different things that, that's a problem. But being able to then say, okay, let's take a look at your world now and let's look at this framework here. How would that impact that? Or have you been doing this? Or actually going in and implementing it personally. We begin to see that application is really, really important. And it was more than just knowledge. Because initially I was somewhat arrogant, I think. I just thought, well, this is great thought leadership. This is great. I'm going to teach you all my findings and it'll change the world. And it was just—

You're coming down from the mountain. I bring you these commandments, right?

Right. Yeah.

Right.

And it was all bullshit. I mean, at the end of the day, if I was working it in the system, we can make it work. But it wasn't something that I was teaching properly. So we, I began to look at elements of, you know, you, you need to test it yourself. You need to be willing to lose money. You need to be willing to fail. You need to be willing to just really make sure it works. And then it has to be taught in a way where people can apply it. Like, what are the case studies that prove this works?

Mm-hmm.

What's the medical science? So in a lot of our theories, we have the biological and medical reasons that even go back to human evolution. Here's why it works. So it becomes blindingly obvious. It's not something somebody has to study. It's like a head slap. So I want to teach head slaps.

Right. Right. Well, and what I talk about that is when you have an effective idea, someone goes, hmm, I haven't thought about it that way before. I haven't heard it that way before. But you got me interested. I'm not even sure I agree with you, but tell me more.

Right.

And that permission to tell me more opens up a new conversation in someone's mind to say, okay, I'm going to evaluate this, but let's figure this out. And one of the things that for a head slap in some ways to me when we were talking about some of your body of work was the concept of losing powerfully, right? Where they're almost antonyms by nature, right?

Right.

It's like, well, if you lose, how do you do it powerfully? So why don't we spend a moment there, unpack that, and let's use that as an example of, like you said, that aha moment.

Yeah, um, it's funny you mentioned it because since we spoke, the, the book has, um, is being released, Winners and Losers, and it's it's in that element and doing the research because I had, I had people come up to me and say, well, you know, you're, you're training all these CEOs, you've trained about 30,000 or more. And, but what about the entrepreneurs? What about the people starting out? What about that? And I'm like, well, you know, we've got, you know, a million books out there for entrepreneurs and courses. And they say, yeah, but there's not millions of new entrepreneurs. Right. So I thought, okay, I love the research.

The failure rate on that is abysmally Yeah, you're right.

And so I thought, well, now that's a challenge because what an interesting area of research because I love researching failure rates. And as I started looking at successful entrepreneurs, there were a lot of books written about, you know, what they did right and how they did this, how they did that. But I, when I dug deeper, I found out that they were at the end of a string of failures and like no one was publishing that, you know, You know, like Richard Branson, like one of the most famous, right? And he's up there in the league and you know what happened to Virgin Cola? Like that didn't work. His Virgin cars couldn't rev up, his Virgin Digital didn't— I mean, there's like a dozen failures. But anyway, and when you hear him talk and he'll freely talk about, as most entrepreneurs will, they'll say, yeah, we screw this up. I failed at this, I failed at that. So what I began to realize that we have a lot of books on winning, but not a lot of books on losing. And I think we need to teach how to lose powerfully. In other words, if you want to be a great entrepreneur or intrapreneur in a company, you have to follow a certain path where you're not avoiding losing, but you're using losing for its power. And its power can be in shifting your beliefs. Its power can be in, you know, uncoupling what you thought was, you know, going to work. You realize now it, it can fail, but also learning. It's all, it all comes down to that piece of learning. And I found that for entrepreneurs, it wasn't just because, you know, we have a lot of books out there, want to fail fast and do this and do it. And that's all great because these are, you know, usually came out of like the high-tech industry. You know, you gotta fail fast.

You have—

The problem is, is failing that way is a little different than failing as an entrepreneur. 'Cause failing that way is you have like a somber team meeting. Well, our project failed. What did we learn? You know, and then you go to lunch. An entrepreneur just lost their house.

Yep.

You know, might have lost their marriage, might not have seen their kids. Their whole life is collapsing. That's a little different than having a sad team meeting.

May have recruited team members who are close to them and convinced them to leave security, and they feel personally responsible. That list of burdens just keep adding up. Right. And that mental voice of I failed.

Right.

Right.

Yeah.

Can be devastating.

Yes. And it was in those moments, and in the book I hopefully make this pronounced enough, is do not run from those moments cuz those are the moments. Those are the moments where you can now learn to lose powerfully and you rise up stronger. And that was a pattern we saw in all these entrepreneurs that were successful. It was just in those moments, they picked themselves up and were stronger. And so I think we should teach that.

If you're enjoying this episode of Leveraging Thought Leadership, please make sure to subscribe. If you'd like to help spread the word about our podcast, please leave a 5-star review at ratethispodcast.com/LTL and share it with your friends. We're available on Apple Podcasts and on all major listening apps, as well as thoughtleadershipleverage.com/podcast. And you make the point that you said, hey, this idea and this book came about because you said, I think we're teaching entrepreneurship wrong in this regard. Right?

Yeah. Yeah.

