Living Systems Leadership (Part 1)

Welcome to Readers, the podcast for the lifelong learner. Join us on our weekly dose of wisdom where we talk about the real-life lessons and applications of books. Enjoy. Welcome back to Readers, everyone. Today we're kicking off a brand new series on living systems leadership, and I could not be more excited about this one. Today's guest, author Nate Payne, is a leadership advisor, speaker, and author with more than 30 years experience advising IT and business leaders across Fortune 500 companies, companies, SMBs, and nonprofits. He's the creator of Living Systems Leadership, a nature-inspired model that helps leaders and teams build clarity, confidence, and resilience in the face of constant change. And his soon-to-be-released book by the same name, which is what we're going to be talking about today, draws on patterns from the natural world to show leaders how to design teams and organizations that are built to adapt, recover, and grow stronger over time. Nate, welcome to the podcast, man. It's great to have you here. I'm really looking forward to this.

Well, great to be here. Thank you for having me.

Absolutely. Now, from my understanding here, Nate, and correct me if I'm wrong, right, your argument is that leadership isn't a role you perform, right? It's a system you design, and the best systems designer we have access to is nature itself. Now, obviously, we'll get deeper into that concept, right? But I think that was just such an interesting concept for me to start this book off with because We are learning from the natural world as we grow as people, as leaders, as members of an organization, right? And over this series, we'll walk through all 15 chapters, each one built around a natural system, forests, aquifers, rivers, reefs, wildebeest herds, firefly fields, everything in between, right? And what each one teaches us about how organizations actually work. Now, in today's episode, we're covering the foundation, right? Why strengths should live in the canopy rather than the trunk. We'll talk about the hidden human aquifers quietly holding companies together. How to read the feedback current before it goes underground. How you know how and why culture works like a coral reef, you know, and the local contours that decide whether a great culture actually translates into great daily work. If you guys can't you know get it by now, it's pretty clear there's a lot of nature references throughout this book here. Now along this way, we'll talk about some really interesting people and examples too. We'll talk about. Dutch nurses who fired their middle managers, a submarine captain who just stopped giving orders, and even a CEO who stunned Wall Street by bringing up a topic seldom discussed by executives. That's part 1, chapters 1 through 5. Without further ado, Nate, whenever you're ready, let's jump right in.

Sure. So, before we get started on Living Systems Leadership, I think it's helpful to understand how we got here and, and maybe why It matters. Why would I look to living systems or ecosystems for answers? And so the first step in looking at this is to understand that our orientation, the way that we see the world, our mindset shapes everything that we do. And so no matter how many new skills, how many leadership traits, how many courses we take, It's almost like we're changing the recipe, but we're not changing the pan that we're actually baking in. So mindset is very important because it shapes everything, our orientation. And so for living systems leadership, the orientation is a concept that says the world is complex. There's a lot to figure out on top, and especially for leaders, there's all these things coming at us at once. And then we have all this knowledge and all of this experience, and pretty soon it's like, how do I process all of these things? And so if you look at how any master really becomes really good at their craft, they don't spend much time on the top. On the surface level of things. They go below the surface. They're looking for the forces, the principles, the laws, the rules, the things that generate all of what they see on top. And the example I give is a painter who focuses on the primary colors because they realize that through these primary colors, every color that they see or that they'll use All come from these 3 colors. If you're a physicist, you come to learn that although you see all this variety in the physical world, it all really comes down to a handful of particles that interact according to a set of rules. And the same goes for music, basically 12 notes, and you can write pretty much any song. So that was our next step. That all of the complexity that we see comes down to a handful of causal forces. And then where do we look to understand those, to have those explained to us? And while we could turn to other leaders and their experience, frameworks, and methodologies, all of those things have an expiration date. And part of that is because even my experience as a leader is based upon sort of where I was, the time I was there, the pressures I was under, the context in which all of those things happened. And while those lessons are important, they may not necessarily translate to what you're dealing with today. So we were looking for a place that we could go where there is no expiration date, where we could learn what those causal forces are to help understand the complexity of our world and leadership in particular, and that once we found it, it would be foundational for us. And so It all started with watching a documentary called The Serengeti Rules, and it was showing all these different ecosystems and how they worked in the different levels and the interdependencies and interactions between species. And that's when it hit me. I said, well, my gosh, this, this is exactly what we're trying to do as companies, as organizations, as leaders. We're really building ecosystems. And we could really learn from nature because nature sort of has the same objective that we have, which is to sustain ourselves and grow. And so if you accept that premise, then living systems leadership then becomes a guide because now what we're looking for are patterns across ecosystems. In particular, healthy ecosystems, how do they continue to sustain and grow? And so that brings us to living systems leadership and why I believe it matters and we should pay attention, because it has been essentially doing what we're trying to do long before we got here and will continue to do so after we're gone.

