March 25, 2025 • 37 mins
How Can Leaders Prepare for the Next Era of Business Transformation?
In this high-powered episode, host Nicole Jansen dives into the dynamic forces shaping American business with distinguished guest John Rossman. As a former Amazon executive and author of the acclaimed "Amazon Way" series, John Rossman brings a wealth of knowledge on innovation, leadership, and digital transformation. With a focus on his latest book, Big Bet Leadership, John shares valuable insights, drawing on his extensive experience at Amazon to discuss the top three mega forces impacting businesses today.
Key takeaways include the critical nature of the “big bet framework” for solving major business challenges and the importance of cultivating a Day One mindset. The episode also explores the role of leadership in adapting to rapid technological advancements and demographic shifts, offering listeners a pragmatic approach to thriving in a hyper-digital era.
Join us for an enlightening discussion with John Rossman, where you'll gain a deeper understanding of how to anticipate and navigate transformative business changes adeptly.
What We Discuss in this Episode
- Unveiling the top three mega forces affecting American business.
- Understanding the pretext for why leaders must excel at transformation.
- Addressing challenges with the big bet framework and solving wicked problems.
- The importance of creating clarity and accelerating risk and value.
- How Amazon’s working backward process informed marketplace success.
- Day One versus Day Two mindset: Maintaining an innovation-driven culture.
- Integrating a dedicated leadership team for impactful transformation.
- Balancing short-term operation with long-term transformation efforts.
- The art of running successful high-stakes executive meetings.
- Combining insights from fractional leadership with a stable core team.
Podcast Highlights
0:00 - Introduction to John Rossman's expertise and achievements.
1:23 - Mega forces driving transformation and their implications.
3:22 - Dealing with labor shortages and demographic changes.
6:09 - The big bet framework and its significance.
11:53 - Amazon’s marketplace evolution and learning from failure.
18:34 - Day 1 vs. Day 2 mindset: Keeping innovation alive.
25:55 - Building the right transformation team.
29:43 - Thinking big, betting small: Avoiding the big leap fallacy.
32:52 - Effective high-stakes decision-making protocols.
34:39 - Encouragement for leaders to take transformative action.
Favorite Quotes
Innovative Leadership: “Become the shark at the table by gathering more information upfront, derisking big concepts with small experiments.”
Day 1 Mindset: “We are a day one company, reminding our teams and shareholders that it's all about constant reinvention.”
Building the Right Team: “A senior leader abandons everything for the mission, inventing the future—a different game of transformational betting.”
Episode Resources: https://leadersof
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Welcome to the Leaders of Transformation podcast. The number one
show for business leaders and entrepreneurs passionate about uplifting
others and making a greater impact in the world. Now here's
your host, transformational coach, speaker, and business
advisor, Nicole Jansen.
(00:21):
What are the top 3 mega forces that are affecting American
business, and how do you prepare for them? Our guest today is
John Rossman. He is a leading authority on innovation,
leadership, and digital transformation. He's actually a former
Amazon executive and the best selling author of the Amazon
Way series. He offers unparalleled
(00:44):
experience and expertise in driving business success through
strategic innovation and leadership excellence. And today,
we're gonna talk about those top 3 mega forces that are shaping
American business, how to solve wicked problems, and the
big bet framework, which is all covered in his latest book, Big
Bet Leadership, and it is fantastic. It is a playbook.
(01:06):
You're gonna wanna read through this just to kind of familiarize yourself with
it and then keep it handy when you are
actually going through your transformation process
because it actually is a step by step playbook. It's fantastic. So, John,
welcome to the leaders transformation. We're glad you're here. Nicole, awesome. Thanks for
having me here. I'm just gonna let you keep talking because you do a great
(01:27):
job of kinda getting to the heart of it. Well, I love bragging on people
and and highlighting what they do well, and you certainly I was so
impressed. Literally, I was telling my husband, I was like, I don't know how this
guy on that, you know, you worked with Amazon and the
Amazon marketplace, that you were part very instrumental
in leading that and making that happen. Wow, amazing so
(01:48):
much that we can learn. And I know that we'll get a little bit of
a taste of it here today. So I appreciate that. So
lots of changes happening already. Lots of changes coming. Let's
talk about those 3 mega forces just to kind of the baseline.
Yep. Understand what we're dealing with, and then how do we navigate
through that bucket? So the pretext of the book
(02:11):
is about why as leaders do we have to
become better at being able to transform
like fundamentally change and improve our
customer experiences, our operating models, our cost structures, like how
we do business because we aren't very good at it today. Right? All the
statistics show how difficult even incremental change, let alone
(02:33):
fundamental restructuring. So the argument we make in the
front part of the book is about the hyper digital era. And
what the short story is is that if you think the past
25, 30 years of kind of digital transformation and
digital disruption has been exciting and has created a lot of change,
that's the early innings. That's the pretext to this
(02:55):
next era of change and what we fundamentally believe is kind
of the 3 mega forces driving that change. Well,
certainly, technology is one of those changes, but it is
just one of those, and it is a mega force. Like, this is
something to contend with both new superpowers harness, but
also new threats and challenges and
(03:17):
errors that we don't really wanna make, but we know we're gonna make. So that's
1 mega force. The other mega force is the
aging of our population and kind of the decreasing
availability of a skilled workforce. Every western
country is facing this mega
force, some much more severe than the US is. Right?
(03:39):
So Japan and much of Western Europe.
And, essentially, our workforce is aging.
Our birth rate is declining, and this is just the
reality that we have to be designing
our companies and our workforce is the aging
of America and scarcity in
(04:02):
skilled labor. And then the 3rd mega force
is really that our country is gonna have a bunch
of constraints on it relative to kind of our
committed spend. So our committed spend is both all of
the entitlement programs that we've committed to as a country and
want to commit to as a country as well as our debt. Like, a
(04:24):
lot of these things are in the news. I'm not a political
analyst, but that does create competition for capital,
and we need to create an environment where innovation
thrives and where we outgrow this challenge of kind of the
committed spend. Those are kind of the 3 mega
forces that, again, each one on their own is like you
(04:47):
could just isolate and force, but those three together are gonna create
a vortex that create this
environment where there will be companies that
are designed and engineered on purpose to
be 10 to 100 x more productive
than their typical peer company is today.
(05:10):
And so there's gonna be a whole new set of winners, a
whole new set of losers, and what we need to
do today is prepare for it, but prepare for it by
becoming good at how we actually explore
and experiment on these concepts of transformation. And that is
what the essence of the playbook is, which is about how to think
(05:33):
big, but do experiments
early to help derisk these bold concepts
that we might have for our business so that you can actually let them do
what they need to do, which is be adjusted and not be committed to. That's
what a big bet is. Yeah. Yeah. Well and that's one of the things I
really appreciated about in your book is that because you acknowledge the
(05:54):
fact that there are these constraints, there are these things
that we need to take into consideration, almost like anchors that can hold
you back from actually making those because we can talk about the
transformation and the opportunity and the possibility and all of
that, but we also need to recognize what we need to let go of
and or what we need to address and, like you said, plan
(06:17):
for. And so that derisking, you know, it's like when we think
about big bets, we think about gambles. We think about just, you know,
shooting for the moon, and we think of I know, like Richard Branson. Right?
