October 20, 2023 • 56 mins
Ever wondered what it's like to have a paid job with a guaranteed income that provides an opportunity to have full autonomy? In this episode I explore the combination of autonomy and consentual intervention and how this can work within an organisation that takes a portfolio approach to appreciating its talent and other assets.
I then explore the world of portfolio management and how a fund of funds that adheres to a principle of principles can enable each fund within the portfolio to ride the stormy waves of market fluctuations specific to its industry.
In this engaging narrative, I bring my personal experiences to the fore, recounting my journey of designing and building autonomous teams using this approach.
Finally I look at how to collaboratively design and agree standards in context of a portfolio approach to running a business unit and how this can catalyse a thriving autonomous culture without having to initiate or contend with radical change.
Gear up for this enlightening discussion that will likely change the way you perceive the nature of autonomy for the better.
Contact David Ding
Thanks for listening!
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Episode Transcript
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Speaker 1 (00:00):
Okay.
So this one is about the natureof autonomy.
Now, this one's been brewingfor a while.
I've been waiting for the righttime to to speak on this and
now is the right time.
It's really timely because wejust had elections in New
Zealand.
We've, it's inevitable, we'vegot a new government coming in.
(00:20):
We're not sure whether there'sgonna be a coalition yet because
the special votes haven't beencounted and it was my last day
with a government agency onFriday.
Some of you know I've beenworking as an innovation advisor
at Callahan innovation andcommercialization team, working
with founders of bleeding edgeinnovation to help them
(00:42):
commercialize it, line them upwith capital raising and all
that kind of stuff.
You know advising the boards,advising the ELT's and it's been
one of the great privileges ofmy life I can say that
unreservedly the caliber of thepeople there, the devotion to
(01:04):
the mission and Just thehumanity of the people and the
way that they work.
You know the startup spaceisn't what you see.
You posted on LinkedIn all thetime with successful Capital
raises.
You know it's strewn withdistressed assets, burnt out
(01:28):
founders.
You know version 188 of a pitchdeck and you know a very small
percentage of people in thatspace successfully, you know,
deliver product market fit andcontinually accomplish stage
(01:48):
missions to unlock Furthercapital and the learning
required, even to open thesedoors.
It's significant, and so what Iwant to say is, first of all,
my heartfelt gratitude toCallahan innovation, a
phenomenal organization, and thecaliber of the people is Unlike
(02:11):
anything I've ever experiencedin my life.
I've never seen such a depth ofexpertise and skills, and when
you combine that with theequipment, the plant, you know,
the buildings and the culture,everything that has come before,
(02:34):
it's truly a diamond in therough and, to my mind, one of a
New Zealand's most preciousassets.
And what I want to speak aboutnow is how woefully we are, as a
(02:56):
nation, of Leveraging the valueof the assets contained within
this organization and I mean I'mmainly meaning the people.
And the reason, you know thisis apt right now is because of
(03:17):
autonomy.
It's because of autonomy, youknow, we've got a national
government coming in in NewZealand with act.
You know act are fully insupport of Greater autonomy for
the individual, which means lessintervention by government.
However, what I want to sharewith you is is a is a concept
(03:44):
for autonomy portrayed in aslightly different way, in terms
of a hybrid of autonomy andintervention.
Now, of course, of course,those of you that know me and
listen to this podcast know thatI'm big time into paradox and
(04:06):
ternary thinking, and so, when Ishare, what I want to share
with you is my perspective onautonomy and how true autonomy
Can be achieved through asymbiosis of a Guard rail of
(04:28):
intervention, whereby autonomyis a privilege that is earned
Through trust.
And so, hopefully, that set thescene, and you know I wanted to
spell some myths around how.
You know, decentralization ofauthority requires massive
(04:49):
upheaval and massive radicalchange, and Radical
decentralization just swingingthe pendulum in the other
direction is what's going tosolve the problem.
We see that centralizedauthority is the root cause of
our suffering.
You know, we live in fear inour daily lives.
We don't trust ourselves to beable to provide for ourselves,
(05:13):
to take care of ourselves wholly.
We know we have to depend ontrusted third parties.
However, paradoxically, we wantless and less intervention by
government.
Now, if you want a benevolentauthority that you can trust,
then you're you actually want itto intervene and Take
(05:37):
responsibility for aspects ofyour care.
And so you can see, in a binarysystem where it's a zero sum
game, it's either this or that.
It's either social or economic,it's either.
It's either research driven orcommercially driven.
(05:57):
But no, it doesn't have to bethat way.
It doesn't have to be a zerosum game.
It can be symbiotic and, intruth, that baseline that we're
looking for we're ofself-responsibility and
intervention based on, you know,agreed Markers For it, for the
(06:19):
point of intervention isactually what we want.
What we're actually seeking istrusted third parties.
And if we are unable to trustthose third parties because
there's only one option, as anexample, you know, I think you
know the you know there arecertain entities that issue
(06:41):
accreditation.
For you know, as an example, inthe medical sector, you know,
if you're a psychologist,there's a, there's a single
regulatory standard.
Or in certification that youneed to be able to practice and
derive an income.
There are no other standardschallenging these single options
(07:03):
.
So we were devoid ofAlternative choices.
We have utter dependency andthere's no competition to spur
innovation.
You see to, there's nomotivation for these
institutions to innovate and toget better.
(07:24):
They can, they set and maintaina standard, but they know that
they're not going to be knockedoff their perch because it's
institutional, it's the onlychoice, and so that creates
scarcity and Stagnation and allthe rest of it.
So autonomy.
(07:44):
What I'm presenting today ishybrid, so I think that's a good
thing.
Today is hybrid of centralizedand decentralized Authority,
where sovereignty, individualsovereignty is the de facto
(08:09):
standard, it is the power thatstands above all else, but where
there is a mechanism For anindividual to then defer their
authority willfully To a trustedthird party who is empowered to
intervene.
You see, he was empowered tointervene and so, rather than
(08:34):
radical disruption, we canintroduce these things now, and
I've experimented in manydifferent jobs I've had in the
past.
You know, typically in mycareer, I found myself, as you
know, leading at large salesteams, leading the sales
Department of an organization,typically with some marketing,
(08:55):
typically with some procurement,product development and looking
after that business unit, asyou know, looking after the P&L
for that unit, and so when youhave that snapshot view, when
you have, when you can zoom outand look at everything as
(09:18):
separate.
But it also is a systemdesigned really to create wealth
, perpetually generate wealth,and From my perspective, of
course, I'm constantly Investingmyself into it in ways that
enable it to become trulyautonomous.
Now, but what you, what youdiscover very, very quickly, is
(09:41):
that if you want something toself-perpetuate, it has to
self-regulate.
It has to self-regulate whichmeans there has to be there have
to be limiters put in place,and I'll give you a, give you a
real simple example.
So, in when I first beganexperimenting with this, it was
(10:04):
in a sales driven organization.
You know you have, you havesales targets, you get the, the
annual number, break it downinto months, break it down into
a daily average and every singleday is a daily average number
that we want, we want to hit asan organization and, very simply
, I am viewed a culture intothat team whereby you are wholly
(10:28):
responsible for that number.
So your portfolio manager, yougot a portfolio of assets.
Your portfolio has to yield andour in the yield was a 10%
increase month on month.
10% increase month on month wasa target.
Now we, you know when yousummed it up, but it it average
(10:51):
doubted 11.5% compounding monthon month, and we always hit it
once.
Once the unit is runningautonomously and it's
self-regulating, it willperpetually compound wealth.
(11:13):
In my experience you know I'mnot saying this is you can be
universally adopted.
My hope is that it can be, butI don't know that for sure.
But how it works is there's anagreement with the portfolio
manager where you're saying that, scientifically, we know that
if you call 30 of your clients aday, and even if you do a
(11:34):
really terrible job ofunderstanding the asset, of
getting in behind it andidentifying the pain points and
working with them to createsolutions for them to transcend
that pain and then pay for theprivilege, even if you do a poor
(11:54):
job of that, we know that ifyou make contact with 30 of them
in a day, the likelihood of youhitting your target is
something like 90%.
So we've got the statistics.
The statistics.
You know that typically thebest predictor of future
(12:15):
performance is past performance.
And so you know, crystal ballgazing.
We believe that if you contact30 of your clients in a really
poor way, you'll probably stillhit your target.
And so you have an agreementwith the individual.
You treat them like a sovereignhuman being and you say do you
(12:36):
agree to this number?
Yes, I agree to this number.
