Gary Hamel - Leading The Revolution Part 4 - The Innovation Show

Episode Transcript
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(00:00):
We're still on this book becauseit's so good leading the Revolution,

(00:04):
and we're joined by the authorof this book, Gary Hamel.
Welcome back.
Nice to be here Aidan.
It's great to have you back, man.
I absolutely love this chapter.
I was teeing up the last dayat the end of the last episode,
but I went deeper into it.
I went down many, many rabbit holes.
It's two brilliant chapters.
One is corporate rebels, and this is theunderstanding of the difficulty that you

(00:27):
have when you're navigating the corporatemaze, the corporate political landscape
as well, that we'll get into in a moment.
I'm gonna tee you up with thisfollowing quote from the book.
It's just, I sent it Gary to so manypeople who work in change and they
were like, oh my God, that's me.
So here we go.
You understand therevolutionary imperative.

(00:49):
You feel it in your bones.
You're vibrating with excitementthat the thought of doing something
new, building something radical,and you can't shut up about it.
But your industrial era boss with ablack belt in corporate gamesmanship,
is immune to your ramblings.
Every time you start to pitchyour idea, you get the look.

(01:09):
You know the one the one thatsays, who hired this idiot?
Anyway, so what do you do?
Asks Gary.
Beat your head against the wall.
Throw yourself in frontof the chairman's limo.
Bide your time until the moronsrecognize your genius and promote you.
Take early mental retirement, whichmany people do enroll in a seminary.

(01:34):
Steady on.
There's another option, a path tooseldom trod that is rocky and
steep, but leads to opportunity.
It is a path unfamiliar tocorporate types, but well known to
thousands of otherwise powerlessindividuals who succeeded in
knocking history out of its grooves.
Absolutely.

(01:54):
Beautiful quote, Gary, let's tellour audience what you were thinking
when you were starting this chapter.
First of all, I've lived for so longin Silicon Valley and I see all these
wonderful entrepreneurs , and half ofthem, probably more than half of them,
used to work in some big company, andthey had an idea and it was powerful
and or at least deserved to be explored.
And they couldn't get an audience, theycouldn't get anybody to pay attention.

(02:16):
So they leave.
Prob probably if probably half ofall business plans get written , on
the employers paying the cost of you takenyour time to write this thing and then
you go in and you build it somewhere else.
So that seemed to melike a colossal waste.
Somebody shouldn't have to like,take the risk shift careers and so

(02:36):
on to get an idea to have traction.
And yet inside most organizations, yeah,it is super, super difficult, particularly
if you're young, particularly if you'reat a lower level to, to get a hearing.
So part of me writing this is likehow do you punch above your weight?
How do you take an idea and getpeople to take it seriously when
you have very little political powerand very little formal influence.

(02:58):
It's such an important book, Gary, and toknow that you're not alone because those
corporate change makers who experiencethis, it can feel like they're failing.
They're the one who's not.
I. Very good at it.
And in, in many cases it's true.
Let's be honest.
And today, in this chapter, inthis episode, we're gonna share
some of the things you can do, butyou quote Russo in the book here,

(03:21):
and there's another lovely quote.
You said, law is a very good thingfor men with property and a very
bad thing for men without property.
The worshipful observance of precedent isa very good thing for those who sit atop.
Organizations because precedentprotects their prerogatives.
It rewards the skills they'veperfected and the knowledge they've
AC acquired in running the old thing.

(03:44):
But precedents and a narrowdistribution of strategy making
power is a very bad thing for anyonewho wants to create a new future.
I'm gonna keep going on here becausethis next bit teases up for a brilliant
diagram shared by Gary that we'regonna share on the screen, Gary, and
we'll have a bit of empathy for thosepeople who are just listening to us.
But to tee you up here in a highlysuccessful company, the operating

(04:08):
model business model, mental model, andpolitical model are all perfectly aligned.
Each one sits squarely atop the one below.
Human resource professionals call this.
Alignment and alignment is fineif the world is not changing, but
perfect alignment destroys anychance of innovation because it.

(04:30):
Brooks, no descent.
And allows no alternatives.
Alignment is the enemy ofbusiness concept innovation.
Get your head around that one because it'ssomething that we don't talk enough about.
And Gary, who penned those words, is gonnashare exactly what he was talking about.
Yeah, lemme try to do that.

(04:51):
So first of all, yeah, alignment.
Is this like dangerous sort?
I think it's almost the holy grailof a lot of HR people, other people.
In fact, I did a cartoon, Aidan'cause I'm cartoonist in my spare
time that has like a whole group oflemmings running off a cliff together.
And like the CO is standing backaway saying, well, Elise, they're all
going in the same direction, right?

(05:12):
So yeah.
I didn't know, I, I didn't knowthey were your own cartoons.
The cartoons you share in all your books.
Brilliant.
so, so, so, so
in any case yes, for sure youought alignment and consistency
on, on, in, many ways.
But perfect alignment isstasis, and stasis is death.
So this little concept I have literally,if you imagine like fortunes of baked

(05:35):
beans or cans of tuna or something,and they're all perfectly stacked.
and at the bottom youhave the operating model.
What's the supply chain whatassets, capabilities we have?
How do we go , to market and so on.
Above that, you have the business model.
What are our choices about what customerswe serve, what's our value proposition?
So on, and, then a top that you havea mental model, and then at the very
top you have the political model.

(05:55):
Who gets to decide who says we'regoing left or right, or whatever.
And what you find in anorganization typically is all of
those things are very aligned.
So you have a group of people, thetop , who grew up probably running
that operating model who grew upinside that business model, whose
mental models accord with all that.

(06:17):
This is the this is my beliefabout who the customers,
how we reach 'em, and so on.
And and then finally, those arethe people who have the power
to say yes or no to anything.
So when that is all perfect life,there's just no room for anybody to
do something radically new, you'rejust gonna get, you're get closed off.
That's not our business.
That's not the way this industry works.
And people, the top who arediscomforted when you come up

(06:39):
with a truly, truly new idea.
So you have to find a way of kindof misaligning those things if you
like, if you want to create anyspace , for new innovation to happen.
Otherwise, as you try to work an idea upthe pyramid, every single time, you're
gonna have somebody , who, who says no.
And if you're down at the bottom ofthe pyramid, there are a lot of people
above you who have the power to say no.

(07:00):
And I think we, we might have talkedabout this before in most organizations
there are no disincentives to say no.
You could just kill an idea.
Nobody comes back to it three years laterand says, Hey, boy, that was a big miss.
What the hell happened there?
Who is the idiot?
Who kind of shut that down?
That will never happen.
So, , if you have perfect alignment,the people at the top they have the
power, they have a particular setof mental models, , and they're very

(07:23):
familiar with the business model.
They build it, they ran it,their skills align with that.
You it is you gotta disruptthat, shake that loose.
If you want any hopeof doing something new.
I'm gonna jump ahead because in thatchapter that we teed up there and where
Gary shares that diagram, there's threecase studies of brilliant change makers.
There's a guy who built a PlayStation,there's a team within IBM who

(07:46):
basically educated the entirecorporation about the internet.
And then really importantly, therewas a guy from France, DuPont La
Rock, who essentially created asustainable business model for Shell.
And again.
Couldn't, didn't stay there.
Which tells you a lotabout what happened there.
But did create the business.

(08:08):
We're gonna skip them.
We're gonna leave them to youto read the business 'cause
they're very much in depth.
Gary, maybe you wanna say a word on thosebecause you did a hell of a lot of work
interviewing each of those change makers.
Yeah, well certainly it's,it's kind of hard to find
people who've done that, right?
So these are kind of, not quite unicorns,but they're fairly , rare beasts.
But that was what , I was looking for.
Let me, let me put a little academicresearch behind this as well.

(08:31):
There.
There's a Stanford faculty member whoI've lost touch with now, but Bob Bergman
who wrote some really lovely stuff abouthow companies do strategic pivots.
And he had done a case study onIntel, and some long time ago, Intel
made a pivot from RAM devices me,memberships into microprocessors.
And of course, in, in hindsight, thislooks like some brilliant strategic

(08:54):
move probably led from the top.
It wasn't at all, right?
It's somebody four levels down who has anidea, who's super persistent, who builds
the case, builds a coalition, , andyou start to and finally the company
says like, maybe we should try this.
And I think that's true inmost of these cases, right?
I I wish it were otherwise, I think, andwe'll we, maybe we'll talk about this.
There are ways , of building strategy atscale in organizations where you ensure

(09:16):
that all these voices on the fringe areheard and you can aggregate them together
and you can see the future faster.
But you know, in the absence ofthat you need people who are willing
to fight their corner, who do nothave a natural constituency, who
are not at the top of the pyramid.
And again, when you look backthrough history, that is how
strategy happens more, or strategychange happens more often than not.