Screw it. Let's do it. Yeah. Okay. So he's an
anomaly a little bit. But also, he may say that, but there's a
lot that's going behind the scenes that people don't hear or know
(06:40):
about. And so they just kinda like, oh, I'm gonna do the same thing, and
I'll just put it out there. It's like, no. You're not getting the
whole picture there in terms of how he's been able to be successful in doing
that. Yeah. Kind of the metaphor of the book behind them. Yeah. The metaphor of
the book is about, like, how do you become the shark at the table? Right?
The shark at the table has some unfair advantages,
(07:00):
typically unfair information. Right? Like, they understand the table
better. They can see things better. And that's the whole goal here is how to
gather more information upfront so that
you truly derisk the the largest conceptual
risks of your concept. The challenge is
what most leaders do is they address risk
(07:22):
by descaling the ambition, by descaling
what their view of the future is, and so they just become this
very incrementally driven organization. And
incremental change is important. Incremental change is fine,
but it won't create new competitive advantage for you.
You have to grow. You have to become more competitive. You do
(07:44):
that by creating step change, some dramatic
transformational change. Those are things that you can't predict,
and that's the whole goal here is really thinking
big, but betting small, incrementally
experimenting on these before you make big commitments so that you're the shark at the
table. Yeah. Well, talk about that. I know you have a series
(08:07):
of memos, which is kind of part of your playbook, your framework
that you guide people through through your book, and you
start off like you in that killer feature. Talk a little bit about that because
that incremental change a lot of times, like, if we make these little changes, little
changes, little changes, we're gonna create this big tidal wave.
Well, maybe and maybe not. So, yeah, talk a little bit
(08:29):
about that. The book is centered on creating 3 critical habits
for these kind of transformational ideas. You have to create clarity,
maintain velocity, and accelerate risk and value, deferring
big commitments. So upfront is creating clarity,
and clarity is well defined. I tend to define things pretty
well. Clarity in this case is getting super clear on
(08:51):
both the problem that you were solving and your
hypothesis about what the future state would be. Guess what
that creates? That creates a vector, 2 points, and you can actually
then test that concept across the life cycle. That's
why creating clarity upfront is key.
Amazon's entire
(09:14):
problem solving innovation approach, like how they think through
complex things, is by writing them out. They call
this the working backwards process, 6 page narratives.
We designed a specific set of memos specifically for this
concept of solving really hard problems. All
of these things are not simple, trivial problems. If you think they
(09:37):
are, they either aren't transformational or you are
grossly underestimating actually what it's gonna take to do it or
what the risks are. And so through the writing and
debating process, what you create
is clarity of the concept. And especially in a
teamwork environment, you both get the best out of
(09:59):
everybody, their insights as to what the problem is, their insights into what
the killer feature or the assumptions are to get to the killer
feature, plus you're preparing them for the change.
They're processing this through, and writing a memo around
it helps set it all up. So, yes, there is a set
of memos that we prescribe relative to this. It's not the
(10:21):
only way to do it, but at the end of the day, if you
can't tell me exactly, like, what is the real
pain that your customer or your operator, your
associate is getting to and have deep empathy and insight into
what are they really trying to get done. Like, it's not this little frictional
thing. It's like it's a deeper essence of a problem.
(10:42):
And then what's your hypothesis about, as we call it,
the killer feature or the most lovable feature? Like, I had somebody
working in the medical field who was like, you know, we're not gonna call it
the killer feature here, John. I was like, fair enough. And this is where the
art of experimentation really starts, is taking that killer
feature and identifying the 3 to 5
(11:05):
things that must be true in order to deliver that
killer feature. Now all of a sudden, I'm interjecting
this critical aspect of admitting I can't
predict everything about it. There are assumptions that I am making relative
to delivering this killer feature. Let's identify and
prioritize those because then when we understand the key
(11:27):
things that must be true that are both high value and high risk, I can
set up isolated, discreet,
narrow experiments to help test and understand them better. Right? I'm
gathering more information, and that is the process you go through.
So let's talk about it in the context of
Amazon in the marketplace. As you were building this out, how did that look
(11:49):
as a practical example of how you use this? Yeah.
So a little time capsule machine here. So
in 2,001, 2002, Amazon
was about a $3,000,000,000 revenue company. They
were 1 third the size of eBay. We were being referred to as
amazondot com, Amazon dotcoast, and my favorite,
(12:11):
Amazon dot org, because we clearly didn't know how to make money.
And we had already taken 2 attempts at
a third party selling strategy and approach. Right?
There have been the auctions business, and there have been something called z shops and
everything, and they didn't work. And Oh, by the way,
why did they not work? Well, if each for different reasons,
(12:35):
z shops, partially because it was a very
disconnected customer experience from the normal shopping pipeline and the
normal shopping approach at Amazon, and so it was just
like this 2nd class citizen experience.
And auctions because auctions don't fit many of
the Amazon customer needs. They like precision. What's my
(12:58):
price? When am I gonna get it? Right? And we didn't recognize those things early.
We were we skipped the important part of understanding
what was the real customer need here. We just looked at Ebay and go, oh,
we'll copy that. Yeah. It didn't work. And what Bezos,
he had a he had intuition that I have to
solve for this situation. I have to become more than just a
(13:20):
books, music, and video retailer, first party retailer.
90% of the business at that point was books, music, video,
all first party inventory. We bought it, we sold it, and the
marketplace was about adding many more categories
and doing it through a third party approach. But
we had the Amazon brand to represent, right? The Amazon brand
(13:43):
is based around trust. A customer trusts you
with their wallet. They trust they're gonna get what they ordered. They trust they're gonna
get it on time and fast. They trust that the price is gonna be in
competitive price. And so we had to work through
understanding that writing and debating these memos out until
we came to a really simple orientation that a
(14:05):
customer needed to trust buying from a third
party as much as they trusted buying from Amazon, the retailer.
That was the killer feature and everything laddered
under that killer feature that imposed that we had to put
a tremendous amount of both rigor and innovation
in how we actually interoperated or integrated
(14:27):
with tens of thousands of third party
sellers, not just a few third party sellers. So we put in place
this very robust choreography of data, obligations,
approaches to doing this to create what is now just
the default expectation customer experience, and you
don't really recognize or care if I'm buying it from
(14:50):
Amazon, the retailer, or through an Amazon seller because
we engineered this so well. But it was only because we
learned from failure and we truly understood, like, this was the real
customer need. So, yes, we wrote all of these types of
memos. We didn't call them the same things we call them in this book, but
I did write the future press release, which is one of the memo types for
(15:12):
the marketplace business. And I think it really
set the basis for why the marketplace business was successful.
Now I love that, and thank you for sharing that because I was
thinking about that. And then you said it it's like the copycatting.
Sometimes we look at other models and go, oh, well, I'll just do that. And
it's like, well, you need to think that through. And one of the other things
(15:34):
that we notice a lot of times in business is that they're so
focused on the systems and the logistics behind the scene that they're
forgetting about the customer experience. I mean, customer service
across the board is terrible in many companies. Right? And getting
worse. And getting worse. And it's like they're not taking this
into consideration. And so if that just leaves the
(15:57):
door open to somebody else coming in and saying, we're gonna do it better,
and we're gonna acknowledge, and that's gonna be that killer feature, most
loved feature and blow everybody else out of the water. So
I sense that that is coming in many different arenas.
So hopefully. But, yeah, the whole idea of not copycatting, but
stepping back and looking and saying, if you wanna create the big bet
(16:19):
leadership, which is actually stepping out and doing something new unprecedented,
the thing I'd tune on that it sometimes copying is important.
In fact, we have a chapter called play chestnut checkers. That is about
learning from others in a very directed manner. To me, it
doesn't matter whether it's unprecedented or new or innovative. What's
important is that it's right for your customer and for your business. Yes.