Do you agree to takeresponsibility for hitting that
number?
Yes, I do.
Okay, and so do you agree that,if you are not forecasting to
deliver that number, that if youfall behind in your forecast,
(12:57):
that you agree to adhere to amutually agreed standard that if
your forecast hits below a 10%yield, then you will commit to
contacting 30 of your clients asa minimum standard.
Yes, that's more thanreasonable.
(13:21):
So what that means is, ifyou're forecasting to do 20%
above your target, then you havefull autonomy.
You have full, total autonomy.
I don't care if you do one calla day, I don't care if you do no
call the day, I don't care ifyou're in a spa, I don't care if
(13:42):
you take the day off.
You are the steward of thatportfolio.
Now I know from experience manyyears experience of managing
portfolio managers that whenthey pegged off, there will be a
compressed moment in timewhereby they'll have to do 60
(14:06):
calls in a day.
You see, you come to learn this, but when people are empowered
and they're self-responsible,they'll do 70 calls in that
compressed window of time.
If they've taken two days offbecause they were forecasting
20% ahead, they are devoted todelivering that number.
(14:30):
They don't actually care aboutthe standard.
They're responsible fordelivering the number and I can
tell you that that's not aprivilege they take lightly and
it's not a privilege they wantto lose.
But underlying this is theunderstanding that, yes, it is a
privilege.
Why is it a privilege?
Because it's a company that hasdelegated authority.
(14:53):
It's a company that hasdelegated authority.
There's a constitutioncontaining the will of the
founders, the stakeholders.
The will is enacted by theboard, the strategy is developed
by the executive leadershipteam, possibly the board as well
(15:14):
, involvement maybe under thestewardship of the chair, and
the agency is delegated.
And this is really important tounderstand.
Although the essentialisedauthority, although it's a
centralised entity, it's acompany, you can still have it
(15:39):
run wholly autonomously and youcan still honour the sovereignty
of the individual.
And it's just an understandingof dynamic that a human being,
before they started working forthat company, entered into an
employment agreement with thatcompany where they agreed to
(16:01):
meet certain standards andresponsibilities, and so they
deferred, they imbued that withtheir commitment.
It is my, I'm committed to XYZABC in exchange for annual
salary.
Now, no employment agreement isthe same and my hope is that
(16:27):
employment agreements willevolve in time to become hybrid
agreements that embody civil lawand statute.
So in a company that has hybridcentralised authority and
distributed authority and totalautonomy, you need hybrid
(16:47):
agreements because you have tohonour the free will of the
natural person and you have tohonour the agency of the legal
person.
The will of the human beingstands above statute and the
(17:09):
agency, which is the enactmentof the will, the power to enact
and fulfil the will, is honouredthrough the legal person.
So the legal person is like adigital twin of the natural
person.
In law it's the physical assetof the human body and the will
is the will of the human being,the immutable sovereignty of the
(17:33):
natural human being.
And so we think we need thisradical transformation and
upheaval.
We need to decentraliseeverything.
The classic web-free thing.
We need to decentraliseeverything, and massive
web-three companies are figuringout that when you spray
authority everywhere, youdecentralise it and just have
(17:56):
total autonomy, then it corruptspower, it renders it impotent.
So you want to consciouslywield your authority and defer
it and be self-responsible.
I back myself to deliver thisnumber.
(18:17):
If, for some reason, I can'tmeet that commitment, I agree to
a minimum standard set in.
Agree by both 30 contacts withmy customer in a day as an
average.
If my daily averages areslipping behind and you watch me
if it does, if I'm going togive you 60,.
(18:38):
That's what you see Now.
There are some people thatdon't.
There are some people thatdon't and that's because they're
losing their will.
They're losing their will.
Their will is becoming broken.
They don't believe that they'recapable.
It seems futile.
(19:00):
Whether they do 30 calls ormore and this is very easy In a
portfolio approach it's like adistressed asset.
If you're a portfolio manager,if you're a venture capitalist,
if you're the principal of afund, then if you have a
distressed asset, it gets yourattention.
That's what gets your attention.
(19:21):
Now, a strong leader knows thatthe greatest assets in their
portfolio are actually the humanbeings their expertise, their
skills, their connections, theirresources, their capability,
their capacity.
The uniqueness of thoseindividuals is the greatest
asset.
It's not the products.
(19:41):
It's not the products.
But the reason for this isbecause autonomy the human
beings aren't the right to theirautonomy.
They're free to innovate.
They're free to try somethingand fail, but they're not going
(20:02):
to sacrifice their baselinelevel of commitment.
They've earned the right totheir autonomy.
They're surplus because they'reprojecting a 10% over-target.
They've created the space forthemselves to fail fast, to
innovate, to try new things, andthis is how autonomy works.
(20:24):
And so my point about a leaderviewing the human beings as
assets.
If you have an asset in yourportfolio that's not yielding or
performing, you give it yourattention, you don't beat it up,
you don't tell it that it mustcomply, you don't apply more and
(20:45):
more pressure, and this is oneof the keys that I had in my
team.
The most potent culture I foundwas when there is a distressed
asset one of the portfoliomanagers that haven't hit target
(21:06):
for three months in a row andlet's say they were trying to
Hit the minimum 30 calls a dayand then it starts slipping,
that's a distressed asset.
They've looked, they're losingthe will to, and they're losing
(21:26):
faith in themselves to upholdthat number.
And so what do you do?
You use science, you focus onthem.
You give them much moreattention than any of the others
.
You look through theirportfolio with them, you look
behind the assets.
You allow them to leverage yourmana, your Expertise, skills,
(21:48):
capability as an asset to creategreater value inside their
portfolio.
In my situation, it may be thatI speak to the CEO or to a
board member or Facilitatorstrategy session To add you know
more value, to unearth greatopportunities.
But you look at the, thedormant potential of that
(22:13):
portfolio, how you can unlock ittogether, support it with
greater marketing.
You know, customize a specificcampaign, develop a specific
product to meet an unmet need ofa client within their portfolio
.
You see, and so you're alwaysleveraging the dormant potential
(22:36):
, the potential of dormantassets, to create greater wealth
and help them to get ahead.
Now there are some scenarioswhere you know you evaluate the
portfolio and One of the assetsin the portfolio it's in a
specific industry, in theindustry's experiencing cyclical
(22:58):
change and it's out of theircontrol.
Their portfolio is Isrepresenting that cyclical
change.
It and it's starting tomanifest that and materialize it
.
And this is where it'sessential In my mind, and I
(23:22):
think this is really what'smissing, the white space that's
missing in the New Zealandinnovation ecosystem is you need
a portfolio manager, then youneed to be a portfolio manager
of portfolio managers.
There needs to be a principleof principles, because we
(23:43):
everything's operating in a silo.
As an example, you got VC fundsthat specializing deep tech,
hard tech, agri-tech, you'reseeing water tech, now web 3,
you know clean tech, you name it.
(24:03):
They're all Operating in silos.
Now there are pros and cons tothis, but the problem is is that
all of those industries likemedtech is a classic example AI.
Ai is even more of a horizontalnow and so you know we need to
adapt to.
We need to adapt so that eachindustry can experience its
(24:32):
cyclical change, the ebbs in theflows and, whilst they're being
adequate, profits and yieldFrom other assets, so you can
weather this door.
And so this is what I did.
I Go to the team and say thisportfolio it's, it has a
(24:53):
dependency on this kind of asset, which means it's experiencing
a cyclical change, and I'd askfor volunteers to absorb the
growth of that portfoliowillingly.
And never did I have a Port, aportfolio manager, not stand up,
not stand up, and whether thatstorm.
(25:14):
Because they know damn wellwhen they're experiencing a
cyclical change and I'm focusing, working with them on their
portfolio, they know I'm gonnago to bat for them and they know
their teammates will bat forthem as well.
You see, and this is what weneed in the New Zealand
innovation ecosystem, we need aportfolio, a fund of funds, if
(25:38):
you will, to consolidate thefragmentation and the siloed
vertical industries, so thatthere are portfolio managers or
principles of portfolios runningportfolios that contain niche
assets, you know?
So you've got a portfolio thatservices web 3 got a portfolio
(26:01):
that services web tech.
Sorry, medtech, agtech, cleantech, tech, tech, tech, tech.
So you have those specialists,but the, the sine wave of the
ebbs and the flows.
You know the bandwidth or thefrequency between each peak and
trough of these cyclicalindustry changes.
(26:24):
Well, you like, in web 3 as anexample, the bearable markets
that you have a portfolio thatunderstands that those that's
the nature of the industry.