I love it. Now, Before we get kind of into the forest, the reefs, that whole chapter 1, right? I want to start with that moment that you described in the introduction. I know you mentioned that there's a lot of context that might not apply, right? But I think this is something that applies to everyone because it's not just about your particular situation. It's about the way disruptive questions seem to approach all of us, right? And I think a lot of us have had this moment where we're like, oh, you know, something just hit me out of the blue. Now, obviously, we all know that this doesn't just appear from nowhere. It's a certain level of conditioning from our environment, what we've experienced, what we've created, right?

Yes.

I'd love to hear a little bit about what that question was for you. You mentioned this earlier on in the book, but I'd love for you to discuss it. What made it so compelling that it drove you to not only create an entire— not only drove you to write a book about it, but also to create an entire leadership style system that then you wanted to pass on and do all these shows and kind of put this out into the world as your legacy, right? Take us back to that season of your life. What was happening in your life, your career, when this question showed up, right? And, and why do you think it refused to let you go?

Yeah, really, really good question. So before there was a term we call it imposter syndrome today, But before we had that term, that's, I think, what a lot of people deal with. And so I dealt with it. You read the books and you go to the courses, you attend the workshops, and in a way you're comparing yourself to the people on stage or the people in the book. And I'm a really close listener, right? So as I attend these events and I'm reading these books, I'm trying to emulate these things. And I realized, I said, you know, some of these things are actually contradictory. Some of these things, I don't, I don't know that I can show up every single day and display all of the qualities and traits that are being associated with a great leader. I don't know how to make my voice heard, to lean in, to speak up, and at the same time, you know, be emotionally intelligent and all these other leadership traits that they say that you should have. So there was a bit of contradiction, but there was also this overwhelm. And I talk about this in the book because these are taken from real-life models and I mean, maybe there's 100 or 150. I mean, but there's a book that tells you to be a particular way, and pretty soon you're just, I can't be all of these things at one time. And so that was the frustration for me, is that following these things in some consistent way, even when they didn't contradict one another, just seemed really impossible. And I didn't have an alternative. a voice, or I didn't see an alternative voice out there. So that's what led me, uh, to find, or at least go in search of something, uh, else that wasn't so opinion-based that I thought would last. It was worth my time investing in. So if today I study this, it's true today, it's true tomorrow, and it's, it's true in 20 years. That's what eventually led me to Living Systems Leadership.

Now, for a listener hearing this for the first time, right? I have this question that, like I mentioned, I teased it a little bit in the intro here, right? But the search kind of lands on this one sentence that really anchors the whole book. And this is right at the entry of your introduction. And I already said this once, but you say, leadership is not a role you perform. It's a system you design. It reframes everything. Suddenly your question isn't, you know, am I a good leader? But suddenly it's, what is my system already producing? Right? For a listener kind of hearing that idea for the first time, right, what does it actually mean to design leadership as a system rather than perform it as a role? Because I think so many people come into these leadership positions and oftentimes it's almost natural, right? Oh, you work at this company, in 2, 3 years you'll just get promoted, and then you'll get promoted again, and then again until you're a manager or whatever that means, right? But when you're a manager, when you're a leader, for a lot of our listeners today who've almost been placed into a position they've never prepped for, Right? Nobody went to school to be a great leader, right?

Right.

How does that change when a leader makes that shift, right? Talk to me about what this sentence really means.