(16:42):
That's what's important here. Right? Yeah. So you have to come to
a deeper understanding of your customer, your
operator, and the challenges that they're focusing and what your brand
stands for. Yeah. That's what's important. And then
copy away, like, the goal is to be autopilot. To be effective, right,
and to grow a great business here. And so that's the only
(17:05):
adjustment I would make to that truism there, which is
just copying others doesn't solve for it. But
work backwards from your customer. That's what all of this is about. It's working backwards
from the outcome that you wanna
get to, and then we figure out a way to play it forward and
experiment and test those things out that are the hard things
(17:27):
that have to be proven out in order to deliver that. Yeah. And not to
be insulting, but it's like for some companies, I think it's get off autopilot. That's
what I was kind of referring to, this idea of, like, oh, we'll just do
this because we see it. It's like get off autopilot, really check-in, be fully
present and conscious about what it is that you're actually doing and the
impact that you wanna make. Absolutely. To some degree, that's a whole another
(17:48):
conversation about how mediocrity
has become not just accepted, but it's actually become the
target for so many organizations. They shoot for
mediocrity in customer experience. They shoot for mediocrity
in terms of goal setting and attainment. And I think that
is another, again, discussion to be had here and
(18:10):
everything. Yeah. Yeah. Well, so let's talk a little bit more about
this idea. I know you have so many concepts in here that I wanted to
unpack. So one of them was the day 1 versus day 2
mindset. Yeah. So there's a couple of ways to explain this. So
one is this is an example of Bezos
being a brilliant strategic communicator and
(18:32):
being something that we call out in the book of being a chief repeating officer.
Repeat. Repeat. Repeat. Yeah. In this particular case, the message
is we are a day one company. We'll unpack that. A
day one company is just message to
both employees and the shareholders that
Amazon is going to try a lot of things that don't work. We
(18:53):
are always gonna be optimistic about the future
and about innovation and about not just
holding on or optimizing just for today. We're gonna optimize for the
long term, and you do that by constant reinvention. And that
we are not going to be beholden to
past traditions. Like, past traditions are interesting,
(19:16):
but they don't define what the future is. In fact, they oftentimes hold us
back from the future. That's how all the things that he
packs into just repeating, I'm a day one company. We're a day one
company. We're a day one company. Right? And Andy Jassy, to his credit,
continues to use that mantra as his
permission slip to go in and question everything
(19:38):
at Amazon. And I think that that humility to
constantly question why is it good
enough, what's the future of this, how could we do
it better, actually scale it, do more on an improving unit
cost, Like, those are the types of constant questions
that a day one company asks itself.
(20:00):
I love this. So one of the things one of my mentors once taught me
is this, the phases of business. You go to invisible, to
emergence, to chaos, to normal operations of
affluence, and to a position of power, what I like to call influence.
You're known in the marketplace, but then they're staying there. So the first one, you
gotta get there and then there's how do you stay there, right, and not
(20:22):
be a blockbuster or one of the, you know, other companies that that were
arrogant enough to think that they had it all, and they kind of
rested on that success. And so I think that's really important. I mean, if
I can take that thread and expand on it Go for it.
We gravitate to kind of these traditional now
dated stories of digital disruption. Right? Blockbuster,
(20:43):
Xerox PARC, so many companies like that, Circuit City and
everything. Right? But just think about last year
and the disruption we saw to a few
gold standard companies, like the category leaders. Listen to this set
of companies that have definitely peaked, and the
question is, are they gonna be able to pull it out or not? Starbucks,
(21:07):
Nike, Boeing, and Intel. Like,
those are 4 gold standard
brands and innovators that have all suffered from
their own version of kind of what we're trying to
avoid here, their story of both accepting
mediocrity and having a diluted value
(21:29):
proposition. And it's those the combination of kind of that innovator's
challenge plus becoming kind of a fat and happy culture
that is the combination that creates so many challenges
in these successful businesses. And as you point out, it's
one challenge to kinda get there, and it's a whole another type of
playbook and leadership playbook to not suffer from
(21:51):
that set of things. And that is really one of the things that
I respect about Amazon. And you can and I can complain
about lots of things about what goes on at Amazon. They are not
perfect at all, but I'll tell you what they are. They're fundamentally
humble, and they realize that if we don't keep
going to be a day 1 company, we're gonna become a commodity.
(22:15):
And that's what leaders at successful companies they
lose sight of is that competitive advantage is short
and getting shorter, and you have to invest the right
amount into kind of this reinvention set of horizons.
And that's what this playbook, big bet leadership is for is
how do we create those next horizon businesses and business
(22:37):
models? Yeah. And coming back to those 3 mega
forces is you tie that all in in terms of from the
technology standpoint, utilizing technology,
also from a talent standpoint. We'll talk about that just for a moment here.
And then, of course, like you said, those constraints and all of that. Let's talk
about the talent. I know you you mentioned in the book, which goes against some
(22:59):
of the current climate of how things are in fractional
leadership and so forth. Yeah. And you talk about, which I
completely get the idea of fractional leadership and why companies
are doing that. And I totally agree with
you 100% on this idea of the importance of a full time team,
people that are sold out, the directly responsible individual
(23:23):
because I've seen it even, like, in working with small businesses. I mean, you put
heck, even volunteers. If you don't have somebody who is absolutely
100% committed to it and it's a side gig, it
just doesn't work long term. You get mediocrity. You get
just enough. Maybe. These fractional teams maybe
work for kinda some incremental situations and well
(23:45):
understood projects. Right? Right? But when we are tackling
what should fundamentally be a big opportunity and a complex
opportunity or a portfolio of considerations that we're debating,
a dedicated team has all sorts of advantages
that a fractionalized team can never bring to the table.
(24:06):
In one of the key roles that you mentioned, the directly responsible
individual, Amazon, we called it a single threaded leader. It's
not just a full time project manager. It
is a senior leader who is fully dedicated
to this mission that we are on, and
they have sway within the organization. They
(24:27):
know how to escalate. They both internally as well as with
partners in the ecosystem and customers and things like that. They know
how to get things done, and they're well respected. And you
don't see too many companies or individuals that
are willing to go, like, the coin of the realm is always the size of
your budget or the size of your headcount. But what I'm suggesting is the exact
(24:50):
opposite, which is a senior leader abandons everything. They have
no revenue. They have what is a seemingly small budget and a
small headcount. But their job is to invent the future for this
organization. So it's an important mission, but they don't
carry the traditional trappings that a senior
executive have. And you either have to believe that we need
(25:13):
to get that done or you don't, and I would say that is the most
controllable factor that you have into whether you are going to be
successful at this job of systematic transformation or
not. Is are you willing to commit a full
time dedicated team with a senior leader to this mission
of transformation. How do we
(25:35):
marry that with this talent shortage that's going on
and find the right people for that team? Because I know you also talk
about that in your book. Because you can get people that will go, oh, yeah.
That sounds good. But they're not fully committed. How do you find the right
people for that team, identify who they are and for that
senior leadership position? Exactly. How to identify that
(25:57):
person is relevant to the circumstances. Some degree, your hunch as
to, like, what's the direction of this transformation.