(09:38):
So I was looking for people whohad been kind of catalyst in doing
that and understand like, well,what does it take to do that?
How do you have this kind of influencein a very large organization?
To literally get them tothink about new opportunities.
And for IBM it was at thattime the internet was coming.
A lot of the incumbents were behind that.
IBM actually got got in front of it.

(09:58):
And of course, PlayStation,we all know that story.
And that was not a businessthat Sodium was interested in.
That was not classicconsumer electronic business.
So, yeah.
And by the way, if you're a leaderand you understand that this is how
strategies change, typically, right?
They don't change at the top becausethe top is too vested in the status quo.
They change when you have somemalcontent, some revolutionary

(10:21):
somebody at the fridges.
If you understand that you're gonna tryto find these people and you're gonna try
to make life easier for them, and you'regonna listen to them and you're gonna
be particularly concerned if their voicesare getting shut off and you don't even
know it because it's happening three yourfour levels down and you never hear them.
So that was kind of the the purposeof going out and finding these
people and saying, what does it take?

(10:43):
To change the direction of a very largecompany when nobody asks you to do it.
And one thing you talk about in thebook, and we are we're gonna cover in the
future when we talk to Joe Bauer about theidea of resource allocation is there's.
Oftentimes the CEO wants thatinformation, but it's the middle layer.
It's those people who have a seriousvested interest in the status quo

(11:05):
who won't let those ideas bubble tothe top and often kill the person.
Try to frustrate them or ostracizethem, or get them to leave outta
frustration many, many times.
And there's a, quote here again, abrilliant paragraph that will speak
to so many people and tee us up forGary's eight moves that you can make.
This is, what can you dowhen you're this person?

(11:27):
Every day companies getblindsided by the future.
Every day, dozens of organizationsfind themselves suddenly on the
defensive, struggling to adapt adecrepit business model to someone
else's business concept innovation.
Yet the future never arrivesas a surprise to everyone in an
organization, someone somewhere.

(11:47):
Mainly the listener to this showwas paying attention for these
heretics and novelty addicts.
Tomorrow's opportunities are every bitas real and an inevitable and inevitable
as today's sunrise, but too oftenthe Sears feel isolated and impotent.
They don't know where to begin in buildinga grassroots movement, even though the

(12:08):
principles of activism aren't classified,and there's no secret handshake.
Over the decade, social containersof all types have constructed a
highly practical theory of activism.
How sad that the principles ofactivism are virtually unknown to
citizens of the corporate realm.
And then you go on to say, well,let's tell you how to build an

(12:30):
insurrection from those people.
Gary studied from all the literature thathe's read, and it starts with one of eight
steps, which is to build a point of view.
And this POV, this point of viewneeds to have four main ingredients.
It needs to be credible,coherent, compelling, and probably

(12:51):
most importantly commercial.
Yeah, well it's it's one thingand I fall prey to this as well.
It's one thing to kind of havethis general sense that there's
a new opportunity over there.
We need to pay attention to it.
Maybe it's something that's gonnacome from AI or it's something
coming from a fundamental shiftin social values or whatever.

(13:11):
But it's one thing to kind of have thatas a nagging feeling or even talk about it
then to really do the hard work of saying, what might the business model look like?
I think in the, in the early maybeeven the preface of that book
Aidan, I laid out a fairly detailedview of what a totally digital
business school might look like now.
Will it ever come to pass?

(13:32):
I don't know.
I. You have to have somethingthat has detail to it that really
reflects , the needs of customers in it.
So don't just talk about , a vague kindof idea yet you really have to put the
work into fleshing it out, making itreal, thinking through the implications,
understanding how you might get there.
And if you're not willing to put thattime in and that effort in to really

(13:56):
elaborate it and think it throughwrite it out, put it in a presentation,
maybe talk to some experts that agreewith you, get their points of view.
If you're not willing to dothat, you're not gonna have any
influence in the organization.
So a, a lot of people kind of complain orwhine or say, gee, we should do something,
but are not willing to put in the hardwork of, of, of, of building something

(14:17):
that can stand scrutiny, something you canshare, something other people can look at.
Maybe it's a simulation maybeit's CAD drawings, whatever it is.
But you gotta reify that idea.
So other people in the organization , canunderstand what you're talking about.
There's one piece whichI find so important.
So firstly, having a pointof view in the first place.
It's one of the reasons, Gary,when I started this show.

(14:38):
I used to interview a lot ofentrepreneurs, startup founders
or scale up business leaders.
And I found that theydidn't have a point of view.
Oftentimes it was quoting Gary Hamelor some other person they'd read, or
some HBO article they just happened tostumble upon, but they didn't have one.
And actually what happened was I startedto get kind of bored because it was

(14:59):
like the same old stuff every week.
And I, and it's why I interview authorson this show, is because they have
worked hard to have a point of view.
They've absorbed information, thatthey've synthesized it, they've written
it, they've put their own slant on it.
And that's what's valuable I find, and Ialways tell change makers, these catalysts
that you talk about here, that writingis a great way to actually establish

(15:24):
that, that they need to start writing.
Which leads us to 0.2, whichis to write a manifesto.
What do you want to see in the future?
I think that's particularly important todo from the perspective , of customers.
Whatever, I've beeninvolved in any innovation.
We try to build some persona.
We try to imagine who this person is.
Why would they care about this?
How are they not being served now?

(15:45):
How is the solutiongonna be better for them?
And I think writing a manifesto fromthat perspective that feels very human
and, where you're really being drivenby a deep need or deep frustrations.
That's like a super critical,that's what people respond to.
They respond to, Hey, how are you going tosolve this really deep, important problem?
So again it takes time, it takes effort.

(16:08):
But as you say, Aidan, in writingthat out you are forced to deal
with the gaps in your own logic.
You're forced to think about, Iwas just assuming this would
happen, but maybe it won't.
So I think that the sheer fact ofwriting it out go back to that business
concept template I have in the book.
Think through every one of those,every one of those kind of building
blocks, what would this look like?

(16:28):
And you don't have to there's certainlygonna still be some gaps and so on.
But if you haven't put in the hardwork of doing that, don't expect
anybody to take you seriously.
There's a couple of key pointsyou make in this manifesto.
One is that something that wedon't often do and particularly
'cause of the frustration,which is to stay constructive.

(16:49):
Don't criticize.
Don't rehearse past failures,and don't look for culprits.
We often do that because we'retrying to, we're so angry.
We're like, wake up your dinosaurs.
And then the second is to provide broadrecommendations, but don't argue for a
single do or do die course of action.
Remember, you're launching a campaign.
Maybe you'll take us through thosetwo because they're two of several

(17:12):
that I picked out from that point ofthe manifesto that are so important.
Well, obviously all of us, werespond better to things that are
positive and future looking thanwe do to criticism and so on.
And so I think again, one of thetricks and all of these people
that I profiled there did this.
They were able to describe those things.

(17:33):
Even those sometimes they weredisruptive and required deep change.
They were able to describethem in ways where people could
say, yeah, we could do that.
That makes sense for us.
We should be in front of that.
So I think you have to be relentlesslyoptimistic , and paint a picture of why
this is better for your organization,why it's better for everybody there.
But to write it.

(17:55):
And I've, I've seen people failbecause of that, to write it as kind
of a, a screed and we're so stupid,we better that just doesn't work.
So trying to find a way that thisis described as, as a, as a win
for the organization is somethingthat moves everybody forward.
I think that's, that's, and, and oftenleaders are looking to see, like,

(18:17):
do I have a place in that future?
Are, are my skillsgonna be still relevant?
So you have to take that into accountand try to try to create something that,
that is positive, where people can seea path for themselves in that future.
In the end, obviously if you're gonnaexperiment, you have to find something
very specific, a place where you start.
But I think early on, I. You don'twant to overs specify because if

(18:40):
you overs specify an opportunity,here's exactly how we're gonna do it.
What channels, here's whatwe're gonna invest, here's the
new people we need to hire.
If you get very very specific, it'seasy for somebody to pick that apart.
And to be honest, early on, youwant a lot of other people thinking
about how we might do this.
So you need to make, the caseneeds to be very compelling.
People need to believe this is someinevitable is somewhat inevitable.

(19:01):
You have to describe the changesthat are enabling all of this.
And you can do a broad pictureof that business model.
But I think you, you don't wanna gettoo specific because something's gonna
say, well that's clearly impossibleor not gonna be able to do that.
Or, so you want to invite andparticularly as you build out a
coalition you want, wanna invite otherpeople to help you make this better.
And by the way, that's also part ofbuilding as I as we talk about building

(19:23):
a coalition of support because.
You wanna give other people the chanceto put their thumbprints on this, right?
And to feel like it's theirs.
And if you come with something that'soverly specified and your argument
is, Hey, this is the only way todo it, I've thought it through.
Let's, like you're disempowering thevery people you would want to support.
So leave it a little bit open early on.
Get a lot of opinionsfrom everybody you can.