Yes. So, it ties into this idea of all of the books and courses, and everyone has an opinion on leadership. And when you go in, it makes leadership about you, about the individual. And there's this suggestion, this idea that's promoted that the better you are as a leader, the more traits you possess, the higher you rise, the better your team, the better the organization, and everyone just sort of comes along with you. But it puts a great deal of pressure on the individual. And this is kind of what chapter 1 is talking about in the forest. Everything bends towards this leader, their personality, their approach. They're responsible for the culture. They're responsible for the metrics, they're responsible for all of this. And so what happens is we, we begin to perform, to act in a way to sort of mimic what we've been taught a good leader is about. And so in my TEDx talk, I talk about this from a gardener's perspective. A lot of this comes from what we learned, you know, 100 years ago through the Industrial Revolution where people moved from the countryside and an agricultural type of lifestyle. They come into the cities, they're working in factories with machines. And it was something in that working with the machines that the machines actually had an influence on us and the way that we looked at ourselves. So in leadership, you are judged by your outcomes. And so you say, well, how do I produce these outcomes? And there's 2 ways. One way is what I call the old way, which is you are the boss, you are in control, you elevate yourself, you get people working together, you manage them. And it's almost this control, not necessarily in a power trip or a negative way, but you are in control. of the group. Now, what I call the new way, the living systems leadership, says, well, no, outcomes are a natural emergent process of the environment. So I use this example, which is kind of weird, but I think everybody will get it. I talk about mildew. No one goes out and creates mildew directly. However, I can create a set of conditions by which mildew will now emerge, right? So there's humidity and there's, there's little wind or air circulation, right? Maybe some darkness. And, and there you have it. So in the same way, we switch from performing Leadership to an act of design, meaning that if the soil is good, if it's— there's good sunlight, there's proper water, you're feeding the plants, they have nutrients, that the plants are going to grow themselves. You don't make the plants grow. And in the same way as leaders, we're not here to make things happen. We are here to create conditions that allow those things to emerge. on their own.

Yeah. Yeah.

The helpful part about this, it takes the pressure off of you as a leader. And, and I kind of make a distinction between typical conventional leadership advice is like a mirror. And you're, you're looking at yourself and you're measuring yourself against whatever they're showing you. Whereas living systems leadership is more of a window. It's, it's something that you're, you're looking beyond yourself You're looking to the outer world and you're saying, what is causing these things? Not, not how do I change them, but how do I change the conditions that are producing them?

And on that note of conditions, right, the first 2 chapters here, you know, they take us from the forest canopy to the underground aquifer, right? And in both cases, the lesson seems to be what you just talked about, right? That strength becomes dangerous when it's concentrated in one place, right? You know, you talk about Wurzburg, I'm probably pronouncing that wrong, but you know, they distributed decision-making across small nursing teams. While you also bring up the example of Captain David Marquette, who worked to move authority away from himself and kind of move it towards the people closest to the information, right? These are different leadership styles that most people don't seem to think about because again, they're not trained to. But what are the stories These 2 stories, I'm not even going to try and pronounce that again. But what do these 2 stories actually teach us about distributing authority without creating chaos? And how can leaders tell when their own competence has turned them into the organizational bottleneck that everyone ends up then depending on?

Right. Well, we sort of create these monsters, if you will, by the advice that we give and who we elevate. In society, right? So we sort of celebrate the Steve Jobs kind of leadership, and which is great, and it's not to take anything away from Steve Jobs. I mean, obviously he did great things. I'm concerned about an organization that requires a Steve Jobs to be successful, right? Because again, it's just like with nature, the idea is sustainability over time. So what you create is a single point of failure, right? So you— that's how I look at it. When I have a dynamic leader and that leader comes in and they make all of these changes and the organization has turned around, that is great in the short term. My concern, however, is that if we don't take the qualities of that leader that allowed that turnaround and allow those qualities to now permeate the system itself. So it's not just the leader who carries those, but it's actually the system, the structure that you're building within that organization that also carries those same qualities. So now when that leader steps away, moves on to another position, maybe takes a vacation, things still continue to move forward. Takes a little bit of humility though, right? Because we've been trained that It— maybe our feelings get hurt a little bit, right? So we, we walk away, we go away for a few weeks, we come back and there's no problems and everything's running without us. And we go, oh wow, well, hmm, you feel good that it didn't fall apart, but there's also this little voice in the back of your, your head, well, maybe you don't feel needed or, or what have you, you know, your value is diminished. And so what we're trying to do is say, no, that actually is The earmark of a great leader. That is how you build legacy. It's not so much how your organization or your team performs when you're there, which is sort of that old model of the factory, right? And the boss is there cracking the whip. But when I step away, that team still performs at a high level. That means I have now not just brought my qualities to the playing field, but I've actually sown them into the system itself. And it's in that self-sustaining system that I find legacy. So this, again, this is a mindset shift, which is why I started at the very top with that. And something that we're trying to help people see that it's not about just what happens when you're there, but what's more important is what happens Sure.