But what's key is you have to make it safe and
smart for this person to go, okay. Yeah. I'm gonna bet my career
on this, you know, we'll call it program that we're
gonna do. The coauthor of this book, Kevin McCaffrey, was my
(26:19):
client. He ran new business incubation at T Mobile. And one of the
thing we wrote this book not just for companies, but for
the teams that are driving these transformations
because there's nothing as exciting for
your career as to be associated, to be on one of
these teams, but there's also nothing quite as risky
(26:42):
as being on one that isn't successful. And if you look at the
odds of success, a lot of these aren't gonna be
successful. And so that's why setting these things up you know, we
have a whole section on the big bet environment and everything, right, around the
right policies, the right mindset, the right, call
it, vessel that we put this into is critical
(27:03):
to its success. The team is part of that vessel, but only
part of what you have to get successful. But you have to
understand this is a different game that we are playing.
We are not shooting for operational optimization. We are
shooting for learning. We're shooting for experimentation, and that will
lead us we believe that will lead us to a concept
(27:25):
that then we should invest in going forward. But you have to
understand what you're shooting for is which gets to the second
critical habit, which is velocity. You have to
maintain velocity. Every company starts off one of
these initiatives or their annual plan with, like, we're fully
committed. You'll get my time and attention, but it quickly
(27:47):
devolves into just another project
meeting, just another thing on the calendar. It slows down to
the typical operational cadence within an organization.
And on these big concepts, you
have to find a different path and a different speed within an organization. One of
the ways you do that is by having a dedicated team and a senior leader,
(28:09):
but that's just one of the ways that you do it. You have to put
constraints on it. You have to make sure it's an actual priority for the rest
of the executive team. You have to have a different set of maybe
policies that you go through, for example, for hiring or for
purchasing tooling or technology or anything that you
need. You have to find a different way, a different environment
(28:31):
for these things to operate in because you have to maintain velocity.
Because if you slow this down, what that does is
that actually creates more risk that forces you into
then betting big, which then forces me
to I derisk it by pulling back on the ambition,
and then I just have another incremental view of
(28:53):
whatever problem I'm solving for. And that's the vicious cycle
that these things go on. Yeah. Well and so what
I'm hearing in that is is you have an organization of this huge organization
in this, like, this engine that's moving forward, and it's moving at a certain
pace. And then you're gonna test some things. You're gonna have this big bet that's
happening on the side, and it's gonna be separate. And you also talk about in
(29:14):
your book about even from a technology standpoint, being able to
move quickly, and we can talk about agility and all of that and your
take on downside of agility and all that. Right? So there's that. It's not
an either or, are we this or are we that? That's right. How do we
work together on that? And what I loved, you said in
the book, you call it don't bet the ranch. And I learned that
(29:36):
firsthand from my dad, and I learned that from my own personal experience.
I just said, you know what? I learned don't bet the farm is what I
call it. How did you learn that from your dad? My dad being a small
business owner, he'd go all in. So he had a successful
business, and he had another business on the side. Everything's going really well, and
he wanted to do something else. And he investigated it, researched
(29:57):
it, and all of that. And this was back when I was, like, 11, 12
years old. And he sold his business, not having mentors
and so forth. He sold this thriving business and walked it and
set aside this other one, and my mom kinda picked it up. It was a
family business. And he sold it to put it into this other thing.
And then this other thing failed, not just a failed failed
(30:18):
absolutely miserably. And, I mean, that's a whole story in
itself. And I've seen how he's the screw it. Let's do
it. His motto was always like, yeah. Let's give it a shot, and
we'll clean up the mess later, which is always there was oftentimes
there was a mess. And so the specific chapter, but it does weave across the
book, is at chapter 4 called think big bet small. And
(30:40):
it really is about this concept of persecuting the
concept way more than just a
normal kind of diligence or analysis does.
One of the biases that companies tend to to fall prey
to is they fall in love with an idea. We build
one concept, and by the time we're getting to kind
(31:02):
of final approval and, like, are we go or no go, Like, it's
kinda either that or we do nothing. And
one of the powerful lessons that I learned at
Amazon and a number of other places is having a portfolio
view of 10 things we could go do,
knowing that we're probably gonna go do one of them. But evaluating
(31:23):
those against each other and doing thought experiments
and tests against them far more, It feels like you're
wasting time and money, but you are both improving your
concept and you're derisking it. And you're helping to avoid
this natural bias of just like, yeah, we're gonna fall in love with the business
and then we are gonna take the big leap when we
(31:45):
really haven't done the diligence that these major
bets take. And so that's the both the essence of
the book, but in particular, that chapter is about how to
stack rank, the assumptions, the risks,
and design thoughtful, fast, isolated
experiments in order to understand that factor
(32:08):
better so that then you make a better decision. And then we have a
chapter in Big Bet Management. My favorite chapter
title, which is continue, kill, pivot, or confusion.
And it's about how to run the high stakes meetings
well because those high stakes meetings where you're making the go no
go decisions and everything. Right? Do we pull back? Do we lean
(32:30):
forward? Do we pivot? Well, what typically happens is confusion,
and it's because we don't run we don't appreciate what these meetings
are, the job to be done in these meetings, and we don't set them up.
And executives don't recognize what they need to do well,
and we don't run them well. So we have a kind of prescriptive
approach to how to do those meetings well. John, there is
(32:53):
so much in this book. I love it. And it's just so on point.
And I love it because it's not just theory. There's a lot of leadership books
out there and some from wonderful authors and so forth. But
the way that you and I should say the way that you and Kevin
unpack it and, practically speaking, talk about how you applied
it. Here's what you learned. Here's what you did. It just stands out. The one
(33:16):
thing I would add to that is we kept the book very readable. Right? It's
45,000 words. It's a great listen, but we took
all the tools, the templates, the checklist, and we have
a rich set of free resources for a reader. You don't even have to
read the book. You can get the resources at bigbetleadership.com that
takes all of this story and approach and
(33:38):
actually draws out kind of the paint by numbers tools that you need in order
to do it. Fantastic. And we'll make sure that that is
highlighted in the notes that everybody who is scanning the notes quickly
will be able to get that as well. I do encourage people though, get a
copy of Big Bet Leadership, Your Transformation Playbook for
Winning in the Hyper Digital Era. There's so much in
(34:00):
this. It's one of those books. I can tell you that it's gonna stay on
my shelf. I read a lot of books and there's a lot of books that
I'll pass on or donate after because I, you know, I just don't want volumes
of, like, libraries full of books and so forth. But this one's gonna stay on
my shelf because I know that this and not just on my shelf, but as
a resource so that I can reference it back again and again. So I highly
(34:20):
recommend you get a copy of that. John, thank you so much for being here.
Such a pleasure. And just to get you unpacking you as I read
it, but then unpacking a little bit more and bringing it to life is just
fantastic. So thanks, Nicole, for the platform and for your preparation and
great conversation. Thank you. Of course. I always say leaders of
transformation take action. Sometimes that action is stepping
(34:42):
back and reflecting and doing some deep thought. Sometimes it's
actually taking action and going out and doing something. And, you know, you gotta know
what the timing is and where you're at. And I just encourage you for to
start with is take action. Get a copy of John's book. If this
is piquing your interest, if you are in the midst of a transformation
or you are looking at making big bets in your business, whether you're a
(35:05):
senior leader of a company with thousands of employees or whether
you're an entrepreneur starting out, there is so much that you can learn
here because it's like you can apply this even on a small scale
to your business, which I you might
actually say that this the risks are higher in terms
of how the impact on you in your business, in your
(35:27):
family, in what you're doing. So whether you're a small business owner, whether you're a
big business leader, I know that this is gonna be very valuable to you.