It understands that in hardtech there's a could be a 20
year event horizon.
You know the exit could be in20 years.
(26:47):
Commercialization could be a 10year horizon.
You know the valuation of theassets could be sporadic.
Of the intangible assets thatare created, clinical trials,
you know in medtech that haveextra long runways.
(27:09):
Now, if you At the moment, ifyou're a special specialty fund,
then you're not gonna have,you're not gonna be able to
encompass all of them.
You're not gonna be able toCapitalise on every opportunity
that shows potential.
Unless you have this approach,unless you have surplus
(27:32):
elsewhere.
Because you've got a diverseportfolio of portfolios and you
know classic one is sasssoftware as a service, really
great Businesses and ventures Toget off the ground quickly,
(27:54):
create recurring revenue.
You know, with very littleinitial capital outlay and you
may actually invest.
You know, inside this portfolioyou may actually have the
equivalent of An index fund oryou may actually invest in.
(28:14):
You know stocks, shares, cryptoassets, these kinds of things
as well, but the key is that youknow property.
The key is that the portfolioprovides a surplus that enables
each industry to go through itscyclical change.
(28:35):
And there's enough.
There's adequate surplus Foreach portfolio manager to earn
the right to their autonomy andto negotiate it back Once
they've demonstrated.
I'm gonna agree that if myforecast falls back, I'm gonna
(28:55):
agree to a minimum level ofactivity and a minimum
harvesting of insights so thatthey can have that discussion
with me and then say we need toReconstitute this portfolio, we
need to redistribute wealth, weneed to reattribute Some you may
(29:16):
be interested in a podcast Idid on retribution and the true
meaning of reattribution, andthis is a portfolio management
concept.
But together we're unified,we're sovereign, we have total
(29:36):
autonomy, we have the equivalentof the autonomic nervous system
.
This is a sympathetic Nervoussystem and the parasympathetic
nervous system.
One is seeking growth, one iscontracting and it's like the
portfolio if there, if it is atrisk and if there is a threat,
(29:56):
then it goes into consolidationmode, it goes into.
You know there are markers thatkick in, that go into
preservation and reconstitution,same way that the body does.
And this is really an organism,right?
(30:17):
This is how an organism works.
Every cell in your body is aparadox.
You know, if you look at yourbody and this is how technology
is evolving, by the way if youlook at your body, there's a
brain.
That brain is like a hive mind.
(30:40):
It's connected to every aspectof your body.
You know, producing all thechemicals, all the signals, and
so well, everything's producingsignals.
But then you have a nervoussystem, and that's the beginning
(31:01):
of paradox the nervous systems,like in mycelium network,
distributing sovereignty.
You know, taking a stem cellthat has the potential to become
anything, transporting it tosome other part of the body
using the blood, and then thestem cell adapts and evolves to
(31:26):
meet the unmet need within thegreater whole.
And that cell is sovereign.
It's sovereign, but it'sconnected to the hive mind of
the brain and it collaborateswith other cells to create
organs, to produce systems.
Yet it is solely responsiblefor itself.
(31:47):
It is solely responsible foritself.
And you know, the body is thegreatest paradox of all.
It's the greatest hybrid ofunity and separation that you
could imagine.
It's not just the binary system, it's a ternary system, it's
(32:08):
autonomous, but it is also, itwill intervene.
And so, really, my point, tobring this full circle in
context of centralized authority, there has to be standards,
(32:30):
standards that are set andagreed upon by all parties
involved.
That if we get to this metric,or this marker that we all hold
in our hands, or this markerthat we all wholly agree that it
triggers an intervention by atrusted third party, and we
(32:52):
willingly acquiesce to whateverthe custodians, whatever whoever
those empowered to intervene,however they want to do it, we
acquiesce, we relinquish controland you have the ultimate
(33:17):
blueprint for an autonomoussystem that has protection and
preservation baked in, but isprogrammed to perpetually
appreciate and compound itswealth, perpetually grow and
expand and become more increasedits capability and capacity,
(33:38):
increase the diversity of itsuniqueness, to create more and
more complex systems, so that itbecomes an ecosystem with
profound interdependency anddiversity.
And those are the two markersfor ecosystems on the planet,
that that's the thing thatseparates them from other
(33:59):
ecosystems interdependency anddiversity.
And so we can have this rightnow.
They're just very basiccultural changes that can happen
within any company.
To create autonomousorganizations, you don't have to
change the whole thing into aDAO, or you don't have to
(34:24):
convert the government into a TLorganization.
You can just enter intosovereign agreements with the
individuals involved when,rather than consensus decision
making on the day to day, theconsensus decision making is
upon the agreed standards Onwhat are the agreed terms for
(34:47):
earning the right to autonomy,what are the agreed terms for a
trusted third party to intervene.
That's it.
That's all we need to do, andthis framework is ubiquitous for
anything A company, a trust, aDAO, some other weird kind of
(35:12):
organization, an uncorporatedgroup Because when individual
sovereignty stands above allelse, the immutability of that
is the same.
The immutability of that createenables there to be perpetually
mutable form of contracting.
That's the beauty of it.
(35:36):
That's the beauty of it.
You can enter into any agreementthat you want, you can
structure it in any way you want, you can insist on dictating
terms, and then the other partyis free to agree or not agree.
You can willfully defer yourauthority in a way that enables
(36:00):
a trusted third party to havetotal dictatorship, without any
standards for intervention.
It can be the default Everyhuman being is responsible for
setting your own standards.
That's not to say that youdon't have global standards for
(36:23):
a team, like a team of portfoliomanagers, as an example,
because that works best ifeveryone's working on that same
model.
But an individual still has theright to try and negotiate
specific terms for them and insome cases that's a better way
of going.
As an example, the scenario Igave you with setting the
(36:49):
standard for intervention beingif your projections fall behind
projecting to yield 10% thatmonth, if your daily averages
are below, fall below thatprojection, then the
intervention kicks in the momentit falls.
(37:11):
But below that, you're committedto doing 30 contacts with your
clients a day.
There are some portfoliomanagers where that's 15.
Or there are some portfoliomanagers where it's 60.
There are some portfoliomanagers where it's 5.
Some portfolio managers whereit's two visits, so you actually
(37:32):
have to go and visit in person.
So you tailor the standard tothe individual.
If you're a beast mowing downcalls, then do that.
If you're an expert facilitator, get in front of them.
Now you're always playing tothe strength of the asset.
You're always leveraging theuniqueness of the asset.
(37:56):
You're never just applying aglobal thing.
You're never just applying aglobal thing may not be playing
to their strengths.
And I'll use the example ofanother portfolio I managed was
student accommodation buildings.
(38:16):
I think I had about 10,000 bedsin London and my role is to
appreciate the assets.
So that means get either sellthe buildings to a university,
lease them out to a universityor lease them out directly to
the students or the studentsparents.
And you can apply a globalstandard to each individual
(38:42):
asset, to each room, and get itabout 80% full using just
blanket global marketing.
But the rest of the 20%, youhave to get in behind each asset
, understand the uniqueness ofeach room, understand the
environments it's in, understandthe pros and cons of the
uniqueness of that room, createbespoke campaigns tailored to
(39:06):
just that room, target ademographic that's particularly
suited to just that room and theuniqueness of that room.
And that's how you get the restof the 20%.
And so this is how I was ableto achieve 98% occupancy.
With the remaining 2%, therooms were just damaged.
(39:28):
And it's incredible what youfind out.
You find out oh, there actuallyare damaged rooms.
You know, if you don't see itstandard where you're trying to
get 100%, you would never evenfigure these things out as a
portfolio manager.
(39:48):
But and this is how you applyportfolio approach to any aspect
of an organization, toeverything you're responsible
for as an employee there'snothing preventing you from
engaging in a conversation withwhoever your manager is to
suggest some standards?
(40:09):
Say what are your thoughts onme gaining autonomy?
You're expecting this of me.
If I can project 10% more thanthis or 20% more than this, if I
can increase my productivityfrom this to this and I can
maintain those numbers, do youagree to give me total order
autonomy so I can take an extraday off a week, or I can attend
(40:34):
this course once a week, or Ican work in this team once a
week, or I can donate 10% of mysurplus time to a nonprofit
project?
You see, this is the power youhave as an individual.
There's absolutely nothing inthe world stopping you from
(40:56):
initiating a conversation withyour portfolio manager, floating
some ideas to your teammates,getting them together to discuss
it.
What's a global regulatorystandard we could set within our
team that triggers anintervention?