I think that brings up the question of people versus systems, right? In terms of how do you realize what the actual issue is? I mean, look, let's not be naive here. It's not like there's never been a person that's wrong for the system. That's a reality. Sometimes you have somebody who's just not right for the system. I think Adam Grant talks about it in Givers and Takers, right? He gave a TED Talk on it. He's written a book on it. But that also being said, I think a big part of the problem is also the system. system. And that's what you've been talking about, right? Um, when the system is just designed to not optimize the people in it. And I think these next 2 chapters, right, they move from rivers to coral reefs, and they show how information and behavior are shaped by the environment around them, right? Um, honestly, like, just quick side note here, I really love the way you're able to kind of contrast and compare these nature parts to the actual organizational environment. I wish we could—

Yes.

properly get deeper into it and talk about it, but I guess to everyone listening, I guess that's what you got to read the book for.

Yes.

But on that note, right, a team may look calm while honest feedback has quietly gone underground, right? Employees may be labeled the problem when the system is actually teaching them how to behave. Now, you bring up the example of New United Motor Manufacturing Inc., right? And this is a great example because many of the same workers that GM, one of the bigger companies, right, had written off produced very, very different results once the surrounding system changed, right? And this is a classic case study. You know, some of the listeners may have heard of this before, but it really shows how the environment can change the efficiency or productivity of that worker as opposed to just, you know, that person should be written off because they're not producing under this environment, right?

Yes.

Now, that brings up the question, right? How can leaders distinguish a true people problem from a system problem? Right? And what practical changes help keep honest feedback above ground while curating— while creating an environment where people can consistently do their best work?

Yeah, really good questions. So, there's a principle that I talk about a lot, and that's people act in their own self-interest. This is very important for leaders to understand, and this is not a negative statement. This is just a truth, meaning they respond to incentives. So if you reward something, you get more of it. If you punish something, you get less of it. So where a lot of times organizations run into trouble is that what they say they want, their goals, their objectives, their behaviors, their incentives conflict with the very things that they say they want. You're rewarding the wrong things, right? So the question is like, what really gets rewarded around here? Because that's what you have. And that's what I mean from a system point of view. It's like you're not pointing the finger at a particular person, but those are the realities that people are living in. So, so one of the examples I like to give about people or system So if you live in the tropics and you grow these beautiful plants and they're flowering, they're fantastic, and you decide to move. And so you, you take some of these plants with you and now you move to the States and maybe you're living in Wisconsin or Minnesota and you plant, you plant these plants that you had at your old home. And they don't do so well. So there's nothing wrong with the tropics. There's nothing wrong with the plants. And there's nothing wrong with Wisconsin. Right? So this is the question. People— and there are different people. So I look at this from a hiring perspective as well. It's like, what environment allows people to thrive? And part of it is just being consistent, because that's what builds a culture. And we we talk about this in the coral reef chapter. It's in that consistency. I may disagree with you about every decision you make as my boss.

Sure.

But but that's okay because you're consistent in the way you make it. So somebody could come to me and they could say, "What do you think he's going to say?" I said, "Oh, he's going to decide this because he's consistent." So I may not like your decision. But I trust you. And trust is that key to building a healthy culture. So part of the, the way to distinguish is what's repeating itself.

Yeah.

Going back to the mindset thing, why that's so important. My grandmother, she had this saying and she would say, well, you know, a dented pan will produce dented bread regardless of how good the recipe is. So if you, if you keep seeing dented bread, it's probably not the recipe. It's probably not your people. It's probably the pan. So that means let me take a look at the system. I'm not going to blame the plant for not flowering, for the leaves turning brown, for not producing, you know, sweet fruit. I'm going to probably look at the conditions of the environment that the plant is growing in and see how we can optimize that.

Yeah. Now, a lot of these past few chapters, right, have been about observing, right? Noticing where, you know, maybe these organizational bottlenecks are, maybe where the system has gotten things wrong and has often even held people back from doing what they honestly could be doing better, right? Now, chapter 5, this is the last kind of chapter and wrap-up question that we'll cover here, right? But this chapter 5 brings all these ideas down to the everyday level. The meetings, the roles, the routines, and the handoffs that really determine how work actually gets done. Now here you tell the story of this guy Paul O'Neill. He became CEO of Alcoa in 1987, and he surprised a lot of his investors by announcing that worker safety would be his highest priority. Not exactly the type of thing a new CEO often shares in a shareholder meeting, right?

Yes.

But he believed that focusing on safety would force the company to improve communication, accountability, and operations across the entire organization, right?

Yes.