So take action on something here today that you learned, whether you apply
it to yourself and you go back, you go get those resources or you get
the book, do something to move you forward. And that's what leaders
do. Okay? And that's how we create transformation because we can I say that because
(35:49):
we can listen to podcasts all day and it's wonderful? We can read books all
day and all that stuff's great, But you gotta take action on and apply it,
and that's where the transformation happens. So I encourage you to do that. We'd love
to hear your stories. You can go on leaders of transformation.com and reach
out to us there. Give us your feedback. Of course, we're all on social as
well. There's lots of other resources also on the leaders of transformation.
(36:10):
We have over 525, 530 by the time this
is released, episodes out there, amazing people making a difference in the world that can
help support you along your journey this year as well as additional resources that
I provide as a coach. And we've got a new faith community we just launched.
So lots there. Go check it out. If there's any way we can
support you, let us know. So again, thank you for being here, John. Thank
(36:32):
you for being here. And, yeah, we look forward to seeing you next week on
another episode of the Leaders of Transformation. Thank you
for listening to the Leaders of Transformation podcast with Nicole
Jansen. If you're enjoying this show, please click the follow or
subscribe button, and leave a rating and review wherever you listen to
your podcasts. And remember to join us on social and get
(36:53):
connected. Together, we can make this world a better
place for everyone. We'll see you next time.
Welcome to the Leaders of Transformation podcast. The number one
show for business leaders and entrepreneurs passionate about uplifting
others and making a greater impact in the world. Now here's
your host, transformational coach, speaker, and business
advisor, Nicole Jansen.
(00:21):
What are the top 3 mega forces that are affecting American
business, and how do you prepare for them? Our guest today is
John Rossman. He is a leading authority on innovation,
leadership, and digital transformation. He's actually a former
Amazon executive and the best selling author of the Amazon
Way series. He offers unparalleled
(00:44):
experience and expertise in driving business success through
strategic innovation and leadership excellence. And today,
we're gonna talk about those top 3 mega forces that are shaping
American business, how to solve wicked problems, and the
big bet framework, which is all covered in his latest book, Big
Bet Leadership, and it is fantastic. It is a playbook.
(01:06):
You're gonna wanna read through this just to kind of familiarize yourself with
it and then keep it handy when you are
actually going through your transformation process
because it actually is a step by step playbook. It's fantastic. So, John,
welcome to the leaders transformation. We're glad you're here. Nicole, awesome. Thanks for
having me here. I'm just gonna let you keep talking because you do a great
(01:27):
job of kinda getting to the heart of it. Well, I love bragging on people
and and highlighting what they do well, and you certainly I was so
impressed. Literally, I was telling my husband, I was like, I don't know how this
guy on that, you know, you worked with Amazon and the
Amazon marketplace, that you were part very instrumental
in leading that and making that happen. Wow, amazing so
(01:48):
much that we can learn. And I know that we'll get a little bit of
a taste of it here today. So I appreciate that. So
lots of changes happening already. Lots of changes coming. Let's
talk about those 3 mega forces just to kind of the baseline.
Yep. Understand what we're dealing with, and then how do we navigate
through that bucket? So the pretext of the book
(02:11):
is about why as leaders do we have to
become better at being able to transform
like fundamentally change and improve our
customer experiences, our operating models, our cost structures, like how
we do business because we aren't very good at it today. Right? All the
statistics show how difficult even incremental change, let alone
(02:33):
fundamental restructuring. So the argument we make in the
front part of the book is about the hyper digital era. And
what the short story is is that if you think the past
25, 30 years of kind of digital transformation and
digital disruption has been exciting and has created a lot of change,
that's the early innings. That's the pretext to this
(02:55):
next era of change and what we fundamentally believe is kind
of the 3 mega forces driving that change. Well,
certainly, technology is one of those changes, but it is
just one of those, and it is a mega force. Like, this is
something to contend with both new superpowers harness, but
also new threats and challenges and
(03:17):
errors that we don't really wanna make, but we know we're gonna make. So that's
1 mega force. The other mega force is the
aging of our population and kind of the decreasing
availability of a skilled workforce. Every western
country is facing this mega
force, some much more severe than the US is. Right?
(03:39):
So Japan and much of Western Europe.
And, essentially, our workforce is aging.
Our birth rate is declining, and this is just the
reality that we have to be designing
our companies and our workforce is the aging
of America and scarcity in
(04:02):
skilled labor. And then the 3rd mega force
is really that our country is gonna have a bunch
of constraints on it relative to kind of our
committed spend. So our committed spend is both all of
the entitlement programs that we've committed to as a country and
want to commit to as a country as well as our debt. Like, a
(04:24):
lot of these things are in the news. I'm not a political
analyst, but that does create competition for capital,
and we need to create an environment where innovation
thrives and where we outgrow this challenge of kind of the
committed spend. Those are kind of the 3 mega
forces that, again, each one on their own is like you
(04:47):
could just isolate and force, but those three together are gonna create
a vortex that create this
environment where there will be companies that
are designed and engineered on purpose to
be 10 to 100 x more productive
than their typical peer company is today.
(05:10):
And so there's gonna be a whole new set of winners, a
whole new set of losers, and what we need to
do today is prepare for it, but prepare for it by
becoming good at how we actually explore
and experiment on these concepts of transformation. And that is
what the essence of the playbook is, which is about how to think
(05:33):
big, but do experiments
early to help derisk these bold concepts
that we might have for our business so that you can actually let them do
what they need to do, which is be adjusted and not be committed to. That's
what a big bet is. Yeah. Yeah. Well and that's one of the things I
really appreciated about in your book is that because you acknowledge the
(05:54):
fact that there are these constraints, there are these things
that we need to take into consideration, almost like anchors that can hold
you back from actually making those because we can talk about the
transformation and the opportunity and the possibility and all of
that, but we also need to recognize what we need to let go of
and or what we need to address and, like you said, plan
(06:17):
for. And so that derisking, you know, it's like when we think
about big bets, we think about gambles. We think about just, you know,
shooting for the moon, and we think of I know, like Richard Branson. Right?
Screw it. Let's do it. Yeah. Okay. So he's an
anomaly a little bit. But also, he may say that, but there's a
lot that's going behind the scenes that people don't hear or know
(06:40):
about. And so they just kinda like, oh, I'm gonna do the same thing, and
I'll just put it out there. It's like, no. You're not getting the
whole picture there in terms of how he's been able to be successful in doing
that. Yeah. Kind of the metaphor of the book behind them. Yeah. The metaphor of
the book is about, like, how do you become the shark at the table? Right?
The shark at the table has some unfair advantages,
(07:00):
typically unfair information. Right? Like, they understand the table
better. They can see things better. And that's the whole goal here is how to
gather more information upfront so that
you truly derisk the the largest conceptual
risks of your concept. The challenge is
what most leaders do is they address risk
(07:22):
by descaling the ambition, by descaling
what their view of the future is, and so they just become this
very incrementally driven organization. And
incremental change is important. Incremental change is fine,
but it won't create new competitive advantage for you.
You have to grow. You have to become more competitive. You do
(07:44):
that by creating step change, some dramatic
transformational change. Those are things that you can't predict,
and that's the whole goal here is really thinking
big, but betting small, incrementally
experimenting on these before you make big commitments so that you're the shark at the
table. Yeah. Well, talk about that. I know you have a series
(08:07):
of memos, which is kind of part of your playbook, your framework
that you guide people through through your book, and you
start off like you in that killer feature. Talk a little bit about that because
that incremental change a lot of times, like, if we make these little changes, little
changes, little changes, we're gonna create this big tidal wave.