So there's a little bit of a burr under the saddle for you to go, let's flip how this is being taught and how it's being considered. Instead of getting everyone to think about chasing the big win, the IPO and the exit and everything, it's like, no, be ready to lose because you most likely will. But that's the tuition you're paying for the lesson.

Yeah. And it's like, if you're not willing to take that journey, then don't take the journey because it shouldn't be for everyone. You know, we don't want to have too many entrepreneurs and we'd have a world of chaos.

Yeah. So I, I want to circle back to a question, to something that you stated, and I want to ask a question. You said, I started studying failure rates.

Okay.

And given your background in engineering, I think there may be a connection there between the two, because if I remember right, early in your career, you were looking at guidance systems on missiles versus now failure rates of entrepreneurs. And the connective tissue is, why did this go wrong? So let me ask you, is that a lens you use to look at the world?

You know, not— interesting point you're making, because I never thought about it as, uh, something that purposefully came out of that. But I think you're right. I think, yeah, as we went through and studied failures, I mean, that happens naturally in engineering when you're, you know, developing new designs. I mean, I've seen nuclear missiles go on cartwheels on a camera in front of my face. And so I, you learn a lot from those failures and they're very expensive. So that may be where I was kind of used to it. So when we, you know, flipping entrepreneurship around was just one angle. We had so much support from a lot of brilliant people and CEOs. So when we, When we flipped how strategic planning occurs, that came out of that approach as well. And when we, when we flipped how leadership occurs, it came out. And it's what CEOs are, I like, 'cause when, when I'm doing these workshops, it's like, oh my God, this is like the opposite way of looking at it, but it makes more sense. It's evidence-based, it's got scientific and ancient support. So it really becomes really fun as a teacher because I, you know, we're flipping a student's mind and that's always a fabulous experience for a teacher. To see that happen with a student.

Whether it's in the formal classroom or you're working with adults who are leaders, that moment where you can see the light bulb come on is absolutely the payoff when you're the one who's guiding. Yeah. Yeah. So you've reached from a number of different fields. You've mentioned the anthropological perspective. You talked about neurology in that. You look at things in a much more broad and inclusive way and saying, what does this bring to the topic at hand?

Yeah.

How did that come to be?

I have ADHD.

But it allows you to—

Oh, it's easy.

—to spot things and say, hey, this may connect in, right? Yeah.

Yeah. And as I ran into a lot of scientists and entrepreneurs, I mean, they were they had the same affliction, which is interesting cuz I don't think it's a deficit. The more I see research come out and I've, I talked to some brilliant people that are like scientific in this area of looking at this pattern and it's almost like there's never, it's not attention deficit. There was never a deficit. There's almost an attention overwhelm. You know, in other words, there's too much attention and to, you know, somebody might focus on 2 or 3 things. We're focusing on 300. Now that it sucks when it, when you're trying to have relationships and things like that and raise a family, but it really, when you're looking at research, it's helpful to pull together hundreds of different points to see where the intersections could be or test them. And so that's why a lot of entrepreneurs can take risks so willingly because they're seeing the world in a way that others aren't seeing it, but they're feeling their way to this possibility. So for me, like when we like, and it was interesting when we flipped strategic planning around, 'cause the strategic planning failure rates are so high, we started looking at, at the autopsies and we started seeing that the companies that were rising up weren't using analysis. That's a total flip, right? I mean, because that was part of the problem. It's when I was teaching at Hopkins in the graduate school, I was teaching analysis. I was teaching analytical models and pricing analysis, market analysis, SWOT analysis. Here's how you do a good SWOT analysis. And it was all bullshit because at the end of the day, so many dead companies had those things. But these other companies had that rose up from nothing and all the experts said they're never going to make it, but they ended up rising up and dominating the market is they had intuition. There was something about shifting of the beliefs again that allowed them to intuit things. So when we started applying that, companies started taking off like crazy. So it's a matter of taking all these disjointed areas of science and engineering and history and philosophy and experimenting with how to alter how we are approaching leadership and the evolution of companies. And it was never a plan. It was just sort of a normal fun exploration that I made a lot of mistakes and learned from them. And then, and had some great CEOs around me. I mean, it was just, I never had a problem fortunately to get, you know, a dozen CEOs or more to join up. I never had a problem finding brilliant people to say, hey, can you work with me on this? So I've been really privileged and grateful for all the help I've gotten from very disparate areas. Everything from sociology to anthropology to, you know, physics. I, yeah, that's what happens. But was it a plan? I, no, it just, emerged.

And there's beauty in that, right? But you have to be, like you said, open and receptive to it and to be able to see, here's an insight that may have applicability to a problem that I'm trying to solve, which is exactly like when you're talking to a CEO or an entrepreneur, the same sort of thing. And so I would argue in many ways, the practice of thought leadership is not only going deep in your area, but being able to scan environmentally across and say, where are the insights elsewhere that help me understand the problem I'm trying to solve in a better way, or gives me a better tool to move forward?