And then, what might we do ifwe become so productive as a
(41:18):
team and that we have surplusthat we can devote to other
things?
How might we innovate?
How might we use some trial anderror to try some new things?
Just because it's an idea, notbecause you know, despite
whether there's scientificevidence or not, you toss that
(41:39):
out the window.
You just give it a go, becomesmuch more fun and much more
innovative, because you'reconstantly delighted and
surprised by how it blooms andblossoms.
When you have a mechanism inplace to protect and preserve
(41:59):
everyone, to provide the carethat they need, that is
obligation free, then theyreally appreciate that,
understanding that if they meetand exceed that standard as a
self-reliant, self-responsiblehuman being and they taste what
(42:22):
it's like to have total freedomand total autonomy and then to
feel the pressure of it slippingaway as a privilege, watch what
happens.
Watch what happens, watch theinnovation that happens and
watch them perform underpressure, because they're not
(42:44):
being told to accomplish a task,they're not being told to
comply.
They made a commitment to you,to that number.
It's about them.
It's about how they feel asself-responsible individuals.
Come hell or high water,they're going to accomplish that
mission because they've.
(43:06):
They're committed by proxy tothe rest of the team.
It's a culture and it's a wayof being.
That's that became verydifficult for me to describe
when I first startedexperimenting with this in an
organization that didn't reallyknow what I was doing.
They knew that my team wasthriving and some of the people
(43:31):
in that organization becamequite jealous of, because my
team looked like they wereswanning around, sometimes Not
understanding that the teammembers that were swanning
around, they'd come in in theweekend and bashed out 60 calls
and got five appointments.
You see, you have these peaksand troughs and the culture that
(43:53):
I had in that team when I knewI'd hit that sweet spot the last
day of the month.
That's when the number has tobe delivered.
They stay behind for as long asit takes to just bash out calls
, get numbers across the line,pull out invoices, get them
billed, whatever it takes to getto deliver that number.
(44:18):
Because of the commitment thatwas made by an individual, not
because they were told they haveto do something, because they
don't, they want to, becausethey made the commitment to
invest themselves in that wayand a co-designed agreement and
a consensus agreement.
And so imagine this scenariowithin government, within a
(44:48):
government agency.
Imagine this relationshipbetween a ministry and a
government agency.
You know the minister can comein and it is my will to XYZ ABC
so that the people of NewZealand thrive, so that the
(45:09):
nation of New Zealand thrivesand prospers.
How can we and we can co-designthose standards together.
We can co-design thosestandards together.
But how can the dormantpotential of the wealth of
knowledge, experience,uniqueness, equipment within an
(45:32):
agency like Callahan Innovation?
How can that be unlocked?
How can that be unlocked?
It's through autonomy.
It's through autonomy so thatthey can create a surplus for
themselves and create the spaceto then innovate in a
(45:56):
cross-pollination way.
They're incentivised to do soand if things slip and they
become less productive, they ownthe productivity for their role
.
They own what they're capableof producing.
They own whatever the unmetneed is behind the reason why
(46:19):
their role exists.
They own it.
They agree to a standard whereintervention happens.
They understand that anyprivileges gained by creating a
surplus are lost if that surplusbecomes eroded, and people are
far less adverse to risk, farless adverse to risk, and
(46:46):
they're incentivised to utilisetechnology to make themselves
more productive.
Now the last thing point I wantto make is and this was always
controversial in my team, justbeing honest is that if your
portfolio yields like if you hada number to hit one month and
(47:09):
you managed to appreciate yourportfolio by 30% in one month,
you absorb that target and yourprojection changes.
And so what this would do andunderstand.
There may be a random anomaly.
(47:31):
There might have been a massivedeal that was done in one month
.
You have to pull that out.
You have to pull out thoseanomalies, otherwise they're
just they're not going tocontinue hitting their target.
You factor in the anomaliesthat there will be anomalies,
but you spread it across theportfolio at the beginning of
(47:51):
the year, so you pull it out.
But if you're compounding yourportfolio 20% month on month,
then the redistribution ofresponsibility happens every
single month.
Every single month theredistribution of that portfolio
(48:14):
happens and this is whatenables the unified whole to
work together as one in unity.
This is how you enable theentire diverse portfolio, you
enable one industry to carryanother, but it's constantly
adapting and evolving so thatthe redistribution of
(48:36):
responsibility is relevant towhere portfolios are wealth
generating, where the surplus is.
And this means that a portfolio, as an example, a Web 3
portfolio this means that a Web3 portfolio in a bear market can
(48:57):
still hit its targets Can stillhit its targets Because every
month the redistribution ofresponsibility is happening
based on where the growth ishappening.
If you're coming into a peak,the equivalent of a bull market,
and you're riding that wave,then you're creating a surplus.
(49:20):
That's helping others who arecontracting, whose portfolios
are contracting and it enablesthem to still experience success
.
But they're intrinsically thenmotivated to consolidate,
reconstitute their assets, cullassets out of their portfolio,
(49:44):
because that's another thingwith portfolio management is, if
there are specific assets thatare not yielding, if they're
depreciating in value and youcan't help it, there's an
incentive to either turn themaround like they're a distressed
asset or reconstitute them.
(50:06):
So maybe merge them withanother asset, innovate to
create a new system between fouror five depreciating assets or
distressed assets, and so or youthen you cull it into a
(50:26):
reactive portfolio that onlygets targeted by marketing as an
example, because the cost ismuch less and you're not getting
a yield on the attention you'reimbuing into that asset.
And so you want to redeploy theattention of the human being
into understanding theopportunities and assets that
(50:47):
actually have potential, andthis is how it becomes
autonomous.
You begin investing in thingsto increase the productivity of
each asset, to increase theproductivity of each individual,
understanding their role inmaking the system more efficient
at meeting an unmet need, aswell as understanding their
(51:08):
contribution to their individualproductivity, so that they can
earn the right to their autonomyas well.
And the other component I foundthat was actually essential in
this is to incentivize knowledgeexchange through the equivalent
of either very junior internsor people just out of university
(51:36):
or just out of college who canabsorb and assimilate knowledge
from people who are earning theright to their autonomy, so that
they have they absorb the costof those people in their
portfolios and it means they canreally enjoy the privilege of
(52:00):
the autonomy that they'reearning.
And in that scenario I've beensharing.
That's about administrators whobought, who enable a portfolio
manager to redeploy theirattention into activities that
(52:20):
are appreciating the portfolio.
But again, the cost ofeverything has to be absorbed by
the portfolio as well.
It has to be absorbed by theunit as a whole.
So this is what autonomy is.
If you are a sovereign humanbeing and you've come to the
(52:42):
conclusion that you do want todelegate responsibility to other
human beings for aspects ofyour care, if you do want to
collaborate with other humanbeings on mission-led projects,
then you know that you have todelegate your authority, you
have to defer your authority.
And if you've drawn thatconclusion, you know that you're
(53:05):
not going to just be anindependent, sovereign human
being doing everything forthemselves, trying to run a
company entirely by themselves.
You know you want a hybrid ofboth.
You know you want a hybrid ofboth and this is a blueprint
(53:28):
that works and it can be infusedinto any organisation.
It can be infused into yourfamily.
You know, if you imaginehelping a child to have a
portfolio approach to how theyrun their life, where all of
their, everything under theirstewardship, all their toys and
their clothes are assets, youcan teach them how to value
(53:52):
those assets, how to appreciatethem by protecting and
preserving the things that theycherish.
You can help them to set theirown standards.
You know, if my room gets thismessy, then I guarantee it will
be tidied up by XYZ.
You know, if my chores that Iagree to as my set standards, if
(54:21):
I exceed them or I'm doing more, if my productivity and my
contribution to this family isincreasing beyond what was
agreed by 10%, then I earnautonomy and they're an adult by
the time they leave home.
They're a self-responsibleadult by the time they finish.
(54:44):
You know, being an adolescent,they've earned the privilege of
going out with their boyfriendor their girlfriend, of learning
how to drive and it's justnormal for them.
So hopefully that's helpful.
Hopefully that shed some lighton autonomy, what it actually
(55:05):
means In a world within whichyou want to delegate your
authority and defer yourauthority.
It is a privilege to be able todo that and defer your
authority.
It is a privilege If you wantto work for a company and be
protected and guaranteed anincome despite what happens.
It's a privilege If you want agovernment to protect you or a
(55:29):
trusted authority or third partyto protect and preserve you,
your body, then you have tofigure out how to generate
wealth as an individual.