(19:46):
And how would you make this better?
What am I missing?
Is there some fatal flaw inthis design that you see?
But the more people you have thatlook at it and help you build
it, the more credible it's goingto be across your organization.
I have to say mea culpa, I was workingin an organization and I built a product
and I did exactly the wrong thing.

(20:07):
I was trying to get credit for it.
My ego took over.
But it, one of theproblems was the culture.
The culture didn't see that wherethe work was coming from and it's,
you felt that you had to takeevery bit of credit that was going.
So it, it speaks to Hawaii, and we'lltalk about this later on in books like.
Humano why culture is such an importantaspect when it comes to innovation.

(20:28):
But one last thing on the manifesto,Gary, you say sometimes you need a
stick and this concept of creatinga burning platform is sometimes
criticized, but sometimes you need it.
And I love how you set this one up,like a reluctant Pharaoh unwilling
to free the Israelites from bondage.
The only way they're going to changetheir minds as if you convince them

(20:49):
that things are bad and getting worse.
Every company sits on a burning platform.
If you don't know where yoursis burning, go find out.
Maybe it's an online competitor that'sabout to rip your margins to shreds.
Again, this informs your manifesto.
Yeah, I think again, in general,I wanna stay positive and I wanna

(21:09):
lead with the opportunity right.
But you know, you're going to find acertain number of people who are very
comfortable with the status quo andwho might rightly tell you, Hey, we're
better off investing the next dollar,pound, whatever in the existing business
than taking a chance on something new.
And so you kind of overinvestslowly in a dying business.

(21:32):
And so you do have to, you have to buildthat case of why this is urgent, why
this is inevitable, why the existingmodel sooner or later is gonna run out.
I, I Don't know if I mentioned thislittle anecdote to you but this is maybe
a place where I'd failed in this sort ofwork, but some years ago now, maybe 15
years ago, I was working with one of thebiggest media companies in the world,

(21:55):
and they had a very disparate portfolio.
And they were trying to, like,what's the logic of this?
They own magazines and movieproduction and television
production and and whatever.
And.
I thought a lot about like,where's digital media going?
What's the one big idea that isgoing to change the media landscape?
And so again, this is, I wannasay maybe this is, I dunno, maybe

(22:17):
it's 20 years ago, I don't know.
But in any case, the big idea for mewas the consumer's gonna be in control.
And our goal is to empower consumers tomake, for the media, to be accessible, for
them, to make choices for them to have.
and I shared this with the board,which included a lot of very prominent
media people, super rich people.

(22:37):
And they said, Gary, we can't dothat because our whole business
model is based on telling peoplewhat they can watch, when they can
watch what time programming it out.
So we lead them from one program to thenext releasing something in the cinemas,
making as much money as we can there,then putting it into premium pay for
view, and then putting it somewhere else.
And so the idea was souncomfortable to them.

(22:58):
That they just couldn't do it.
And clearly the, probably the failureI made there was I really didn't
marshal enough data and maybe thatstill would've made a difference,
but I didn't really spend enough timemarshaling the data on why this was
gonna happen, whether you like it or not.
I dunno if I told you about this story.
This is another storythat maybe I told you.
By the way, let's tell them again.
Let's tell them, because I don't remember.

(23:21):
well, you might,
but, but again,
many rabbit holes.
I don't remember.
you know, I, long time agoI got asked to speak at
well, I guess I can tell you.
Yeah.
I got, I got asked to speak at a bigevent at Microsoft, and this is back
in the days of, of Bill Gates and SteveBalmer before Satin at Ellis time there.

(23:42):
And I. And it was a very intimidatingevent because they had a hundred
CEOs from all over the world.
So I'm sitting in this room andthere is the chairman of SO and Ford
and Citibank and whatever the hell.
And part of my presentation I talkedabout what happens when the PC is no
longer the center of the digital universe.
'cause it was clear the network was gonnabe the center and the PC was just gonna

(24:04):
be one more device along smartphonesand other digitally enabled things.
So at the end of this little talk,some senior Microsoft person, a
little bit upset at me for sure,and I thought the talk went well.
But they came up to me, 'cause Italked about the post pc, post personal
computer future and they said Gary, wedon't believe in the post PC future.
That's not how we see it.

(24:25):
I said, oh.
I said, how do you see?
He said, it is gonnabe the PC plus future.
In other words, it's the PC is stillthe center and it's plus whatever comes.
And I was a little taken aback.
I didn't know how to respond.
So I thought for one momentI said the future, strangely
indifferent to our preferences.
The world may work outthat way, but maybe not.
So like, be be acknowledgewhat your preferences are.

(24:47):
Like why, like, are you feelingthat because you've done all the
research, you have all the data,you've looked at the things, or is that
just makes you feel warm and fuzzy?
And so I think you do haveto bring data to bear.
You have to look at theinevitability of these things.
Again, let me take an example.
I got very curious looking at thesuccess of Tesla and we'll see they're

(25:12):
gonna flatten out they're not gonnadestroy the whole auto industry.
And some of the net zero stuff we'regonna have to pull back on just
for probably practical reasons.
But nevertheless, I, I got thinking,okay, so you launched the model s in
2012, the first like mainstream ev.
What were the leaders at Toyota and Fordand GM and Volkswagen and BMW Mercedes,

(25:34):
what were these guys thinking about?
And they clearly weren'ttaking this seriously.
And if you go back you can find all thesekind of scathing, dismissive concepts.
This is a toy, it's never gonna work.
Nobody's built a new autocompany in a hundred years.
Like what a waste.
But there were three things thatyou could see that were happening
that anybody who's paying attentionknew were going to be significant.

(25:56):
One, you had the increasing CO2emissions, which sooner or later
we're gonna have to take thatseriously in one way or the other.
And that had been goingon for a long time.
That wasn't the new thing.
Number two, you had the rapidlydeclining cost per kilowatt
hour of battery performance.
So they were getting more and moreefficient and therefore affordable.

(26:16):
And then finally you had thegrowing power of GPUs that are
necessary for autonomous driving.
You could see all thesetrends for a long time.
And when you start to put them together,you go like, okay, this is, it's not a
question of whether this is gonna happen.
It's inevitable.
It is gonna happen.
So I think a lot of what you're tryingto do when you're trying to help a

(26:38):
company get out in front of somethingis you're trying to bring , the,
the distant future into the present.
You're trying to help them understand thedifference between, well, it might happen
and what is very likely an inevitability.
It will happen.
We don't know exactly when, wedon't know exactly how, but it's

(26:58):
probably better for us that we'reshaping that than it's shaping us.
So I think that is also part of buildingthat case, is looking at the things
that kind of just make this inevitable.
I'll give you one last example.
Again, it's a long ago story,but I think very relevant.
I was sitting with a group of seniorleaders from one of the biggest

(27:20):
consumer products companies inthe world that makes food things,
home cleaning products and so on.
You can decide who it is, butthere's only a couple of 'em, right?
So I'm sitting with them and,and they, these companies, they
all grew by buying brands, right?
So you see all these brands,you have no idea who's behind
it, who's the parent company?

(27:40):
All you see is this soap brand, thisdetergent brand this, whatever it is.
So I said at them, I said like,somebody's gonna figure out, 'cause you
guys have no brand economies, right?
Every one of thesebrands is a little thing.
You're advertising it.
Maybe some of 'em are bigger,maybe it's even a billion dollars.
But it's just, you're fragmentinghuge marketing investments
across like th 30, 40, 50 brands.

(28:00):
I said, somebody's gonna figure outhow to build a, an arch brand, right?
A Keystone brand above all of this.
This is Gary.
Like, no way people love these brands.
They grew up with them.
It's the brand that's important.
And I said, you know what?
Be careful when you arechallenging economics.
So the economics of advertising andputting that together and advertising one

(28:22):
brand and whatever, merchandising thoseeconomics are like, they're there, right?
Somebody's gonna figureout how to do this.
Well, it's interesting today the largestconsumer brand in the United States
by far is a brand called Kirkland.
And it's the house brand of Costco.
And it's bigger than any brand frompick these way, way, way, way bigger.

(28:45):
And of course if you go to the UK,you'll find the Tesco store brands and
the Sainsbury store brands and whatever.
So like I knew this was inevitablesim simply because the economics.
We're so powerful, like and so you haveto find those future inevitabilities
and make them real for people.
So it's not like, well yeah,maybe we could do this, maybe.