Yeah, I think that's, that's it. And you, if, if you're not open to it, you won't see it. Like, you know, I had, I had to leave the university system and fund my own research because it, it's difficult to get money to say I'm going to do an expedition somewhere in Southeast Asia or Africa. Well, why are you going? I don't know. What are you gonna discover? I don't know.

You know how it's like, it's a bunch of, if I knew what I was going to discover, I'd have written the paper already.

Right? Exactly. So in every one of these, you know, I don't know, so many expeditions, I always learned something just because of what you said. I was just open to seeing what was going on and, you know, how are we teaching, why is leadership theory failing and how can we reverse that? So I might be in a tribe somewhere. I may be in a lost civilization in the Himalayas. I may be like, I visited a 10,000-year-old tribe in the Atlas Mountains in Africa. I learned something about us as a species, but also how to teach leadership differently. And then we start applying it. And 'cause, you know, if it's bad news, I'm just gonna, or it's not gonna work, I'm gonna hear about it. I'm gonna have 100 CEOs say, hey, that's screwed up.

Good idea, but not for us, right? Exactly. Exactly. Yeah. So as we begin to wrap up, Don, I want to ask a couple of questions. And the first one being, now that you've been practicing thought leadership as long as you have, what advice would you give your younger self? And the reason I ask is many listeners here are starting out on the journey. Rather than having spent a career. What do you wish you knew or what would you tell yourself?

Oh geez. We don't have that much time, but I mean, you know, it's different. There's two areas. There's the formulation and there's the execution. And of course in the formulation we've been talking a lot about that, but the execution part I think is important because otherwise it's just us with a good idea. And I've got, you know, I've had shelves of good ideas that went nowhere. And I think in the execution piece, we have to sort of give up executing and allow someone else to come to us to help with that. And that was a struggle I've always had because if I'm executing, I'm not having time for research and publishing and vice versa. So like fortunately what I did is I actually reached out to 1,000 CEOs and actually one group came out the Pacific Institute, which is what I'm now partnering with them in this new book that we just released, Winners and Losers. And, um, and it's interesting because they were started by Lou Tice, who actually is the guy 50 years ago who created the word mindset, and he created the term find your why. Like, this all started half a century ago, and he did it, what I was doing, like connecting with these brilliant scientists and thought leaders and all that to put it all together. So I'm sort of a, it's been great by they, they now, we are now looking at having me leveraged with some execution capacity beyond just me giving speeches and working with companies. And I have a small team, but this just takes it to a whole new level. So I think my, my first piece of advice is, hey, find that, that capacity to leverage and scale what you're doing. Because if you're spending that much time creating thought leadership, you're really going to diminish that if you're going to spend so much time trying to run a business. Does it make sense?

Well, and they're two separate skill sets, right? The ability to look and say, what is the insight here? And to craft and to polish that insight versus to understand how to design and run a marketing campaign or sell into enterprise. Those are things that, you know, as an entrepreneur, if you're running a thought leadership-based business. Yeah. Those are a lot of balls to juggle.

It's a lot of balls. And my staff will tell you, you know, it's, it's just too many. And, and not that I haven't tried. I mean, my mistake was, I guess to build on that, is I hired like 4 or 5 teams to take this on in the past and they all failed because they weren't at the level of thinking to take the idea and channel it. You know what I mean? And, right, right. So I had to fire them. And, and some of these are brilliant people. They weren't stupid. It's just that it didn't get the concept. So, as a thought leader, there needs to be that— what do they call it— that integrator, I think, sort of the chief of staff or whatever. They can take the pieces that can work and put them into scalability.

I love that. And then the final question: you've talked about your new book, Winners and Losers, and we'll put that in the show notes for people who are interested. Okay, my question for you is whose work in your field, and you can define that how you want, do you think more people should know about and be reading?

Oh geez. You know, I'm so grateful to so many different people. It's hard to, and they all have different dimensions, you know. The, oh, that's funny. That's funny. Some of the people that I rely on aren't really in the business area, but I probably should like Dr. David Buss, the revolutionized evolutionary psychology, basically one of the founders. He's now, he left Cambridge, he's now in Austin running the lab there. So he and I talk occasionally, maybe we'll do a book at some point. George Stalk, who started the lean manufacturing revolution. I love hanging out with him. He's just, he follows my ideas, I'm following his, he critiques my work. I love it, I love it. And he, so he's written a number of Harvard Business Review papers. His new work on the OODA loop is fascinating. When we look at that, Sai Wakeman, I mean, she came out naturally competent. She would never admit this, but so Sai, you're so freaking competent. She came out of sociology and transformed reality-based leadership is what her thing was. So, you know, we're good friends and I just feel like I'm just, it's just fortunate. I'm blessed to have the people like that around me, but they're all different areas, you know what I mean? Right, right.

One area, it's just— exactly. And what I like being able to do in this show is to expand people's horizon, not only by listening to the guests, but one step beyond to say, what are they reading? Where are they getting inspiration from? So Don, thank you very much for joining us today to talk about your work. And good luck with the launch of the book.

Great. Thanks for having me.

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