You have to figure out how tocreate a surplus, but you also
want your autonomy.
So how can we, how can we dothis together Without all this
(55:57):
radical change that everyonethinks that has to happen?
There doesn't have to be a massdeluge of insane disruption
that creates equal measure ofharm than it does good.
We can do this without doingany harm by creating sustainable
surplus, but it needs aportfolio approach.
(56:21):
Okay, so I'll leave it there.
That's it for now, for thenature of autonomy.
Talk soon.
Okay.
So this one is about the natureof autonomy.
Now, this one's been brewingfor a while.
I've been waiting for the righttime to to speak on this and
now is the right time.
It's really timely because wejust had elections in New
Zealand.
We've, it's inevitable, we'vegot a new government coming in.
(00:20):
We're not sure whether there'sgonna be a coalition yet because
the special votes haven't beencounted and it was my last day
with a government agency onFriday.
Some of you know I've beenworking as an innovation advisor
at Callahan innovation andcommercialization team, working
with founders of bleeding edgeinnovation to help them
(00:42):
commercialize it, line them upwith capital raising and all
that kind of stuff.
You know advising the boards,advising the ELT's and it's been
one of the great privileges ofmy life I can say that
unreservedly the caliber of thepeople there, the devotion to
(01:04):
the mission and Just thehumanity of the people and the
way that they work.
You know the startup spaceisn't what you see.
You posted on LinkedIn all thetime with successful Capital
raises.
You know it's strewn withdistressed assets, burnt out
(01:28):
founders.
You know version 188 of a pitchdeck and you know a very small
percentage of people in thatspace successfully, you know,
deliver product market fit andcontinually accomplish stage
(01:48):
missions to unlock Furthercapital and the learning
required, even to open thesedoors.
It's significant, and so what Iwant to say is, first of all,
my heartfelt gratitude toCallahan innovation, a
phenomenal organization, and thecaliber of the people is Unlike
(02:11):
anything I've ever experiencedin my life.
I've never seen such a depth ofexpertise and skills, and when
you combine that with theequipment, the plant, you know,
the buildings and the culture,everything that has come before,
(02:34):
it's truly a diamond in therough and, to my mind, one of a
New Zealand's most preciousassets.
And what I want to speak aboutnow is how woefully we are, as a
(02:56):
nation, of Leveraging the valueof the assets contained within
this organization and I mean I'mmainly meaning the people.
And the reason, you know thisis apt right now is because of
(03:17):
autonomy.
It's because of autonomy, youknow, we've got a national
government coming in in NewZealand with act.
You know act are fully insupport of Greater autonomy for
the individual, which means lessintervention by government.
However, what I want to sharewith you is is a is a concept
(03:44):
for autonomy portrayed in aslightly different way, in terms
of a hybrid of autonomy andintervention.
Now, of course, of course,those of you that know me and
listen to this podcast know thatI'm big time into paradox and
(04:06):
ternary thinking, and so, when Ishare, what I want to share
with you is my perspective onautonomy and how true autonomy
Can be achieved through asymbiosis of a Guard rail of
(04:28):
intervention, whereby autonomyis a privilege that is earned
Through trust.
And so, hopefully, that set thescene, and you know I wanted to
spell some myths around how.
You know, decentralization ofauthority requires massive
(04:49):
upheaval and massive radicalchange, and Radical
decentralization just swingingthe pendulum in the other
direction is what's going tosolve the problem.
We see that centralizedauthority is the root cause of
our suffering.
You know, we live in fear inour daily lives.
We don't trust ourselves to beable to provide for ourselves,
(05:13):
to take care of ourselves wholly.
We know we have to depend ontrusted third parties.
However, paradoxically, we wantless and less intervention by
government.
Now, if you want a benevolentauthority that you can trust,
then you're you actually want itto intervene and Take
(05:37):
responsibility for aspects ofyour care.
And so you can see, in a binarysystem where it's a zero sum
game, it's either this or that.
It's either social or economic,it's either.
It's either research driven orcommercially driven.
(05:57):
But no, it doesn't have to bethat way.
It doesn't have to be a zerosum game.
It can be symbiotic and, intruth, that baseline that we're
looking for we're ofself-responsibility and
intervention based on, you know,agreed Markers For it, for the
(06:19):
point of intervention isactually what we want.
What we're actually seeking istrusted third parties.
And if we are unable to trustthose third parties because
there's only one option, as anexample, you know, I think you
know the you know there arecertain entities that issue
(06:41):
accreditation.
For you know, as an example, inthe medical sector, you know,
if you're a psychologist,there's a, there's a single
regulatory standard.
Or in certification that youneed to be able to practice and
derive an income.
There are no other standardschallenging these single options
(07:03):
.
So we were devoid ofAlternative choices.
We have utter dependency andthere's no competition to spur
innovation.
You see to, there's nomotivation for these
institutions to innovate and toget better.
(07:24):
They can, they set and maintaina standard, but they know that
they're not going to be knockedoff their perch because it's
institutional, it's the onlychoice, and so that creates
scarcity and Stagnation and allthe rest of it.
So autonomy.
(07:44):
What I'm presenting today ishybrid, so I think that's a good
thing.
Today is hybrid of centralizedand decentralized Authority,
where sovereignty, individualsovereignty is the de facto
(08:09):
standard, it is the power thatstands above all else, but where
there is a mechanism For anindividual to then defer their
authority willfully To a trustedthird party who is empowered to
intervene.
You see, he was empowered tointervene and so, rather than
(08:34):
radical disruption, we canintroduce these things now, and
I've experimented in manydifferent jobs I've had in the
past.
You know, typically in mycareer, I found myself, as you
know, leading at large salesteams, leading the sales
Department of an organization,typically with some marketing,
(08:55):
typically with some procurement,product development and looking
after that business unit, asyou know, looking after the P&L
for that unit, and so when youhave that snapshot view, when
you have, when you can zoom outand look at everything as
(09:18):
separate.
But it also is a systemdesigned really to create wealth
, perpetually generate wealth,and From my perspective, of
course, I'm constantly Investingmyself into it in ways that
enable it to become trulyautonomous.
Now, but what you, what youdiscover very, very quickly, is
(09:41):
that if you want something toself-perpetuate, it has to
self-regulate.
It has to self-regulate whichmeans there has to be there have
to be limiters put in place,and I'll give you a, give you a
real simple example.
So, in when I first beganexperimenting with this, it was
(10:04):
in a sales driven organization.
You know you have, you havesales targets, you get the, the
annual number, break it downinto months, break it down into
a daily average and every singleday is a daily average number
that we want, we want to hit asan organization and, very simply
, I am viewed a culture intothat team whereby you are wholly
(10:28):
responsible for that number.
So your portfolio manager, yougot a portfolio of assets.
Your portfolio has to yield andour in the yield was a 10%
increase month on month.
10% increase month on month wasa target.
Now we, you know when yousummed it up, but it it average
(10:51):
doubted 11.5% compounding monthon month, and we always hit it
once.
Once the unit is runningautonomously and it's
self-regulating, it willperpetually compound wealth.
(11:13):
In my experience you know I'mnot saying this is you can be
universally adopted.
My hope is that it can be, butI don't know that for sure.
But how it works is there's anagreement with the portfolio
manager where you're saying that, scientifically, we know that
if you call 30 of your clients aday, and even if you do a
(11:34):
really terrible job ofunderstanding the asset, of
getting in behind it andidentifying the pain points and
working with them to createsolutions for them to transcend
that pain and then pay for theprivilege, even if you do a poor
(11:54):
job of that, we know that ifyou make contact with 30 of them
in a day, the likelihood of youhitting your target is
something like 90%.
So we've got the statistics.
The statistics.
You know that typically thebest predictor of future
(12:15):
performance is past performance.
And so you know, crystal ballgazing.
We believe that if you contact30 of your clients in a really
poor way, you'll probably stillhit your target.
And so you have an agreementwith the individual.
You treat them like a sovereignhuman being and you say do you
(12:36):
agree to this number?
Yes, I agree to this number.
Do you agree to takeresponsibility for hitting that
number?
Yes, I do.
Okay, and so do you agree that,if you are not forecasting to
deliver that number, that if youfall behind in your forecast,
(12:57):
that you agree to adhere to amutually agreed standard that if
your forecast hits below a 10%yield, then you will commit to
contacting 30 of your clients asa minimum standard.
Yes, that's more thanreasonable.
(13:21):
So what that means is, ifyou're forecasting to do 20%
above your target, then you havefull autonomy.