Well, maybe and maybe not. So, yeah, talk a little bit
(08:29):
about that. The book is centered on creating 3 critical habits
for these kind of transformational ideas. You have to create clarity,
maintain velocity, and accelerate risk and value, deferring
big commitments. So upfront is creating clarity,
and clarity is well defined. I tend to define things pretty
well. Clarity in this case is getting super clear on
(08:51):
both the problem that you were solving and your
hypothesis about what the future state would be. Guess what
that creates? That creates a vector, 2 points, and you can actually
then test that concept across the life cycle. That's
why creating clarity upfront is key.
Amazon's entire
(09:14):
problem solving innovation approach, like how they think through
complex things, is by writing them out. They call
this the working backwards process, 6 page narratives.
We designed a specific set of memos specifically for this
concept of solving really hard problems. All
of these things are not simple, trivial problems. If you think they
(09:37):
are, they either aren't transformational or you are
grossly underestimating actually what it's gonna take to do it or
what the risks are. And so through the writing and
debating process, what you create
is clarity of the concept. And especially in a
teamwork environment, you both get the best out of
(09:59):
everybody, their insights as to what the problem is, their insights into what
the killer feature or the assumptions are to get to the killer
feature, plus you're preparing them for the change.
They're processing this through, and writing a memo around
it helps set it all up. So, yes, there is a set
of memos that we prescribe relative to this. It's not the
(10:21):
only way to do it, but at the end of the day, if you
can't tell me exactly, like, what is the real
pain that your customer or your operator, your
associate is getting to and have deep empathy and insight into
what are they really trying to get done. Like, it's not this little frictional
thing. It's like it's a deeper essence of a problem.
(10:42):
And then what's your hypothesis about, as we call it,
the killer feature or the most lovable feature? Like, I had somebody
working in the medical field who was like, you know, we're not gonna call it
the killer feature here, John. I was like, fair enough. And this is where the
art of experimentation really starts, is taking that killer
feature and identifying the 3 to 5
(11:05):
things that must be true in order to deliver that
killer feature. Now all of a sudden, I'm interjecting
this critical aspect of admitting I can't
predict everything about it. There are assumptions that I am making relative
to delivering this killer feature. Let's identify and
prioritize those because then when we understand the key
(11:27):
things that must be true that are both high value and high risk, I can
set up isolated, discreet,
narrow experiments to help test and understand them better. Right? I'm
gathering more information, and that is the process you go through.
So let's talk about it in the context of
Amazon in the marketplace. As you were building this out, how did that look
(11:49):
as a practical example of how you use this? Yeah.
So a little time capsule machine here. So
in 2,001, 2002, Amazon
was about a $3,000,000,000 revenue company. They
were 1 third the size of eBay. We were being referred to as
amazondot com, Amazon dotcoast, and my favorite,
(12:11):
Amazon dot org, because we clearly didn't know how to make money.
And we had already taken 2 attempts at
a third party selling strategy and approach. Right?
There have been the auctions business, and there have been something called z shops and
everything, and they didn't work. And Oh, by the way,
why did they not work? Well, if each for different reasons,
(12:35):
z shops, partially because it was a very
disconnected customer experience from the normal shopping pipeline and the
normal shopping approach at Amazon, and so it was just
like this 2nd class citizen experience.
And auctions because auctions don't fit many of
the Amazon customer needs. They like precision. What's my
(12:58):
price? When am I gonna get it? Right? And we didn't recognize those things early.
We were we skipped the important part of understanding
what was the real customer need here. We just looked at Ebay and go, oh,
we'll copy that. Yeah. It didn't work. And what Bezos,
he had a he had intuition that I have to
solve for this situation. I have to become more than just a
(13:20):
books, music, and video retailer, first party retailer.
90% of the business at that point was books, music, video,
all first party inventory. We bought it, we sold it, and the
marketplace was about adding many more categories
and doing it through a third party approach. But
we had the Amazon brand to represent, right? The Amazon brand
(13:43):
is based around trust. A customer trusts you
with their wallet. They trust they're gonna get what they ordered. They trust they're gonna
get it on time and fast. They trust that the price is gonna be in
competitive price. And so we had to work through
understanding that writing and debating these memos out until
we came to a really simple orientation that a
(14:05):
customer needed to trust buying from a third
party as much as they trusted buying from Amazon, the retailer.
That was the killer feature and everything laddered
under that killer feature that imposed that we had to put
a tremendous amount of both rigor and innovation
in how we actually interoperated or integrated
(14:27):
with tens of thousands of third party
sellers, not just a few third party sellers. So we put in place
this very robust choreography of data, obligations,
approaches to doing this to create what is now just
the default expectation customer experience, and you
don't really recognize or care if I'm buying it from
(14:50):
Amazon, the retailer, or through an Amazon seller because
we engineered this so well. But it was only because we
learned from failure and we truly understood, like, this was the real
customer need. So, yes, we wrote all of these types of
memos. We didn't call them the same things we call them in this book, but
I did write the future press release, which is one of the memo types for
(15:12):
the marketplace business. And I think it really
set the basis for why the marketplace business was successful.
Now I love that, and thank you for sharing that because I was
thinking about that. And then you said it it's like the copycatting.
Sometimes we look at other models and go, oh, well, I'll just do that. And
it's like, well, you need to think that through. And one of the other things
(15:34):
that we notice a lot of times in business is that they're so
focused on the systems and the logistics behind the scene that they're
forgetting about the customer experience. I mean, customer service
across the board is terrible in many companies. Right? And getting
worse. And getting worse. And it's like they're not taking this
into consideration. And so if that just leaves the
(15:57):
door open to somebody else coming in and saying, we're gonna do it better,
and we're gonna acknowledge, and that's gonna be that killer feature, most
loved feature and blow everybody else out of the water. So
I sense that that is coming in many different arenas.
So hopefully. But, yeah, the whole idea of not copycatting, but
stepping back and looking and saying, if you wanna create the big bet
(16:19):
leadership, which is actually stepping out and doing something new unprecedented,
the thing I'd tune on that it sometimes copying is important.
In fact, we have a chapter called play chestnut checkers. That is about
learning from others in a very directed manner. To me, it
doesn't matter whether it's unprecedented or new or innovative. What's
important is that it's right for your customer and for your business. Yes.
(16:42):
That's what's important here. Right? Yeah. So you have to come to
a deeper understanding of your customer, your
operator, and the challenges that they're focusing and what your brand
stands for. Yeah. That's what's important. And then
copy away, like, the goal is to be autopilot. To be effective, right,
and to grow a great business here. And so that's the only
(17:05):
adjustment I would make to that truism there, which is
just copying others doesn't solve for it. But
work backwards from your customer. That's what all of this is about. It's working backwards
from the outcome that you wanna
get to, and then we figure out a way to play it forward and
experiment and test those things out that are the hard things
(17:27):
that have to be proven out in order to deliver that. Yeah. And not to
be insulting, but it's like for some companies, I think it's get off autopilot. That's
what I was kind of referring to, this idea of, like, oh, we'll just do
this because we see it. It's like get off autopilot, really check-in, be fully
present and conscious about what it is that you're actually doing and the
impact that you wanna make. Absolutely. To some degree, that's a whole another
(17:48):
conversation about how mediocrity
has become not just accepted, but it's actually become the
target for so many organizations. They shoot for
mediocrity in customer experience. They shoot for mediocrity
in terms of goal setting and attainment. And I think that
is another, again, discussion to be had here and
(18:10):
everything. Yeah. Yeah. Well, so let's talk a little bit more about
this idea. I know you have so many concepts in here that I wanted to
unpack. So one of them was the day 1 versus day 2
mindset. Yeah. So there's a couple of ways to explain this. So
one is this is an example of Bezos
being a brilliant strategic communicator and
(18:32):
being something that we call out in the book of being a chief repeating officer.