(29:07):
No, no, it's gonna happen.
Like where do you wanna be in this story?
But let's not pretendit's not gonna happen.
. So you have to leave the opportunity, butyou need also to be able to talk about the
imperative that if we wanna control ourdestiny, this is not gonna be optional.
those stories, one of the reasons I'mso eager to share the books and in a

(29:29):
way, I mean you probably at the startwhen I got in touch were probably gone.
Oh, well those booksare better outta date.
They're actually not.
If you generify them and you take themas templates, they're not outta date.
They're the exact same stories.
The company's names change.
Some stuff went a different way becauseof some business model or something
took off that you just couldn't predict.

(29:50):
But one of the things you mentioned,Tesla there, for example, the
template of Tesla for me isexactly with the likes of Toyota.
So Toyota disrupted Ford and gm.
Ford and GGM dismissed them.
They got better.
And also Toyota started building electricvehicles way before everybody else.
So even though they were thisdisruptor, they fell into the

(30:11):
trap themselves with Tesla.
And I thought about what you told mebefore about working with Nokia that
Nokia the way Toyota and all theseother companies dismissed Tesla, Nokia,
dismissed the iPhone, Blackberry Rimat the time, dismissed the iPhone.
And you worked with the people in Nokiawho dismissed it even though they were

(30:33):
the ones who created this industry.
And it's that pattern that I think isso important to highlight and we see
over and over and over and again, andI can understand that it must be EAs,
it must be very, very difficult to seethe label when you're inside the jar.
So when it's you who's in thespotlight, you running the company,
it's impossible to see the pattern.

(30:54):
Yeah, I, I think it's a good point thereAidan, about thinking about the patterns.
We did a little exercise some time ago.
I, I should resurrect it 'cause I, Ithought it was a very powerful idea.
We have this little ideaaround, I, I think we called
it the strategy genome project.
And, and here was the thought behind it
or the analogy.
So all proteins and all of human lifeare built out of 20 amino acids put

(31:17):
together in different combinations.
So I started to think about as you lookabout, as you look at strategies, many
strategies across industries and so on,do you see the same strategies over and
over again, but in different industriesand kind of describe differently?
And of course the answer isyou do you find strategies of
disintermediation, you find strategiesof doing roll-ups in a fragmented.

(31:40):
Industry you find strategies whereyou have radical customer empowerment
strategies that are based on peer-to-peerand so on strategies where you're creating
markets where markets never existed.
And so that's why I thinkit's, and we actually kind of
did this kind of fun thing.
I think we did identify what wethought were the most powerful

(32:02):
20 powerful strategic ideas.
And then you could look at these ideas, as columns, and then look at a set of
industries like, where's this, likeArtie, and where are people not seeing it?
So that's also a super strong argumentfor why you have to be learning
outside of your industry, right?
Because that, that it might nothave happened where you are yet.
The other thing that makes this alittle difficult is most, most kind

(32:25):
of so-called disruptive strategies.
You know, they don't, I. Theydon't destroy a company right away.
Right?
It can still take decades.
And so the real risk isn'tthat somebody comes along and
overnight blows up your business.
The real risk is just this long slowslide into irrelevance where, where
the danger is never apparent enough,real enough until it's too late.

(32:48):
I was watching the new and thiswill date our little broadcast here,
but I was watching the New PressSecretary in the Trump administration
here in the United States.
A young woman sitting in the White Housebriefing room, and they're now bringing
in a lot of the new media players, right?
The folks that have huge audiencesonline on YouTube and so on.
And they're giving them a seat at this,what was a very exclusive table for

(33:11):
the biggest newspapers, the biggestbroadcasters, and now those guys
simply aren't the show anymore, right?
Donald Trump reached a whole lot morevoters being on the Joe Rogan show, right?
Than than he did on any formal network.
Well.
You could see this coming forever.
Literally, and I won't tell you wherewe saw it, but we saw it a long time ago.

(33:33):
Wrote about it so youcould see this coming.
Once, once you have these newplatforms where people find that
the voices that they wanna listento you'll be able to build audiences
that are bigger than the audiencesand conventional media where you're
telling people, here are a few choices.
And it's just , like,it's, it's it's logic.
And, and so those guys had20 years to figure this thing
out, cable news and so on.

(33:55):
Linear television.
so that's that's the real risk is thatthe slope into irrelevance is shallow
enough that you are never moved to action.
And that's why again, it is soimportant to fold the future back in
the present and say, what part ofthese sins some trends will peter out.
Some are irrelevant.

(34:15):
What do we see that islikely to be inevitable?
Because it fits with economic reality.
It fits with what consumers really want.
It addresses frustrations.
It addresses gaps in our own thinking.
So you have to build that pictureand it has to be as real to

(34:36):
you and as compelling to you asclear to you as present reality.
And if you don't do that, you'llalways dismiss what's coming next.
So that's if you wanna havethat kind of influence and
you're young in an organization.
Yes.
Build out your case.
But also, not everything is inevitable.
Some things it's just agreat idea and Nespresso was

(34:59):
probably not inevitable, right?
But clearly if you look at the valueproposition, it's pretty compelling.
So build out , the value proposition,also if you really believe this is an
inevitable future, you gotta marshalthe data, build a a persuasive argument.
And the platform may not be burningyet, but it may be smoldering,
and you have to point to that.

(35:20):
I always think of a Gary as, as life.
We all one day bend down to tie ourshoelaces and it hurts a bit more than
it used to, or we can't reach thosekeys We dropped on the floor and, and
eventually it, it just sneaks up on you.
I remember.
Recently I was stretching in thegym and , the fitness instructor who

(35:40):
works in that gym said to me, oh, I,I don't usually see you stretching.
And I said, yeah, , you end upstretching when it hurts enough.
So, but, but it had been hurting.
It'd been getting tighter andtighter for quite some time.
And I think that's thesame thing with a business.
And we know this.
That's why one of the real drivers inme doing this show is we know this the

(36:01):
books behind me there, mental biases,how the brain embraces the status quo.
Doesn't want you , try things.
We know this and yet we stillfind it so, so difficult.
So having you on the show is so valuable.
So I'm gonna, I can get back to , theeight steps we're, we're on step two and
I, there's one last piece of step two,which is to anticipate the resistance.

(36:24):
Gary says, expect to hear dozensof reasons for not doing something
when timid, backward lookingsouls go scrambling for an escape
hatch, , your job is to bolt it shut.
So an example, Gary, and maybe this allspark some ideas for you, some examples
that you've seen even as the consultantthey're paying to come into the company.

(36:44):
An escape hatch you say, is, forexample, it's not happening as
fast as you say, and the bolt thatyou slam shut is, oh yes it is.
And here's the data to prove it.
So you go through examples after examplesof this where people will throw out
a blocker and here's the pre-preparedreason why you shut down that blocker.

(37:05):
that is work that many innovatorsdon't like to do 'cause it's
quite left-brained work.
It's boring.
It's to sit through almostscript scenario planning.
What will they do to shut my idea down?
And then I have to go and get thatdata to actually prove that I'm
right or I'm on the right track.
, I think , the thought there is also,whatever that idea is, pressure, test
it with a lot of your peers first.

(37:27):
Make sure that you've heard all theobjections and you've built your counter
arguments where you can before you runthis up, the corporate hierarchy, right?
Because share it with people whocan't, who don't have the power to
kill it, but maybe critics right?
And may point out someflaw that you didn't see.
So I think, yeah the more kind ofcritical eyes you have looking at

(37:49):
something and again, leaders can killan idea really, really quickly and often
inadvertently simply by saying, as yousaid, it's not happening that fast.
I don't believe it.
It's not gonna affect us.
This is gonna run outta steam.
I heard, I, I don't know if we'vetalked in our conversation so

(38:09):
far about the pattern of denial.
I don't remember if we have, but I thinkdenial follows this very similar pattern,
whether it's in human relationshipsor whether it's in the boardroom.
Bedrooms and boardrooms.
It's the same in this sense.
Is that, so I, I'll use the analogy of arelationship that's not working very well.
And let me try to talk aboutthis from the perspective of the
guy in this relationship, becausethat's the only perspective I know.

(38:35):
But if you have, let's say yourgirlfriend, your wife, whatever, and
it's not working so well the firstresponse is always simply to deny it
like, well, or, or to kind of dismiss it.
Lemme say it that way to dismiss it.
And you make it seem as ifit's just this little thing.
Well, yeah, all couples fight.
There's rocky patches.
You just have to expect that.
And probably this thingwill sort itself out.

(38:55):
So you're, when it was alittle uncomfortable, the first
reaction is just make it go away.
Just like, pretend it doesn't exist.
Nah, nah, nah, I can't hear it.
So, so that will go for a while, butin this relationship, things start
to get worse and there's like longperiods of silence and you're kind
of just a perpetual level of angerthere, and your gut is turning.
So you'll go from dismissalto rationalization.