You have full, total autonomy.
I don't care if you do one calla day, I don't care if you do no
call the day, I don't care ifyou're in a spa, I don't care if
(13:42):
you take the day off.
You are the steward of thatportfolio.
Now I know from experience manyyears experience of managing
portfolio managers that whenthey pegged off, there will be a
compressed moment in timewhereby they'll have to do 60
(14:06):
calls in a day.
You see, you come to learn this, but when people are empowered
and they're self-responsible,they'll do 70 calls in that
compressed window of time.
If they've taken two days offbecause they were forecasting
20% ahead, they are devoted todelivering that number.
(14:30):
They don't actually care aboutthe standard.
They're responsible fordelivering the number and I can
tell you that that's not aprivilege they take lightly and
it's not a privilege they wantto lose.
But underlying this is theunderstanding that, yes, it is a
privilege.
Why is it a privilege?
Because it's a company that hasdelegated authority.
(14:53):
It's a company that hasdelegated authority.
There's a constitutioncontaining the will of the
founders, the stakeholders.
The will is enacted by theboard, the strategy is developed
by the executive leadershipteam, possibly the board as well
(15:14):
, involvement maybe under thestewardship of the chair, and
the agency is delegated.
And this is really important tounderstand.
Although the essentialisedauthority, although it's a
centralised entity, it's acompany, you can still have it
(15:39):
run wholly autonomously and youcan still honour the sovereignty
of the individual.
And it's just an understandingof dynamic that a human being,
before they started working forthat company, entered into an
employment agreement with thatcompany where they agreed to
(16:01):
meet certain standards andresponsibilities, and so they
deferred, they imbued that withtheir commitment.
It is my, I'm committed to XYZABC in exchange for annual
salary.
Now, no employment agreement isthe same and my hope is that
(16:27):
employment agreements willevolve in time to become hybrid
agreements that embody civil lawand statute.
So in a company that has hybridcentralised authority and
distributed authority and totalautonomy, you need hybrid
(16:47):
agreements because you have tohonour the free will of the
natural person and you have tohonour the agency of the legal
person.
The will of the human beingstands above statute and the
(17:09):
agency, which is the enactmentof the will, the power to enact
and fulfil the will, is honouredthrough the legal person.
So the legal person is like adigital twin of the natural
person.
In law it's the physical assetof the human body and the will
is the will of the human being,the immutable sovereignty of the
(17:33):
natural human being.
And so we think we need thisradical transformation and
upheaval.
We need to decentraliseeverything.
The classic web-free thing.
We need to decentraliseeverything, and massive
web-three companies are figuringout that when you spray
authority everywhere, youdecentralise it and just have
(17:56):
total autonomy, then it corruptspower, it renders it impotent.
So you want to consciouslywield your authority and defer
it and be self-responsible.
I back myself to deliver thisnumber.
(18:17):
If, for some reason, I can'tmeet that commitment, I agree to
a minimum standard set in.
Agree by both 30 contacts withmy customer in a day as an
average.
If my daily averages areslipping behind and you watch me
if it does, if I'm going togive you 60,.
(18:38):
That's what you see Now.
There are some people thatdon't.
There are some people thatdon't and that's because they're
losing their will.
They're losing their will.
Their will is becoming broken.
They don't believe that they'recapable.
It seems futile.
(19:00):
Whether they do 30 calls ormore and this is very easy In a
portfolio approach it's like adistressed asset.
If you're a portfolio manager,if you're a venture capitalist,
if you're the principal of afund, then if you have a
distressed asset, it gets yourattention.
That's what gets your attention.
(19:21):
Now, a strong leader knows thatthe greatest assets in their
portfolio are actually the humanbeings their expertise, their
skills, their connections, theirresources, their capability,
their capacity.
The uniqueness of thoseindividuals is the greatest
asset.
It's not the products.
(19:41):
It's not the products.
But the reason for this isbecause autonomy the human
beings aren't the right to theirautonomy.
They're free to innovate.
They're free to try somethingand fail, but they're not going
(20:02):
to sacrifice their baselinelevel of commitment.
They've earned the right totheir autonomy.
They're surplus because they'reprojecting a 10% over-target.
They've created the space forthemselves to fail fast, to
innovate, to try new things, andthis is how autonomy works.
(20:24):
And so my point about a leaderviewing the human beings as
assets.
If you have an asset in yourportfolio that's not yielding or
performing, you give it yourattention, you don't beat it up,
you don't tell it that it mustcomply, you don't apply more and
(20:45):
more pressure, and this is oneof the keys that I had in my
team.
The most potent culture I foundwas when there is a distressed
asset one of the portfoliomanagers that haven't hit target
(21:06):
for three months in a row andlet's say they were trying to
Hit the minimum 30 calls a dayand then it starts slipping,
that's a distressed asset.
They've looked, they're losingthe will to, and they're losing
(21:26):
faith in themselves to upholdthat number.
And so what do you do?
You use science, you focus onthem.
You give them much moreattention than any of the others
.
You look through theirportfolio with them, you look
behind the assets.
You allow them to leverage yourmana, your Expertise, skills,
(21:48):
capability as an asset to creategreater value inside their
portfolio.
In my situation, it may be thatI speak to the CEO or to a
board member or Facilitatorstrategy session To add you know
more value, to unearth greatopportunities.
But you look at the, thedormant potential of that
(22:13):
portfolio, how you can unlock ittogether, support it with
greater marketing.
You know, customize a specificcampaign, develop a specific
product to meet an unmet need ofa client within their portfolio
.
You see, and so you're alwaysleveraging the dormant potential
(22:36):
, the potential of dormantassets, to create greater wealth
and help them to get ahead.
Now there are some scenarioswhere you know you evaluate the
portfolio and One of the assetsin the portfolio it's in a
specific industry, in theindustry's experiencing cyclical
(22:58):
change and it's out of theircontrol.
Their portfolio is Isrepresenting that cyclical
change.
It and it's starting tomanifest that and materialize it
.
And this is where it'sessential In my mind, and I
(23:22):
think this is really what'smissing, the white space that's
missing in the New Zealandinnovation ecosystem is you need
a portfolio manager, then youneed to be a portfolio manager
of portfolio managers.
There needs to be a principleof principles, because we
(23:43):
everything's operating in a silo.
As an example, you got VC fundsthat specializing deep tech,
hard tech, agri-tech, you'reseeing water tech, now web 3,
you know clean tech, you name it.
(24:03):
They're all Operating in silos.
Now there are pros and cons tothis, but the problem is is that
all of those industries likemedtech is a classic example AI.
Ai is even more of a horizontalnow and so you know we need to
adapt to.
We need to adapt so that eachindustry can experience its
(24:32):
cyclical change, the ebbs in theflows and, whilst they're being
adequate, profits and yieldFrom other assets, so you can
weather this door.
And so this is what I did.
I Go to the team and say thisportfolio it's, it has a
(24:53):
dependency on this kind of asset, which means it's experiencing
a cyclical change, and I'd askfor volunteers to absorb the
growth of that portfoliowillingly.
And never did I have a Port, aportfolio manager, not stand up,
not stand up, and whether thatstorm.
(25:14):
Because they know damn wellwhen they're experiencing a
cyclical change and I'm focusing, working with them on their
portfolio, they know I'm gonnago to bat for them and they know
their teammates will bat forthem as well.
You see, and this is what weneed in the New Zealand
innovation ecosystem, we need aportfolio, a fund of funds, if
(25:38):
you will, to consolidate thefragmentation and the siloed
vertical industries, so thatthere are portfolio managers or
principles of portfolios runningportfolios that contain niche
assets, you know?
So you've got a portfolio thatservices web 3 got a portfolio
(26:01):
that services web tech.
Sorry, medtech, agtech, cleantech, tech, tech, tech, tech.
So you have those specialists,but the, the sine wave of the
ebbs and the flows.
You know the bandwidth or thefrequency between each peak and
trough of these cyclicalindustry changes.
(26:24):
Well, you like, in web 3 as anexample, the bearable markets
that you have a portfolio thatunderstands that those that's
the nature of the industry.
It understands that in hardtech there's a could be a 20
year event horizon.
You know the exit could be in20 years.
(26:47):
Commercialization could be a 10year horizon.
You know the valuation of theassets could be sporadic.
Of the intangible assets thatare created, clinical trials,
you know in medtech that haveextra long runways.
(27:09):
Now, if you At the moment, ifyou're a special specialty fund,
then you're not gonna have,you're not gonna be able to
encompass all of them.