Now look, is anyone out in the world saying the ideal or the greatest CEO of all time is Paul O'Neill? Probably not. Maybe, probably not. But to close this out, right, what did Paul O'Neill understand really well about choosing one small issue of one system that could reveal and improve the entire system, right? And for the leader, manager, You know, anyone listening, right, who recognizes some of these patterns in their own organization but feels overwhelmed by where to begin, right? How can they identify the right place to even start, right? Because yeah, it sounds simple. Yeah, of course we want to prioritize our worker safety. But at the end of the day, when you go into work, how do you actually make that happen? How do they identify the right place to start? And what is the simple question or diagnostic that they can bring back to their team this week?

Yes. Very good questions. So what Paul O'Neill was really shooting for, what he wanted to improve and what he understood, there was poor communication. And so he was just looking for a leverage point. He was just looking for something that he could use to improve communication within the organization. And so he starts with safety. But what that also did is sent a message to the frontline workers as well, right? That I care about the people that work with me. Now, there's something else in that story that he also did. He also tied the managers, right, the leaders of those different business units, their compensation, their bonus was attached to their success, right, hitting certain metrics around safety. So that kind of goes back. He understood that people Respond to things that are in their own self-interest. So if you want to get something done, he didn't just make a statement and say, we want to improve safety, right? He incentivized it. That was a very important thing that he did. But also, he found a leverage point. He knew that he could, once we improve communication through, in his case, it was through employee safety, That once we did that, then we can now take and extrapolate that communication model that we already found success in across the organization in other areas. So in answer to your question, pick one. Each organization is gonna be a little bit different, but what you're trying to do is build habits. You— proof of concept, if you will, to get the buy-in from people. So this is where you start listening to, you know, every priority is going to be different depending on the organization, but find one priority. You look for one small victory. Because if you, if you read through the whole book, you realize that we're pretty much saying the same thing through every chapter, just in different ways. Right? And that's the beauty of it, because these are patterns. These are repeating patterns, right? So if you had 15 chapters and there's 15 different things that you have to do, that's too overwhelming, especially under pressure. You're not going to remember. It's just not going to happen. And that's what happens in a lot of these books. I purposely wanted to show that there's really just a handful of things. There's only a few primary colors. There's only 12 notes, right? There's only, there's only a few particles. And so what we do as we look across these ecosystems, we're saying, look, there's feedback loops, right, that translate to communication. There's distributed authority. These are things that you just see constantly over time, and it makes it a lot easier when the pressure's on or you have a rather trying situation in front of you. I can address this and I can address it with confidence. This is what I, this is what I talk about in that introduction. Circling back to that is that I know that this works. This isn't Nate's opinion. Right. Nate, Nate didn't write this. This isn't based on Nate's experience. This is based on healthy ecosystems and not just one or two different types. And that was the reason for kind of traveling across the different ecosystems and say, look, there's a pattern to building sustainable, healthy, growing, uh, organizations and systems. And, and here are those, those patterns. I love it.

I love it. You know, what I really appreciate about these first 5 chapters, right, is that I feel like they give leaders a different way to look at the problems they face every day, right? Instead of kind of immediately asking who's underperforming, who needs more training, or who needs to step up, right? I think a lot of self-help books, a lot of leadership books talk about the people in an organization, which is extremely important, by the way, right? Of course, you want to have these quality individuals in your organization and a culture of helping them step up. But the reality is And the bigger organizations get, the harder it is to maintain systems that are constantly changing, adapting, and growing to then fit the needs of today, right? And the reality is we have very similar organizational systems to what we did 50 years ago, 100 years ago, right? And that's a problem because the world's changed a lot.

Yes.

And so I think to everyone listening, pay attention this week to the person everyone turns to when something becomes you know, a little confusing, urgent, or stuck, right? And then ask yourself why the work keeps flowing towards that person. I think, are they simply the most capable or has the system quietly become dependent on them, right? That one pattern may actually tell you more about how your organization's designed than really any mission statement, performance review, or culture survey ever could, right?

Yes.

And so I think that's, at least to me, I think that was the one takeaway that I really had. It's something I wanted to do going into, you know, this next week, right before episode 2, of course. Again, Nate, thank you so much for joining me today. This has been an absolute pleasure and I'm really excited for part 2.

Awesome. Yes, so am I.

Yes. And so in the next episode, right, we'll continue into chapters 6 through 10 where we'll explore recurring conflict, distributed intelligence, resilience, coordination, and what it really takes for trust to carry weight inside an organization, which is, I think, one of the most important parts of this book. And so to everyone listening, thank you again for tuning in to Readers. I'll see you in part 2. And until then, keep on learning, keep on changing, and keep on growing. We'll see you next time.

Thank you.