(39:17):
And now you have to you have to have astory because clearly this is not usual.
So if you're a guy, your story's gonnabe something like my wife has issues and
like it's daddy issues, or old boyfriendor something, but like, maybe go talk to
a co. But it's like you're, it's, it's

(39:39):
you're, you're letting yourselfoff the hook in that case.
It's just, you gotta have a story.
So that will go on for a while.
Then you move fromrationalization to mitigation.
Now you have to do something.
And Typically whatever that mitigatingstep is, it's gonna be something
that you put on somebody else.
So the mitigating step is, dear,have you ever thought about Prozac?
Right?
Like, maybe that will like, getyour mood back in equilibrium

(40:01):
or something like that.
And that probably that suggestionprobably doesn't get the, the
response you were hoping for.
So the fourth step is actuallyconfrontation, not confronting her,
but confronting your own beliefs.
Like do I not listen very well?
Like, how am I not showing upas a good husband or whatever?
And what, what you see often inindustry, Aidan, is that that can

(40:22):
take 20 years to sort itself out.
And I don't know if Itold you this little story.
This was, I, this was a dinner.
I had one evening in London with a bunchof senior people at Ford and they told
me that they had just finished their20th annual benchmarking study of Toyota.
And I dunno when this was,this is a long time ago.

(40:43):
But I asked them like, okay, whatdid you guys learn in your 20
that you did learn in 19 18 17 60?
Like, what's taken you so long?
So that was not a very polite question.
It kind of hung there inthe cigar smoke for a while.
And then their treasurer gave avery thoughtful, honest answer.
He said, for the first fiveyears we looked at Toyota,

(41:04):
we didn't believe the data.
Young people would come back and they saidhow good they were, how few defects per
vehicle, how few labor hours per vehicle.
We just said, it's impossible.
You're miscounting.
There's clearly something thatyou know you need to go look at.
So we kept, we kept getting thedata and finally it's inescapable.
So for the next five years.
So that was the dismissal stage.
I just can't be true next five years.

(41:25):
We said, well, it was therationalization stage.
It's just because they're Japanese, right?
They believe in NE Wasi andwa, whatever the hell that is.
Right?
They don't have they have governmentsupport, they have lower cost of
capital, they have docile unions,like never is it gonna work
outside of Japan, but like, fine.
Okay, yeah, great.
He said, then they started buildingplants in north of England, in southern

(41:48):
United States, and they got the sameresults there they got in Japan.
So we moved from kind of rationalizationto mitigation, but the mitigation
was, you know let's go steady.
Everything they're doing we'll hirethe consultants, we'll have these
quality circles we'll put in robots.
And he said, we nevergot the same results.
No, what, whatever we did.
And he said, only in the last fewyears did we come to this honest

(42:11):
confrontation where we said the realadvantage is they have a completely
different view of their frontlineemployees and what they're capable of.
And the pace of improvement comes fromthem turning on all of the intellectual
capabilities and problem solvingcapabilities of people on the front lines.
And, and we have toxic relationshipswith those people and we don't
know how to use their intellect.
So the, the last thing we'll challenge istypically our own deeply embedded beliefs.

(42:37):
And, and so what you're tryingto do in all of these cases is
shorten the denial cycle, right?
Like, let's just like, but.
Yeah.
But it is human nature, and so youkind of have to, you have to think
through what are the excuses gonna be?
What, what people are gonna say,well, it's not really happening
really well, what data do we have?
Or they're gonna say, there'snothing we can do about it.

(42:58):
Really.
Like, why, why do you believe that?
Or it'll never happen here.
So I think, it's, it's all about kindof building something that's airtight
and anticipating the objections.
We interrupt this broadcast forAidan to ring his wife quickly.
I was wrong.
I was wrong, Gary.

(43:19):
Well, I love that man.
That's a an absolutely brilliantexample and one that we can
all relate to in any aspect.
There's a, something that was referred toon the show before as the three asshole
rule, which is if you meet three assholesin one day, maybe you're the asshole.
Well, I think for me,the lesson there is, I.

(43:43):
If you wanna dismiss something oryou're arguing with something, or
you don't wanna believe something,ask yourself, how does it serve
your own interests to dismiss this?
And be very careful ofdismissing things, you know?
Now, if you have the facts behindyou and so on, that's fine.
You can just say, well, that's,that's like, not, not true, but

(44:03):
if you're presented with new factsor new interpretation, be really,
really wary of that first reaction tokind of shut it down or dismiss it.
If, if, if that reaction is something thatmakes you feel more comfortable or makes
you feel better about yourself, right?
That's just like a personaldiscipline you have to have.
Like, oh yeah, okay, well this is prettyuncomfortable, but let me see if I can get

(44:24):
over that and hear the real truth here.
Absolutely, man, , it's such importantthe personal renewal that goes with
organizational renewal, which is, , I'msure you've seen it or maybe even.
Prescribed it when you wereworking with organizations that the
leadership team need coaching when theorganization's going through change.
Yeah, they need coaching and they needa systematic effort to unpack a lot of

(44:48):
those legacy beliefs and assumptions.
I think we, we have talked about this forsure, but it's why I believe the first and
most critical step in innovation is alwaysdeconstructing what you already believe
and asking how much of that is stillrelevant, how much of that is just legacy?
How much of that is selfcomforting illusions?
But if you don't do that as a veryexplicit exercise, then you're likely
to hang on to things that simply makeyou comfortable and use your political

(45:12):
power to shut down conversationsthat make you feel uncomfortable.
Super, super dangerous for theorganization, for shareholders, it
happens again and again and again.
Just on that one, one thing thatI, I'm always conscious of is.
Many people who lead organizations arenot leaders of people, they're political
geniuses, and in some cases psychopaths, and certainly in narcissists.

(45:37):
And therefore, they don't reallycare about who they damage
in getting to those roles.
And it's one thing that that actuallyhappens in organizations and many, many
entrepreneurs have that profile andthen when the organization goes to,
needs to jump to the next level, theydon't have that personal willingness
to actually let go of the past.
And in some types, in, in some cases,actually sabotage their own businesses.

(45:59):
Maybe you've seen that sometimes.
Well, I think, yeah, I think thatis a vulnerability, particularly in
entrepreneurial companies because thefounder is so closely associated with
one kind of idea and, and, and thenthe organization becomes dependent.
That person's kind of vision andperspicuity and when they run
inevitably you can maybe find exceptionshere and there, some extraordinary

(46:23):
entrepreneur and there, there aresome that have had multiple acts.
But, but in almost always at some pointthe founder runs out of vision, right?
And, and if the organization hasnot developed its own muscles to
kind of see the future, to createstrategy and so on, you co become
highly dependent on that person.
They, they like being seen as the greatSierra and the strategist and so on, and

(46:46):
will very easily shut down new ideas.
So if, if you are in, in an organization,entrepreneur you need to build from the,
the, the strategic thinking capacityof the whole organization and not let
them end up depending just on you,however, kind of ego boosting that is.
We better keep moving Gary,'cause we're only on 0.3 of eight.
The next one is something, manyof us, again have to, to that

(47:10):
very point that Gary made, lookin the mirror and see if you're
actually the challenge here because.
You can't do it all yourself.
No man or woman's an island.
And Gary says you can't change thedirection of your company all by yourself.
This is a lesson that evencorporate chairman eventually lead.
And I'd love you to share this story,Gary, because it's one that is in the

(47:31):
rear view mirror, but is so, so relevant.
And it was where founder and chairmanof Silicon Graphics, Inc. Jim Clark,
fought a long running battle, anoften bitter battle with S-G-I-C-E-O.
Ed McCracken Clark was eager that SGIgo down, down market, which is something
we've talked about regularly on the show.

(47:51):
Moved down market to produce a cheaperproduct and produce workstations at
the upper end of the PC price range.
So.
Big, machines go down,it's gonna be cheaper.
We're gonna have to ship more ofthem to keep the same profits.
And McCracken was low to sacrifice fatmargins, to serve out of scope customers,
as he called them exactly to what youwere talking about, clung to the past.

(48:15):
The status quo was convenientand eventually Clark quit.
Yeah, I think,
if I'm not sure what Clark could havedone different in that situation,
but clearly wherever you are, evenif you're the CEO or the chairman,
you need to marshal a lot of support.

(48:35):
I think coalition building is anunderappreciated art and doesn't often
get taught when we, when we think abouthow to change things and I , I tend to
be quite relatively conservative in myviews, and yet in writing that book I was
reading Hannah Arendt and Paul Alinsky.
These are like the most radical.

(48:57):
Almost Marxist kind of activist.
But I realized there's somethingin that, there's something about
how you change large embeddedsystems and you can't do it alone.
You have to reach outand find other people.
And so building that kind ofgroundswell is hugely important.
Now, today, we can do that veryquickly by using technology tools.