You're not gonna be able toCapitalise on every opportunity
that shows potential.
Unless you have this approach,unless you have surplus
(27:32):
elsewhere.
Because you've got a diverseportfolio of portfolios and you
know classic one is sasssoftware as a service, really
great Businesses and ventures Toget off the ground quickly,
(27:54):
create recurring revenue.
You know, with very littleinitial capital outlay and you
may actually invest.
You know, inside this portfolioyou may actually have the
equivalent of An index fund oryou may actually invest in.
(28:14):
You know stocks, shares, cryptoassets, these kinds of things
as well, but the key is that youknow property.
The key is that the portfolioprovides a surplus that enables
each industry to go through itscyclical change.
(28:35):
And there's enough.
There's adequate surplus Foreach portfolio manager to earn
the right to their autonomy andto negotiate it back Once
they've demonstrated.
I'm gonna agree that if myforecast falls back, I'm gonna
(28:55):
agree to a minimum level ofactivity and a minimum
harvesting of insights so thatthey can have that discussion
with me and then say we need toReconstitute this portfolio, we
need to redistribute wealth, weneed to reattribute Some you may
(29:16):
be interested in a podcast Idid on retribution and the true
meaning of reattribution, andthis is a portfolio management
concept.
But together we're unified,we're sovereign, we have total
(29:36):
autonomy, we have the equivalentof the autonomic nervous system
.
This is a sympathetic Nervoussystem and the parasympathetic
nervous system.
One is seeking growth, one iscontracting and it's like the
portfolio if there, if it is atrisk and if there is a threat,
(29:56):
then it goes into consolidationmode, it goes into.
You know there are markers thatkick in, that go into
preservation and reconstitution,same way that the body does.
And this is really an organism,right?
(30:17):
This is how an organism works.
Every cell in your body is aparadox.
You know, if you look at yourbody and this is how technology
is evolving, by the way if youlook at your body, there's a
brain.
That brain is like a hive mind.
(30:40):
It's connected to every aspectof your body.
You know, producing all thechemicals, all the signals, and
so well, everything's producingsignals.
But then you have a nervoussystem, and that's the beginning
(31:01):
of paradox the nervous systems,like in mycelium network,
distributing sovereignty.
You know, taking a stem cellthat has the potential to become
anything, transporting it tosome other part of the body
using the blood, and then thestem cell adapts and evolves to
(31:26):
meet the unmet need within thegreater whole.
And that cell is sovereign.
It's sovereign, but it'sconnected to the hive mind of
the brain and it collaborateswith other cells to create
organs, to produce systems.
Yet it is solely responsiblefor itself.
(31:47):
It is solely responsible foritself.
And you know, the body is thegreatest paradox of all.
It's the greatest hybrid ofunity and separation that you
could imagine.
It's not just the binary system, it's a ternary system, it's
(32:08):
autonomous, but it is also, itwill intervene.
And so, really, my point, tobring this full circle in
context of centralized authority, there has to be standards,
(32:30):
standards that are set andagreed upon by all parties
involved.
That if we get to this metric,or this marker that we all hold
in our hands, or this markerthat we all wholly agree that it
triggers an intervention by atrusted third party, and we
(32:52):
willingly acquiesce to whateverthe custodians, whatever whoever
those empowered to intervene,however they want to do it, we
acquiesce, we relinquish controland you have the ultimate
(33:17):
blueprint for an autonomoussystem that has protection and
preservation baked in, but isprogrammed to perpetually
appreciate and compound itswealth, perpetually grow and
expand and become more increasedits capability and capacity,
(33:38):
increase the diversity of itsuniqueness, to create more and
more complex systems, so that itbecomes an ecosystem with
profound interdependency anddiversity.
And those are the two markersfor ecosystems on the planet,
that that's the thing thatseparates them from other
(33:59):
ecosystems interdependency anddiversity.
And so we can have this rightnow.
They're just very basiccultural changes that can happen
within any company.
To create autonomousorganizations, you don't have to
change the whole thing into aDAO, or you don't have to
(34:24):
convert the government into a TLorganization.
You can just enter intosovereign agreements with the
individuals involved when,rather than consensus decision
making on the day to day, theconsensus decision making is
upon the agreed standards Onwhat are the agreed terms for
(34:47):
earning the right to autonomy,what are the agreed terms for a
trusted third party to intervene.
That's it.
That's all we need to do, andthis framework is ubiquitous for
anything A company, a trust, aDAO, some other weird kind of
(35:12):
organization, an uncorporatedgroup Because when individual
sovereignty stands above allelse, the immutability of that
is the same.
The immutability of that createenables there to be perpetually
mutable form of contracting.
That's the beauty of it.
(35:36):
That's the beauty of it.
You can enter into any agreementthat you want, you can
structure it in any way you want, you can insist on dictating
terms, and then the other partyis free to agree or not agree.
You can willfully defer yourauthority in a way that enables
(36:00):
a trusted third party to havetotal dictatorship, without any
standards for intervention.
It can be the default Everyhuman being is responsible for
setting your own standards.
That's not to say that youdon't have global standards for
(36:23):
a team, like a team of portfoliomanagers, as an example,
because that works best ifeveryone's working on that same
model.
But an individual still has theright to try and negotiate
specific terms for them and insome cases that's a better way
of going.
As an example, the scenario Igave you with setting the
(36:49):
standard for intervention beingif your projections fall behind
projecting to yield 10% thatmonth, if your daily averages
are below, fall below thatprojection, then the
intervention kicks in the momentit falls.
(37:11):
But below that, you're committedto doing 30 contacts with your
clients a day.
There are some portfoliomanagers where that's 15.
Or there are some portfoliomanagers where it's 60.
There are some portfoliomanagers where it's 5.
Some portfolio managers whereit's two visits, so you actually
(37:32):
have to go and visit in person.
So you tailor the standard tothe individual.
If you're a beast mowing downcalls, then do that.
If you're an expert facilitator, get in front of them.
Now you're always playing tothe strength of the asset.
You're always leveraging theuniqueness of the asset.
(37:56):
You're never just applying aglobal thing.
You're never just applying aglobal thing may not be playing
to their strengths.
And I'll use the example ofanother portfolio I managed was
student accommodation buildings.
(38:16):
I think I had about 10,000 bedsin London and my role is to
appreciate the assets.
So that means get either sellthe buildings to a university,
lease them out to a universityor lease them out directly to
the students or the studentsparents.
And you can apply a globalstandard to each individual
(38:42):
asset, to each room, and get itabout 80% full using just
blanket global marketing.
But the rest of the 20%, youhave to get in behind each asset
, understand the uniqueness ofeach room, understand the
environments it's in, understandthe pros and cons of the
uniqueness of that room, createbespoke campaigns tailored to
(39:06):
just that room, target ademographic that's particularly
suited to just that room and theuniqueness of that room.
And that's how you get the restof the 20%.
And so this is how I was ableto achieve 98% occupancy.
With the remaining 2%, therooms were just damaged.
(39:28):
And it's incredible what youfind out.
You find out oh, there actuallyare damaged rooms.
You know, if you don't see itstandard where you're trying to
get 100%, you would never evenfigure these things out as a
portfolio manager.
(39:48):
But and this is how you applyportfolio approach to any aspect
of an organization, toeverything you're responsible
for as an employee there'snothing preventing you from
engaging in a conversation withwhoever your manager is to
suggest some standards?
(40:09):
Say what are your thoughts onme gaining autonomy?
You're expecting this of me.
If I can project 10% more thanthis or 20% more than this, if I
can increase my productivityfrom this to this and I can
maintain those numbers, do youagree to give me total order
autonomy so I can take an extraday off a week, or I can attend
(40:34):
this course once a week, or Ican work in this team once a
week, or I can donate 10% of mysurplus time to a nonprofit
project?
You see, this is the power youhave as an individual.
There's absolutely nothing inthe world stopping you from
(40:56):
initiating a conversation withyour portfolio manager, floating
some ideas to your teammates,getting them together to discuss
it.
What's a global regulatorystandard we could set within our
team that triggers anintervention?
And then, what might we do ifwe become so productive as a
(41:18):
team and that we have surplusthat we can devote to other
things?
How might we innovate?
How might we use some trial anderror to try some new things?
Just because it's an idea, notbecause you know, despite
whether there's scientificevidence or not, you toss that
(41:39):
out the window.
You just give it a go, becomesmuch more fun and much more
innovative, because you'reconstantly delighted and
surprised by how it blooms andblossoms.