Repeat. Repeat. Repeat. Yeah. In this particular case, the message
is we are a day one company. We'll unpack that. A
day one company is just message to
both employees and the shareholders that
Amazon is going to try a lot of things that don't work. We
(18:53):
are always gonna be optimistic about the future
and about innovation and about not just
holding on or optimizing just for today. We're gonna optimize for the
long term, and you do that by constant reinvention. And that
we are not going to be beholden to
past traditions. Like, past traditions are interesting,
(19:16):
but they don't define what the future is. In fact, they oftentimes hold us
back from the future. That's how all the things that he
packs into just repeating, I'm a day one company. We're a day one
company. We're a day one company. Right? And Andy Jassy, to his credit,
continues to use that mantra as his
permission slip to go in and question everything
(19:38):
at Amazon. And I think that that humility to
constantly question why is it good
enough, what's the future of this, how could we do
it better, actually scale it, do more on an improving unit
cost, Like, those are the types of constant questions
that a day one company asks itself.
(20:00):
I love this. So one of the things one of my mentors once taught me
is this, the phases of business. You go to invisible, to
emergence, to chaos, to normal operations of
affluence, and to a position of power, what I like to call influence.
You're known in the marketplace, but then they're staying there. So the first one, you
gotta get there and then there's how do you stay there, right, and not
(20:22):
be a blockbuster or one of the, you know, other companies that that were
arrogant enough to think that they had it all, and they kind of
rested on that success. And so I think that's really important. I mean, if
I can take that thread and expand on it Go for it.
We gravitate to kind of these traditional now
dated stories of digital disruption. Right? Blockbuster,
(20:43):
Xerox PARC, so many companies like that, Circuit City and
everything. Right? But just think about last year
and the disruption we saw to a few
gold standard companies, like the category leaders. Listen to this set
of companies that have definitely peaked, and the
question is, are they gonna be able to pull it out or not? Starbucks,
(21:07):
Nike, Boeing, and Intel. Like,
those are 4 gold standard
brands and innovators that have all suffered from
their own version of kind of what we're trying to
avoid here, their story of both accepting
mediocrity and having a diluted value
(21:29):
proposition. And it's those the combination of kind of that innovator's
challenge plus becoming kind of a fat and happy culture
that is the combination that creates so many challenges
in these successful businesses. And as you point out, it's
one challenge to kinda get there, and it's a whole another type of
playbook and leadership playbook to not suffer from
(21:51):
that set of things. And that is really one of the things that
I respect about Amazon. And you can and I can complain
about lots of things about what goes on at Amazon. They are not
perfect at all, but I'll tell you what they are. They're fundamentally
humble, and they realize that if we don't keep
going to be a day 1 company, we're gonna become a commodity.
(22:15):
And that's what leaders at successful companies they
lose sight of is that competitive advantage is short
and getting shorter, and you have to invest the right
amount into kind of this reinvention set of horizons.
And that's what this playbook, big bet leadership is for is
how do we create those next horizon businesses and business
(22:37):
models? Yeah. And coming back to those 3 mega
forces is you tie that all in in terms of from the
technology standpoint, utilizing technology,
also from a talent standpoint. We'll talk about that just for a moment here.
And then, of course, like you said, those constraints and all of that. Let's talk
about the talent. I know you you mentioned in the book, which goes against some
(22:59):
of the current climate of how things are in fractional
leadership and so forth. Yeah. And you talk about, which I
completely get the idea of fractional leadership and why companies
are doing that. And I totally agree with
you 100% on this idea of the importance of a full time team,
people that are sold out, the directly responsible individual
(23:23):
because I've seen it even, like, in working with small businesses. I mean, you put
heck, even volunteers. If you don't have somebody who is absolutely
100% committed to it and it's a side gig, it
just doesn't work long term. You get mediocrity. You get
just enough. Maybe. These fractional teams maybe
work for kinda some incremental situations and well
(23:45):
understood projects. Right? Right? But when we are tackling
what should fundamentally be a big opportunity and a complex
opportunity or a portfolio of considerations that we're debating,
a dedicated team has all sorts of advantages
that a fractionalized team can never bring to the table.
(24:06):
In one of the key roles that you mentioned, the directly responsible
individual, Amazon, we called it a single threaded leader. It's
not just a full time project manager. It
is a senior leader who is fully dedicated
to this mission that we are on, and
they have sway within the organization. They
(24:27):
know how to escalate. They both internally as well as with
partners in the ecosystem and customers and things like that. They know
how to get things done, and they're well respected. And you
don't see too many companies or individuals that
are willing to go, like, the coin of the realm is always the size of
your budget or the size of your headcount. But what I'm suggesting is the exact
(24:50):
opposite, which is a senior leader abandons everything. They have
no revenue. They have what is a seemingly small budget and a
small headcount. But their job is to invent the future for this
organization. So it's an important mission, but they don't
carry the traditional trappings that a senior
executive have. And you either have to believe that we need
(25:13):
to get that done or you don't, and I would say that is the most
controllable factor that you have into whether you are going to be
successful at this job of systematic transformation or
not. Is are you willing to commit a full
time dedicated team with a senior leader to this mission
of transformation. How do we
(25:35):
marry that with this talent shortage that's going on
and find the right people for that team? Because I know you also talk
about that in your book. Because you can get people that will go, oh, yeah.
That sounds good. But they're not fully committed. How do you find the right
people for that team, identify who they are and for that
senior leadership position? Exactly. How to identify that
(25:57):
person is relevant to the circumstances. Some degree, your hunch as
to, like, what's the direction of this transformation.
But what's key is you have to make it safe and
smart for this person to go, okay. Yeah. I'm gonna bet my career
on this, you know, we'll call it program that we're
gonna do. The coauthor of this book, Kevin McCaffrey, was my
(26:19):
client. He ran new business incubation at T Mobile. And one of the
thing we wrote this book not just for companies, but for
the teams that are driving these transformations
because there's nothing as exciting for
your career as to be associated, to be on one of
these teams, but there's also nothing quite as risky
(26:42):
as being on one that isn't successful. And if you look at the
odds of success, a lot of these aren't gonna be
successful. And so that's why setting these things up you know, we
have a whole section on the big bet environment and everything, right, around the
right policies, the right mindset, the right, call
it, vessel that we put this into is critical
(27:03):
to its success. The team is part of that vessel, but only
part of what you have to get successful. But you have to
understand this is a different game that we are playing.
We are not shooting for operational optimization. We are
shooting for learning. We're shooting for experimentation, and that will
lead us we believe that will lead us to a concept
(27:25):
that then we should invest in going forward. But you have to
understand what you're shooting for is which gets to the second
critical habit, which is velocity. You have to
maintain velocity. Every company starts off one of
these initiatives or their annual plan with, like, we're fully
committed. You'll get my time and attention, but it quickly
(27:47):
devolves into just another project
meeting, just another thing on the calendar. It slows down to
the typical operational cadence within an organization.