(49:17):
If you have, if you're invitinghundreds or thousands or tens of
thousands of people into the, intothe strategy conversation, and you
have hundreds of them saying, here'ssomething we should do, well that's
gonna be pretty hard to ignore.
But but you know, again, most companiesdon't approach strategy in that way.
So you're kind of left to do thatcoalition building on your own.
And you make another point in therethat has made before, but , it's

(49:40):
worth making again that I think.
High margin companies are particularlyvulnerable to missing the future.
Because often what happens overtime is technologies become
kind of democratized, right?
They spread.
And if you're you see thisright now in this debate and
it has yet to work itself out.
We don't have all the facts,but you look at deep seeq, which

(50:02):
apparently was done for a fraction.
This new AI tool from China done it.
A fraction of the cost of open AI and openai started out as being open, but then
say, no, there's a lot more money to bemade if we close this thing up and so on.
So when you have a high marginbusiness almost anything new that
you can imagine will be dilutiveto what you're already doing.

(50:26):
And so like, everybody's like,well, why would we do that?
That's gonna make us less profitable.
So I have to remind people thatprofits is like volume times margin.
So if it brings in millionsmore customers, yeah, maybe
there's less margin, but maybethe whole opportunity is bigger.
And you saw that withIntel in recent years.
You saw it much earlier with with Xerox.

(50:48):
I think you may be seeingit now in the AI space.
But yeah, that's just a common mistakein high margin companies, right?
They just do not, and so like, that'sfine there's a certain number of companies
in the world that can make Louis Vuittonhandbags and Hermès Birkin bags and so on.
But that's a very, verysmall part of any market.

(51:10):
And maybe it's better to be Costcothan it's to be to be herm maze.
I don't know.
But, be wary.
Be wary if your argument is thatwill dilute our margins because
that's often a very bad defense.
There's another reason you say tobuild a coalition, which is most new
opportunities don't fit neatly intoany of the organizational boxes.

(51:32):
And what you mean here is actuallythe silos or the departments
inside the organization.
So as a result, you have to create amagnet for people who harbored the same
revolutionary tendencies you do, whethertheir current organizational home is
wherever that is, and a movement isnot a box on the organizational chart.
I love what you say here.
It's an ink blot bled allover the formal org chart.

(51:56):
It's a splat, not a department.
I thought that was a very astutepoint that's often missed.
Yeah, I think, you know what ifparticularly you're a young person
and you're trying to build aconsensus, you have to find the
supporters wherever they are.
Right?
And they're not and so there's a campaignwhere you talk to everybody you can think

(52:19):
of like, does this make sense to you?
Do you know anybody else whomight be interested in this?
And I think the story I toldabout IBM, I'm gonna forget the
chap's name, who kind of led that.
But that was he started holdingconferences and he would invite
here's the internet, here'swhere we think it's gonna go.
If you're interested, like,come show up, we're gonna talk
about this, think this through.
What are the implications for our company?

(52:39):
And so he didn't have anyformal mandate to do that.
Nobody, like he was not theczar of the internet, right?
He was not the company'schief strategist or futures.
But he just said, guys, I thinkthis is gonna be important and
we have to pay attention to it.
And so you are just creating opportunitiesfor people who care about this to get
together and push the thinking forward.
So again, not conventionalthinking for most people.

(53:01):
Let me go up through the channels,let me work through the typical
structure that's a failure mode.
If you have an idea as, as you said,if you have an idea that doesn't have a
natural home, and by the way, even if theidea does have potentially a natural home,
but is kind of uncomfortable, you stillbetter be working across the boundaries
to build a coalition that again, , Imight have said this in , another case,

(53:22):
but one of the ways I think about change,particularly when it's hard, is how do
I build a coalition for the future thatis more powerful and has more influence
than the coalition for the status quo?
And that just takes a lot of, talkingto people, is this interesting to you?
How would you help me make my idea better?

(53:44):
And creating opportunities forthose people to come together
and share and learn and buildon each other's enthusiasm.
So not a skill is taught anywhereinside of business schools, but , pretty
fundamental , if you ever want to havereal influence in an organization,
rather than spend your careerkissing somebody else's backside.
Absolutely.
You know what you were talkingabout, the media company.

(54:05):
I worked in one that was where the,I started this show and I was doing
what that guy in IBM was doing.
I was going around giving these brownbag lunches, trying to create a movement.
And in one of, in, in my firstperformance review before I started
that I got like, really high performancereview and then she found out I was
doing this and she asked me to stop.

(54:26):
And then I was absolutely slatedin my l performance review and
my role was made redundant.
So lemme
So I learned,
and let's, let's talkabout you for a moment.
It's an interesting case study.
Why did she say stop?
well,
in what you were doingor what, what was the.
was power.
So I was working in the digitaldepartment and I was educating all the

(54:49):
other departments on what digital was.
How to run social media campaigns.
What social media was to try anddemocratize it to get everybody doing it
rather than keep it in the department.
And her whole thing was territory and havemore and more people, more and more power.
The time I knew it was reallya trouble was hilarious.
She asked me to do a strategy, whatI would do if I was in charge and I

(55:10):
do a strategy and I had like thesevertical pillars for the different
departments across the organization.
And it had one for the digital department.
And then the next slide wasthere was no digital department
and that was a different colorand that color was diffused
Exactly.
Everything's digital.

(55:31):
The digital was, a horizontalline across everybody.
And she went, she waslike, delete that slide.
Yeah.
And, and by the way, let's be clearbeing an internal kind of rebel or
activist is always going to be dangerous.
You have to believe an idea stronglyenough that you're, you're willing

(55:53):
to take that risk and be ready to gosomewhere else if you don't succeed.
And this would not be any kindof critique on what you did, but
because sometimes, sometimes thatis the inevitable result, right?
You just meet somebody whose poweris threatened and they have enough
power to kind of shut the thing down.

(56:14):
What I would say is in this approach,you do have to be kind of relentlessly
optimistic, and you ha, you try,you have to try to paint a picture.
Where every everybody's role gets better.
And again, that's not always possible,but even there you might try to think
about, well, instead of this woman kindof running the digital services of the

(56:38):
digital department, like maybe her rolebecomes kind of building the digital
capability of the whole organization andwhat she needs to be is see her role , as
building capability, as training people,as diffusing this rather than hang on.
Now, would she, would she buy that?
I don't know.
But, but the secret there for me,and again, not always possible, is

(56:58):
helping to paint a picture where thepeople might be kind of against you.
You can paint a picture where , this givesthem a chance to have more influence to
maybe in a different way, but rather thanboxing them out or making them irrelevant.
So, again, not always possible, but that'smy instinct is how do I position this in
a way where I'm giving you and , I havethis conversation often now with CEOs who.

(57:23):
I believe that they need to becomemore and more architects of, of
organizational capability ratherthan strategy strategists and
chief decision maker and chief.
And what you're trying to help them seeis, guys, the biggest impact you can have
on the organization is not like being thearbiter on decisions or doing a big deal.
The biggest impact you can have is helpingto build new institutional capabilities.
More agility, more innovation, right?

(57:44):
More customer centricity.
And so in a way they're giving upa certain kind of power, that kind
of strategic authority, but anotherway you're helping them see a, a way
where they can have far more influenceacross the entire organization.
So that's an important thing for if youwanna be that kind of change maker, try
to find the people might be against you.

(58:05):
See if you can't reframe that in a waythat this gives them greater influence
in a different way, but greaterinfluence than they might otherwise have.
And you have to be.
Willing to share the glory andshare the success if you're in it for
yourself, people quickly figure that out.
Then it just becomes a battle of hey,yeah, Aidan has this ego and he's trying
to do this, and , I'm not suggestingthat was the case, but I see that

(58:27):
a lot of times where, you know, youwanna hold onto it, you want it to
be yours, and therefore, like youbuild a bunch of enemies and they're
powerful enough to kill the thing.
Absolutely.
But you know, the reason I was sharingit was actually it was the two, gents and
IBM were Dave Grossman and John Patrick.
And then the other case studiesyou share in Sony, Ken Kutaragi,

(58:49):
Mm-hmm.
and then George Dupont Roques,which was the Shell guy.
But what I found was really interestingabout them was they were doing this,
but then rather than shut them down,somebody higher up actually lifted them
up and actually gave them air cover.
And it's so important that that happens.
And I, and I do think it's a roll of thedice, sometimes you'll get, you won't get

(59:12):
that air cover or you're not loud enoughor you don't get to the right people.
And this is actually links asnicely to 0.4 that you talk
about is, which is you gotta pickyour moments and you gotta pick.
that you're aiming for, because otherwisethat's what probably happened to me.
I didn't pick an allowed enough place to,to pitch my wares and get it out there.