When you have a mechanism inplace to protect and preserve
(41:59):
everyone, to provide the carethat they need, that is
obligation free, then theyreally appreciate that,
understanding that if they meetand exceed that standard as a
self-reliant, self-responsiblehuman being and they taste what
(42:22):
it's like to have total freedomand total autonomy and then to
feel the pressure of it slippingaway as a privilege, watch what
happens.
Watch what happens, watch theinnovation that happens and
watch them perform underpressure, because they're not
(42:44):
being told to accomplish a task,they're not being told to
comply.
They made a commitment to you,to that number.
It's about them.
It's about how they feel asself-responsible individuals.
Come hell or high water,they're going to accomplish that
mission because they've.
(43:06):
They're committed by proxy tothe rest of the team.
It's a culture and it's a wayof being.
That's that became verydifficult for me to describe
when I first startedexperimenting with this in an
organization that didn't reallyknow what I was doing.
They knew that my team wasthriving and some of the people
(43:31):
in that organization becamequite jealous of, because my
team looked like they wereswanning around, sometimes Not
understanding that the teammembers that were swanning
around, they'd come in in theweekend and bashed out 60 calls
and got five appointments.
You see, you have these peaksand troughs and the culture that
(43:53):
I had in that team when I knewI'd hit that sweet spot the last
day of the month.
That's when the number has tobe delivered.
They stay behind for as long asit takes to just bash out calls
, get numbers across the line,pull out invoices, get them
billed, whatever it takes to getto deliver that number.
(44:18):
Because of the commitment thatwas made by an individual, not
because they were told they haveto do something, because they
don't, they want to, becausethey made the commitment to
invest themselves in that wayand a co-designed agreement and
a consensus agreement.
And so imagine this scenariowithin government, within a
(44:48):
government agency.
Imagine this relationshipbetween a ministry and a
government agency.
You know the minister can comein and it is my will to XYZ ABC
so that the people of NewZealand thrive, so that the
(45:09):
nation of New Zealand thrivesand prospers.
How can we and we can co-designthose standards together.
We can co-design thosestandards together.
But how can the dormantpotential of the wealth of
knowledge, experience,uniqueness, equipment within an
(45:32):
agency like Callahan Innovation?
How can that be unlocked?
How can that be unlocked?
It's through autonomy.
It's through autonomy so thatthey can create a surplus for
themselves and create the spaceto then innovate in a
(45:56):
cross-pollination way.
They're incentivised to do soand if things slip and they
become less productive, they ownthe productivity for their role
.
They own what they're capableof producing.
They own whatever the unmetneed is behind the reason why
(46:19):
their role exists.
They own it.
They agree to a standard whereintervention happens.
They understand that anyprivileges gained by creating a
surplus are lost if that surplusbecomes eroded, and people are
far less adverse to risk, farless adverse to risk, and
(46:46):
they're incentivised to utilisetechnology to make themselves
more productive.
Now the last thing point I wantto make is and this was always
controversial in my team, justbeing honest is that if your
portfolio yields like if you hada number to hit one month and
(47:09):
you managed to appreciate yourportfolio by 30% in one month,
you absorb that target and yourprojection changes.
And so what this would do andunderstand.
There may be a random anomaly.
(47:31):
There might have been a massivedeal that was done in one month
.
You have to pull that out.
You have to pull out thoseanomalies, otherwise they're
just they're not going tocontinue hitting their target.
You factor in the anomaliesthat there will be anomalies,
but you spread it across theportfolio at the beginning of
(47:51):
the year, so you pull it out.
But if you're compounding yourportfolio 20% month on month,
then the redistribution ofresponsibility happens every
single month.
Every single month theredistribution of that portfolio
(48:14):
happens and this is whatenables the unified whole to
work together as one in unity.
This is how you enable theentire diverse portfolio, you
enable one industry to carryanother, but it's constantly
adapting and evolving so thatthe redistribution of
(48:36):
responsibility is relevant towhere portfolios are wealth
generating, where the surplus is.
And this means that a portfolio, as an example, a Web 3
portfolio this means that a Web3 portfolio in a bear market can
(48:57):
still hit its targets Can stillhit its targets Because every
month the redistribution ofresponsibility is happening
based on where the growth ishappening.
If you're coming into a peak,the equivalent of a bull market,
and you're riding that wave,then you're creating a surplus.
(49:20):
That's helping others who arecontracting, whose portfolios
are contracting and it enablesthem to still experience success
.
But they're intrinsically thenmotivated to consolidate,
reconstitute their assets, cullassets out of their portfolio,
(49:44):
because that's another thingwith portfolio management is, if
there are specific assets thatare not yielding, if they're
depreciating in value and youcan't help it, there's an
incentive to either turn themaround like they're a distressed
asset or reconstitute them.
(50:06):
So maybe merge them withanother asset, innovate to
create a new system between fouror five depreciating assets or
distressed assets, and so or youthen you cull it into a
(50:26):
reactive portfolio that onlygets targeted by marketing as an
example, because the cost ismuch less and you're not getting
a yield on the attention you'reimbuing into that asset.
And so you want to redeploy theattention of the human being
into understanding theopportunities and assets that
(50:47):
actually have potential, andthis is how it becomes
autonomous.
You begin investing in thingsto increase the productivity of
each asset, to increase theproductivity of each individual,
understanding their role inmaking the system more efficient
at meeting an unmet need, aswell as understanding their
(51:08):
contribution to their individualproductivity, so that they can
earn the right to their autonomyas well.
And the other component I foundthat was actually essential in
this is to incentivize knowledgeexchange through the equivalent
of either very junior internsor people just out of university
(51:36):
or just out of college who canabsorb and assimilate knowledge
from people who are earning theright to their autonomy, so that
they have they absorb the costof those people in their
portfolios and it means they canreally enjoy the privilege of
(52:00):
the autonomy that they'reearning.
And in that scenario I've beensharing.
That's about administrators whobought, who enable a portfolio
manager to redeploy theirattention into activities that
(52:20):
are appreciating the portfolio.
But again, the cost ofeverything has to be absorbed by
the portfolio as well.
It has to be absorbed by theunit as a whole.
So this is what autonomy is.
If you are a sovereign humanbeing and you've come to the
(52:42):
conclusion that you do want todelegate responsibility to other
human beings for aspects ofyour care, if you do want to
collaborate with other humanbeings on mission-led projects,
then you know that you have todelegate your authority, you
have to defer your authority.
And if you've drawn thatconclusion, you know that you're
(53:05):
not going to just be anindependent, sovereign human
being doing everything forthemselves, trying to run a
company entirely by themselves.
You know you want a hybrid ofboth.
You know you want a hybrid ofboth and this is a blueprint
(53:28):
that works and it can be infusedinto any organisation.
It can be infused into yourfamily.
You know, if you imaginehelping a child to have a
portfolio approach to how theyrun their life, where all of
their, everything under theirstewardship, all their toys and
their clothes are assets, youcan teach them how to value
(53:52):
those assets, how to appreciatethem by protecting and
preserving the things that theycherish.
You can help them to set theirown standards.
You know, if my room gets thismessy, then I guarantee it will
be tidied up by XYZ.
You know, if my chores that Iagree to as my set standards, if
(54:21):
I exceed them or I'm doing more, if my productivity and my
contribution to this family isincreasing beyond what was
agreed by 10%, then I earnautonomy and they're an adult by
the time they leave home.
They're a self-responsibleadult by the time they finish.
(54:44):
You know, being an adolescent,they've earned the privilege of
going out with their boyfriendor their girlfriend, of learning
how to drive and it's justnormal for them.
So hopefully that's helpful.
Hopefully that shed some lighton autonomy, what it actually
(55:05):
means In a world within whichyou want to delegate your
authority and defer yourauthority.
It is a privilege to be able todo that and defer your
authority.
It is a privilege If you wantto work for a company and be
protected and guaranteed anincome despite what happens.
It's a privilege If you want agovernment to protect you or a
(55:29):
trusted authority or third partyto protect and preserve you,
your body, then you have tofigure out how to generate
wealth as an individual.
You have to figure out how tocreate a surplus, but you also
want your autonomy.
So how can we, how can we dothis together Without all this
(55:57):
radical change that everyonethinks that has to happen?
There doesn't have to be a massdeluge of insane disruption
that creates equal measure ofharm than it does good.
We can do this without doingany harm by creating sustainable
surplus, but it needs aportfolio approach.
(56:21):
Okay, so I'll leave it there.
That's it for now, for thenature of autonomy.
Talk soon.
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