And on these big concepts, you
have to find a different path and a different speed within an organization. One of
the ways you do that is by having a dedicated team and a senior leader,
(28:09):
but that's just one of the ways that you do it. You have to put
constraints on it. You have to make sure it's an actual priority for the rest
of the executive team. You have to have a different set of maybe
policies that you go through, for example, for hiring or for
purchasing tooling or technology or anything that you
need. You have to find a different way, a different environment
(28:31):
for these things to operate in because you have to maintain velocity.
Because if you slow this down, what that does is
that actually creates more risk that forces you into
then betting big, which then forces me
to I derisk it by pulling back on the ambition,
and then I just have another incremental view of
(28:53):
whatever problem I'm solving for. And that's the vicious cycle
that these things go on. Yeah. Well and so what
I'm hearing in that is is you have an organization of this huge organization
in this, like, this engine that's moving forward, and it's moving at a certain
pace. And then you're gonna test some things. You're gonna have this big bet that's
happening on the side, and it's gonna be separate. And you also talk about in
(29:14):
your book about even from a technology standpoint, being able to
move quickly, and we can talk about agility and all of that and your
take on downside of agility and all that. Right? So there's that. It's not
an either or, are we this or are we that? That's right. How do we
work together on that? And what I loved, you said in
the book, you call it don't bet the ranch. And I learned that
(29:36):
firsthand from my dad, and I learned that from my own personal experience.
I just said, you know what? I learned don't bet the farm is what I
call it. How did you learn that from your dad? My dad being a small
business owner, he'd go all in. So he had a successful
business, and he had another business on the side. Everything's going really well, and
he wanted to do something else. And he investigated it, researched
(29:57):
it, and all of that. And this was back when I was, like, 11, 12
years old. And he sold his business, not having mentors
and so forth. He sold this thriving business and walked it and
set aside this other one, and my mom kinda picked it up. It was a
family business. And he sold it to put it into this other thing.
And then this other thing failed, not just a failed failed
(30:18):
absolutely miserably. And, I mean, that's a whole story in
itself. And I've seen how he's the screw it. Let's do
it. His motto was always like, yeah. Let's give it a shot, and
we'll clean up the mess later, which is always there was oftentimes
there was a mess. And so the specific chapter, but it does weave across the
book, is at chapter 4 called think big bet small. And
(30:40):
it really is about this concept of persecuting the
concept way more than just a
normal kind of diligence or analysis does.
One of the biases that companies tend to to fall prey
to is they fall in love with an idea. We build
one concept, and by the time we're getting to kind
(31:02):
of final approval and, like, are we go or no go, Like, it's
kinda either that or we do nothing. And
one of the powerful lessons that I learned at
Amazon and a number of other places is having a portfolio
view of 10 things we could go do,
knowing that we're probably gonna go do one of them. But evaluating
(31:23):
those against each other and doing thought experiments
and tests against them far more, It feels like you're
wasting time and money, but you are both improving your
concept and you're derisking it. And you're helping to avoid
this natural bias of just like, yeah, we're gonna fall in love with the business
and then we are gonna take the big leap when we
(31:45):
really haven't done the diligence that these major
bets take. And so that's the both the essence of
the book, but in particular, that chapter is about how to
stack rank, the assumptions, the risks,
and design thoughtful, fast, isolated
experiments in order to understand that factor
(32:08):
better so that then you make a better decision. And then we have a
chapter in Big Bet Management. My favorite chapter
title, which is continue, kill, pivot, or confusion.
And it's about how to run the high stakes meetings
well because those high stakes meetings where you're making the go no
go decisions and everything. Right? Do we pull back? Do we lean
(32:30):
forward? Do we pivot? Well, what typically happens is confusion,
and it's because we don't run we don't appreciate what these meetings
are, the job to be done in these meetings, and we don't set them up.
And executives don't recognize what they need to do well,
and we don't run them well. So we have a kind of prescriptive
approach to how to do those meetings well. John, there is
(32:53):
so much in this book. I love it. And it's just so on point.
And I love it because it's not just theory. There's a lot of leadership books
out there and some from wonderful authors and so forth. But
the way that you and I should say the way that you and Kevin
unpack it and, practically speaking, talk about how you applied
it. Here's what you learned. Here's what you did. It just stands out. The one
(33:16):
thing I would add to that is we kept the book very readable. Right? It's
45,000 words. It's a great listen, but we took
all the tools, the templates, the checklist, and we have
a rich set of free resources for a reader. You don't even have to
read the book. You can get the resources at bigbetleadership.com that
takes all of this story and approach and
(33:38):
actually draws out kind of the paint by numbers tools that you need in order
to do it. Fantastic. And we'll make sure that that is
highlighted in the notes that everybody who is scanning the notes quickly
will be able to get that as well. I do encourage people though, get a
copy of Big Bet Leadership, Your Transformation Playbook for
Winning in the Hyper Digital Era. There's so much in
(34:00):
this. It's one of those books. I can tell you that it's gonna stay on
my shelf. I read a lot of books and there's a lot of books that
I'll pass on or donate after because I, you know, I just don't want volumes
of, like, libraries full of books and so forth. But this one's gonna stay on
my shelf because I know that this and not just on my shelf, but as
a resource so that I can reference it back again and again. So I highly
(34:20):
recommend you get a copy of that. John, thank you so much for being here.
Such a pleasure. And just to get you unpacking you as I read
it, but then unpacking a little bit more and bringing it to life is just
fantastic. So thanks, Nicole, for the platform and for your preparation and
great conversation. Thank you. Of course. I always say leaders of
transformation take action. Sometimes that action is stepping
(34:42):
back and reflecting and doing some deep thought. Sometimes it's
actually taking action and going out and doing something. And, you know, you gotta know
what the timing is and where you're at. And I just encourage you for to
start with is take action. Get a copy of John's book. If this
is piquing your interest, if you are in the midst of a transformation
or you are looking at making big bets in your business, whether you're a
(35:05):
senior leader of a company with thousands of employees or whether
you're an entrepreneur starting out, there is so much that you can learn
here because it's like you can apply this even on a small scale
to your business, which I you might
actually say that this the risks are higher in terms
of how the impact on you in your business, in your
(35:27):
family, in what you're doing. So whether you're a small business owner, whether you're a
big business leader, I know that this is gonna be very valuable to you.
So take action on something here today that you learned, whether you apply
it to yourself and you go back, you go get those resources or you get
the book, do something to move you forward. And that's what leaders
do. Okay? And that's how we create transformation because we can I say that because
(35:49):
we can listen to podcasts all day and it's wonderful? We can read books all
day and all that stuff's great, But you gotta take action on and apply it,
and that's where the transformation happens. So I encourage you to do that. We'd love
to hear your stories. You can go on leaders of transformation.com and reach
out to us there. Give us your feedback. Of course, we're all on social as
well. There's lots of other resources also on the leaders of transformation.
(36:10):
We have over 525, 530 by the time this
is released, episodes out there, amazing people making a difference in the world that can
help support you along your journey this year as well as additional resources that
I provide as a coach. And we've got a new faith community we just launched.
So lots there. Go check it out. If there's any way we can
support you, let us know. So again, thank you for being here, John. Thank
(36:32):
you for being here. And, yeah, we look forward to seeing you next week on
another episode of the Leaders of Transformation. Thank you
for listening to the Leaders of Transformation podcast with Nicole
Jansen. If you're enjoying this show, please click the follow or
subscribe button, and leave a rating and review wherever you listen to
your podcasts. And remember to join us on social and get
(36:53):
connected. Together, we can make this world a better
place for everyone. We'll see you next time.
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