(59:35):
Well, certainly as you are buildinga coalition you're looking for
people, particularly senior people.
And that's why always go in tentative.
Don't go in like, Hey, Ifigured this thing all out.
You guys are idiots.
This thing is gonna happen.
But kind of always go inwhatever your idea is.
And we talked about developingit and fleshing it out.
I think you need to do that.
But particularly when you're talkingto, to, to more senior people, kind

(59:58):
of start out humbly start out withlike, we got, we have this hypothesis.
This is something we think is happening.
And start to sniff out who you think is,is willing to kind of support you or not.
Where does this resonate or not?
, and if you get a very, very quickpushback and you can see this
person's not interested in learning,they don't wanna know, just go on.

(01:00:20):
Right.
Find somebody else.
Don't waste your time tryingto get somebody to change
their religious beliefs here.
But again, talk to a lot of people.
Be humble.
Find the senior people who mightbe willing to back you up, give
you some air cover put you infront of a more senior group.

(01:00:41):
And and don't be deterred ordiscouraged when 80% of the people
you talk to are either not interestedor disagree, just find the ones who
might give you some some amplification.
I think that's such an importantpoint that's rarely said is
some people just don't care.
They're just there for their paycheck.
They don't care.
They don't want this hassle.
This is way, way beyond theirpaycheck or they believe it is,

(01:01:04):
Aidan there's a trick here or a gift,but it's, I don't think it's that hard.
Is exactly as you're saying, istrying to find the people impact is
more important to them than career.
Where the company's future is moreimportant to them than career.
And you can f you can find thosepeople , they're going to be
the people who are also willingto say, Hey, this is a problem.

(01:01:26):
We're not doing very well here.
Right.
They don't feel, they don'tfeel an immediate need to defend
every decision that's been made.
They're not reflexivelydefensive about things.
So you can suss that out pretty quickly.
And those are the people who arelikely are, are gonna be your allies.
I think you've covered step five,which is to co-opt and neutralize.

(01:01:46):
This is from Saul Alinsky's work whereyou're trying to disarm and co-opt
rather than demean and confront.
I think.
I think we've covered that, Gary, unless
you feel otherwise.
So.
So we'll jump then to step six.
So we're nearly there, whichis a brilliant one to find it.
Translator.
So you've been at a while and despiteyour best efforts, you're having
trouble getting heard, you talk,but not sure they've comprehended.

(01:02:10):
Don't be surprised.
The very things that make you arevolutionary make it difficult to
build a base of common understandingwith the disciples of orthodoxy.
I think this is again, a key one thatsometimes the change maker as well is
like listening to talking gibberish.
I often think of the Cassandracurse, that she knows the future,

(01:02:30):
but nobody understands her.
Or it's like blurt outso much information.
It's like trying to drink water froma hose pipe and not having their story
perfect, not having rehearsed their story.
So therefore, you may need somebodyhigher up to actually translate
and go, look, this is whereit re relates to our strategy.
Well, and again, everybody has theirown particular knothole they're looking

(01:02:53):
through in an organization, and youmay be right on all the specifics,
and the idea may be very compelling.
I. But you know, you don't understandwhat are the other trade offs.
You don't understand perhaps thepressures that senior leaders are under.
So yeah, finding somebody who whether,whether you, whether you, it's it's
financial perspective you need onthis, whether it's a broader strategic

(01:03:16):
perspective, whether it's a re regulatorykind of perspective that you need.
Finding people who can kind of putthis in whatever language and terms
makes sense to the very top groupof the company is important, right?
That's, that's gonna be yourmentor, your sponsor, and so on.
So that's a little bit my, my last point,like looking for senior people who are
not reflexively defensive who have beenkind of outspoken in the past saying,

(01:03:42):
Hey, we missed this, we shouldn't have.
And then saying, guys, how do Imake this how do I put this in
the terms, make it palatable.
So it fits with the all overallnarrative in the company.
Often the company will have a set ofstrategic pillars or strategic priorities,
and that can be, that's both a goodthing, but it can also be dangerous

(01:04:03):
because then you rule out everythingthat doesn't fit like our strategy.
But it is important to be ableto kind of translate that in.
I, I, I think about my own, in my owninstitution, the London Business School.
So part of our, our mantra at theLondon Business School is global impact.
Right.
We are very, very keen on not justbeing a bunch of scholars talking to
other scholars, but having real impacton the way organizations operate.

(01:04:25):
So anything I might propose,I better figure out, like, how
does this multipli our impact?
Right.
And be able to measure thatand describe that in that way.
So yeah, finding it, findingpeople who understand the broader
strategic context, who can helpyou position your argument in that.
Again, I think like, like,like super important.

(01:04:46):
And
yeah, you just may not be ableto do that from your perspective.
I.
yeah, and sometimes the configurationdoesn't work in your favor
and you have to just move on.
That's life.
But step seven is a key one.
Again, because you kind of.
I alluded to this earlier on, isthat you, you can't boil the ocean.
You gotta win small,win early and win often.

(01:05:08):
And people can argue with positionpapers, but they can't argue with success.
All your organizational efforts areworth nothing if you can't demonstrate
that your ideas actually work.
Therefore, start small unlessyou harbor kamikaze instinct.
We might talk about this later, Idon't know, but certainly one company
that figured out, one leader thatfigured out this is a guy, Scott Cook.

(01:05:32):
He was a kind of refugee from Procterand Gamble, a founded Intuit, the
finance personal accounting softwarecompany, which has done spectacularly
over the last now it's probably 30 yearsold now, but even over the last decade
they way outperformed the indices and.
When he worked at p and g, he hadgotten really frustrated , by how
long it took to make a decision.
And by the way, and how often decisionsare made just on the basis of PowerPoints

(01:05:54):
or political power, or your persuasiveabilities, but not on any like reality.
And so at some point he could seeinto it kind of adopting those bad
tendencies and meeting after meeting,going through reviews and so on.
And he finally said, listen, I onlywanna make decisions based on data.
And that means if you have anidea, go try something, right?

(01:06:14):
And again, much hasbeen written about this.
We don't need to rehearse this,but there, but even even quite
bold and difficult ideas, there'soften ways of starting to test your
assumptions at super low cost, right?
Building mockups or talking to experts.
And so rather than take a completelytheoretical case, see what try

(01:06:34):
to identify the most contentious.
Assumption you have or theone that is most likely to be.
And see if you can go findconfirming data, see if you can
test that in some way, right?
And so at Intuit, this ended up theydeveloped a whole methodology for very,
now of course it's a technology company.

(01:06:55):
You can do a lot of thistesting very cheaply online.
But they ended up with thismethodology of go find customers.
And by the way, hire is thesame kind of thing, right?
If you have an idea for a product.
You don't run it up theflagpole internally.
You put it out in socialmedia and you say, guys, does
this make any sense to you?
Like, what would you change here?
And so on.
And so you're always going into meetingsarm, not just with an idea, but with

(01:07:18):
an idea plus con confirming data.
And I think that's likesuper, super important.
So often take your time to do that beforeyou put yourself in a position where
you're gonna have a yes or no answer.
Right?
And two things are tend to bevery persuasive to leaders.
One is when you have a groupof people coming and saying,

(01:07:38):
Hey, we need to do this, right?
The reality is if you just look atthe data, most ideas are dumb, right?
Most ideas are like so if I'm aleader, it's not completely illogical
that I would just reflect and say,nah, we're not gonna do that, right?
Because there are way more dumbideas out there than are smart ideas.
So that's not like, okay, fine.

(01:07:59):
So I have a lot more confidence if a dozenpeople come to me and say, Hey, we've
been spending a bunch of weekends on this.
We've been thinking this thing through.
I go like, alright, this isnot one guy's brain fart.
This is now whatever.
And then that confidence is doubled ifthey say, and by the way, here's how
we've been testing our core hypotheses.
Here's what we've learned.
So you do those two things and yourodds of success are way, way higher.

(01:08:21):
And it also says to you, if you are thechange maker, don't have a brain fart.
Don't give, don't give the idea too early.
Like I. Incubate it.
Get your point of view.
Go through all these steps, theprevious seven steps, and then hopefully
you'll get to step eight, which isisolate, infiltrate, , integrate.
And what Gary tells us hereis experiments that stay.

(01:08:43):
Experiments are failures.
The object is to turn early experimentsinto radical new wealth, creating
business models with the power tochange the direction of your company.
And for this to happen, you musteventually push your brood of
BA baby projects outta the nest.
In the early stages of youractivist campaign, you may want
to isolate your projects fromthe rest of the ISO organization.

(01:09:06):
But to grow new opportunities,need to escape bureaucratic
controls and orthodox thinking.
They need their own place.
A place where new ideas, new values,and new teams can grow unmolested.
This is the logic behind corporateincubators, internal venture
divisions, and skunk words.
But sadly, most projects never escapethe incubator, which is often little

(01:09:29):
more than an orphanage for unlovedideas, malnourished and secluded.
Few projects ever find foster parents.
That idea.
Where, it away from the company,the sucking sound of the core.
Essentially the work that was proposedby Clayton Christensen may have value
in the early days, but then, like yousay here, and colleagues like Michael

(01:09:52):
Tushman, Charles O'Reilly is like, youhave to bring it back into the company.
And actually, in some casesit, it deserves to be born
there in the first place.
Yeah, and I think part of this goalof at some point, finding senior
sponsors and doing your best tointegrate it with the broader strategic
themes, the mission of the company.

(01:10:14):
Another, another very helpful thingis sometimes to go back into the
company's history and look at analogiesand examples that say, guys, this may
seem very kind of new and radical, butif you look at what we did 20 years
ago, we did something like this.
So you, you really need to find amentor who's not running the idea

(01:10:36):
lab, but a mentor who's, who hasreal positional authority, who
has p and l authority, perhapssomebody who controls some critical
resources that you're going to need.
But, but yeah, you need fosterparents, as I say, not the thing to
be isolated in some kind of orphanage.
And so, again, and I thinkcompanies that understand this and

(01:10:57):
institutionalize this have an advantage.
I if I, if I'm a CEO, the first question Iwould have of every EVP vp, whatever, is,
Hey, tell me about the new ideas you'rementoring within your, your division.
Tell me about the things that arekind of unconventional, maybe a little
uncomfortable, but might have promisewhere you're spending 20 or 30% of
your time supporting those people,helping them, making sure they get

(01:11:19):
resources because that's what I need.
I need a lot of really great mentors.
Not people that we've dumped in somecorner somewhere and said Good luck.
But you have to find those mentorsyourself if that hasn't been
institutionalized in that way.
And but if you don't and youdon't do that fairly early, yeah,

(01:11:43):
you'll, you'll never escape.
Probably you'll, you'll, you'll beseen as an irrelevance, as tangential,
as easy to ignore, easy to kill.
Gary, the last point you make,we've got through all eight.
The last point you make is you give someof the characteristics or values of the
change maker, these corporate rebels.
I think our audience know about that.

(01:12:04):
But there was one important thing,and this speaks to the leaders who may
have listened to this show as well.
Those people who.
Lead troops is the importance of courage.
And I loved how you put this.
And it's so funny.
I was watching yesterday, I waswatching the Nuremberg Trials, the old
black and white version of that movie.

(01:12:25):
I think I can't remember whothe great actor is in it anyway,
but it's, it's magnificent.
And when you watch it, you can see howhistory doesn't repeat but it rhymes.
'cause you see about how people canrally around a leader who maybe wasn't
the greatest leader that they needed.
And you wrote that after Stalin's death.

(01:12:45):
So the idea here is having courage and howdifficult it can be to have courage when
there's so many people going against you.
After Stalin's death khrushchevaddressed the supreme Soviet and
denounced his predecessors, horrificcrimes against the Soviet people.
Many in the audience were stunned.
the scale of Stalin'sevil was mind boggling.

(01:13:06):
Finally, from the back of the hall,a voice rang out, comrade Khrushchev.
You were there.
You were with Stalin.
Why did you not stop him?
Momentarily flustered, Khrushchev'seyes raked the assembly.
Who said that?
He demanded, who said that?
He roared again.
around the imp pertinent questioner,sank lower in their seats.

(01:13:29):
While no voice is raised, no hand went up.
And after a terrible silence, Khrushchevsaid, you know why the questioner
that day was no more willing to standup to Khrushchev than Khrushchev
was willing to stand up to Stalin.
The point was made.
Luckily, there is no gulag inmost companies, but activism

(01:13:51):
still takes magnificent courage.
well said.
Yeah, there's no, there'sno getting away from that.
You do have to believe the, and , notevery idea takes this kind of courage,
but the idea has to be, , if it'sreally important, the idea will be

(01:14:12):
more important to you than your career.
And and that's a hard thing to sayif you're a young person and you've
struggled hard to get a great job andyou really do not want to disrupt things.
So I I say that recognizingthat's a big ask.
But I think it's important.

(01:14:33):
I see even relatively senior people,Aidan, and it, it kind of drives
me crazy, but I understand it.
I see relatively senior peoplelet, let, let's say like
maybe a vice president level.
You have a younger team that comes intotally enthused, wants to do something,
they have a bunch of data, whatever.
And that senior person, their wholethinking is not, is this a good
idea or not, but is how is thisgoing to play with the top group?

(01:14:54):
Is it gonna make them uncomfortable?
Does it fit with theirstrategic vision, whatever.
And what's interesting is often thetop people are so anxious for new
ideas, but this person in the middleis so afraid of challenging the
status quo or some embedded beliefthat they are, they will shut these
people down, even though the leadermight say, that's exactly what I want.

(01:15:14):
Right?
And so yeah.
So it takes, even those peopleoften just lack the curse.
Say, yeah, that's a good idea.
Let me, lemme go pitch this and seeI've had my version of that and I
don't want to overstate this becauseit will sound maybe I, I don't wanna
sound arrogant , or also as if I'm somekind of a masochist, but I. We'll get
to the more recent stuff I'm writingthat really challenges the whole idea

(01:15:36):
of the organizational hierarchies exist.
Now that's not a popular thing.
I have another cartoon where someguy's standing in front of the room.
He is, he's talking to the executivecommittee and he has a big chart on,
on the wall with the inverted pyramid.
And the CEO sitting in the back says,Hey, Sam, I get it, but I don't like it.
Right.

(01:15:58):
So for me, building institutions thatare truly effective and truly resilient
is far more important than kind ofprotecting the ego of people at the top.
Having said that, if you make themall enemies, nothing is gonna happen.
Right.
And it's easier to have couragemaybe at my stage of life than
it is if you're 28 years old andin your first job and so on.

(01:16:21):
But,
so I wanna temper that advice,but just say, yeah, don't blow up
your career if you don't have to.
But in the end, if it's truly a powerfulidea we talked about Eric Yuan, who
left WebEx and Cisco to found a zoom.
If it's a truly great idea, it isgonna be a great idea wherever you are.

(01:16:42):
One of the reasons Gary, I do thisshow is for that very point, is
that life is short and , it doestake courage and it's difficult.
I've shared with people on the showbefore, I left jobs before because I
was being forced into, as you said, earlymental retirement and as a great guest

(01:17:03):
I had on the show, I spent many episodeswith him just like I did with you.
Dee Hock, the founder of Visa, said,he said, most people retire on the job
Yeah.
put their brain into their drawerand they start to slowly rot.
And I hate that idea.
. It's almost inevitable, Aidan, if youare not in the thrall of a problem or a

(01:17:25):
challenge that is bigger than you, andthat doesn't kind of inspire you every
day is like, what else can I do here?
How do I move the needle forward?
One of the things I believe as humanbeings, yes, we're partly defined
by our accomplishments, but we'realso defined by the audacity of the
causes to which we devote our lives.

(01:17:47):
And, whether that's somebody workingat Tesla who thinks they're making a
contribution to cleaning up the planet
I remember having this conversationwith some of my colleagues in the
business school and saying, guys,what do you, what's our goal?
What do we do here?
And they'll talk about, we grant degreesand we educate young people, and so on.
I said, no no.
We are working to improve the qualityof management around the world

(01:18:09):
because this is one of society'smost critical social technologies.
And, and if you start to think about itthat way, suddenly seems very mundane.
Well, I'm just teaching a course andwe're gonna we're taking engineers
and training them so they can liketriple their salary or whatever it is
then suddenly you have a much thatforces you to think more broadly.
That, that it pulls youaway from the status quo.

(01:18:30):
So I, I really believe deeplythat, that life is too short to
work on inconsequential problems.
And that doesn't and what'sconsequential for you may be
different than what is for me.
But what it says is, if you are notin the thrall of some purpose that's
bigger than you, you are never gonnahave the courage to do these things.

(01:18:51):
You'll not live your best life.
You'll not have theimpact you want to have.
And so yeah, I'd rather make a smalldifference to a big problem than work on
something that's peripheral or trivial.
Beautiful, beautiful wayto wrap up this episode.
Absolutely love this book, Gary, andI'm glad we, did a deep dive and thank

(01:19:13):
you for your contribution to inspirecourage in so many of our audiences.
Well, for those people who arestill listening to us at this stage,
'cause I see the stats tend tofade as the show goes on, so only
the diehard make it to the end.
So to them, we dedicate thisepisode to you and to our.
Guest, Gary Hamel, authorof Leading the Revolution.
Thank you for joining us.

(01:19:34):
My pleasure, Aid

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Gary Hamel - Leading The Revolution Part 4

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Gary Hamel - Leading The Revolution Part 4